VW to Pay up to $14.7 Billion Under Proposed 2.0-Liter Settlements

June 28, 2016 – The Department of Justice filed a notice of lodging of partial consent decree in the U.S. District Court for the Northern District of California, San Francisco Division, to partially settle allegations by EPA and California that Volkswagen (VW) used illegal defeat devices on Model Year 2009 through 2015 diesel vehicles to evade emission tests.  In addition, the Federal Trade Commission filed, in the same court, a partial stipulated order for permanent injunction and monetary judgment, also to partially settle the VW case.

Under the settlements – which are subject to public notice in the Federal Register (expected this week) and a 30-day comment period – VW and related entities agree to spend up to $14.7 billion.  Up to $10 billion of this total is to compensate consumers and get the vehicles off the road through buyback, repair and additional compensation programs.  Another $2.7 billion will go into a mitigation trust fund be allocated among every state (including DC and Puerto Rico) in the nation as well as tribes – a minimum of $6.5 million per state – to undertake pollution reduction projects to offset the excess emissions that occurred from the affected vehicles.  The final $2 billion will be spent by VW to expand infrastructure for and improve access to zero-emitting vehicles.

These settlements apply only to affected 2.0 liter vehicles; action on 3.0 liter vehicles is still pending.  In addition, the settlements do not address civil claims or criminal liability.

NACAA is pleased to note that with respect to mitigation the settlement incorporates many of the recommendations included in the document adopted by the NACAA members last month at the association’s membership meeting.
More information on the settlements is available here.