Mercedes/Daimler Accused of Misleading Consumers Regarding Vehicle Emissions in Violation of Maryland Consumer Protection and Environmental Laws
BALTIMORE, MD – Attorney General Anthony G. Brown today announced a $149,673,750 settlement with Mercedes-Benz USA and Daimler AG resolving allegations the companies engaged in and facilitated cheating diesel emissions tests, misleading consumers, and causing dangerous and unlawful amounts of harmful air pollution.
The settlement is the result of a multistate investigation of Mercedes-Benz USA and Daimler AG’s conduct that was co-led by Attorney General Brown on behalf of the Consumer Protection Division of the Office of the Attorney General and the Maryland Department of the Environment. The settlement addresses allegations that the companies equipped their diesel vehicles, sold in Maryland and throughout the United States, with illegal “defeat devices” to allow the vehicles to appear to meet emissions requirements when, in fact, they were emitting unlawful amounts of Nitrogen Oxides (NOx) in violation of state air quality standards.
“After nearly a decade of investigation, this nearly $150 million settlement holds Mercedes accountable for deceiving Maryland consumers and polluting the air our families breathe,” said Attorney General Anthony Brown. “Maryland will receive more than $6.7 million from this recovery, and approximately 4,000 Maryland vehicle owners will benefit from direct payments, extended warranties, and free repairs. This significant outcome demonstrates that no corporation—no matter how powerful—is above the law when it comes to protecting our environment and our consumers.”
“This settlement marks a significant victory for public health and clean air in Maryland,” said Maryland Department of the Environment Secretary Serena McIlwain. “This action holds the companies accountable for their use of ‘defeat devices,’ ensures vehicles are repaired to meet our state’s air quality standards, and secures millions of dollars to advance environmental protection.”
Mercedes-Benz is alleged to have violated state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing vehicles equipped with unlawful and undisclosed emissions “defeat devices” designed to circumvent emissions standards. The devices were installed in 211,000 model year 2008-2016 diesel passenger cars and vans and optimized emission controls during emissions tests, while reducing those controls outside of normal operations. The complaint alleges that the defeat devices enabled vehicles to far exceed Maryland’s and other jurisdictions’ limits of NOx emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog. The allegations further state that Mercedes concealed the existence of these defeat devices from state and federal regulators and the public while at the same time, marketing the vehicles to consumers as “environmentally-friendly” and in compliance with applicable emissions regulations.
Today’s settlement requires Mercedes-Benz USA and Daimler AG to pay $120 million to the fifty jurisdictions that took part in the investigation. Maryland will receive $6,737,163 from today’s settlement. An additional $29,673,750, reduced pro rata based on the number of vehicles Mercedes repairs to comply with existing state emissions standards, may be paid to the states.
Additionally, Mercedes will establish a comprehensive consumer relief program for the estimated 39,565 vehicles, which, as of August 1, 2023, had not been repaired or permanently removed from the road in the United States. The agreement requires that Mercedes install approved emission modification software on each of the affected vehicles, provide consumers with an extended warranty, and pay consumers $2,000 directly for each impacted subject vehicle. As of 2020, there were approximately 4,000 impacted vehicles in Maryland.
The company must also comply with reporting requirements and reforms to their practices, including a prohibition on any further engagement in unfair or deceptive marketing or sale of diesel vehicles or misrepresentations regarding emissions and compliance.
Along with Attorney General Brown, the attorneys general of Connecticut and Delaware led this multistate group. Georgia, New Jersey, New York, South Carolina, and Texas served on the Executive Committee and Alaska, Arkansas, Colorado, the District of Columbia, Florida, Hawaiʻi, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico joined in today’s settlement.
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