Court Approves VW Settlement

October 25, 2016 – Judge Charles Breyer of the U.S. District Court for the Northern District of California has issued final approval for the partial consent decree with Volkswagen (VW) related to the company’s alleged illegal use of emission control "defeat devices" on nearly 500,000 2.0-liter diesel vehicles of Model Years 2009 through 2015 (U.S. v. Volkswagen AG, et al, Case No. 3:16-cv-00295).  The consent decree calls for VW to, among other things, pay $2.7 billion for a Mitigation Trust Fund to be allocated among states and tribes for pollution reduction projects.  The proposed partial consent decree was originally announced on June 28, 2016 and was subject to public comment.  Based on this input and further negotiations among the parties (including VW, the U.S. Department of Justice [DOJ] and the California Air Resources Board), DOJ submitted an amended partial consent decree to the court on September 30, 2016.  On October 18, 2016 Judge Breyer held a hearing, at which time he indicated that he would approve the agreement within the week.  As reported in the Washington Update of October 3-7, 2016, there were not extensive changes to the proposed consent decree in response to public comments.  The revisions were mostly contained in Appendix D of the proposed consent decree and included:  allowing beneficiaries (e.g., states) 90 days, rather than 30, after being deemed a beneficiary to submit a “Beneficiary Mitigation Plan” that summarizes how the funds will be used; allowing newer engines to be eligible under the program (up to model year 2009, rather than model year 2006); providing greater flexibility with respect to the percentage of the costs of repowering and replacement that are permitted to be covered; and increasing the amount of administrative expenses that may be claimed from 10 percent to 15 percent of the total cost of an eligible mitigation action.  Click here for access to relevant documents.