A federal judge in San Francisco approved a $307.5 million settlement resolving claims that Fiat Chrysler Automobiles illegally equipped about 100,000 diesel vehicles with software that allowed them to cheat emissions tests.
“This settlement is inclusive in its reach and swift in its process,” said Dee Miles, appointed trial counsel for the Plaintiffs’ Steering Committee (PSC). “We had a great benefit on this PSC in that most of our team members had worked on the VW emissions class, which gave us a huge advantage in moving this case along expeditiously.”
The agreement, which the automaker struck in January with the U.S. government, the state of California, and the owners and lessees of certain model year 2014-2016 “EcoDiesel” Jeep Grand Cherokees and Dodge Ram 1500 pick-up trucks, clears the path for payment on claims and repairs to fix the software cheat.
Robert Bocsh GmbH, the German supplier that provided the emissions control software to Fiat Chrysler, will pay $27.5 million of the settlement agreement.
Most owners of the affected vehicles will receive full-compensation payments of $3,075 under the terms of the agreement to make up for the unlawful emissions controls, while lease holders are entitled to $990. In cases where there is more than one owner of the vehicle, partial owners will receive $2,460.
Vehicle owners will have 21 months to submit a claim, and two years to complete the repair and receive compensation. Fiat Chrysler will update the emissions control software in the vehicles free of charge.
In addition to cash compensation, class members will receive extended warranty benefits up 10 years or 120,000 miles (whichever comes first) on the emissions modifications, which are worth an additional $239.5 million.
The automaker estimates the total value of its settlements related to the emissions cheat will cost about $800 million.
“I’m anxious to get this on the road, so to speak, and get this fix done, because that’s in the best interest of the consumers and the public,” Judge Edward Chen said of the settlement during a hearing in San Francisco.
Fiat Chrysler is also on the hook for $311 in total civil penalties to the U.S. and California for environmental regulatory violations and $72.5 million in civil penalties for each of the 50 states.
The costly penalty comes amid the U.S. government’s ramped-up oversight and enforcement of vehicle emissions rules after German automaker Volkswagen AG admitted in Sept. 2015 that it had outfitted its diesel-powered vehicles with software designed to cheat emissions testing.
The auxiliary emission control devices (AECDs), which are often called “defeat devices” or “cheat devices,” keep nitrogen oxide emissions levels within the legal limits during emissions testing by using software to recognize testing patterns. During normal driving, however, the AECD shuts off emissions controls, allowing the vehicle to spew illegal amounts of air pollutants.
The related federal criminal investigation of Fiat Chrysler is ongoing.