Department of Commerce and Consumer Affairs

DEPARTMENT OF THE ATTORNEY GENERAL

DAVID Y. IGE

GOVERNOR

DOUGLAS S. CHIN

ATTORNEY GENERAL

STEPHEN H. LEVINS
EXECUTIVE DIRECTOR, OFFICE OF CONSUMER PROTECTION

For Immediate Release                                                                                                                                                       

June 28, 2016

ATTORNEY GENERAL AND OFFICE OF CONSUMER PROTECTION ANNOUNCE COMPENSATION FOR HAWAII CONSUMERS UNDER  SETTLEMENTS WITH VOLKSWAGEN OVER EMISSIONS FRAUD
Volkswagen Required to Repurchase or Fix Falsely-Marketed Diesel Vehicles, Provide Restitution and Address Environmental Harms; Attorneys General Nationwide Obtain More Than $570 Million in Civil Penalties

HONOLULU – Attorney General Doug Chin and Office of Consumer Protection (“OCP”) Executive Director Stephen Levins today announced a settlement requiring Volkswagen to pay more than $570 million for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing diesel vehicles equipped with illegal and undisclosed defeat device software. This agreement is part of a series of state and federal settlements that will provide cash payments to affected consumers, require Volkswagen to buy back or modify certain Volkswagen and Audi 2.0-liter diesel vehicles, and prohibit Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.

Attorney General Chin said “This settlement punishes Volkswagen for deceiving Hawaii consumers. It affects the owners of more than 900 vehicles owned or leased in Hawaii. In addition to consumer restitution, it provides up to $10 million in payments to Hawaii.”

Today’s coordinated settlements resolve consumer protection claims raised by a multistate coalition of State Attorneys General in 43 states and jurisdictions against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. They also resolve actions against Volkswagen brought by the United States Environmental Protection Agency (EPA), the Department of Justice (DOJ), the Federal Trade Commission (FTC), California and car owners in private class action suits.

OCP Executive Director Levins said “This settlement will provide excellent relief to the Hawaii consumers who were victimized by Volkswagen’s outrageous conduct.”

The attorneys generals’ investigation confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with “defeat device” software intended to circumvent applicable emissions standards for certain air pollutants, and actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as environmentally friendly or “green” and that the cars were compliant with federal and state emissions standards, when, in fact, Volkswagen knew the vehicles emitted harmful oxides of nitrogen (NO_x) at rates many times higher than the law permitted.

Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015 listed in the chart below at a maximum cost of just over $10 billion. This includes up to 911 vehicles in Hawaii. 820 affected vehicles in Hawaii are 2.0 liter engine models. The remaining vehicles are 3.0 liter engine models. This settlement specifically pertains to the 820 2.0 liter engines in Hawaii. Lawyers continue to negotiate about what relief will be available later to owners of the 3.0 liter engines.

Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:

• A buy back of the vehicle (based on pre-scandal National Automobile Dealers Association (“NADA”) value); or

• A modification to reduce NO_x emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a fix. Owners who choose the modification option would also receive an Extended Emission Warranty; and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.

The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and sellers after September 18, 2015 when the emissions-cheating scandal was disclosed (50 percent of the restitution available to owners). Additional components of today’s settlements include:

• Environmental Mitigation Fund: Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NO_x. This fund, also subject to court approval, is intended to mitigate the total lifetime excess NOx emissions from the 2.0-liter diesel vehicles identified below. Under the terms of the mitigation trust, Hawaii is eligible to receive $7.5 million to fund mitigation projects.
• Additional Payment to the States: In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer protection laws, amounting to $570 million nationwide. This amount includes $2.5 million paid for affected vehicles Volkswagen sold and leased in Hawaii.
• Zero Emission Vehicles: Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or Zero Emission Vehicles (ZEV), and supporting infrastructure.

Volkswagen will also pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can utilize for future training and initiatives, including investigations concerning emissions violations, automobile compliance, and consumer protection.

The full details of the consumer program will be available online at VWCourtSettlement.com and www.ftc.gov/VWSettlement.

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For more information, contact:
Joshua A. Wisch
Special Assistant to the Attorney General
(808) 586-1284
[email protected]

 

William Nhieu
Communications Officer
Department of Commerce and Consumer Affairs
(808) 586-7582
[email protected]

2.0 Liter Diesel Models

Model Year (MY)	EPA Test Group	Vehicle Make and Model(s)
2009	9VWXV02.035N 9VWXV02.0U5N	VW Jetta, VW Jetta Sportwagen
2010	AVWXV02.0U5N	VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2011	BVWXV02.0U5N	VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2012	CVWXV02.0U5N	VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2013	DVWXV02.0U5N	VW Beetle, VW Beetle Convertible, VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2014	EVWXV02.0U5N	VW Beetle, VW Beetle Convertible, VW Golf, VW Jetta, VW Jetta Sportwagen
2012 2013 2014	CVWXV02.0U4S DVWXV02.0U4S EVWXV02.0U4S	VW Passat
2015	FVGAV02.0VAL	VW Beetle, VW Beetle Convertible, VW Golf, VW Golf Sportwagen, VW Jetta, VW Passat, Audi A3