Attorney General Dan Rayfield today joined a coalition of 50 attorneys general announcing a $149,673,750 settlement with Mercedes-Benz USA and Daimler for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing vehicles equipped with illegal and undisclosed emissions defeat devices designed to circumvent emissions standards. The settlement also includes more than $200 million in potential consumer relief.
“Oregonians expect the cars they buy to be safe, legal, and honestly marketed,” said Attorney General Rayfield. “When a company cuts corners and hides the truth, people pay the price – in their health, their wallets, and the air we all breathe. This settlement holds Mercedes and Daimler accountable, puts money back in the pockets of affected Oregon drivers, and helps protect our communities from pollution that never should have been there in the first place.”
Beginning in 2008 and continuing to 2016, the states allege Mercedes manufactured, marketed, advertised, and distributed nationwide more than 211,000 diesel passenger cars and vans equipped with software defeat devices that optimized emission controls during emissions tests, while reducing those controls outside of normal operations. The defeat devices enabled vehicles to far exceed legal limits of nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog.
Mercedes engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance, that it was unable to meet while complying with applicable emission standards. Mercedes concealed the existence of these defeat devices from state and federal regulators and the public. At the same time, Mercedes marketed the vehicles to consumers as “environmentally-friendly” and in compliance with applicable emissions regulations.
Today’s settlement requires Mercedes-Benz USA and Daimler to pay $120 million to the states upon the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a comprehensive consumer relief program.
Oregon will receive $2,560,231.86 to resolve both UTPA and environmental claims.
The consumer relief program extends to the estimated 39,565 vehicles that had not been repaired or permanently removed from the road in the United States by August 1, 2023. There were 4,094 effected vehicles in Oregon. Mercedes must bear the cost of installing approved emission modification software on each of the affected vehicles. The companies must provide participating consumers with an extended warranty and will pay consumers $2,000 per subject vehicle.
The companies must also comply with reporting requirements, reform their practices, and refrain from including a prohibition on any further unfair or deceptive marketing or sale of diesel vehicles, including misrepresentations regarding emissions and compliance.
Today’s settlement follows similar settlements reached previously between the states and Volkswagen, Fiat Chrysler and German engineering company Robert Bosch GmbH over its development of the cheat software. Automaker Fiat Chrysler and its subsidiaries paid $72.5 million to the states in 2019. Bosch paid $98.7 million in 2019. Volkswagen reached a $570 million settlement with the states in 2016.
In addition to Oregon, the final settlement was also joined by Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico.
