Central New Yorkers who bought diesel vehicles from Volkswagen learned 10 months ago that the company cheated on their emissions testing. Volkswagen may now be facing criminal charges and major environmental fines. New York state attorney General Eric Schneiderman will be handling the ongoing investigation.
The $14.7 billion dollar partial settlement is likely only the beginning for Volkswagen and its affiliates Audi and Porsche, who will now be paying state penalties for environmental and consumer fraud. More than 25,000 New York motorists have been driving the affected vehicles, and Attorney General Eric Schneiderman is making sure consumers will be fully compensated for their cars.
" Car owners will be able to sell their cars back to Volkswagen at the price they were worth before the emissions scandal broke," Schneiderman said. "Plus, they will get at least $5,000 on top of that. And as an alternative Volkswagen is able to modify its emissions systems back to a level approved by the EPA, car owners will have the option of keeping their cars and demanding that VW modify the emissions system and still receive at least $5,000 in cash compensation."
In return, Schneiderman says New York will receive $30 million dollars for the deception and an additional $117 million for environmental projects to improve New York’s air quality.
"That fund is going to help pay for diesel emission engine replacements, retro-fit projects or other measures to reduce harmful emissions and improve the quality of our air here in NY and really all across the country," Schneiderman said. "That means that New York State can pay to replace old diesel engines in our garbage trucks, school buses or update obsolete machinery in our ports and tugboats."
?Schneiderman calls Tuesday's settlement an important step forward, but says it is not the end and New York will continue to seek legal action.
Tuesday's settlement against Volkswagen includes the following:
- Volkswagen is required to repurchase or modify all of the more than 487,000 2.0 liter engine diesel vehicles that Volkswagen and Audi falsely marketed in the United States as compliant with federal and state emissions standards, when in fact they emitted harmful NOx pollutants at rates many times higher than the law permitted. As part of the settlement, a VW and Audi 2.0 liter engine diesel car owner can sell the car back to VW at the pre-scandal fair market value, or wait to see if VW and Audi develop acceptable emissions fixes; whether cars are sold back to Volkswagen or fixed, the car owner will also receive a cash payment of at least $5,100 over and above the market value of the car. Under this agreement, which is subject to the approval of the federal court presiding over the class action litigation and the FTC and EPA’s lawsuits, Volkswagen is to set aside up to $10 billion to address car owner claims. The current settlement does not address the relief to be received by owners of the 6-cylinder, 3.0 liter engine diesel SUVs and luxury sedans sold in the U.S. by VW, Audi and Porsche; the resolution of those claims awaits further engineering studies and negotiations with Volkswagen.
- Volkswagen will pay about $1,100 per car directly to the states for the companies’ repeated violations of the states’ and other jurisdictions’ laws prohibiting unfair and deceptive marketing and trade practices. This agreement, which Attorney General Schneiderman’s office secured together with the attorneys general of five other states on behalf of a coalition in which over 40 states participated, will generate over $500 million in nationwide payments by Volkswagen, including over $30 million in penalties going to the State of New York.
- Volkswagen will fund of a $2.7 billion Mitigation Fund. This Fund, which also is subject to court approval, is to be used by all states, the District of Columbia and Puerto Rico to address the harm caused to the environment by Volkswagen’s unlawful diesel vehicles. States will be able to spend money from the Mitigation Fund to pay for diesel engine replacement and retrofit projects and other measures that will reduce NOx and other harmful emissions from numerous different sources. Approximately $117 million of these monies will be administered by New York’s Department of Environmental Conservation for air quality improvement programs in New York.
- Volkswagen’s commitment to invest $2 billion in the United States over the next 10 years for the development of Zero Emission Vehicles (ZEV, that is, electric) and supporting infrastructure. $800 million of these monies are to be spent in California and the balance, or $1.2 billion, for ZEVs and ZEV infrastructure in the rest of the country.
- Volkswagen also will pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can draw from in future consumer fraud investigations, including of possible violations by automobile manufacturers
More information about the agreement is at www.vwcourtsettlement.com