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January 10, 2019

MADIGAN ANNOUNCES SETTLEMENTS WITH FIAT CHRYSLER & AUTO SUPPLIER ROBERT BOSCH FOR UNDERMINING AUTO EMISSIONS REGULATIONS WITH UNLAWFUL “DEFEAT DEVICES”

Madigan & State Attorneys General Obtain $72.5 Million in Nationwide Payments from Fiat Chrysler and Another $98.7 Million from Bosch for its Role in Supplying and Programming the Software Used by Fiat Chrysler and Earlier Violator Volkswagen

Chicago — Attorney General Lisa Madigan today announced a settlement that will provide for millions of dollars in compensation for Illinois consumers who purchased or leased Fiat Chrysler vehicles that allegedly contained illegal defeat devices. In addition to the consumer payments, the settlement will provide payment of approximately $8.7 million to Illinois and provide more than $171 million to 52 jurisdictions nationwide, including Illinois, from Fiat Chrysler and Bosch, an auto supplier who allegedly supplied and helped program the illegal emissions “defeat device” software used by both Fiat Chrysler and Volkswagen in their diesel vehicles.

Fiat Chrysler
Following a nearly two-year investigation, Madigan and attorneys general from states and territories around the country allege that Fiat Chrysler Automobiles N.V., its U.S. subsidiary FCA US, LLC, its Italian affiliate V.M. Motori S.p.A. and V.M. North America, Inc. (collectively, “Fiat Chrysler”) installed unlawful defeat device software and undisclosed Auxiliary Emissions Control Devices (“AECDs”) in 87,350 Model Year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles that the automaker sold in states around the country, including Illinois. Madigan and the states allege that Fiat Chrysler cheated on federal and state emissions tests by calibrating the vehicles’ software to conceal that the vehicles emitted higher than permitted levels of harmful nitrogen oxides (NOx) in real-world driving conditions, and misled consumers by falsely claiming the “Eco-Diesel”-branded Jeep SUVs and Ram 1500 trucks were environmentally friendly and compliant with the law in all 50 states.

The settlement will require Fiat Chrysler to pay more than $2.1 million to the state of Illinois under state consumer protection laws for deceptively and unfairly marketing, selling and leasing the vehicles to consumers. Nationwide, excluding the separate penalties the company will be required to pay to the federal government and California, the multistate agreement is expected to result in payments totaling $72.5 million to 49 states, Puerto Rico, the District of Columbia and Guam.

The settlement will also prohibit Fiat Chrysler from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers, and require Fiat Chrysler to carry out its obligations under a related settlement agreement in the Multidistrict Litigation (“MDL Consumer Settlement”) pending in the U.S. District Court for the Northern District of California. The MDL Consumer Settlement, once approved by the MDL court, will resolve claims brought by a national class of affected consumers. The MDL Consumer Settlement requires Fiat Chrysler to: eliminate the defeat device features from the relevant software through a software “flash fix;” provide eligible owners and lessees extended warranties; and, together with co-defendant Bosch, pay eligible owners who take their vehicle to an authorized dealer for the software repair an average restitution of approximately $2,908 and lessees and former owners who do so restitution of $990. Related settlements between Fiat Chrysler and the U.S. Department of Justice, the U.S. Environmental Protection Agency, the California Air Resources Board and the state of California also require Fiat Chrysler to make available 200,000 upgraded catalytic converters to mitigate air pollution across the country when installed by Fiat Chrysler vehicle owners as replacements to their existing catalytic converters.

If all owners and lessees nationwide participate, this will result in total available restitution of approximately $307 million, including up to $7.5 million to affected owners and lessees of 2,611 vehicles in Illinois.

“Fiat Chrysler and Robert Bosch skirted the law, defrauded consumers and polluted our environment,” Madigan said. “Today’s settlement demonstrates that manufacturers and suppliers will be held accountable for misconduct in the auto industry.”

Bosch
Bosch is a multinational engineering company known for its consumer products and a major supplier to the global automotive industry. Among the products Bosch supplies to its auto manufacturing customers are the electronic control units (“ECUs”) that house the complex software that controls nearly all aspects of an engine’s performance, including emissions systems. When Volkswagen, a Bosch customer, was revealed to have systematically utilized defeat device software in its diesel vehicles, Madigan and several state attorneys general began a separate investigation into the role played by Bosch in enabling its customers to potentially violate federal and state emissions regulations. Today, after another Bosch customer, Fiat Chrysler, has settled claims that it too employed illegal defeat devices, Attorney General Madigan also announced the conclusion of that separate investigation into Bosch’s conduct.

Madigan and the attorneys general allege that Bosch facilitated the implementation of the defeat device software in more than 600,000 Volkswagen and Fiat Chrysler vehicles over a period that spanned more than a decade and continued to assist these customers as they implemented the defeat devices and concealed their misconduct from regulators and the public.

Under the terms of the proposed settlement, Bosch will pay more than $6.5 million to the state of Illinois for violation of consumer and environmental statutes. The agreement also includes precedent-setting injunctive terms and requires Bosch to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software.

Bosch will also pay a total of $98.7 million under states’ consumer protection and environmental laws and make a separate $5 million payment to the National Association of Attorneys General (NAAG) for training and future enforcement purposes. Under the related MDL Settlements, Bosch will also pay approximately $27.5 million to consumers who purchased or leased the affected Fiat Chrysler vehicles. Bosch earlier paid more than $275 million to consumers who purchased or leased the affected Volkswagen vehicles.

Assistant Attorneys General Cecilia Abundis, Greg Grzeskiewicz and Cassandra Halm handled these cases for Madigan's Consumer Fraud Bureau.

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