Chrysler-Dodge EcoDiesel Class Deal Worth Up to $300M OK’d

Feb. 12, 2019, 4:27 PM

Fiat Chrysler Automobiles N.V. will pay up to $308 million to car owners alleging that its diesel cars were made to cheat emissions tests under a class settlement that won preliminary approval Feb. 11.

The car maker has a strong incentive to ensure that there is a high participation rate, Judge Edward M. Chen wrote for the U.S. District Court for the Northern District of California.

Under consent decrees negotiated simultaneously with the U.S. and California, substantial penalties kick in if there isn’t a participation rate over 85 percent in two years, the court said.

The settlement covers about 100,000 cars. Current and former owners and lessees will receive $990 to $3,075 under the deal. FCA will also repair the emissions systems and extend the warranty for current owners.

Similar claims against Volkswagen resulted in a settlement worth up to $10 billion that covers half a million cars in the U.S.

Owners of Ram 1500s and Jeep Grand Cherokees branded “EcoDiesel” sued car maker FCA; engine maker, VM; and the maker of the units used to control emissions from the engines, Robert Bosch GmbH. They alleged the companies conspired to make cars that defeated emissions testing while marketing them as environmentally friendly.

The parties reached a settlement just before a hearing on class certification.

“The settlement was vigorously negotiated at arm’s length and with the assistance of one of the country’s preeminent settlement masters,” Ken Feinberg, the court said.

It found the settlement fund substantial, and the attorneys’ fee request of $59 million—19 percent of its potential value—reasonable.

Hagens Berman Sobol Shapiro LLP, Keller Rohrback LLP, Motley Rice LLC, and others represented the car owners.

Sullivan and Cromwell LLP, McGlinchey Stafford, and others represented Chrysler. Cleary Gottlieb Steen and Hamilton LLP and Sidley Austin LLP represented Bosch.

The case is In re Chrysler-Dodge Ecodiesel Mktg., Sales Practices, & Prods. Liab. Litig., 2019 BL 44758, N.D. Cal., No. 17-MD-2777, 2/11/19.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; C. Reilly Larson at rlarson@bloomberglaw.com

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