Judge approves $14.7B Volkswagen settlement

A federal judge on Tuesday approved the $14.7 billion settlement among Volkswagen, regulators and drivers related to the company’s emissions cheating scandal. 

The settlement covers many of the claims from the Justice Department, Environmental Protection Agency and Federal Trade Commission, as well as a class-action lawsuit brought against the automaker by drivers. 

{mosads}More than $10 billion of the settlement will go toward repairing or replacing 2-liter diesel VW and Audi vehicles that had been equipped with “defeat devices,” or software that VW installed to allow vehicles to skirt federal emissions limits. The settlement covers 475,000 cars from model years 2009 to 2015 in the United States. 

Another $2.7 billion covers environmental penalties related to excessive emissions of nitrogen oxides and other pollutants spewed by the vehicles. VW will also invest $2 million into research on zero-emissions vehicles.

U.S. District Judge Charles Breyer called the settlement “fair, reasonable, and adequate” in a decision issued Tuesday. 

The settlement comes more than one year after regulators announced they had discovered defeat devices on 11 million vehicles produced by VW worldwide. The legal fight that ensued will cost VW tens of billions of dollars to finally settle; the company has also agreed to pay $1.2 billion to U.S. franchise dealers and it has yet to settle claims related to 3-liter vehicles with defeat devices. 

Consumer groups welcomed the settlement announcement. 

“We are very pleased the court has granted final approval to this historic settlement that holds Volkswagen accountable for its illegal behavior and breach of consumer trust,” said Elizabeth Cabraser, lead counsel for the consumer group suing the company. 

“We encourage all class members to take advantage of the significant compensation this settlement provides, which also fixes or removes these polluting cars from our roads.”