Attorney General Alan Wilson announces nearly $150 million settlement with Mercedes-Benz USA and Daimler

(COLUMBIA, S.C.) –Attorney General Alan Wilson today joined a coalition of 50 attorneys general announcing a nearly $150 million settlement with Mercedes-Benz USA for violating state laws prohibiting unfair or deceptive trade practices. The lawsuit accused the company of marketing, selling, and leasing vehicles equipped with illegal and undisclosed devices designed to circumvent emissions standards. The exact amount of the settlement is $149,673,750.

Beginning in 2008 and continuing to 2016, the states allege Mercedes manufactured, marketed, advertised, and distributed nationwide more than 211,000 diesel passenger cars and vans equipped with software-defeat devices that optimized emission controls during emissions tests, while reducing those controls outside of normal operations. The states allege that the defeat devices enabled vehicles to far exceed many legal limits of nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog.

"Today's settlement is a win for South Carolina," Attorney General Wilson said. "This car manufacturer circumvented rules to meet its own goals while posing serious potential harm to our citizens."

Mercedes allegedly engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance, that it was unable to meet while complying with applicable emission standards. Mercedes concealed the existence of these defeat devices from state and federal regulators, as well as the public. At the same time, Mercedes marketed the vehicles to consumers as “environmentally friendly” and in compliance with applicable emissions regulations.

Today’s settlement requires Mercedes-Benz USA to pay $120 million to the states immediately upon the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a comprehensive consumer relief program.

South Carolina will receive $2,024,981.00 through today’s settlement. Approximately 1,820 of the impacted vehicles were sold or registered in South Carolina.

The consumer relief program extends to the estimated 39,565 vehicles, which as of August 1, 2023, had not been repaired or permanently removed from the road in the United States. Mercedes must bear the cost of installing approved emission modification software on each of the affected vehicles. The company must provide consumers with an extended warranty and will pay consumers $2,000 per subject vehicle.

The company must also comply with reporting requirements and reforms to its practices, including a prohibition on any further engagement in unfair or deceptive marketing or sale of diesel vehicles, as well as misrepresentations regarding emissions and compliance.

Today’s settlement follows similar settlements reached previously between the states and Volkswagen, Fiat Chrysler, and German engineering company Robert Bosch GmbH over its development of the cheat software. Automaker Fiat Chrysler and its subsidiaries paid $72.5 million to the states in 2019. Bosch paid $98.7 million in 2019. Volkswagen reached a $570 million settlement with the states in 2016.

The attorneys general of Alabama, Connecticut, Delaware, Georgia, Maryland, New Jersey, New York, South Carolina, and Texas led today’s settlement, joined by Alaska, Arkansas, Colorado, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico..

You can read the judgment here.