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Utah AG Reyes Announces State, Federal and Consumer Multi-Billion Settlement Agreements with Volkswagen

VW Required to Repurchase or Fix Falsely-Marketed Diesel Vehicles, Provide Billions of Dollars in Additional Restitution to States, Federal Government and Car Owners

SALT LAKE CITY June 28, 2016 – After months of intense negotiations, Attorney General Sean Reyes today announced a series of state and federal settlements that require Volkswagen AG and its related entities to make payments and take additional remedial action for consumers that will cost the automaker an estimated $15.2 billion nationwide. Today’s coordinated settlements resolve consumer protection claims raised by a multistate coalition of over forty state Attorneys General against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. They also resolve actions against Volkswagen brought by the United States Environmental Protection Agency (EPA) and Department of Justice (DOJ), the Federal Trade Commission (FTC), and car owners in private class action suits.

“As a state, we are extremely pleased with the result of these settlement agreements. While each settlement addressed a critical issue needing resolution, our foremost concern was making things right for consumers. We believe every Utahan who purchased a defective vehicle from Volkswagen will be justly compensated based on the negotiated  remedies. It remains a top priority of my office to see that we vigorously protect consumers and obtain justice if they are harmed by bad business practices or fraud,” said Attorney General Sean D. Reyes. “On a national level, collaboration between federal agencies, states and class action plaintiffs was crucial in this case.  On a local level, leadership from Governor Herbert was critical. Executive Director Francine Giani and the Utah Department of Commerce are the lead agency for civil consumer protection issues and they played a pivotal role in opting Utah into these monumental settlements. We also recognize Director Alan Matheson and the Utah Department of Environmental Quality as well as County and District Attorneys and Commissioners across our state for their support in this case.

“Once confirmed by the court, the first settlement of approximately $10 billion will require Volkswagen to pay each affected customer between $5,000 and $10,000 in restitution in addition to either fixing the car or buying it back at the pre-incident car value. This equates to a minimum statewide reimbursement of $40 to $80 million disbursed to 7,877 Utah car owners. The next settlement obligates Volkswagen to pay approximately $2.7 billion to an environmental fund for mitigation projects nationwide, including an estimated $32 million for Utah. Another requirement is that Volkswagen outlay an additional $2 billion for zero emission technology development. The final settlement for civil penalties dictates payments of over $1,000 per car, $500 million nationally and about $8 million to Utah. Both the $10 billion buyback and the $2.7 billion in environmental mitigation apply only to 2.0 liter vehicles. Negotiations are ongoing for a future settlement on 3.0 liter autos.”

“I commend Attorney General Sean Reyes and his office for their hard work in securing this momentous Volkswagen settlement on behalf of the Department of Commerce and the Department of Environmental Quality. Utah consumers who were deceived by Volkswagen’s deceptive diesel marketing and manufacturing will now receive monetary relief that they rightly deserve,” stated Governor Gary R. Herbert, “This settlement agreement with Volkswagen is a strong reminder that Utah is a great state for business, and that our state government continues to protect the rights of consumers, holding all industries to high standards.”https://ci6.googleusercontent.com/proxy/RnNZfQn2o2xpggJQqefCOervMbPIci5mujDPJnvl43kv6Rtxjyh5gHN_JKVzeU-aaGz3pePFgxfoAAtZJZNx8mveVTc-11j98EfuAJVcumUenA=s0-d-e1-ft#https://ssl.gstatic.com/ui/v1/icons/mail/images/cleardot.gif

The investigation by the state attorneys general confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with “defeat device” software intended to circumvent applicable emissions standards for certain air pollutants and actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as environmentally friendly or “green” and that the cars were compliant with federal and state emissions standards, when, in fact, Volkswagen knew the vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted.

Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015 listed in the chart below at a maximum cost of just over $10 billion. This includes 7,877 vehicles in Utah.

Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:

  • A buy back of the vehicle (based on pre-scandal NADA value); or

  • A modification to reduce NOx emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a fix. Owners who choose the modification option would also receive an Extended Emission Warranty; and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.

The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and sellers after September 18, 2015 when the emissions-cheating scandal was disclosed (50 percent of the restitution available to owners). Additional components of today’s settlements include:

  • Environmental Mitigation Fund: Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NOx. This fund, also subject to court approval, is intended to mitigate the total, lifetime excess NOx emissions from the 2.0-liter diesel vehicles identified below. Under the terms of the mitigation trust, Utah is eligible to receive $32,356,471.11 to fund mitigation projects.

  • Additional Payment to the States: In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer protection laws, amounting to $570 million nationwide.  This amount includes $8,664,700 paid for affected vehicles Volkswagen sold and leased in Utah.

  • Zero Emission Vehicles: Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or Zero Emission Vehicles (ZEV), and supporting infrastructure.

  • Preservation of Environmental Claims: Today’s settlement by state attorneys general preserves certain claims under state laws, and Utah and other entities maintain the right to seek additional relief from Volkswagen for its violations of applicable laws and regulations.

Volkswagen will also pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can utilize for future training and initiatives, including investigations concerning emissions violations, automobile compliance, and consumer protection.

The full details of the consumer program will be available online at VWCourtSettlement.com and www.ftc.gov/VWSettlement.

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2.0 Liter Diesel Models

Model Year

(MY)

EPA Test Group

Vehicle Make and Model(s)

2009

9VWXV02.035N

9VWXV02.0U5N

VW Jetta, VW Jetta Sportwagen

2010

AVWXV02.0U5N

VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3

2011

BVWXV02.0U5N

VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3

2012

CVWXV02.0U5N

VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3

2013

DVWXV02.0U5N

VW Beetle, VW Beetle Convertible, VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3

2014

EVWXV02.0U5N

VW Beetle, VW Beetle Convertible, VW Golf, VW Jetta, VW Jetta Sportwagen

2012

2013

2014

CVWXV02.0U4S DVWXV02.0U4S EVWXV02.0U4S

VW Passat

2015

FVGAV02.0VAL

VW Beetle, VW Beetle Convertible, VW Golf, VW Golf Sportwagen, VW Jetta, VW Passat, Audi A3

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