Consumer Settlements

State and federal settlements reached in 2016 totaling $15 billion will provide more than 475,000 owners and lessees of 2009-2015 model year 2.0-liter diesel vehicles with extensive relief, at a maximum cost of just over $10 billion. More than 12,500 vehicles registered in Massachusetts stand to benefit from the settlements, which seek to hold Volkswagen accountable for installing software to cheat emissions tests performed on its diesel vehicles. A related 2016 multistate settlement led by Attorney General Maura Healey required Volkswagen to pay more than $570 million to the states for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing diesel vehicles equipped with illegal and undisclosed defeat device software.

The consumer-related settlements for owners and lessees of affected 2.0-liter diesel vehicles received final Court approval on October 26, 2016. Under those settlements, eligible owners and lessees have a choice to either sell their vehicles back to Volkswagen or wait to have their vehicles' emissions systems modified. Under either option, eligible owners will also receive an additional cash payment from Volkswagen ranging from at least $5,100 up to a potential maximum of $10,000.  Eligible lessees are also entitled to receive restitution and a choice between buyback and lease termination.

The consumer-related settlements for owners and lessees of affected 3.0-liter diesel vehicles were preliminarily approved on February 14, 2017. Under the proposed 3.0-liter agreements, certain vehicles are eligible for buybacks or lease terminations, while others may be eligible for free emissions modifications, if approved by regulators, and additional compensation. If emissions modifications for those vehicles are not approved, they will be eligible for buybacks or lease terminations. A final approval hearing has been scheduled for May 11, 2017.

The details of the 2.0-liter settlement and the proposed 3.0-liter settlement are available at www.VWCourtSettlement.com, through the Federal Trade Commission website, www.ftc.gov/VWSettlement and on the Court's website. Consumers can also call 1-844-98-CLAIM.

Environmental Lawsuit and Settlement

On March 30, 2017, Attorney General Maura Healey announced a further multistate settlement of state environmental claims against Volkswagen, Audi, and Porsche, in which the companies agreed to pay $157 million to settle environmental claims by Massachusetts and 9 other states. The settlement provides a $20 million payment to Massachusetts, including the largest civil penalty ever in an environmental enforcement case brought by the state. In addition, the automakers have agreed to increase the availability of new electric zero-emission vehicles in Massachusetts and other states.

A multistate investigation, led by Attorney General Healey and New York Attorney General Eric Schneiderman, culminated with the filing of lawsuits in July 2016 against the automakers under state environmental laws for selling more than 570,000 2.0- and 3.0-liter diesel vehicles (including more than 15,000 in Massachusetts) fitted with undisclosed and illegal “defeat device” software. The software allowed the vehicles to pass formal emissions testing while concealing from consumers and regulators the vehicles’ excessive emissions of harmful pollutants of up to 35 times the legal limit during normal driving.

AG Healey’s complaint pdf format of Commonwealth v Volkswagen AG et al
file size 12MB [LINK] alleges Volkswagen, Audi, and Porsche resorted to the defeat devices because of their inability to develop diesel emissions control systems that would otherwise comply with applicable emissions standards, and knowing that what they doing was illegal. The complaint further alleges that, as a result of the illegal defeat devices, which the automakers actively concealed from regulators for nearly a decade, the automakers caused thousands of additional tons of nitrogen oxides (NOx) to be spewed onto streets around the country.

For the states involved, the multistate environmental settlement resolves claims that the companies’ conduct violated state environmental laws and regulations. In Massachusetts, the settlement includes:

  • A $20 million payment to the state of Massachusetts.
  • A commitment to make new Volkswagen zero-emission electric vehicles available in Massachusetts to grow the market for such vehicles and further reduce vehicle air emissions.
  • Comprehensive factual admissions by the companies, including the admissions by Volkswagen AG attached to its federal guilty plea [LINK to Statement of Facts].

A copy of the Massachusetts complaint can be found here pdf format of Commonwealth v Volkswagen AG et al
file size 12MB.

A copy of the multistate environmental settlement can be found here pdf format of ECF Filed Remand Stipulation
file size 1MB.

The current settlement covers only diesel vehicles with the 2.0 liter engines

Volkswagen, the state attorneys general, federal regulators, and the consumer class action lawyers continue to negotiate about what relief will be available later to owners of the 3.0  liter engines.

The specific 2.0 liter engine vehicles covered by the settlement are the following vehicles purchased or leased in the US:

VOLKSWAGEN
MODELMODEL YEARS
Beetle, Beetle Convertible2013-2015
Golf 2-Door2010-2013
Golf 4-Door2010-2015
Golf SportWagen2015
Jetta2009-2015
Jetta SportWagen2009-2014
Passat2012-2015
AUDI
A32010-2013, 2015

Consumers who purchased an affected vehicle have the option of either 1) selling it back to Volkswagen, or 2) having the emissions systems modified with an Approved Emissions Modification. Under either option, consumers will also receive additional restitution from Volkswagen.

Consumers who leased an affected vehicle have a similar option, and can either 1) terminate the lease with no penalty, or 2) have the cars' emission system modified with an Approved Emissions Modification. Under either option, lessees will also receive additional restitution from Volkswagen.

Buyback Option

For car owners who choose the buyback option, Volkswagen will pay the National Automobile Dealers Association (“NADA”) value of the car before the Volkswagen’s defeat device fraud became public in September 2015, plus an additional cash payment. The minimum restitution payment for any vehicle—to be paid on top of the vehicle value—will be a minimum of $5,100, and some class members may receive as much as $10,000 in restitution if they choose the buyback option.

For owners who sold the car after September 18, 2015, the settlement divides the restitution payment approximately 50/50 with the current owner.

Modification Option

Car owners who want to keep their vehicle and get it modified to meet the EPA emissions requirements will need to wait for final EPA approval of Volkswagen’s proposed engine modifications. Once a modification is approved, consumers can bring their vehicle into a local dealership to be modified at no cost to them; they also will receive at that time a restitution payment as described above.  That means owners who keep their cars will receive between $5,100 and $10,000 each, in addition to the repairs at no cost. Volkswagen will also offer extended warranties and disclosures of the emissions modifications.

Note that the EPA approval process might not be complete for many months, perhaps as late as 2018 for some engine models. Consumers who want to keep their vehicles will therefore need to wait to find out whether their car can be fixed with an Approved Emission Modification. 

If a modification for a particular engine type ultimately is not approved, owners who waited for a potential modification would be eligible to get a buyback on the same terms as described above. 

Leased Vehicle Options

Lessees may terminate their leases without any termination fee and receive a cash restitution payment equal to approximately half of what the owner of the identical car would receive under the buyback plan. Consumers with an active lease who want to hold on to their cars may choose to wait to see whether there will be an Approved Emissions Modification for their car, as described above. If those lessees elect to keep their cars under their leases with the repairs, they too will receive restitution.

AG Healey Announces Record-Setting $20 Million Settlement by Volkswagen, Audi, and Porsche for Knowingly Selling Illegally Polluting Cars and SUVs

Multistate Settlements Announced Today Include Unprecedented $157 Million in Payments to States for Environmental Violations, and Provide New Electric Zero-Emission Vehicles

BOSTON – Attorney General Maura Healey announced today that Volkswagen, Audi, and Porsche, as well as their American subsidiaries, have agreed to pay $157 million to settle environmental claims by Massachusetts and 9 other states. The settlement provides a $20 million payment to Massachusetts, including the largest civil penalty ever obtained in an environmental enforcement case brought by the state.  In addition, the automakers have agreed to increase the availability of new electric zero-emission vehicles in Massachusetts and other states. 

A multistate investigation, led by AG Healey and New York Attorney General Eric Schneiderman, culminated last year with the filing of lawsuits against the automakers under state environmental laws for selling more than 570,000 2.0- and 3.0-liter diesel vehicles (including more than 15,000 in Massachusetts) fitted with undisclosed and illegal “defeat device” software that allowed the vehicles to pass formal emissions testing while concealing from consumers and regulators the vehicles’ excessive emissions of harmful pollutants of up to 35 times the legal limit during normal driving. 

“Volkswagen, Audi, and Porsche perpetrated one of the most egregious frauds in corporate history, and then repeatedly lied to the public and regulators to cover up their deceit. These companies’ actions flagrantly violated the state laws that protect public health and polluted the air that we breathe,” AG Healey said. “This record-setting settlement shows that state attorneys general will pursue enforcement against powerful interests that illegally deceive consumers and pollute the air.”

Filed in July 2016, AG Healey’s complaint pdf format of MA AG Volkswagen Complaint (filed).pdf
file size 5MB alleges Volkswagen, Audi, and Porsche resorted to the defeat devices because of their inability to develop diesel emissions control systems that would otherwise comply with applicable emissions standards, and knowing that what they doing was illegal.  The complaint further alleges that, as a result of the illegal defeat devices, which the automakers actively concealed from regulators for nearly a decade, the automakers caused thousands of additional tons of nitrogen oxides (NOx) to be spewed onto streets around the country. 

NOx pollution presents grave risks to human health. It contributes to the formation of harmful ground-level ozone (smog) and soot. Exposure to smog and soot is linked to a number of respiratory- and cardiovascular-related health effects, including premature death. Children, older adults, people who are active outdoors (including outdoor workers), and people with heart or lung disease are particularly at risk for health effects related to smog or soot exposure. Nitrogen dioxide formed by NOemissions can aggravate respiratory diseases, particularly asthma, and may also contribute to the development of asthma in children. In Massachusetts, the Department of Environmental Protection (MassDEP) issues air quality alerts on numerous days every year because ozone levels make the air unhealthy to breathe.

“The actions of these automakers knowingly caused excess NOx emissions to pollute the air in communities across the Commonwealth,” said MassDEP Commissioner Martin Suuberg. “This settlement requires VW to advance the sales of zero-emission vehicles in Massachusetts, which will help us meet our important emission reduction goals under the Clean Air Act and the Global Warming Solutions Act.”

Under the terms of today’s settlement pdf format of ECF Filed Remand Stipulation
file size 1MB, which was filed today in the U.S. District Court for the Northern District of California, the automakers admitted that the defeat device software rendered the vehicles’ emissions control systems inoperative outside of emissions test conditions and that they did not disclose the existence of the software in their applications for permission to sell the vehicle in the States.  

The lawsuits by AG Healey’s office and other state attorneys general followed an extensive investigation by a multistate coalition of over 40 states and other jurisdictions, led by Massachusetts, New York, and four other states. Massachusetts’s Department of Environmental Protection and other state environmental agencies provided important assistance with the investigation.

Today’s settlement builds on the car companies’ June 2016 partial settlement with state attorneys general of claims for penalties for consumer deception totaling $570 million nationwide, including more than $20 million for Massachusetts, as well as the companies’ agreement to establish a fund to mitigate the environmental damage caused by their admitted misconduct. Under that agreement, Massachusetts is designated to receive $75 million for diesel and electric vehicle projects to reduce NOx emissions. Related federal and nationwide consumer class action settlements entered in October 2016 included a comprehensive consumer relief program for 2.0-liter diesel vehicle owners and lessees, providing each consumer a restitution payment and a choice between a buy back of the affected vehicle at its pre-scandal value or a modification to the vehicle’s emission system. Proposed federal and nationwide consumer class action settlements filed in December 2016 and January 2017 seek to expand the consumer relief program to include 3.0-liter diesel vehicles. In January 2017, Volkswagen agreed to plead guilty to various federal crimes and pay a $2.5 billion fine, as well as nearly $1.5 billion in Clean Air Act civil penalties for its conduct in this case.

For the states involved, today’s settlement resolves claims that the companies’ conduct violated state environmental laws and regulations. In Massachusetts, the settlement includes:

  • A $20 million payment to the state of Massachusetts.
  • A commitment to make new Volkswagen zero-emission electric vehicles available in Massachusetts to grow the market for such vehicles and further reduce vehicle air emissions.
  • Comprehensive factual admissions by the companies pdf format of VW Statement of Facts.pdf
file size 1MB, including the admissions by Volkswagen AG attached to its federal guilty plea.

 The case was handled in Massachusetts by Gillian Feiner, Chief of AG Healey’s False Claims Division, Christophe Courchesne, Chief of AG Healey’s Environmental Protection Division, and Peter Mulcahy, an Assistant Attorney General in AG Healey’s Environmental Protection Division, with assistance from Assistant Attorney General Gary Klein, Investigator Anthony Crespi of AG Healey’s Investigations Division and Financial Investigator Krista Roche. At the Massachusetts Department of Environmental Protection, Chief Bureau Counsel Laurel Mackay and Acting Assistant Commissioner Christine Kirby in the Bureau of Air and Waste also made important contributions to the case.

For consumer information on today’s settlement click here

To view today’s settlement click here. pdf format of ECF Filed Remand Stipulation
file size 1MB

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