- Utah is getting money due to the misbehavior of a high end auto manufacturer that cheated the emissions system.
- This money and the settlement are important due to Utah's continuing struggle with air pollution that comes from tail pipes.
- The settlement isn't just for Utah, as the $149.6M settlement is spread across the nation.
The Utah Department of Commerce’s Division of Consumer Protection and the Office of the Utah Attorney General on Monday joined a coalition of 50 states announcing a $149.6 million settlement with Mercedes-Benz USA and Daimler AG for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing vehicles equipped with illegal and undisclosed emissions defeat devices designed to circumvent emissions standards.
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 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.
Why this matters in Utah
Mercedes allegedly engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance that the company could not meet while complying with emission standards.
Tailpipe emissions are the biggest contributor to air pollution along the Wasatch Front. It is estimated those emissions are 50% of the problem that helps stoke inversions and create advisories such as “red air” days that encourage people to drive less, take public transit and avoid burning wood as a heating source.
Mercedes concealed these defeat devices from state and federal regulators and the public. At the same time, Mercedes marketed the vehicles to consumers as “environmentally friendly” and in compliance with applicable emissions regulations.
The settlement requires Mercedes-Benz USA and Daimler AG to pay $120 million to the states immediately upon the effective date of the settlement. An additional $29.6 million will be suspended and potentially waived pending completion of a comprehensive consumer relief program.
Utah will receive $535,654 through the settlement. Approximately 1,857 impacted vehicles were sold or registered in Utah.
“Utah stands for the rule of law and a level playing field in the marketplace,” said Utah Attorney General Derek Brown. “Mercedes-Benz undermined fair competition by installing illegal emissions defeat devices. Free enterprise works only when the same rules apply to everyone, and Utah will enforce the law to protect the integrity of our markets.”
The consumer relief program extends to the estimated 39,565 vehicles, which as of Aug. 1, 2023, had not been repaired or permanently removed from the road. 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 vehicle.
The company must also comply with reporting requirements and reforms to their practices, including a prohibition on any further engagement in unfair or deceptive marketing or sale of diesel vehicles, misrepresentations regarding emissions and compliance.
“Deceptive claims like the ones Mercedes made to its customers will not be tolerated in Utah,” said Margaret Woolley Busse, executive director of the Utah Department of Commerce.
“The work done to achieve this settlement is proof that our state will do whatever it can to ensure that consumers get what they pay for. If a company does not make good on their representations, we will hold them accountable.”
This is not the first time states have had to go after automobile manufacturers that skirt the law.
A similar settlement was reached 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 impact of this latest “cheat” went far and wide beyond Utah.
The attorneys general of Alabama, Connecticut, Delaware, Georgia, Maryland, New Jersey, New York, South Carolina, and Texas led Monday’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.