Penalty Amount
$149,673,750
Consumers Affected
211,000
Environmental and consumer protection enforcement action where Mercedes-Benz USA agreed to a nearly $150 million settlement for installing emissions defeat devices in diesel vehicles and misleading consumers about their environmental compliance. The settlement includes significant consumer relief and practice reforms.
Mercedes-Benz USA must pay $120 million to the states, with $29,673,750 suspended pending consumer relief. They must provide extended warranties and $2,000 payments to affected consumers, install emission modifications, and refrain from deceptive marketing.
In-house legal teams should review all vehicle sales contracts, lease agreements, and dealer distribution agreements for clauses related to emissions compliance warranties, marketing representations regarding environmental performance, and disclosures about vehicle software or modifications. Specific clauses to scrutinize include those guaranteeing compliance with emissions standards, restrictions on defeat devices, recall procedures, and remedies for misrepresentation. Given the settlement's focus on undisclosed defeat devices and misleading 'environmentally-friendly' claims, contracts may need amendments to explicitly warrant against such devices, require pre-approval of environmental marketing claims, and incorporate enhanced disclosure obligations for any emissions-related software. Additionally, agreements should address coordination for consumer relief programs, such as the $2,000 per vehicle restitution and extended warranties mandated by the settlement.
Entity
Mercedes-Benz USA
Also known as: Mercedes-Benz
Industry
Automotive"Mercedes-Benz USA"
"$149,673,750 settlement"
"violating state laws prohibiting unfair or deceptive trade practices"
"vehicles equipped with illegal and undisclosed emissions defeat devices"
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