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The settlement marks the first time New York and the other settling states – all of which have adopted California’s stringent vehicle emission standards – have secured environmental penalties from an automobile manufacturer under their own state auto emissions laws. Historically, enforcing vehicle emission standards has been done primarily by the federal government. 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. New York will continue to enforce the tough auto emission and greenhouse gas standards established by California, and intends to oppose any effort by the federal government to roll back EPA emission standards currently in place.
“Volkswagen, Audi and Porsche tried to pull off an extraordinarily cynical corporate fraud – deceiving hundreds of thousands of consumers, pumping thousands of tons of harmful pollution into our air, and flouting New York and federal environmental laws designed to protect public health,” said Attorney General Schneiderman. “This went on for nearly a decade, for no other reason than their bottom line, so the companies could avoid the expense of engineering cars that would actually meet our environmental standards. Adding insult to injury, they marketed these dirty vehicles as environmentally-friendly and technologically-advanced – not only deceiving consumers and harming our environment, but also undercutting the sales of their law-abiding competitors.”
“But Volkswagen was caught – and today’s settlement means we’ve now held them to full account,” Attorney General Schneiderman continued. “The companies are already paying billions of dollars in consumer relief, environmental mitigation funds, and criminal and civil penalties as a result of our earlier state, federal and private settlements. Now, this state environmental penalty makes clear that no company – however large or powerful – is above the law in New York. As we’ve made clear, if the federal government fails to do its job, I will continue to enforce our state’s environmental laws and hold accountable anyone who violates them – to ensure New Yorkers’ public health and environment are protected.”
Crucial to New York State’s enforcement action – and the precedent it sets – is the substantial size of this settlement; the $32.5 million in penalties Volkswagen will pay New York for emissions cheating represents the largest air pollution fine ever obtained by New York State. Amounting to over $1,250 per defeat-device-equipped Porsche, Audi, and Volkswagen diesel vehicle sold or leased in the state – and in addition to the amounts the companies have already agreed to pay – this penalty will serve to deter other companies considering breaking New York’s environmental laws. The monies, in conjunction with other remedial payments Volkswagen has agreed to pay to offset the pollution caused by the operation of its illegal defeat device-equipped cars, will fund environmental and other government programs across the state.
The settlement announced today caps a series of settlements New York and other states have reached with Volkswagen over its deployment of illegal defeat devices:
- In June 2016, a coalition of over 45 jurisdictions, led by New York, settled their consumer deception claims against Volkswagen, for a total of approximately $570 million, with $31.8 million going to New York alone.
- Volkswagen also agreed to establish a national $2.9 billion fund to mitigate the environmental damage caused by their defeat-device-equipped vehicles’ excess pollution; over $127 million of that fund will be directed to New York for air quality improvement plans in the state.
- With the settlement announced today, New York will receive a total of $193 million in penalties and environmental remediation funds, as a result of the Attorney General’s vigorous enforcement of state and federal environmental law against Volkswagen.
Also as part of today’s settlement, Volkswagen has agreed to substantially increase its commitment to New York’s emerging electric car market. The agreement requires Volkswagen to – by 2020 – at least triple the number of electric car models its Volkswagen, Porsche, and Audi brands offer to New Yorkers from one model to three, including two electric SUVs. This commitment will further increase consumer choice and spur pollution-reducing electric car sales. Further, as part of the related class action, federal and state settlements, Volkswagen will provide consumers who purchased or leased a 2.0 liter vehicle the option of a buyback or fix of the vehicle’s emissions systems, plus thousands of dollars in restitution, and as part of a settlement that is currently awaiting court approval, Volkswagen will provide substantial compensation to consumers who purchased or leased a 3.0 liter vehicle and is committed to fix the emissions systems of those vehicles or eventually repurchase them.
This multistate settlement agreement was filed today in the U.S. District Court for the Northern District of California and will be further memorialized in consent judgments to be filed in New York and other state courts. The other states joining today’s settlement include Connecticut, Delaware, Massachusetts, Maine, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington. Referred to as “Section 177 States,” New York and the other states settling with Volkswagen today have all incorporated into their state law the more stringent auto emissions standards established by California, as permitted by Section 177 of the federal Clean Air Act.
“Today’s announcement of the multi-state settlement with Volkswagen demonstrates New York State’s commitment to clean air and our ongoing efforts to safeguard air quality for the benefit of communities statewide,” said DEC Commissioner Basil Seggos. “DEC will continue to aggressively enforce our environmental laws and ensure companies do not put the health of the environment and our residents at risk by cheating our regulations which are in place to reduce air pollution and mitigate climate change.”
As alleged in Attorney General Schneiderman’s complaint, Volkswagen, Audi, and Porsche 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. Once installed, the software activates required emissions controls during a car inspection, but deactivates those controls during regular driving, effectively falsifying the inspection results and allowing nitrogen oxide (NOx) emissions up to 35 times the legal limit. The automakers installed defeat devices in several generations of US-market Volkswagen and Audi diesel engines that equipped over a dozen models, including flagship Audi luxury sedans and high-performance Porsche SUVs, with sales eventually totaling over 25,000 vehicles in New York, before these vehicles were pulled from the market in 2015.
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