Commonwealth of Virginia
Office of the Attorney General
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Michael Kelly, Director of Communications
SETTLEMENTS WITH FIAT CHRYSLER AND AUTO SUPPLIER ROBERT BOSCH ADDRESS USE OF EMISSIONS DEFEAT DEVICES
~ Virginia is recovering approximately $5.3 million as part of the $171 million multistate settlements related to the alleged use of "emissions defeat devices" ~
RICHMOND (March 5, 2019) - As part of settlements stemming from the use of "emissions defeat devices," Fiat Chrysler and the auto parts supplier Robert Bosch will be required to fix vehicles, provide restitution, address environmental harms, and pay a total of $171 million to the states, including $5.3 million to Virginia. Bosch allegedly supplied and helped program the illegal emissions "defeat device" software used by both Fiat Chrysler and Volkswagen in their diesel vehicles.
Attorney General Herring previously reached a settlement with Volkswagen to address the company's illegal modification of the emissions systems of certain cars and violations of state laws. That settlement and related settlements required Volkswagen to fix affected vehicles, provide millions in compensation directly to the owners of the more than 20,000 affected VW and Audi vehicles bought or leased in Virginia, compensate the state for violations of consumer protection laws, and establish a trust fund for use on projects to improve the environment by reducing air pollution in the transportation sector. Money from the trust fund has supported projects including investments in all-electric transit buses across Virginia and the development of a statewide public electric vehicle charging network.
"Businesses who lie to consumers about their products must be held accountable, and Virginians who purchased these misrepresented products deserve compensation," said Attorney General Herring. "These agreements with Fiat Chrysler and Robert Bosch and our settlement with Volkswagen back in 2016 send a clear message that we will not tolerate auto makers and other companies that attempt to cheat regulators and consumers. Car manufacturers should be working to find ways to protect our environment for further generations instead of finding ways to skirt our environmental laws and regulations."
Following a nearly two-year investigation, the Virginia Attorney General alleges that Fiat Chrysler Automobiles N.V., its U.S. subsidiary FCA US, LLC, its Italian affiliate V.M. Motori S.p.A. and V.M. North America, Inc. (collectively, "Fiat Chrysler") installed unlawful defeat device software and undisclosed Auxiliary Emissions Control Devices ("AECDs") in 2,054 Model Year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles that the automaker sold in Virginia. The Attorney General's Office alleges that Fiat Chrysler cheated on federal and state emissions tests by calibrating the vehicles' software to conceal that the vehicles emitted higher than permitted levels of harmful nitrogen oxides (NOx) in real-world driving conditions, and misled consumers by falsely claiming the "Eco-Diesel"-branded Jeep SUVs and Ram 1500 trucks were environmentally friendly and compliant with the law in all 50 states.
The settlements require Fiat Chrysler to pay $72.5 million to 49 states, Puerto Rico, the District of Columbia and Guam, including $1.2 million to Virginia for deceptively marketing, selling and leasing the vehicles to consumers.
Virginia's settlement will also prohibit Fiat Chrysler from engaging in future deceptive acts and practices in connection with its dealings with consumers, and require Fiat Chrysler to carry out its obligations under a related settlement agreement in the Multidistrict Litigation pending in the U.S. District Court for the Northern District of California. Once the related settlement is approved by the court, it will resolve claims brought by a national class of affected consumers. Other settlements between Fiat Chrysler and the United States Department of Justice, the Environmental Protection Agency, the California Air Resources Board and the State of California were also filed in the proceedings. These Multidistrict Litigation settlements together require Fiat Chrysler to:
- Eliminate the defeat device features from the relevant software through a software "flash fix";
- Provide eligible owners and lessees extended warranties;
- Make available 200,000 upgraded catalytic converters to mitigate air pollution across the country when installed by Fiat Chrysler vehicle owners as replacements to their existing catalytic converters; and
- With co-defendant Bosch, pay eligible owners who take their vehicle to an authorized dealer for the software repair an average restitution of approximately $2,908 and lessees and former owners who do so restitution of $990 (assuming all owners and lessees nationwide participate, this will result in total available restitution of approximately $307 million, including approximately $6 million to affected owners and lessees of 2,054 vehicles in Virginia).
The proposed settlements with Fiat Chrysler follow earlier comprehensive settlements reached with Volkswagen for equipping, marketing, selling and leasing more than 570,000 Volkswagen, Audi and Porsche diesel vehicles with illegal defeat devices.
Bosch is a multinational engineering company well known for its consumer products. It is also a major supplier to the global automotive industry. Among the products Bosch supplies to its auto manufacturing customers are the electronic control units ("ECUs") that house the complex software that controls nearly all aspects of an engine's performance, including emissions systems. When Volkswagen, a Bosch customer, was revealed to have systematically utilized defeat device software in its diesel vehicles, several states Attorneys General, including the Attorney General of Virginia, commenced a separate investigation into the role played by Bosch in enabling its customers to potentially violate federal and state emissions regulations. Now that another Bosch customer, Fiat Chrysler, has settled claims that it too employed illegal defeat devices, the Attorney General's Office is able to announce the conclusion of that separate investigation into Bosch's conduct.
The Attorney General alleges that Bosch facilitated the implementation of the defeat device software in more than 600,000 Volkswagen and Fiat Chrysler vehicles over a period that spanned more than a decade. Notwithstanding concerns about the illegality of the devices raised internally to management, and externally to Volkswagen and Fiat Chrysler, the Attorney General alleges that Bosch continued to assist these customers as they implemented the defeat devices and concealed their misconduct from regulators and the public.
Under a multistate agreement involving Virginia and 49 other jurisdictions, Bosch will pay a total of $98.7 million under the jurisdictions' consumer protection and environmental laws, including $4.1 million to Virginia, and make a separate $5 million payment to the National Association of Attorneys General (NAAG) for training and future enforcement purposes. Under the related MDL Settlements, Bosch will also pay approximately $27.5 million to consumers who purchased or leased the affected Fiat Chrysler vehicles. Bosch earlier paid more than $275 million to consumers who purchased or leased the affected Volkswagen vehicles. The multistate agreement also includes precedent-setting injunctive terms and requires Bosch to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software.
Since 2014, Attorney General Herring's Consumer Protection Section has recovered more than $292 million in relief for consumers and payments from violators. The Section has also transferred more than $33 million to the Commonwealth's General Fund. Following a major reorganization and enhancement in 2016, the OAG's Consumer Protection Section has been even more effective in fighting for the rights of Virginians.
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