Fiat Chrysler Hit with $483 Million Settlement Terms

If you bought a Jeep Grand Cherokee or Ram 1500 of 2014-2016 vintage because of the diesel-powered vehicles’ fuel economy or environmental friendliness, you were duped, said the office of California Attorney General Xavier Becerra today. Fiat Chrysler just agreed to pay $78.4 million to the State of California and remove the software that allowed the SUVs and trucks to defeat nitrogen-oxide-detection devices during smog checks. The software enabled the vehicles to pollute above state standards during regular driving.

Both the California Air Resources Board (CARB) and the federal government’s Environmental Protection Agency began stronger enforcement of air-pollution-control devices on cars and trucks after Volkswagen admitted to similar software “defeat devices” in 2015 on its light-duty diesel vehicles. Of the Fiat Chrysler settlement, CARB Chair Mary Nichols said it was “a direct result of the enhanced screening and testing procedures CARB developed to uncover the Volkswagen diesel cheating scandal.” She added it was “a warning to other car manufacturers that the vehicles they sell must meet the rules and vehicle standards expressly designed to protect public health.”

In addition to the penalty paid for violating environmental law, violations of California’s Unfair Competition Law, prosecution costs, and to mitigate the excess pollution, Fiat Chrysler will also pay $105 million in an extended warranty to affected customers, estimated to own 13,325 of the vehicles in California and 100,000 across the United States. Fiat Chrysler must recall the vehicles and bring them into emissions compliance, at an estimated cost of $60 million-$80 million to the company. A related class-action suit, in a settlement also announced on January 10, provides $300 million in consumer relief.