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Attorney General Kilmartin Announces Settlement of State Environmental Claims with Volkswagen for Emissions Fraud

VW Required to Pay $4.1 Million for Environmental Projects in Rhode Island and Commit to Sale of Three Types of Electric Vehicles

Attorney General Peter F. Kilmartin today announced a settlement requiring Volkswagen to pay more than $4.1 million for violating Rhode Island state laws prohibiting the sale and leasing of diesel vehicles equipped with illegal and undisclosed emissions control defeat device software.

The agreement is the last in a series of state and federal settlements that will provide cash payments to affected consumers, required Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles, and prohibited Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.

The coordinated settlements resolve state environmental claims raised by a multistate coalition of 10 state attorneys general against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. collectively referred to as Volkswagen. These 10 states have all adopted California's more stringent auto emissions standards, pursuant to the federal Clean Air Act, which prohibited Volkswagen's actions here.

Under the settlement announced today, Volkswagen is required to pay a total $157,448,480 to Rhode Island and the other 9 settling states. In accordance with the terms of the settlement, Rhode Island must use its share, $4.1 million, on environmentally beneficial projects as directed and approved by the Attorney General's Office. Volkswagen will also be required to offer for sale in these states 3 separate models of electric vehicles.

"Volkswagen deceived its customers along with state and federal regulators when the company knowingly sold vehicles that failed to meet emissions standards as marketed, and further, tried to cover up their actions," said Attorney General Kilmartin. "This settlement, one of the largest in recent history, along with related federal and state settlement against Volkswagen, will provide millions of dollars to Rhode Island for diesel emission reduction, electric vehicle infrastructure, and related environmental projects. These settlements hold the company responsible for their reckless and negligent actions."

The attorneys generals' investigation confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with "defeat device" software intended to circumvent applicable emissions standards for certain air pollutants, and actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as environmentally friendly or "green" and that the cars were compliant with federal and state emissions standards, when, in fact, Volkswagen knew the vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted.

In addition to today's state environmental settlement, previous federal and state settlements have provided significant benefits and restitution for the State, as well as consumer lessees and owners of affected vehicles. As part of a previously announced federal settlement, Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NOx. This fund is intended to mitigate the total, lifetime excess NOx emissions from the 2.0-liter diesel vehicles included in the settlement. Under the terms of the mitigation trust, Rhode Island is eligible to receive approximately $13.5 million to fund mitigation projects through the Department of Environmental Management.

Today's settlement marks the first time the settling states -- all of which have adopted California's stringent vehicle emission standards -- have secured environmental penalties from an automobile manufacturer under their own state auto emissions laws. Historically, enforcing vehicle emission standards has been done primarily by the federal government. Setting this precedent is particularly vital now, when President Trump has vowed to defund federal environmental enforcement and undo federal environmental protections, which would leave states as the first line of defense for the environment.

"As the new Administration continues to dismantle the nation's clean energy policies, it will be left up to the states more and more to hold companies who knowingly attempt to circumvent state emission standards and other environmental polluters," added Kilmartin.

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