Press Release  AG Campbell Announces Nearly $150,000 Million Multistate Settlement With Mercedes-Benz USA Over Vehicle Emissions Fraud

BOSTON — Massachusetts Attorney General Andrea Joy Campbell today announced that she, as part of a coalition of 50 attorneys general, has reached a $149,673,750 multistate settlement, including nearly $3 million for Massachusetts, with Mercedes-Benz USA and Mercedes-Benz Group AG for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling, and leasing vehicles equipped with illegal and undisclosed emissions defeat devices designed to circumvent emissions standards. The settlement also includes more than $200 million in potential consumer relief.

“No company is exempt from our consumer protection and environmental laws, nor can they deceive consumers about the compliance of their products,” said AG Campbell. “This settlement holds Mercedes accountable for misleading our residents and violating our state vehicle emissions standards. My office will continue to enforce our laws to protect public health, level the playing field for responsible businesses, and ensure that companies operating in the Commonwealth play by the rules.”   

AG Campbell and the coalition allege that, beginning in 2008 and continuing to 2016, Mercedes manufactured, marketed, advertised, and distributed nationwide more than 211,000 diesel passenger cars and vans equipped with software defeat devices that optimized emission controls during emissions tests, while reducing those controls during normal operations. Approximately 4,677 of the implicated vehicles were registered in Massachusetts. The states allege the defeat devices enabled vehicles to far exceed many legal limits on nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and premature death and contributes to the formation of harmful smog. 

Mercedes allegedly engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance, that it was unable to meet while complying with applicable emission standards. Mercedes concealed the existence of the defeat devices from state and federal regulators and the public. At the same time, Mercedes marketed the vehicles to consumers as “environmentally-friendly” and in compliance with applicable emissions regulations.

Today’s settlement requires Mercedes-Benz USA and Mercedes-Benz Group AG to pay $120 million to the states following the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a comprehensive consumer relief program. 

Massachusetts will receive $2,924,818 through today’s settlement. Of that amount, $1,575,732 will be deposited into the Natural Resources Damages Trust, administered by the Massachusetts Department of Environmental Protection, to reduce air emissions from the transportation sector by funding and supporting electric vehicle charging infrastructure projects, electric vehicle deployment, and projects that reduce emissions from diesel motor vehicles and engines. 

The consumer relief program extends to the estimated 39,565 vehicles which, as of August 1, 2023, had not been repaired or permanently removed from the road in the United States. Mercedes will bear the cost of installing approved emission modification software on each of the affected vehicles. The company will also provide consumers with an extended warranty, estimated at a $1,200 value, and will pay affected consumers $2,000 per subject vehicle. In accordance with the settlement, Mercedes will send information to eligible vehicle owners and lessees about how to participate in the consumer relief program. 

The companies must also comply with reporting requirements and reforms to their practices, including a prohibition on any further engagement in unfair or deceptive marketing or sale of diesel vehicles, including misrepresentations regarding emissions and compliance. 

In Massachusetts, this matter was handled by Senior Appellate Counsel Seth Schofield, Senior Enforcement Counsel Tracy Triplett, and Special Assistant Attorney General Jon Whitney of the AGO’s Energy and Environment Bureau, along with Managing Attorney Matthew Lashof-Sullivan of the AGO’s Consumer Protection Division. Chief Bureau Counsel Jenny Outman and Assistant Commissioner Christine Kirby of the Massachusetts Department of Environmental Protection’s Bureau of Air and Waste also made important contributions to this case.

Joining AG Campbell in the today’s settlement are the attorneys general of Alabama, Alaska, Arkansas, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Hampshire, New York, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico.

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