Precedent-Setting Settlement With Bosch Marks First Time Any Auto Supplier Has Entered Into Such Settlement.
New York, NY - January 10, 2019 - Attorney General Letitia James today announced a landmark settlement with auto industry giants Fiat Chrysler and Bosch totaling $171 million in nationwide payments for violating various environmental and consumer protection standards across the United States. New York led a coalition of nine states, including Alabama, Connecticut, Illinois, Maryland, Massachusetts, Oregon, Texas and Washington, in this case.
The Attorney General’s investigation found that Fiat Chrysler:
Installed unlawful software in more than 97,000 vehicles sold nationwide, including in 3,050 vehicles in New York;
Cheated on federal and state emissions tests to conceal true emissions levels; and,
Misled consumers about vehicles being environmentally friendly, and lied about its ecological footprint and compliance with state laws.
As a result of the settlement, Fiat Chrysler is required to fix falsely marketed diesel vehicles, provide restitution to its impacted costumers, pay $72.5 million in civil payments throughout the country, and report on any possible environmental concerns that can be directly attributed to the company’s business practices.
In a related investigation, the Attorney General found that major auto supplier Bosch, which cooperated with the Attorney General:
Supplied the illegal so-called “defeat device” software used in more than 600,000 Volkswagen and Fiat Chrysler vehicles over the span of a decade;
Assisted Volkswagen and Fiat Chrysler with installation and use of the devices despite knowledge and concern of the risks; and,
Concealed misconduct from regulators and the public.
As a result of the settlement, Bosch is required to pay $98.7 million to states across the country. The settlement with Bosch includes precedent-setting injunctive terms and requires Bosch to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software.
The settlements also provide millions of dollars in compensation for New York consumers who purchased or leased Fiat Chrysler vehicles containing the illegal defeat devices, and combined civil penalties of approximately $10.7 million to the State of New York from Fiat Chrysler and Bosch.
“Fiat Chrysler and Bosch attempted to pull the wool over the eyes of American consumers, and pollute their way to the bank, but the Office of Attorney General will not stand for that type of behavior from any company,” said Attorney General Letitia James. “Today’s settlements are a victory for everyday Americans who simply want to know that the car they are driving works as advertised, and will ensure no long-term environmental damage was done. Our office will never tolerate companies that cheat and evade New York’s environmental laws and pollute our skies, or companies that deceive consumers about the products they sell.
Details on the settlements are as follows:
Following a nearly two-year investigation, today’s proposed consent judgment requires Fiat Chrysler Automobiles N.V., its U.S. subsidiary FCA US, LLC, its Italian affiliate V.M. Motori S.p.A. and V.M. North America, Inc. (collectively, “Fiat Chrysler”) to pay New York more than $4.85 million in civil penalties, including nearly $2.94 million under New York environmental laws for equipping, offering, selling and leasing the environmentally non-compliant vehicles, and more than $1.9 million under New York consumer protection laws for deceptively and unfairly marketing, selling and leasing the vehicles to consumers. Nationwide, excluding the separate penalties the company will be required to pay to the federal government and California, the multistate agreement forged by the Attorney General’s Offices of New York and eight other states is expected to result in payments totaling $72.5 million to 49 states, Puerto Rico, the District of Columbia and Guam.
New York’s proposed consent judgment also prohibits Fiat Chrysler from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers, and requires Fiat Chrysler to carry out its obligations under a series of related settlement agreements in the Multidistrict Litigation pending in the U.S. District Court for the Northern District of California. The full complaint filed by the New York Attorney General is available here.
The settlements with Fiat Chrysler follow earlier comprehensive settlements reached between New York, along with other states, federal and private actors, and Volkswagen for equipping, marketing, selling and leasing more than 570,000 Volkswagen, Audi and Porsche diesel vehicles with illegal defeat devices. Under those settlements, Volkswagen paid New York civil penalties of more than $64 million, fixed or repurchased the affected vehicles, and paid tens of millions of dollars in restitution to New York consumers.
Today’s proposed consent judgment requires Robert Bosch GmbH and its U.S. subsidiary, Robert Bosch LLC, (collectively “Bosch) to pay New York more than $5.84 million in consumer and environmental civil penalties. The agreement also includes precedent-setting injunctive terms and requires Bosch to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software.
Under a multistate agreement involving New York and 49 other jurisdictions – including Puerto Rico, the District of Columbia, Guam and all states other than California, Texas and West Virginia – Bosch will pay a total of $98.7 million under the jurisdictions’ consumer protection and environmental laws and make a separate $5 million payment to the National Association of Attorneys General (NAAG) for training and future enforcement purposes. Under the related MDL Settlements, Bosch will pay $27.5 million to consumers who purchased or leased the affected Fiat Chrysler vehicles. Bosch earlier paid more than $275 million to consumers who purchased or leased the affected Volkswagen vehicles. The full complaint filed by the New York Attorney General is available here.
These matters were handled by Executive Division Senior Enforcement Counsel David Nachman, Chief of the Affirmative Litigation Section in the Environmental Protection Bureau Morgan Costello, Assistant Attorney General Noah Popp of the Consumer Protection Bureau, and Assistant Attorneys General Danielle Fidler and Channing Wistar-Jones of the Environmental Protection Bureau. The Consumer Protection Bureau is led by Bureau Chief Jane Azia and the Environmental Protection Bureau is led by Bureau Chief Lemuel Srolovic. The Social Justice Division is led by Chief Deputy Attorney General Jennifer Levy.