Attorney General Laxalt Announces Settlement With Volkswagen Over Emissions Fraud


June 28, 2016

Nevada to receive $5.3 million in compensation  

Carson City, NV -   Today,   Nevada Attorney General Adam Paul Laxalt announced a settlement with Volkswagen requiring the manufacturer to pay nearly $5.3 million to the State of Nevada. The settlement resolves consumer protection claims raised by a multistate coalition of 44 state attorneys general and other jurisdictions against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc., collectively referred to as Volkswagen. The agreement also resolves actions against Volkswagen brought by the Environmental Protection Agency (EPA), the Department of Justice (DOJ), the Federal Trade Commission (FTC), the State of California and car owners in private class action suits. Nevada participated on the Executive Committee in this multi-state action. 

The investigation concluded that Volkswagen violated state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing diesel vehicles equipped with illegal and undisclosed defeat device software. The investigation also confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with "defeat device" software intended to circumvent applicable emissions standards for certain air pollutants. The investigation also revealed that Volkswagen actively concealed the existence of the defeat device from regulators and the public.

"Consumers deserve to have all of the facts before buying or leasing any vehicle," said Laxalt. "This comprehensive settlement holds Volkswagen accountable for past practices, provides restitution to affected consumers and prevents consumers from being misled in the future. By participating on the Executive Committee, attorneys within my Office were able to take a more active role in the investigation and resolution of this case to ensure that Nevadans receive the compensation they are rightfully owed."

Volkswagen made false statements to consumers in their marketing and advertising knowing their vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted. The manufacturer misrepresented the cars as environmentally friendly or "green" and lead consumers to believe the vehicles complied with federal and state emissions standards.

Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015 listed below at a maximum cost of just over $10 billion. This includes approximately 5,200 Nevada vehicles.

This agreement is part of a series of state and federal settlements that will provide cash payments to affected consumers, require Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles, and prohibit Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.  

Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:

·    A buy back  of the vehicle based on pre-scandal National Automobile Dealers Association value; or

·    A modification  to reduce NOx emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event that regulators do not approve a fix. Owners who choose the modification option would also receive an Extended Emission Warranty and Lemon-law type compensation. A Lemon law is a state law for products that repeatedly fail to meet standards of quality and performance to protect against the possibility that the modification causes subsequent problems.    

The consumer program also provides benefits and partial restitution for eligible lessees and a no-penalty lease termination option. Those who sold their vehicles after September 18, 2015 when the emissions-cheating scandal was disclosed will receive half of the restitution, with the other half awarded to the buyer. Additional components of today's settlements include:

·  Environmental Mitigation Fund : Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NOx . This fund, also subject to court approval, is intended to reduce the total, lifetime excess NOx  emissions from the 2.0-liter diesel vehicles identified below. Under the terms of the mitigation trust, Nevada is eligible to receive up to $22.25 million to fund mitigation projects.

·  Zero Emission Vehicles : Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or Zero Emission Vehicles (ZEV), and supporting infrastructure.

In addition to Nevada, participants in the settlement include: Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin, Wyoming, as well as Washington D.C. and Puerto Rico.

Chief Deputy Attorney General JoAnn Gibbs, along with Senior Deputy Attorney General Lucas Tucker and Deputy Attorney General Laura Tucker of the Attorney General's Bureau of Consumer Protection represented Nevada in this settlement.

The full details of the agreement will be available online at VWCourtSettlement.com  and www.ftc.gov/VWSettlement  on or about June 28, 2016. To view the affected 2.0-liter diesel models, click here .

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    Page Last Updated:6/28/2016