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Judge ‘inclined’ to OK $14.7B VW emission settlement

Keith Laing
Detroit News Washington Bureau

Washington — A federal judge said Tuesday that he is “inclined” to approve a $14.7 billion settlement between Volkswagen and U.S. regulators over allegations that the German automaker rigged hundreds of thousands of cars to cheat U.S. emission standards.

The comments, from U.S. District Court Judge Charles Breyer in San Francisco, came after drivers — who have argued they were duped into buying the polluting autos — offered testimony for several hours Wednesday.

Breyer said he will make a final decision on the fairness of the Volkswagen settlement by Oct. 25. He said the deal that is on the table currently may not satisfy every VW owner, but he said it would address the impact on nearly a half-million drivers in the U.S.

“I think I have to look at the settlement and make a determination as to whether that settlement is fair, adequate and reasonable,” he said. “This settlement rises and falls on the adequacy of it as presently constitutes.”

Breyer added: “The court is strongly inclined to approve the settlement, however I want to consider the objections further to determine whether the court should recommend any modification.”

Breyer granted preliminary approval to the proposed Volkswagen settlement over the summer. The proposed settlement calls for the German automaker to pay more than $10 billion to either buy back or repair about 475,000 2-liter diesel vehicles that were sold between 2009 and 2015 and were built with devices to trick emissions testers.

Under the agreement, Volkswagen will also compensate owners who purchased 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of their cars.

Breyer’s comments came during fairness hearing on Tuesday that featured about two dozen speakers, most of whom are unsatisfied with Volkswagen’s proposed settlement.

Several Volkswagen owners petitioned Breyer to increase the penalties that Volkswagen will have to pay for selling polluting autos to U.S. consumers.

Mark Dietrich, of San Francisco, argued that Volkswagen should be forced to repay the original value of their polluting autos, instead of the amount that is determined based on the auto’s average value at the time it was caught cheating by federal regulators.

“Volkswagen’s deceit didn’t start on Sept. 18,” Dietrich said. “For me, it started when I was researching cars to buy. Reimbursing me for the value (on Sept. 18) is tantamount to saying what they were doing on Sept. 17 was perfectly OK.”

Betty Carroll, of Clarksville, Calif., said, “I’m on a limited income and can’t afford the financial burden that Volkswagen is putting on me,” she said. “Americans are tired of these corporations being lied to by them to us. I feel that it’s time for these corporations to pay up.”

Breyer said Tuesday that he cannot just include the impact of Volkswagen’s emission cheating on individual drivers like Dietrich and Carroll, however.

“We are talking about approximately 500,000 vehicles which were on the road, which were polluting ... so there was a real urgency here and it went effectively beyond consumers,” he said. “It went to the general public, because the general public was affected by this.”

Attorneys for Volkswagen argued Tuesday that the number of objectors to the proposed emission settlement is small compared to the overall number of drivers who will be made whole by the agreement.

The company said Tuesday it hopes Breyer will grant final approval to the settlement soon.

“The parties believe that the proposed 2.0L TDI settlement program will provide a fair and reasonable resolution for affected Volkswagen and Audi customers in the United States and we welcome Judge Breyer’s positive comments during today’s hearing,” the beleaguered German automaker said in a statement.

The proposed settlement includes the following diesel cars: 2013-15 Beetle; 2010-2015 Golf; 2009-15 Jetta; 2012-15 Passat; and 2010-13 and 2015 Audi A3.

The EPA accused the German automaker in September 2015 of selling diesels for years with software that activated required air pollution equipment only during emissions tests. They had been marketed as “clean diesels” for the company’s Volkswagen, Audi and Porsche brands between 2008 and 2015.

Volkswagen has admitted to programming its diesel cars to trick emissions testers into believing the engines released far less pollution than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

The settlement, which was reached between Volkswagen and the Environmental Protection Agency, Department of Justice and Federal Trade Commission, calls for Volkswagen to pay $2.7 billion into a federal environmental mitigation trust fund and spend another $2 billion for research on zero-emissions vehicles under the settlement.

Volkswagen has said the agreement is not an admission of liability.

klaing@detroitnews

(202) 662-8735

Twitter: @Keith_Laing