SACRAMENTO – California Attorney General Xavier Becerra has joined the California Air Resources Board and the United States Department of Justice, along with the Environmental Protection Agency, to announce a joint settlement with Fiat Chrysler Automobiles N.V. and related companies.
Becerra said in a press release that the settlement is valued at more than $500 million, resolving allegations that Fiat Chrysler violated environmental and consumer protection laws by using “defeat device software to circumvent emissions testing."
According to Becerra’s Jan. 10 press release, California will receive $78.4 million as part of the settlement.
Becerra alleged Fiat Chrysler installed the defeat device software in 100,000 vehicles nationwide and 13,325 vehicles in California.
The allegedly affected vehicles are 2014-2016 diesel Jeep Grand Cherokees and Dodge Ram 1500s, according to Becerra.
“California’s emission standards exist to protect our residents and the environment from harmful pollution,” Becerra said. “Fiat Chrysler tried to evade these standards by installing software to cheat emissions testing.”
Becerra said the company not only violated the law, but did so at the expense of the environment.
“With this settlement, we are holding Fiat Chrysler accountable and securing important funds for environmental protection efforts,” Becerra said.
CARB Chair Mary D. Nichols said the settlement is a direct result of the enhanced screening and testing procedures CARB developed to uncover the Volkswagen diesel cheating scandal.
“It is a testament to our ongoing commitment to clean the air - and a warning to other car manufacturers - that the vehicles they sell must meet the rules and vehicle standards expressly designed to protect public health,” Nichols said in the release.
According to Becerra’s press release, California’s $78.4 million recovery includes $45.8 million in penalties for violations of environmental laws and a mitigation payment of $19 million.
“These payments will be deposited into the Air Pollution Control Fund and managed by CARB through the budget process to fully mitigate the excess nitrogen oxide emissions from the affected vehicles,” the press release stated.
The settlement also includes a $13.5 million payment to the California Attorney General’s Office for alleged violations of the Unfair Competition Law, other statutes and costs, according to the press release.
"The extended warranty negotiated as part of the government settlement will cost Fiat Chrysler approximately $105 million," also requiring "Fiat Chrysler to establish a recall program offering consumers an approved emission modification with an extended warranty to bring the vehicles into emissions compliance," the press release stated.
The attorney general’s office said the settlement requires Fiat Chrysler to conduct ongoing testing of emissions compliance, durability and the vehicles’ diagnostics systems.
"The company must also enact corporate reforms and undergo ongoing independent compliance monitoring," according to Becerra’s press release.
"Fiat Chrysler estimates that the cost of research and development for the approved emissions modification, installing the approved emissions modification and implementing the federal mitigation program will be between $60 million and $80 million," the press release stated.
A related class action settlement filed Jan. 10 also provides approximately $300 million in consumer relief, according to the press release.