Attorney General Andy Beshear announced a settlement Tuesday with Volkswagen that potentially means $100 million for the state and impacted car owners in Kentucky.
The settlement is part of reparations the automaker is expected to pay in settlements with 44 states, Puerto Rico and the District of Columbia. Volkswagen expects to pay up to $14.7 billion to consumers and the federal government as part of the largest penalty ever leveled on a car manufacturer for wrongdoing.
Beshear filed a lawsuit in March claiming Volkswagen and its connected brands violated Kentucky’s Consumer Protection Act after the car-maker admitted its vehicles cheated on emission standards testing.
In September, the company acknowledged installing software in its Volkswagen, Porsche and Audi models with diesel engines from 2009 to 2016 that limited the vehicles emissions during testing but allowed almost four times more emissions to be released while on the road.
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Beshear noted that former Volkswagen President and CEO Martin Winterkorn had promised the company would answer to its customers.
“While I believe that Volkswagen’s conduct was blatant, I do believe that they are living up to that promise to try and make things right with their consumers, our Kentuckians and that they are taking responsibility,” Beshear said.
Under the settlement, nearly 3,200 owners of affected cars in Kentucky will receive payments of at least $5,100 for the loss of value on their vehicle. Car owners will also have the choice to sell back their car for the original value or receive a modification that will make the vehicle meet emission standards. There are currently no EPA-approved fixes for the cars but a modification is being developed.
The state will get $19 million from an environmental mitigation trust funded by the automaker.
Money from the trust is intended to be used for projects that target emissions of nitrous oxide, the same emission related to the Volkswagen scandal.
Kentucky also will receive nearly $3.5 million in civil penalties from the carmaker for violating the state’s consumer protection act.
Beshear said that after expenses associated with the case, he believes the state will receive at least $2 million for its General Fund.
The attorney general’s office originally worked with a multi-state group to negotiate a settlement but decided to leave the group and make an individual claim.
“We believe that because we chose to depart and filed our own complaint, our outcome is better than it otherwise would have been,” Beshear said.
Volkswagen’s settlements with the federal government and states are preliminary and the company could still face criminal and civil penalties for federal Clean Air Act violations.
Details of the consumer restitution program available to nearly 580,000 U.S. customers can be viewed at https://www.vwcourtsettlement.com.