Appeals Court Upholds Volkswagen’s $10 Billion Diesel Settlement with Owners
The three-judge panel of the U.S. 9th Circuit Court of Appeals said, in dismissing a number of objections to the settlement, that it “delivered tangible, substantial benefits to class members, seemingly the equivalent of — or superior to —those obtainable after successful litigation, and was arrived at after a momentous effort.”
In total, Volkswagen AG has agreed to pay more than $25 billion in the United States for claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles. The buybacks will continue through the end of 2019.
The ruling on Monday pertained to the settlement covering the owners and former owners of 475,000 polluting 2.0-liter vehicles. VW agreed to offer owners of the 2.0 liter vehicles between $5,100 and $10,000 in compensation, in addition to the estimated value of the vehicle.
Volkswagen declined to comment on the appeals court decision.
The German automaker admitted in September 2015 to secretly installing software in nearly 500,000 U.S. cars to cheat government exhaust emissions tests. The vehicles had emitted up to 40 times the legally allowable pollutants.
In May, federal prosecutors in Detroit unsealed criminal charges against former VW Chief Executive Officer Martin Winterkorn. Two other former VW employees have pleaded guilty in the investigation and are serving prison terms. In total, nine people have been charged in the United States.
Last month, Audi CEO Rupert Stadler was arrested in Germany, but he has not been charged. VW suspended him and named an interim CEO.
Volkswagen has paid more than $7.4 billion to buy back about 350,000 of 475,000 2.0-liter U.S. diesel vehicles through mid-February, according to court filings, and has fixed or removed from the road 86 percent of all 2009-2015 2.0-liter diesel vehicles. The company reached a separate settlement covering 80,000 3.0-liter diesels and agreed to buy back about 20,000 of those vehicles.
The appeals court rejected a challenge to the 2.0-liter settlement that stipulated that any of the $10 billion not spent will revert to VW. It also rejected challenges to the court’s approval of the class, the fairness of the settlement itself and the adequacy of the court process in approving it.
Last month, VW said it would pay owners of some diesel vehicles up to $1,000 in additional payments to settle state lawsuits in Vermont and Arizona.
In 2016, VW reached a $603 million consumer fraud settlement with 44 U.S. states. Since then it has settled with five other states – including Vermont – worth more than $120 million. The only state with a pending consumer fraud action is New Mexico.
(Reporting by David Shepardson in Washington; Additional reporting by Jonathan Stempel; Editing by Jeffrey Benkoe)