California AG announces settlement with Fiat Chrysler valued at over $500M
California Attorney General Xavier Becerra and the California Air Resources Board, together with the United States Department of Justice, announced a joint settlement valued at more than $500M with Fiat Chrysler Automobiles N.V. and related companies. The settlement resolves allegations that the company violated environmental and consumer protection laws by using "defeat device software" to circumvent emissions testing. California will receive $78.4M as part of the settlement. Fiat Chrysler is accused of installing the defeat device software in 100,000 vehicles nationwide and 13,325 vehicles in California. The affected vehicles are 2014-2016 diesel Jeep Grand Cherokees and Dodge Ram 1500s. The extended warranty negotiated as part of the government settlement will cost Fiat Chrysler approximately $105M. It also requires Fiat Chrysler to establish a recall program offering consumers an approved emission modification with an extended warranty to bring the vehicles into emissions compliance. The settlement requires Fiat Chrysler to conduct ongoing testing of emissions compliance, durability, and the vehicles' diagnostics systems. The company must also enact corporate reforms and undergo ongoing independent compliance monitoring. Fiat Chrysler estimates that the cost of research and development for the approved emissions modification, installing the approved emissions modification, and implementing the federal mitigation program will be between $60M-$80M. Additionally, a related class action settlement filed today provides approximately $300M in consumer relief.