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Volkswagen to pay over $14 billion to settle emissions scandal

Posted on Tuesday, June 28th, 2016   

One of the largest consumer class action settlements in United States history is currently underway after it was uncovered that automaker Volkswagen programmed some of its diesel cars to cheat on emissions test. The scandal affects 11 million vehicles worldwide. The company has agreed to pay $14.7 billion to settle claims in the US, which only covers a fraction of the 11 million vehicles that have been confirmed to be involved.

In accordance with the Clean Air Act, automobiles are not permitted to emit a certain amount of common air pollutants because of the harmful effects they subject to both human health and the environment. The Volkswagen vehicles involved were found to be spewing nitrogen oxides at up to 40 times the levels that are permitted by law. The company circumvented this legal limit by fitting the pollution controls systems in their cars with illegal software that enabled the cars to pass emissions tests, but exceed legal pollution limits while on the road.

Volkswagen has been subject to a $10.3 billion dollar buy back of all affected cars at their pre-scandal values coupled with cash compensation for all of the vehicle owners. They must also pay $2.7 billion to an E.P.A fund for environmental impact compensation as well as another $2 billion on new cleaner vehicle projects. Aside from this, the company also still faces criminal investigation by the Department of Justice and attorneys general in 42 states, the District of Columbia, and the District of Puerto Rico, with a pending settlement of $500 million in penalties for defrauding consumers.

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