AG Tong Announces Multistate Settlements with Fiat-Chrysler and Bosch over Defeat Devices in Certain Diesel Passenger Vehicles
Resolves environmental, unfair trade practice claims against two companies in wake of Volkswagen emissions cheating scandal
Auto-maker Fiat Chrysler and its subsidiaries will pay $72.5 million to resolve allegations from 51 states and territories that the company manufactured and marketed more than 100,000 model year 2014 to 2016 Ram 1500 trucks and Jeep Grand Cherokee sport utility vehicles with 3.0 liter V6 diesel engines that were equipped with software intended to circumvent emission standards, Attorney General William Tong said today.
Additionally, Robert Bosch GmbH, a German engineering and electronics company, and its US subsidiary, Robert Bosch LLC, will pay $98,713,378 million to resolve consumer protection and environmental claims from Connecticut and 50 other states and territories alleging that the company developed and programmed emissions control software for its clients – Volkswagen, Audi, Porsche and Fiat Chrysler –knowing that the software would be used in unlawful "defeat devices" designed to conceal vehicles emissions that far exceeded state and federal standards.
"Vehicle emission standards exist as a way to protect the air we all breathe, and companies that knowingly seek to circumvent those standards will be held accountable," said Attorney General Tong. "These settlements are critically important in righting the wrongs of the emissions cheating scandal."
Connecticut served on the leadership team of the multistate working group that investigated the two companies and negotiated their settlements, and will receive civil penalties of $1,398,892 from Fiat Chrysler, including $373,370 for violations of Connecticut's Unfair Trade Practices Act, and $2,960,722 from Bosch. Connecticut's total $4,359,614 million in penalty funds will be deposited into the state's General Fund.
Between 2013 and 2016, Fiat Chrysler sold approximately 87,350 diesel vehicles – including 598 vehicles sold in Connecticut – that failed to comply with emissions certifications received from the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB). The states alleged that Fiat Chrysler deceived regulators and consumers by describing the vehicles as environmentally friendly when the vehicles were, in fact, emitting substantial amounts of nitrogen oxide pollution into the air.
The states' settlement with Fiat Chrysler resolves the states' potential consumer protection claims against the company as well as environmental law claims of so-called "Section 177" states, which are states – including Connecticut – that have enacted more stringent air quality and emissions standards pursuant to Section 177 of the federal Clean Air Act.
The settlement prohibits Fiat Chrysler from engaging in unfair or deceptive acts, including offering or selling vehicles equipped with a defeat device, and incorporates provisions from a consent decree with federal authorities and CARB that requires a fix to affected vehicles' emissions-related software as well as pay restitution to vehicles owners and lessors.
The states alleged that Bosch installed undisclosed "software features" in hundreds of thousands of light-duty diesel passenger vehicles. The software features worked as defeat devices in order to meet emission standards during formal tests but to reduce emission controls during normal driving conditions in order to meet performance and fuel economy goals.
In addition to the financial terms of the states' settlement, Bosch has agreed to maintain its substantially enhanced compliance policies and procedures that prohibit development or marketing of defeat device software and bar the company from participating in developing or marketing a vehicle that utilizes a defeat device. Bosch must also train certain employees on compliance with these enhanced procedures and is prohibited from retaliation against any employee who reports an issue related to compliance. Bosch previously reached a class action settlement calling for $275.5 million in compensation to consumers affected by the VW scandal.
The settlements, which will be filed in the coming days, are not final unless and until they are approved by the court.
The state working group's executive committee is led by the Maryland, Massachusetts and New York attorneys general and, in addition to Connecticut, includes the states of Alabama, Illinois, Oregon, Texas and Washington.
Assistant Attorneys General Brendan Flynn; Scott Koschwitz; Lorrie Adeyemi; and Matthew Levine, head of the Environment Department; and law student interns Steen Kadison and Brittany McEwan, assisted the Attorney General with this matter.
Jaclyn M. Severance