- Office of Attorney General Maura Healey
Media Contact for AG Healey Announces Major Award For More Than 12,500 Massachusetts Consumers Under Settlements with Volkswagen Over Emissions Fraud
Boston — In the wake of admissions that Volkswagen installed software to cheat emissions tests performed on its diesel vehicles, Attorney General Maura Healey today announced a multistate settlement requiring Volkswagen to pay more than $570 million 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. This is part of $15 billion in total obligations Volkswagen has to consumers and government.
The multistate agreement is part of a series of state and federal settlements that will provide cash payments to affected consumers, require Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles, and prohibit Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.
“Volkswagen’s contempt for the law and fraud on thousands of consumers in Massachusetts and across the country were startling in their scope and brazenness,” AG Healey said. “Today’s settlements mark the beginning of our efforts to hold Volkswagen accountable for the harm it caused, with a robust consumer compensation program, critical funding for environmental mitigation projects, and a serious civil penalty for Volkswagen’s widespread false advertising of so-called clean diesel.”
Today’s coordinated settlements resolve consumer protection claims raised by a multistate coalition co-led by AG Healey and attorneys general in Connecticut, New York, Oregon, Tennessee, and Washington, and joined by 37 other states against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. They also resolve actions against Volkswagen brought by the United States Environmental Protection Agency (EPA) and Department of Justice (DOJ), the Federal Trade Commission (FTC), California and car owners in private class action suits.
The attorneys generals’ investigation confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with “defeat device” software intended to circumvent applicable emissions standards for certain air pollutants, and actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as environmentally friendly or “green” and that the cars were compliant with federal and state emissions standards, when, in fact, Volkswagen knew the vehicles emitted harmful nitrogen oxides (NOx) at rates many times higher than the law permitted.
“With the Environmental Mitigation Fund, the Commonwealth will be able to reduce NOx emissions that contribute to ozone exceedances or ‘smog’ by addressing diesel vehicles and engines to be replaced or repowered with clean technologies,” said Commissioner Martin Suuberg of the Massachusetts Department of Environmental Protection. “The ZEV commitment will also fund electric vehicle charging infrastructure, which is critical to meeting our goals under the Global Warming Solutions Act.”
Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015 at a maximum cost of just over $10 billion. This includes more than 12,500 vehicles registered in Massachusetts.
Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment ranging from at least $5,100 to a potential maximum of $10,000 and a choice between:
- A buy back of the vehicle (based on their value in September 2015 before the emissions-cheating scandal was disclosed); or
- A modification to the vehicle developed by Volkswagen to reduce NOx emissions that is acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve an appropriate modification. Owners who choose the modification option would also receive an Extended Emission Warranty and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.
The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and prior owners who sold their Volkswagen (50 percent of the restitution available to owners). Additional components of today’s settlements include:
- Environmental Mitigation Fund: Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NOx. This fund, also subject to court approval, is intended to mitigate the total, lifetime excess NOx emissions from the 2.0-liter diesel vehicles identified below. Under the terms of the mitigation trust, Massachusetts is eligible to receive nearly $70 million to fund eligible mitigation projects.
- Additional Payment to the States: In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer protection laws, amounting to more than $570 million nationwide. This amount includes more than $20 million for Massachusetts.
- Zero Emission Vehicles: Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or Zero Emission Vehicles (ZEV), and supporting infrastructure.
- Preservation of Environmental Claims: Today’s settlement by state attorneys general preserves all claims under state environmental laws, and Massachusetts maintains the right to seek additional penalties from Volkswagen for its violations of environmental and emissions testing laws and regulations.
Volkswagen will also pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can utilize for future training and initiatives, including investigations concerning emissions violations, automobile compliance, and consumer protection.
The full details of the consumer restitution and recall program will be available online at VWCourtSettlement.com and through the Federal Trade Commission’s website, www.ftc.gov/VWSettlement. Consumers can also call 1-844-98-CLAIM or visit the Attorney General’s website at www.mass.gov/ago/vw for more information.
Since the Volkswagen defeat device scandal was disclosed in September 2015, a group of state attorneys general has conducted a detailed investigation into Volkswagen’s wrongdoing. That multistate investigation was led for Massachusetts by Gillian Feiner, Chief of AG Healey’s False Claims Division, First Assistant Attorney General Christopher Barry-Smith, Christophe Courchesne, Chief of AG Healey’s Environmental Protection Division, Peter Mulcahy, Assistant Attorney General in AG Healey’s Environmental Protection Division, and former Assistant Attorney General Fred Augenstern of Environmental Protection Division, with critical assistance from Assistant Attorneys General Diane Barry and Gary Klein, along with Attorney Meghan Mackenzie, and Paralegal Krista Roche.