San Francisco, CALIF. – On Jan. 31, 2017, settlement agreements were filed by the consumer plaintiffs and the Federal Trade Commission in the Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation that, if approved, will provide owners and lessees of Volkswagen, Audi and Porsche 3.0-liter diesel vehicles substantial cash compensation in addition to buybacks, trade-ins, government-approved emissions modifications or compliant repairs, depending on the generation of vehicle. The proposed settlements were filed in the Northern District of California as part of the multidistrict litigation (MDL) currently overseen by Judge Charles R. Breyer.
Beasley Allen lawyer W. Daniel “Dee” Miles, III, served as Class Counsel for this litigation and assisted in the settlement. “This 3.0-liter VW engine settlement completes the federal regulatory and class action part of the ‘dieselgate’ saga for VW and is an historical and exceptional recovery for consumers and taxpayers,” Miles said. “The extraordinary efforts of the lawyers, the government and the court in this case resulted in an unprecedented settlement in record time. We are proud to have played a role in this benchmark litigation.”
Upon final court approval, consumers’ options and compensation will depend on whether their vehicles are classified as Generation One or Generation Two. The engine designs for each generation are different, with different prospects for emissions compliance. The cash payments in addition to these options are only available to those who participate in the class action settlement, which covers approximately 75,000 3.0-liter TDI vehicles.
- Generation One (Model Years 2009-2012): These vehicles – like 2.0-liter vehicles – cannot be repaired to be compliant with their originally certified emissions standards. Therefore, owners will have the option of a buyback, trade-in, or an Environmental Protection Agency (EPA)- and California Air Resource Board (CARB)-approved emissions modification plus substantial cash compensation ranging from $7,755 to $13,880. Lessees will also be eligible to have their lease terminated and receive cash compensation.
- Generation Two (Model Years 2013-2016): Government regulators believe these newer vehicles can be repaired to fully comply with the original emissions standards to which they were certified. If this is achieved and approved by the EPA and CARB, Generation Two owners will receive this repair plus substantial cash compensation ranging from $7,039 to $16,114. Lessees are also eligible for this repair plus cash payment. Consumers may choose to receive half this payment upfront, before any repair is approved, and the other half upon repair completion.
If the EPA and CARB do not approve an emissions compliant repair by deadlines set out in the class settlement agreement, a process will follow in which Class Counsel can ask the Court to order a buyback, or other remedies if the repair results in reduced performance as detailed in the settlement agreement.
Under the consumer agreements, Volkswagen will pay approximately $1.2 billion in combined compensation, assuming an Emissions Compliant Repair becomes timely available for all Generation Two vehicles. If such repairs do not become available by deadlines detailed in the settlement, Volkswagen has agreed to pay approximately $4.04 billion dollars. Under the related DOJ 3.0-Liter Consent Decree, Volkswagen will pay an additional $225 million to mitigate the environmental effects of excess NOx emissions.
“This agreement builds on the successes of the 2.0-liter settlement by providing substantial benefits to both consumers and the environment,” said Elizabeth Cabraser, Court-appointed Lead Counsel and chair of the 21 member Plaintiffs’ Steering Committee, which negotiated the settlement on behalf of class members. “We are another step closer to achieving our goal: providing consumers fair value for their vehicles, while repairing or removing illegally polluting vehicles from the road. We are appreciative of the guidance provided by Judge Breyer; the Settlement Master, former FBI Director Robert Mueller; and the efforts and cooperation of DOJ, EPA, FTC and CARB.”
A settlement resolving claims against Bosch was also filed with the court. Under this agreement, which includes 2.0-liter and 3.0-liter TDI owners and lessees, Bosch will pay $327.5 million. Typical 2.0-liter owners will each receive $350 and 3.0-liter owners will each receive $1,500 in addition to their Volkswagen settlement payments. For example, a combination of Bosch and 3.0-liter repair payments for Generation Two owners would range from $8,539 to $17,614; Generation One owners who choose a buyback would receive combined payments from $26,255 to $58,657. Class members will receive a separate notice about how to obtain the Bosch payments.
The settlements are subject to court approval. If preliminary approval is granted after a hearing currently scheduled for Feb. 14, 2017, class members will receive more information about the terms of the settlement. At that time, consumers can also visit www.VWCourtSettlement.com to enter their vehicle’s VIN to learn if they have an eligible vehicle and see their expected compensation amount. Additional information can also be found on the Court’s website: http://www.cand.uscourts.gov/crb/vwmdl.
Affected consumers do not need to take any action at this time. When and if the Court grants final approval, the claims process will open to eligible owners, lessees and post-September 18, 2015 sellers without delay from any appeals, and payments will commence shortly after. The ultimate deadline to file a claim will be December 31, 2019. For purposes of calculating buyback payments, under the settlement, vehicle value remains frozen as of September 18, 2015 (the date the emissions allegations became public), meaning its value generally will not depreciate while consumers go through the claims process.
In October 2016, VW settled similar claims affecting vehicles with 2.0-liter diesel engines, agreeing to pay out nearly $15 billion to affected vehicle owners, believed to be the largest automobile settlement in history.