AG Brown announces $150 million multistate settlement with Mercedes, Daimler over emissions fraud

A coalition of 50 attorneys general, including Washington AG Nick Brown, have reached a $150 million settlement with Mercedes-Benz USA and Daimler AG for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling, and leasing vehicles equipped with illegal and undisclosed emissions defeat devices designed to circumvent emissions standards.

Nationwide, beginning in 2008 and continuing to 2016, the states allege Mercedes produced and distributed more than 211,000 diesel passenger cars and vans equipped with software defeat devices that optimized emission controls during testing while reducing those controls outside of normal operations. The states allege the defeat devices enabled vehicles to far exceed many legal limits of nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog.

Mercedes concealed the existence of these defeat devices from state and federal regulators and the public. At the same time, Mercedes marketed the vehicles to consumers as "environmentally-friendly" and in compliance with applicable emissions regulations.

Today's settlement requires Mercedes-Benz USA and Daimler AG to pay $120 million to the states immediately upon the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a comprehensive consumer relief program.

Those figures are just the beginning for Mercedes and Daimler to make right for what they've done. In addition to that amount, Mercedes will pay $2,000 per subject vehicle and provide each consumer with an extended warranty worth an estimated $1,200. Initial estimates suggest the total value of the settlement could reach $347 million nationally.

Washington state will receive more than $3 million to be divided between the Attorney General's Office and the state Department of Ecology. There are estimated to be almost 5,000 vehicles in Washington for which Mercedes will pay participating consumers $2,000 per vehicle with the extended warranty estimated at $1,200.

"I'm pleased to have been part of this broad bipartisan effort to protect consumers," Brown said. "Air pollution from transportation is a serious threat. The least companies can do is meet the long-established national standards to reduce it."

The consumer relief program extends nationally to the estimated 39,565 vehicles which as of August 1, 2023, had not been repaired or permanently removed from the road in the United States. Mercedes must bear the cost of installing approved emission modification software on each of the affected vehicles.

The company must also comply with reporting requirements and reforms to their practices, including a prohibition on any further engagement in unfair or deceptive marketing or sale of diesel vehicles and misrepresentations regarding emissions and compliance.

Today's settlement follows similar settlements reached previously between the states and Volkswagen, Fiat Chrysler, and German engineering company Robert Bosch GmbH over its development of the cheat software. Automaker Fiat Chrysler and its subsidiaries paid $72.5 million to the states in 2019. Bosch paid $98.7 million in 2019. Volkswagen reached a $570 million settlement with the states in 2016.

The attorneys general of Alabama, Connecticut, Delaware, Georgia, Maryland, New Jersey, New York, South Carolina, and Texas led today's settlement, joined by Alaska, Arkansas, Colorado, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, and Puerto Rico joined in today's settlement.