The automaker allegedly misled consumers by marketing and selling diesel vehicles as “clean,” even though it knew the cars were equipped with defeat device software to cheat on emissions tests.
Texas will receive $50 million in civil penalties and attorneys' fees, according to a press release.
In addition, VW will be permanently enjoined from falsely representing its cars are environmentally friendly, marketing or selling cars with defeat devices, misrepresenting car emissions, and making other deceptive claims.
"The message this settlement sends is ‘Don’t mess with Texas.’ You cannot fleece Texans and expect to get away with it,” Paxton said. “We’ve held VW accountable for the harm it caused to a degree that should deter future corporate malfeasance.”
As part of an overall $14.7 billion nationwide settlement – the largest auto scandal settlement in U.S. history – VW must make amends to nearly 500,000 of its customers, including more than 40,000 Texas owners of VWs and Audis with 2-liter diesel engines.
All of them are entitled to have their cars bought back or modified and receive additional compensation up to $10,000. Leases covering the affected cars can be terminated.
Another part of the nationwide settlement requires VW to establish a $2.7 billion trust fund for projects designed to mitigate environmental harm caused by excess emissions from the rigged vehicles in affected states. Texas stands to benefit from as much as $191 million of the funds in the trust.
While the state of Texas and VW have agreed to settle the state’s claims under the DTPA, they have not resolved Texas’ penalty claims for VW’s violations of environmental protection laws, which the attorney general’s office continues to pursue.