VW Judge Says He'll Approve 3-Liter Diesel Cheating Accord

  • Carmaker may spend more than $24.5 billion to resolve scandal
  • Company lawyer tells judge U.S. accord is important milestone

A U.S. judge said he intends to give final approval to Volkswagen AG’s $1.225 billion settlement with regulators and about 78,000 drivers of premium Audis, VWs and Porsches over the company’s diesel cheating-scandal.

All told, VW is committed to spending upwards of $24.5 billion in North America to settle lawsuits and buy back or repair some 560,000 vehicles armed with algorithms intentionally installed to trick emissions tests. The accord presented Thursday for sign-off by U.S. District Judge Charles Breyer in San Francisco includes an additional $327.5 million that covers claims against technology provider Robert Bosch GmbH.

The agreement requires VW to compensate owners of 3-liter diesel engine vehicles, fix about 58,000 cars and buy back as many as 20,000 Touareg and Audi Q7 sport-utility vehicles. While the carmaker is on the brink of resolving the vast majority of consumer and government agency claims against it in the U.S., the company still faces criminal investigations and investor cases in Germany, the U.K. and elsewhere.

VW admitted in September 2015 that about 11 million diesel cars worldwide were outfitted with so-called defeat devices, embedded algorithms used to game emissions tests.
Owners of unfixable cars will be eligible for cash compensation of as much as $13,880 in addition to a buyback, according to a statement from the plaintiffs’ lawyers. Drivers with vehicles that can be brought up to standard could receive as much as $16,114.

In April, a federal judge in Detroit approved VW’s agreement to pay a $4.3 billion penalty for misleading U.S. regulators and customers. That includes $1.5 billion in civil penalties issued by the federal government and a guilty plea for conspiring to defraud regulators, obstruction of justice and making false statements.

Breyer said at a hearing Thursday he intends to issue a written order finalizing the three-liter settlement by May 17.

Robert Giuffra, an attorney for VW, told the judge the deal is “an important milestone.”

“It would mean the company has reached a resolution for every single affected diesel car in the United States,” he said.

Elizabeth Cabraser, the lead attorney for consumers, said in a statement that the “agreements accomplish our goal of making the consumers harmed by Volkswagen’s emissions deception whole, while repairing or removing illegally polluting vehicles from our roads.”

The case is In Re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, 15-02672, U.S. District Court, Northern District of California (San Francisco).

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