Federal Judge Approves Nearly $15 Billion Settlement with Volkswagen

Federal Judge Approves Nearly $15 Billion Settlement with Volkswagen

On October 25, 2016, United States District Judge Charles Breyer approved a record-setting $14.7 billion settlement with regulators and owners of 475,000 Volkswagens and Audis with 2.0 liter diesel engines.

In September 2015, Volkswagen admitted to installing secret software in its diesel vehicles to cheat exhaust emissions tests and make them appear cleaner than they really were.

Minami Tamaki filed several lawsuits on behalf of 23 owners of affected vehicles in 2015, and has worked over the last year with chief lead counsel for vehicle owners in prosecuting their civil claims.

This agreement represents the largest civil settlement ever reached with an automaker over allegations of misconduct and fraud toward vehicle owners.  The agreement is also notable in that the parties reached agreement on comprehensive settlement terms within one year, bringing a swift resolution to claims by hundreds of thousands of class members.

Owners of vehicles equipped with the so-called “defeat devices” will be offered $5,100 to $10,000 each in compensation along with the option of a buyback or a fix. Owners who choose the buyback option will receive their cars’ trade-in value as of September, 2015, just before VW admitted to the emissions cheating.

“The settlement is fair, reasonable and adequate,” Judge Breyer wrote in his order. The order states that nearly 340,000 owners of 2.0 liter diesels have registered for the settlement.

The settlement requires Volkswagen to spend up to $10.033 billion on the buybacks and owner compensation. Under the settlement, Volkswagen must remove 85 percent of affected vehicles from the road by June 30, 2019.  If it fails to do that, it will have to pay an additional $85 million into the environmental mitigation trust for each percentage point of the shortfall.  Volkswagen must also pay an additional $13.5 million into the trust for each percentage point it falls below the 85 percent target in California.

Volkswagen agreed to spend $4.7 billion on programs to offset excess emissions and boost zero-emission vehicle infrastructure and other clean vehicle projects. Volkswagen must provide $2 billion over 10 years to fund programs to promote construction of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum. Volkswagen must pay up $2.7 billion over three years to enable government agencies and agencies on Native American tribal lands to replace old buses or to fund infrastructure to reduce diesel emissions, and to award states about $600 million.

The settlement releases the legal claims of most 2.0 liter VW and Audi owners, but VW continues to face claims related to its larger, more complex 3.0 liter six-cylinder diesel vehicles, where no settlement has been reached.

Minami Tamaki’s Consumer & Employee Rights Group litigates class actions and individual cases on behalf of consumers, investors, and employees who have been harmed by illegal or unfair business or employment practices. Minami Tamaki attorneys have a sterling record of success representing tens of thousands of individuals in class action and individual cases. We have recovered tens of millions of dollars for our clients. Learn more at http://www.minamitamaki.com//cerg.

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