Facts

The United States and the State of California brought suit against FCA US LLC , Fiat Chrysler Automobiles NV, V.M. Motori SPA, and V.M. North America Inc. in relation to certain software functions and calibrations that were installed in over 100,000 Ram 1500 and Jeep Grand Cherokee vehicles from model years 2014 to 2016 that were equipped with 3.0 liter EcoDiesel engines.

A class of consumers and used car dealers also sued Fiat Chrysler as well as Robert Bosch GmbH, who supplied engine control units for the subject vehicles.

PLAINTIFF'S CONTENTIONS: Plaintiff alleged that each of the subject vehicles contained software that caused the emission control system of the vehicles to underperform or shut off during emission testing but not during normal vehicle use. Plaintiff contended that these auxiliary emission control devices were undisclosed, in violation of the Clean Air Act.

DEFENDANTS' CONTENTIONS: Defendants denied all allegations and asserted various affirmative defenses.

Result

The parties reached settlements in the multi-district litigation, which included Fiat Chrysler agreeing to implement a recall program to repair more than 100,000 non-compliant diesel vehicles. Fiat Chrysler agreed to pay a $305 million civil penalty that will be divided between the federal government and California. The recalling vehicles and fixing the emissions could cost up to $185 million for Fiat Chrysler. Fiat Chrysler also settled with consumers, which could reach $280 million. Lastly, in order to settle state law claims, Fiat Chrysler will pay $72.5 million, split among every state, with the exception of California. Bosch has agreed to contribute up to $27.5 million.

Other Information

In a separate settlement with the state, Fiat Chrysler will pay an additional $19 million to mitigate excess emissions from more than 13,000 of the non-compliant vehicles in California. In a separate administrative agreement, Fiat Chrysler will pay $6 million to settle U.S. Customers and Border Protection claims.