Federal judge approves Daimler’s $1.5 billion diesel emissions settlement

A federal judge on Tuesday approved Daimler AG’s $1.5 billion settlement to settle a U.S. government investigation into the German automaker’s use of undisclosed software that permitted excess diesel pollution to be emitted by 250,000 of its automobiles in the United States.

The settlement with the U.S. Justice Department and California Air Resources Board, which was declared in September, includes an $875 million civil penalty levied under the Clean Air Act, $70 million in extra penalties, and $546 million to repair the polluting vehicles and offset excess emissions, court papers reveal.

U.S. District Judge Emmet G. Sullivan described the California settlement to be fair, reasonable, and in the public interest, and noted settlement-related discussions lasted for more than three years.

As part of the settlement, the automaker will pay California $285.6 million.

The automaker has separately agreed to a $700 million settlement with diesel vehicle owners. That settlement has won preliminary approval and it may get final approval this summer, said Steve Berman, a lawyer for the owners.

In December, the Justice Department said the settlement ensured the automaker would repair around 250,000 automobiles at no cost to consumers and fully address excess air pollution.

Diesel vehicles have come under scrutiny in the United States since Volkswagen confessed in 2015 to installing secret software on 580,000 U.S. vehicles that enabled them to emit excess emissions.

In 2019, Daimler agreed to pay an 870 million-euro ($1.03 billion) fine in Germany for breaching diesel emissions regulations.

Both Volkswagen and Daimler have stopped the sales of U.S. passenger diesel vehicles.