Judge approves Volkswagen’s $14.7 billion diesel settlement, automaker to start buy-back

By Dale Kasler

dkasler@sacbee.com

October 25, 2016 09:03 AM

A Volkswagen diesel car undergoes testing in California by researchers from West Virginia University. Their tests helped nail down the case against VW’s polluting vehicles. West Virginia University
A Volkswagen diesel car undergoes testing in California by researchers from West Virginia University. Their tests helped nail down the case against VW’s polluting vehicles. West Virginia University

A federal judge in San Francisco on Tuesday approved Volkswagen’s $14.7 billion settlement over its diesel pollution scandal, paving the way for the German automaker to start buying back several hundred thousand tainted vehicles in the United States.

Volkswagen reportedly plans to begin buying back cars in November.

Under the settlement approved by U.S. District Judge Charles Breyer, the automaker will spend up to $10 billion repurchasing as many as 475,000 polluting Volkswagens and Audis. It will spend another $4.7 billion on a host of government programs designed to offset air pollution and promote zero-emission vehicles, of which about $1.1 billion will be spent in California. The settlement was first announced in June.

The settlement follows the blockbuster announcement last fall by U.S. and California regulators that Volkswagen had rigged diesel cars sold since 2009 to cheat on air pollution tests. Engineers at the California Air Resources Board’s testing lab in El Monte, acting on a tip from West Virginia University researchers, determined that the cars were equipped with “defeat device” software aimed at cheating on pollutions tests. The software activated pollution controls when the vehicles were being tested but switched them off when they were on the open road.

The vehicles emit nitrogen oxide, a key component in smog, at up to 40 times the allowable limits, officials said.

The settlement “sets in motion a public process that will develop a range of projects to mitigate the harmful health effects of smog,” said Mary Nichols, chairwoman of the California air board, in a prepared statement. Some of the funds will go into projects to replace dirty heavy duty diesel vehicles with clean-burning vehicles, as well as programs to develop zero-emissions vehicles.

The settlement covers consumer claims and a lawsuit filed by the federal government. Volkswagen vehicle owners have the option of selling their cars back or having the automaker repair them, if the EPA and California air board can agree on a repair plan.

“Given the risks of prolonged litigation, the immediate settlement of this matter is far preferable,” Breyer wrote in his decision. “As the court stated at the outset, the priority was to get the polluting cars off the road as soon as possible. The settlement does that.”

Dale Kasler: 916-321-1066, @dakasler