Volkswagen emissions deal clears first hurdle

SAN FRANCISCO — A nearly $15 billion settlement over Volkswagen’s emissions cheating scandal cleared a key hurdle Tuesday, with a federal judge giving preliminary approval to the deal that includes an option for owners to have the carmaker buy back their vehicles.

U.S. District Judge Charles Breyer called the settlement an “enormous effort” by attorneys from both sides and urged Volkswagen owners who may want to opt out and pursue their own lawsuits to consider the deal’s environmental achievements.

“Because that’s significant, and that’s part of what you’re attempting to achieve in this settlement,” said Judge Breyer, who is overseeing consumer lawsuits and government allegations that Volkswagen’s diesel engines cheated on U.S. emissions tests.

The German carmaker has agreed to spend up to $10 billion buying back or repairing about 475,000 Volkswagens and Audi vehicles with 2-liter diesel engines and paying their owners an additional $5,100 to $10,000 each. Details about the vehicle repairs have not been finalized.

The settlement also includes $2.7 billion for unspecified environmental mitigation and an additional $2 billion to promote zeroemissions vehicles.

The judge’s decision allows attorneys to notify vehicle owners of the terms and consumers to use a settlement website to determine how much compensation they would get. They could object and opt out, allowing them to pursue legal action against Volkswagen on their own. Owners are under no obligation to accept the buyback offer for the value of the cars before Volkswagen’s test-rigging scheme was disclosed, so they could pick a third option: drive their diesel Jettas, Beetles and Passats until the wheels come off.

The deal does not cover about 85,000 more-powerful Volkswagens and Audis with 3-liter engines also caught up in the emissions scandal. Bloomberg News contributed.