San Francisco

Judge OKs $86M Settlement in Volkswagen Pollution-Cheating Lawsuit

A federal judge in San Francisco signed off Thursday on an $86 million settlement of a false advertising and unfair business practices lawsuit filed by the state of California against automaker Volkswagen for its sales of pollution-cheating diesel vehicles.

The agreement approved by U.S. District Judge Charles Breyer is separate from a larger $14.7 billion proposed settlement that lawyers for car owners and the U.S. government reached with Volkswagen in June.

Breyer is scheduled to hold a fairness hearing on the larger settlement on Oct. 18.

Both cases concern the German company's sales between 2009 and 2015 of diesel-fueled vehicles it advertised as being "clean" and non-polluting.

In fact, as Volkswagen admitted in the fall of 2015, the vehicles were equipped with so-called "defeat devices" that turned on emission controls when the cars were being tested and turned them off when the cars were driven normally.

Some models emitted up to 40 times the allowed amount of smog-producing nitrogen oxides when the cars were driven on the road.

California filed its separate lawsuit against Volkswagen in federal court in San Francisco on June 27, the day before the larger proposed settlement was announced.

The state's lawsuit included claims of violations of California's false advertising, unfair business practices, consumer protection, public nuisance and environmental laws.

The proposed settlement of most of that case was announced by California Attorney General Kamala Harris and submitted to Breyer on July 7.

In addition to the $86 million in civil penalties, the now-approved agreement includes a prohibition on false and deceptive advertising by Volkswagen and a requirement for submission of complete and accurate reports to state regulators on emissions control software.

The payment will include $76 million to reimburse the state for the costs of investigating and litigating its claims and $10 million for research on better detection of defeat devices.

Some claims in the state's lawsuit are being resolved in the larger settlement and other claims are reserved for possible future court proceedings on behalf of the California Air Resources Board, according to the settlement document.

Harris said in a statement, "Our state and national environmental protection laws exist to protect public health and to preserve our planet for future generations.

"Volkswagen undermined these objectives by deceiving California consumers and flagrantly violating California environmental and consumer protection laws," Harris said.

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