Attorney General Steve Marshall joined other attorneys general across the country Monday in announcing a $149 million settlement with Mercedes-Benz USA and Mercedes-Benz Group AG over emissions fraud.
Mercedes-Benz USA and Mercedes-Benz Group AG were found to violate state laws by utilizing deceptive trade practices. The company had been marketing, selling, and leasing vehicles equipped with emissions defeat devices to circumvent emission standards. These devices optimized emission controls during tests, while the car actually emitted nitrogen oxides far above the legal limits.
State attorneys general allege that from 2008 through 2016, Mercedes distributed 211,000 diesel passenger cars and vans with this emissions defeat software. Mercedes marketed these vehicles as “environmentally friendly” and achieved standardized design and performance goals.
“This settlement sends a clear message to consumers: they deserve honesty, and deceptive marketing won’t be tolerated,” said Marshall.
The settlement requires Mercedes-Benz USA and Mercedes-Benz Group AG to pay $120 million to the states once the settlement takes effect. An additional $29.7 million is suspended and could be waived if the company completes a comprehensive consumer relief program.
That program applies to an estimated 39,565 vehicles nationwide, including nearly 12,000 affected vehicles identified in Alabama, that had not been repaired or permanently removed from the road as of Aug. 1, 2023. Mercedes must cover the cost of installing approved emissions modification software on each affected vehicle, provide an extended warranty, and pay consumers $2,000 per vehicle that receives the fix.
Beyond the financial penalties, the agreement also imposes reporting requirements and mandates changes to Mercedes’ business practices. The company is barred from engaging in unfair or deceptive marketing or sales of diesel vehicles, including misrepresentations about emissions compliance.
The settlement follows earlier high-profile emissions cases involving other automakers and suppliers. Volkswagen reached a $570 million settlement with states in 2016 and later paid billions more in civil and criminal penalties. Fiat Chrysler paid $72.5 million to states in 2019, and German engineering firm Robert Bosch GmbH paid $98.7 million that same year for its role in developing emissions-cheating software.
Mercedes previously agreed in 2020 to pay about $1.5 billion to the U.S. government and California regulators to resolve federal and state claims related to diesel emissions. In a statement, the company said the latest multi-state agreement resolves all remaining diesel emissions litigation in the United States, while maintaining that it considers the allegations unfounded and denies liability.
The multi-state investigation was led by the attorneys general of Connecticut, Delaware and Maryland, with Alabama among several states that assisted in the case.
