Judge approves $1.5B Daimler settlement in diesel emissions probe

A federal judge on Tuesday approved a $1.5 billion settlement for the German automaker Daimler and its subsidiary Mercedes-Benz over alleged cheating on emissions tests. 

Daimler will make the payment following what the EPA said in September was cheating involving about 250,000 vehicles sold in the U.S. between 2009 and 2016. 

At the time, the company rejected the accusations, saying in a statement that it “denies the authorities’ allegations as well as the class action plaintiffs’ claims and does not admit any liability.”

The settlement, approved by D.C. federal judge Emmet Sullivan, included $875 million in civil penalties as well as the cost of recalling the vehicles and funding for mitigation projects in California, which was also a plaintiff in the case.

In a statement on Tuesday, a Daimler spokesperson said that the developments allowed the company “to take an important step towards legal certainty in connection with various diesel proceedings.”

“Daimler has fully cooperated with the U.S. regulatory authorities,” the spokesperson said. 

When the settlement was first announced, then-EPA administrator Andrew Wheeler said it was the “second-largest civil penalty in the history of the Clean Air Act.”

To sell their vehicles in the U.S., automakers must prove they conform to the country’s emissions standards. Daimler was accused of using software tools called “defeat devices” that would show the vehicles appearing to be compliant in testing, even though they weren’t when on the road. 

Officials said this resulted in an increase in the emissions of nitrogen oxides, which can form smog. Nitrogen oxides can be harmful for people’s respiratory systems and can contribute to adverse environmental effects such as acid rain. 

The case is smaller in scope than the cheating scandal involving Volkswagen, which impacted about 590,000 vehicles, but larger than alleged cheating by Fiat Chrysler, which involved about 100,000 vehicles.