In a Feb. 1 settlement, German automaker Volkswagen agreed to fully compensate American consumers who purchased 3.0-liter diesel engine vehicles equipped with the company’s rigged “clean diesel” emissions testing devices. The company may have to pay as much as $4 billion to cheated customers.
Under the federal court order, the company will make reparations to customers in the form of buybacks with additional compensation or payment for repairs that would bring the vehicles into compliance with environmental protection laws.
Owners of VW Touareg and Audi Q7 cars from 2009-2012 will be eligible for a buyback ranging from about $26,000 to $58,000. They may alternatively opt for smaller compensations and receive modifications on their cars that would reduce the vehicle’s nitrous oxide emissions, assuming the Environmental Protection Agency and California Air Resources Board approve such repairs, which are not currently available. If no emissions repair is approved, the company will have to offer buybacks for every car. Former owners will also be entitled to some reimbursement, approximately $4,500 to $7,700, depending on the make and model.
Customers who purchased certain newer-generation VW, Audi, and Porsche models from 2013-2016 (a complete list of which is available here) are expected to receive repairs to bring the cars into compliance, plus additional monetary compensation ranging from approximately $8,500 to $17,600. The Federal Trade Commission explained in its release that consumers will effectively “receive the car they thought they purchased – plus a substantial additional payment.”
This is yet another settlement Volkswagen has reached following revelations that certain vehicles’ diesel engines were equipped with a “defeat device” that was designed to cheat emissions tests – in effect, defrauding customers and deceiving regulators.
The automaker had previously agreed to a $15 billion settlement over its smaller 2.0-liter diesel engine cars. In January, following a Department of Justice investigation, the company plead guilty to three criminal felony counts, agreeing to pay $2.8 billion in criminal penalties and an additional $1.5 billion to settle civil claims. The AP reported that the company will have spent at least $20 billion in total to settle criminal and civil complaints in the United States.
Seeger Weiss partner Christopher Seeger was appointed to the Plaintiffs’ Steering Committee and serves on the Settlement Committee in the Volkswagen multidistrict litigation.