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June 28, 2016

Volkswagen “Clean Diesel” Class Settlement Details released for impacted 2.0 liter vehicles

by: Joseph F. Rice

Nearly nine months after news broke that Volkswagen had programmed more than 11 million vehicles worldwide, including approximately 482,000 vehicles in the U.S., to cheat environmental standards by emitting lower emissions in official tests than in real-world use, the first settlement for impacted owners has been proposed. Filed today with U.S. District Court Judge Charles R. Breyer of the Northern District of California, the proposed settlement details the compensation process for people who owned or leased a Volkswagen or Audi 2.0-liter TDI vehicle from Sept. 18, 2015 to today. This is the largest auto-related consumer class action settlement in U.S. history.

As one of the lead negotiators of the proposed settlement for private consumers on behalf of the Plaintiffs’ Steering Committee (PSC), I worked closely with fellow attorney and PSC chair Elizabeth Cabraser and other members of the PSC, Volkswagen AG, the U.S. government, including attorneys from the Department of Justice, the Environmental Protection Agency, the Federal Trade Commission, and the California Air Resources Board to reach today’s proposed settlement.

Volkswagen consumers were duped into believing their vehicle was a “clean” and environmentally-friendly diesel that provided great performance that proudly dedicated their lives to being green and living sustainably. The majority purchased or leased these vehicles specifically because they were led to believe they were ‘clean diesel’ and not harmful to the environment. To learn the opposite and that they were driving a polluting machine was inexcusable. However, unlike many consumer fraud situations, including the current dangerous Takata airbag recall that affects 1 in 5 cars on the road, VW realized that it made flawed decisions. At a time when we are seeing record-breaking volumes of vehicle recalls, all manufacturers and suppliers should be taking ownership of mistakes and working as diligently as possible to fix them.

This proposed settlement offers eligible owners, eligible sellers and eligible lessees the option of a buyback, to have their car fixed or time to wait and see what is going to be best for them in the long-run. The below shows the step-by-step process for the vehicle buyback option and the emissions modification option:

Vehicle Buyback

Download Vehicle Buyback PDF

Emissions Modification

Download Emissions Modification PDF

Volkswagen has also agreed to two significant environmental restitution provisions in this proposal. First, it will pay $2.7 billion into a trust with the purpose of supporting environmental programs through the country that will reduce NOx in the atmosphere by an amount equal to or greater than the combine excess NOx pollution caused by the cars that are the subject of this lawsuit. Second, VW will spend $2 billion to develop additional, new, clean technology on top of what it had already allocated towards new clean technology.

Rule number one of litigating mass torts is to keep them just, speedy and inexpensive. After serving as lead negotiator in some of the largest civil actions our courts have seen in the last 23 years, including the Master Tobacco Settlement Agreement and the BP Deepwater Horizon Business Economic Loss Settlement, I am honored to be part of the team that was able to achieve a proposed settlement of this magnitude and significance in this litigation.  The extremely complicated engineering issues involving a foreign corporation, a half million vehicles in the U.S. and the multiple adversely impacted parties including consumers, the EPA, CARB, the FTC and states added to the complexity.

While VW has not detailed the fix at this time, included in this proposed settlement is a 12-month schedule in which it may propose a modification. If the modification is not approved by the Court and the EPA, then VW must buy back the vehicles.

The proposed settlement does not apply to 3.0 liter vehicles as remedies are still being discussed. Additionally, Volkswagen still faces criminal charges from the Department of Justice for violating the Clean Air Act and state imposed fines and penalties.

Impacted owners will receive information in the mail about the settlement after July 26, 2016. For more information, including the full settlement program filing, visit http://www.vwcourtsettlement.com/.