Last week, U.S. Senior District Judge Charles Breyer accepted a historical class action settlement between the Federal Trade Commission and the world’s second-largest automaker, Volkswagen.
This summer, VW agreed to pay close to $15 billion in settlement fees. Of that amount, $10 billion will be paid to consumers (who own or leased affected 2.0-liter VW models), and $4.7 billion will be paid towards environmental restitution. Judge Breyer said the settlement “adequately and fairly compensates” consumers and, "given the risks of prolonged litigation, the immediate settlement of this matter is far preferable."
In late 2015, Volkswagen admitted to installing secret software on their 2.0 and 3.0-liter models to increase gas mileage and to cheat emission tests. Consumers who purchased or leased a VW 2.0-liter diesel Beetle, Golf, Jetta, Passat, and Audi A3 automobiles under the guise of a “cleaner fuel” automobile bought vehicles that emit pollution up to 40 times the amount of legal pollution levels. The 3.0-liter models emit up to 9 times the legal levels.
Cynthia Giles with the US Environmental Protection Agency stated, "Today is a landmark day, when this innovative settlement can be put into action, investing billions of dollars into public health protections to remedy these serious violations."
Under the settlement, consumers who own or lease the effected 2.0-liter automobiles, have three options available: VW will buyback the vehicle, the lease can terminated, or the vehicle can be fitted with an approved emissions modification. Consumers have until September 1, 2018, to submit a claim. The FTC breaks down the options and claims process. For more information click here.
Volkswagen CEO Matthias Mueller called the settlement, “an important milestone for us on the way towards clearing up the problem that we caused some time ago." The historic settlement does not address the VW 3.0-liter diesel models. The automaker faces billions more in costs to address the estimated 85,000 3.0-liter diesel Porsche, Audi and Volkswagen models that also contain the secret software. Volkswagen must update the court on November 3, with a status of the plan for the 3.0-liter models.
Advocate Capital, Inc. is proud to support the work of plaintiff trial attorneys as they hold big corporations like Volkswagen accountable. We will continue to follow this story and blog about this historic class action settlement.
Executive Client Manager
Photo Credit: Arsenie Krasnevsky