Deputy Attorney General Jeff Rosen said the settlements, which follow a nearly five-year investigation, will "serve to deter any others who may be tempted to violate our nation's pollution laws in the future."
In court documents, Daimler agreed to pay 250,000 owners up to $3,290 each to get polluting vehicles repaired and agreed not to oppose paying $83.4 million in attorneys fees and expenses for the owners' lawyers. Owners will get $800 less if a prior owner files a valid claim.
Daimler noted in court papers it denies the allegations "and does not admit any liability. The settlement does not include an external compliance monitor, it added. The German automaker still faces an ongoing criminal back investigation and could face additional U.S. financial penalties.
The settlements require Daimler to address the vehicles' excess emissions as part of binding consent decrees. Daimler will issue recalls and extended warranties but is not required to buy back vehicles unless it is unable to offer an emissions fix within a required timetable.
The Justice Department said Daimler failed to disclose at least 16 auxiliary emissions control devices, the government alleged, allowing "vehicles to perform in a variety of consumer-desirable ways, including allowing for fewer (diesel exhaust fluid) tank refills (and) better fuel mileage."
The settlement includes an $875 million civil penalty levied under the Clean Air Act and $546 million to fix the polluting vehicles and offset excess emissions, court papers show. Daimler will pay California $285.6 million in total.
Diesel vehicles have come under scrutiny in the United States since Volkswagen AG admitted in September 2015 to installing secret software on 580,000 U.S. vehicles that allowed them to emit up to 40 times legally allowable emissions.
In September 2019, Daimler in Germany agreed to pay a fine of 870 million euros ($1 billion) for breaking diesel emissions regulations.
Both Volkswagen and Daimler have halted sales of U.S. passenger diesel vehicles.
Fiat Chrysler Automobiles NV in 2019 reached a settlement worth about $800 million to resolve claims by regulators and owners that it used illegal software that produced false results on diesel-emissions tests.
Fiat Chrysler said in July it was in talks to resolve an ongoing Justice Department criminal probe.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.