By Brandon Moseley
Alabama Political Reporter
Tuesday, June 28, Attorney General Luther Strange (R) announced that Alabama is participating in an interrelated series of settlements with Volkswagen AG and its Audi and Porsche affiliates arising from Volkswagen’s violations of state consumer protection laws and emissions standards.
In two related settlements, one with the United States and the State of California, and one with the US Federal Trade Commission (FTC), German automaker Volkswagen AG and related entities have agreed to spend up to $14.7 billion to settle allegations of cheating emissions tests and deceiving customers.
AG Strange said that, “as part of the settlements, some of which are still subject to court approval, Alabama owners of certain 2.0 liter, 4-cylinder engine VW and Audi diesel cars purchased between 2009 and 2015 will be entitled to be paid full, pre-scandal fair market value for their vehicle, in addition to a cash payment of at least $5,100. Under the deal, affected car owners may also choose to keep their vehicle and wait to see if VW and Audi develop acceptable emissions fixes. Car owners who exercise this option will also receive a cash payment of at least $5,100.”
Alabama was part of a coalition of 43 states that raised claims against the deceptive vehicles sold by Volkswagen.
According to the state attorneys general’s investigation confirmed that Volkswagen equipped more than one-half million diesel vehicles sold in the United States with “defeat device” software intended to circumvent applicable emissions standards for certain air pollutants and actively concealed the existence of the defeat device software from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as environmentally friendly—or “green”—when in fact, Volkswagen knew the vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted.
Strange said, “Today’s settlement will compensate consumers and require Volkswagen to make appropriate repairs to vehicles, as well as providing environmental restitution. It also holds Volkswagen to account for its wrongdoing and sends a strong warning to others that such deception will not be tolerated.”
“The principal components of today’s sweeping settlements include:
•Volkswagen is required to repurchase or modify each of the 4,385 2.0 liter diesel vehicles that Volkswagen and its affiliates falsely marketed and sold in Alabama. 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.”
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.
Volkswagen will also: pay $2.7 billion into an Environmental Mitigation Fund to address the harm caused to the environment by Volkswagen’s unlawful diesel vehicles; invest $2 billion in the United States over the next 10 years for the development of Zero Emission Vehicles and supporting infrastructure; and pay more than $570 million directly to the States for the companies’ repeated violations of the states’ and other jurisdictions’ laws prohibiting unfair and deceptive marketing and trade practices; 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 possible violations by automobile manufacturers.
Alabama and the other states maintain the right to seek penalties for Volkswagen’s violations of state environmental laws, such as Alabama’s law against tampering with a vehicle’s emissions system.
To determine if your Volkswagen or Audi vehicle is eligible for the settlement, please visit www.VWCourtSettlement.com and enter you VIN number.
US Deputy Attorney General Sally Q Yates said in the Department of Justice statement, “By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our environment. This partial settlement marks a significant first step towards holding Volkswagen accountable for what was a breach of its legal duties and a breach of the public’s trust. And while this announcement is an important step forward, let me be clear, it is by no means the last. We will continue to follow the facts wherever they go.”
US Environmental Protection Agency (EPA) Administrator Gina McCarthy said, “Today’s settlement restores clean air protections that Volkswagen so blatantly violated, and it secures billions of dollars in investments to make our air and our auto industry even cleaner for generations of Americans to come. This agreement shows that EPA is committed to upholding standards to protect public health, enforce the law, and to find innovative ways to protect clean air.”
According to DOJ, “Buyback option: Volkswagen must offer to buy back any affected 2.0 liter vehicle at their retail value as of September 2015 — just prior to the public disclosure of the emissions issue. Consumers who choose the buyback option will receive between $12,500 and $44,000, depending on their car’s model, year, mileage, and trim of the car, as well as the region of the country where it was purchased. In addition, because a straight buyback will not fully compensate consumers who owe more than their car is worth due to rapid depreciation, the FTC order provides these consumers with an option to have their loans forgiven by Volkswagen. Consumers who have third party loans have the option of having Volkswagen pay off those loans, up to 130 percent of the amount a consumer would be entitled to under the buyback (e.g., if the consumer is entitled to a $20,000 buyback, VW would pay off his/her loans up to a cap of $26,000).”