by Donald Eng
HARTFORD, CT — Mercedes-Benz USA and Daimler AG deliberately put hundreds of thousands of vehicles on the road that the companies knew were emitting pollution far above legal limits, Attorney General William Tong and Delaware Attorney General Kathy Jennings said Monday in announcing a $149.6 million settlement for violating state laws.
Tong said the carmaker violated laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing vehicles equipped with undisclosed emissions defeat devices that illegally circumvented Connecticut’s emissions standards. The settlement also includes more than $200 million in potential consumer relief.
Connecticut’s share of the settlement is just under $5 million, and Tong estimated there are 3,181 impacted vehicles in the state.
“Mercedes-Benz and Daimler hid devices inside their vehicles to cheat emissions tests, knowingly pumping out toxic emissions far exceeding legal limits. Their deception hurt their customers and harmed air quality for all Americans, and we’re holding them accountable,” Tong said. “This settlement, as with others previously reached with Volkswagen and Fiat Chrysler, sends millions of dollars back to states as well as comprehensive relief for consumers who purchased these defective vehicles.”
In a statement, the company said while it cooperated with the attorneys general, it continues to regard the accusations made as unfounded and denies any liability to the U.S. states or otherwise.
About 85% of the vehicles, BlueTEC II diesel passenger cars and vans, have already been updated, according to the company. The settlement allows Mercedes-Benz to avoid lengthy and costly court actions, the company said.
Department of Consumer Protection Commissioner Bryan T. Cafferelli said consumers deserve to know exactly what they are purchasing and should be able to reasonably assume new vehicles are in compliance with all laws and regulations.
“This deception was unfair to consumers and a clear violation of public trust,” he said.
Beginning in 2008 and continuing to 2016, the states allege Mercedes manufactured, marketed, advertised, and distributed nationwide more than 211,000 diesel passenger cars and vans equipped with software defeat devices that optimized emission controls during emissions tests, while reducing those controls outside of normal operations. The defeat devices enabled vehicles to exceed legal limits of nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog.
Mercedes engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance, that it was unable to meet while complying with applicable emission standards, according to the states. 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 upon the effective date of the settlement. An additional $29.6 million will be suspended and potentially waived pending completion of a comprehensive consumer relief program.
The consumer relief program extends to the estimated 39,565 vehicles that had not been repaired or permanently removed from the road in the United States by Aug. 1, 2023. Mercedes must bear the cost of installing approved emission modification software on each of the affected vehicles. The companies must provide participating consumers with an extended warranty and will pay consumers $2,000 per subject vehicle.
The companies must also comply with reporting requirements, reform their practices, and refrain from including a prohibition on any further unfair or deceptive marketing or sale of diesel vehicles, including misrepresentations regarding emissions and compliance.
The 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.