Consumer Protection Settlements Reached With Fiat Chrysler, Bosch

Over 2,500 Arizonans who purchased or leased certain Jeep Grand Cherokees or Dodge Ram 1500 vehicles will receive $1,000 in compensation as a result of a settlement, according to the Arizona Attorney General’s Office. The settlement resolves claims against Fiat Chrysler that the company harmed Arizonans by installing unlawful defeat devices in vehicles marketed as “clean-burning.”

According to the Arizona Attorney General’s Office, the deceptive devices caused the cars to appear to be more environmentally friendly than they actually are. The settlement impacts Model Year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles that the automaker sold or leased in Arizona.

The settlement is similar to a 2018 settlement between the Arizona Attorney General’s Office and Volkswagen that provided $1,000 in restitution to more than 11,000 eligible Arizona consumers who were harmed by Volkswagen’s clean diesel scandal. In another lawsuit filed earlier this week, Attorney General Brnovich announced he is suing Mercedes-Benz USA LLC and Daimler AG to seek restitution for consumers harmed by Mercedes’ alleged similar use of “clean diesel” defeat devices. That lawsuit is ongoing.

The consumer restitution is part of combined restitution and civil penalties from Fiat Chrysler and Bosch of approximately $4 million to Arizona, and total payments of more than $171 million to 52 jurisdictions nationwide. Bosch supplied and helped program the illegal emissions “defeat device” software used by both Fiat Chrysler and Volkswagen in their diesel vehicles.

Fiat Chrysler

Following a nearly two-year investigation, Attorney General Brnovich alleges that Fiat Chrysler Automobiles N.V., its U.S. subsidiary FCA US, LLC, its Italian affiliate V.M. Motori S.p.A. and V.M. North America, Inc. (collectively, “Fiat Chrysler”) installed unlawful defeat device software and undisclosed Auxiliary Emissions Control Devices (“AECDs”) in 2,585 Model Year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles that the automaker sold or leased in Arizona. Brnovich alleges Fiat Chrysler misled consumers by falsely claiming the “Eco-Diesel”-branded Jeep SUVs and Ram 1500 trucks were environmentally friendly and compliant with the law when in fact they had calibrated the vehicles’ software to conceal that the vehicles emitted high levels of harmful nitrogen oxides (NOx) in real-world driving conditions.

The settlement will require Fiat Chrysler to pay the State more than $1.6 million under Arizona consumer protection laws for deceptively and unfairly marketing, selling and leasing the vehicles to consumers. Nationwide, excluding the separate penalties the company will be required to pay to the federal government and California, the multistate agreement is expected to result in payments totaling $72.5 million to 49 states, Puerto Rico, the District of Columbia, and Guam.

Additional Terms and Restitution Available for Consumers

Arizona’s settlement will also prohibit Fiat Chrysler from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers, and require Fiat Chrysler to carry out its obligations under a related settlement agreement in the Multidistrict Litigation (“MDL Consumer Settlement”) pending in the U.S. District Court for the Northern District of California. The MDL Consumer Settlement, once approved by the MDL court, will resolve claims brought by a national class of affected consumers. The MDL Consumer Settlement requires Fiat Chrysler to: (1) eliminate the defeat device features from the relevant software through a software “flash fix”; (2) provide eligible owners and lessees extended warranties; and, (3) together with co-defendant Bosch, pay eligible owners who take their vehicle to an authorized dealer for the software repair an average restitution of approximately $2,908 and lessees and former owners who do so restitution of $990.

Related settlements between Fiat Chrysler and the United States Department of Justice, the Environmental Protection Agency, the California Air Resources Board, and the State of California also require Fiat Chrysler to make available 200,000 upgraded catalytic converters to mitigate air pollution across the country when installed by Fiat Chrysler vehicle owners as replacements to their existing catalytic converters.

Assuming all owners and lessees nationwide participate, this will result in additional restitution of approximately $307 million, including approximately $7.5 million available to affected owners and lessees of 2,585 vehicles in Arizona.

Bosch

Bosch is a multinational engineering company well known for its consumer products. It is also a major supplier to the global automotive industry. Among the products Bosch supplies to its auto manufacturing customers are the electronic control units (“ECUs”) that house the complex software that controls nearly all aspects of an engine’s performance, including emissions systems. When Volkswagen, a Bosch customer, was revealed to have systematically utilized defeat device software in its diesel vehicles, several states Attorneys General, including Arizona, commenced a separate investigation into the role played by Bosch in enabling its customers to potentially violate federal and state emissions regulations. Attorney General Brnovich alleges Bosch facilitated the implementation of the defeat device software in more than 600,000 Volkswagen and Fiat Chrysler vehicles over a period that spanned more than a decade.

Under the terms of the proposed settlement with the Attorney General, Bosch will pay Arizona nearly $2.5 million in restitution and consumer and environmental civil penalties. The agreement also includes precedent-setting injunctive terms and requires Bosch to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software.

Under a multistate agreement involving Arizona and 49 other jurisdictions – including Puerto Rico, the District of Columbia, Guam and all states other than California, Texas and West Virginia – Bosch will pay a total of $98.7 million under the jurisdictions’ consumer protection and environmental laws and make a separate $5 million payment to the National Association of Attorneys General (“NAAG”) for training and future enforcement purposes.

Under the related MDL Settlements, Bosch will also pay approximately $27.5 million to consumers who purchased or leased the affected Fiat Chrysler vehicles. Bosch earlier paid more than $275 million to consumers who purchased or leased the affected Volkswagen vehicles.