Judge OKs $14.7B VW emission settlement

Keith Laing
Detroit News Washington Bureau

Washington — A federal judge approved a $14.7 billion settlement between Volkswagen and U.S. regulators on Tuesday to settle allegations that the German automaker rigged hundreds of thousands of cars to cheat U.S. emission standards.

U.S. District Judge Charles Breyer signed off on the deal in an order that was released Tuesday, saying the proposed settlement “in its current form is fair, adequate, and reasonable and is in the best interest of Class Members.”

Breyer added: “Benefits under the settlement shall immediately be made available to Class Members.”

The approval follows a contentious hearing in San Francisco last week that featured several drivers who have argued Volkswagen should face higher penalities for duping them into buying the polluting diesel-powered autos.

Breyer granted preliminary approval to the settlement over the summer, and said during last week’s fairness hearing that he was “inclined” to approve it. The 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 now-ratified agreement, Volkswagen also will compensate owners who purchased 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of the car.

Several Volkswagen owners petitioned Breyer to increase the penalties Volkswagen will have to pay during a fairness hearing last Tuesday that featured about two dozen speakers, most of whom were unsatisfied with Volkswagen’s offer.

Mark Dietrich of San Francisco argued that Volkswagen should be forced to repay the original value of the cars instead of an amount based on the car’s average value at the time it was discovered to be out of compliance 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, California, said, “I’m on a limited income and can’t afford the financial burden that Volkswagen is putting on me. ... I feel that it’s time for these corporations to pay up.”

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

The company said Tuesday that it is glad to have Breyer’s approval for the settlement.

“Final approval of the 2.0L TDI settlement is an important milestone in our journey to making things right in the United States, and we appreciate the efforts of all parties involved in this process,” Hinrich Woebcken, president and CEO of Volkswagen Group of America Inc., said in a statement.

“Volkswagen is committed to ensuring that the program is now carried out as seamlessly as possible for our affected customers and has devoted significant resources and personnel to making their experience a positive one,” Woebcken added.

The settlement that was ratified on Tuesday covers the following diesel cars: 2013-15 Beetle; 2010-15 Golf; 2009-15 Jetta; 2012-15 Passat; and 2010-13 and 2015 Audi A3.

The agreement was reached after 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. The cars 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 diesels 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 the cars emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

Joe Rice, an attorney who represented plaintiffs in the Volkswagen lawsuit and helped negotiate the company’s settlement with regulators, praised the speed with which the deal was crafted and approved.

“The settlement is all about giving the consumer options while ensuring Volkswagen does its part to remedy its harm to the environment as well as fairly compensate those impacted,” Rice said in a statement. “Having led negotiations on behalf of plaintiffs in some of the largest civil settlements this country has seen, this is one of the fastest to reach a resolution that I have seen, making it a model for future litigation.”

The settlement 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.


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Twitter: @Keith_Laing