Record-Breaking Settlement Over Volkswagen Emissions Scandal Receives Final Nod

On October 25, 2016, the Honorable Charles R. Breyer of the Northern District of California granted final approval of the Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation settlement that includes an unprecedented funding pool of $10.033 billion for affected consumers and $4.7 billion for environmental impact. At nearly $15 billion, the settlement is the largest consumer auto industry class action settlement in U.S. history.

On September 3, 2015, Volkswagen admitted to the Environmental Protection Agency and the California Air Resources Board that it had installed “defeat devices” on its Volkswagen and Audi 2.0-liter diesel engine vehicles between 2009 and 2015 (approximately 482,000 vehicles in the United States). The devices tricked regulators into believing the cars were complying with emissions standards, when they were in truth emitting between 10 and 40 times the number of harmful pollutants on the road. 

On October 18, 2016, in a packed courtroom in San Francisco, Robbins Geller founding partner Paul Geller, along with Lead Counsel Elizabeth Cabraser, presented the settlement to Judge Breyer on behalf of the Plaintiffs’ Steering Committee representing VW owners and lessees.  Also participating in the hearing were government attorneys from the Department of Justice, the Federal Trade Commission, and the California Attorney General’s office. “The scope of the relief and the speed at which it was resolved is remarkable,” said Geller. “Working collaboratively with the government and my fellow PSC members in ensuring that Volkswagen is held accountable for its betrayal of customer trust and for the damage to our environment has been a career highlight for me.”

The settlement provides owners and lessees of Volkswagen and Audi 2.0-liter diesel vehicles compensation through cash payments, buybacks and lease terminations, government-approved emissions modifications, and the repair or removal of their polluting vehicles from the road. “Given the risks of prolonged litigation, the immediate settlement of this matter is far preferable,” noted Judge Breyer in his order. “[T]he priority was to get the polluting cars off the road as soon as possible [and the] Settlement does that. It requires Volkswagen to make the funds to compensate Class Members available within ten days of the Court’s final approval order . . . and the Buyback program will begin immediately upon final approval . . . .”

This suit doesn’t mark the end for Volkswagen. The largest automotive company worldwide still faces claims relating to its 3.0-liter vehicles as well as international shareholder claims.