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January 24, 2019

Proposed settlement deal reached with Fiat Chrysler to resolve emissions litigation

Fiat Chrysler Automobiles (FCA) has agreed to resolve allegations that it installed software to cheat emissions tests in certain diesel vehicles for model years 2014 to 2016. The U.S. Department of Justice, the Environmental Protection Agency, and the State of California on Jan. 10, 2019 announced nearly $400 million in civil penalties and other proposed settlement terms with FCA.  FCA also agreed to resolve claims brought by consumers by paying owners and lessees of the diesel vehicles up to $280 million and providing extended warranties worth more than $100 million.

Under the proposed consumer settlement, U.S. consumers who owned or leased an affected vehicle between Jan. 12, 2017 and the to-be-determined claims submission deadline would be offered a cash payment and a vehicle repair consisting of a software update. The proposed settlement would also resolve consumer claims against Robert Bosch GmbH (Bosch), which supplied the emissions control software for the vehicles. Under the proposed settlement with FCA and Bosch, most owners would receive a payment of $3,075, while lessees would receive $990.

The proposed settlement deal was presented before the U.S. District Court for the Northern District of California on January 23 for preliminary approval. A final approval hearing is scheduled for May 3.

The EPA first raised allegations against Fiat Chrysler on Jan. 12, 2017, accusing the auto-manufacturer of violating federal law by installing defeat software in its 2014-2016 “EcoDiesel” Jeep Grand Cherokees and Dodge Ram 1500 vehicles to bypass federal emissions regulations. Roughly 104,000 vehicles are believed to be affected.

Under the proposed settlement with the DOJ and the EPA, FCA would:

  • Implement a recall program to repair more than 100,000 noncompliant diesel vehicles sold or leased in the U.S.
  • Offer an extended warranty on repaired vehicles
  • Pay a civil penalty of $305 million to settle claims of cheating emission testing and failing to disclose unlawful defeat devices
  • Implement a program to mitigate excess pollution from these vehicles

FCA also would pay an additional $19 million to the State of California to mitigate excess emissions from more than 13,000 noncompliant vehicles in the state.

Separately, in a proposed settlement with the U.S. Customs and Border Protection, FCA would pay a civil penalty of $6 million to resolve allegations of illegally importing 1,700 noncompliant vehicles.

For more information on the settlement, visit www.EcoDieselSettlement.com.

Motley Rice co-founder Joe Rice served as a member of the Plaintiffs’ Steering Committee for the litigation filed against Fiat Chrysler, In re Chrysler-Dodge-Jeep EcoDiesel Marketing, Sales Practice and Products Liability Litigation, and played a leading role in negotiating the settlement for owners and lessees of the vehicles. The litigation followed similar allegations made against Volkswagen in 2015 that led to the nearly $15 billion “Clean Diesel” settlement reached for owners and lessees of 2.0-liter TDI vehicles, and a multi-billion settlement reached for owners and lessees of 3.0-Audi, Porsche and VW TDI vehicles. Joe Rice was also a member of the PSC and played a leading role in negotiating both consumer settlements in that litigation.