Largest Auto-Scandal Settlement in U.S. History Approved

A federal judge has approved a $14.7-billion settlement in the Volkswagen emissions-cheating case, the largest auto-scandal settlement in U.S. history.

The deal, approved Tuesday, gives about 475,000 owners of Volkswagens and Audis with 2-liter diesel engines the opportunity to have their cars bought back or modified by Volkswagen and to seek additional cash compensation.

U.S. District Judge Charles Breyer in San Francisco, who has overseen the litigation against the German automaker, approved the settlement that was proposed in July. He called the deal “fair, reasonable and adequate.”

The VW scandal erupted a year ago when Volkswagen admitted that it had installed “cheat devices” on diesel-powered cars from 2009 through 2015. The devices enabled the vehicles’ engines to emit less pollutants during emissions tests than during normal road use.

The scandal involved nearly 600,000 cars in the United States, including about 71,000 in California, and 11 million Volkswagen vehicles worldwide.

Volkswagen said Tuesday that it would start to implement the U.S. settlement immediately and that it was hiring 900 people to help with the buybacks, including one employee to be stationed at each of its 652 U.S. dealerships.

Under the settlement, owners of certain 2-liter diesel cars made by Volkswagen in the model years 2009 through 2015 will receive between $12,500 and $44,000 from the automaker to buy back their cars. Leases of those vehicles may be terminated without penalty, and leaseholders also may seek cash payments.

Instead of having their cars bought back, drivers can choose to have VW modify their vehicles to meet emissions standards — once that method is approved by the California Air Resources Board and the Environmental Protection Agency. Federal officials said such a modification does not yet exist, though the company is working on a fix.

Regardless of whether they choose the buyback or modification option, owners will also receive a cash payment of at least $5,100 and as much as $10,000, depending on the model.