VW, Audi agree to $85 million diesel settlement in principle with Texas

By David Shepardson

(Reuters) -Volkswagen and its Audi unit have agreed to an $85 million settlement in principle over violations of Texas environmental laws stemming from its diesel cheating scandal, Texas Attorney General Ken Paxton said on Thursday.

The settlement stipulates that the German automakers pay a civil penalty of $85 million for their unlawful actions, Paxton said.

Earlier this month, the Texas Supreme Court ruled the state environmental lawsuit against Volkswagen and Audi could go forward.

Volkswagen, which declined to comment on Thursday, previously settled U.S. actions prompted by the emissions scandal for more than $20 billion, but that did not shield it from local and state government liability, courts ruled previously.

“If a company thinks they will avoid accountability when they violate Texas laws, endanger Texans, and pollute our environment, they’re dead wrong. Volkswagen and Audi are finding that out the hard way, and now they are paying the price,” Paxton said in a statement.

In 2015, Volkswagen disclosed it had used sophisticated software to evade emissions requirements in nearly 11 million vehicles worldwide. It also misled the U.S. Environmental Protection Agency, which started looking into the matter in 2014.

Paxton’s office did not immediately respond to a question seeking more details of the settlements.

Volkswagen’s U.S. subsidiary in 2021 unsuccessfully argued that under the Clean Air Act, the landmark U.S. environmental law, only the federal government can pursue emissions claims.

In 2022, Ohio settled with VW for $3.5 million, which was a fraction of what the state had previously sought. VW said in prior court papers that Ohio’s claims could have totaled “$350 million per day, or more than $127 billion per year, over a multi-year period.”

(Reporting by David Shepardson; Editing by Diane Craft and Bill Berkrot)