Florida Attorney General Pam Bondi today announced a 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 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 misled consumers not only in Florida, but across the country, to believe they purchased a vehicle that met specific emissions standards,” said Attorney General Bondi. “Thanks to the collaborative efforts of my office and other state attorneys general, significant relief will be afforded to consumers.”
The coordinated settlements resolve consumer protection claims raised by 43 states and jurisdictions against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. The settlements also resolve actions against Volkswagen brought by the United States Environmental Protection Agency, the U.S. Department of Justice, the Federal Trade Commission, California and car owners in private class action suits.
The attorneys general’s 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 Volkswagen actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers through marketing and advertising, misrepresenting the cars as environmentally friendly or green and that the cars complied with federal and state emissions standards, when, in fact, Volkswagen knew the vehicles emitted harmful oxides of nitrogen at rates many times higher than the law permitted.
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 more than $10 billion.
Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:
–A buy back of the vehicle based on pre-scandal NADA value; or
–A modification to reduce NOx emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a fix. 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.
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, Florida is eligible to receive funds for 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 $570 million nationwide. This amount includes more than $32 million to be paid for affected vehicles Volkswagen sold and leased in Florida;
–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, and supporting infrastructure; and
–Preservation of Environmental Claims: Today’s settlement by state attorneys general preserves all claims under state environmental laws.
Volkswagen will also pay $20 million to the states for the states’ 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.