Montgomery, AL – Alabama Attorney General Steve Marshall has joined a coalition of 50 attorneys general in announcing a $149,673,750 multistate settlement with Mercedes-Benz USA and Mercedes-Benz Group AG over allegations that the companies violated state laws prohibiting unfair or deceptive trade practices.
According to the settlement, the companies marketed, sold, and leased diesel vehicles equipped with illegal and undisclosed emissions “defeat devices” designed to circumvent emissions standards. The agreement also includes more than $200 million in potential consumer relief nationwide.
In Alabama, the state has identified approximately 11,906 affected vehicles that were sold or registered. Through the settlement, Alabama is set to receive $4,934,299.
The multistate investigation alleges that from 2008 through 2016, Mercedes manufactured and distributed more than 211,000 diesel passenger cars and vans nationwide containing software designed to optimize emissions controls during laboratory testing while reducing those controls during normal driving conditions. As a result, the vehicles allegedly emitted nitrogen oxides (NOx) at levels far exceeding legal limits.
NOx emissions are a harmful pollutant linked to respiratory illness and the formation of smog. States allege the defeat devices allowed Mercedes to meet certain performance and design goals—such as increased fuel efficiency and reduced maintenance—that could not be achieved while complying with emissions regulations. The companies are also accused of concealing the existence of the devices from regulators and consumers while marketing the vehicles as environmentally friendly and emissions-compliant.
“This settlement sends a clear message to consumers: they deserve honesty, and deceptive marketing won’t be tolerated,” Marshall stated.
Under the terms of the settlement, Mercedes-Benz USA and Mercedes-Benz Group AG will pay $120 million to the states upon the agreement’s effective date. An additional $29,673,750 will be suspended and may be waived if the companies successfully complete a comprehensive consumer relief program.
That program applies to an estimated 39,565 vehicles in the United States that had not been repaired or permanently removed from the road as of August 1, 2023. Mercedes is required to install approved emissions modification software at no cost to owners, provide an extended warranty, and pay participating consumers $2,000 per affected vehicle.
The settlement also requires the companies to comply with ongoing reporting requirements, reform internal practices, and refrain from engaging in unfair or deceptive marketing or sales of diesel vehicles, including misrepresentations related to emissions compliance.
The agreement follows similar multistate settlements involving other automakers and suppliers. Volkswagen reached a $570 million settlement with states in 2016. Fiat Chrysler paid $72.5 million in 2019, and German engineering firm Robert Bosch GmbH paid $98.7 million that same year for its role in developing emissions-cheating software.
The attorneys general of Connecticut, Delaware, and Maryland led the multistate investigation, with assistance from Alabama, Georgia, New Jersey, New York, South Carolina, and Texas. The settlement was also joined by attorneys general from more than 40 additional states and territories, including Puerto Rico.
