California To Receive $78.4 Million As Fiat Chrysler Settles Diesel Emissions Lawsuit

Fiat Chrysler Automobiles will pay $800 million to settle a lawsuit from state and federal regulators who accused the company of cheating on emissions tests.

Under terms of the settlement, California will receive $78.4 million from the company for violating environmental and consumer protection laws, Attorney General Xavier Becerra announced Thursday.

Fiat Chrysler also agreed to launch a recall program that will update software on its diesel pickup trucks to bring them into compliance with emissions limits, and to provide compensation worth $2,800 on average to owners.

An estimated 100,000 diesel Jeep Grand Cherokees and Dodge Ram 1500s from the 2014-2016 model years had devices that brought levels of nitrogen oxide below emissions limits during tests, but allowed them to exceed limits in everyday driving, the lawsuit alleged. About 13,000 of the trucks were sold in California.

Regulators from the U.S. Environmental Protection Agency and California Air Resources Board discovered the devices after enacting more stringent testing for diesel vehicles in the wake of the 2015 scandal over Volkswagen’s cheating on emissions tests.

The $800 million Fiat Chrysler will spend to settle the case includes $500 million worth of penalties the company must pay to the federal government and all 50 states, as well as the cost of the recall and compensation for owners.

“California’s emission standards exist to protect our residents and the environment from harmful pollution. Fiat Chrysler tried to evade these standards by installing software to cheat emissions testing,” Becerra said in a statement Thursday. “With this settlement, we are holding Fiat Chrysler accountable and securing important funds for environmental protection efforts.”

The company did not admit wrongdoing as part of the settlement, and asserted in a statement that it “did not engage in any deliberate scheme to install defeat devices to cheat emissions tests.”

The money California receives will go into the state’s Air Pollution Control Fund, which is managed by the air resources board. It will be used to “fully mitigate the excess nitrogen oxide emissions from the affected vehicles,” according to Becerra’s office.

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