Mercedes-Benz to pay $12.7 million to Indiana and Hoosier consumers to settle allegations of deception regarding vehicle emission controls

Attorney General Todd Rokita announced today that Mercedes-Benz will send $12.7 million to Indiana to settle allegations the companies violated state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing vehicles equipped with illegal and undisclosed emissions “defeat devices” designed to circumvent emissions standards. 

Under the settlement, the State of Indiana will receive a payment of $4,765,500, and Hoosier consumers of 16,521 vehicles sold in Indiana can receive up to $7,976,304 in restitution. 

“Hoosiers deserve to be treated with fairness, honesty, respect and transparency by companies doing business in our state,” Attorney General Rokita said. “At the bare minimum, they should be able to trust that companies will follow our laws rather than deliberately attempt to cover up violations.” 

Attorney General Rokita thanked members of his team who worked on this settlement, including Deputy Attorney General Mark Snodgrass, Chief Counsel and Director of Consumer Protection Scott Barnhart, and Section Chief of Consumer Litigation Corinne Gilchrist. 

Indiana is one of 48 states and two U.S. territories involved in a $150 million national settlement. 

Beginning in 2008 and continuing to 2016, the states allege Mercedes manufactured, marketed, advertised and distributed nationwide more than 211,000 diesel passenger cars and vans equipped with software defeat devices that optimized emission controls during emissions tests, while reducing those controls outside of normal operations. 

The states allege the defeat devices enabled vehicles to far exceed many legal limits of nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog. Mercedes allegedly engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance, that it was unable to meet while complying with applicable emission standards. 

Mercedes concealed the existence of these defeat devices from state and federal regulators and the public. At the same time, Mercedes marketed the vehicles to consumers as “environmentally-friendly” and in compliance with applicable emissions regulations.  

The settlement requires Mercedes-Benz to pay $120 million to the states immediately upon the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a comprehensive consumer relief program.  

The consumer relief program extends to the estimated 39,565 vehicles, which as of Aug. 1, 2023, had not been repaired or permanently removed from the road in the United States. Mercedes must bear the cost of installing approved emission modification software on each of the affected vehicles. The company must provide consumers with an extended warranty and will pay consumers $2,000 per subject vehicle.  

The company must also comply with reporting requirements and reforms to its practices, including a prohibition on any further engagement in unfair or deceptive marketing or sale of diesel vehicles, misrepresentations regarding emissions and compliance.  

Today’s settlement follows similar settlements reached previously between the states and Volkswagen, Fiat Chrysler and German engineering company Robert Bosch GmbH over its development of the cheat software. Automaker Fiat Chrysler and its subsidiaries paid $72.5 million to the states in 2019. Bosch paid $98.7 million in 2019. Volkswagen reached a $570 million settlement with the states in 2016.  

Read the complaint here and the judgement here.