Vermont Business Magazine Attorney General Charity Clark today joined a bipartisan coalition of 49 other attorneys general in announcing a settlement with Mercedes-Benz USA and Daimler AG for violating 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. The settlement, of which Vermont will receive $295,000, also includes more than $200 million in potential consumer relief.
“Vermont consumers often make choices based on products’ environmental impacts, and when companies like Mercedes-Benz and Daimler misrepresent the environmental harms of their products, consumers are robbed of this ability,” said Attorney General Clark. “It’s important to me that we hold these companies accountable. Mercedes-Benz and Daimler will take corrective action, provide a free fix for their customers, and pay for the environmental harms their deception has caused.”
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 defeat devices enabled vehicles to far exceed legal limits of nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog.
Mercedes 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.
Today’s settlement requires Mercedes-Benz USA and Daimler AG to pay $120 million to the states 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 that had not been repaired or permanently removed from the road in the United States by August 1, 2023. Mercedes must bear the cost of installing approved emission modification software on each of the affected vehicles. The companies must provide participating consumers with an extended warranty and will pay consumers $2,000 per subject vehicle.
The companies must also comply with reporting requirements, reform their practices, and refrain from any further unfair or deceptive marketing related to diesel vehicles, including misrepresentations regarding emissions and compliance.
Eligible consumers will be notified directly by the companies via first-class mail if they are eligible for the emissions installation program and/or the installation incentive payments.
Joining Attorney General Clark in this settlement are the attorneys general of Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
A copy of the settlement is available on our website.
12.22.2025. MONTPELIER, Vt. – Attorney General
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