​Oregon Governor Kate Brown and Oregon Attorney General Ellen Rosenblum today announced two separate settlements with Volkswagen relating to emissions fraud. A federal settlement will require Volkswagen to pay more than $68 million into a trust to support diesel emission reduction programs in Oregon. The federal settlement also includes cash payments to Oregon consumers who purchased a falsely marketed vehicle, and will require VW to buy back or fix certain VW and Audi diesel vehicles.

A separate multistate settlement reached by Attorney General Rosenblum and 37 other Attorneys General will require VW to pay $570 million for violating state laws prohibiting unfair or deceptive trade practices, including a payment of more than $17 million to Oregon. Oregon was among six states that led this investigation, in part because Oregon has the highest per-capita ownership of the affected VW vehicles in the nation.

“The EPA estimates as many as 400 Oregonians sicken or die each year from respiratory and cardiac disease caused by exposure to diesel emissions, which are also linked to certain cancers,” Governor Brown said. “I am committed to putting the settlement funds to work immediately to protect the health of Oregonians, both now and in the future.”

“Many Oregonians purchased these vehicles because VW advertised the cars as legitimate ‘green vehicles’ — when in reality they were some of the dirtiest cars on the road,” said Attorney General Rosenblum. “We aggressively led this multi-state investigation because Oregon consumers care about the cars they drive and their impact on the environment. This settlement shows that it doesn’t matter the size or reach of the company. We will aggressively pursue any company that has deceptive marketing tactics.”

The attorneys general’s investigation confirmed that VW and Porsche sold more than 570,000 2.0- and 3.0 liter diesel vehicles in the United States equipped with “defeat device” software intended to circumvent emissions standards for certain air pollutants, and concealed the existence of the defeat device from regulators and the public. VW and Porsche made false marketing and advertising statements and misrepresented the cars as environmentally friendly or “green” and compliant with federal and state emissions standards — when in fact VW knew the vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted.

Today’s coordinated settlements resolve consumer protection claims raised by a multistate coalition of state Attorneys General co-led by attorneys general in Oregon, Connecticut, Massachusetts, New York, Tennessee, and Washington, and joined by 37 other jurisdictions against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. They also resolve actions against Volkswagen brought by the United States Environmental Protection Agency (EPA), U.S. Department of Justice (DOJ), and the Federal Trade Commission (FTC), California and car owners in private class action suits.

The settlements require VW to implement a restitution and recall program for 13,015 Oregon owners and lessees of the model year 2009-2015, 2.0-liter diesel vehicles listed below at a maximum cost of just over $10 billion. Once the consumer program is approved by the court, affected VW owners, lessees and sellers will receive a lump sum payment of at least $5,100 and a choice between:

• a buyback (based on pre-scandal market value); or
• a modification to make vehicles emissions-compliant, subject to VW’s proposal of and regulators’ approval of an acceptable modification. Consumers will still be eligible to choose a buyback if an acceptable fix is not approved. 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.

Additional components of today’s federal settlements include:

• Environmental Mitigation Fund: VW will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce NOx and other dangerous emissions. This fund, also subject to court approval, is to be used to address the harm caused to the environment by VW unlawful diesel vehicles. Under the agreement, Oregon will receive $68.2 million, which the Governor will direct to be used to reduce diesel emissions from trucks and other eligible sources under programs of the Oregon Department of Environmental Quality.
• Civil Penalties: VW will pay civil penalties of more than $1,000 per car directly to the states for repeated violations of state consumer protection laws. Civil penalties to the states are expected to amount to more than $570 million nationwide, including more than $17 million to Oregon.
• Zero Emission Vehicles: VW has committed to investing $2 billion over the next ten 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 Oregon maintains the right to seek additional fines or penalties from VW for its violations of environmental and emissions laws and regulations.

VW will also pay $20 million to the states for investigation costs and to establish a fund that state attorneys general can utilize in future investigations concerning emissions violations, automobile compliance, and consumer protection.  Under the multi-state settlement, VW has also agreed it will not engage in future unfair misrepresentations or deceptive acts or practices in connection with their dealings with consumers and state regulators. The full details of the agreement are available at VWCourtSettlement.com and www.ftc.gov/VWSettlement.

Below are the 2.0 Liter Diesel Models Included in the Multi-District Litigation Class Settlement:

Contact:

• Kristina Edmunson, Department of Justice, Kristina.Edmunson@doj.oregon.gov, 503-378-6002
• Bryan Hockaday, Office of Governor Brown, Bryan.Hockaday@oregon.gov, 503-580-7836