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_____________________________________ 

Case 3:15-md-02672-CRB Document 2845 Filed 02/01/17 Page 1 of 7 

JONATHAN COHEN, DC Bar 483454; jcohen2@ftc.gov

MICHELLE L. SCHAEFER, DC Bar 478773; mschaefer@ftc.gov

AMANDA B. KOSTNER, CA Bar 245345; akostner@ftc.gov

SANGJOON “SIMON” HAN, DC Bar 998971; shan@ftc.gov 

MEGAN A. BARTLEY, VA Bar 81840; mbartley@ftc.gov 

Federal Trade Commission 

600 Pennsylvania Avenue NW, CC-9528 

Washington, DC 20580

(202) 326-2551 (Cohen); -3515 (Schaefer); 

-2880 (Kostner); -2495 (Han); -3424 (Bartley); 

-3197 (fax) 

Attorneys for Plaintiff Federal Trade Commission 

UNITED STATES DISTRICT COURT
 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

IN RE: VOLKSWAGEN “CLEAN DIESEL” MDL NO. 2672 CRB (JSC) 

MARKETING, SALES PRACTICES, AND 

PRODUCTS LIABILITY LITIGATION FTC’S STATEMENT SUPPORTING 

THE 3.0L “CLEAN DIESEL” 

CONSUMER SETTLEMENTS 

This document relates to: 

Hon. Charles R. Breyer 

ALL ACTIONS 

As part of its effort to protect American consumers, the Commission voted unanimously 

to approve the proposed FTC Order, which resolves its claims concerning 3.0-liter vehicles with 

“Clean Diesel” TDI engines. Volkswagen employed defeat devices in its TDI engines to cheat 

on emissions tests and deceived consumers through its extensive and brazenly false “Clean 

Diesel” marketing campaign. Along with the Plaintiffs Steering Committee’s (“PSC’s”) 

companion settlement, this joint consumer resolution fully compensates “Clean Diesel” owners 

through a comprehensive package of monetary relief and other consumer-friendly provisions. 

As explained below, the restitution includes a buyback at favorable prices for consumers with 

older vehicles. For consumers with newer cars, Volkswagen must repair them to meet emissions 

standards without materially affecting fuel economy or power, and pay additional restitution. 

In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Products Liability Litigation, MDL No. 2672 

FTC’S STATEMENT SUPPORTING THE 3.0L “CLEAN DIESEL” CONSUMER SETTLEMENTS 
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Case 3:15-md-02672-CRB Document 2845 Filed 02/01/17 Page 2 of 7 

Model Years 2009-2012 

With respect to older cars, the FTC Order requires Volkswagen to offer to buy back all 

3.0-liter TDI engine vehicles from model years 2009-2012. The buyback has important 

consumer-friendly features: 

 The buyback prices are based on retail1

 prices in September 2015—

approximately two months before it became clear that the defeat device 

scandal affected 3.0-liter vehicles.2 

 In addition to September 2015 Clean Retail, consumers will receive a 

restitution payment to compensate for their economic losses. See Ex. A 

(listing approximate restitution ranges). 

Importantly, consumers will receive September 2015 retail value (plus compensation) even if 

Volkswagen does not repurchase their cars until as late as 2019.

3 

Model Years 2013-2016 

For owners of TDI engine vehicles from model years 2013-2016, the FTC Order ensures 

that consumers will receive the car they thought they purchased.4 First, these owners will 

1

 Specifically, the FTC used National Association of Automobile Dealers (“NADA”) 

“Clean Retail” figures. “Clean Retail” represents the price a consumer “could reasonably pay 

for a vehicle [in good condition] at a dealer’s lot,” as opposed to “Clean Trade,” which is the 

amount consumers could expect to receive when trading in a comparable vehicle in good 

condition. See www.nada.com/b2b/support/glossary.aspx (viewed Jan. 26, 2017). Because 

dealers mark up trade-ins before resale, Clean Retail is always higher than Clean Trade. 

Additionally, for 2015 and 2016 vehicles that NADA did not yet catalog in September 2015, the 

FTC used a generous, consumer-friendly inferred value to ensure these owners receive full 

compensation. 

2

 The Environmental Protection Agency (“EPA”) issued a Notice of Violation (“NOV”) 

concerning 2.0-liter TDI engine vehicles in September 2015. EPA issued an NOV concerning 

3.0-liter vehicles in November 2015. 

3

 If EPA and CARB approve an emissions Modification, owners of 3.0-liter TDI engine 

vehicles from model years 2009-2012 will also have the choice to obtain that Modification free 

under the FTC Order and the related DOJ settlement of environmental claims, along with as 

much as $15,380 in additional restitution. See Ex. A. The Approved Emissions Modification 

(“Modification”) would improve vehicle emissions but not render them fully compliant. 

Notably, the FTC Order and DOJ Consent Decree use different terminology, but both documents 

and the PSC Settlement distinguish between technical changes that would reduce NOx but not 

achieve full compliance (or reduce other emissions), on one hand, and technical changes that 

would achieve full compliance, on the other. 

In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Products Liability Litigation, MDL No. 2672 

FTC’S STATEMENT SUPPORTING THE 3.0L “CLEAN DIESEL” CONSUMER SETTLEMENTS

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Case 3:15-md-02672-CRB Document 2845 Filed 02/01/17 Page 3 of 7 

receive a Certified Emissions Repair (“Repair”) at no cost. Unlike an Approved Emissions 

Modification (“Modification”), a Repair must fully restore the vehicle to the emissions standard 

Volkswagen originally promised consumers (a Modification reduces nitrogen oxide (NOx) 

emissions but not to the standards to which they were originally certified). Second, the FTC 

Order requires Volkswagen to accomplish this full Repair without materially diminishing the 

vehicles’ performance (fuel economy, torque, and horsepower – attributes important to “Clean 

Diesel” purchasers). Third, these consumers will receive restitution ranging from more than 

$8,539 to $17,614.5 See Ex. A (restitution ranges).6

 Simply put, these consumers will have the 

car they thought they purchased—in terms of emissions, fuel economy, torque, and 

horsepower—along with significant financial restitution that will fully compensate them.7 

Other Consumer-Friendly Order Provisions 

The FTC Order (and PSC Settlement) includes important additional consumer-friendly 

provisions: 

4

 These 2013-2016 vehicles include one Porsche model, one Volkswagen model, and 

several Audi models. 

5

 Consumers with newer vehicles who elect to participate in the settlement may receive 

half of their restitution in advance, before their vehicle undergoes a Repair. FTC Order § IX(A). 

6

 The global consumer settlement’s restitution figures include approximately $276.5 

million for consumers from Bosch, which manufactured the defeat device Volkswagen used. 

The FTC engaged with Bosch and allocated Bosch’s contribution among consumers in an 

equitable manner that the Commission determined reflects the public interest. 

7

 If Volkswagen cannot fully and timely Repair the vehicles’ emissions according to a set 

timetable, then these owners will have their cars bought back using September 2015 Clean Retail 

prices plus additional restitution (they may also have the option to accept a partial repair – an 

emissions Modification – if one exists, plus additional restitution). If Volkswagen’s Repairs

diminish fuel economy by more than 3 MPG, torque by more than 5%, or horsepower by more 

than 5%, then Volkswagen must make an automatic extra payment to consumers. FTC Order §

VIII(B). Additionally, there are two other protections against reduced performance. First, 

whether or not these three specific triggers apply, the existing FTC Order restitution amounts 

provide compensation for some reduced performance (including other performance attributes). 

Second, depending on the severity of the reduced performance, Volkswagen could face 

additional remedies the Court directs, including free repairs, further compensation, or even a full 

buyback. FTC Order § VIII(B). 

In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Products Liability Litigation, MDL No. 2672 

FTC’S STATEMENT SUPPORTING THE 3.0L “CLEAN DIESEL” CONSUMER SETTLEMENTS

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Case 3:15-md-02672-CRB Document 2845 Filed 02/01/17 Page 4 of 7 

 Loan Forgiveness. Consumers eligible for a buyback but with loan 

balances exceeding their vehicle’s value may receive loan forgiveness up 

to 130% of the vehicle’s full buyback amount.8 

 Relief for American Servicemembers. The FTC Order ensures that 

members of our armed forces serving abroad must receive the same (or 

substantially equivalent) benefits as everyone else—even if Volkswagen 

must pay additional expenses associated with buying back vehicles or 

making Repairs to vehicles overseas.9 

 Protection for Consumers in Rural Areas and Hawaiian Residents. 

The FTC Order ensures that Volkswagen must provide the Order’s 

benefits (or substantially equivalent benefits) to eligible consumers whose 

geographic location unduly burdens their ability to participate (such as 

consumers who reside on Hawaiian islands without a dealer, or rural 

residents residing a significant distance from the nearest dealer). 

Volkswagen is responsible for any associated costs.10 

 Restitution for Consumers Who Sold After the Scandal Broke. Many

consumers—understandably offended by Volkswagen’s emissions 

cheating and unwilling to drive a polluting vehicle—sold their vehicles 

shortly after the scandal broke. This created a “firesale” situation where, 

due to the scandal, these consumers had no choice but to accept depressed 

prices for their cars. The FTC Order provides these consumers with 

substantial compensation.11 

 Compensation for Lessees.

12 The FTC Order provides substantial

restitution for lessees of 3.0-liter TDI vehicles. These consumers were 

also affected by Volkswagen’s deceptive marketing. Additionally, certain 

lessees have the option to terminate their leases without any early 

termination penalties. 

 Pro-Rated Extended Warranty Refunds. Many consumers who 

purchased “Clean Diesel” vehicles also bought expensive extended 

warranties or service plans that they cannot use after Volkswagen buys 

back their car. The FTC Order provides consumers with pro-rated refunds 

for the unused portions of service contracts or extended warranties.13 

 Warranty and Lemon Law Protection. The FTC Order provides

consumers who receive Modifications to their emissions systems or full 

8

 FTC Order § IV(G)(1). 

9 Id. § XVI(C)(7). 

10 Id. 

11 Id. § XIV. 

12 Id. §§ VI, XII-XIII. 

13 Id. § XV(O). 

In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Products Liability Litigation, MDL No. 2672 

FTC’S STATEMENT SUPPORTING THE 3.0L “CLEAN DIESEL” CONSUMER SETTLEMENTS

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Case 3:15-md-02672-CRB Document 2845 Filed 02/01/17 Page 5 of 7 

Repairs with a robust warranty covering any vehicle components that the 

Repair (or Modification) might reasonably affect.14 Most importantly, if

Volkswagen cannot fix the vehicles after several attempts, Volkswagen 

must offer to buy them back at favorable prices.15 

 Other Consumer-Friendly Provisions. Among other things, the 

proposed FTC Order (1) imposes stringent claims processing deadlines;16 

(2) appoints a neutral, independent Claims Supervisor to monitor and 

report on Volkswagen’s compliance;17 (3) requires Volkswagen to offer 

consumers multiple choices as to when they bring their vehicle to the 

dealer for a buyback, Repair, or Modification (and allows consumers to 

choose the dealer);18 (4) requires Volkswagen to offer a loaner vehicle for 

Repairs or Modifications that take longer than three hours;19 (5) requires

Volkswagen to offer consumers the option to receive restitution through 

an Electronic Funds Transfer (“EFT”);20 and (6) prohibits Volkswagen

from using information it collects during the claims process for any other 

purpose (such as marketing).21 

In short, the FTC Order is clearly in the public interest. Indeed, if it were not, the FTC 

would never have approved it. See, e.g., United States v. Cannons Eng’g Corp., 899 F.2d 79, 84 

(1st Cir. 1990) (explaining that deference is appropriate “where, as here, a government actor 

committed to the protection of the public interest has pulled the laboring oar in constructing the 

proposed settlement”) (citing FTC v. Standard Fin. Mgmt. Corp., 830 F.2d 404, 408 (1st Cir. 

1987) (discussing need for judicial deference “to the agency’s determination that the settlement 

is appropriate”)); State of California Dep’t of Toxic Substances Control v. Waymire Drum Co., 

No. C-98-03834, 1999 WL 169536, *2 (N.D. Cal. Mar. 19, 1999) (quoting Cannons; “The 

presumption in favor of settlement is particularly strong where a consent decree has been 

negotiated by a governmental agency specially equipped, trained, or oriented in the field.”). As 

14 Id. § XV(A). 

15 Id. § XV(L). 

16 Id. § XVI. 

17 Id. § XVII. 

18 Id. § XVII(C)(4). 

19 Id. § XI(F). 

20 Id. § XVI(D). 

21 Id. at XVII(C)(10). 

In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Products Liability Litigation, MDL No. 2672 

FTC’S STATEMENT SUPPORTING THE 3.0L “CLEAN DIESEL” CONSUMER SETTLEMENTS

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1 the federal agency with a statutory mandate to protect consumers, the FTC urges the Court to 

2 enter both consumer settlements quickly so that redress can begin. 

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Dated: January 31, 2017 Respectfully. Submitted~ ,,.,....,- / 

/ /~L-

/ !onajhjilft:°Xen Gcohen2@ftc.gov) 

,, MiGllelle L. Schaefer (mschaefer@ftc.gov) 

V Amanda B.Kostner(akostner@ftc.gov) 

Sangjoon "Simon" Han (shan@ftc.gov) 

Megan A. Bartley (mbartley@ftc.gov) 

Federal Trade Commission 

600 Pennsylvania Avenue NW, CC-9528 

Washington, DC 20580 

(202) 326-2551 (Cohen); -3515 (Schaefer); -2880 

(Kostner); -2495 (Han); -3424 (Bartley); -3197 (fax) 

Attorneys for PlainNff Federal Trade Commission 

In re Volkswagen "Clean Diesel" Marketing, Sales Practices, & Products Liability Litigation, MDL No, 2672 

FTC'S STATEMENT SUPPORTING THE 3.0L "CLEAN DfESEJ..." CONSUMER SETTLEMENTS 

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Case 3:15-md-02672-CRB Document 2845 Filed 02/01/17 Page 6 of 7 
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CERTIFICATE OF SERVICE 

I, Jonathan Cohen, hereby certify that on January 31, 2017, I caused to be 

served true copies of the foregoing by electronic means, by filing such documents through the 

Court's Electronic Case Filing System. 

/ Jo9atlfan Cohen (jcohen2@ftc.gov) 

t- ~ttomey for Plaintiff 

/ Federal Trade Commission 

ln re Volkswagen "Clean Diesel" Marketing, Sales Practices, & Products Liability Litigation, MDL No. 2672 

FTC'S ST A TEMENT SUPPORTING THE 3 .OL "CLEAN DIESEL" CONSUMER SETTLEMENTS 

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Case 3:15-md-02672-CRB Document 2845 Filed 02/01/17 Page 7 of 7