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AG Madigan announces huge VW settlement

Tuesday, Jun 28, 2016

* Press release [replaced with revised release]

Attorney General Lisa Madigan today announced her office has reached $275 million settlement with Volkswagen Group of America Inc. for misrepresenting the emissions of its 2.0-liter Volkswagen and Audi diesel engine cars sold in the U.S. As part of a multistate settlement, Madigan secured $28.9 million for violations of Illinois’ Consumer Fraud Act, and the state could see an additional $150 million in consumer restitution based on consumer participation in the settlement. Illinois can also apply for an additional $97 million from an environmental settlement reached by the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA).

The scandal uncovered in September 2015 affected approximately 29,800 cars sold in Illinois. The diesel cars branded environmentally friendly were equipped with defeat device software designed to reduce the effectiveness of the vehicles’ emissions control systems and as a result emitted excess nitrogen oxides (NOx) throughout the state.

“Volkswagen deliberately defrauded its consumers and polluted our environment while promoting its cars as clean diesel vehicles,” Madigan said. “This settlement is the result of the company’s deliberate misconduct and egregious corporate consumer fraud.”

Madigan was among 43 states and jurisdictions that settled with Volkswagen for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing diesel vehicles equipped with illegal and undisclosed defeat device software. The agreement is part of a series of state and federal settlements that will provide cash payments to affected consumers, require Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles, and prohibits Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.

Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:

    A buy back of the vehicle (based on pre-scandal National Automobile Dealers Association/NADA value); or
    A modification to reduce NOx emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a fix. Owners who choose the modification option would also receive an Extended Emission Warranty; and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.

The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and sellers after September 18, 2015 when the emissions-cheating scandal was disclosed (50 percent of the restitution available to owners). Additional components of today’s settlements include:

    Environmental Mitigation Fund: Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NOx. This fund, also subject to court approval, is intended to mitigate the total, lifetime excess NOx emissions from the 2.0-liter diesel vehicles identified below. Under the terms of the mitigation trust, Illinois is eligible to seek up to $97 million from this fund to pay for emissions related mitigation projects.

    Additional Payment to the States: In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer protection laws, amounting to $570 million nationwide. This amount includes $28.9 million paid for affected vehicles Volkswagen sold and leased in Illinois.

    Zero Emission Vehicles: Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or Zero Emission Vehicles (ZEV), and supporting infrastructure.

    Preservation of Environmental Claims: Today’s settlement by state attorneys general preserves all claims under state environmental laws, and Illinois maintains the right to seek additional penalties from Volkswagen for its violations of environmental and emissions laws and regulations.

More info is here.

- Posted by Rich Miller        

15 Comments
  1. - How Ironic - Tuesday, Jun 28, 16 @ 10:16 am:

    Rauner response in 3….2….1…

    “Lisa Madigan and the Volkswagen settlements she controls….”


  2. - 51st Ward - Tuesday, Jun 28, 16 @ 10:43 am:

    From the national news it seems Volkswagen has made a worldwide settlement is Lisa just taking credit for something that is happening in the whole country and worldwide. This isn’t some special deal she worked out for Illinois residents.


  3. - burbanite - Tuesday, Jun 28, 16 @ 10:48 am:

    Illinois did not have to partake in the settlement as it states 43 states did. There would have been significant negotiation as to what Illinois’ cut would be just as with the tobacco settlements. This is the deal she worked out for Illinois residents.


  4. - @MisterJayEm - Tuesday, Jun 28, 16 @ 11:05 am:

    I always said fahrvergnügen sounded too good to be true…

    – MrJM


  5. - HaL9000 - Tuesday, Jun 28, 16 @ 11:16 am:

    As someone who traded his 2010 Jetta TDI in March 2015 before the issue was public, I’m curious what is being done for the original owners. I bought it because it was a “clean diesel”. Not so much.


  6. - YSW - Tuesday, Jun 28, 16 @ 11:32 am:

    Goofy comment by 51st Ward. You think settlement agreements negotiate themselves? Illinois doesn’t get $275 mil without the AG negotiating hard.


  7. - PublicServant - Tuesday, Jun 28, 16 @ 11:43 am:

    Rauner response: Instead of helping Ford, with its factory right here in Illinois, Lisa Madigan is dishonestly wasting time persecuting a non-local business who might otherwise be located in our state. I ask her to get behind real reform, and stop poisoning the business climate of this state anymore that decades of democrat rule already have.


  8. - Formerly Known As... - Tuesday, Jun 28, 16 @ 12:04 pm:

    =an additional $150 million in consumer restitution based on consumer participation in the settlement=

    This portion was not negotiated by the AG. Restitution is being paid at standard rates in every state to all consumers who participate in the settlement.


  9. - Formerly Known As... - Tuesday, Jun 28, 16 @ 12:10 pm:

    =an additional $97 million from an environmental settlement reached by the U.S. Department of Justice and the U.S. Environmental Protection Agency=

    This portion was not negotiated by the AG either.


  10. - Formerly Known As... - Tuesday, Jun 28, 16 @ 12:20 pm:

    =Madigan secured $28.9 million=

    This portion was also not negotiated independently by the AG. 51st Ward’s comment was unexepctedly accurate.

    Volkswagen is paying a standard rate to every state of =more than $1,000 per car for repeated violations of state consumer protection laws, amounting to $570 million nationwide. This amount includes $28.9 million paid for affected vehicles Volkswagen sold and leased in Illinois.= Tennessee is getting $12.59 Mill by the same formula, Georgia is getting $18.8 Mill, Connecticut $16.3 Mill, and on.


  11. - Chachi - Tuesday, Jun 28, 16 @ 12:24 pm:

    “From the national news it seems Volkswagen has made a worldwide settlement is Lisa just taking credit for something that is happening in the whole country and worldwide. This isn’t some special deal she worked out for Illinois residents.”

    You just described every press release that comes out of Lisa’s office, and in fact her entire career as AG.


  12. - illinois bob - Tuesday, Jun 28, 16 @ 3:43 pm:

    Hey, don’t knock Lisa. She got Tammy Duckworth off at taxpayer expense with just a slap on the wrist, didn’t she?LOL


  13. - Term Limits - Tuesday, Jun 28, 16 @ 3:56 pm:

    Volkswagen has a 200 mpg car. Why are they not
    allowed to sell this car in the United States?


  14. - A guy - Tuesday, Jun 28, 16 @ 4:28 pm:

    Non-Green Slug Bug- (punch in the shoulder)


  15. - cannon649 - Tuesday, Jun 28, 16 @ 9:54 pm:

    Lisa was not part of the settlement deal. I hope these owners get whole. Do not like the idea that the government get their money to use in way they think is best. Give it all the owners.


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