A $14.7 billion proposed settlement with automaker Volkswagen in a pollution-cheating scandal is a "landmark deal for California," state Attorney General Kamala Harris said at a news conference Tuesday in San Francisco.
"It brings billions of dollars in consumer relief and billions of dollars going forward" to abate air pollution, Harris said.
The settlement applies to so-called 2-liter diesel-fueled Volkswagens and Audis. The liter number refers to cylinder space.
Volkswagen announced in 2008 that the diesel vehicles were "clean" with low emissions of pollutants. In fact, as the company later admitted, it had installed "defeat devices" that registered low emissions when the cars were tested, but turned off the controls when the cars were driven on the road.
Harris and California Air Resources Board Chairman Mary Nichols said the state will directly receive $1.18 billion for environmental projects from the settlement.
"Because the cheat that VW perpetrated wasn't just a cheat on the consumers that bought them; it was a cheat on all the people of the state of California who are breathing unacceptable air quality," Harris said.
That amount is more than one-fourth of a $4.7 billion fund Volkswagen will pay to states nationwide to mitigate pollution and invest in zero emissions technology.
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In addition, the tens of thousands of Californians who bought diesel-fueled Volkswagens between 2009 and 2015 will be the largest single group to benefit from approximately $10 billion the German company will pay to compensate car owners, Harris said.
"Seventy-one thousand vehicles were purchased by California consumers who were misled by VW into thinking their purchase was not only a smart investment, but also eco-friendly," Harris said.
The total numbers of buyers nationwide is about 450,000. An agreement has not been reached concerning a smaller number of 80,000 3-liter vehicles.
The proposed settlement will resolve lawsuits filed by hundreds of car owners, the U.S. Department of Justice and the Federal Trade Commission.
All of the lawsuits were assigned to U.S. District Judge Charles Breyer of San Francisco. Breyer appointed San Francisco consumer attorney Elizabeth Cabraser as the lead counsel for the car owners.
The judge will hold a hearing on July 26 on whether to grant preliminary approval of the settlement, which is the nation's largest in a case concerning vehicles.
Breyer announced in April that a settlement had been reached in principle but ordered the details kept under wrap until the final proposals were filed in court Tuesday.
Car owners will have the option of selling their cars back to Volkswagen or receiving a not-yet-developed fix to the defeat devices.
Harris' and Nichols' agencies also filed a separate, new lawsuit against Volkswagen in federal court in San Francisco on Monday. It alleges violation of several anti-fraud laws, including a state law that prohibits false advertising.
Harris said that many environmentally conscious Californians were duped by the advertising and bought the Volkswagens only because they thought the cars were clean.
Volkswagen owners can find out more details about the settlement at www.vwcourtsettlement.com.
