Texas Attorney General announced an agreement with Volkswagen (VW) Friday to resolve a lawsuit brought against the automaker over its fuel emission scandal.
The lawsuit forces VW to pay Texas $50 million in civil penalties and attorney’s fees and will prohibit the company from falsely advertising its cars as environmentally friendly if they are affixed with the so-called defeat devices.
“The message this settlement sends is ‘Don’t mess with Texas.’ You cannot fleece Texans and expect to get away with it,” Paxton said in a Friday press statement. “We’ve held VW accountable for the harm it caused to a degree that should deter future corporate malfeasance.”
VW’s fuel emission-cheating scandal will cost the company a grand total of $14.7 billion, $10 billion of which will go to the owners of the tainted vehicles, while another $2.7 billion goes to the Environmental Protection Agency for environmental mitigation. The company will plow another $2 billion investment into electric vehicle technology, which will be distributed within the next decade.
Texans, for their part, will benefit from nearly $200 million of the funds in the trust.
The German automaker must also square accounts with 500,000 of its customers, including more than 40,000 VW owners in Texas. The lawsuit stipulates that customers are entitled to an additional compensation up to $10,000, as well as having their cars bought back.
VW admitted in September to installing so-called defeat devices in hundreds of thousands of diesel-powered vehicles in the U.S.
Audi vehicles were fitted with a device in 1999 to stop a “disagreeable noise” the vehicles made during startup, which then resulted in fuel flooding the car’s system, causing them to run afoul of Europe’s fuel emission standards.
A lawsuit filed in July found that VW installed the cheating software that deactivated the new injection technology during road testing situations. That technology would end up in all the cars tainted with the devices from model year 2004 to 2008.
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