The deal, laid out in court papers last month, offers drivers of some 475,000 diesel-powered vehicles with two-liter engines the option of either selling back their cars or waiting until regulators approve a technical fix to make the cars compliant with emissions standards.
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“It’s not a simple settlement”, Breyer said in court.
U.S. District Judge Charles Breyer called the settlement an “enormous effort” by attorneys from both sides and urged Volkswagen owners who may want to opt out and pursue their own lawsuits to consider the deal’s environmental achievements.
“We have designed a settlement that places the consumers – the owners and lessees – in a central, decisive role”, said Elizabeth Cabraser, lead attorney for Volkswagen owners.
Under the agreement, Volkswagen will also compensate owners who purchased 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of their cars. Those with leased vehicles will receive an average of $3,500 in compensation and can terminate their leases.
Judge Breyer still needs to give the settlement final approval, and he’s slated to do so in October.
In addition, the carmaker will spend $2.7 billion to support environmental projects, including construction of an extensive network of fast-recharging stations for electric vehicles in California, with an additional $2 billion earmarked for research on reducing emissions.
The judge’s decision allows attorneys to notify vehicle owners of the terms and consumers to use a settlement website to determine how much compensation they would get.
The deal does not cover about 85,000 more powerful Volkswagens and Audis with 3-liter engines also caught up in the emissions scandal.
The affected vehicles include model year 2009 to 2015 Volkswagen Jettas, 2010 to 2015 Volkswagen Golfs, 2012 to 2015 Volkswagen Passats and Beetles, and 2010 to 2015 Audi A3s.
The company still faces billions more dollars in fines and penalties and possible criminal charges. Joshua Van Eaton, an attorney with the Justice Department, told the court that regulators are working closely with Volkswagen on a technical fix and should have more information on those vehicles at an August 25 hearing.
New York Attorney General Eric Schneiderman recently lobbed his own lawsuit against the company.
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The beleaguered German automaker said its leaders and the federal regulators who had been investigating the emission cheating believe “the proposed settlement program will provide a fair, reasonable and adequate resolution for affected Volkswagen and Audi customers”, now that it has received initial approval by Breyer.
