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Volkswagen Reaches $157M Settlement over Emissions Cheating Claims

Mar 31, 2017

10 States to Receive Payments from VW over Emissions Cheating Devices

Volkswagen Reaches $157M Settlement over Emissions Claims

Volkswagen AG, Audi AG and Porsche AG will pay $157.45 million to 10 states over its emissions cheating scandal. The settlement also reportedly covers consumer emissions fraud claims not covered in a prior settlement. Volkswagen was accused of using a defeat device to hide true levels of nitrogen oxides in cars marketed as "clean" diesel vehicles. Volkswagen pled guilty to the emissions scandal in Michigan federal court in early 2017.

Parker Waichman LLP has spent years representing clients in lawsuits over allegedly defective products, including automobiles. The firm is offering free legal consultations to anyone with questions about filing an emissions fraud lawsuit.

According to Law360, Volkswagen will be paying penalties to the following 10 states: Connecticut, Delaware, Maine, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington.

Volkswagen reached a previous $603 million settlement in 2016. That agreement involved diesel emissions claims from 44 states, the District of Columbia and Puerto Rico.

The recent agreement resolves consumer protection claims not included in the 2016 settlement, in which states sought injunctive relief or restitution involving affected cars that use 3.0-liter diesel engines.

Under the new settlement, Volkswagen must offer at least three new electric car models by 2020. Two of the models must be electric SUVs. The company had agreed to do this previously in California, Law360 reports.

The 10 states have all adopted California's strict clean-air standards.

According to Law360, California has the unique authority to set its own emissions standards so long as they are at least in compliance with federal regulations. States that do not have this power can adopt rules from California.

"Historically, enforcing vehicle emission standards has been done primarily by the federal government," said New York Attorney General Eric T. Schneiderman, according to a press release. "Setting this precedent is particularly vital now, when President Trump has vowed to defund federal environmental enforcement and undo federal environmental protections, which would leave states like New York and California as the first line of defense for the environment."

Volkswagen will be paying Connecticut about $14.85 million, Delaware about $1.45 million, Massachusetts about $20 million, Maine about $5.16 million, New York about $32.53 million, Oregon about $16.22 million, Pennsylvania about $30.43 million, Rhode Island about $4.1 million, Vermont about $4.24 million and Washington about $28.42 million, Law360 reports.

Volkswagen Emissions Cheating Scandal Background

Volkswagen Emissions Cheating Scandal

Volkswagen first came under fire for the emissions fraud issue in September 2015. Government agencies, including the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board, alleged that the automaker implemented cheat devices to pass federal emissions tests.

Volkswagen has admitted that it indeed uses a defeat device. Nearly 600,000 diesel vehicles in the United States and 11 million around the world came pre-installed with software designed to fool federal tests for toxic emissions. After the cars left the testing labs, higher levels of emissions were released.

The automaker pleaded guilty to criminal charges, ending an investigation by the U.S. Justice Department. The terms of the settlement required Volkswagen to pay a $2.8 billion criminal fine and an additional $1.45 billion civil penalty.

Additionally, seven Volkswagen executives were indicted by a grand jury. One executive was arrested in Miami while others live in Germany.

"Volkswagen's attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation's environmental, consumer protection and financial laws," said Attorney General Lynch, according to a Department of Justice press release issued Jan. 11, 2017.

According to the release, the company admitted to conspiring to defraud the US and violate the Clean Air Act. Volkswagen acknowledged that it lied and misled regulators and customers about emissions standards on certain diesel vehicles. Among other things, the terms of the settlement required the company to be on probation for three years, during which time it must operate with an independent monitor.

"Americans expect corporations to operate honestly and provide accurate information," said Deputy Director McCabe, according to the release. "Volkswagen's data deception defrauded the U.S. government, violated the Clean Air Act and eroded consumer trust. This case sends a clear message to corporations, no matter how big or small, that if you lie and disregard rules that protect consumers and the environment, you will be caught and held accountable."

Filing an Emissions Fraud Lawsuit

If you or someone you know is interested in filing an emissions fraud lawsuit, contact Parker Waichman today. Our firm offers free, no-obligation case evaluations. For more information, fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529).

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