Settlement, California v. Volkswagen (2016)

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California AG, working with the federal EPA, entered into two related settlements over Volkswagen’s use of defeat devices to evade emissions testing.

Citation: People of the State of California v. Volkswagen, 16-cv-03620 (2016)

Topic: Air Pollution

Type of action: Lawsuit v. Private Actor

States involved: California

Summary: In 2015, it became clear that Volkswagen used “defeat devices” to evade U.S. emissions testing on diesel vehicles. Essentially, the devices allowed cars to recognize when they were undergoing emissions testing and switched the cars into lower-operation modes. This ultimately led to Volkswagen cars emitting far greater concentrations of nitrous oxide than they reported. California was since involved in two settlements with Volkswagen. The first was a fairly global settlement that involved a joint effort with the California AG’s office, the California Air Resources Board (CARB), EPA, and other states. California participated in the settlement talks in order to receive part of the $14.7 billion agreement and to carve out California civil liability. As part of the larger settlement, California got $1.18 billion to repay consumers, invest in environmental projects, and invest in zero-emissions technology. Part of the funding ($380 million) went directly to CARB for environmental mitigation projects in the state. The second settlement finalized the civil liability that California successfully carved out of the first agreement. As part of the deal, Volkswagen agreed to pay $86 million in civil penalties. $10 million of those funds went to local governments and research institutions to better detect defeat devices in the future. The agreement also included very strict injunctive terms to prevent future violations by Volkswagen.

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