Volkswagen, Audi, Porsche 3.0-Liter Settlements to Compensate Consumers, Protect Environment and Hold VW Accountable for Emissions Conduct
Class and government settlements provide substantial cash payments to fully compensate owners and lessees, ensure vehicles no longer illegally pollute environment
San Francisco, CA—Settlement agreements were filed today by the consumer plaintiffs and the Federal Trade Commission in the Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation that, if approved, will provide owners and lessees of Volkswagen, Audi and Porsche 3.0-liter diesel vehicles substantial cash compensation in addition to buybacks, trade-ins, government-approved emissions modifications or compliant repairs, depending on the generation of vehicle. The proposed settlements were filed in the Northern District of California as part of the multidistrict litigation currently overseen by Judge Charles R. Breyer.
Upon final court approval, consumers’ options and compensation will depend on whether their vehicles are classified as Generation One or Generation Two. The engine designs for each generation are different, with different prospects for emissions compliance. The cash payments in addition to these options are only available to those who participate in the class action settlement, which covers approximately 75,000 3.0-liter TDI vehicles.
Generation One (Model Years 2009-2012): These vehicles – like 2.0-liter vehicles – cannot be repaired to be compliant with their originally certified emissions standards. Therefore, owners will have the option of a buyback, trade-in, or an EPA- and CARB-approved emissions modification plus substantial cash compensation ranging from $7,755 to $13,880. Lessees will also be eligible to have their lease terminated and receive cash compensation.
Generation Two (Model Years 2013-2016): Government regulators believe these newer vehicles can be repaired to fully comply with the original emissions standards to which they were certified. If this is achieved and approved by the EPA and CARB, Generation Two owners will receive this repair plus substantial cash compensation ranging from $7,039 to $16,114. Lessees are also eligible for this repair plus cash payment. Consumers may choose to receive half this payment upfront, before any repair is approved, and the other half upon repair completion.
If the EPA and CARB do not approve an emissions compliant repair by deadlines set out in the class settlement agreement, a process (described below) will follow in which Class Counsel can ask the Court to order a buyback, or other remedies if the repair results in reduced performance as detailed in the settlement agreement.
Under the consumer agreements, Volkswagen will pay approximately $1.2 billion in combined compensation, assuming an Emissions Compliant Repair becomes timely available for all Generation Two vehicles. If such repairs do not become available by deadlines detailed in the settlement, Volkswagen has agreed to pay approximately $4.04 billion dollars. Under the related DOJ 3.0-Liter Consent Decree, Volkswagen will pay an additional $225 million to mitigate the environmental effects of excess NOx emissions.
“This agreement builds on the successes of the 2.0-liter settlement by providing substantial benefits to both consumers and the environment,” said Elizabeth Cabraser, Court-appointed Lead Counsel and chair of the 21 member Plaintiffs’ Steering Committee, which negotiated the settlement on behalf of class members. “We are another step closer to achieving our goal: providing consumers fair value for their vehicles, while repairing or removing illegally polluting vehicles from the road. We are appreciative of the guidance provided by Judge Breyer; the Settlement Master, former FBI Director Robert Mueller; and the efforts and cooperation of DOJ, EPA, FTC and CARB.”
A settlement resolving claims against Bosch was also filed today with the court. Under this agreement, which includes 2.0-liter and 3.0-liter TDI owners and lessees, Bosch will pay $327.5 million. Typical 2.0-liter owners will each receive $350 and 3.0-liter owners will each receive $1,500 in addition to their Volkswagen settlement payments. For example, a combination of Bosch and 3.0-liter repair payments for Generation Two owners would range from $8,539 to $17,614; Generation One owners who choose a buyback would receive combined payments from $26,255 to $58,657. Class members will receive a separate notice about how to obtain the Bosch payments.
The settlements are subject to Court approval. If preliminary approval is granted after a hearing currently scheduled for February 14, 2017, class members will receive more information about the terms of the settlement. At that time, consumers can also visit www.VWCourtSettlement.com to enter their vehicle’s VIN to learn if they have an eligible vehicle and see their expected compensation amount. Additional information can also be found on the Court’s website: http://www.cand.uscourts.gov/crb/vwmdl.
Affected consumers do not need to take any action at this time. When and if the Court grants final approval, the claims process will open to eligible owners, lessees and post-September 18, 2015 sellers without delay from any appeals, and payments will commence shortly after. The ultimate deadline to file a claim will be December 31, 2019. For purposes of calculating buyback payments, under the settlement, vehicle value remains frozen as of September 18, 2015 (the date the emissions allegations became public), meaning its value generally will not depreciate while consumers go through the claims process.
Generation One Vehicles (2009-2012 Volkswagen Touareg and Audi Q7 3.0-liter TDI diesel engine vehicles)
The agreement will compensate those who currently own or lease an eligible Generation One vehicle, or sold their vehicle after September 18, 2015 or November 2, 2015 (the date the emissions allegations became public and the date the allegations specific to 3.0-liter vehicles became public, respectively). No matter the option they choose, eligible owners will also receive cash compensation in addition to the value of a buyback, trade-in or approved modification in an amount ranging from $7,755 to $13,880. Lessees will also be eligible to have their lease terminated and receive cash compensation. The Bosch compensation will increase these figures as well.
Eligible owners who choose the buyback program will receive a payment equal to the September 2015 National Automobile Dealers Association (“NADA”) Clean Trade-In value of the car (the vehicle value before the emissions conduct became public), adjusted for their options and mileage. This equals a total payment ranging from $24,755 to $57,157.
If owners prefer, they will instead have the option of receiving a trade-in credit equal to the buyback amount to purchase a new or used vehicle at a Volkswagen or Audi dealership. If the purchase is less than the trade-in credit, the consumer will receive the balance.
Approved Emissions Modification
If owners and lessees prefer, they can wait and see whether an emissions modification is approved by EPA and CARB for their vehicles. If an EPA- and CARB-approved emissions modification becomes available, Volkswagen will modify their non-compliant 3.0-liter vehicle free of charge. If a modification is not approved for a certain vehicle, the buyback program will still be available, or a class member can withdraw from the settlement. Volkswagen and Audi have a final deadline of November 10, 2017 to submit proposed emissions modifications of Generation One vehicles to regulators.
Generation Two Vehicles (2013-2016 Volkswagen Touareg; 2013-2015 Audi Q7; 2014-2016 Audi A6, A7, A8, A8L and Q5; and, 2013-2016 Porsche Cayenne 3.0-liter TDI vehicles)
Unlike Generation One vehicles, government regulators are providing Volkswagen an opportunity to repair these newer vehicles to fully comply with the original emissions standards to which they were certified. The class settlement imposes a set of deadlines, or “Decision Dates,” by which the regulators must have approved the repairs for these vehicles – October 23, November 8 and December 20, 2017 for the three groups of Generation Two vehicles described in the settlement. With these repairs, eligible owners will also receive additional cash compensation ranging from $7,039 to $16,114. Lessees are also eligible for these repairs, plus cash payment. Consumers may choose to receive half their cash payment as soon as the Court grants final approval, and the other half upon repair completion.
If the EPA and CARB have not made a final decision on a vehicle group by the applicable Decision Date, Class Counsel will ask the Court under an expedited procedure to order a buyback. The Court can extend a Decision Date if there is good cause to do so. If the Court does not extend a Decision Date, then Volkswagen can extend the date for up to 90 days total, in exchange for an Extension Payment of $500 per 30-day extension for each vehicle. After that, a buyback will occur if a repair is still not approved. During this period, a Class Bridge Warranty covers vehicles whose warranties would otherwise expire. Total buyback payments for all Generation Two owners would be $43,153 to $99,862. The Bosch compensation will increase these figures as well.
Volkswagen represents that these emissions compliant repairs will not affect important performance attributes of these vehicles (mileage, torque and peak horsepower), and Volkswagen will be required to make an additional payment of $500 per affected vehicle if an approved repair results in reduced performance in any of these attributes, as required to be reported to the EPA and CARB. Class Counsel could also seek additional remedies if this reduced performance exceeded levels detailed in the settlement agreement.
Additional benefits to both Generation One and Generation Two class members include one free AdBlue refill and oil change for their eligible vehicle while awaiting an emissions modification or repair, buyback, trade-in, or lease termination; refunds of unused portions of extended warranties and service plans; loaner cars while their vehicles are being modified or repaired; and for Class Members who get a buyback, forgiveness of auto loan balances to the extent these exceed their buyback amount.