A multistate coalition of attorneys general has secured a $149.6 million settlement with Mercedes-Benz USA and its parent company, Daimler AG, over allegations that the automaker deceptively marketed, sold, and leased more than 200,000 diesel vehicles in the United States that violated federal and District emissions standards.
The agreement covers roughly 380 vehicles registered in the District of Columbia and addresses years of excess air pollution tied to software designed to evade emissions testing. In Maryland, the agreement covers approximately 4,000 vehicle owners who will benefit from direct payments, extended warranties and free repairs.
“After nearly a decade of investigation, this nearly $150 million settlement holds Mercedes accountable for deceiving Maryland consumers and polluting the air our families breathe,” said Attorney General Anthony Brown.
The settlement follows findings that Mercedes installed so-called defeat devices in diesel cars and vans sold between 2008 and 2016, according to D.C. Attorney General Brian Schwalb.
The District attorneys general explained the software allowed vehicles to pass emissions tests while emitting significantly higher levels of pollution during everyday driving.
Regulators allege the company concealed the devices and the true pollution levels from consumers and government agencies, enabling the vehicles to release nitrogen oxides far above legal limits, a pollutant linked to respiratory illness and smog.
As part of the agreement, Mercedes will pay $120 million immediately to participating states and jurisdictions, including $250,000 to the District of Columbia. An additional $29.6 million will be suspended and may be waived if the company completes a comprehensive consumer relief program. Impacted vehicle owners who install approved emissions modification software will receive $2,000 in restitution, along with extended warranties. Mercedes is also required to repair tens of thousands of vehicles that remain on U.S. roads so they comply with emissions standards going forward.
District officials said the conduct violated local consumer protection laws by misleading regulators to obtain certifications, concealing noncompliance with emissions standards, and marketing diesel vehicles as environmentally friendly despite their real-world pollution levels. The settlement also imposes reporting requirements and bars Mercedes from future deceptive marketing or misrepresentations related to diesel emissions.
Brown said Maryland will receive more than $6.7 million from this recovery.
“These companies used illegal devices to cheat emissions tests while marketing their diesel vehicles as environmentally friendly,” he said. “This settlement holds them accountable, delivers relief to consumers, and helps protect the health of Marylanders and our environment.”
The case was led by attorneys general from Alabama, Connecticut, Delaware, Georgia, Maryland, New Jersey, New York, South Carolina, and Texas, with the District of Columbia and more than 40 other states and territories joining the agreement. Officials said the resolution follows earlier multistate settlements involving Volkswagen, Fiat Chrysler, and Robert Bosch GmbH over similar emissions-cheating schemes that collectively resulted in hundreds of millions of dollars in penalties.
The environmental impact is major locally and nationwide.
“This settlement marks a significant victory for public health and clean air in Maryland,” said Maryland Department of the Environment Secretary Serena McIlwain. “This action holds the companies accountable for their use of ‘defeat devices,’ ensures vehicles are repaired to meet our state’s air quality standards, and secures millions of dollars to advance environmental protection.”
Schwalb and Brown said the outcome sends a clear signal to corporations operating in the nation’s capital, Maryland and beyond.
“My office will not allow companies to profit by cheating the system, lying to consumers, or polluting our environment,” Schwalb said.
Brown emphasized the larger message from the lawsuit.
“This significant outcome demonstrates that no corporation — no matter how powerful — is above the law when it comes to protecting our environment and our consumers.”