Volkswagen Agrees to $157 Million Deal with Ten States

Donnett Hickson,
Legal Staff Writer

On March 30, 2017, Volkswagen AG (“VW”), Audi AG and Porsche AG agreed to pay $157.45 million in penalties as part of a deal with ten states to begin to resolve the emissions fraud scandal the company has engaged in since 2015. The deal will also resolve environmental claims and consumer protection claims that were excluded from previous settlements. In addition, VW and its subsidiaries agreed to make available at least three new electric car models, including two electric SUVs, by the year 2020.

Compared to the previous $603 million deal VW struck with 44 states, D.C. and Puerto Rico, the settlement is relatively small but has added to the overall cost of the VW emissions saga. For VW, the losses continue to pile up as they work to shorten their legal battles and earn back consumers’ trust, but for the plaintiffs involved, the victory goes beyond monetary gain. Major legal precedent is being established favoring the side of environmental protection. According to New York Attorney General Eric T. Schneiderman, the deal marks the first time in history states have won environmental penalties from an automaker under their state vehicle emission laws, and can now become “the first line of defense for the environment.”

The states’ claims against Volkswagen were consolidated into a multidistrict litigation, but now under the deal now many of the cases will be remanded back to state courts for settlement purposes while the settlement itself remains subject to approval. VW spoke on the deal as being a measure to avoid “further prolonged and costly litigation as Volkswagen continues to work to earn back the trust of its customers, regulators and the public.”

The MDL is In re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, case number 3:15-md-02672, in the U.S. District Court for the Northern District of California.

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