Judge 'inclined' to approve Volkswagen settlement
A federal judge signaled Tuesday that he's likely to give final approval for a nearly $15 billion U.S. settlement over the Volkswagen Group emissions scandal, saying he recognizes the need to get the smog-belching diesels either fixed or off the road as soon as possible.
Judge Charles Breyer of the U.S. District Court in San Francisco said in a hearing that he would rule in writing by Oct. 25.
"The court is strongly inclined to approve the settlement, however I want to consider the objections further to determine whether the court should recommend any modifications," he said. "There is an urgency as I’ve expressed to bring this matter to conclusion. Cars are on the road out of compliance of environmental regulations, and it is imperative that this matter be addressed immediately."
Breyer had already given preliminary approval to the settlement giving owners of affected 2-liter diesel cars a choice. They can opt for a free fix to bring their car into compliance with emissions regulations and receive a payout of $5,100 to $9,852 depending on the value of the car. Or they can sell the car back to VW, giving them $12,475 to $44,176 including restitution. On Tuesday, he lavished praised on the attorneys who negotiated the settlement, further underscoring the likelihood that he'll sign off.
Separately, Breyer also gave preliminary approval for a $1.2 billion settlement between Volkswagen and its dealerships over the same matter.
The German automaker has admitted to rigging 11 million diesels worldwide with software to evade emissions standards, including 475,000 2-liter diesel cars in the U.S.
More than 336,000 of the eligible VW owners have already registered for the settlement, though they could back out if VW can't come up with a fix. The company has yet to receive approval from the Environmental Protection Agency, and if it fails to do so, everyone will be offered the buyback option.
The deal also includes $2.7 billion for environmental mitigation and another $2 billion for clean-emissions infrastructure.
VW plaintiffs attorney Elizabeth Cabraser said the deal "set a land speed record — probably an air speed record as well." She exhorted the judge to sign off, citing a nursery rhyme to describe the remediation offered by the deal.
"All the king's horses and all the king's men couldn't put Humpty Dumpty back together again," she said. "I think we've all ... put this back together again."
Fewer than 1% of eligible VW owners opted out of the deal before September deadline. People who did not respond are automatically considered to have taken the offer.
About two dozen VW owners objected to the deal during Tuesday's hearing. Most of the objections boiled down to complaints over the amount of the payout, while some critics also lambasted the automaker's "clean diesel" advertising and purposeful environmental pollution.
Mark Dietrich of San Francisco said he and his wife purchased an Audi, a VW luxury brand affected by the scandal, in 2010 prior to the arrival of their first child.
"We drank up their marketing materials and their promises of clean diesel," he told Judge Breyer. "We got played the fool."
The deal, he said, "does not go far enough."
Still, the U.S. Justice Department, EPA, Federal Trade Commission and California regulators and attorney general have thrown their weight behind the deal, adding to the likelihood that it will receive approval.
"This is an excellent settlement and we urge the court to approve it," FTC attorney Jonathan Cohen said.
VW attorney Robert Giuffra said the deal "may well be one of the biggest settlements in consumer history" and represents VW's concerted attempt to make things right.
"Under any circumstance this is a fair and reasonable settlement for consumers," he said.
While it's not clear what changes to the settlement Judge Breyer may be contemplating, one issue that arose involved whether it's fair that the settlement calculates trade-in value based on average annual driving of 12,500 miles.
Daniel Sasse, attorney for corporate automotive fleet company Wheels Inc., said the firm has exact mileage records for 5,000 vehicles that should entitle it to compensation accordingly.
The deal "refused and rejected actual data in exchange for assumptions," Sasse said.
Separately, VW's Giuffra told Breyer that he's hoping to have positive news to report at a Nov. 3 hearing regarding the status of settlement talks over 3-liter diesel vehicles that also cheated emissions standards but are not included in this settlement.
"There must be a resolution," Breyer said, adding that 3-liter diesel owners have been "aggrieved" and "their claims are no less important."
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.