$15B Volkswagen Settlement Gets Preliminary Go-Ahead

A federal judge has tentatively approved the largest class action settlement in U.S. history, allowing Volkswagen's agreement to pay $15 billion to consumers to move forward. The car manufacturer settlement claims that it doctored emissions data on hundreds of thousands of cars, leading consumers to think they were more fuel-efficient and environmentally friendly.

With judicial approval, Volkswagen can now start gathering information on some 475,000 consumers eligible for compensation, which could begin as early as October. Here's what you need to know.

Emissions Evasions

The settlement covers certain Volkswagen and Audi "clean diesel" vehicles with 2.0-liter TDI engines. These cars were also rigged with software designed to cheat emissions tests, allowing the vehicles to emit 40 times the pollutants allowed by law. Drivers who thought they were saving the planet were in fact harming it at an alarming rate.

As reported by Courthouse News Service, Volkswagen agreed to pay $10.33 billion to help TDI buyers either get rid of their cars or modify them to reduce the emissions they produce. Members of the class can either sell their cars to Volkswagen at trade-in value or allow the car company to modify their cars' emissions systems to reduce emissions to acceptable levels. Those leasing a Volkswagen can cancel their leases without paying a penalty.

Volkswagen will also pay $2.7 billion as restitution for the excess pollution from the affected cars, and another $2 billion to fund a public awareness campaign on zero-emissions vehicles.

Settlement Steps

While the settlement is good news for all sides, it isn't final yet. While U.S. District Judge Charles Breyer has allowed the settlement to move forward, he maintained concerns that not all consumers had been properly notified of the settlement or would approve. "We must consider the views of people who have not spoken today, who have not been heard from," Breyer said. "I want people to have the opportunity in every state in this country to look at this settlement, ask questions about it, and make up their own minds if this settlement is appropriate."

The parties have a hearing on October 18, when the settlement could be finalized.

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• 3 Business Lessons From the VW Scandal (FindLaw's Free Enterprise)