Latest Legal Development in the VW Settlement

Consent decree requires recalls of 3.0-liter TDI diesel engines and adds at least $225 million to the Environmental Mitigation Trust.

On May 17, 2017, Justice Charles Breyer’s U.S. District Court in California issued a new consent decree requiring VW to recall all pre-2017 vehicles with 3.0-liter turbocharged direct injection (TDI) diesel engines and to contribute $225 million to the Environmental Mitigation Trust.

The latest consent decree is the second in an ongoing lawsuit between the U.S. Department of Justice (DOJ), the state of California, and VW. At issue: VW’s long-running use of a device that allowed its diesel vehicles to evade air emission requirements. The DOJ and California each sued VW over the company’s failure to comply with clean air laws.

Under the terms of the new consent decree, VW must:

• Modify or replace at least 85 percent of all affected vehicles built between 2009 and 2012 in the United States and California by November 30, 2019.
• Modify or replace at least 85 percent of all affected vehicles built between 2012 and 2016 in the United States and California by May 31, 2020.
• Contribute $225 million to the Environmental Mitigation Trust.

Environmental Mitigation Trust funds will be issued to states and tribes for activities that help remediate the excess nitrogen oxides (NOx) emitted by VW’s 3.0-liter vehicles.

The consent decree also provides penalties should VW fall short of its 85 percent recall target. These penalties range between $5.5 and $21 million for each percentage point nationally, and between $900,000 and $5.5 million for each percentage point in California.

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