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December 4, 2018

Volkswagen Mitigation Plan will upgrade South Carolina to more environmentally friendly school buses

Eighty to 100 percent of the initial dollars provided to South Carolina by Volkswagen following settlement from the automaker’s “Clean Diesel” emissions scandal will help improve air quality and decrease NOx emissions throughout the state by funding upgrades to eligible 2009 and older modeled school buses and other forms of public transportation.

In total, South Carolina is allotted to receive $33,895,491.39 over the course of two years — roughly 1.16 percent of a $2.925 billion Environmental Mitigation Trust established by VW to compensate all 50 states, the District of Columbia, and Puerto Rico for environmental harm caused by its “defeat device” scheme that bypassed federal emissions standards. South Carolina can request up to a third of its total award over the course of the Trust’s first year, and up to two-thirds during the first two years.

Motley Rice co-founder Joe Rice, with the help of several of the firm’s other attorneys, served as one of the lead negotiators of the settlements stemming from civil litigation and reached with Volkswagen. The firm also advocated for use of the South Carolina portion of the settlement funds set aside for environmental abatement to be used in large part to replace as much as possible of the state’s aged school bus fleets.

“A primary goal of this litigation has always been to right the wrongs committed by Volkswagen against our environment, our air quality and consumers,” said Rice. “Thanks to the cooperation of all parties involved to bring about a swift resolution, we can now begin the important work of helping to reduce NOx emissions and improve air quality in the State of South Carolina and throughout the country.” 

A Beneficiary Mitigation Plan prepared by South Carolina’s Department of Insurance details the anticipated benefits of the funds, including:

  • Tons of NOx, GHGs, and other pollutants reduced over the lifetime of the replacement engines and/or vehicles
  • Net reduction in gallons of diesel fuel used
  • Improved ambient air quality and health in South Carolina’s communities
  • Reduced exposure of the public to diesel particulate matter

The majority of the funds awarded to South Carolina over the course of the Trust’s first year will be used to update eligible 2009 engine model year or older class 4-8 school, shuttle and mass transit buses by replacing older engines and/or scrapping the buses and replacing them with diesel, alternate fueled or all-electric vehicles that produce lower emissions. 

In addition, the state plans to use 0 to 10 percent of the initial funding to acquire, install, operate and maintain new light duty Zero Emission Vehicle (ZEV) supply equipment; 0 to 10 percent to consider any other eligible mitigation actions that aren’t already included in the plan; and up to 1 percent to cover administrative expenditures.   

VW Emissions Fraud Background

News broke in September 2015 that VW had installed a “defeat device” in more than 11 million vehicles worldwide — nearly 600,000 in the U.S. — that allowed the vehicles to bypass regulations by emitting lower emissions levels during official tests than they would on the road.

In November 2015, the EPA accused VW of violating federal emissions standards  as defined by the Clean Air Act. Volkswagen AG pleaded guilty to federal conspiracy and other charges in violation of the Clean Air Act in January 2017, and agreed to pay $4.3 billion in penalties.

In addition, VW has agreed to pay a nearly $15 billion class action settlement for to owners and lessees of impacted 2.0-liter vehicles, the largest auto-related consumer class action settlement in U.S. history. A separate multi-billion settlement was also reached with regards to 3.0-liter vehicles.

Motley Rice represents the class of owners and lessees in the litigation and played a leading role in negotiating both settlements through the firm’s positions on the Plaintiffs’ Steering Committee’s negotiating and financial committees.

For more information, read the Beneficiary Mitigation Plan for the State of South Carolina.