VW settlement of emissions case could mean millions for Arizona

WASHINGTON – The state of Arizona could get up to $53 million for clean-air programs as part of a $14.7 billion settlement of a U.S. government lawsuit that charged Volkswagen rigged its “clean diesel” vehicles to cheat on emissions tests.

People who bought or leased those vehicles – as many as 10,000 of them in Arizona – would also be able to get benefits ranging from about $2,500 for a lessee to the cost of having their car bought back by the automaker.

The agreement sets aside $10 billion for vehicle owners, $2.7 billion for environmental remediation and $2 billion to encourage the use of zero-emission vehicles, like electric cars and buses.

U.S. District Judge Charles Breyer in San Francisco reviewed the terms of the deal in a hearing Tuesday and said in published reports that he is inclined to approve the settlement by the end of the month.

The case began last year when the Environmental Protection Agency accused the automaker of installing “defeat devices,” software that made the cars run cleaner during emissions testing, on as many as 580,000 vehicles in the U.S.

“The people who got the bad vehicles are being made whole by this settlement, and the state is also getting money to invest in clean air,” said Sandy Bahr, director of the Grand Canyon chapter of the Sierra Club. “This money isn’t taking away from the owners of the vehicles, as some people – mostly uniformed politicians – said.”

If Breyer approves the settlement at the federal level, the state would receive a portion of funds directly, based on how “many polluting cars were sold in Arizona,” said Suzanne Pletcher, spokeswoman at the Southwest Energy Efficiency Project, a regional advocacy group promoting clean energy.

Arizona is scheduled to get just under 2 percent of the total $2.7 billion remediation fund for the 10,000 affected cars registered in the state. California, which had the largest share of consumers with so-called “clean diesel” vehicles, would get the largest share, at 14.1 percent of the funds, followed by Texas at 7 percent.

-Cronkite News video by Claire Caulfield

The $53 million Arizona is scheduled to receive would be used to help reduce damage to air quality caused by the vehicles that would not have passed emissions tests had they not had the duplicitous software. There are a number of ways the state can work on addressing the harmful emissions.

“Once the judge rules and the dollars are distributed, we will be anxious to work with the state and to ensure that the dollars are used to benefit the people of Arizona and improve their air quality,” Bahr said.

A spokeswoman for Arizona Attorney General Mark Brnovich said his office could not comment on the settlement because it is in the middle of a separate fraud lawsuit against Volkswagen. But the spokeswoman did say that the settlement of the EPA suit does not affect the state’s ability to press its fraud case against the automaker.

“Arizona has one of the strongest consumer fraud provisions in the nation,” Brnovich said in a July statement on the state’s suit. “While some other states are limited to a few thousand dollars in penalties per violation, Arizona law provides for as much as $10,000 penalty for each willful violation of the Consumer Fraud Act.”

Gov. Doug Ducey’s office would not comment on the settlement, but his office would be responsible for designating which state agency would develop plans to use any funds from the federal settlement.

– Cronkite News reporters Claire Caulfield and Sabella Scalise contributed to this report.