The Environmental Protection Agency announced a massive settlement (between $14.7 and $15.3 billion) by Volkswagen in a press release today. More fines could be in the works as the EPA is still considering civil fines under the Clean Air Act and the Department of Justice is still investigating the automaker for potential criminal charges.
VW admitted in September that it installed defeat devices on as many as 11 million cars. The installed software circumvented EPA emissions tests for certain diesel cars. When not under EPA tests, the diesel cars emitted substantially larger quantities of pollutants.
As part of the settlement, Volkswagen agreed to buy back vehicles from consumers and fund the development of clean technologies. The $10 billion buyback was a partial settlement with the Federal Trade Commission, which declared it the largest false advertising case in FTC history. For nearly 500,000 cars, VW advertised to owners that there were low levels of harmful emissions when in fact the cars exceeded the U.S. emissions standards. $4.7 billion from the settlement will be spent by VW towards pollution mitigation and supporting zero-emissions technology efforts.
The resolution has been called the largest auto-related class-action settlement in U.S. history. Media and investment bank speculation about the potential cost of the Dieselgate scandal to VW had put the settlement cost as high as $87 billion.
The largest environmental penalty and the largest-ever civil settlement with a single entity, according to the Associated Press in April, is the $20.8 billion settlement over the 2010 BP oil spill in the Gulf of Mexico.
From a whistleblower perspective, this type of case would skirt the line between the False Claims Act and the new auto whistleblower program created by the Motor Vehicle Safety Whistleblower Act.