VW, EPA, CARB Reach “Agreement in Principle”

April 21, 2016 – Presiding over proceedings in the U.S. District Court for the Northern District of California, the Honorable Charles R. Breyer announced that the United States, on behalf of EPA, the California Air Resources Board in conjunction with the California Attorney General’s office, and Volkswagen (VW) have reached an “agreement in principle” to address the approximately 480,000 2.0-liter diesel cars that VW equipped with “defeat devices,” as well as the resulting excess emissions from these vehicles.  Under the agreement in principle, consumers will be provided several options: the option to have VW buy back the vehicle; subject to government approval following further testing, the option to have the vehicle modified in accordance with the agreement; and, for those who have leased an affected vehicle, the option to cancel the lease and return the car to VW.  Consumers will not have to select an option until there has been an opportunity to fully evaluate all the details and there is nothing for consumers to do at this time; they will receive a formal notice when action is required.  The agreement also provides for the payment by VW of “substantial compensation to the consumers” in connection with any of the three options.  In addition, according to Judge Breyer, “the agreement will fully address any excess emissions of NOx coming from these vehicles, and the environmental consequences from these excess emissions, by establishing a fund for appropriate remediation efforts.  In addition to all these other matters, Volkswagen will be required to commit other funds to promote green automotive technology.”  Breyer also noted that none of these terms would become effective “unless and until the parties are able to reduce this to a consent decree, upon which we would then seek public comment at that time.”  He then established deadlines for next steps.  The United States shall file any consent decree memorializing its agreements with VW on or before June 21, 2016.  The plaintiffs shall file a motion for preliminary approval of the settlement of the consumer class action complaint on or before June 21, 2016.  The court will hold a hearing on the preliminary approval motion on July 26, 2016.  All filings will be public and the public will have an opportunity to fully review and evaluate the proposed agreements before they are approved or acted upon by the court.  There will be a status conference on May 19, 2016.  Breyer ordered all parties “to continue to keep the contents of the discussions and any proposed agreements confidential until they are filed with the Court.”  Finally, he noted, “there are obviously several other issues that I have not discussed this morning.  Nor have I addressed them.”  Included among these are the approximately 90,000 3.0-liter diesel vehicles equipped with defeat devices, as well as the issues of fines and penalties.  Of these, Breyer said, “It is the Court’s expectation that the parties, in addition to finalizing the agreements that I’ve just discussed, will work expeditiously in resolving these outstanding issues.”