Daim­ler set­tles over emis­sions cheat­ing

San Francisco Chronicle Late Edition - - BUSINESS - By Bob Egelko Bob Egelko is a San Fran­cisco Chron­i­cle staff writer. Email: begelko@ sfchron­i­cle.com Twit­ter: @BobEgelko

Daim­ler, the par­ent com­pany of MercedesBe­nz, has agreed to pay $1.5 bil­lion to set­tle gov­ern­ment ac­cu­sa­tions that it equipped 250,000 diesel cars and vans sold in the United States with de­vices that cheated emis­sions tests and spewed pol­lu­tants into the air, Cal­i­for­nia and U.S. Jus­tice Depart­ment of­fi­cials an­nounced Mon­day.

About $300 mil­lion of the set­tle­ment will go to Cal­i­for­nia, state At­tor­ney Gen­eral Xavier Be­cerra said.

The Ger­man au­tomaker has also an­nounced a sep­a­rate $700 mil­lion set­tle­ment of a clas­s­ac­tion suit by pur­chasers of the ve­hi­cles, from model years 2009 through 2016. Daim­ler halted U.S. sales of diesel­pow­ered cars in 2016.

The set­tle­ments are sim­i­lar to the Volk­swa­gen emis­sions scan­dal in 2015 that led to a $14.7 bil­lion set­tle­ment with ve­hi­cle own­ers and the U.S. gov­ern­ment and the im­pris­on­ment of sev­eral VW ex­ec­u­tives.

“Cheat­ing isn’t the smartest way to mar­ket your prod­uct,” Be­cerra said in a state­ment. “Daim­ler is find­ing that out to­day. But they’re not the first — nor likely the last — to try.”

Of the 250,000 ve­hi­cles, 39,646 were sold in Cal­i­for­nia, Be­cerra’s of­fice said. The of­fice said the state’s $300 mil­lion share in­cludes $17.5 mil­lion for en­vi­ron­men­tal mon­i­tor­ing and enforcemen­t, and for en­vi­ron­men­tal projects in Cal­i­for­nia.

Daim­ler, like Volk­swa­gen, was ac­cused of rig­ging diesel emis­sions sys­tems to ar­ti­fi­cially lower re­lease of ni­trous ox­ides dur­ing test­ing. The pol­lu­tants are a ma­jor cause of smog and also con­trib­ute to global warm­ing.

The $1.5 bil­lion set­tle­ment in­cludes the costs of re­pair­ing the ve­hi­cles, fund­ing gov­ern­ment projects to re­duce ni­trous ox­ide pol­lu­tion, and civil penal­ties to the gov­ern­ment, Be­cerra’s of­fice said. The sep­a­rate $700 mil­lion set­tle­ment will com­pen­sate ve­hi­cle own­ers for their losses.

The Trump ad­min­is­tra­tion an­nounced the set­tle­ment while fight­ing sep­a­rately to lower U.S. fuel­econ­omy stan­dards, an ac­tion that would in­crease emis­sions of cli­mate­chang­ing green­house gases. Cal­i­for­nia has sued the ad­min­is­tra­tion for re­vok­ing a long­stand­ing waiver that al­lowed the state to set stricter fuel­econ­omy stan­dards.

Daim­ler’s ac­tions first came to light last year, when Ger­man auto reg­u­la­tors reached a $960 mil­lion set­tle­ment with the com­pany for testcheat­ing de­vices on more than 680,000 Mercedes diesel ve­hi­cles sold world­wide.

Daim­ler said Mon­day it “de­nies the au­thor­i­ties’ al­le­ga­tions and the class ac­tion plain­tiffs’ claims and does not ad­mit any li­a­bil­ity” but “avoids lengthy court ac­tions with re­spec­tive le­gal and fi­nan­cial risks” by agree­ing to the set­tle­ment.

“Since 2016, Daim­ler has sig­nif­i­cantly en­hanced tech­ni­cal com­pli­ance and its in­no­va­tive com­pli­ance man­age­ment sys­tem pro­vides a blue­print for au­to­mo­tive in­dus­try,” the com­pany said.

David Zalubowski / As­so­ci­ated Press

Cal­i­for­nia will get $300 mil­lion of the Mercedes­Benz maker’s set­tle­ment.

Su­san Walsh / As­so­ci­ated Press

EPA Ad­min­is­tra­tor An­drew Wheeler an­nounces the $1.5 bil­lion set­tle­ment with Daim­ler.

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