Judge OKs Volkswagen’s $1.2B 3-Liter Emissions Scandal Settlement

A federal judge in San Francisco gave preliminary approval Tuesday to a $1.2 billion settlement that will compensate the owners of roughly 78,000 Volkswagens with 3-liter engines that were equipped with emissions cheating devices.

Volkswagen previously agreed to spend up to $10 billion to compensate owners of nearly 475,000 VW and Audi vehicles with 2-liter diesel engines involved in the German automaker’s emissions scandal.

U.S. District Judge Charles Breyer praised the parties before granting preliminary approval to the smaller deal involving Volkswagens, Audis and Porsches. He noted the emissions scandal settlement deal was complicated and motivated by economic and environmental concerns.

The $1.2 billion Volkswagen emissions scandal settlement offers thousands of dollars in compensation to individual vehicle owners as well as buybacks or repairs.

Approximately 20,000 owners of 2009-2012 3-liter models that cannot be fixed to meet pollution standards will be offered buybacks or trade-ins. They also will receive compensation ranging from $7,755 to $13,880. Those who purchased 58,000 newer cars will receive compensation between $7,039 and $16,114, according to attorneys representing the vehicle owners.

However, if Volkswagen is unable to repair the newer models to the satisfaction of U.S. regulators, then the car owners will likely return to court to seek buybacks. That may mean, the German automaker could end up paying over $4 billion to vehicle owners.

In addition to green-lighting the $1.2 billion emissions scandal settlement, Judge Breyer also granted preliminary approval for a $327.5 million between German auto supplier Robert Bosch GmbH and VW owners.

Lead attorney for the plaintiffs’ steering committee, Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein LLP, told Judge Breyer that some Class Members were concerned over the terms of the deal, stating that they were not able to just opt for a buyback of the newer generation vehicles.

“Another option would have been to wait another year or so to see what the results of the emissions modification is,” she states.

Judge Breyer congratulated the attorneys in their contingency planning, and stated that fixing the emissions problems would be more “environmentally sound” than a buyback that would “waste assets that have already been committed to manufacturing … the vehicle.”

“When there is a situation in which there is an ongoing harm, I think courts have a responsibility to move quickly — carefully, but quickly — to address that harm. And the fact is that since these cars were out of compliance on the road it appeared … that we ought to pay attention to what is happening now,” he said. “The attorneys in this case are to be congratulated for spending the effort now to address the problem, even though the answers are complicated and somewhat cumbersome because you are anticipating the future.”

Preliminary approval allows consumers to weigh in on the settlement and determine whether they have an eligible vehicle and how much compensation to expect.

Judge Breyer still needs to give his final nod on the deal and has scheduled May 11 for a hearing on final approval.

Volkswagen has now resolved most U.S. claims stemming from the diesel emissions scandal, acknowledging that the vehicles were programmed to turn on emissions controls during government lab tests and turn off the controls while on the road. The automaker has also agreed to pay $4.3 billion to settle a U.S. criminal investigation.

The plaintiffs’ steering committee is chaired by Elizabeth J. Cabraser of Lieff Cabraser Heimann & Bernstein LLP.

The VW Emissions Scandal Class Action Lawsuit is In re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, Case No. 3:15-md-02672, in the U.S. District Court for the Northern District of California.

UPDATE: More details regarding the proposed VW 3.0L class action settlement are now available. Former owners of eligible vehicles must register on the settlement website by May 1, 2017.