HomeMy WebLinkAboutVW Clean Diesel Second Partial Consent Decree 12202016 12-20-2016-VW
SECOND PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
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JOHN C. CRUDEN
Assistant Attorney General
Environment and Natural Resources Division
JOSHUA H. VAN EATON (WA-39871)
BETHANY ENGEL (MA-660840)
Trial Attorneys
Environmental Enforcement Section
U.S. Department of Justice
P.O. Box 7611
Washington DC 20044-7611
Telephone: (202) 514-5474
Facsimile: (202) 514-0097
Email: Josh.Van.Eaton@usdoj.gov
Attorneys for Plaintiff United States of America
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
IN RE: VOLKSWAGEN “CLEAN
DIESEL” MARKETING, SALES
PRACTICES, AND PRODUCTS
LIABILITY LITIGATION
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Case No: MDL No. 2672 CRB (JSC)
SECOND PARTIAL CONSENT
DECREE
Hon. Charles R. Breyer
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TABLE OF CONTENTS
I. JURISDICTION AND VENUE ......................................................................................... 6
II. APPLICABILITY ............................................................................................................... 7
III. DEFINITIONS .................................................................................................................... 8
IV. PARTIAL INJUNCTIVE RELIEF ................................................................................... 14
V. APPROVAL OF SUBMISSIONS AND EPA/CARB DECISIONS ................................ 17
VI. REPORTING AND CERTIFICATION REQUIREMENTS ........................................... 19
VII. STIPULATED PENALTIES AND ADDITIONAL MITIGATION TRUST
PAYMENTS ..................................................................................................................... 23
VIII. FORCE MAJEURE .......................................................................................................... 29
IX. DISPUTE RESOLUTION ................................................................................................ 31
X. INFORMATION COLLECTION AND RETENTION ................................................... 34
XI. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS ......................................... 37
XII. COSTS .............................................................................................................................. 42
XIII. NOTICES .......................................................................................................................... 43
XIV. EFFECTIVE DATE .......................................................................................................... 48
XV. RETENTION OF JURISDICTION .................................................................................. 48
XVI. MODIFICATION ............................................................................................................. 48
XVII. TERMINATION ............................................................................................................... 49
XVIII. PUBLIC PARTICIPATION ............................................................................................. 49
XIX. SIGNATORIES/SERVICE............................................................................................... 50
XX. INTEGRATION ............................................................................................................... 50
XXI. FINAL JUDGMENT ........................................................................................................ 51
XXII. APPENDICES .................................................................................................................. 51
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WHEREAS, Plaintiff United States of America, on behalf of the United States
Environmental Protection Agency, filed a complaint in this action on January 4, 2016 (as
amended on October 7, 2016), against Volkswagen AG, Volkswagen Group of America, Inc.,
Volkswagen Group of America Chattanooga Operations, LLC, Audi AG, Dr. Ing. h.c. F. Porsche
AG, and Porsche Cars North America, Inc. (together, “Defendants”) alleging that Defendants
violated Sections 203(a)(1), (2), (3)(A), and (3)(B) of the Clean Air Act, 42 U.S.C.
§§ 7522(a)(1), (2), (3)(A), and (3)(B), with regard to approximately 500,000 model year 2009 to
2015 motor vehicles containing 2.0 liter diesel engines (more specifically defined elsewhere as
“2.0 Liter Subject Vehicles”) and approximately 80,000 model year 2009 to 2016 motor vehicles
containing 3.0 liter diesel engines (more specifically defined elsewhere as “3.0 Liter Subject
Vehicles”), for a total of approximately 580,000 motor vehicles (collectively, “Subject
Vehicles”);
WHEREAS, the U.S. Complaint alleges that each Subject Vehicle contains, as part of
the engine control module (“ECM”), certain computer algorithms that cause the emissions
control system of those vehicles to perform differently during normal vehicle operation and use
than during emissions testing. The U.S. Complaint alleges that these computer algorithms are
prohibited defeat devices under the Act, and that during normal vehicle operation and use, the
Subject Vehicles emit levels of oxides of nitrogen (“NOx”) significantly in excess of the EPA-
compliant levels. The U.S. Complaint alleges and asserts four claims for relief related to the
presence of the defeat devices in the Subject Vehicles;
WHEREAS, the People of the State of California, by and through the California Air
Resources Board (“CARB”) and Kamala D. Harris, Attorney General of the State of California,
filed a complaint on June 27, 2016, against Defendants alleging that Defendants violated Cal.
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Health & Safety Code §§ 43016, 43017, 43151, 43152, 43153, 43205, 43211, and 43212; Cal.
Code Regs. tit. 13, §§ 1903, 1961, 1961.2, 1965, 1968.2, and 2037, and 40 C.F.R. Sections
incorporated by reference in those California regulations; Cal. Bus. & Prof. Code §§ 17200 et
seq., 17500 et seq., and 17580.5; Cal. Civ. Code § 3494; and 12 U.S.C. § 5536 et seq., with
regard to approximately 71,000 model year 2009 to 2015 motor vehicles containing 2.0 liter
diesel engines and approximately 16,000 model year 2009 to 2016 motor vehicles containing 3.0
liter diesel engines, for a total of approximately 87,000 motor vehicles in California. The
California Complaint alleges, in relevant part, that the motor vehicles contain prohibited defeat
devices and have resulted in, and continue to result in, increased NOx emissions from each such
vehicle significantly in excess of CARB requirements, that these vehicles have resulted in the
creation of a public nuisance, and that Defendants engaged in related conduct that violated unfair
competition, false advertising, and consumer protection laws;
WHEREAS, on June 28, 2016, the United States lodged a Partial Consent Decree, Dkt.
No. 1605-1 (“First Partial Consent Decree”), concerning the 2.0 Liter Subject Vehicles, which
was entered into by the United States, California, and certain Defendants (Volkswagen AG, Audi
AG, Volkswagen Group of America, Inc., and Volkswagen Group of America Chattanooga
Operations, LLC). The First Partial Consent Decree was entered by this Court on October 25,
2016. Dkt. No. 2103;
WHEREAS, the United States and California enter into this Second Partial Consent
Decree with Defendants (collectively, the “Parties”) to address the 3.0 Liter Subject Vehicles on
the road and the associated environmental consequences resulting from the past and future
excess emissions from the 3.0 Liter Subject Vehicles;
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WHEREAS, Defendants admit that software in the 3.0 Liter Subject Vehicles enables
the vehicles’ ECMs to detect when the vehicles are being driven on the road, rather than
undergoing Federal Test Procedures, and that this software renders certain emission control
systems in the vehicles inoperative when the ECM detects the vehicles are not undergoing
Federal Test Procedures, resulting in emissions that exceed EPA-compliant and CARB-
compliant levels when the vehicles are driven on the road;
WHEREAS, Defendants admit that this software was not disclosed in the Certificate of
Conformity and Executive Order applications for the 3.0 Liter Subject Vehicles, and, as a result,
the design specifications of the 3.0 Liter Subject Vehicles, as manufactured, differ materially
from the design specifications described in the Certificate of Conformity and Executive Order
applications;
WHEREAS, except as expressly provided in this Consent Decree, nothing in this
Consent Decree shall constitute an admission of any fact or law by any Party except for the
purpose of enforcing the terms or conditions set forth herein;
WHEREAS, the Parties agree that:
1. The 3.0 Liter Subject Vehicles on the road emit NOx at levels above the standards
to which they were certified to EPA and CARB pursuant to the Clean Air Act and the California
Health and Safety Code, and a prompt remedy to address the noncompliance is needed;
2. At the present time, there are no practical engineering solutions that would,
without negative impact to vehicle functions and unacceptable delay, bring the Generation 1.x
3.0 Liter Subject Vehicles into compliance with the exhaust emission standards and the on-board
diagnostics requirements to which Defendants certified the vehicles to EPA and CARB.
Defendants expect there to be a practical engineering solution to bring the Generation 2.x 3.0
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Liter Subject Vehicles into compliance with the exhaust emission standards to which Defendants
certified the vehicles to EPA and CARB;
3. Accordingly, as one element of the remedy to address the Clean Air Act and
California Health and Safety Code violations, Defendants are required to perform two vehicle
recalls as follows:
a. First, for Generation 1.x 3.0 Liter Subject Vehicles, Defendants
must offer the Buyback or the Lease Termination, for 100% of the Generation 1.x
vehicles under terms described in Appendix A of this Consent Decree (Buyback,
Lease Termination, Vehicle Modification, and Emissions Compliant Recall
Program). In addition, if approved by EPA/CARB, Defendants may, in
accordance with the requirements specified in Appendix B of this Consent Decree
(Vehicle Recall and Emissions Modification Program for 3.0 Liter Subject
Vehicles), modify such vehicles to substantially reduce their NOx emissions in
accordance with standards established by EPA/CARB in this Consent Decree.
b. Second, for Generation 2.x 3.0 Liter Subject Vehicles, if proposed
by Defendants and approved by EPA/CARB, Defendants must offer an Emissions
Compliant Recall as set forth in Appendix A to bring these vehicles into
compliance with their Certified Exhaust Emission Standards in accordance with
the requirements specified in Appendix B. If Defendants are unable to effect a
recall that meets Certified Exhaust Emission Standards for a particular Test Group
or Groups of Generation 2.x 3.0 Liter Subject Vehicles within the timeframe and
in accordance with the other requirements specified in Appendix B, Defendants
must offer the Buyback or Lease Termination, under terms described in Appendix
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A, for 100% of such vehicles and may, if proposed by Defendants and approved
by EPA/CARB, consistent with the provisions in Appendix B, modify such
vehicles to substantially reduce their NOx emissions in accordance with standards
established by EPA/CARB in this Consent Decree.
c. In the event Defendants do not achieve the 85% recall rates
required by Appendix A, Defendants must pay additional funds into the Mitigation
Trust;
4. The practical engineering solutions provided by Appendix B, should Defendants
propose such emissions modifications consistent with the provisions of Appendix B, would
substantially reduce NOx emissions from the 3.0 Liter Subject Vehicles and improve their on-
board diagnostics, would avoid undue waste and potential environmental harm that would be
associated with removing the 3.0 Liter Subject Vehicles from service, and would allow Eligible
Owners and Eligible Lessees to retain their Eligible Vehicles;
5. Members of the public who are Eligible Owners or Eligible Lessees of Eligible
Vehicles will benefit from the relief provided by this Consent Decree;
6. As described below, Defendants will pay a total of $225,000,000 to fund Eligible
Mitigation Actions that will reduce emissions of NOx where the 3.0 Liter Subject Vehicles were,
are, or will be operated. The funding for the Eligible Mitigation Actions required by this
Consent Decree is intended to fully mitigate the total, lifetime excess NOx emissions from the
3.0 Liter Subject Vehicles;
WHEREAS, the Parties recognize, and the Court by entering this Consent Decree finds,
that this Consent Decree has been negotiated by the Parties in good faith and will avoid litigation
among the Parties regarding certain relief with respect to the 3.0 Liter Subject Vehicles for the
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claims alleged in the Complaints, and that this Consent Decree is fair, reasonable, and in the
public interest; and
WHEREAS, the Parties recognize, and the Court by entering this Consent Decree finds,
that the United States and California are not enforcing the laws of other countries, including the
emissions laws or regulations of any jurisdiction outside the United States. Nothing in this
Consent Decree is intended to apply to, or affect, Defendants’ obligations under the laws or
regulations of any jurisdiction outside the United States. At the same time, the laws and
regulations of other countries shall not affect the Defendants’ obligations under this Consent
Decree.
NOW, THEREFORE, before the taking of any testimony, without the adjudication of
any issue of fact or law, and with the consent of the Parties, IT IS HEREBY ADJUDGED,
ORDERED, AND DECREED as follows:
I. JURISDICTION AND VENUE
1. The Court has jurisdiction over the subject matter of this action, pursuant to 28
U.S.C. §§ 1331, 1345, and 1355, and Sections 203, 204, and 205 of the Act, 42 U.S.C. §§ 7522,
7523, and 7524, and over the Parties. Venue lies in this District pursuant to 28 U.S.C. § 1407
and the MDL Panel’s Transfer Order, dated December 8, 2015, and filed in this MDL action as
Dkt. # 1. The Court has supplemental jurisdiction over the California State law claims pursuant
to 28 U.S.C. § 1367. For purposes of this Decree, Defendants consent to the Court’s jurisdiction
over this Consent Decree, over any action to enforce this Consent Decree, and over Defendants,
and consent to venue in this judicial district. Defendants reserve the right to challenge and
oppose any claims to jurisdiction that do not arise from the Court’s jurisdiction over this Consent
Decree or an action to enforce this Consent Decree.
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2. For purposes of this Consent Decree, Defendants agree that the U.S. Complaint
states claims upon which relief may be granted pursuant to Sections 203, 204, and 205 of the
Act, 42 U.S.C. §§ 7522, 7523, and 7524, and that the California Complaint states claims upon
which relief may be granted pursuant to Cal. Health & Safety Code §§ 43016, 43017, 43151,
43152, 43153, 43205, 43211, and 43212; Cal. Code Regs. tit. 13, §§ 1903, 1961, 1961.2, 1965,
1968.2, and 2037, and 40 C.F.R. Sections incorporated by reference in those California
regulations; Cal. Bus. & Prof. Code §§ 17200 et seq., 17500 et seq., and 17580.5; Cal. Civ. Code
§ 3494; and 12 U.S.C. § 5536 et seq.
II. APPLICABILITY
3. The obligations of this Consent Decree apply to and are binding upon the United
States and California, and upon Defendants and any of Defendants’ successors, assigns, or other
entities or persons otherwise bound by law.
4. With respect to the obligation to perform, pay all costs and warranties associated
with, and be liable for all violations of, the emissions modification, lease termination and
buyback provisions herein, the Porsche Defendants shall be liable only for the Porsche 3.0 Liter
Subject Vehicles. The non-Porsche Defendants shall be jointly and severally liable for these
obligations with respect to all 3.0 Liter Subject Vehicles, including the Porsche 3.0 Liter Subject
Vehicles. All Defendants shall be jointly and several liable to comply with all other
requirements of this Consent Decree, including the Mitigation Trust Payments (Paragraph 17)
and the Consequences of Failing to Meet Recall Targets (Appendix A, Paragraph 10.3). In the
event of the insolvency of any Defendant or the failure by any Defendant to implement any
requirement of this Consent Decree, the remaining Defendants shall complete all such
requirements except as set forth in this Paragraph.
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5. Any legal successor or assign of any Defendant shall assume that Defendant’s
liability and remain jointly and severally liable for the payment and other performance
obligations hereunder for which that Defendant is jointly and severally liable. Defendants shall
include an agreement to so remain liable in the terms of any sale, acquisition, merger, or other
transaction changing the ownership or control of any of the Defendants, and no change in the
ownership or control of any Defendant shall affect the obligations hereunder of any Defendant
without modification of the Decree in accordance with Section XVI.
6. Defendants shall provide a copy of this Consent Decree to the members of their
respective Board of Management and/or Board of Directors and their executives whose duties
might reasonably include compliance with any provision of this Decree. Defendants shall
condition any contract providing for work required under this Consent Decree to be performed in
conformity with the terms thereof. Defendants shall also ensure that any contractors, agents, and
employees whose duties might reasonably include compliance with any provision of the Decree
are made aware of those requirements of the Decree relevant to their performance.
7. In any action to enforce this Consent Decree, Defendants shall not raise as a
defense the failure by any of its officers, directors, employees, agents, or contractors to take any
actions necessary to comply with the provisions of this Consent Decree.
III. DEFINITIONS
8. Terms used in this Consent Decree that are defined in the Act or in regulations
promulgated pursuant to the Act shall have the meanings assigned to them in the Act or such
regulations, unless otherwise provided in this Decree. Terms that are defined in an Appendix to
this Consent Decree have the meaning assigned to them in that Appendix. Whenever the terms
set forth below are used in this Consent Decree, the following definitions apply:
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“2.0 Liter Subject Vehicles” means each and every light duty diesel vehicle equipped
with a 2.0 liter TDI engine that Defendants sold or offered for sale in, or introduced or delivered
for introduction into commerce in the United States or its Territories, or imported into the United
States or its Territories, and that is or was purported to have been covered by the following EPA
Test Groups:
Model Year EPA Test Group Vehicle Make and Model(s)
2009 9VWXV02.035N VW Jetta, VW Jetta Sportwagen
2009 9VWXV02.0U5N VW Jetta, VW Jetta Sportwagen
2010 AVWXV02.0U5N VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2011 BVWXV02.0U5N VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2012 CVWXV02.0U5N VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2012 CVWXV02.0U4S VW Passat
2013 DVWXV02.0U5N VW Beetle, VW Beetle Convertible, VW Golf, VW
Jetta, VW Jetta Sportwagen, Audi A3
2013 DVWXV02.0U4S VW Passat
2014 EVWXV02.0U5N VW Beetle, VW Beetle Convertible, VW Golf, VW
Jetta, VW Jetta Sportwagen
2014 EVWXV02.0U4S VW Passat
2015 FVGAV02.0VAL VW Beetle, VW Beetle Convertible, VW Golf, VW
Golf Sportwagen, VW Jetta, VW Passat, Audi A3
“3.0 Liter Subject Vehicles” means each and every model year 2009 to 2016 light duty
diesel vehicle equipped with a 3.0 liter TDI engine that Defendants sold or offered for sale in, or
introduced or delivered for introduction into, commerce in the United States or its Territories, or
imported into the United States or its Territories, and that is or was purported to have been
covered by the following test groups:
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Model Year EPA Test Group(s) Vehicle Make and Model(s) Generation
2009 9ADXT03.03LD VW Touareg, Audi Q7 1.1
2010 AADXT03.03LD VW Touareg, Audi Q7 1.1
2011 BADXT03.02UG
BADXT03.03UG
VW Touareg, Audi Q7 1.2
2012 CADXT03.02UG
CADXT03.03UG
VW Touareg
Audi Q7
1.2
2013 DADXT03.02UG
DADXT03.03UG
DPRXT03.0CDD
VW Touareg
Audi Q7
Porsche Cayenne Diesel
2.1 SUV
2014 EADXT03.02UG
EADXT03.03UG
EPRXT03.0CDD
VW Touareg
Audi Q7
Porsche Cayenne Diesel
2.1 SUV
2014 EADXJ03.04UG Audi: A6 quattro, A7 quattro,
A8, A8L, Q5
2 PC
2015 FVGAT03.0NU3
Audi: Q7, A6 quattro, A7
quattro, A8, A8L, Q5
2.1 SUV
2015 FVGAT03.0NU2
FPRXT03.0CDD
VW Touareg
Porsche Cayenne Diesel
2.2 SUV
2015 FVGAJ03.0NU4 Audi: A6 quattro, A7 quattro,
A8, A8L, Q5
2 PC
2016 GVGAT03.0NU2
GPRXT03.0CDD
VW Touareg
Porsche Cayenne Diesel
2.2 SUV
2016 GVGAJ03.0NU4 Audi: A6 quattro, A7 quattro,
A8, A8L, Q5
2 PC
“Approved Emissions Modification” has the meaning set forth in Appendix B;
“Buyback” has the meaning set forth in Appendix A;
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“CA AG” means the California Attorney General’s Office and any of its successor
departments or agencies;
“California” means the People of the State of California, acting by and through the
California Attorney General and the California Air Resources Board;
“California Complaint” means the complaint filed by California in this action;
“CARB” means the California Air Resources Board and any of its successor departments
or agencies;
“Certified Exhaust Emissions Standards” has the meaning set forth in Appendix A;
“Clean Air Act” or “Act” means 42 U.S.C. §§ 7401-7671q;
“Complaints” means the U.S. Complaint and the California Complaint;
“Consent Decree” or “Decree” or “Second Partial Consent Decree” means this partial
consent decree and all Appendices attached hereto (listed in Section XXII);
“Day” means a calendar day unless expressly stated to be a business day. In computing
any period of time under this Consent Decree, where the last day would fall on a Saturday,
Sunday, or federal or California holiday, the period shall run until the close of business of the
next business day;
“Defendants” means the persons or entities named in the U.S. Complaint and California
Complaint, specifically, Volkswagen AG, Volkswagen Group of America, Inc., Volkswagen
Group of America Chattanooga Operations, LLC, Audi AG, Dr. Ing. h.c. F. Porsche AG, and
Porsche Cars North America, Inc.;
“Effective Date” has the meaning set forth in Section XIV;
“Eligible Lessee” has the meaning set forth in Appendix A;
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“Eligible Mitigation Actions” has the meaning set forth in Appendix D to the First Partial
Consent Decree;
“Eligible Owner” has the meaning set forth in Appendix A;
“Eligible Vehicle” has the meaning set forth in Appendix A;
“Emissions Compliant Recall” has the meaning set forth in Appendix A;
“EPA” means the United States Environmental Protection Agency and any of its
successor departments or agencies;
“First Partial Consent Decree” means the Partial Consent Decree entered in this action by
the Court on October 25, 2016;
“First California Partial Consent Decree” means the Partial Consent Decree between the
California Attorney General and Defendants entered by the Court on September 1, 2016;
“Generation” means the different versions of emission control technology installed in
various configurations of 3.0 Liter Subject Vehicles. The Generation of each 3.0 Liter Subject
Vehicle is specified in the chart set forth in the definition of 3.0 Liter Subject Vehicles;
“Generation 1.x 3.0 Liter Eligible Vehicle” and “Generation 2.x 3.0 Liter Eligible
Vehicle” have the meanings set forth in Appendix A. The Generations are specified in the chart
set forth in the definition of 3.0 Liter Subject Vehicles;
“Initial 3.0 Liter Mitigation Allocation Appendix” or “Mitigation Appendix” is the
appendix setting forth the initial allocation of Mitigation Trust funds for the 3.0 Liter Subject
Vehicles;
“Lease Termination” has the meaning set forth in Appendix A;
“Materials” means Submissions and other documents, certifications, plans, reports,
notifications, data, or other information that is required to be submitted pursuant to this Decree;
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“Mitigation Trust” or “Trust” means the trust established or to be established pursuant to
Section IV. and Appendix D of the First Partial Consent Decree;
“Mitigation Trust Payment” means any payment required to be paid into the Trust
Account;
“Paragraph” means a portion of this Decree identified by an Arabic numeral;
“Parties” means the United States, California, and Defendants;
“Porsche Defendants” means Dr. Ing. h.c. F. Porsche AG, and Porsche Cars North
America, Inc.;
“Porsche 3.0 Liter Subject Vehicles” means the Porsche vehicles specified in the chart set
forth in the definition of 3.0 Liter Subject Vehicles;
“Retail Replacement Value” has the meaning set forth in Appendix A;
“Section” means a portion of this Decree identified by a Roman numeral;
“Submission” means any plan, report, guidance, or other item that is required to be
submitted for approval pursuant to this Consent Decree;
“Test Group” has the meaning set forth in Appendix B;
“Trust Account” has the meaning set forth in the Trust Agreement;
“Trust Agreement” means a trust agreement in the form set forth in Appendix D to the
First Partial Consent Decree, to be entered into by the Defendants and the Trustee selected
pursuant to Paragraph 15 of the First Partial Consent Decree;
“Trustee” means the trustee selected for the Mitigation Trust in accordance with
Paragraph 15 of the First Partial Consent Decree;
“United States” means the United States of America, acting on behalf of EPA, except
when used in subparagraph 75.h, when it shall mean the United States of America; and
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“U.S. Complaint” means the complaint filed by the United States in this action on
January 4, 2016 (as amended on October 7, 2016).
IV. PARTIAL INJUNCTIVE RELIEF
Buyback, Lease Termination, Vehicle Modification, and Emissions Compliant
Recall Program (Appendix A) and Vehicle Recall and Emissions Modification
Program for 3.0 Liter Vehicles (Appendix B)
9. Defendants shall implement the Buyback, Lease Termination, Vehicle
Modification, and Emissions Compliant Recall Program in accordance with the requirements set
forth in Appendix A, together with the Vehicle Recall and Emissions Modification Program for
3.0 Liter Subject Vehicles in accordance with the requirements set forth in Appendix B.
10. Generation 1.x 3.0 Liter Subject Vehicles. As required by Appendix A, by no later
than November 30, 2019, Defendants shall remove from commerce in the United States and/or
perform an Approved Emissions Modification (in accordance with Appendix B) on at least 85%
of the Generation 1.x 3.0 Liter Subject Vehicles.
11. Generation 2.x 3.0 Liter Subject Vehicles. As required by Appendix A, by no later
than May 31, 2020, Defendants shall perform an Emissions Compliant Recall (or, if no
Emissions Compliant Recall is achieved, remove from commerce in the United States and/or
perform an Approved Emissions Modification) on at least 85% of all Generation 2.x 3.0 Liter
Subject Vehicles.
12. Defendants must offer each and every Eligible Owner and Eligible Lessee of a 3.0
Liter Eligible Vehicle for which the offer of the Buyback is required pursuant to Appendix A, the
option of the Buyback of the Eligible Vehicle at a price no less than Retail Replacement Value,
or the Lease Termination in accordance with the terms specified in Appendix A.
13. In the event Defendants do not achieve these 85% recall rates, Defendants shall
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pay additional funds into the Mitigation Trust as set forth in Appendix A.
14. If Defendants implement an Emissions Compliant Recall or a vehicle recall and
Approved Emissions Modification for any 3.0 Liter Subject Vehicle, approval and
implementation of that modification shall be governed by Appendices A and B.
15. Defendants shall not sell or cause to be sold, or lease or cause to be leased, any 3.0
Liter Subject Vehicle, except as provided in Appendices A and B. Defendants shall not modify
or cause to be modified any emission control system or emissions aftertreatment or any other
software or hardware that affects the emission control system on any 3.0 Liter Subject Vehicle
except in compliance with Appendices A and B.
16. Except as otherwise provided in Appendices A and B, Defendants may not export
from the United States to another country any 3.0 Liter Subject Vehicle.
Mitigation of Excess Emissions and Mitigation Trust (First Partial Consent
Decree, Appendix D)
17. Payment of Mitigation Funds.
a. Mitigation Trust Payment. Not later than 30 Days after the
Effective Date, Defendants shall deposit $225,000,000 in Mitigation Trust
Payments into the Trust Account to be used to fund Eligible Mitigation Actions to
achieve reductions of NOx emissions in accordance with the Trust Agreement.
b. Mitigation Trust Payments under Appendices A and B. All
Mitigation Trust Payments required by Appendices A and B shall be deposited
into the Trust Account.
c. Notice of Trust Payments. Defendants shall notify the Trustee and
the United States and CARB by mail and email in accordance with the
requirements of Section XIII (Notices) on the Day any such Mitigation Trust
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Payments are made.
d. Court Registry. If any payments required under this Paragraph 17
become due before the Trust Account is established, Defendants shall deposit such
payments with the Court in accordance with Fed. R. Civ. P. 67. Defendants shall
execute such documents and support such actions as necessary to facilitate the
deposit of payments with the Court. For purposes of Fed. R. Civ. P. 67, this
Consent Decree constitutes an order permitting such deposits and authorizing the
Clerk of Court for the Northern District of California: (1) to accept an electronic
funds transfer payment from Defendants of any payments required under this
Paragraph 17; and (2) to hold such funds in the Clerk’s Registry, including interest
earned thereon, pending the further order of this Court. For purposes of 28 U.S.C.
§ 2042, this Consent Decree constitutes an order permitting the Trustee, upon
filing a designation and identification of Trust Account as required by Appendix D
to the First Partial Consent Decree, to withdraw all such funds, including all
accrued interest, for immediate and concurrent deposit into the Trust Account. In
the event that the United States determines that the funds cannot be deposited in
accordance with Fed. R. Civ. P. 67, and unless otherwise agreed in writing by the
Parties, the Defendants shall hold the funds in an interest-bearing escrow account,
for deposit (together with all accrued interest) into the Trust Account when
established.
18. Modification of Appendix D (Form of Environmental Mitigation Trust
Agreement) and Appendix D-3 (Certification for Beneficiary Status under Environmental
Mitigation Trust Agreement) to the First Partial Consent Decree. Upon the Effective Date of the
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Second Partial Consent Decree, the Parties agree to make non-material modifications to
Appendix D and Appendix D-3 of the First Partial Consent Decree as follows to enable the
Mitigation Payments from this Consent Decree to be placed in the Mitigation Trust created
pursuant to the First Partial Consent Decree: (1) all references to 2.0 Liter Subject Vehicles will
also include 3.0 Liter Subject Vehicles; (2) all references to Appendix D-1 will also include the
Mitigation Appendix; (3) most references to Consent Decree will include both the First and
Second Partial Consent Decrees; and (4) most references to Settling Defendants will also include
Defendants.
19. Mitigation Appendix. The Mitigation Appendix, attached to this Second Partial
Consent Decree, sets forth an initial allocation of Mitigation Trust funds for the 3.0 Liter Subject
Vehicles for entities that may seek to become a Beneficiary under the Trust Agreement.
20. Modification of Trust Agreement and its Appendices. After the Trust is
established pursuant to Paragraph 17 of the First Partial Consent Decree, the Trust may be
modified only in accordance with Paragraph 19 of the First Partial Consent Decree.
V. APPROVAL OF SUBMISSIONS AND EPA/CARB DECISIONS
21. For purposes of this Consent Decree, unless otherwise specified in this Consent
Decree:
a. with respect to any Submission, other obligation, or force majeure
claim of Defendants concerning Appendix B, EPA and CARB, or the United
States and California as applicable, will issue a joint decision concerning the
Submission, other obligation, or force majeure claim; and
b. with respect to any other Submission, obligation, or force majeure
claim of Defendants under the Consent Decree, the position of EPA or the United
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States, after consultation with CARB or California, as applicable, shall control.
22. For purposes of this Section, Section VII (Stipulated Penalties and Other
Mitigation Trust Payments), Section VIII (Force Majeure), and Section IX (Dispute Resolution),
in accordance with the decision-making authorities set forth in Paragraph 21, references to
“EPA/CARB” mean EPA and CARB jointly, or EPA or CARB, as applicable; references to “the
United States/California” mean the United States and California jointly, or the United States or
California, as applicable; and references to the United States/CARB mean the United
States/CARB jointly, or the United States or CARB, as applicable.
23. Any specific procedures or specifications for the review of Submissions set forth
in the Appendices shall govern, as applicable, the review of any Submission submitted pursuant
to such Appendix. Except as otherwise specified in the Appendices, after review of any
Submission, EPA/CARB shall in writing: (a) approve the Submission; (b) approve the
Submission upon specified conditions; (c) approve part of the Submission and disapprove the
remainder; or (d) disapprove the Submission. In the event of disapproval, in full or in part, of
any portion of the Submission, if not already provided with the disapproval, upon the request of
Defendants, EPA/CARB will provide in writing the reasons for such disapproval.
24. If the Submission is approved pursuant to Paragraph 23, Defendants shall take all
actions required by the Submission in accordance with the schedules and requirements of the
Submission, as approved. If the Submission is conditionally approved or approved only in part
pursuant to subparagraph 23(b) or (c), Defendants shall, upon written direction from
EPA/CARB, take all actions required by the Submission that EPA/CARB determine(s) are
technically severable from any disapproved portions.
25. If the Submission is disapproved in whole or in part pursuant to subparagraph
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23(c) or (d), Defendants shall, within 30 Days or such other time as provided by an Appendix or
as the Parties agree to in writing, correct all deficiencies and resubmit the Submission, or
disapproved portion thereof, for approval, in accordance with Paragraphs 23 and 24. If the
resubmission is approved in whole or in part, Defendants shall proceed in accordance with
Paragraph 24.
26. If a resubmitted Submission, or portion thereof, is disapproved in whole or in part,
EPA/CARB may again require Defendants to correct any deficiencies, in accordance with
Paragraphs 24 and 25, or EPA/CARB may itself/themselves correct any deficiencies.
27. Defendants may elect to invoke the dispute resolution procedures set forth in
Section IX (Dispute Resolution) concerning any decision of EPA/CARB to disapprove, approve
on specified conditions, or modify a Submission. If Defendants elect to invoke dispute
resolution, they shall do so within 30 Days (or such other time as the Parties agree to in writing)
after receipt of the applicable decision.
28. Any stipulated penalties applicable to the original Submission, as provided in
Section VII (Stipulated Penalties and Other Mitigation Trust Payments), shall accrue during the
30-Day period or other specified period pursuant to Paragraph 25. Such stipulated penalties shall
not be payable unless the resubmission of the Submission is untimely or is disapproved in whole
or in part; provided that, if the original Submission was so deficient as to constitute a material
breach of Defendants’ obligations under this Decree in making that Submission, the stipulated
penalties applicable to the original Submission shall be due and payable notwithstanding any
subsequent resubmission.
VI. REPORTING AND CERTIFICATION REQUIREMENTS
29. Timing of Reports. Unless otherwise specified in this Consent Decree, or the
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Parties otherwise agree in writing:
a. To the extent quarterly reporting is required by this Decree,
Defendants shall submit each report one month after the end of the calendar
quarter, and the report shall cover the prior calendar quarter. That is, reports shall
be submitted on April 30, July 31, October 31, and January 31 for the prior
respective calendar quarter (i.e., the report submitted on April 30 covers January 1
through March 31), as further specified, and covering the items specified,
elsewhere in the Consent Decree.
b. To the extent semi-annual or annual reporting is required,
Defendants shall submit each report one month after the end of the applicable
prior 6-month or annual calendar period, i.e., April 30, July 31, October 31, or
January 31, as applicable, and as further specified, and covering the items
specified, elsewhere in the Consent Decree.
30. Defendants may assert that information submitted under this Consent Decree is
protected as Confidential Business Information (“CBI”) as set out in 40 C.F.R. pt. 2 or Cal. Code
Regs. tit. 17, §§ 91000 to 91022.
31. Reporting of Violations
a. Except to the extent the Appendices specify different timeframes
or notice recipients, if Defendants reasonably believe they have violated, or that
they may violate, any requirement of this Consent Decree, Defendants shall notify
EPA, CARB, and CA AG of such violation and its likely duration, in a written
report submitted within 10 business days after the Day Defendants first reasonably
believe that a violation has occurred or may occur, with an explanation of the
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violation’s likely cause and of the remedial steps taken, or to be taken, to prevent
or minimize such violation. If Defendants believe the cause of a violation cannot
be fully explained at the time the report is due, Defendants shall so state in the
report. Defendants shall investigate the cause of the violation and shall then
submit an amendment to the report, including a full explanation of the cause of the
violation, within 30 Days after the Day on which Defendants reasonably believe
they have determined the cause of the violation. Nothing in this Paragraph or the
following Paragraph relieves Defendants of their obligation to provide the notice
required by Section VIII (Force Majeure).
b. Semi-Annual Report of Violations. On January 31 and July 31 of
each year, Defendants shall submit a summary to the United States and California
of any violations of the Decree that occurred during the preceding six months (or
potentially shorter period for the first semi-annual report), and that are required to
be reported pursuant to subparagraph 31.a, including the date of the violation, the
date the notice of violation was sent, and a brief description of the violation.
32. Whenever Defendants reasonably believe that any violation of this Consent Decree
or any other event affecting Defendants’ performance under this Decree may pose an immediate
threat to the public health or welfare or the environment, Defendants shall notify EPA and
California by email as soon as practicable, but no later than 24 hours after Defendants first
reasonably believe the violation or event has occurred. This procedure is in addition to the
requirements set forth in Paragraph 31.
33. All plans, reports, and other information required to be posted to a public website
by this Consent Decree shall be accessible on the public website that Defendants use to
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administer the Claims Program pursuant to Appendix A-1 (or the analogous website used by
Defendants pursuant to a Parallel Agreement under Appendix A-1), and a link to such website
shall be displayed on www.vw.com, www.audiusa.com, and www.porsche.com.
34. Each report or other item that is required by an Appendix to be certified pursuant
to this Paragraph shall be signed by an officer or director of Defendants and shall include the
following sworn certification, which may instead be certified as provided in 28 U.S.C. § 1746:
I certify under penalty of perjury under the laws of the United States and
California that this document and all attachments were prepared under my
direction or supervision in accordance with a system designed to assure that
qualified personnel properly gather and evaluate the information submitted.
Based on my inquiry of the person or persons who manage the system, or those
persons directly responsible for gathering the information, the information
submitted is, to the best of my knowledge and belief, true, correct, and complete.
I have no personal knowledge, information or belief that the information
submitted is other than true, correct, and complete. I am aware that there are
significant penalties for submitting false information, including the possibility of
fine and imprisonment for knowing violations.
35. Defendants agree that the certification required by Paragraph 34 is subject to 18
U.S.C. §§ 1001(a) and 1621, and California Penal Code §§ 115, 118, and 132.
36. The certification requirement in Paragraph 34 does not apply to emergency or
similar notifications where compliance would be impractical.
37. The reporting requirements of this Consent Decree do not relieve Defendants of
any reporting obligations required by the Act or implementing regulations, or by any other
federal, state, or local law, regulation, permit, or other requirement.
38. Any information provided pursuant to this Consent Decree may be used by the
United States or California in any proceeding to enforce the provisions of this Consent Decree
and as otherwise permitted by law.
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VII. STIPULATED PENALTIES AND ADDITIONAL MITIGATION TRUST
PAYMENTS
39. Defendants shall be liable for stipulated penalties and additional Mitigation Trust
Payments (collectively, “stipulated payments”) to the United States and California for violations
of this Consent Decree as specified in this Section and the Appendices, unless excused under
Section VIII (Force Majeure). A violation includes failing to perform any obligation required by
the terms of this Decree, including any work plan or schedule approved under this Decree,
according to all applicable requirements of this Decree and within the specified time schedules
established by or approved under this Decree.
40. Partial Injunctive Relief Requirements: Appendices A and B. The stipulated
payments and other remedies for violations of requirements of Appendices A and B are set forth
in those Appendices.
41. Partial Injunctive Relief Requirements: Section IV, Paragraph 17 (Payment of
Mitigation Funds). The following additional Mitigation Trust Payments shall accrue for each
day that the Mitigation Trust Payment of $225,000,000 required by subparagraph 17.a is late:
Interest (per
Par. 44) 1st through 4th Day
$50,000 5th through 30th Day
$100,000 31st through 45th Day
$200,000 46th Day and beyond
a. The additional Mitigation Trust Payments required by this
Paragraph 41 are in addition to the Payment required by subparagraph 17.a, which
Payment shall not be reduced on account of the payment of additional Mitigation
Trust Payments.
b. In the event that no Trust Account has been established as of the
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date that any additional Mitigation Trust Payment required pursuant to this
Paragraph 41 becomes due, such payment shall be made into the Court Registry
account in accordance with subparagraph 17.d.
42. Reporting and Certification Requirements: Section VI
a. Reporting of Violations. The following stipulated penalties shall
accrue per violation per Day for each violation of the requirements of
Paragraph 31 (Reporting of Violations):
$2,000 1st through 14th Day
$5,000 15th through 30th Day
$10,000 31st Day and beyond
b. Certification Requirements. The following stipulated penalties
shall accrue per violation per Day for each violation of the certification
requirements of Paragraph 34, except for false statements as described in
subparagraph 42.c, below, in which case the stipulated penalty shall be the higher
of the penalty provided for here in subparagraph 42.b or in subparagraph 42.c:
$10,000 1st through 14th Day
$25,000 15th through 30th Day
$50,000 31st Day and beyond
c. False Statements. Defendants shall pay a stipulated penalty of
$1,000,000 for each report or Submission required to be submitted pursuant to this
Consent Decree that contains a knowingly false, fictitious, or fraudulent statement
or representation of material fact.
43. Stipulated payments under this Section shall begin to accrue on the Day after
performance is due or on the Day a violation occurs, whichever is applicable, and shall continue
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to accrue until performance is satisfactorily completed or until the violation ceases. Stipulated
payments shall accrue simultaneously for separate violations of this Consent Decree.
44. If Defendants fail to pay stipulated penalties or the Mitigation Trust Payments
required by subparagraphs 17.a (Mitigation Trust Payment) and .b (Mitigation Trust Payments
under Appendices A and B) according to the terms of this Consent Decree, Defendants shall be
liable for interest on such payments at the rate provided for in 28 U.S.C. § 1961, accruing as of
the date payment became due and continuing until payment has been made in full. Nothing in
this Paragraph shall be construed to limit the United States or California from seeking any
remedy otherwise provided by law for Defendants’ failure to pay any stipulated payments.
45. Stipulated Payment Demands and Payments
a. The United States, in consultation with CARB, will issue any
demand for stipulated Mitigation Trust Payments required by Paragraph 41 and
Appendix B and for stipulated penalties required by this Consent Decree, except
that CARB may issue a separate demand for a stipulated penalty pursuant to
Appendix A, Paragraph 12.2.7 based on Defendants’ failure to make an additional
California Mitigation Trust Payment required under Appendix A, Paragraphs
10.3.2, 10.3.4 and 10.4 .
b. For the stipulated payments set forth in Paragraph 45.a, Defendants
shall pay stipulated penalties to the United States/CARB and stipulated Mitigation
Trust Payments to the Mitigation Trust within 30 Days after a written demand by
the United States or CARB, as applicable, unless Defendants invoke the dispute
resolution procedures under Section IX (Dispute Resolution) within the 30-Day
period. Except as provided in Appendix B, Defendants shall pay 75% percent of
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the total stipulated penalty amount due to the United States and 25% percent to
CARB.
c. Stipulated Mitigation Trust Payments required by Appendix A,
Paragraphs 10.3 and 10.4 shall be paid as set forth therein.
46. Either the United States or CARB may, in the unreviewable exercise of its
discretion, reduce or waive stipulated penalties otherwise due it under this Consent Decree.
However, no action by either the United States or CARB may reduce or waive stipulated
penalties due to the other.
47. Stipulated payments shall continue to accrue as provided in Paragraph 43 during
any Dispute Resolution, but need not be paid until the following:
a. If the dispute is resolved by agreement of the Parties or by a
decision of EPA/CARB that is not appealed to the Court, Defendants shall pay
accrued stipulated payments determined to be owing, together with interest as
provided in Paragraph 44, to the United States/CARB/the Mitigation Trust, as
applicable, within 30 Days after the effective date of the agreement or the receipt
of EPA’s/CARB’s decision or order.
b. If the dispute is appealed to the Court and the United
States/California prevail(s) in whole or in part, Defendants shall pay all accrued
payments determined by the Court to be owing, together with interest as provided
in Paragraph 44, to the United States/CARB/the Mitigation Trust within 60 Days
after receiving the Court’s decision or order, except as provided in subparagraph c,
below.
c. If any Party appeals the District Court’s decision, Defendants shall
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pay to the United States/CARB/the Mitigation Trust all accrued payments
determined to be owing, together with interest as provided in Paragraph 44, within
15 Days after receiving the final appellate court decision.
48. Defendants shall pay stipulated penalties owing to the United States by FedWire
Electronic Funds Transfer (“EFT”) to the DOJ account, in accordance with instructions provided
to Defendants by the Financial Litigation Unit (“FLU”) of the United States Attorney’s Office
for the Northern District of California after the Effective Date. The payment instructions
provided by the FLU will include a Consolidated Debt Collection System (“CDCS”) number,
which Defendants shall use to identify all payments required to be made in accordance with this
Consent Decree. The FLU will provide the payment instructions to:
Head of Treasury of Volkswagen AG
Joerg Boche
Joerg.boche@volkswagen.de
011-49-5361-92-4184
on behalf of Defendants. Defendants may change the individual to receive payment instructions
on their behalf by providing written notice of such change to the United States and CARB in
accordance with Section XIII (Notices).
49. Defendants shall pay stipulated penalties owing to CARB by check, accompanied
by a Payment Transmittal Form (which CARB will provide to the addressee listed in Paragraph
48 after the Effective Date), with each check mailed to:
Air Resources Board, Accounting Branch
P.O. Box 1436
Sacramento, CA 95812-1436;
or by wire transfer, in which case Defendants shall use the following wire transfer information
and send the Payment Transmittal Form to the above address prior to each wire transfer:
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State of California Air Resources Board
c/o Bank of America, Inter Branch to 0148
Routing No. 0260-0959-3 Account No. 01482-80005
Notice of Transfer: Yogeeta Sharma Fax: (916) 322-9612
Reference: ARB Case # MSES-15-085.
Defendants are responsible for any bank charges incurred for processing wire transfers. Except
as otherwise provided by this Consent Decree, stipulated penalties paid to CARB shall be
deposited into the Air Pollution Control Fund and used by CARB to carry out its duties and
functions.
50. At the time of payment, Defendants shall send notice that a stipulated payment has
been made: (i) to EPA via email at cinwd_acctsreceivable@epa.gov or via regular mail at EPA
Cincinnati Finance Office, 26 W. Martin Luther King Drive, Cincinnati, Ohio 45268; (ii) to DOJ
via email or regular mail in accordance with Section XIII; and/or (iii) to CARB via email or
regular mail in accordance with Section XIII. Such notice shall state that the payment is for
stipulated penalties or Mitigation Trust Payments, as applicable, owed pursuant to the Consent
Decree in In re Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability
Litigation, and shall state for which violation(s) the stipulated payments are being paid. Such
notice shall also reference MDL No. 2672 CRB (JSC), CDCS Number and DOJ # 90-5-2-1-
11386.
51. Defendants shall not deduct any stipulated penalties paid under this Decree
pursuant to this Section in calculating their income taxes due to federal, state, or local taxing
authorities in the United States.
52. The payment of stipulated payments and interest, if any, shall not alter in any way
Defendants’ obligation to complete the performance of the requirements of this Consent Decree.
53. Non-Exclusivity of Remedy. Stipulated payments and other remedies provided for
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in the Consent Decree are not the United States’ or California’s exclusive remedy for violations
of this Consent Decree, including violations of the Consent Decree that are also violations of
law. Subject to the provisions in Section XI (Effect of Settlement/Reservation of Rights), the
United States and California reserve all legal and equitable remedies available to enforce the
provisions of this Consent Decree. In addition to the remedies specifically reserved and those
specifically agreed to elsewhere in this Consent Decree, the United States and California
expressly reserve the right to seek any other relief they deem appropriate for Defendants’
violation of this Consent Decree, including but not limited to an action against Defendants for
statutory penalties where applicable, additional injunctive relief, mitigation or offset measures,
contempt, and/or criminal sanctions. However, the amount of any statutory penalty assessed for
a violation of this Consent Decree (and payable to the United States or to California,
respectively) shall be reduced by an amount equal to the amount of any stipulated penalty
assessed and paid pursuant to this Consent Decree (to the United States or to California,
respectively) for the same violation.
VIII. FORCE MAJEURE
54. “Force majeure,” for purposes of this Consent Decree, is defined as any event
arising from causes beyond the control of Defendants, of any entity controlled by Defendants, or
of Defendants’ contractors, that delays or prevents the performance of any obligation under this
Consent Decree despite Defendants’ best efforts to fulfill the obligation. The requirement that
Defendants exercise “best efforts to fulfill the obligation” includes using best efforts to anticipate
any potential force majeure event and best efforts to address the effects of any potential force
majeure event (a) as it is occurring, and (b) following the potential force majeure, such that the
delay and any adverse effects of the delay are minimized. “Force majeure” does not include
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Defendants’ financial inability to perform any obligation under this Consent Decree.
55. If any event occurs or has occurred that may delay the performance of any
obligation under this Consent Decree, for which Defendants intend or may intend to assert a
claim of force majeure, whether or not caused by a force majeure event, Defendants shall
provide notice by email to EPA and CARB, within 7 Days of when Defendants first knew that
the event might cause a delay. Within 14 Days thereafter, Defendants shall provide in writing to
EPA and CARB an explanation and description of the reasons for the delay; the anticipated
duration of the delay; all actions taken or to be taken to prevent or minimize the delay or the
effect of the delay; a schedule for implementation of any such measures; Defendants’ rationale
for attributing such delay to a force majeure event if it intends to assert such a claim; and a
statement as to whether, in the opinion of Defendants, such event may cause or contribute to an
endangerment to public health, welfare or the environment. Defendants shall include with any
notice all available documentation supporting the claim that the delay was attributable to a force
majeure event. Failure to comply with the above requirements shall preclude Defendants from
asserting any claim of force majeure for that event for the period of time of such failure to
comply, and for any additional delay caused by such failure. Defendants shall be deemed to
know of any circumstance of which Defendants, any entity controlled by Defendants, or
Defendants’ contractors knew or should have known.
56. If EPA/CARB agree(s) that the delay or anticipated delay is attributable to a force
majeure event, the time for performance of the obligations under this Consent Decree that are
affected by the force majeure event will be extended by EPA/CARB for such time as is
necessary to complete those obligations. An extension of the time for performance of the
obligations affected by the force majeure event shall not, of itself, extend the time for
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performance of any other obligation. EPA/CARB will notify Defendants in writing of the length
of the extension, if any, for performance of the obligations affected by the force majeure event.
57. If EPA/CARB do(es) not agree that the delay or anticipated delay has been or will
be caused by a force majeure event, EPA/CARB will notify Defendants in writing of its/their
decision.
58. If Defendants elect to invoke the dispute resolution procedures set forth in Section
IX (Dispute Resolution), it shall do so no later than 15 Days after receipt of EPA’s/CARB’s
notice. In any such proceeding, Defendants shall have the burden of demonstrating by a
preponderance of the evidence that the delay or anticipated delay has been or will be caused by a
force majeure event, that the duration of the delay or the extension sought was or will be
warranted under the circumstances, that best efforts were exercised to avoid and mitigate the
effects of the delay, and that Defendants complied with the requirements of Paragraphs 54 and
55. If Defendants carry this burden, the delay at issue shall be deemed not to be a violation by
Defendants of the affected obligation of this Consent Decree identified to EPA/CARB and the
Court.
IX. DISPUTE RESOLUTION
59. Unless otherwise expressly provided for in this Consent Decree, the dispute
resolution procedures of this Section shall be the exclusive mechanism to resolve disputes arising
under or with respect to this Consent Decree. Failure by the Defendants to seek resolution of a
dispute under this Section shall preclude Defendants from raising any such issue as a defense to
an action by the United States or California to enforce any obligation of Defendants arising
under this Decree.
60. Informal Dispute Resolution. Any dispute subject to dispute resolution under this
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Consent Decree shall first be the subject of informal negotiations. The dispute shall be
considered to have arisen when Defendants send the United States and California by mail a
written Notice of Dispute. Such Notice of Dispute shall state clearly the matter in dispute,
including, where applicable, whether the dispute arises from a decision made by EPA and CARB
jointly, or EPA or CARB individually. The period of informal negotiations shall not exceed 30
Days after the date the dispute arises, unless that period is modified by written agreement. If the
Parties cannot resolve a dispute by informal negotiations, then the position advanced by the
United States/California shall be considered binding unless, within 30 Days after the conclusion
of the informal negotiation period, Defendants invoke formal dispute resolution procedures as set
forth below.
61. Formal Dispute Resolution. Defendants shall invoke formal dispute resolution
procedures, within the time period provided in the preceding Paragraph, by serving on the United
States/California a written Statement of Position regarding the matter in dispute. The Statement
of Position shall include, but need not be limited to, any factual data, analysis, or opinion
supporting Defendants’ position and any supporting documentation relied upon by Defendants.
62. The United States/California will serve its/their Statement of Position within 45
Days after receipt of Defendants’ Statement of Position. The United States’/California’s
Statement of Position will include, but need not be limited to, any factual data, analysis, or
opinion supporting that position and any supporting documentation relied upon by the United
States/California. The United States’/California’s Statement of Position shall be binding on
Defendants, unless Defendants file a motion for judicial review of the dispute in accordance with
Paragraph 63.
63. Defendants may seek judicial review of the dispute by filing with the Court and
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serving on the United States/California, in accordance with Section XIII (Notices), a motion
requesting judicial resolution of the dispute. The motion must be filed within 20 Days after
receipt of the United States’/California’s Statement of Position pursuant to the preceding
Paragraph. The motion shall contain a written statement of Defendants’ position on the matter in
dispute, including any supporting factual data, analysis, opinion, or documentation, and shall set
forth the relief requested and any schedule within which the dispute must be resolved for orderly
implementation of the Consent Decree.
64. The United States/California will respond to Defendants’ motion within the time
period allowed by the Local Rules of the Court. Defendants may file a reply memorandum, to
the extent permitted by the Local Rules.
65. Standard of Review for Judicial Disputes
a. Disputes Concerning Matters Accorded Record Review. In any
dispute arising under Appendix B and brought pursuant to Paragraph 63,
Defendants shall have the burden of demonstrating that EPA’s/CARB’s action or
determination or position is arbitrary and capricious or otherwise not in
accordance with law based on the administrative record. For purposes of this
subparagraph, EPA/CARB will maintain an administrative record of the dispute,
which will contain all statements of position, including supporting documentation,
submitted pursuant to this Section. Prior to the filing of any motion, the Parties
may submit additional materials to be part of the administrative record pursuant to
applicable principles of administrative law.
b. Other Disputes. Except as otherwise provided in this Consent
Decree, in any other dispute brought pursuant to Paragraph 63, Defendants shall
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bear the burden of demonstrating by a preponderance of the evidence that their
actions were in compliance with this Consent Decree.
66. In any disputes brought under this Section, it is hereby expressly acknowledged
and agreed that this Consent Decree was jointly drafted in good faith by the United States,
California, and Defendants. Accordingly, the Parties hereby agree that any and all rules of
construction to the effect that ambiguity is construed against the drafting party shall be
inapplicable in any dispute concerning the terms, meaning, or interpretation of this Consent
Decree.
67. The invocation of dispute resolution procedures under this Section shall not, by
itself, extend, postpone, or affect in any way any obligation of Defendants under this Consent
Decree, unless and until final resolution of the dispute so provides. Stipulated penalties with
respect to the disputed matter shall continue to accrue from the first Day of noncompliance, but
payment shall be stayed pending resolution of the dispute as provided in Paragraph 47. If
Defendants do not prevail on the disputed issue, stipulated payments shall be assessed and paid
as provided in Section VII (Stipulated Penalties and Other Mitigation Trust Payments).
X. INFORMATION COLLECTION AND RETENTION
68. The United States, California, and their representatives, including attorneys,
contractors, and consultants, shall have the right of entry, upon presentation of credentials, at all
reasonable times into any of Defendants’ offices, plants, or facilities:
a. to monitor the progress of activities required under this Consent
Decree;
b. to verify any data or information submitted to the United States or
California in accordance with the terms of this Consent Decree;
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c. to inspect records related to this Consent Decree;
d. to conduct testing related to this Consent Decree;
e. to obtain documentary evidence, including photographs and similar
data, related to this Consent Decree;
f. to assess Defendants’ compliance with this Consent Decree; and
g. for other purposes as set forth in 42 U.S.C. § 7542(b) and Cal.
Gov’t Code § 11180.
69. Upon request, and for purposes of evaluating compliance with the Consent Decree,
Defendants shall promptly provide to EPA and California or their authorized representatives at
locations to be designated by EPA and California:
a. vehicles, in specified configurations, for emissions testing;
b. engine control units for vehicles of specified configurations;
c. specified software and related documentation for vehicles of
specified configurations;
d. reasonable requests for English translations of software
documents; or
e. other items or information that could be requested pursuant to 42
U.S.C. § 7542(a) or Cal. Gov’t Code § 11180.
70. Until three years after the termination of this Consent Decree, Defendants shall
retain, and shall instruct their contractors and agents to preserve, all non-identical copies of all
documents, records, reports, or other information (including documents, records, or other
information in electronic form) (hereinafter referred to as “Records”) in their or their contractors’
or agents’ possession or control, or that come into their or their contractors’ or agents’ possession
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or control, relating to Defendants’ performance of their obligations under this Consent Decree,
except that Defendants are not required to retain copies or images of military identification cards
to the extent that retention of such copies or images would violate 18 U.S.C. § 701. This
information-retention requirement shall apply regardless of any contrary corporate or
institutional policies or procedures. At any time during this information-retention period, upon
request by the United States or California, Defendants shall provide copies of any Records
required to be maintained under this Paragraph, notwithstanding any limitation or requirement
imposed by foreign laws. Nothing in this Paragraph shall apply to any documents in the
possession, custody, or control of any outside legal counsel retained by Defendants in connection
with this Consent Decree or of any contractors or agents retained by such outside legal counsel
solely to assist in the legal representation of Defendants. Defendants may assert that certain
Records are privileged or protected as provided under federal or California law. If Defendants
assert such a privilege or protection, they shall provide the following: (a) the title of the Record;
(b) the date of the Record; (c) the name and title of each author of the Record; (d) the name and
title of each addressee and recipient; (e) a description of the subject of the Record; and (f) the
privilege or protection asserted by Defendants. However, Defendants may make no claim of
privilege or protection regarding: (1) any data regarding the 3.0 Liter Subject Vehicles or
compliance with this Consent Decree; or (2) the portion of any Record that Defendants are
required to create or generate pursuant to this Consent Decree.
71. At the conclusion of the information-retention period provided in the preceding
Paragraph, Defendants shall notify the United States and California at least 90 Days prior to the
destruction of any Records subject to the requirements of the preceding Paragraph and, upon
request by the United States or California, Defendants shall deliver any such Records to EPA or
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California. Defendants may assert that certain Records are privileged or protected as provided
under federal or California law. If Defendants assert such a privilege or protection, they shall
provide the following: (a) the title of the Record; (b) the date of the Record; (c) the name and
title of each author of the Record; (d) the name and title of each addressee and recipient; (e) a
description of the subject of the Record; and (f) the privilege or protection asserted by
Defendants. However, Defendants may make no claim of privilege or protection regarding:
(1) any data regarding the 3.0 Liter Subject Vehicles or compliance with this Consent Decree; or
(2) the portion of any Record that Defendants are required to create or generate pursuant to this
Consent Decree.
72. Defendants may also assert that information required to be provided under this
Section is protected as CBI as defined in Paragraph 30. As to any information that Defendants
seek to protect as CBI, Defendants shall follow the procedures set forth in 40 C.F.R. pt. 2 or
equivalent California law.
73. This Consent Decree in no way limits or affects any right of entry and inspection,
or any right to obtain information, held by the United States or California pursuant to applicable
federal or state laws, regulations, or permits, nor does it limit or affect any duty or obligation of
Defendants to maintain Records imposed by applicable federal or state laws, regulations, or
permits.
XI. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS
74. Satisfaction of all the requirements of this Second Partial Consent Decree (and, as
to California, satisfaction of all the requirements of this Second Partial Consent Decree and the
concurrently lodged Second California Partial Consent Decree) shall resolve and settle all of the
United States’ and California’s civil claims in the Complaints for injunctive relief, based on facts
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that were disclosed by Defendants to EPA and CARB prior to October 24, 2016, relating to any
defeat devices or auxiliary emission control devices (“AECDs”) in the 3.0 Liter Subject
Vehicles, that they made or could have made against Defendants:
a. requiring Defendants to take action to buy back, recall, or modify
the 3.0 Liter Subject Vehicles in order to remedy the violations alleged in the
Complaints concerning the 3.0 Liter Subject Vehicles;
b. requiring Defendants to make payments to owners and lessees of
the 3.0 Liter Subject Vehicles in order to remedy the violations alleged in the
Complaints concerning the 3.0 Liter Subject Vehicles; and
c. requiring Defendants to mitigate the environmental harm
associated with the violations alleged in the Complaints concerning the 3.0 Liter
Subject Vehicles.
75. The United States reserves, and this Second Partial Consent Decree is without
prejudice to, all claims, rights, and remedies against Defendants with respect to all matters not
expressly resolved in Paragraph 74. Notwithstanding any other provision of this Decree, the
United States reserves all claims, rights, and remedies against Defendants with respect to:
a. Further injunctive relief, including prohibitory and mandatory
injunctive provisions intended to enjoin, prevent, and deter future violations of the
Act of the types alleged in the U.S. Complaint related to the 3.0 Liter Subject
Vehicles;
b. All rights to address noncompliance with Appendix B as set forth
in Paragraph 8.1 of Appendix B;
c. All rights reserved by Paragraph 53;
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d. Civil penalties with respect to the 3.0 Liter Subject Vehicles;
e. Any and all civil claims related to any 2.0 Liter Subject Vehicles,
but only to the extent not previously resolved under the First Partial Consent
Decree, or to any other vehicle other than the 3.0 Liter Subject Vehicles;
f. Any and all civil claims and administrative authorities for
injunctive relief: (i) based on facts that were not disclosed by Defendants to EPA
and CARB prior to October 24, 2016, related to any defeat devices or AECDs
installed on or in the 3.0 Liter Subject Vehicles; or (ii) related to any other failures
by the 3.0 Liter Subject Vehicles to conform with the Act or its implementing
regulations;
g. Any criminal liability; and
h. Any claim(s) of any agency of the United States, other than EPA,
including but not limited to claims by the Federal Trade Commission.
76. California reserves, and this Second Partial Consent Decree is without prejudice
to, all claims, rights, and remedies against Defendants with respect to all matters not expressly
resolved in Paragraph 74. Notwithstanding any other provision of this Decree, California
reserves all claims, rights, and remedies against Defendants with respect to:
a. An order requiring Defendants to take all actions necessary to
enjoin, prevent, and deter future violations of the Health and Safety Code and
related regulations of the types alleged in the California Complaint related to the
3.0 Liter Subject Vehicles;
b. Further injunctive relief, including prohibitory and mandatory
injunctive provisions intended to enjoin, prevent, and deter future misconduct,
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and/or incentivize its detection, disclosure, and/or prosecution; or to enjoin false
advertising, violation of environmental laws, the making of false statements, or the
use or employment of any practice that constitutes unfair competition;
c. All rights to address noncompliance with Appendix B as set forth
in Appendix B, Paragraph 8.1;
d. All rights reserved by Paragraph 53;
e. Civil penalties with respect to the 3.0 Liter Subject Vehicles, but
only to the extent not previously resolved in the First California Partial Consent
Decree;
f. Any and all civil claims related to any 2.0 Liter Subject Vehicle,
but only to the extent not previously resolved under the First Partial Consent
Decree or First California Partial Consent Decree, or to any vehicle other than the
3.0 Liter Subject Vehicles;
g. Any and all civil claims and administrative authorities for
injunctive relief (i) based on facts that were not disclosed by Defendants to EPA
and CARB prior to October 24, 2016, related to any defeat devices or AECDs
installed on or in the 3.0 Liter Subject Vehicles; or (ii) related to any other failures
by the 3.0 Liter Subject Vehicles to conform with the California Health and Safety
Code or its implementing regulations;
h. Any criminal liability;
i. Any part of any claims for the violation of securities or false
claims laws;
j. Costs and attorneys’ fees, including investigative costs, incurred
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after the date of lodging;
k. Claims for relief to customers, including claims for restitution,
refunds, rescission, damages, and disgorgement, but only to the extent not
previously resolved under the First Partial Consent Decree or First California
Partial Consent Decree; and
l. Any other claim(s) of any officer or agency of the State of
California, other than CARB or CA AG.
77. By entering into this Consent Decree, the United States and California are not
enforcing the laws of other countries, including the emissions laws or regulations of any
jurisdiction outside the United States. Nothing in this Consent Decree is intended to apply to, or
affect, Defendants’ obligations under the laws or regulations of any jurisdiction outside the
United States. At the same time, the laws and regulations of other countries shall not affect the
Defendants’ obligations under this Consent Decree.
78. This Consent Decree shall not be construed to limit the rights of the United States
or California to obtain penalties or injunctive relief under the Act or implementing regulations,
or under other federal or state laws, regulations, or permit conditions, except as specifically
provided in Paragraph 74. The United States and California further reserve all legal and
equitable remedies to address any imminent and substantial endangerment to the public health or
welfare or the environment arising at any of Defendants’ facilities, or posed by Defendants’ 3.0
Liter Subject Vehicles, whether related to the violations addressed in this Consent Decree or
otherwise.
79. In any subsequent administrative or judicial proceeding initiated by the United
States or California for injunctive relief, civil penalties, or other appropriate relief relating to
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Defendants’ violations, Defendants shall not assert, and may not maintain, any defense or claim
based upon the principles of waiver, res judicata, collateral estoppel, issue preclusion, claim
preclusion, claim-splitting, or other defenses based upon any contention that the claims raised by
the United States or California in the subsequent proceeding were or should have been brought in
the instant case, except with respect to the claims that have been specifically resolved pursuant to
Paragraph 74.
80. This Consent Decree is not a permit, or a modification of any permit, under any
federal, State, or local laws or regulations. Defendants are responsible for achieving and
maintaining complete compliance with all applicable federal, State, and local laws, regulations,
and permits; and Defendants’ compliance with this Consent Decree shall be no defense to any
action commenced pursuant to any such laws, regulations, or permits, except as set forth herein.
The United States and California do not, by their consent to the entry of this Consent Decree,
warrant or aver in any manner that Defendants’ compliance with any aspect of this Consent
Decree will result in compliance with provisions of the Act, or with any other provisions of
United States, State, or local laws, regulations, or permits.
81. This Consent Decree does not limit or affect the rights of Defendants or of the
United States or California against any third parties, not party to this Consent Decree, nor does it
limit the rights of third parties, not party to this Consent Decree, against Defendants, except as
otherwise provided by law.
82. This Consent Decree shall not be construed to create rights in, or grant any cause
of action to, any third party not party to this Consent Decree.
XII. COSTS
83. The Parties shall bear their own costs of this Consent Decree, including attorneys’
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fees, except that the United States and California shall be entitled to collect the costs and
reasonable attorneys’ fees incurred in any action necessary to collect any portion of the stipulated
penalties due under this Consent Decree but not paid by Defendants.
XIII. NOTICES
84. Except as specified elsewhere in this Decree, whenever any Materials are required
to be submitted pursuant to this Consent Decree, or whenever any communication is required in
any action or proceeding related to or bearing upon this Consent Decree or the rights or
obligations thereunder, they shall be submitted with a cover letter or otherwise be made in
writing (except that if any attachment is voluminous, it shall be provided on a disk, hard drive, or
other equivalent successor technology), and shall be addressed as follows:
As to the United States: DOJ at the email or mail addresses below,
with a preference for email unless otherwise
specified
and
EPA at the email and mail addresses below
As to DOJ by mail: EES Case Management Unit
Environment and Natural Resources
Division
U.S. Department of Justice
P.O. Box 7611
Washington, D.C. 20044-7611
Re: DJ # 90-5-2-1-11386
As to DOJ by overnight mail: Chief
Environmental Enforcement Section
Environment and Natural Resources
Division
U.S. Department of Justice
601 D St. NW
Washington, D.C. 20004
As to DOJ by email: eescdcopy.enrd@usdoj.gov
Re: DJ # 90-5-2-1-11386
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As to EPA: By mail and email to:
Director, Air Enforcement Division
1200 Pennsylvania Avenue NW
William J Clinton South Building
MC 2242A
Washington, DC 20460
VW_settlement@epa.gov
As to California: CARB and CA AG at the email or mail
addresses below, as applicable
As to CARB by email (including for
Paragraphs 32, 55): Alexandra.Kamel@arb.ca.gov
As to CARB by mail: Chief Counsel
California Air Resources Board
Legal Office
1001 I Street
Sacramento, California 95814
As to CA AG by email: nicklas.akers@doj.ca.gov
judith.fiorentini@doj.ca.gov
david.zonana@doj.ca.gov
As to CA AG by mail: Senior Assistant Attorney General
Consumer Law Section
California Department of Justice
455 Golden Gate Ave., Suite 11000
San Francisco, CA 94102-7004
Senior Assistant Attorney General
Environment Section
Office of the Attorney General
P.O. Box 944255
Sacramento, CA 94244-2550
As to Volkswagen AG by mail: Volkswagen AG
Berliner Ring 2
38440 Wolfsburg, Germany
Attention: Company Secretary
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With copies to each of the following:
Volkswagen AG
Berliner Ring 2
38440 Wolfsburg, Germany
Attention: Group General Counsel
Volkswagen Group of
America, Inc.
2200 Ferdinand Porsche Dr.
Herndon, VA 20171
Attention: U.S. General Counsel
As to Audi AG by mail: Audi AG
Auto-Union-Straße 1
85045 Ingolstadt, Germany
Attention: Company Secretary
With copies to each of the following:
Volkswagen AG
Berliner Ring 2
38440 Wolfsburg, Germany
Attention: Group General Counsel
Volkswagen Group of
America, Inc.
2200 Ferdinand Porsche Dr.
Herndon, VA 20171
Attention: U.S. General Counsel
As to Volkswagen Group of
America, Inc. by mail: Volkswagen Group of
America, Inc.
2200 Ferdinand Porsche Dr.
Herndon, VA 20171
Attention: Company Secretary
With copies to each of the following:
Volkswagen Group of
America, Inc.
2200 Ferdinand Porsche Dr.
Herndon, VA 20171
Attention: President
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Volkswagen Group of
America, Inc.
2200 Ferdinand Porsche Dr.
Herndon, VA 20171
Attention: U.S. General Counsel
As to Volkswagen Group of America
Chattanooga Operations, LLC by mail: Volkswagen Group of America
Chattanooga Operations, LLC
8001 Volkswagen Dr.
Chattanooga, TN 37416
Attention: Company Secretary
With copies to each of the following:
Volkswagen Group of
America, Inc.
2200 Ferdinand Porsche Dr.
Herndon, VA 20171
Attention: President
Volkswagen Group of
America, Inc.
2200 Ferdinand Porsche Dr.
Herndon, VA 20171
Attention: U.S. General Counsel
As to Dr. Ing. h.c. F. Porsche AG by mail: Dr. Ing. h.c. F. Porsche Aktiengesellschaft
Porscheplatz 1, D-70435 Stuttgart
Attention:
GR/ Rechtsabteilung/ General Counsel
As to Porsche Cars North America, Inc.: Porsche Cars North America, Inc.
1 Porsche Dr.
Atlanta, GA 30354
Attention: Secretary
With copy by email to offsecy@porsche.us
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As to one or more of the
Defendants by email: Robert J. Giuffra, Jr.
Sharon L. Nelles
Granta Nakayama
Cari Dawson
giuffrar@sullcrom.com
nelless@sullcrom.com
gnakayama@kslaw.com
cari.dawson@alston.com
As to one or more of the
Defendants by mail: Robert J. Giuffra, Jr.
Sharon L. Nelles
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Granta Nakayama
King & Spalding LLP
1700 Pennsylvania Ave., N.W., Suite 200
Washington, DC 20006
Cari Dawson
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
85. Any Party may, by written notice to the other Parties, change its designated notice
recipient or notice address provided above.
86. Communications submitted pursuant to this Section shall be deemed submitted
upon (1) mailing or emailing as required and where Defendants have a choice, or (2) where both
email and mail are required, when both methods have been accomplished, except as provided
elsewhere in this Consent Decree or by mutual agreement of the Parties in writing.
87. The Parties anticipate that a non-public secure web-based electronic portal may be
developed in the future for submission of Materials. The Parties may agree in the future to use
such a portal, or any other means, for submission of Materials. Any such agreement shall be
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approved as a non-material modification to the Decree in accordance with Paragraphs 90-91.
XIV. EFFECTIVE DATE
88. The Effective Date of this Consent Decree shall be the date upon which this
Consent Decree is entered by the Court or a motion to enter the Consent Decree is granted,
whichever occurs first, as recorded on the Court’s docket.
XV. RETENTION OF JURISDICTION
89. The Court shall retain jurisdiction over this case until termination of this Consent
Decree, for the purpose of resolving disputes arising under this Decree or entering orders
modifying this Decree, pursuant to Sections IX and XVI, or effectuating or enforcing compliance
with the terms of this Decree.
XVI. MODIFICATION
90. Except as otherwise provided herein or in the attached Appendices, the terms of
this Consent Decree, including any attached Appendices, may be modified only by a subsequent
written agreement signed by all the Parties. Where the modification constitutes a material
change to this Decree, it shall be effective only upon approval by the Court.
91. The United States or California, as applicable, will file any non-material
modifications with the Court. Once the non-material modification has been filed, Defendants
shall post the filed version (with ECF stamp) on the website required by Paragraph 33.
92. Any disputes concerning modification of this Decree shall be resolved pursuant to
Section IX (Dispute Resolution), provided, however, that instead of the burden of proof provided
by Paragraph 65, the Party seeking the modification bears the burden of demonstrating that it is
entitled to the requested modification in accordance with Fed. R. Civ. P. 60(b).
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XVII. TERMINATION
93. After Defendants have completed the requirements of Section IV (Partial
Injunctive Relief), except for Appendix A, Paragraphs 5.2, 6.2, 8.2 (No End Dates) and
associated requirements, have complied with all other requirements of this Consent Decree, and
have paid any accrued stipulated penalties as required by this Consent Decree, Defendants may
serve upon the United States and California a Request for Termination, stating that Defendants
have satisfied those requirements, together with all necessary supporting documentation.
94. Following receipt by the United States and California of Defendants’ Request for
Termination, the Parties shall confer informally concerning the Request and any disagreement
that the Parties may have as to whether Defendants have satisfactorily complied with the
requirements for termination of this Consent Decree. If the United States, after consultation with
California, agrees that the Decree may be terminated, the United States will file a motion to
terminate the Decree, provided, however, that the provisions associated with effectuating and
enforcing Appendix A, Paragraph 5.2, 6.2, 8.2 (No End Dates) shall continue in full force and
effect indefinitely.
95. If the United States, after consultation with California, does not agree that the
Decree may be terminated, Defendants may invoke Dispute Resolution under Section IX.
However, Defendants shall not seek Dispute Resolution of any dispute regarding termination
until 45 Days after service of their Request for Termination.
XVIII. PUBLIC PARTICIPATION
96. This Consent Decree shall be lodged with the Court for a period of not less than 30
Days for public notice and comment in accordance with 28 C.F.R. § 50.7. The United States
reserves the right to withdraw or withhold its consent if the comments regarding the Consent
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Decree disclose facts or considerations indicating that the Consent Decree is inappropriate,
improper, or inadequate. California reserves the right to withdraw or withhold its consent if the
United States does so. Defendants consent to entry of this Consent Decree without further notice
and agree not to withdraw from or oppose entry of this Consent Decree by the Court or to
challenge any provision of the Decree, unless the United States has notified Defendants in
writing that it no longer supports entry of the Decree.
XIX. SIGNATORIES/SERVICE
97. Each undersigned representative of Defendants and California, and the Assistant
Attorney General for the Environment and Natural Resources Division of the DOJ certifies that
he or she is fully authorized to enter into the terms and conditions of this Consent Decree and to
execute and legally bind the Party he or she represents to this document.
98. This Consent Decree may be signed in counterparts, and its validity shall not be
challenged on that basis. For purposes of this Consent Decree, a signature page that is
transmitted electronically (e.g., by facsimile or e-mailed “PDF”) shall have the same effect as an
original.
XX. INTEGRATION
99. This Consent Decree constitutes the final, complete, and exclusive agreement and
understanding among the Parties with respect to the settlement embodied in the Decree and
supersedes all prior agreements and understandings, whether oral or written, concerning the
settlement embodied herein. Other than deliverables that are subsequently submitted and
approved pursuant to this Decree, the Parties acknowledge that there are no documents,
representations, inducements, agreements, understandings, or promises that constitute any part of
this Decree or the settlement it represents other than those expressly contained in this Consent
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Decree.
XXI. FINAL JUDGMENT
100. Upon approval and entry of this Consent Decree by the Court, this Consent Decree
shall constitute a final judgment of the Court as to the United States, California, and Defendants.
The Court finds that there is no just reason for delay and therefore enters this judgment as a final
judgment under Fed. R. Civ. P. 54 and 58.
XXII. APPENDICES
101. The following Appendices (and any attachments thereto) are attached to and part
of this Consent Decree:
“Appendix A” is the Buyback, Lease Termination, Vehicle Modification, and Emissions
Compliant Recall Program.
“Appendix B” is the Vehicle Recall and Emissions Modification Program for 3.0 Liter Subject
Vehicles.
“Initial 3.0 Liter Mitigation Allocation Appendix” (“Mitigation Appendix”) is the initial
allocation of Mitigation Trust funds for the 3.0 Liter Subject Vehicles.
Dated and entered this day of __________, 2017,
__________________________________
CHARLES R. BREYER
UNITED STATES DISTRICT JUDGE
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 53 of 164
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FOR THE UNITED STATES OF AMERIC.
Date
.ion
U.J. LeIJAI"CIllellC Oi JUSL1Ce
JOS UA H. VA~7 EATON
BE NY ENGEL
GA KIEL ALLEN
LESLIE ALLEN
PATRICK BRYAN
NIGEL GOONEY
KAREN D W ORKIN
DANICA GLASER
RUBEN GOMEZ
ANNA GRACE
SHEILA McANANEY
ROBERT MULLANEY
RICHIE KHANH NGUYEN
ERIKA WELLS
IVA ZIZA
Environmental Enforcement Section
Environment and Natural Resources Division
United States Department of Justice
P.O. Box 7611
Washington, D.C. 20044-7611
Telephone: (202) 514-5474
Facsimile: (202) 514-0097
j osh.van.eaton@usdoj .gov
bethany. engel @usdoj . gov
Counsel for the United States
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SECOND PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
December 20, 2016
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 54 of 164
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FOR THE U.S. ENVIRONMENTAL
~ Z ~-
Date
•
.~'I I l~~~~
C A GILES
Assi an Administrator
Office Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460
USAN SH KMAN
Director, Office of Civil Enforcement
Office of Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Waon~DC~0460 ~
~HILLIP t~. !ROOKS
Director, Ai,~Enforcement Division
Office of~ivil Enforcement
Office of Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460
EVAN BELSER
MEETU KAUL
SEEMA KAKADE
BRIANNA IDDINGS
Air Enforcement Division
Office of Civil Enforcement
Office of Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
1200 Pennsylvania Ave., NW
Washington, DC 20460
53
SECOND PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 55 of 164
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FOR VOLKSWAGEN AG: Date: Dec... bl '1-o~'o Date: D e c. . b 1 2..o \ 'o FRANCI JAVIER GARCIA SANZ VOLK J\GEN AG P.O. Bo 1849 D-38436 Wolfsburg, Germany MANFRED DOESS VOLKSWAGEN AG P.O. Box 1849 D-38436 Wolfsburg, Germany SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 58 of 164
FOR AUDI AG: Date: 1)e._c . lo \. -i..~ \.\c Auto-ion-Stra8e 1 85045 Ingolstadt, Germany MARTIN WAG NER AUDIAG Auto-Union-Stral3e 1 85045 lngolstadt, Gennany SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 59 of 164
FOR VOLKSWAGEN GROUP OF AMERICA, INC.: Date: ~ c:. . bl '2...~\.\o DAVID DETWEILER VOLKSWAGEN GROUP OF AMERICA, INC. 2200 Ferdinand Porsche Drive Herndon, Virginia 20171 SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 60 of 164
FOR VOLKSWAGEN GROUP OF AMERICA CHA IT ANOOGA OPERATIONS, LLC: Date: "Pe. t.. 6 l '1..t:>l lo DAVID DETWEILER VOLKSWAGEN GROUP OF AMERICA, INC. 2200 Ferdinand Porsche Drive Herndon, Virginia 20171 SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 61 of 164
COUNSEL FOR VOLKSWAGEN AG, AUDI AG, VOLKSWAGEN GROUP OF AMERICA, INC., and VOLKSWAGEN GROUP OF AMERICA CHATTANOOGA OPERATIONS, LLC 1),€.(_i 6 f '1....0\.b Date R~~ab, SHARON L. NELLES WILLIAMB.MONAHAN Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 Telephone: (212) 558-4000 Facsimile: (212) 558-3358 giuffrar@sullcrom.com nelless@sullcrom.com monahanw@sullcrom.com SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 62 of 164
fOR DR. ING. H.C. F. PORSCHE AG: Date: Tut.. b 1 2...t>\ le. Date: Dec.. b I 'l.O \6 DMSLIBRARYOl\29712617 vi Member of the Executive Board -Research and Development-DR. ING. h.c. F. PORSCHE AKTIENGESELLSCHAH Porschestrasse 911 71287 Weissach. Germany r . rd'JI (,,, t,?,1, 4 ~ 'GELA KREITZ General Counsel & Chief Compliance Officer DR. ING. h.c. F. PORSCHE AK'I IENGESELLSCHAI-I Porscheplatz I 70435 Stuttgart-Zuffenhausen, Germany SECOND PAR I IAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 63 of 164
FOR PORSCHE CARS NORTH AMERICA, INC.: Date: "T'\_ UC C... b \ "'2..0\.b Date: 'De C b '2..o tb { Vice President, General Counsel and Secretary PORSCHE CARS NORTII AMERICA, INC. 1 Porsche Drive Atlanta, GA 30354 Vice President, After Sales PORSCHE CARS NORTII AMERICA, INC. 1 Porsche Drive Atlanta, GA 30354 SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 64 of 164
COUNSEL FOR DR. ING. h.c. F. PORSCHE AG and PORSCHE CARS NORTH AMERICA, INC.: Date: l)e c. • 6 l °"2..cllo Date: ir1\ NAK.M' AMA JOSEPH A. EISERT King & Spalding LLP 1700 Pennsylvania Ave., N.W., Suite 200 Washington, DC 20006 gnakayama@kslaw.com jeisert@kslaw.com CARI DAWSON Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309-3424 cari.dawson@alston.com SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 65 of 164
COUNSEL FOR DR. ING. h.c. F. PORSCHE AG and PORSCHE CARS NORTH AMERICA, INC.: Date: Date: D € L . ki { -z....c l '-GRANT A NAKAYAMA JOSEPH A. EISERT King & Spalding LLP 1700 Pennsylvania Ave., N.W., Suite 200 Washington, DC 20006 gnakayama@kslaw.com jeisert@kslaw.com CARI DAWSON Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309-3424 cari.dawson@alston.com SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC) Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 66 of 164
APPENDIX A TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix A
Buyback, Lease Termination, Vehicle Modification,
And Emissions Compliant Recall Program
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 67 of 164
1 APPENDIX A TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
APPENDIX A
BUYBACK, LEASE TERMINATION, VEHICLE MODIFICATION,
AND EMISSIONS COMPLIANT RECALL PROGRAM
I. PURPOSE
The purpose of this Buyback, Lease Termination, Vehicle Modification, and Emissions
Compliant Recall Program (“Recall Program”) is to remove 3.0 Liter Subject Vehicles that
emit nitrogen oxides (“NOx”) in excess of applicable standards from the roads and highways
of the United States pursuant to EPA’s and CARB’s respective authorities under the Clean Air
Act (“CAA”) and the California Health and Safety Code (“CHSC”). In order to achieve this
CAA and CHSC remedy, EPA/CARB require Defendants to perform two vehicle recalls.
First, for Generation 1.x 3.0 Liter Eligible Vehicles, Defendants must offer the Buyback or the
Lease Termination, as defined below, for 100% of the Generation 1.x non-compliant Eligible
Vehicles under terms described herein. In addition, if approved by EPA/CARB, Defendants
may, consistent with the provisions in Appendix B of this Consent Decree, modify such
vehicles to substantially reduce their NOx emissions in accordance with standards established
by the agencies in this Consent Decree.
Second, for Generation 2.x 3.0 Liter Subject Vehicles, if proposed by Defendants and if
approved by EPA/CARB, Defendants must offer an Emissions Compliant Recall to bring these
vehicles into compliance with their Certified Exhaust Emission Standards consistent with the
provisions in Appendix B of this Consent Decree. If Defendants are unable to effect a recall that
meets Certified Exhaust Emission Standards for a particular Test Group or Test Groups of
Generation 2.x vehicles within the timeframe and in accordance with the other requirements
specified in Appendix B, Defendants must offer the Buyback and Lease Termination, as defined
below, for 100% of the affected Generation 2.x non-compliant Eligible Vehicles under terms
described herein and may, if proposed by Defendants and if approved by EPA/CARB consistent
with the provisions in Appendix B, modify such vehicles to substantially reduce their NOx
emissions in accordance with standards established by the agencies in this Consent Decree.
This Recall Program establishes the enforceable rules by which Defendants shall make
offers to Eligible Owners and Eligible Lessees of Eligible Vehicles to repurchase, cancel
leases for, or modify the 3.0 Liter Subject Vehicles. Under this Recall Program and subject to
the requirements contained in Section X of this Appendix A, Defendants shall remove from
commerce and/or perform an Approved Emissions Modification on at least 85% of all
Generation 1.x 3.0 Liter Subject Vehicles no later than November 30, 2019. In addition,
Defendants shall perform an Emissions Compliant Recall (or if no Emissions Compliant
Recall is achieved, remove from commerce and/or perform an Approved Emissions
Modification) on at least 85% of all Generation 2.x 3.0 Liter Subject Vehicles no later than
May 31, 2020. If Defendants fail to achieve the required 85% Recall Rates, Defendants shall
pay additional funds to the Environmental Mitigation Trust established pursuant to the First
Partial Consent Decree, as described more fully below.
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2 APPENDIX A TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
II. DEFINITIONS
2.1 Terms used in this Appendix A shall have the meanings set forth below. Terms
that are not defined below but are defined in Section III of the Consent Decree (Definitions)
including any of its Appendices shall have the meanings set forth therein.
2.2 “3.0 Liter Subject Vehicle” shall have the same meaning as is used in the
Consent Decree. The term “Eligible Vehicles” used in this Appendix A refers only to a subset of
3.0 Liter Subject Vehicles.
2.3 “Approved Emissions Modification” shall have the same meaning as is used in
Appendix B of this Consent Decree.
2.4 “Buyback” shall mean the return of an Eligible Vehicle by an Eligible Owner to
Defendants, under terms and in accordance with a process set forth in Appendix A-1 (or
authorized by Section III of Appendix A-1) and consistent with this Appendix A, in exchange for
a payment that equals or exceeds the Retail Replacement Value.
2.5 “Certified Exhaust Emissions Standards” means, for Generation 2.x 3.0 Liter
Subject Vehicles, emission standards that correspond to Tier 2 Bin 5 LEV2/ULEV standards as
set forth in Appendix B. A 3.0 Liter Subject Vehicle is not necessarily covered by a Certificate
of Conformity or Executive Order solely by virtue of meeting Certified Exhaust Emissions
Standards.
2.6 “Dealerships” shall mean all authorized Volkswagen, Audi, and Porsche
dealerships in the United States as well as all independent Volkswagen, Audi, or Porsche
dealerships in the United States with which Defendants have a business relationship.
2.7 “Eligible Lessee” shall mean the current lessee or lessees of an Eligible Vehicle
with an active lease issued by VW Credit, Inc. as of the date the lessee completes a lease
termination. No person shall be considered an Eligible Lessee by virtue of holding a lease issued
by a lessor other than VW Credit, Inc.
2.8 “Eligible Owner” means the owner or owners of an Eligible Vehicle on the day
the Eligible Vehicle is sold to Defendants for the Buyback or receives an Emissions Compliant
Recall or Approved Emissions Modification, except that the owner of an Eligible Vehicle who
had an active lease issued by VW Credit, Inc. as of November 3, 2015, and purchased the
previously leased Eligible Vehicle after the date this Consent Decree is lodged with the Court
(“Off-Lease Owner” and “Date of Lodging”), shall not be an Eligible Owner, except that such
Off-Lease Owner shall be entitled to an Emissions Compliant Recall or an Approved Emissions
Modification pursuant to Paragraphs 5.1, 6.1, or 8.1 of this Appendix A as applicable. For
avoidance of doubt, an Eligible Owner ceases to be an Eligible Owner if he or she transfers
ownership of the Eligible Vehicle to a third party on or after the Date of Lodging; and a third
party who acquires ownership of an Eligible Vehicle on or after the Date of Lodging, thereby
becomes an Eligible Owner if that third party otherwise meets the definition of an Eligible
Owner. An owner of an Eligible Vehicle will not qualify as an Eligible Owner while the Eligible
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Vehicle is under lease to any third party, although any such owner, including any leasing
company other than VW Credit, Inc., who otherwise meets the definition of an Eligible Owner
would become an Eligible Owner if such lease has been canceled or terminated and the owner
has taken possession of the vehicle.
2.9 “Eligible Vehicle” means any 3.0 Liter Subject Vehicle that is: (1) listed in the
table immediately below this Paragraph; (2) registered with a state Department of Motor
Vehicles or equivalent agency or held by a dealer not affiliated with Defendants and located in
the United States as of the Date of Lodging; and (3) Operable as of the date the vehicle is
brought in for the Buyback, the Lease Termination, Approved Emissions Modification, or
Emissions Compliant Recall.
Model Year EPA Test Group(s) Vehicle Make and Model(s)
Generation
2009 9ADXT03.03LD VW Touareg, Audi Q7 1.1
2010 AADXT03.03LD VW Touareg, Audi Q7 1.1
2011 BADXT03.02UG
BADXT03.03UG
VW Touareg
Audi Q7
1.2
2012 CADXT03.02UG
CADXT03.03UG
VW Touareg
Audi Q7
1.2
2013 DADXT03.02UG
DADXT03.03UG
DPRXT03.0CDD
VW Touareg
Audi Q7
Porsche Cayenne Diesel
2.1 SUV
2014 EADXT03.02UG
EADXT03.03UG
EPRXT03.0CDD
VW Touareg
Audi Q7
Porsche Cayenne Diesel
2.1 SUV
2014 EADXJ03.04UG Audi: A6 quattro, A7 quattro,
A8, A8L, Q5
2 PC
2015 FVGAT03.0NU3
Audi Q7
2.1 SUV
2015 FVGAT03.0NU2
FPRXT03.0CDD
VW Touareg
Porsche Cayenne Diesel
2.2 SUV
2015 FVGAJ03.0NU4 Audi: A6 quattro, A7 quattro,
A8, A8L, Q5
2 PC
2016 GVGAT03.0NU2
GPRXT03.0CDD
VW Touareg
Porsche Cayenne Diesel
2.2 SUV
2016 GVGAJ03.0NU4 Audi: A6 quattro, A7 quattro,
A8, A8L, Q5
2 PC
2.10 “Emissions Compliant Recall” means only an Approved Emissions Modification
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4 APPENDIX A TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
of Generation 2.x 3.0 Liter Subject Vehicles that is approved by EPA/CARB pursuant to
Paragraph 5.1.1 of Appendix B to this Decree and meets Tier 2 Bin 5 LEV2/ULEV standards.
An Approved Emissions Modification that complies only with Maximum Emissions
Modification Limits shall not be considered an Emissions Compliant Recall.
2.11 “Emissions Modification Proposal” shall have the same meaning as used in
Appendix B of this Consent Decree.
2.12 “First Partial Consent Decree” shall have the same meaning as is used in the
Consent Decree.
2.13 “Generation” shall have the same meaning as is used in Appendix B of this
Consent Decree.
2.14 “Generation 1.x” means Generation 1.1 and/or 1.2 as those terms are defined in
Appendix B.
2.15 “Generation 1.x 3.0 Liter Eligible Vehicle” means a 3.0 Liter Eligible Vehicle
that is listed in the table of Definition 2.9 of this Appendix A as belonging to Generation 1.1 or
1.2 as those terms are defined in Appendix B.
2.16 “Generation 2.x” means Generation 2.1 SUV, 2.2 SUV, and/or 2 PC as those
terms are defined in Appendix B.
2.17 “Generation 2.x 3.0 Liter Eligible Vehicle” means a 3.0 Liter Eligible Vehicle
that is listed in the table of Definition 2.9 of this Appendix A as belonging to Generation 2.1
SUV, 2.2 SUV, or 2 PC as those terms are defined in Appendix B.
2.18 “Operable” means that a vehicle so described can be driven under its own 3.0-liter
TDI engine power. A vehicle is not Operable if it had a branded title of “Assembled,”
“Dismantled,” “Flood,” “Junk,” “Rebuilt,” “Reconstructed,” or “Salvaged” as of November 3,
2015, and was acquired by any person or entity from a junkyard or salvaged after November 3,
2015.
2.19 “Lease Termination” shall mean the return of an Eligible Vehicle by an Eligible
Lessee to Defendants, under terms and in accordance with a process set forth in Appendix A-1
(or authorized by Section III of Appendix A-1) and consistent with this Appendix A.
2.20 “Maximum Emissions Modification Limits” shall have the same meaning as used
in Appendix B of this Consent Decree.
2.21 “Modified Vehicle” shall mean a 3.0 Liter Subject Vehicle that has received an
Approved Emissions Modification.
2.22 “Reduced Emissions Modification” shall mean, with respect to only Generation
2.x Subject Vehicles, an Approved Emissions Modification that does not qualify as an Emissions
Compliant Recall.
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
2.23 “Retail Replacement Value” shall mean, for a given Eligible Vehicle, and only for
purposes of satisfying Defendants’ obligations under this Consent Decree, the cost of retail
purchase of a comparable replacement vehicle of similar value, condition, and mileage as of
November 2, 2015, as calculated and defined in Appendix A-1 to this Consent Decree.
2.24 “Recall Program” shall mean the Buyback, Lease Termination, Vehicle
Modification, and Emissions Compliant Recall Program established pursuant to this Appendix
A.
III. NOTICES
3.1 Generation 1.x Notices. For Generation 1.x 3.0 Liter Eligible Vehicles,
Defendants shall comply with the following provisions in this Paragraph 3.1 to notify Eligible
Owners and Eligible Lessees of Generation 1.x 3.0 Liter Eligible Vehicles of the Recall
Program.
3.1.1 Buyback and Lease Termination Notices. No later than fifteen (15)
Days after the later of (a) the Effective Date or (b) approval by EPA/CARB in accordance
with this paragraph, Defendants shall send or cause to be sent by First-Class, postage paid
U.S. mail to all Eligible Owners and Eligible Lessees of Generation 1.x 3.0 Liter Eligible
Vehicles known to Defendants, notice of the Recall Program and a complete description of
Eligible Owners and Eligible Lessees’ rights thereunder. The notice to be distributed
pursuant to this Sub-Paragraph shall be in a form approved by EPA and CARB.
Defendants shall submit a proposed notice to EPA/CARB for approval no later than
January 24, 2017 together with a proposed plan for disseminating such notice to owners
and lessees for review and approval in accordance with Paragraph 23 of the Consent
Decree.
3.1.2 Emissions Modification Notices. If, with respect to any Generation 1.x
Test Group or combination of Generation 1.x Test Groups, EPA/CARB issue a notice of
Approved Emissions Modification in accordance with Appendix B of this Consent Decree,
Defendants shall provide by First-Class, postage paid U.S. mail to all affected Eligible
Owners and Eligible Lessees known to Defendants, notice of the availability of the
Approved Emissions Modification within fifteen (15) Days of receiving the EPA/CARB
notice. The notice sent to affected Eligible Owners and Eligible Lessees (“Approved
Emissions Modification Disclosure”) shall be in a form and include the disclosures
approved by EPA/CARB at the time EPA/CARB approve the Proposed Emissions
Modification pursuant to the terms of Appendix B to this Consent Decree. Defendants
shall also include in the mailing the applicable Extended Emissions Warranty for the
Eligible Vehicle, as approved by EPA/CARB.
3.1.2.1 Contents of the Emissions Modification Notice and Extended
Emissions Warranty. The Approved Emissions Modification Disclosure and
approved Extended Emissions Warranty shall contain all disclosures required in
Paragraphs 4.3.10 through 4.3.12 of Appendix B to this Consent Decree and any
other disclosures required by law. EPA/CARB may reject any proposed notice and
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require changes to any proposed notice that does not contain a clear and accurate
written disclosure regarding all impacts of the Approved Emissions Modification on
the vehicle. Any notice issued in connection with an Approved Emissions
Modification shall also make clear that the affected Eligible Owner or Eligible
Lessee alternatively has a right to participate in the Buyback or Lease Termination
options described in Section IV of this Appendix A.
3.1.2.2 Online Access to the Emissions Modification Notice. The
Approved Emissions Modification Disclosure shall also be made available online on
a public website by Defendants within two (2) business days of EPA/CARB
approval of the Proposed Emissions Modification. The website shall display the
Approved Emissions Modification Disclosure and approved Extended Emissions
Warranty applicable to a specific vehicle when a user inputs the vehicle VIN. This
online access to the Approved Emissions Modification Disclosure and approved
Extended Emissions Warranty shall continue for a minimum of ten (10) years after
the Consent Decree is entered.
3.1.2.3 Notice of Non-Availability of an Emissions Modification. If
Defendants (a) receive from EPA/CARB a Final Notice of Disapproval of Proposed
Emissions Modification; (b) withdraw any application for an Approved Emissions
Modification; or (c) fail to timely submit any such application, Defendants shall,
within fifteen (15) Days of receiving the notice of disapproval or withdrawing or
declining to submit the relevant application, notify affected Eligible Owners and
Eligible Lessees by First-Class, postage paid U.S. mail that the Proposed Emissions
Modification for the affected Eligible Vehicles is not available. Defendants shall also,
within two (2) business days of receiving the notice of disapproval or withdrawing or
declining to submit the relevant application, post a notice of the non-availability online
at the public website Defendants use to administer the Recall Program. Any such
notice issued to affected Eligible Owners and Eligible Lessees, as well as any such
notice published online, shall also make clear that the affected Eligible Owners and
Eligible Lessees have a right to accept the Buyback or the Lease Termination offers
described in Section IV of this Appendix A.
3.2 Generation 2.x Notices. For Generation 2.x 3.0 Liter Eligible Vehicles,
Defendants shall comply with the following provisions in this Paragraph 3.2 to notify Eligible
Owners and Eligible Lessees of Generation 2.x 3.0 Liter Eligible Vehicles of the Recall
Program.
3.2.1 Emissions Compliant Recall Notices. If, with respect to any Generation
2.x Test Group or combination of Generation 2.x Test Groups, EPA/CARB issue a notice
of approval for an Emissions Compliant Recall in accordance with Appendix B of this
Consent Decree, Defendants shall provide by First-Class, postage paid U.S. mail to all
affected Eligible Owners and Eligible Lessees known to Defendants, notice of the
availability of the Emissions Compliant Recall within fifteen (15) Days of receiving the
EPA/CARB notice. The notice sent to affected Eligible Owners and Eligible Lessees
(“Emissions Compliant Recall Disclosure”) shall be in a form and include the disclosures
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
approved by EPA/CARB at the time EPA/CARB approve the Emissions Compliant Recall
pursuant to the terms of Appendix B to this Consent Decree. Defendants shall also include
in the mailing the applicable Extended Emissions Warranty for the Eligible Vehicle, as
approved by EPA/CARB.
3.2.1.1 Contents of the Emissions Compliant Recall Notice and
Extended Emissions Warranty. The Emissions Compliant Recall Disclosure and
approved Extended Emissions Warranty shall contain all disclosures required in
Paragraphs 4.3.10 through 4.3.12 of Appendix B to this Consent Decree and any
other disclosures required by law. EPA/CARB may reject any proposed notice and
require changes to any proposed notice that does not contain a clear and accurate
written disclosure regarding all impacts of the Emissions Compliant Recall on the
vehicle.
3.2.1.2 Online Access to the Emissions Modification Notice. The
Emissions Compliant Recall Disclosure shall also be made available online on a
public website by Defendants within two (2) business days of EPA/CARB approval
of the Proposed Emissions Compliant Recall. The website shall display the
Emissions Compliant Recall Disclosure and approved Extended Emissions
Warranty applicable to a specific vehicle when a user inputs the vehicle VIN. This
online access to the Emissions Compliant Recall Disclosure and approved Extended
Emissions Warranty shall continue for a minimum of ten (10) years after the
Consent Decree is entered.
3.2.2 Buyback and Lease Termination Notices. If, with respect to any
Generation 2.x Test Group or combination of Generation 2.x Test Groups, EPA/CARB
issue a Final Notice of Disapproval for an Emissions Compliant Recall in accordance with
Appendix B of this Consent Decree, Defendants shall, within forty-five (45) days of
receiving such disapproval, provide by First-Class, postage paid U.S. mail to all affected
Eligible Owners and Eligible Lessees known to Defendants, notice of the availability of
Buyback and Lease Termination options for affected Generation 2.x 3.0 Liter Eligible
Vehicles. Such notice shall be in the same form and contain the same analogous
information as approved by EPA/CARB pursuant to Sub-Paragraph 3.1.1 above for
Buyback and Lease Termination of Generation 1.x 3.0 Liter Eligible Vehicles. Defendants
shall submit a proposed notice to EPA/CARB for approval no later than fifteen (15) Days
after EPA/CARB issue the Final Notice of Disapproval for the proposed Emissions
Compliant Recall, together with a proposed plan for disseminating such notice to owners
and lessees, for review and approval in accordance with Paragraph 23 of the Consent
Decree. In no event shall Defendants be required to disseminate such notice earlier than
fifteen (15) Days after receiving EPA/CARB approval of the notice pursuant to this
paragraph.
3.2.3 Emissions Modification Notices. If, with respect to any Generation 2.x
Test Group or combination of Generation 2.x Test Groups, EPA/CARB issue a notice of
Approved Emissions Modification in accordance with Appendix B of this Consent Decree
for a Reduced Emissions Modification, Defendants shall provide by First-Class, postage
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
paid U.S. mail to all affected Eligible Owners and Eligible Lessees known to Defendants,
notice of the availability of the Approved Emissions Modification within fifteen (15) Days
of receiving the EPA/CARB notice. The notice sent to affected Eligible Owners and
Eligible Lessees (“Approved Emissions Modification Disclosure”) shall be in a form and
include the disclosures approved by EPA/CARB at the time EPA/CARB approve the
Proposed Emissions Modification pursuant to the terms of Appendix B to this Consent
Decree. Defendants shall also include in the mailing the applicable Extended Emissions
Warranty for the Eligible Vehicle, as approved by EPA/CARB.
3.2.3.1 Contents of the Emissions Modification Notice and Extended
Emissions Warranty. The Approved Emissions Modification Disclosure and
approved Extended Emissions Warranty shall contain all disclosures required in
4.3.10 through 4.3.12 of Appendix B to this Consent Decree and any other
disclosures required by law. EPA/CARB may reject any proposed notice and
require changes to any proposed notice that does not contain a clear and accurate
written disclosure regarding all impacts of the Approved Emissions Modification on
the vehicle. Any notice issued in connection with an Approved Emissions
Modification shall also make clear that the affected Eligible Owner or Eligible
Lessee alternatively has a right to participate in the Buyback or Lease Termination
options described in Section VII of this Appendix A.
3.2.3.2 Online Access to the Emissions Modification Notice. The
Approved Emissions Modification Disclosure shall also be made available online on
a public website by Defendants within two (2) business days of EPA/CARB
approval of the Proposed Emissions Modification. The website shall display the
Approved Emissions Modification Disclosure and approved Extended Emissions
Warranty applicable to a specific vehicle when a user inputs the vehicle VIN. This
online access to the Approved Emissions Modification Disclosure and approved
Extended Emissions Warranty shall continue for a minimum of ten (10) years after
the Consent Decree is entered.
3.2.3.3 Notice of Non-Availability of an Emissions Modification. If
Defendants (a) receive from EPA/CARB a Final Notice of Disapproval of Proposed
Emissions Modification; (b) withdraw any application for a Reduced Emissions
Modification or Emissions Compliant Recall; or (c) decline to submit any such
application, Defendants shall, within fifteen (15) Days of receiving the notice of
disapproval or withdrawing or declining to submit the relevant application, notify
affected Eligible Owners and Eligible Lessees by First-Class, postage paid U.S. mail
that neither the Emissions Compliant Recall nor the Reduced Emissions
Modification for the affected Eligible Vehicles is available. Defendants shall also,
within two (2) business days of receiving the notice of disapproval or withdrawing
or declining to submit the relevant application, post a notice of the non-availability
online at the public website Defendants use to administer the Recall Program. Any
such notice issued to affected Eligible Owners and Eligible Lessees, as well as any
such notice published online, shall also make clear that the affected Eligible Owners
and Eligible Lessees have a right to accept the Buyback or the Lease Termination
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
offers described in Section VII of this Appendix A.
3.2.4 Ability to Combine Notices. Defendants may, to the extent not
inconsistent with the terms above, combine multiple notices into one consumer
mailing. Defendants may request additional time from EPA/CARB to disseminate
notices in accordance with this Sub-Paragraph.
3.3 Other Notices
3.3.1 Subsequent Notices. Nothing in this Consent Decree or its Appendices
shall prevent Defendants from issuing subsequent notices or taking additional measures
to inform Eligible Owners or Eligible Lessees of the Recall Program, provided, however,
that Defendants may not provide any notice or additional information regarding the
Recall Program that is inconsistent with or contradictory to the notices required by
Paragraphs 3.1 and 3.2 of this Appendix A, and any notice or additional information must
conform to the disclosures that are approved by EPA/CARB in connection with an
Approved Emissions Modification, Reduced Emissions Modification, or Emissions
Compliant Recall, as applicable. Defendants shall provide a copy of any subsequent
consumer notices regarding the Recall Program that they provide to Eligible Owners or
Eligible Lessees to the EPA, CARB, and CA AG in accordance with Section XIII of the
Consent Decree (Notices) as part of Defendants’ reports required by Paragraph 11.3 of
this Appendix A and shall provide any such subsequent consumer notices regarding the
Recall Program to CA AG at the time such notices are distributed to affected Eligible
Owners or Eligible Lessees.
3.3.2 Dealer Notices. No later than fifteen (15) Days after the later of (a) the
Effective Date, or (b) approval by EPA/CARB in accordance with this paragraph,
Defendants shall provide to Dealerships a notice describing dealers’ obligations under the
Recall Program. Defendants shall also provide subsequent notices to all affected
Dealerships if Defendants are required to offer the Buyback and Lease Termination for
Generation 2.x 3.0 Liter Eligible Vehicles. Such subsequent notices shall be mailed to
affected Dealerships no later than fifteen (15) Days before such Buyback or Lease
Termination is to be made available to affected Eligible Owners or Eligible Lessees of
Generation 2.x Eligible Vehicles. All notices to be distributed pursuant to this Paragraph
shall be submitted to EPA and CARB for approval no later than twenty (20) days before
the notice(s) are to be distributed, for review and approval in accordance with Paragraph
23 of the Consent Decree.
3.3.3 Notice Regarding Termination of Buyback and Lease Termination Offers.
Defendants may not withdraw any Buyback or Lease Termination offer associated with
the Recall Program or terminate the Recall Program with regard to any vehicle model or
engine Test Group unless notice of the Recall Program termination date with regard to
the particular vehicle(s) has been submitted to the United States and California in
accordance with Section XIII of the Consent Decree (Notices) at least 180 Days in
advance. Defendants shall also give notice of Recall Program termination to all affected
Eligible Owners and Eligible Lessees who have not participated in the Buyback, Lease
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PARTIAL CONSENT DECREE
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Termination, Approved Emissions Modification, Maximum Emissions Recall, or
Emissions Compliant Recall at least 180 Days before Program termination. All notices to
be distributed pursuant to this Paragraph shall be submitted to EPA and CARB for
approval no later than thirty (30) Days before the notice(s) are to be distributed, for
review and approval in accordance with Paragraph 23 of the Consent Decree. In no event
shall Defendants be required to disseminate such notices earlier than fifteen (15) Days
after receiving EPA/CARB approval of the notices pursuant to this paragraph.
IV. GENERATION 1.x BUYBACK AND LEASE TERMINATION
4.1 Buyback Recall. Beginning no later than thirty (30) Days after the Effective
Date of the Consent Decree, Defendants shall offer, and if accepted provide, each Eligible
Owner of a Generation 1.x 3.0 Liter Eligible Vehicle the Buyback, as defined in Paragraph 2.4 of
this Appendix A, of the Eligible Vehicle at no less than the Retail Replacement Value. Except as
provided in a Parallel Agreement satisfying the requirements of Paragraphs 3.1 through 3.4 of
Appendix A-1, Defendants may not require any release of liability for any legal claims or
arbitration of any claim that an Eligible Owner may have against Defendants or any other person
solely in exchange for receiving Retail Replacement Value.
4.2 Early Termination of Leases Recall. Beginning no later than thirty (30) Days
after Effective Date of the Consent Decree, Defendants shall offer the Lease Termination to each
Eligible Lessee of a Generation 1.x 3.0 Liter Eligible Vehicle, upon return of the Eligible
Vehicle. Any Lease Termination offer shall include full cancellation of the remaining terms of
the lease with no financial or other penalty or cost. Defendants shall pay any amounts associated
with early termination of the lease, including, without limitation, early termination fees owed to
third parties, except for fees for excess wear and use and excess mileage at the point of vehicle
surrender, and other amounts due such as late payment fees, tickets, tolls, etc. Except as
provided in a Parallel Agreement satisfying the requirements of Paragraphs 3.1 through 3.4 of
Appendix A-1, Defendants may not require any release of liability for any legal claims or
arbitration of any claim that an Eligible Lessee may have against Defendants or any other person
solely in exchange for receiving a Lease Termination.
4.3 Duration of Buyback and Lease Termination Offers. The Buyback and the
Lease Termination recall offers required by Paragraphs 4.1 and 4.2 of this Appendix A shall be
available to Eligible Owners and Eligible Lessees of Generation 1.x Eligible Vehicles beginning
no later than thirty (30) Days after the Effective Date of the Consent Decree, and the Buyback
and the Lease Termination portions of the Recall Program shall remain open for Generation 1.x
3.0 Liter Eligible Vehicles until at least two years after the Effective Date or such other time as
authorized by Section III of Appendix A-1.
V. GENERATION 1.x EMISSIONS MODIFICATION
5.1 Emissions Modification Recall. No later than fifteen (15) Days after
Defendants receive from EPA/CARB notice of the Approved Emissions Modification for one
or more Generation 1.x Test Groups pursuant to the terms of Appendix B of this Consent
Decree, Defendants shall offer to Eligible Owners, Eligible Lessees, and Off-Lease Owners of
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the applicable Eligible Vehicles an Approved Emissions Modification in accordance with the
terms approved by EPA/CARB.
5.1.1 No Incurred Costs. Defendants, their agents, contractors, dealers,
successors, or assigns shall provide the Approved Emissions Modification free of
charge to all Eligible Owners, Eligible Lessees, and Off-Lease Owners. Although
Defendants need not provide any consumer restitution or damages payment in
connection with the Approved Emissions Modification, Defendants must provide an
Approved Emissions Modification to any Eligible Owner or Eligible Lessee regardless
of whether the consumer is eligible for or receives such consumer restitution or
damages.
5.1.2 No Release of Private Party Claim Solely for Approved Emissions
Modification. Defendants may not require any release of liability for any legal claims or
arbitration of any claim that an Eligible Owner or Eligible Lessee may have against
Defendants or any other person solely in exchange for receiving an Approved
Emissions Modification.
5.2 No End Date for Emissions Modification Recall: Once an emissions
modification is approved by EPA/CARB pursuant to Appendix B and is offered to Eligible
Owners, Eligible Lessees, or Off-Lease Owners in accordance with Paragraph 5.1 of this
Appendix A, such modification offer shall remain available to all Eligible Owners, Eligible
Lessees, or Off-Lease Owners of an Eligible Vehicle within the applicable Test Group or Test
Groups indefinitely and shall remain subject to the conditions in Sub-Paragraphs 5.1.1, 5.1.2,
Paragraph 9.1, and the label requirements in Paragraph 9.5 of this Appendix A. In accordance
with Paragraph 94 of the Consent Decree, the requirements contained in this Paragraph 5.2
shall continue in full force and effect after Termination of the Decree. Defendants may move
for Termination of the Decree pursuant to the requirements of Section XVII of the Consent
Decree (Termination) even though the obligations of this Paragraph 5.2 shall remain in place.
VI. GENERATION 2.x EMISSIONS COMPLIANT RECALL
6.1 Emissions Compliant Recall. No later than fifteen (15) Days after Defendants
receive from EPA/CARB notice of the approval for an Emissions Compliant Recall for one or
more Generation 2.x Test Groups pursuant to the terms of Appendix B of this Consent Decree,
Defendants shall offer to Eligible Owners, Eligible Lessees, and Off-Lease Owners of the
applicable Eligible Vehicles an Emissions Compliant Recall in accordance with the terms
approved by EPA/CARB.
6.1.1 No Incurred Costs. Defendants, their agents, contractors, dealers,
successors, or assigns shall provide the Emissions Compliant Recall free of charge to all
Eligible Owners, Eligible Lessees, and Off-Lease Owners. Although Defendants need
not provide any consumer restitution or damages payment in connection with the
Emissions Compliant Recall, Defendants must provide an Emissions Compliant Recall
to any Eligible Owner or Eligible Lessee regardless of whether the consumer is eligible
for or receives such consumer restitution or damages.
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6.1.2 No Release of Private Party Claim Solely for Emissions Compliant
Recall. Defendants may not require any release of liability for any legal claims or
arbitration of any claim that an Eligible Owner or Eligible Lessee may have against
Defendants or any other person solely in exchange for receiving an Emissions
Compliant Recall.
6.1.3 No Buyback or Lease Termination Required. If Defendants obtain
EPA/CARB approval for an Emissions Compliant Recall in accordance with the terms
of Appendix B for any particular Generation 2.x Test Group or Test Groups, nothing in
this Decree shall require Defendants to offer Buyback or Lease Termination to Eligible
Owners or Eligible Lessees of the applicable Eligible Vehicles.
6.2 No End Date for Emissions Compliant Recall. Once an Emissions Compliant
Recall is approved by EPA/CARB pursuant to Appendix B and is offered to Eligible Owners,
Eligible Lessees, or Off-Lease Owners in accordance with Paragraph 6.1 of this Appendix A,
such offer shall remain available to all Eligible Owners, Eligible Lessees, or Off-Lease Owners
of an Eligible Vehicle within the applicable Test Group or Test Groups indefinitely and shall
remain subject to the conditions in Sub-Paragraphs 6.1.1, 6.1.2, Paragraph 9.1, and the label
requirements in Paragraph 9.5 of this Appendix A. In accordance with Paragraph 94 of the
Consent Decree, the requirements contained in this Paragraph 6.2 shall continue in full force
and effect after Termination of the Decree. Defendants may move for Termination of the
Decree pursuant to the requirements of Section XVII of the Consent Decree (Termination) even
though the obligations of this Paragraph 6.2 shall remain in place.
VII. GENERATION 2.x BUYBACK AND LEASE TERMINATION
7.1 Buyback Recall. If Defendants fail to timely submit, or withdraw and do not
timely resubmit, an application for an Emissions Modification Proposal intended to meet
Certified Exhaust Emissions Standards for any Test Group or Test Groups of Generation 2.x 3.0
Liter Subject Vehicles, or receive a Final Notice of Disapproval from EPA/CARB with respect
to any such application, Defendants shall offer, and if accepted provide, each affected Eligible
Owner of a Generation 2.x 3.0 Liter Eligible Vehicle the Buyback, as defined in Paragraph 2.4 of
this Appendix A, of the Eligible Vehicle at no less than the Retail Replacement Value. Except as
provided in a Parallel Agreement satisfying the requirements of Paragraphs 3.1 through 3.4 of
Appendix A-1, Defendants may not require any release of liability for any legal claims or
arbitration of any claim that an Eligible Owner may have against Defendants or any other person
solely in exchange for receiving Retail Replacement Value.
7.2 Early Termination of Leases Recall. If Defendants fail to timely submit, or
withdraw and do not timely resubmit, an application for an Emissions Modification Proposal
intended to meet Certified Exhaust Emissions Standards for any Test Group or Test Groups of
Generation 2.x 3.0 Liter Subject Vehicles, or receive a Final Notice of Disapproval from
EPA/CARB with respect to any such application, Defendants shall offer the Lease Termination
to each affected Eligible Lessee of a Generation 2.x 3.0 Liter Eligible Vehicle, upon return of the
Eligible Vehicle. Any Lease Termination offer shall include full cancellation of the remaining
terms of the lease with no financial or other penalty or cost. Defendants shall pay any amounts
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associated with early termination of the lease, including, without limitation, early termination
fees owed to third parties, except for fees for excess wear and use and excess mileage at the point
of vehicle surrender, and other amounts due such as late payment fees, tickets, tolls, etc. Except
as provided in a Parallel Agreement satisfying the requirements of Paragraphs 3.1 through 3.4 of
Appendix A-1, Defendants may not require any release of liability for any legal claims or
arbitration of any claim that an Eligible Lessee may have against Defendants or any other person
solely in exchange for receiving a Lease Termination.
7.3 Duration of Buyback and Lease Termination Offers. The Buyback and the
Lease Termination recall offers required by Paragraphs 7.1 and 7.2 of this Appendix A shall be
available to Eligible Owners and Eligible Lessees of Generation 2.x 3.0 Liter Eligible Vehicles
beginning no later than sixty (60) Days after (a) Defendants fail to timely submit, or withdraw
and do not timely re-submit, an Emissions Modification Proposal intended to meet Certified
Emissions Standards, or (b) Defendants receive a Final Notice of Disapproval from EPA/CARB
for the proposed Emissions Compliant Recall for the applicable Test Group or Test Groups.
Once Buyback and Lease Termination requirements in Paragraphs 7.1 and 7.2 of this Appendix
A are triggered, the Buyback and Lease Termination portions of the Recall Program shall remain
open for the applicable Generation 2.x 3.0 Liter Eligible Vehicles for no less than two years from
the date that Buyback and Lease Termination offers first become available for the applicable
vehicles or for no less time than is authorized by Section III of Appendix A-1.
VIII. GENERATION 2.x EMISSIONS MODIFICATION
8.1 Reduced Emissions Modification. Defendants shall offer a Reduced
Emissions Modification for any Test Group or Test Groups of Generation 2.x 3.0 Liter Subject
Vehicles in the event that: 1) Defendants have failed to submit, withdrawn and not timely re-
submitted an application for, or received a Final Notice of Disapproval from EPA/CARB for a
proposed Emissions Compliant Recall for one or more Test Group or Test Groups of
Generation 2.x 3.0 Liter Subject Vehicles; and 2) Defendants have received notice of approval
from EPA/CARB for a Reduced Emissions Modification that satisfies Reduced Emissions
Modification Limits for the applicable vehicles. No later than fifteen (15) Days after
Defendants receive from EPA/CARB notice of approval for the Reduced Emissions
Modification for one or more Generation 2.x Test Groups pursuant to the terms of Appendix B
of this Consent Decree, Defendants shall offer to Eligible Owners, Eligible Lessees, and Off-
Lease Owners of the applicable Eligible Vehicles a Maximum Modification in accordance with
the terms approved by EPA/CARB.
8.1.1. No Incurred Costs. Defendants, their agents, contractors, dealers,
successors, or assigns shall provide the Reduced Emissions Modification free of charge
to all Eligible Owners, Eligible Lessees, and Off-Lease Owners. Although Defendants
need not provide any consumer restitution or damages payment in connection with the
Reduced Emissions Modification, Defendants must provide a Reduced Emissions
Modification to any Eligible Owner, Eligible Lessee, or Off-Lease Owner regardless of
whether the consumer is eligible for or receives such consumer restitution or damages.
8.1.2. No Release of Private Party Claim Solely for Approved Emissions
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Modification. Defendants may not require any release of liability for any legal claims or
arbitration of any claim that an Eligible Owner or Eligible Lessee may have against
Defendants or any other person solely in exchange for receiving a Reduced Emissions
Modification.
8.2 No End Date for Emissions Modification Recall. Once an emissions
modification is approved by EPA/CARB pursuant to Appendix B and is offered to Eligible
Owners, Eligible Lessees, or Off-Lease Owners in accordance with Paragraph 8.1 of this
Appendix A, such modification offer shall remain available to all Eligible Owners, Eligible
Lessees, or Off-Lease Owners of an Eligible Vehicle within the applicable Test Group or Test
Groups indefinitely and shall remain subject to the conditions in Sub-Paragraphs 8.1.1, 8.1.2,
Paragraph 9.1, and the label requirements in Paragraph 9.5 of this Appendix A. In accordance
with Paragraph 94 of the Consent Decree, the requirements contained in this Paragraph 8.2
shall continue in full force and effect after Termination of the Decree. Defendants may move
for Termination of the Decree pursuant to the requirements of Section XVII of the Consent
Decree (Termination) even though the obligations of this Paragraph 8.2 shall remain in place.
IX. ADDITIONAL REQUIREMENTS FOR APPROVED EMISSIONS
MODIFICATIONS AND EMISSIONS COMPLIANT RECALLS
9.1 Warranty. 3.0 Liter Subject Vehicles receiving the Approved
Emissions Modification or an Emissions Compliant Recall shall qualify for a
warranty as described in Paragraph 3.9 of Appendix B (the “Warranty”).
9.2 Warranty Remedies. In addition to any protections provided by law (including
those referenced in Paragraph 9.3 below), Defendants must reoffer and provide a Buyback or
Lease Termination to any Eligible Owner or Eligible Lessee of a Modified Vehicle (or in the
case of an Approved Emissions Modification that qualifies as an Emissions Compliant Recall,
must offer a Buyback or Lease Termination in the first instance) in the event that, during the 18
months or 18,000 miles following the completion of the Approved Emissions Modification (the
“Reoffer Period”), Defendants fail to repair or remedy a confirmed mechanical failure or
malfunction covered by the Warranty and associated with the Approved Emissions
Modification or Emissions Compliant Recall (a “Warrantable Failure”) after the Eligible Owner
or Eligible Lessee physically presents the Modified Vehicle to a dealer for repair of the
Warrantable Failure; and (1) the Warrantable Failure is unable to be remedied after making four
separate service visits for the same Warrantable Failure during the Reoffer Period; or (2) the
Modified Vehicle with the Warrantable Failure is out of service due to the Warrantable Failure
for a cumulative total of 30 Days during the Reoffer Period. (For avoidance of doubt, a
Modified Vehicle shall not be deemed “out of service” when, after diagnosing the Warrantable
Failure, the dealer returns or tenders the Modified Vehicle to the customer while the dealer
awaits necessary parts for the Warrantable Failure, and the Modified Vehicle remains
Operable.) In such a case, the Eligible Owner or Eligible Lessee of an Eligible Vehicle
receiving an Approved Emissions Modification shall receive the payments that he or she would
have received under the Buyback or the Lease Termination at the time the Eligible Owner or
Eligible Lessee first requested the Approved Emissions Modification less any payment amounts
already received; or, in the case of an Emissions Compliant Recall, the Eligible Owner or
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Eligible Lessee shall receive the payments that he or she would have been entitled to receive
under Section VII of this Appendix A had a Final Notice of Disapproval been issued by
EPA/CARB with respect to the proposed Emissions Compliant Recall, less any payment
amounts already received. No Eligible Owner or Eligible Lessee shall receive double-recovery
of any portion of any payment. Defendants shall, as part of their reporting obligations in
Paragraph 11.3 below, notify EPA/CARB and CA AG when any Eligible Owner or Eligible
Lessee participates in the Buyback or the Lease Termination under this Paragraph 9.2.
9.3 Preservation of Remedies. The Warranty shall be subject to any remedies
provided by state or federal laws, such as the Magnuson-Moss Warranty Act, that provide
consumers with protections, including without limitation “Lemon Law” protections, with
respect to warranties.
9.4 No Defense. Except in an action alleging noncompliance with the terms of
the Consent Decree, nothing in this Consent Decree or its Appendices may be cited as a
defense to liability arising out of the Approved Emissions Modification or the Emissions
Compliant Recall.
9.5 Disclosure to Subsequent Purchasers. For each 3.0 Liter Subject Vehicle that
receives the Approved Emissions Modification, Reduced Emissions Modification, or Emissions
Compliant Recall, Defendants shall affix to the vehicle the applicable label approved by
EPA/CARB in accordance with Appendix B. Defendants shall also provide subsequent
purchasers of such 3.0 Liter Subject Vehicles who purchase the vehicles from Dealerships the
applicable Monroney fuel economy label for the vehicle as specified in Appendix B of this
Consent Decree. In addition, Defendants shall make available online a searchable Emissions
Modification and Compliant Emissions Recall Database by which users, including potential
purchasers, may conduct a free-of-charge search by vehicle VIN to determine whether the
Approved Emissions Modification, Reduced Emissions Modification, or Emissions Compliant
Recall has been applied to a specific vehicle. This online access to the searchable Emissions
Modification and Compliant Emissions Recall Database shall continue for a minimum of ten
(10) years after the Effective Date of the Consent Decree.
X. RECALL RATE
10.1 Recall Rate Target – Generation 1.x. By no later than November 30, 2019,
Defendants shall remove from commerce in the United States and/or perform an Approved
Emissions Modification on at least 85% of those Generation 1.x 3.0 Liter Subject Vehicles
that existed as of November 2, 2015, as defined below (“Generation 1.x National Recall
Target” for the “Generation 1.x National Recall Rate”). Additionally, by November 30, 2019,
Defendants shall remove from commerce in California and/or perform an Approved
Emissions Modification on at least 85% of those Generation 1.x 3.0 Liter Subject Vehicles
registered in California that existed as of November 2, 2015, as defined below (“Generation
1.x California Recall Target” for the “Generation 1.x California Recall Rate”). Defendants
shall receive credit toward the Generation 1.x National Recall Target (and for California
vehicles, the Generation 1.x California Recall Target) for every Buyback, Lease Termination,
or Approved Emissions Modification of a Generation 1.x 3.0 Liter Subject Vehicle that
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Defendants execute prior to November 30, 2019, as well as any Generation 1.x 3.0 Liter
Subject Vehicles that is scrapped or otherwise permanently removed from commerce between
November 3, 2015 and November 30, 2019, provided that no Generation 1.x 3.0 Liter Subject
Vehicle may be counted more than once. For purposes of this Paragraph, the total number of
Generation 1.x 3.0 Liter Subject Vehicles is 19,602. For purposes of this Paragraph, the total
number of all Generation 1.x 3.0 Liter Subject Vehicles registered in California is 2,925.
10.2 Recall Rate Target – Generation 2.x. By no later than May 31, 2020,
Defendants shall perform an Emissions Compliant Recall on at least 85% of those Generation
2.x 3.0 Liter Subject Vehicles that existed as of November 2, 2015, as defined below; or, if no
Emissions Compliant Recall is approved by EPA/CARB, Defendants shall remove from
commerce in the United States and/or perform a Reduced Emissions Modification on at least
85% of those Generation 2.x 3.0 Liter Subject Vehicles that existed as of November 2, 2015,
as defined below (“Generation 2.x National Recall Target” for the “Generation 2.x National
Recall Rate”). Additionally, by May 31, 2020, Defendants shall perform an Emissions
Compliant Recall on at least 85% of those Generation 2.x 3.0 Liter Subject Vehicles registered
in California that existed as of November 2, 2015, as defined below; or, if no Emissions
Compliant Recall is approved by EPA/CARB, Defendants shall remove from commerce in
California and/or perform a Reduced Emissions Modification on at least 85% of those
Generation 2.x 3.0 Liter Subject Vehicles registered in California that existed as of November
2, 2015, as defined below (“Generation 2.x California Recall Target” for the “Generation 2.x
California Recall Rate”). Defendants shall receive credit toward the Generation 2.x National
Recall Target (and for California vehicles, the Generation 2.x California Recall Target) for
every Emissions Compliant Recall, Buyback, Lease Termination, or Reduced Emissions
Modification of a Generation 2.x 3.0 Liter Subject Vehicle that Defendants execute prior to
May 31, 2020, as well as any Generation 2.x 3.0 Liter Subject Vehicles that is scrapped or
otherwise permanently removed from commerce between November 3, 2015 and May 31,
2020, provided that no Generation 2.x 3.0 Liter Subject Vehicle may be counted more than
once. For purposes of this Paragraph, the total number of Generation 2.x 3.0 Liter Subject
Vehicles is 62,772. For purposes of this Paragraph, the total number of all Generation 2.x 3.0
Liter Subject Vehicles registered in California is 11,805.
10.3 Consequences of Failing to Meet Recall Targets. If, by November 30, 2019
for Generation 1.x 3.0 Liter Subject Vehicles, and by May 31, 2020 for Generation 2.x 3.0
Liter Subject Vehicles, Defendants fail to achieve the 85% Recall Rate Targets required by
Paragraphs 10.1 and 10.2 of this Appendix A, Defendants shall make additional contributions
(“Mitigation Trust Payments”) to the Environmental Mitigation Trust established pursuant to
the First Partial Consent Decree. Such additional Mitigation Trust Payments shall be as
follows:
10.3.1. National Mitigation Trust Payment – Generation 1.x. For failure to
reach the Generation 1.x National Recall Target, Defendants shall contribute to the
Environmental Mitigation Trust $5,500,000 for each 1% that the Generation 1.x
National Recall Rate falls short of the Generation 1.x National Recall Target. In
calculating any payment required under this Sub-Paragraph, the Generation 1.x National
Recall Rate shall be rounded to the nearest half percentage point. Any payments to the
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Environmental Mitigation Trust made pursuant to this Sub-Paragraph shall be used
pursuant to the terms of the First Partial Consent Decree exclusively to fund
environmental mitigation projects outside California.
10.3.2. California Mitigation Trust Payment – Generation 1.x. For failure to
reach the Generation 1.x California Recall Target, Defendants shall contribute to the
Environmental Mitigation Trust $900,000 for each 1% that the Generation 1.x
California Recall Rate falls short of the Generation 1.x California Recall Rate Target.
In calculating any payment required under this Sub-Paragraph, the Generation 1.x
California Recall Rate shall be rounded to the nearest half percentage point. Any
payments to the Environmental Mitigation Trust made pursuant to this Sub-
Paragraph shall be used pursuant to the terms of the First Partial Consent Decree
exclusively to fund environmental mitigation projects in California.
10.3.3. National Mitigation Trust Payment – Generation 2.x. For failure to
reach the Generation 2.x National Recall Target, Defendants shall contribute to the
Environmental Mitigation Trust $21,000,000 for each 1% that the Generation 2.x
National Recall Rate falls short of the Generation 2.x National Recall Target. In
calculating any payment required under this Sub-Paragraph, the Generation 2.x
National Recall Rate shall be rounded to the nearest half percentage point. Any
payments to the Environmental Mitigation Trust made pursuant to this Sub-
Paragraph shall be used pursuant to the terms of the First Partial Consent Decree
exclusively to fund environmental mitigation projects outside California.
10.3.4. California Mitigation Trust Payment – Generation 2.x. For failure to
reach the Generation 2.x California Recall Target, Defendants shall contribute to the
Environmental Mitigation Trust $5,500,000 for each 1% that the Generation 2.x
California Recall Rate falls short of the Generation 2.x California Recall Rate Target.
In calculating any payment required under this Sub-Paragraph, the Generation 2.x
California Recall Rate shall be rounded to the nearest half percentage point. Any
payments to the Environmental Mitigation Trust made pursuant to this Sub-
Paragraph shall be used pursuant to the terms of the First Partial Consent Decree
exclusively to fund environmental mitigation projects in California.
10.4 Payment Schedule for Additional Mitigation Payments. All Mitigation
Trust Payments made pursuant to this Section X shall be made to the Trust Account in the
manner set forth in the First Partial Consent Decree and shall be made no later than thirty
(30) Days after the applicable date provided in Paragraph 10.3 above, together with interest
as provided for in 28 U.S.C. § 1961.
XI. OTHER PROVISIONS
11.1 No Prohibition on Other Incentives. Nothing in this Appendix A is
intended to prohibit Defendants from offering an Eligible Owner or Eligible Lessee any
further incentives or trade-in options in addition to those provided herein; however,
Defendants may not offer Eligible Owners or Eligible Lessees other incentives or trade-in
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options in lieu of the options contained herein, in whole or in part, or any incentive not to
participate in those options.
11.2 Disposition of Vehicles.
11.2.1 Vehicles Rendered Inoperable. All Eligible Vehicles returned to
Defendants through the Recall Program shall be rendered inoperable by removing the
vehicle’s Engine Control Unit (“ECU”) and may be, to the extent possible, recycled to
the extent permitted by law. No Eligible Vehicle that is rendered inoperable may
subsequently be rendered operable except as allowed by and in compliance with Sub-
Paragraph 11.2.3 below and Appendix B of this Consent Decree.
11.2.2 Limitation on Scrapping of Vehicles. Returned Eligible Vehicles and
3.0 Liter Subject Vehicles may be salvaged for parts, and such parts may be sold in the
United States or exported, provided, however, that in no event may the ECU, diesel
oxidation catalyst, or diesel particulate filter be salvaged, resold, or exported.
11.2.3 Sale or Re-Sale of Returned Vehicles. Notwithstanding the
requirements of Sub-Paragraphs 11.2.1 and 11.2.2 above, Defendants may elect to resell
or sell any returned Eligible Vehicle or any 3.0 Liter Subject Vehicle in the United
States, provided, however, that Defendants meet the following requirements:
11.2.3.1 Generation 1.x Vehicles. For Generation 1.x 3.0 Liter Subject
Vehicles, Defendants must first modify the particular vehicle in accordance with the
applicable Approved Emissions Modification, label such vehicle, and provide the
Approved Emissions Modification Disclosure, Warranty, and Warranty Remedies as
provided in Section IX above to prospective purchasers, and meet the other
requirements for resale of returned vehicles set forth in Appendix B.
11.2.3.2 Generation 2.x Vehicles. For Generation 2.x 3.0 Liter Subject
Vehicles, Defendants must first perform the applicable Emissions Compliant Recall
or Reduced Emissions Modification on the particular vehicle as approved by
EPA/CARB, label such vehicle, and provide the applicable Emissions Compliant
Recall or Reduced Emissions Modification Disclosure, Warranty, and Warranty
Remedies as provided in Section IX above to prospective purchasers, and meet the
other requirements for resale of returned vehicles as set forth in Appendix B.
11.2.4 Export of 3.0 Liter Subject Vehicles. Except as otherwise provided in
Appendix B, Defendants may not export or arrange for the export of 3.0 Liter Subject
Vehicles, unless such vehicle has been modified in accordance with the applicable
Approved Emissions Modification, Reduced Emissions Modification, or Emissions
Compliant Recall pursuant to the terms of Appendix B of this Consent Decree.
11.2.5 Disposition of Vehicles without an Approved Emissions Modification
or Emissions Compliant Recall. In the event that there is no Approved Emissions
Modification, Reduced Emissions Modification, or Emissions Compliant Recall for a
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particular Test Group or Test Groups of 3.0 Liter Subject Vehicles (either because the
proposed submission was disapproved by EPA/CARB, or because Defendants
withdrew or failed to timely submit an application for an Approved Emissions
Modification or Emissions Compliant Recall), such vehicles may only be disposed of
consistent with the requirements of Sub-Paragraphs 11.2.1 and 11.2.2 above.
11.3 Reporting. Defendants shall provide EPA, CARB, and the CA AG with status
reports on the Buyback, Lease Termination, Vehicle Modification, and Emissions Compliant
Recall Program. Such status reports shall be certified in accordance with the requirements of
Paragraph 34 of the Consent Decree and shall include, at a minimum, the following elements:
11.3.1 A review of Defendants’ progress toward reaching the Recall
Rate targets required by Section X of this Appendix A;
11.3.2 Each Eligible Vehicle, listed by VIN, model and year, reacquired
by Defendants and the date of such reacquisition;
11.3.3 Each Eligible Vehicle, listed by VIN, model and year, that has
been resold, exported, rendered inoperable, or destroyed and the date of such
resale, export, rendering, or destruction;
11.3.4 Each Eligible Vehicle, listed by VIN, model and year, that has
received an Approved Emissions Modification or that has been modified in
accordance with an Emissions Compliant Recall or Reduced Emissions
Modification and the date of such modification;
11.3.5 A compilation of all notices widely distributed to Eligible Owners
or Eligible Lessees since the last report submitted by Defendants under this
Paragraph, including email notices and any updates to the claims administration
website;
11.3.6 Each 3.0 Liter Subject Vehicle, listed by VIN, model and year, that
is not an Eligible Vehicle and that has been removed from commerce and/or has
received an Approved Emissions Modification, Reduced Emissions Modification, or
an Emissions Compliant Recall;
11.3.7 A summary or copy of all bulletins, notices, or other similar
communications sent to authorized Dealerships regarding the Recall Program,
including information regarding Warranties and Warranty Remedies provided to
dealerships.
11.3.8 The first report shall be due by the end of the month following the end
of the quarter in which the Consent Decree is entered by the Court (i.e., January 31st,
April 30th, July 31st, and October 31st, as applicable). Thereafter each subsequent
report shall be due at the end of the month following the end of each quarter, with the
final report due May 31, 2020, or the end of all Buyback and Lease Termination
programs required by this Decree, whichever is later. After one year following the
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beginning of the Recall Program, Defendants may submit such reports on a semi-
annual basis together with any other reports required by this Consent Decree.
Additionally, Defendants shall provide the EPA, CARB, and the CA AG with any
documents, accounting, or other information related to Volkswagen’s compliance
within 30 Days of the request by the agencies, or longer with the requesting party’s
agreement.
11.3.9 Defendants’ obligation to submit reports under this Paragraph 11.3 and
its Sub-Paragraphs shall not continue beyond May 31, 2020, or the end of all Buyback
and Lease Termination programs required by this Decree, whichever is later, provided
however, that nothing in this Sub-Paragraph 11.3.9 alters or affects Defendants’
obligation to submit reports pursuant to Paragraph 6.1 of Appendix B for five (5) years
following the Effective Date of the Consent Decree.
11.4 No Attorneys’ Fees or Costs. To the extent Defendants elect to pay private
attorneys’ fees or costs, Defendants will not receive credit for such payments against
obligations to Eligible Owners or Eligible Lessees required under this Consent Decree or its
Appendices.
XII. DISPUTE RESOLUTION AND STIPULATED PENALTIES
12.1 Dispute Resolution. All disputes between a) Defendants; and b) the United
States and/or CARB and/or the California Attorney General’s Office shall be addressed in the
manner set forth in Section IX of the Consent Decree (Dispute Resolution). With respect to any
dispute under this Appendix A, in any judicial proceeding conducted pursuant to the dispute
resolution procedures set forth in the Consent Decree, Defendants shall bear the burden of
demonstrating by a preponderance of the evidence that their actions were in compliance with this
Appendix A.
12.2 Stipulated Penalties. The following Stipulated Penalties shall be applicable in
connection with this Appendix A. All Stipulated Penalties required by this Paragraph 12.2 shall
be paid in accordance with the requirements of Section VII of the Consent Decree (Stipulated
Penalties and Additional Mitigation Trust Payments).
12.2.1 Failure to Make Required Payments. If Defendants fail to transmit
the full amount of any Buyback payment within fifteen (15) Days following the Day an
Eligible Vehicle is surrendered by an Eligible Owner or Eligible Lessee, Defendants shall
pay the following Stipulated Penalty: $8,000 per affected Eligible Vehicle.
12.2.2 Failure to Timely Initiate Recall Program Offer – Generation 1.x.
If Defendants fail to timely initiate any offer of the Buyback, Lease Termination, or
Approved Emissions Modification to all applicable Eligible Owners and applicable
Eligible Lessees of Generation 1.x 3.0 Liter Eligible Vehicles as required by Paragraphs
4.1, 4.2, or 5.1 of this Appendix A (that is, if Defendants fail to initiate offers of the
Buyback or the Lease Termination within thirty (30) Days of the Effective Date, or fail to
initiate offers of Approved Emissions Modification within 15 Days of modification
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approval), unless such time is extended in writing by EPA/CARB, Defendants shall pay
the following Stipulated Penalty for each Day the offer is delayed:
$10,000 1st through 14th Day
$25,000 15th through 30th Day
$50,000 31st Day and beyond
12.2.3 Failure to Timely Initiate Recall Program Offer – Generation 2.x.
If Defendants fail to timely initiate any offer of Emissions Compliant Recall (or if no
Emissions Compliant Recall is approved by EPA/CARB, any offer of Buyback, Lease
Termination, or Reduced Emissions Modification) to all applicable Eligible Owners and
applicable Eligible Lessees of Generation 2.x 3.0 Liter Eligible Vehicles as required by
Paragraphs 6.1, 7.1, 7.2, or 8.1 of this Appendix A (that is, if Defendants fail to initiate
offers of Emissions Compliant Recall within 15 Days of recall approval; or offers of
Buyback and Lease Termination within 60 Days of Emissions Compliant Recall
disapproval; or offers of Reduced Emissions Modification within 15 Days of
modification approval), unless such time is extended in writing by EPA/CARB,
Defendants shall pay the following Stipulated Penalty for each Day the offer is delayed:
$10,000 1st through 14th Day
$25,000 15th through 30th Day
$50,000 31st Day and beyond
12.2.4 Failure to Submit Reports or Notices. If Defendants fail to timely
submit any report required by Paragraph 11.3 or any notice required by Paragraphs 3.1,
3.2, or 3.3 of this Appendix A, the following Stipulated Penalties shall apply for each
Day that such Report or Notice is not submitted:
$2,000 1st through 14th Day
$5,000 15th through 30th Day
$10,000 31st Day and beyond
In no event shall Defendants be required to pay stipulated penalties for the same conduct
under this Sub-Paragraph 12.2.4 and Paragraph 42 of the Consent Decree.
12.2.5 Early Termination of Recall Program. If Defendants prematurely
terminate the Recall Program with respect to any Test Group or Test Groups of Eligible
Vehicle or Vehicles, Defendants shall pay the following Stipulated Penalty per Day.
$50,000 1st through 14th Day
$100,000 15th through 30th Day
$200,000 31st Day and beyond
12.2.6 Unauthorized Waiver or Release. If Defendants require any release
of liability for any legal claims that an Eligible Owner or Eligible Lessee may have
against Defendants or any other person solely in exchange for receiving a Buyback,
Lease Termination, Approved Emissions Modification, Reduced Emissions Modification,
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or Emissions Compliant Recall, Defendants shall pay the following Stipulated Penalty:
$10,000 per affected Eligible Vehicle.
12.2.7 Failure to Make Mitigation Payments. If Defendants fail to timely
make any Mitigation Trust Payments required by Paragraph 10.4 of this Appendix A, the
following Stipulated Penalties shall apply for each Day the required payment is not
submitted:
$50,000 1st through 14th Day
$100,000 15th through 30th Day
$200,000 31st Day and beyond
12.2.8 Misleading Notices or Advertisements. If Defendants provide any
materially misleading or inaccurate notice to any Eligible Owner or Eligible Lessee
regarding the individual owner or lessee’s rights, right to payment, or available remedies
under the Recall Program, Defendants shall have 30 Days to correct such notice after
EPA, CARB, or the CA AG advise Defendants that the notice is materially misleading or
inaccurate. If Defendants fail to correct the notice within 30 Days, the following
stipulated penalty shall apply per Day the notice is not corrected:
$10,000 1st through 14th Day
$25,000 15th through 30th Day
$50,000 31st Day and beyond
12.2.9 Failure to Properly Dispose of Returned Vehicle. If Defendants
improperly dispose of or export any returned vehicle in violation of the requirements of
Paragraph 11.2 of this Appendix A or sell, re-sell or cause to be sold or re-sold any 3.0
Liter Subject Vehicle that has not received an Approved Emissions Modification,
Reduced Emissions Modification, or Emissions Compliant Recall, Defendants shall pay
the following Stipulated Penalty: $10,000 per affected 3.0 Liter Subject Vehicle. In no
event shall Defendants be required to pay stipulated penalties under Sub-Paragraph 8.2.3
of Appendix B of this Consent Decree if a stipulated penalty under this Sub-Paragraph
12.2.9 is demanded for the same conduct.
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Appendix A-1
Recall Program Administration
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APPENDIX A-1
RECALL PROGRAM ADMINISTRATION
I. CALCULATION OF RETAIL REPLACEMENT VALUE
1.1 Retail Replacement Value Components. For all 3.0 Liter Eligible Vehicles, and
only for purposes of satisfying Defendants’ obligations under this Consent Decree, Retail
Replacement Value shall be defined as equal to the sum of the following three components:
(1) Vehicle Value, as described below;
(2) State and Local Taxes Payment; and
(3) Associated Owner Expenses.
Each of the three components shall be calculated in accordance with Paragraphs 1.2-1.4
below.
1.2 Vehicle Value. The Vehicle Value for a given Eligible Vehicle shall equal the
vehicle’s Base Value adjusted for OEM-installed NADA Options and NADA Mileage, as
described below.
1.2.1 Base Value. Base Value shall be calculated as follows:
1.2.1.1 The Base Value for each Eligible Vehicle is, where available
(including both Model Year (“MY”) vehicles before 2015 and certain MY 2015
vehicles), the Clean Retail value of the vehicle based on the NADA Vehicle
Identification Code (VIC) for each Eligible Vehicle in the November 2015
NADA Used Car Guide (“NADA Guide”) published in or around October 2015.
1.2.1.2 For MY 2015 Eligible Vehicles for which no value was
published in the NADA Guide as of November 2015 (MY 2015 Porsche Cayenne;
Audi Q5 Premium Plus, Q5 Prestige, Q5 Prestige S; Volkswagen Touareg
Executive, Touareg Lux, and Touareg Sport Technology), the Base Value shall be
equal to 75.856% of MSRP for the Eligible Vehicle. This figure is derived by
multiplying the MSRP for each individual vehicle by the average ratio of
November 2015 Clean Retail values to average MSRPs for MY 2015 vehicles for
which values were available (MY 2015 Audi A6 Premium Plus and A6 Prestige,
A7 Premium Plus and A7 Prestige, A8, and Q5 Premium Plus).
1.2.1.3 Because no Clean Retail values for any MY 2016 vehicles were
available in the NADA Guide, the Base Value for each MY 2016 Eligible Vehicle
shall be set at 112.886% of the MY 2015 NADA Guide Clean Retail value (where
available) or 112.886% of the MY 2015 calculated value, if the MY 2015 value is
calculated in accordance with Sub-Paragraph 1.2.1.2 above. This number is
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derived by comparing the average MY 2014 to MY 2015 year-over-year growth
in NADA Clean Retail price for vehicles for which MY 2015 values were
available (MY 2015 Audi A6 Premium Plus and A6 Prestige, A7 Premium Plus
and A7 Prestige, A8, and Q5 Premium Plus).
1.2.2 NADA Region. The Base Value for each Eligible Vehicle, excepting MY
2015 and MY 2016 vehicles with derived values, shall be determined using the NADA
region that includes the state of the Eligible Vehicle’s last known vehicle registration as
of November 2015.
1.2.3 NADA Options. Options adjustments to Base Values shall be determined
by using Volkswagen, Audi, and Porsche OEM-installed options, as valued by the
November 2015 NADA Used Car Guide. Because no option values were published in
the NADA Guide as of November 2015 for MY 2016 Eligible Vehicles, option
adjustments to Base Value for MY 2016 vehicles will be determined by using
Volkswagen, Audi, and Porsche OEM-installed options, and valued based on MY 2015
NADA Guide as of November 2015 option values, adjusted to MY 2016 using the same
methodology described in Sub-Paragraph 1.2.1.3 above.
1.2.4 NADA Mileage. Mileage adjustments to Base Values shall be determined
based on the actual mileage at the time the vehicles are surrendered in the Buyback using
the mileage adjustment table in the November 2015 NADA Used Car Guide with an
allowance for standard NADA mileage of 12,500 miles per year, prorated monthly from
November 2015 to the month of surrender. Because the November 2015 NADA used car
guide does not include mileage tables for any MY 2016 vehicles, MY 2016 vehicles will
not be subject to a mileage adjustment, unless authorized by Section III of this Appendix
A-1.
1.3 State and Local Taxes Payment. The State and Local Taxes Payment shall
equal a defined percentage of the Vehicle Value for each Eligible Vehicle, based on the vehicle’s
state of registration as of November 2015. The applicable percentage or formula (“Combined
Rate/Formula”) for each state is set forth in Appendix A-1 Table 1. For vehicles for which there
was no known state of registration as of November 2015, an average percentage of 6% will be
used.
1.4 Associated Owner Expenses. The Associated Owner Expenses shall equal $720
for all Eligible Vehicles.
1.5 Vehicle Buyback List. No later than 15 Days after the Effective Date,
Defendants shall submit to EPA/CARB a list of all known 3.0 Liter Subject Vehicles that existed
as of November 2, 2015, and had been retailed to customers as of that date (“3.0 Liter Buyback
List”). The 3.0 Liter Buyback List shall contain the make, model, year, VIN, and state of
registration for each vehicle as of November 2015 if known, as well as an initial calculation of
the Retail Replacement Value for each vehicle, in accordance with the terms of this Section I of
Appendix A-1. The initial calculation for each vehicle may be adjusted for NADA Mileage in
accordance with Sub-Paragraph 1.2.4 above prior to completing a Buyback of the vehicle.
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Defendants’ failure to include an Eligible Vehicle on the 3.0 Liter Buyback List shall not exclude
the vehicle from the Buyback program if the vehicle is otherwise eligible.
II. PROGRAM ADMINISTRATION
2.1 Claims Program. Defendants shall be responsible for establishing, funding, and
executing the Claims Program to effect the Buyback and Lease Termination offers of the Recall
Program. Such Claims Program will be established and administered under the supervision of an
independent Program Supervisor, proposed by Defendants and agreed to by the United States
and California prior to the Effective Date. The Claims Program shall be the process by which
Eligible Owners and Eligible Lessees obtain the Buyback and Lease Termination offers
(“Program Offers”) required by Appendix A. The Claims Program shall be organized according
to the requirements of this Section II of Appendix A-1.
2.1.1 Website and Registration. Defendants shall establish a website whereby
Eligible Owners and Eligible Lessees can provide their (i) Vehicle Identification Number
(VIN); (ii) name; (iii) email address; and (iv) zip code to receive relevant information
about the Claims Program. All Eligible Owners and Eligible Lessees who provide the
information required by this paragraph shall receive periodic updates as necessary
communicating relevant Claims Program dates, availability of Buyback and Lease
Termination offers, and any ending dates for relevant Claims Program offers.
2.1.2 Call Center. Defendants shall establish a Call Center for Eligible Owners
and Eligible Lessees to talk to a Volkswagen, Audi, or Porsche representative for
questions concerning the Claims Program.
2.2 Claimants. Eligible Owners and Lessees who have registered for the Claims
Program shall be able to submit a claim online by uploading all necessary documents and
information to a website portal for review and verification for eligibility. Once an Eligible
Owner or Lessee has been verified by Defendants as eligible, he or she shall be considered a
“Claimant.”
2.2.1 Non-Standard Claims. The Program Supervisor shall determine the
required documentation for non-standard Claims, including but not limited to Claims
involving military personnel serving overseas, decedent estates, divorce, bankruptcy,
stolen vehicles, and payment of child support and family or attorney liens.
2.2.2 Loan Obligations. If the Eligible Vehicle is under an outstanding loan
obligation at the time of a Buyback, Defendants shall communicate with the Claimant’s
bank in advance of a Buyback, pursuant to a written consent form executed by the
Claimant, to determine payoff amounts for loans. If an Eligible Owner electing a
Buyback owes less than Retail Replacement Value on an Eligible Vehicle, Defendants
shall pay that Eligible Owner’s lender the full amount required to pay off the outstanding
loan obligation and shall remit the remainder of the Retail Replacement Value to the
Eligible Owner. If the Eligible Owner owes more than Retail Replacement Value on the
Eligible Vehicle, Defendants shall pay the Eligible Owner’s lender the Retail
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Replacement Value, and the Eligible Owner shall retain the obligation to fulfill any
additional outstanding loan obligation at the time of the Buyback.
2.2.3 Formal Notification. Claimants whose eligibility has been verified by the
Program Supervisor shall be sent a Formal Notification setting forth the Buyback or
Lease Termination terms. Once a Formal Notification is made, a Claimant may choose to
proceed by signing and notarizing an offer package and uploading it to the Claims Portal.
2.3 Appointments. Claimants shall be allowed to schedule an appointment at their
preferred Volkswagen, Audi, or Porsche dealership (corresponding to the make of the Eligible
Vehicle) to complete the Claims Program and execute the Buyback or Lease Termination.
Appointments for a Buyback shall be available within 90 days of a Claimant’s acceptance of the
terms set forth in the Formal Notification and Defendants’ validation of the submitted offer
package. Appointments for a Lease Termination shall be available within 45 days of acceptance.
When the ability to schedule an appointment to obtain the selected remedy becomes available,
the Claimant shall be notified and may then schedule the appointment online.
2.3.1 Scheduling. Appointments for Buybacks and Lease Terminations shall be
made available on a first-come, first-served basis depending on the make of the Eligible
Vehicle. Although the Buyback or Lease Termination will take place at a Volkswagen,
Audi, or Porsche dealer, the appointments must be scheduled either online through the
Claims Portal or via phone at a number that will be displayed prominently on the Claims
Program website. Volkswagen, Audi, and Porsche dealers will not be able to schedule
appointments for Buyback or Lease Termination directly.
2.3.2 Program Specialist. On the appointed day, Claimants will meet with a
“Program Specialist” acting on behalf of Defendants at the Volkswagen, Audi, or Porsche
dealer to complete the Buyback or Lease Termination. The Program Specialist will
verify the identity of the Claimant and Eligible Vehicle, capture the current mileage of
the Eligible vehicle, collect necessary documentation, take possession of the Eligible
Vehicle, and trigger payment to the Claimant (and lenders, if applicable) of any amount
due. Claimants electing the Lease Termination option will need to comply with lease
terms concerning mileage and condition verification prior to termination.
2.4 Form of Buyback Payment. Buyback payments in the amount of Retail
Replacement Value shall be made to the Claimant by electronic funds transfer or by check
according to the preference expressed by each Claimant.
2.4.1 Electronic Funds Transfer. An electronic fund transfer will be submitted
within three banking days of completion of the Claims Program following sale of the
Eligible Vehicle to Defendants.
2.4.2 Check Processing. For Claimants opting to receive a check, a check for
the full amount due will be available at the dealership, unless a mileage adjustment is
required. If an upward mileage adjustment is required (resulting in a lower payment), the
Claimant will not receive a check at the dealer but will be sent a check within three
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banking days, or alternatively the Claimant can opt to reschedule the appointment. If a
downward mileage adjustment is required (resulting in a higher payment), the Claimant
will receive a check at the dealer that does not reflect the mileage adjustment and will be
mailed an additional check within three banking days for the additional amount due as a
result of the downward mileage adjustment.
2.4.3 Receipt. Claimants will be issued a receipt at the conclusion of their
appointment at the Volkswagen, Audi, or Porsche dealership, including that they
surrendered their Eligible Vehicle and providing specific information about exactly when
and where their compensation will be received, as well as whom to call if it is not timely
received.
2.5 Program Supervisor. The Claims Program shall be monitored by a Program
Supervisor selected in accordance with Paragraph 2.5.2 below. In acting under this Consent
Decree, the Program Supervisor is an agent of this Court, and solely the agent of this Court, and
shall be accountable directly to this Court. With the exception of review of claims pursuant to
Paragraph 2.5.3 below, the Program Supervisor shall not perform any of the claims processing
functions associated with the Claims Program unless requested by or agreed to by the United
States and California. The Program Supervisor has the power and authority to monitor
Defendants’ compliance with the Claims Program in accordance with this Section 2.5.
2.5.1 Program Supervisor Candidates. No later than fifteen (15) Days after the
date of this Consent Decree is lodged with the Court, Defendants shall submit to the
United States and California a list of three candidates for the position of Program
Supervisor. Defendants shall:
2.5.1.1 Submit a resume, biographical information, and any relevant
material concerning each of the candidate firms and its
competence and qualifications to serve as Program Supervisor;
2.5.1.2 Describe any past, present, or future business or financial
relationship that the candidate has with the Defendants, EPA, or
CARB;
2.5.1.3 Verify that the candidate has agreed not to be employed by any
Defendant, or its subsidiary, for a minimum of two years after
the termination of its term as the Program Supervisor; and
2.5.1.4 Accompany all of the information listed above in Paragraph
2.5.1.1 through Paragraph 2.5.1.3 with a certification in
accordance with Paragraph 34 of the Consent Decree for any
candidate deemed acceptable by the United States and California.
2.5.2 Selection of Program Supervisor. After receiving the list of candidates
from the Defendants, the United States, after consultation with California, shall select a
Program Supervisor from among the candidates, and notify the Defendants of such
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selection. If the United States does not select any of the candidates submitted by the
Defendants, the process under Paragraph 2.5.1 shall be repeated until the Program
Supervisor is selected.
2.5.3 The Program Supervisor shall review claims for payment of Retail
Replacement Value under this Appendix A-1 and shall review the claims administration
process to ensure that it is conducted in accord with this Appendix A-1, including
ensuring that:
2.5.3.1 Retail Replacement Value is calculated and paid in compliance
with this Appendix A-1;
2.5.3.2 Claims are processed in an efficient and consistent manner;
2.5.3.3 The calculations of approved payments to Eligible Owners
comply with the Claims Program; and
2.5.3.4 Determinations of eligibility are proper under the Claims
Program.
2.5.4 Within one month from the Effective Date and every three months
thereafter until the end of the Claims Program with respect to all 3.0 Liter Subject
Vehicles or May 31, 2020 (whichever is later), the Program Supervisor shall submit a
report to the Court, with copies to the EPA, CARB, CA AG, and Defendants, concerning
Defendants’ performance of its obligations under this Appendix A-1, including:
2.5.4.1 The progress of the Claims Program, including but not limited
to the participation rate in any Buyback or Lease Termination;
2.5.4.2 The length of time for Eligible Owners to receive any payment
of Retail Replacement Value;
2.5.4.3 Any complaints regarding efforts by any Eligible Owners or
Eligible Lessees to participate in any Buyback or Lease
Termination;
2.5.4.4 The Program Supervisor’s review of ineligible claims.
2.5.5 The Program Supervisor shall serve until May 31, 2020, unless ordered by
this Court to continue.
2.5.6 Defendants shall in a timely manner provide the Program Supervisor full
access to all documents and information necessary for the Program Supervisor to fulfill
the Program Supervisor’s duties pursuant to this Appendix A-1.
2.5.7 Defendants shall fully cooperate with any reasonable request of the
Program Supervisor and shall take no action to interfere with or impede the Program
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Supervisor’s ability to monitor Defendants’ compliance with the terms of this Consent
Decree and its Appendices.
2.5.8 The Program Supervisor shall provide the United States and California
accounting or other information related to compliance with the terms of this Appendix A-
1 within 10 business days of a request, unless a longer time is agreed to by a United
States or California representative in writing.
2.5.9 Defendants are responsible for all costs and fees relating to the Program
Supervisor. Defendants, the United States, and California may agree, or the Program
Supervisor may seek Court approval to employ, at Defendants’ expense, such
consultants, accountants, attorneys, and other representatives and assistants as are
reasonably necessary to carry out the Program Supervisor’s duties and responsibilities.
2.6 Claim Period. Defendants must hold open all Program Offers for at least two
years, as required by Paragraphs 4.3 and 7.3 of Appendix A, and as set forth in this Paragraph
2.6 of Appendix A-1.
2.6.1 Generation 1.x Vehicles. For all Generation 1.x 3.0 Liter Eligible
Vehicles, Defendants shall begin accepting and processing Buyback and Lease
Termination Claims no later than thirty (30) Days after the Effective Date. Defendants
shall continue to accept and process Claims for Buyback or Lease Termination through at
least March 31, 2019. All eligible Claims shall be fully processed and all Buybacks and
Lease Terminations for eligible Claims shall be completed no later than June 30, 2019.
2.6.2 Generation 2.x Vehicles. For any Test Group or combination of Test
Groups of Generation 2.x 3.0 Liter Eligible Vehicles for which a Buyback and Lease
Termination Program is triggered in accordance with the requirements of Section VII of
Appendix A, Defendants must hold open the Generation 2.x Buyback and Lease
Termination program for no less than two years. The last day to submit a valid Claim for
a Buyback or Lease Termination of a Generation 2.x 3.0 liter Eligible Vehicle shall be no
earlier than 90 days prior to the termination of the Buyback and Lease Termination
program with respect to the applicable Generation 2.x vehicles.
III. RELATION TO OTHER SETTLEMENTS
3.1 Individual Consumer Releases. Defendants are strictly prohibited by the terms
of this Consent Decree from obtaining any private party consumer release of liability solely for
any Buyback payments required by the terms of this Decree. Nothing in this Consent Decree
alters, affects, limits, authorizes, enlarges, or precludes Defendants' ability to obtain private party
releases of liability in exchange for additional payments not required under this Consent Decree,
to the extent permitted by law. If Defendants enter into and this Court approves a Parallel
Agreement that provides for a class-wide release of individual claims by all class members and
satisfies the terms of Paragraph 3.2 below, Defendants are not required by this Consent Decree to
offer a Buyback or Lease Termination to Eligible Owners or Lessees who opt out of the Class
Action Settlement.
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3.2 Parallel Agreements. By fulfilling buyback, lease termination, and claims
administration obligations of a future FTC Order, Class Action Settlement, or other order of the
Court (“Parallel Agreement”), Defendants may satisfy (1) all Buyback and Lease Termination
requirements of Sections IV and VII of Appendix A to this Consent Decree; and (2) all
requirements contained in the Calculation of Retail Replacement Value (Section I) and Program
Administration (Section II) Sections of this Appendix A-1, provided that the requirements in
Sub-Paragraphs 3.2.1 through 3.2.6 below are satisfied:
3.2.1 The Parallel Agreement(s) must offer Buyback to 100% of all Eligible
Owners of Generation 1.x 3.0 Liter Eligible Vehicles and Lease Termination to 100% of
all Eligible Lessees of Generation 1.x 3.0 Liter Eligible Vehicles.
3.2.2 The Parallel Agreement(s) must offer Buyback or Lease Termination to
100% of all Eligible Owners of affected Generation 2.x 3.0 Liter Eligible Vehicles and
Lease Termination to 100% of all Eligible Lessees of affected Generation 2.x 3.0 liter
Eligible Vehicles if, with respect to any Test Group or Groups of Generation 2.x 3.0 Liter
Eligible Vehicles, Defendants fail to timely submit, or withdraw and do not timely
resubmit, an application for an Emissions Modification Proposal intended to meet
Certified Exhaust Emissions Standards, or a Final Notice of Disapproval for a proposed
Emissions Compliant Recall is issued by EPA/CARB in accordance with Sub-Paragraph
5.1.2(ii) of Appendix B of this Decree.
3.2.3 All Buyback payments required by the Parallel Agreement(s) must be
equal to or in excess of Retail Replacement Value as calculated in Section I of this
Appendix A-1.
3.2.4 All Notices required by the Parallel Agreement(s) must comply with the
requirements of Section III of Appendix A (Notices) and Paragraph 3.3 of this Appendix
A-1.
3.2.5 The United States and California must send notice to Defendants that the
Parallel Agreement(s) satisfy (1) the Buyback and Lease Termination requirements of
Sections IV and VII of Appendix A to this Consent Decree; and (2) all requirements
contained in the Calculation of Retail Replacement Value (Section I) and Program
Administration (Section II) Sections of this Appendix A-1.
3.2.6 Such Parallel Agreement(s) must be filed in this action, In re Volkswagen
“Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation, MDL No.
2672 (N.D. Cal.) and lodged or filed with this Court no later than January 31, 2017. With
the agreement of all parties to this Consent Decree, this deadline may be extended for
good cause shown by the Defendants by order of the Court to a date not later than March
1, 2017.
3.2.7 If the United States and California send the notice referenced in Sub-
Paragraph 3.2.5 above, Defendants may satisfy all obligations in Sections IV and VII of
Appendix A and all obligations in Sections I and II of Appendix A-1 by fulfilling all
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obligations in the Parallel Agreement. To the extent that any obligations in Sections IV
and VII of Appendix A or Sections I and II of Appendix A-1 are inconsistent with the
requirements of a Parallel Agreement, the Parallel Agreement shall control, provided the
United States and California have issued the notice referenced in Sub-Paragraph 3.2.5 of
this Appendix A-1.
3.3 Class Action Notices. If the United States and California send the notice
referenced in Sub-Paragraph 3.2.5 above, Defendants may use the class action notification
process to satisfy notification requirements and deadline requirements in Section III of Appendix
A, provided that EPA/CARB must continue to approve all notices that require approval under
Section III of Appendix A.
3.4 Court Disapproval of Parallel Agreements. If for any reason the Court does
not enter or grant final approval of the Parallel Agreement(s), Defendants must continue to
comply with all requirements of this Consent Decree, including all requirements of Appendices
A and A-1. Defendants may not use satisfaction of any Parallel Agreement to fulfill any
obligations in this Consent Decree or its Appendices if (1) the Parallel Agreement is not entered
as a final judgment by the Court; or (2) execution or entry of the Parallel Agreement is delayed,
reversed, or vacated by an appellate court.
3.5 Stipulated Penalties. Nothing in Section III of this Appendix A-1 alters or
affects EPA/CARB’s ability to assess or collect any stipulated penalties under Section XII of
Appendix A.
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State State Tax Rate Avg. Local Tax Rate Combined Rate/Formula
Alabama 2.00%1.88%3.88%
Alaska None 1.78%1.78%
Arizona 5.60%2.65%8.25%
Arkansas 6.50%2.80% (on first $2,500)6.50% + $70
California 7.50%0.98%8.48%
Colorado 2.90%4.62%7.52%
Connecticut
6.35% (vehicles under
$50,000) or 7.75% (vehicles
over $50,000)
0.00%
6.35% (vehicles under
$50,000) or 7.75% (vehicles
over $50,000)
Delaware 4.25%0.00%4.25%
District of
Columbia
7.00% (vehicles 3,500 - 4,999
lbs.) or 8.00% (vehicles 5,000
lbs. or above)
0.00%
7.00% (vehicles 3,500 - 4,999
lbs.) or 8.00% (vehicles 5,000
lbs. or above)
Florida 6.00%0.66% (first $5,000)6.00% + $33.00
Georgia 7.00%0.00%7.00%
Hawaii 4.17% - 4.71%0.00%4.44%
Idaho 6.00%0.00%6.00%
Illinois 6.25%2.39%8.64%
Indiana 7.00%0.00%7.00%
Iowa 5.00%0.00%5.00%
Kansas 6.50%2.10%8.60%
Kentucky 6.00%0.00%6.00%
Louisana 5.00%5.00%10.00%
Maine 5.50%0.00%5.50%
Maryland 6.00%0.00%6.00%
Massachusetts 6.25%0.00%6.25%
Michigan 6.00%0.00%6.00%
Minnesota 6.50%0.00%6.50%
Mississippi 5.00%0.00%5.00%
Missouri 4.23%3.64%7.86%
Montana 0.00%0.00%0.00%
Nebraska 5.50%1.37%6.87%
Nevada 6.85%1.13%7.98%
New Hampshire 0.00%0.00%0.00%
New Jersey 7.00%0.00%7.00%
New Mexico 3.00%0.00%3.00%
New York 4.00%4.49%8.49%
North Carolina 3.00%0.00%3.00%
North Dakota 5.00%0.00%5.00%
Ohio 5.75%1.39%7.14%
Oklahoma
3.25% (new vehicles) or $20
on first $1,500 +3.25% on
balance (used vehicles)
0.00%3.25% * (vehicle value -
$1,500) + $20
Oregon 0.00%0.00%0.00%
9 APPENDIX A-1 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix A-1 Table 1
State and Local Taxes Calculation
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 100 of 164
Pennsylvania 6.00%1.50%7.50%
Rhode Island 7.00%0.00%7.00%
South Carolina 5.00% (capped at $300)0.00%5.00% (capped at $300)
South Dakota 4.00%0.00%4.00%
Tennessee 7.00%2.75% (on first $3,200)7.00% + $88
Texas 6.25%0.00%6.25%
Utah 5.95%0.74%6.69%
Vermont 6.00%0.17%6.17%
Virginia 4.15%0.00%4.15%
Washington 6.80%2.39%9.19%
West Virginia 5.00%0.00%5.00%
Wisconsin 5.00%0.41%5.41%
Wyoming 4.00%1.42%5.42%
10 APPENDIX A-1 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix A-1 Table 1
State and Local Taxes Calculation
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APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix B
Vehicle Recall and Emissions Modification Program
For 3.0 Liter Subject Vehicles
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1 APPENDIX B TO SECOND
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MDL No. 2672 CRB (JSC)
APPENDIX B
VEHICLE RECALL AND EMISSIONS MODIFICATION PROGRAM
FOR 3.0 LITER SUBJECT VEHICLES
I. PURPOSE
This Appendix B establishes how Defendants shall submit Proposed Emissions
Modifications, and how the United States Environmental Protection Agency (“EPA”) and the
California Air Resources Board (“CARB”) (collectively, “EPA and CARB” or “EPA/CARB”)
will approve or disapprove any such proposal, should Defendants choose, at their election, to
submit a Proposed Emissions Modification. Defendants must comply with the requirements of
this Appendix B. No Emissions Modification may be performed by, or on behalf of, Defendants
unless and until EPA/CARB approve the applicable Proposed Emissions Modification.
Following approval, any Emissions Modification performed by, or on behalf of, Defendants must
conform to the applicable Approved Emissions Modification and the requirements set forth
herein.
If Defendants submit a Proposed Emissions Modification according to the terms of this
Appendix B, and EPA/CARB determine the proposal satisfies the requirements set forth herein,
then EPA/CARB will approve that Proposed Emissions Modification. EPA/CARB will issue
decisions, including decisions concerning the approval or disapproval of Proposed Emissions
Modifications, in accordance with the definitions and decision-making authorities set forth in
Paragraphs 21-23 of the Consent Decree. EPA/CARB will review any proposal according to this
Appendix B, rather than according to the regulatory processes for reviewing applications for
Certificates of Conformity, Executive Orders, or administrative recalls; provided, however,
except as otherwise expressly stated herein, the applicable regulatory calculation methods, test
procedures, protocols, processes, or procedures shall apply unless an alternative approach is
approved by the agencies.
II. DEFINITIONS
2.1 Terms used in this Appendix B shall have the meanings set forth below. Terms
that are not defined below but are defined in Section III (Definitions) of the Consent Decree shall
have the meanings set forth therein.
2.2 “20º F FTP” means the FTP conducted at 20º Fahrenheit, as specified in 40
C.F.R. Part 1066, Subpart H.
2.3 “50º F FTP” means the FTP conducted at 50º Fahrenheit, as specified in Cal.
Code Regs. tit. 13, § 1961 and the incorporated test procedures.
2.4 “A-to-B Emissions Demonstration Vehicle” means the vehicle(s) identified for
use in A-to-B emissions demonstration purposes in Appendix B-3 to this Consent Decree.
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
2.5 “A-to-B Fuel Economy Demonstration Vehicle” means the vehicle(s) identified
for use in A-to-B fuel economy demonstration purposes in Appendix B-3 to this Consent Decree.
2.6 “Adaptive Dosing to Prevent Deposits” (online dosing) means an AECD included
in the Master Series Calibration that modifies DEF dosing such that NH3 storage mode is no
longer active. In the Master Series Calibration, Adaptive Dosing to Prevent Deposits does not
activate and online dosing is inhibited during US06 and HWY emissions tests.
2.7 “Approved Emissions Modification” means an Emissions Modification submitted
by Defendants and approved by EPA/CARB.
2.8 “Auxiliary Emission Control Device” or “AECD” has the meaning set forth in 40
C.F.R. § 86.1803-01.
2.9 “Calibration” means a specific parameterization of a vehicle computers’ software,
such as the ECU software, that determines how various processes in engine and exhaust
aftertreatment are controlled under many different operating conditions, or the TCU software
that determines when the transmission will shift gears and operate various actuators in the
transmission. A common example of a process is fuel injection (timing and quantity) under
different engine loads and ambient conditions.
2.10 “Combined Uphill/Downhill and Highway Route” means the driving route shown
and described in Appendix B-4 to this Consent Decree.
2.11 “Critical OBD Demonstration” means the minimum set of OBD emission
demonstration tests, pursuant to Cal. Code Regs. tit. 13, § 1968.2(h) (2013), that must be
completed and included in the Emissions Modification Proposal, as follows: SCR Catalyst
efficiency, SCR Dosing delivery performance underdosing, all injectors Fuel System Quantity
and Timing minimum, all injectors Fuel System Quantity and Timing maximum, EGR Low
Flow, EGR High Flow, EGR Slow Response, EGR cooling, Boost system over-boost, Boost
system under-boost, Charge Air Under Cooling, DOC efficiency, Too Frequent Regeneration,
NOx Sensors Upstream, and PM Filter efficiency. Additionally, for the Audi Q7 Generation 2.1
vehicle, Defendants must complete and submit with the applicable Emissions Modification
Proposal a Critical OBD Demonstration of the DEF dosing delivery performance monitor.
2.12 “Customized SRC” means the mileage accumulation cycle used to age the 3.0
Liter Subject Vehicles for purposes of durability demonstrations and OBD demonstrations to
achieve an acceleration factor of up to 1.8 for mileage accumulation to the equivalent of Full
Useful Life, provided that if an acceleration factor of less than 1.8 is used for this purpose, that
factor value must replace the 1.8 factor value for all purposes under this Appendix B, where (a)
the TCM Step 3 mileage share is raised to at least 20 percent on average by artificially lifting the
exit/entry modeled SCR-temperature during mileage accumulation; (b) the Mileage Safety Out
Parameter is set to an applicable value, which is calculated by dividing the distance between two
regenerations determined during the regulated SRC procedure by the acceleration factor; (c) the
emission testing intervals will equate to equivalent mileage based on the acceleration factor up to
1.8, meaning 30,000 equivalent miles will result in a delta odometer mileage of 16,667 miles;
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3 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
and (d) to adjust for accelerated aging, the Defendants must modify the mileage based
aftertreatment device aging factors by dividing the existing distance based axis points by up to
1.8. Except as otherwise set forth in subparagraph 4.3.2, the Customized SRC shall be run on the
DDVs for each Generation, and on any other vehicles for which the Customized SRC is
applicable (as set forth in Appendix B-3), starting at the agreed mileage parameters set forth in
subparagraph 4.3.2 for each test vehicle.
2.13 “Cylinder Pressure Sensor” means a sensor located in the cylinder head which
directly or indirectly measures pressure or related characteristics inside the cylinder.
2.14 “Dealers” means Volkswagen, Audi, and Porsche authorized dealers and
Volkswagen, Audi, and Porsche authorized service facilities.
2.15 “DEF System” means the combination of vehicle components used to store, filter,
measure the level and quality of, thaw, and inject the DEF into the exhaust.
2.16 “Defeat Device” has the meaning provided under 42 U.S.C. § 7522(a)(3)(B) and
40 C.F.R. § 86.1803-01.
2.17 “Deterioration Factor” or “DF” means the number, determined pursuant to 40
C.F.R. § 86.1823-08, that represents the change in emissions performance during a vehicle’s Full
Useful Life. The DF is applied to emission results from the required test cycles, as provided in
40 C.F.R. § 86.1841-01 except as provided herein. DFs are used to estimate increases in
emissions caused by deterioration of the emission control system as a vehicle ages over its Full
Useful Life.
2.18 “Diesel Exhaust Fluid” or “DEF” means a liquid reducing agent used in
conjunction with selective catalytic reduction to reduce NOX emissions. DEF is generally
understood to be an aqueous solution of urea conforming to the specification of ISO 22241. DEF
is used in each Generation of the 3.0 Liter Subject Vehicles and is sometimes referred to by the
trademarked name, “AdBlue.”
2.19 “Diesel Oxidation Catalyst” or “DOC” means part of the emission control system
that promotes chemical oxidation of CO, NO, and HC, as well as the SOF portion of diesel
particulates. For 3.0 Liter Subject Vehicles that are passenger vehicles, the DOC is housed in the
same housing part as the DPF and SCR components. All 3.0 Liter Subject Vehicles that are sport
utility vehicles have separate housings for the DOC and the DPF.
2.20 “Diesel Particulate Filter” or “DPF” means part of the emissions control system
designed to capture particle emissions through a combination of filtration mechanisms, such as
diffusional deposition, inertial deposition, or flow-line interception. The process of regeneration
removes collected particulates from the DPF. During active regeneration, the emissions control
system is modulated to increase exhaust temperature to promote combustion of the particulate
matter by oxygen. Additionally, particulate matter is passively and continuously regenerated by
reaction with NO2 at lower temperatures (the Continuously Regenerating Trap or CRT effect).
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4 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
2.21 “Drivability” means the smooth delivery of power, as demanded by the driver or
operator. Typical elements of Drivability degradation are rough idling, misfiring, surging,
increased hesitation, or insufficient power.
2.22 “Durability Demonstration Vehicle,” “DDV,” or “Official Durability Vehicle”
means a vehicle with the final emission Calibration that is run on the Customized SRC to the
equivalent of Full Useful Life. For Generation 1.2, Generation 2.1, and Generation 2.2 SUV,
running the Customized SRC to the equivalent of Full Useful Life requires execution of at least
143 DPF regenerations. For Generation 2 PC, running the Customized SRC to the equivalent of
Full Useful Life requires execution of at least 190 DPF regenerations. For Generation 1.1,
Defendants must determine the number of regenerations required according to Paragraph 2.12 of
this Appendix B. In accordance with the mileage intervals set forth in subparagraph 4.3.2 of this
Appendix B, Defendants shall conduct emissions testing in the FTP75 on the Durability
Demonstration Vehicle, and shall calculate the DF based on such periodic emissions tests. After
completion of mileage accumulation to the equivalent of Full Useful Life and all applicable
emissions tests, the vehicle must be reflashed with the final engine Calibration, which includes
the final emissions Calibration (used during mileage accumulation to the equivalent of Full
Useful Life) and the final OBD Calibration. To adjust such final engine Calibration for
accelerated aging, Defendants must set the mileage based aftertreatment device aging factors by
dividing the existing distance based axis points by 1.8. The reflashed vehicle is used for Full
Useful Life emissions compliance and Final OBD Demonstration testing that shall be submitted
according to subparagraph 3.1.11 of this Appendix B. The Durability Demonstration Vehicles
for each Generation are set forth in Appendix B-3 to this Appendix B.
2.23 “Engine Control Unit” or “ECU” means the computer, including associated
software, that controls various engine functions, including emission control system functions,
and/or other functions that may impact vehicle emissions or OBD compliance by processing
electrical signals from sensors and/or electronic signals from other electronic control modules on
the vehicle (e.g., TCU, SCR control unit, stability control units, brake control units, the body
control module, and the instrument cluster).
2.24 “Exhaust Gas Recirculation” or “EGR” means a device that directs a portion of
the exhaust gas into the intake air stream for the purpose of controlling emissions.
2.25 “Emission Control System” means a unique group of emission control devices,
auxiliary emission control devices, engine modifications and strategies, and other elements of
design designated by EPA/CARB and used to control exhaust emissions of a vehicle.
2.26 “Emission Control System Data Parameters” means the data parameters that
Defendants must record while conducting the Required Emissions Test Procedures, including the
preconditioning cycles, and such other tests as set forth in this Appendix B. The Emission
Control System Data Parameters applicable to each Generation are subject to prior-authorization
of EPA/CARB. Prior to conducting the required test procedures for each Generation, Defendants
must submit for EPA/CARB review and approval, the proposed emission control system data
parameters to be recorded during test procedures for the applicable Generation.
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5 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
2.27 “Emissions Increasing Auxiliary Emissions Control Device” or “EI-AECD”
means any AECD, as defined in Cal. Code. Regs. tit. 13, § 1968.2(c), that reduces the
effectiveness of the emission control system under conditions which may reasonably be expected
to be encountered in normal vehicle operation and use, provided that the need for such AECD is
justified by the protection it provides against vehicle damage or accident. EI-AECDs do not
include AECDs that do not sense, measure, or calculate any parameter or command or trigger
any action, algorithm, or alternate strategy; or AECDs that are activated solely due to any of the
following conditions: (1) operation of the vehicle above 8,000 feet in elevation; (2) ambient
temperature; (3) when the engine is warming up and is not reactivated once the engine has
warmed up in the same driving cycle; (4) failure detection (storage of a fault code) by the OBD
system; (5) execution of an OBD monitor; or (6) execution of an infrequent regeneration event.
2.28 “Emissions Modification” means the alterations to 3.0 Liter Subject Vehicles
including all software recalibrations, and the replacement, repair, installation, or upgrading of
parts related to the Emission Control System, that are designed to reduce emissions, remove all
Defeat Devices and bring the vehicles into compliance with the applicable emissions standards
or limits, and the other requirements specified in this Appendix B.
2.29 “Emissions Modification Database” means a searchable database that Defendants
make available online, by which users, including Eligible Owners, Eligible Lessees, and
potential purchasers, may conduct a free-of-charge search by vehicle VIN to determine whether
the Emissions Modification is available for, or has been applied to, a specific vehicle.
2.30 “Emissions Modification Proposal” means the required materials Defendants
provide in a Submission or multiple Submissions for EPA/CARB review and approval or
disapproval of any Proposed Emissions Modification, if Defendants elect to submit such a
proposal.
2.31 “Engineering Durability Data” means data which is used to estimate the Official
Durability Data. It may be based on a preliminary design of the Emission Modification. It may
also be determined from an extrapolation of incomplete Official Durability Data or by simulating
the mileage accumulation required under 40 C.F.R. § 86.1823-08.
2.32 “Engineering Durability Vehicle” means a vehicle used for testing to obtain
Engineering Durability Data.
2.33 “EPA/CARB” means EPA and CARB when the agencies evaluate Defendants’
Submissions and issue decisions, including decisions concerning the approval or disapproval of
Proposed Emissions Modifications, in accordance with the definitions and decision-making
authorities set forth in Paragraphs 21-23 of the Consent Decree.
2.34 “Federal Test Procedure” or “FTP75” means the driving schedule in 40 C.F.R.
Part 86, Appendix I, Section (a) (EPA Urban Dynamometer Driving Schedule for Light-Duty
Vehicles and Light-Duty Trucks).
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6 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
2.35 “FTP-72” means the driving schedule defined in 40 C.F.R. Part 86, Appendix
I(a)(3).
2.36 “Final OBD Demonstration” means all OBD emission demonstration testing
required under Cal. Code. Regs. tit. 13, § 1968.2(h) (2013), provided, however, if Defendants
assert that only a functional test is required because no failure or deterioration of the specific
tested system could result in an engine’s emissions exceeding the emission malfunction criteria,
Defendants must still complete the OBD demonstration and submit with the proposal all
emission and fault detection data from vehicles equipped with the Proposed Emissions
Modification used to determine that only a functional test of the system(s) is required.
2.37 “FTP@1620m” means FTP testing at high-altitude conditions, i.e., a test altitude
of 1,620 meters (5,315 feet), plus or minus 100 meters (328 feet), or equivalent observed
barometric test conditions of 83.3±1 kilopascals.
2.38 “Full Useful Life” or “FUL” means the regulatory period in years or miles during
which vehicles must meet the applicable emissions standards or limitations specified in this
Appendix B. Full Useful Life is 10 years or 120,000 miles, whichever occurs first, for Model
Year 2009-2016 3.0 Liter Subject Vehicles.
2.39 “Full Useful Life Emissions Demonstration Vehicle” means the vehicle(s)
identified for demonstrating emissions compliance with the Full Useful Life Standards, set forth
in Appendix B-3. Such standards are demonstrated with the inclusions of IRAF.
2.40 “Generation” means the different versions of emission control technology
installed in various configurations of 3.0 Liter Subject Vehicles.
2.41 “Generation 1.1” or “GEN 1.1” means the following 3.0 Liter Subject Vehicles:
Model Year 2009-2010 Audi Q7 and VW Touareg, within the Test Groups specified in
Paragraph 2.9 of Appendix A to this Consent Decree.
2.42 “Generation 1.2” or “GEN 1.2” means the following 3.0 Liter Subject Vehicles:
Model Year 2011-2012 Audi Q7 and VW Touareg, within the Test Groups specified in
Paragraph 2.9 of Appendix A to this Consent Decree.
2.43 “Generation 2.1” or “GEN 2.1” means the following 3.0 Liter Subject Vehicles:
Model Year 2013-2015 Audi Q7, and Model Year 2013-2014 VW Touareg and Porsche
Cayenne, within the Test Groups specified in Paragraph 2.9 of Appendix A to this Consent
Decree.
2.44 “Generation 2.2 SUV” or “GEN 2.2 SUV” means the following 3.0 Liter Subject
Vehicles: Model Year 2015-2016 VW Touareg and Porsche Cayenne, within the Test Groups
specified in Paragraph 2.9 of Appendix A to this Consent Decree.
2.45 “Generation 2 Passenger Cars” or “GEN 2 PCs” means the following 3.0 Liter
Subject Vehicles: Model Year 2014-2016 Audi A6, A7, A8, A8L, and Q5, within the Test
Groups specified in Paragraph 2.9 of Appendix A to this Consent Decree.
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
2.46 “Generation 2 SUV” or “GEN 2 SUV” means Generation 2.1 and Generation 2.2
SUV, collectively.
2.47 “Highway Fuel Economy Test,” “HWFET,” or “HWY FE” mean the test cycle
that represents highway driving as described in 40 C.F.R. Part 600, Appendix I.
2.48 “Hydrocarbon Poisoning SCR Catalyst Strategy” means an AECD in the Master
Series Calibration that models the amount of hydrocarbons stored on the SCR catalyst and that
diminishes the ability to store NH3 on the SCR catalyst so that the SCR efficiency is reduced,
and therefore DEF dosing amount will be reduced within ammonia storage mode. The adjusted
SCR efficiency was not employed during emissions testing. If the amount of hydrocarbons stored
on the SCR catalyst exceeds a calibrated value, the Adaptive Dosing to Prevent Deposits AECD
will activate.
2.49 “Include” and “Including,” as used in this Appendix B, are not limiting terms.
2.50 “Infrequent Regeneration Adjustment Factor” or “IRAF” means the adjustment
factor for each pollutant used to account for increased emissions caused by periodic regeneration
of certain control devices, such as DPFs, performed by burning particulates that have
accumulated in the control device. The increased emissions caused by such regeneration are
accounted for by adjustment factors, or IRAFs, applicable to the pollutants NMOG, NOx, CO,
and PM. Defendants shall calculate the IRAF using the method specified in 40 C.F.R. § 86.004-
28(i) based on test vehicles at a minimum of 75% of Full Useful Life. For purposes of the IRAF
calculation for GEN 1.1, Defendants shall use the method specified in 40 C.F.R. § 86.004-28(i),
with the regulated SRC for the regeneration interval determination. For purposes of the IRAF
calculation for GEN 2 PC, the regeneration frequency shall be 636 miles between regenerations.
For purposes of the IRAF calculation for GEN 1.2 and GEN 2 SUV, the regeneration frequency
shall be 840 miles between regenerations.
2.51 “Lambda Sensor” means a sensor located in a vehicle’s exhaust system that
measures oxygen or a related characteristic.
2.52 “Master Series Calibration” means the Calibration installed on Subject 3.0 Liter
Vehicles when originally certified and introduced into commerce that controls Emission Control
Systems in the vehicle. The Master Series Calibration includes the Temperature Conditioning
Mode, Adaptive Dosing to Prevent Deposits, Hydrocarbon Poisoning SCR Catalyst Strategy, and
the Transmission Warmup Mode.
2.53 “Maximum Emissions Modification Limits” means the emissions levels specified
in Appendix B-1 to this Appendix B that the Modified Vehicles may not exceed.
2.54 “Mileage Safety Out Parameter” means the mileage value that is set within a
Calibration which, when reached, is treated as the equivalent of a full DPF and triggers a DPF
regeneration.
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
2.55 “Modified Vehicle” means a 3.0 Liter Subject Vehicle that Defendants, or an
entity acting on behalf of Defendants, have modified in accordance with an Approved Emissions
Modification.
2.56 “Noise Vibration and Harshness” means a measure of the noise level heard during
driving, the vibrations felt during driving, and the harshness of the ride of the vehicle.
2.57 “Non-Methane Organic Gases” or “NMOG” means the sum of oxygenated and
non-oxygenated hydrocarbons contained in a gas sample as measured using the procedures
described in 40 C.F.R. § 1066.635.
2.58 “NOx” means oxides of nitrogen, i.e., the sum of the nitric oxide and nitrogen
dioxide contained in a gas sample as if the nitric oxide were in the form of nitrogen dioxide.
2.59 “NOx Sensor” means a sensor located in a vehicle’s exhaust system which
directly or indirectly measures NOx or related characteristics.
2.60 “Official Durability Data” means emissions data obtained by periodic testing
during the accumulation of the equivalent of at least 100% of Full Useful Life mileage
accumulated using the Customized SRC on Durability Demonstration Vehicles, as described in
40 C.F.R. § 1823-08, and as required under this Appendix B. Official Durability Data is used to
determine DFs.
2.61 “OBD Demonstration Vehicle” means the vehicle(s) identified for each
Generation for OBD demonstration purposes in Appendix B-3 to this Consent Decree.
2.62 “Particulate Matter” or “PM” means particulates formed during the diesel
combustion process and measured by the procedures specified in 40 C.F.R. Part 86, Subpart B.
2.63 “Particulate Matter Sensor” or “PM Sensor” means a sensor located in a vehicle’s
exhaust system which directly or indirectly measures particulate matter or related characteristics.
2.64 “Portable Emissions Measurement System” or “PEMS” means an emissions
measurement system that complies with 40 C.F.R. Part 1065 and that measures emissions while
a vehicle is driven on the road.
2.65 “Preconditioning” means taking steps consistent with the regulations to ensure
that the exhaust system is stabilized. Preconditioning may include an initial one hour minimum
soak and up to three driving cycles of the UDDS, as specified in 40 C.F.R. § 86.132-96(e)(2).
Subject to prior authorization by EPA/CARB and provided that Defendants demonstrate a need
for any additional preconditioning measure(s) specified in § 86.132-96(e)(2), EPA/CARB may
allow such preconditioning, pursuant to 40 C.F.R. § 86.132-96(d).
2.66 “Proposed Emissions Modification” means the alterations to 3.0 Liter Subject
Vehicles, including all software recalibrations, and, if applicable, the replacement, repair,
installation, or upgrading of parts related to the Emission Control System, that Defendants may
propose for EPA/CARB approval, and that are designed to reduce emissions, remove all Defeat
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Devices, and bring the vehicles into compliance with the requirements specified in this Appendix
B.
2.67 “Required Emissions Test Procedures” shall have the meaning specified in
subparagraph 4.3.2(i) of this Appendix B.
2.68 “SC03” means the test cycle, described in 40 C.F.R. § 86.160-00 and listed in 40
C.F.R. Part 86, Appendix I, paragraph (h), which is designed to represent driving under urban
conditions at elevated temperatures and high solar loading with the air conditioner on.
2.69 “Selective Catalytic Reduction” or “SCR” means an active emissions control
technology system that injects a liquid-reductant agent into the exhaust stream onto a special
catalyst. The reductant source is Diesel Exhaust Fluid (DEF).
2.70 “SCR Inducements” or “Inducements” means the limitations imposed on vehicle
operation that occur when a vehicle runs out of DEF, has poor quality DEF, or when tampering
occurs to the SCR system. Inducements might include limitations on vehicle speed or rendering
inoperable the restart function of the vehicle.
2.71 “SCR System” means the combination of components necessary for NOx to be
reduced by selective catalytic reduction. These components include the DEF tank, DEF injection
system, SCR catalyst(s), and associated sensors and controllers.
2.72 “Standard Road Cycle” or “SRC” means the mileage accumulation cycle
described in 40 C.F.R. Part 86, Appendix V. To accumulate miles on the SRC, the vehicle may
be run on a track or on a mileage accumulation dynamometer.
2.73 “Sea Level” means common altitudes at which Defendants conduct certain tests
(0-500 meters height).
2.74 “SFTP Composite” means emissions result weighted over three test cycles
according to the following formula: SFTP Composite = 0.35 × (FTP) + 0.28 × (US06) + 0.37 ×
(SC03).
2.75 “Supplemental FTP” or “SFTP” mean the additional test procedures designed to
measure emissions during aggressive and microtransient driving, as described in 40 C.F.R. §
86.159-00 over the US06 cycle, and also the test procedure designed to measure urban driving
emissions while the vehicle’s air conditioning system is operating, as described in 40 C.F.R. §
86.160-00 over the SC03 cycle.
2.76 “Temperature Conditioning Mode” or “TCM” means the AECD that controls
engine out emissions and exhaust temperatures when the SCR system is below specified
temperatures, consisting of three or more emission control strategy steps. As originally calibrated
in the Master Series Calibration, the TCM operated the strategy steps during the regulatory test
cycles in a different manner than when driving on the road.
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2.77 “Test Group” means the basic classification unit within a durability group used
for the purpose of demonstrating compliance with exhaust emission standards in accordance with
40 C.F.R. § 86.1841-01.
2.78 “Transmission Control Unit” or “TCU” means a computer module that regulates
or impacts shifting and clutch functions of a vehicle’s automatic transmission (which may impact
fuel economy and emissions control) by processing electrical signals from the vehicle’s ECU,
other electronic control units (e.g., stability control units, brake control units) and/or sensors,
potentially including the steering wheel position sensor, accelerometers, the brake pedal position
sensor, the transmission fluid temperature sensor, the vehicle speed sensor, and the throttle
position sensor.
2.79 “Transmission Warmup Mode” or “TWM” means a transmission control strategy
designed to change transmission control during warm up to optimize emissions which may
impact fuel economy (e.g., altered shift maps that achieve higher engine speed by preventing the
gearbox from selecting the next gear, resulting in faster engine warm-up and decreased engine
load which lowers raw NOx emissions).
2.80 “Urban/Downtown Los Angeles Route” means the driving route shown and
described in Appendix B-4 to this Consent Decree.
2.81 “US06” means the driving schedule described in 40 C.F.R. § 86.159-08 and listed
in 40 C.F.R. 86, Appendix I, section (g), as amended July 13, 2005, entitled, “EPA US06
Driving Schedule for Light-Duty Vehicles and Light-Duty Trucks” (e.g., hard acceleration, more
power requirement, high speed, high load).
III. EMISSIONS MODIFICATION CRITERIA
3.1 Each Proposed Emissions Modification for any 3.0 Liter Subject Vehicle
must meet the following criteria.
3.1.1 Required Emissions Performance.
i. For Generations 1.1, Modified Vehicles must comply with the emissions
standards of Tier 2, Bin 7, as set forth in 40 C.F.R. §§ 86.1811-04(c)(6),
(f) and (j) (hereafter “Tier 2, Bin 7”), with the exception of PM, which
must be 0.01 g/mile.
ii. For Generation 1.2, Modified Vehicles must comply with the emissions
standards of Tier 2, Bin 6, as set forth in 40 C.F.R. §§ 86.1811-04(c)(6),
(f) and (j) (hereafter “Tier 2, Bin 6”).
iii. Defendants must offer a Buyback for each Eligible 3.0 Liter Generation
1.1 and Generation 1.2 Vehicle. Eligible Owners and Eligible Lessees may
elect such Buyback as an alternative to an Approved Emissions
Modification or in the event a Proposed Emissions Modification is not
available, as further specified in Appendix A to the Consent Decree.
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iv. For Generation 2.1, Generation 2.2 SUV and Generation 2 PC, Modified
Vehicles must comply with the emissions standards of Tier 2, Bin 5, as set
forth in 40 C.F.R. §§ 86.1811-04(c)(6), (f), and (j) (hereafter “Tier 2, Bin
5”), and LEV 2/ULEV, as set forth in Cal. Code Regs. tit. 13, § 1961
(hereafter “LEV2/ULEV”). In the event EPA/CARB determine that
Defendants have failed to demonstrate in the applicable proposal that a
Proposed Emissions Modification for Generation 2.1, Generation 2.2
SUV, or Generation 2 PC will result in Modified Vehicles that comply
with Tier 2, Bin 5 and LEV2/ULEV or meet the other requirements for
approval pursuant to Section V of this Appendix B, then, as further
specified in Appendix A to the Consent Decree, Defendants must offer a
Buyback for each Eligible 3.0 Liter Vehicle within the relevant Test
Group. For any Emissions Modification Proposal that fails to demonstrate
that Modified Vehicles comply with Tier 2, Bin 5 and LEV2/ULEV, the
Modified Vehicles must comply with the applicable Maximum Emissions
Modification Limits of this Appendix B.
v. For each Generation, Defendants must demonstrate that Modified
Vehicles comply with the applicable emissions standard or limitations by
submitting the applicable Proposed Emissions Modification, including all
results from the Required Emissions Test Procedures, and including all
applicable data generated during any preconditioning cycles. Defendants
must also submit all data from the Emission Control System Data
Parameters recorded during the Required Emissions Test Procedures, and
during any preconditioning cycles. Modified Vehicles must have the same
Calibration as the test vehicles used to make this demonstration. For all
Generations, Modified Vehicles must operate with the same transmission
performance (including warm up) on the road and the dynamometer.
Defendants must demonstrate that acceleration sensor malfunctions and
any other sensors that are used directly or indirectly as part of the
transmission warm up strategy will either (1) be monitored by the OBD
system as required by Cal. Code. Regs. tit. 13, § 1968.2 or (2) do not
affect the transmission warm up strategy and control strategies outside of
transmission warm up conditions, either directly or indirectly, when the
sensor is malfunctioning.
vi. Preconditioning cycles are subject to prior authorization by EPA/CARB.
At least thirty (30) Days prior to running the Required Emissions Test
Procedures, Defendants must submit for EPA/CARB review and approval
a description of any proposed preconditioning cycles. Notwithstanding the
approval by EPA/CARB of any preconditioning cycle, EPA/CARB may
conduct emissions tests, and Defendants’ vehicles are subject to applicable
emissions limits, without such preconditioning measures. For purposes of
this Appendix B, EPA/CARB have approved the following additional
preconditioning measures: (1) an on-road regeneration if the DPF soot
load is greater than 22 grams for SUVs, or greater than 19 grams for
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Passenger Cars; and (2) for high altitude testing only, up to three FTP-72
test cycles separated by one hour soak times.
vii. For all emissions testing, Defendants must ensure that aging factors that
adjust for aging by mechanisms other than mileage (e.g., temperature
based aging) are representative of the equivalent mileage for which the
vehicle is being tested.
3.1.2 Quantifiable Reduction in NOx. For any Proposed Emissions Modification
that does not result in compliance with Tier 2, Bin 5 and LEV 2/ULEV, Defendants must
demonstrate that the vehicles meet the Maximum Emissions Modification Limits and that
the Proposed Emissions Modification results in a quantifiable reduction in NOx
emissions over the Required Emissions Test Procedures, based on the results of the
Required Emissions Test Procedures, and in A-to-B comparisons run on the applicable
A-to-B Emissions Demonstration Vehicle for each of the Required Emissions Test
Procedures that compare “Condition A” vehicles with “Condition B” vehicles as follows:
Condition A vehicles are test vehicles with the Master Series Calibration installed and
purposefully modified to represent on road emissions. At a minimum, this includes
executing the procedure submitted by Defendants to EPA/CARB on November 28, 2016,
or an alternative proposal approved by EPA and CARB. The Emission Control System
Data Parameters must be recorded during the A-to-B comparison tests required under this
subparagraph. Defendants must submit with each applicable Emissions Modification, a
detailed description of the procedure that was executed when conducting the Condition A
portion of these tests, including the Emission Control System Data Parameters, and,
within ten (10) Days of EPA/CARB’s request, provide any software and other devices
not within EPA/CARB’s reasonable possession, so that EPA/CARB are able to replicate
Condition A. Condition B vehicles are the same test vehicles with the applicable
Proposed Emissions Modification installed.
3.1.3 Emissions Durability Requirement. Modified Vehicles in each Generation
must comply with the applicable emissions standard or limitation for such Test Group
until the vehicle accumulates 120,000 miles. Defendants must demonstrate compliance
with such durability requirement by submitting in-use durability test results in accordance
with Section VI of this Appendix B (In-use Compliance Assurance for Modified
Vehicles).
3.1.4 AECD Disclosure Requirement and Defeat Device, Unapproved AECD,
and Previously Noncompliant Calibration Prohibition. Defendants must fully disclose all
previously undisclosed AECDs. Defendants also must, as applicable, remove, or modify
to make compliant, all Defeat Devices, unapproved AECDs, and previously
noncompliant Calibrations, from each and every electronic control module on each and
every Modified Vehicle. The requirements of this subparagraph 3.1.4 apply to, at least,
but are not limited to the following functions, whether or not they constitute an AECD:
the Temperature Conditioning Mode, Transmission Warmup Mode, Adaptive Dosing to
Prevent Deposits, and the Hydrocarbon Poisoning SCR Catalyst Calibrations. Defendants
must also provide evidence, as described in subparagraphs 4.3.6, 4.3.14, and 4.3.16, and
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as may be additionally requested by EPA/CARB, to EPA and CARB that demonstrates
that no electronic control module on the Modified Vehicles contains a Defeat Device or
undisclosed AECD, and the Modified Vehicles do not otherwise have Defeat Devices or
undisclosed AECDs.
3.1.5 General OBD Requirements. Modified Vehicles must comply with the
OBD requirements, including the regulatory protocol, process, and test requirements, set
forth in Cal. Code Regs. tit. 13, § 1968.2 (2013), except for any applicable permitted
OBD noncompliances approved by EPA/CARB in accordance with this Appendix B, and
except that (1) allowances for permitted OBD noncompliances set forth in this Appendix
B shall apply instead of the deficiency provisions for OBD noncompliances in Cal. Code
Regs. tit 13, § 1968.2(k) (2013); (2) test vehicle aging for monitoring system
demonstration testing shall be conducted based on the provisions set forth in this
Appendix B instead of Cal. Code Regs. tit. 13, § 1968.2(h)(2.3) (2013); and (3) the
required demonstration tests shall be conducted based on this Appendix B instead of Cal.
Code Regs. tit. 13, § 1968.2(h)(4) (2013). Other than as set forth in this Appendix B, the
requirements under Cal. Code Regs. tit. 13, § 1968.2 related to OBD requirements for the
corresponding model years shall apply to the respective Generations.
3.1.6 Permissible OBD Noncompliances. The permissible noncompliances
applicable to each Generation are identified in Appendix B-2 and further described in the
list submitted by Defendants to EPA/CARB on November 28, 2016 (together, the
“Permissible OBD Noncompliances List”). In any Emissions Modification Proposal,
Defendants may propose for EPA/CARB approval permitted OBD noncompliances in
accordance with this Appendix B. Except as specified herein, each proposed permitted
noncompliance must be drawn from the noncompliances specified in the Permissible
OBD Noncompliances List applicable to each Generation, up to the total number allowed
under subparagraph 3.1.8. If Defendants propose to use fewer than the total number of
allowed noncompliances specified herein, Defendants may propose for EPA/CARB
approval additional noncompliances within the limitations specified below (“Alternate
Noncompliances”).
3.1.7 Alternate OBD Noncompliances. If Defendants reach the maximum
number of permitted noncompliances with noncompliances specified in the applicable
Permissible OBD Noncompliances List, no Alternate Noncompliances shall be allowed.
If Defendants demonstrate that the number of noncompliances specified in the
Permissible OBD Noncompliances List is less than the maximum number allowed,
Defendants may propose for EPA/CARB approval the substitution of an Alternate
Noncompliance for each permissible noncompliance not needed, up to the number
allowed. For Alternate Noncompliances, Defendants may propose OBD noncompliances
that are not listed in the Permissible OBD Noncompliances List, provided that (1) no
monitor that fails to demonstrate compliance within the regulatory OBD emission
threshold will be approved; (2) no OBD deficiency or noncompliance that would trigger a
recall under the OBD regulation, Cal. Code Reg. tit. 13, § 1968.5, will be approved; and
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(3) Defendants must submit such a proposal no later than the submission deadline for the
Final OBD Demonstration.
3.1.8 The number of permitted noncompliances and Alternate Noncompliances
applicable to each Generation follows.
i. Generation 1.1: No more than a total of twenty-five (25) noncompliances
shall be allowed, including five (5) carry-over noncompliances from the
certification of the Master Series Calibration. If applicable, Defendants
may propose up to four (4) Alternate Noncompliances.
ii. Generation 1.2: No more than a total of eighteen (18) noncompliances
shall be allowed, including two (2) carry-over noncompliances from the
certification of the Master Series Calibration. If applicable, Defendants
may propose up to four (4) Alternate Noncompliances.
iii. Generation 2.1, Generation 2.2 SUV, and Generation 2 PC: No more than
a total of sixteen (16) permitted noncompliances shall be allowed. If
applicable, Defendants may propose up to four (4) Alternate
Noncompliances.
3.1.9 Additional Warranty Extensions. If Defendants are unable to comply with
the OBD requirements in subparagraphs 3.1.6 – 3.1.8 of this Appendix B, Defendants
may propose and EPA/CARB may approve an increase in the number of permitted OBD
noncompliances, provided that: (1) no monitor that fails to demonstrate compliance
within the regulatory OBD threshold will be approved; (2) no OBD noncompliance that
would trigger a recall under the OBD regulation will be approved; (3) Defendants must
submit such a proposal no later than the applicable deadline for the Final OBD
Demonstration; and (4) for each additional permitted OBD noncompliance, Defendants
must extend by 6 months and 6,000 miles the Extended Emissions Warranty periods
specified in subparagraph 3.9.3 (“Additional Warranty Extensions”). If such Additional
Warranty Extension is approved after Defendants issued an Emissions Modification
Disclosure pursuant to an Approved Emissions Modification, Defendants must issue an
Additional Warranty Disclosure to Eligible Owners and Eligible Lessees, and include the
Additional Warranty Extension in the Emissions Modification Database, pursuant to the
disclosure requirements of this Appendix B, and the applicable notice requirements of
Appendix A.
3.1.10 Critical OBD Demonstrations. For purposes of demonstrating in an
Emissions Modification Proposal that Modified Vehicles meet the General OBD
Requirements described in subparagraph 3.1.5, Defendants must conduct Critical OBD
Demonstration testing on the Critical OBD Demonstration Vehicles for each Generation,
aged to (a) 75% of the equivalent of Full Useful Life on the Customized SRC, and
pursuant to 40 C.F.R. § 86.1823-08, or (b) for Generation 2 SUV, the mileage
accumulated on the OBD Demonstration Vehicles must be no less than 70,000 miles;
provided, however, that Defendants must also complete Final OBD Demonstrations in
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accordance with subparagraph 3.1.11 of this Appendix B. To obtain EPA/CARB
approval to sell or lease vehicles, Defendants must conduct the Critical OBD
Demonstration testing, as further specified in subparagraph 7.2.2 For purposes of Critical
OBD Demonstrations, pursuant to this subparagraph 3.1.10 and Final OBD
Demonstrations, pursuant to subparagraph 3.1.11, the following vehicles shall be tested:
GEN 1.1 SUV, LDT3 configuration; GEN 1.2 SUV, LDT3 configuration; GEN 2 SUV;
and GEN 2 PC (PC Configuration). Additionally, for the GEN 2.1 Audi Q7 vehicle, the
DEF dosing delivery performance monitor shall be demonstrated as this vehicle has a
unique dosing system.
3.1.11 Final OBD Demonstrations. After approval of a Proposed Emissions
Modification, and for each Generation, Defendants must also demonstrate compliance
with applicable OBD requirements by completing Final OBD Demonstration testing on
the applicable OBD Demonstration Vehicles. To complete the Final OBD Demonstration,
Defendants must continue the Critical OBD Demonstration using the same Durability
Demonstration Vehicle(s) for each Generation, as specified in Appendix B-3, aged to the
equivalent of Full Useful Life on the Customized SRC. Except as otherwise provided in
this Appendix B, Engineering Durability Data vehicles may not be used for Final OBD
Demonstration testing. Defendants must complete Final OBD Demonstration testing no
later than August 10, 2018, for Generation 1.1 and Generation 1.2 vehicles; March 16,
2018, for Generation 2 SUV vehicles; and July 20, 2018, for Generation 2 Passenger
Cars. Defendants may not use oven-aged parts to represent Full Useful Life aging during
Final OBD Demonstration testing. Relaxed soak times (8-hour minimum to 60-hour
maximum) may only be used for Final OBD demonstration testing; provided that
EPA/CARB may use soak times described in the official test procedures during
confirmatory and/or enforcement testing. Defendants must supply all results of the Final
OBD Demonstration tests for each Generation to EPA and CARB upon completion of
such tests. If the Final OBD Demonstration indicates additional OBD noncompliances
that were not described in the applicable Proposed Emissions Modification, Defendants
may propose to use Alternate Noncompliances, if applicable under subparagraph 3.1.7, or
to extend the Emissions Modification Warranty in accordance with subparagraph 3.1.9.
For any OBD noncompliance discovered in use or during the Final OBD Demonstration
that is not permitted under this Appendix B (as a Permitted Noncompliance, or an
Alternate Noncompliance, or for which Defendants offer an Additional Warranty
Extension), Defendants must pay a Stipulated Penalty pursuant to subparagraph 8.2.8 of
this Appendix B. Defendants must certify the Final OBD Demonstration test results in
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accordance with subparagraph 4.3.18 of this Appendix B. With respect to the test vehicle
for Final OBD Demonstration testing, Defendants must:
i. Test vehicles that meet the mileage and other requirements described in
subparagraph 4.3.2(i).
ii. Upon request by EPA/CARB, for each Generation, provide a vehicle and
all test equipment (e.g., malfunction simulators, deteriorated components,
etc.) necessary to duplicate the Defendants’ tests.
3.1.12 Fuel Economy and Emissions Impacts. Defendants must measure, and
provide to EPA and CARB, the fuel economy and emissions impacts of the Proposed
Emissions Modification by using the FTP, US06, SC03, HWFET, and 20° F and 50° F
FTP test cycles, based on A-to-B testing on the applicable A-to-B Fuel Economy
Demonstration Vehicles that compares “Condition A” vehicles with “Condition B”
vehicles as follows: Condition A vehicles are test vehicles with the Master Series
Calibration installed and purposefully modified to represent on road emissions. At a
minimum, this includes executing the procedure submitted by Defendants to EPA/CARB
on November 28, 2016, or an alternative procedure subject to EPA/CARB approval. The
Emission Control System Data Parameters must be recorded during all A-to-B
comparison tests required under this subparagraph. Defendants must submit with each
applicable Emissions Modification, a detailed description of the procedure that was
executed when conducting the Condition A portion of these tests, including the Emission
Control System Data Parameters, and, within ten (10) Days of EPA/CARB’s request,
provide any software and other devices not within EPA/CARB’s reasonable possession,
so that EPA/CARB are able to replicate Condition A. Condition B vehicles are test
vehicles to which Defendants have applied the Proposed Emissions Modification. This
comparison testing must be conducted on the same vehicle, and using the same testing
parameters that could affect emissions, including but not limited to fuel. Defendants must
conduct such test cycles on the A-to-B Emission and A-to-B Fuel Economy
Demonstration Vehicles. The comparisons may be conducted in “D” mode. Defendants
must provide all emissions and fuel consumption data for all cycles for the tests described
in this subparagraph. Fuel economy must be calculated according to the vehicle specific
five-cycle methodology described in 40 C.F.R. Part 600. Additionally, new fuel economy
label values must be calculated based on the Proposed Emissions Modification. These
fuel economy label values may be determined by applying a percentage difference
between the fuel economy of the test vehicles for each Generation tested in Condition B
above and the fuel economy of the same vehicle tested under Condition C, which is the
Master Series Calibration as originally produced. The fuel economy label values will be
calculated for each model type by applying the B-to-C percentage difference to all fuel
economy test data used to determine the original fuel economy label values for all
vehicles for such model type, unless Defendants choose to provide specific measurements
for specific vehicle types.
i. If the Defendants choose to utilize the percent difference from the B-to-C
testing to determine the fuel economy label values, the Defendants must
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make a reasonable attempt to provide to EPA and CARB a vehicle from
the same configuration or sub-configuration, and for Generation 2 PC and
Generation 2 SUV, with mileage that is within 4,000 miles of the mileage
accumulated on the vehicle used to make the comparison. For Generation
1.1 and Generation 1.2, Defendants must provide a vehicle pursuant to
section 3.1.14 within 10,000 miles of the mileage accumulated on the
vehicle used to make the comparison. Such vehicle(s) submitted pursuant
to this subparagraph shall be counted as test vehicles submitted to
EPA/CARB pursuant to subparagraph 3.1.14.
ii. As an alternative, Defendants have the option of providing to EPA/CARB
the vehicle used to make this B-to-C comparison.
3.1.13 Labeling Requirements. Defendants must permanently affix the labels
described in this subparagraph 3.1.13, and in the form approved by EPA/CARB, to each
and every Modified Vehicle. Such labels must (1) not cover any previously affixed
labels; (2) inform potential vehicle purchasers and potential Lessees that the vehicle has
received the applicable Approved Emissions Modification, in accordance with this
Appendix B; (3) clearly specify, in the form and manner required for the applicable
labels, the applicable emissions standard, and the fuel economy rating of the Modified
Vehicle; and (4) identify all emission control components installed in accordance with the
applicable Approved Emissions Modification. The form of, information contained in, and
application of the labels must conform with the Vehicle Emissions Compliance
Information (“VECI”) label required under 40 C.F.R. § 86.1807-01, the recall label
required under 40 C.F.R. Part 85, Subpart S, and the current EPA fuel economy label.
Defendants may provide the required fuel economy information to Eligible Owners and
Eligible Lessees that elect the Emissions Modification in a notice printed on paper,
provided that the Defendants provide such notice upon returning the Modified Vehicle to
such Owners and Lessees. For each Modified Vehicle offered for sale or lease by
Defendants or Dealers, a temporary Monroney fuel economy label must be affixed by
Defendants or Dealers on the window of such Modified Vehicle.
3.1.14 Test Vehicles Submittal. Defendants must, within 10 Days of submitting a
Proposed Emissions Modification, provide EPA and CARB with the applicable test
vehicles for each Proposed Emissions Modification, as follows: four test vehicles from
each of the following Generations: Generation 1.1, Generation 1.2, and Generation 2 PC;
and two test vehicles from each of the following Generations: Generation 2.1 and
Generation 2.2 SUV; for a total of sixteen (16) vehicles. EPA and CARB will notify
Defendants of the place for delivery for each vehicle, and whether such vehicles should
have the Master Series Calibration or the final Calibration under the applicable Proposed
Emissions Modification installed. If test vehicles are delivered with the Master Series
Calibration installed, subsequently, and within 5 Days of EPA/CARB’s request,
Defendants must install on such vehicles the final Calibration under the applicable
Proposed Emissions Modification. EPA/CARB will maintain such test vehicles for the
purpose of (1) evaluating the Proposed Emissions Modification to determine whether
such vehicles meet the requirements of this Appendix B, and (2) conducting in-use
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compliance testing after approval. If Defendants deliver such test vehicles after 10 Days
following submission of any proposal, the EPA/CARB expected response dates shall be
extended by the length of delay in delivery, beginning from the date the proposal was
submitted. Upon delivering Modified Vehicles for testing purposes, and upon modifying
unmodified test vehicles as described above, Defendants must certify, in accordance with
the certification requirements of subparagraph 4.3.18 of this Appendix B, that each such
test vehicle provided to EPA and CARB has the same Calibration as Eligible Vehicles
will receive with the applicable Proposed Emissions Modification.
3.1.15 Limited Export of Vehicles for Testing Purposes. Subject to prior
authorization by EPA, Defendants may export a reasonable number of Subject 3.0 Liter
Vehicles for testing purposes only. Prior to exporting such vehicles, Defendants must
inform EPA of the configuration, VIN number, and mileage of such vehicles for tracking
purposes. Subject to prior authorization by EPA, vehicles exported pursuant to this
subparagraph may be reimported and delivered to EPA for testing purposes only. Nothing
in this subparagraph shall affect Defendants’ obligations to comply with other applicable
export, import, customs, or other law, including under 40 C.F.R. §§ 85.1709 and 85.1511
with respect to export or reimport of such vehicles. In no event may any such vehicles be
sold, leased, or transferred to any other party, or used on public roads except for purposes
related to testing. Exporting any such vehicles shall have no impact on the Generation 1.x
Recall Rate or the Generation 2.x Recall Rate, as those terms are defined in Appendix A
to this Consent Decree.
3.1.16 Test Vehicle Criteria. With respect to the vehicle used for Official
Durability Demonstration, in the event parts that are not part of the emission control
system, or are not covered by the Extended Emissions Warranty described in Paragraph
3.9, break down, the parties will meet and confer and, subject to EPA/CARB approval,
Defendants may replace such failed parts with parts from an Engineering Durability
Vehicle, in accordance with the requirements of 40 C.F.R. § 86.1834-01. If during the
durability testing, the Defendants determine that an emission control system has a
catastrophic failure, then the Official Durability Demonstration must be restarted or,
subject to EPA/CARB approval, may be completed on the respective Backup Durability
Demonstration Vehicles, as specified in Appendix B-3. In the event of catastrophic
failure, and prior to completing the demonstration on a Backup DDV, Defendants must
submit to EPA/CARB a proposal for the agencies to review and approve or disapprove.
Such proposal must describe the catastrophic failure event and explain the justification
for using a Backup DDV in place of the DDV. Aging procedures for, and emissions tests
of, Backup Durability Demonstration Vehicles are to be run concurrently with the
respective DDVs and must be of the same generation, model, and meet similar mileage
requirements and other characteristics as the respective test vehicle identified in
Appendix B-3. Defendants will age the Backup DDV in accordance with 40 C.F.R. §
86.1823-08(c)(1)(i), provided, however, that Defendants may not age the Backup DDV
on the engine dynamometer.
3.1.17 Emissions Modification Database. Defendants must make available online
a searchable database, as defined in Paragraph 2.29, that includes all Subject 3.0 Liter
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Vehicles, by which users, including Eligible Owners, Eligible Lessees, and prospective
purchasers, may conduct a free-of-charge search by vehicle VIN to determine if an
Emissions Modification is available for such vehicle. The website must display the
Approved Emissions Modification disclosure and Approved Extended Emissions
Warranty, including any Additional Warranty Extension under subparagraph 3.1.9,
applicable to a specific vehicle when a user inputs the vehicle VIN.
3.1.18 Emissions Modification Disclosure. Defendants must disseminate the
approved Emissions Modification Disclosure (1) within 15 Days of approval of each
Proposed Emissions Modification, by mailing the Disclosure to each Eligible Owner and
each Eligible Lessee and (2) within 2 business days of approval of each Proposed
Emissions Modification, by posting and maintaining the applicable Disclosure on the
webpage for each 3.0 Liter Subject Vehicle within the Emissions Modification Database.
3.2 Additional Requirements for Generation 1.1 3.0 Liter Subject Vehicles: In
addition to the requirements of Paragraph 3.1, each Proposed Emissions Modification for any
Generation 1.1 3.0 Liter Subject Vehicle must also:
3.2.1 Require the installation of two new Cylinder Pressure Sensors.
3.2.2 Comply with the OBD requirements under Cal. Code Regs. tit. 13, §
1968.2 (2013), except for the applicable permitted noncompliances specified in the
Permitted Noncompliances Table and as set forth under this Appendix B.
3.3 Additional Requirements for Generation 1.2 3.0 Liter Subject Vehicles: In
addition to the requirements of Paragraph 3.1, each Proposed Emissions Modification for any
Generation 1.2 3.0 Liter Subject Vehicle must also:
3.3.1 Require the installation of two new Cylinder Pressure Sensors, a NOx
Sensor (for model year 2011 only), and SCR catalyst DF500B, including a turbine mixer
and DEF dosing valve, as proposed by Defendants to EPA and CARB on September 9,
2016.
3.3.2 Comply with the OBD requirements under Cal. Code Regs. tit. 13, §
1968.2 (2013), except for the applicable permitted noncompliances specified in the
Permitted Noncompliances Table and as set forth in this Appendix B.
3.4 Additional Requirements for Generation 2.1 3.0 Liter Subject Vehicles: In
addition to the requirements of Paragraph 3.1, each Proposed Emissions Modification for a
Generation 2.1 3.0 Liter Subject Vehicle must also:
3.4.1 Require the installation of the SCR catalyst DF500B, including a turbine
mixer and DEF dosing valve, on all Q7 model years within Generation 2.1. Require the
installation of an updated Cylinder Pressure Sensor for all model year 2013-2014
vehicles. Require the installation of the SCR catalyst DF500B, including a turbine mixer
and DEF dosing valve, on all Cayenne and Touareg model years within Generation 2.1.
Require the replacement of a PM Sensor on all GEN 2.1 vehicles.
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PARTIAL CONSENT DECREE
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3.4.2 Comply with the OBD requirements under Cal. Code Regs. tit. 13, §
1968.2 (2013), except for the permitted noncompliances specified in the Permitted
Noncompliances Table and as set forth under this Appendix B.
3.5 Additional Requirements for Generation 2.2 SUV 3.0 Liter Subject Vehicles:
In addition to the requirements of Paragraph 3.1, each Proposed Emissions Modification for a
Generation 2.2 SUV 3.0 Liter Subject Vehicle must also:
3.5.1 Comply with the OBD requirements under Cal. Code Regs. tit. 13, §
1968.2 (2013), except for the permitted noncompliances set forth in the Permitted
Noncompliances Table and as set forth under this Appendix B.
3.6 Additional Requirements for Generation 2 Passenger Car 3.0 Liter Subject
Vehicles: In addition to the requirements of Paragraph 3.1, each Proposed Emissions
Modification for a Generation 2 PC 3.0 Liter Subject Vehicle must also:
3.6.1 Require the installation of a new Lambda Sensor for all model year
vehicles within Generation 2 PC, and a new Cylinder Pressure Sensor for model year
2014 vehicles only.
3.6.2 Comply with the OBD requirements under Cal. Code Regs. tit. 13, §
1968.2 (2013), except for the applicable noncompliances specified in the Permitted
Noncompliances Table and as set forth in this Appendix B.
3.7 Continued Compliance: Except as otherwise stated in this Appendix B, and as if
the vehicles were originally certified to the applicable emissions standard required under any
Approved Emissions Modification, if tested at any mileage or time during the useful life of the
vehicles, Modified Vehicle test groups remain subject to, and Defendants must comply with: (1)
all EPA and CARB requirements for in-use testing under 40 C.F.R. Part 86, Subpart S, and Cal.
Code Regs. tit. 13, §§ 2111-2140; (2) OBD enforcement pursuant to Cal. Code Regs. tit. 13, §
1968.5; (3) federal defect reporting requirements under 40 C.F.R. Part 85, Subpart T; and (4)
California Emissions Warranty and Information Reporting requirements under Cal. Code Regs.
tit. 13, §§ 2141-2146. As stated in Section VIII of this Appendix B (Stipulated Penalties and
Other Stipulated Remedies for Noncompliance), EPA and CARB reserve all rights and
authorities to impose consequences if Defendants fail to comply with these testing and reporting
requirements, including if such testing demonstrates that the Modified Vehicles exceed the
applicable emissions standard, Maximum Emissions Modification Limits, or the OBD
noncompliances set forth in and approved pursuant to this Appendix B. For OBD in-use
compliance measurements, no add-ons are granted.
3.8 Costs: Defendants must incur and satisfy the costs associated with each
Approved Emissions Modification, as specified in Appendix A.
3.9 Warranty: Defendants must provide an Emission Control System and an Engine
Long Block warranty (collectively, the “Extended Emissions Warranty”) for each Subject 3.0
Liter Vehicle receiving an Approved Emissions Modification. The Extended Emissions
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PARTIAL CONSENT DECREE
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Warranty shall cover all parts and labor, as well as the cost or provision of a loaner vehicle for
warranty service lasting longer than 3 hours. Defendants must not impose on consumers any fees
or charges, and must pay any fees or charges imposed by its dealers related to the warranty
service. The Extended Emissions Warranty shall provide warranty coverage as follows.
3.9.1 The Emission Control System warranty must cover the entire emission
control system including (1) all components that are replaced, repaired, installed,
upgraded, or otherwise modified as part of the Approved Emissions Modification; (2) all
components listed in subparagraphs 3.9.1 and 3.9.2; (3) and any other component that can
reasonably be impacted by effects of the Approved Emissions Modification. The
Emission Control System warranty must cover, at a minimum, the following parts:
i. The entire exhaust aftertreatment system including the DOC, the DPF, the
SCR catalyst, the dosing injector and other DEF system components, all
sensors and actuators, and any exhaust flap;
ii. The entire fuel system, including the fuel pumps, high pressure common
rail, fuel injectors, and all sensors and actuators;
iii. The EGR system including the EGR valve, EGR bypass valve, EGR
cooler, EGR filter, all related hoses and pipes, and all sensors and
actuators;
iv. The turbocharger system including all related hoses and pipes, all sensors
and actuators;
v. The OBD System and any malfunctions detected by the OBD systems;
and
vi. The ECU and the TCU.
3.9.2 The Engine Long Block warranty must cover the engine sub-assembly that
consists of the assembled block, crankshaft, cylinder head, camshaft, and valve train.
3.9.3 The warranty period for the Extended Emissions Warranty shall be the
greater of:
i. 10 years or 120,000 actual miles whichever comes first; and
ii. 4 years or 48,000 miles, whichever comes first, from date and mileage of
implementing the Emissions Modification, except for vehicles offered for
resale, in which case, from the date and mileage of the first resale
transaction after the modification to the first person who in good faith
purchases the vehicle for purposes other than resale.
3.9.4 Defendants must make available online a searchable database that includes
all 3.0 Liter Subject Vehicles, by which users, including Eligible Owners, Eligible
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Lessees, and prospective purchasers, may conduct a free-of-charge search by vehicle VIN
to determine whether the Extended Emissions Warranty, and any Additional Warranty
Extension, applies to a specific vehicle. To satisfy this requirement, Defendants may
include a webpage that meets these specifications on the Emissions Modification
Database, pursuant to subparagraph 3.1.17. Upon the modification of each and every
Modified Vehicle, Defendants must identify whether such vehicle is covered by the
Extended Emissions Warranty by displaying the applicable warranty disclosure
statements when a user enters the VIN. Defendants must provide the VINs for all such
vehicles to EPA/CARB within fifteen (15) Days of EPA/CARB’s request.
3.9.5 Defendants must also maintain a database that includes all 3.0 Liter
Subject Vehicles, by which Dealers shall search by vehicle VIN to determine whether the
Extended Emissions Warranty applies to a specific 3.0 Liter Subject Vehicle. Defendants
shall establish procedures such that the vehicle VIN shall dictate component or system
coverage described in the approved Extended Emissions Warranty Component List. Such
procedures shall include a feature on the database by which Dealers shall enter the
identification number for any part pertaining to a Modified Vehicle and the database shall
inform all Dealers whether such part is covered by the Extended Emissions Warranty, in
accordance with the approved Extended Emissions Warranty Component List.
Defendants must maintain the Extended Emissions Warranty Component List and the
Dealer database to ensure current part identification numbers are listed. In no event shall
warranty coverage be subject to service writers’ discretion.
3.9.6 The Extended Emissions Warranty is associated with the car, and remains
available to any and all subsequent owners and operators.
3.9.7 The Extended Emissions Warranty shall not supersede or void any
outstanding warranty. To the extent there is a conflict in any provision(s) of this warranty
and any outstanding warranty, that conflict shall be resolved to the benefit of the
consumer.
3.9.8 The Extended Emissions Warranty shall not modify, limit, or affect any
state, local or federal legal rights available to the owners.
3.9.9 The Lemon Law Provisions and other warranty provisions set forth in
Appendix A shall apply.
3.9.10 Any waiver of any provision of the Extended Emissions Warranty by an
owner is null and void.
3.9.11 For Eligible Owners and Eligible Lessees who decline to receive the
Emissions Modification for an Eligible Vehicle, Defendants must continue to service
such Eligible Vehicle in accordance with existing applicable warranty provisions,
provided that if service of the ECU is needed, in no event may Defendants install the
Master Series Calibration. Such requirements, and the potential effect on Eligible Owners
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
and Eligible Lessees must be clearly described in the Emissions Modification Disclosure
Statement under subparagraph 4.3.10.
IV. EMISSIONS MODIFICATION PROPOSAL REQUIREMENTS
4.1 Defendants may submit to EPA and CARB, for any Test Group or combination of
Test Groups of the 3.0 Liter Subject Vehicles, an Emissions Modification Proposal according to
the schedule and requirements specified in this Section IV. In addition to the requirements
specified herein, the Emissions Modification Proposal must contain all the elements of an
Ordered Recall Plan/Remedial Plan, pursuant to 40 C.F.R. Part 85, Subpart S and Cal. Code
Regs., tit. 13, § 2125. EPA/CARB will not approve an Emissions Modification Proposal unless
and until Defendants have provided in a Submission or Submissions all materials required under
Section IV of this Appendix B to EPA/CARB.
4.2 Each Emissions Modification Proposal must be submitted by Defendants to EPA
and CARB on or before the dates and as specified in the chart below. EPA/CARB will use the
agencies’ best efforts to either approve or disapprove each complete proposal (as detailed herein)
within 45 Days of the actual Submission. To facilitate an expeditious review and approval
process, Defendants may submit data and Emissions Modifications Proposals at any time before
the deadlines below. Regardless of the time of Submission, no Approval can be made until after
the Effective Date of the Consent Decree. If any of the Final Submittal Deadlines below expire
prior to the Date of Entry, such deadlines will be extended to fourteen (14) Days beyond the Date
of Entry.
Generation
Defendants’
Expected
Submittal Date
Defendants’ Final
Submittal
Deadline
1.1 August 25, 2017 November 10, 2017
1.2 August 25, 2017 November 10, 2017
2.1 February 24,
2017 May 12, 2017
2.2 SUV February 11,
2017 April 25, 2017
2 PC April 7, 2017 June 23, 2017
4.3 Emissions Modification Proposal, Part A: For any Emissions Modification
Proposal, Defendants must submit the following information in a submission clearly marked as
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PARTIAL CONSENT DECREE
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“Proposed Emissions Modification, Part A: [corresponding test group or combination of test
groups of 3.0 Liter Subject Vehicles].”
4.3.1 Applicable Required Emissions Performance. Statement specifying the
applicable emissions standard or Maximum Emissions Modification Limits, as
demonstrated by the Required Emissions Test Procedure results concerning the
corresponding vehicles, in accordance with subparagraph 3.1.1, above. For Generation
2.1, Generation 2 PC, and/or Generation 2.2 SUV, Defendants may propose in a single
Emissions Modification Proposal to comply with Tier 2/Bin 5 and LEV2/ULEV or, in the
alternative, the applicable Maximum Emissions Modification Limits set forth in
Appendix B-1 to this Appendix B.
4.3.2 Required Emissions Test Procedures and Data. All emissions data from a
vehicle that has been modified pursuant to the Proposed Emissions Modification that
demonstrates each of the following:
i. Compliance to the applicable emissions standard or Maximum Emissions
Modification Limits. Defendants must make this demonstration with all
data from emissions tests conducted according to the FTP, US06, SC03,
and HWY FE, 20° F FTP (no specific compliance limits), and 50° F FTP
(no specific compliance limits) test procedures specified in 40 C.F.R. Parts
86 and 600, and the applicable California regulations (the Required
Emissions Test Procedures), including the Emission Control System Data
Parameters, for all tests, and including any preconditioning tests. The FTP
test must be performed at Sea Level and an FTP@1620m must also be
performed. Defendants must conduct all tests in driving mode “D.”
Consistent with the regulations, EPA/CARB may conduct tests in any
driving mode, and noncompliance indicated by such tests may form the
basis for disapproval. Defendants may conduct the Required Emissions
Test Procedures in regular default mode only, provided that the worst-case
configuration is selected (e.g., 4WD-capable vehicles must be tested with
the vehicle in 4WD mode), and provided that any compliance tests
conducted by EPA/CARB may be conducted in any user-selected mode,
as allowed under EPA or CARB regulations. Such demonstration must
account for emissions deterioration by conducting the Required Emissions
Test Procedures on each Durability Demonstration Vehicle aged to the
equivalent of Full Useful Life and must also account for IRAFs, as defined
in Paragraph 2.50. For all Generations, a DF shall be calculated according
to the requirements of this Appendix B. A DF slope shall be calculated
using the incremental increase in NOx based on the delta between the 50K
and 120K mile emissions values, and the DF shall be applied based on
application of the DF slope to the mileage of the applicable test vehicle for
vehicles with the equivalent of less than 120,000 miles. Defendants must
conduct emissions demonstrations using only the applicable Durability
Demonstration Vehicles and, subject to prior authorization from
EPA/CARB, may precondition the test vehicle. Defendants must conduct
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
the Required Emissions Test Procedures and calculate the DF according to
the following specifications:
a. Generation 1.1 and Generation 1.2: Defendants may conduct
the required tests using a vehicle with miles accumulated in-
use of less than or greater than 60,000 miles. If less than
60,000, Defendants must age the vehicle with the installed
Emissions Modification on the Customized SRC to the
equivalent of Full Useful Life. If more than 60,000, Defendants
must age the vehicle with the installed Emissions Modification
on the Customized SRC for at least the equivalent of 60,000
miles, and treat the resulting mileage as Full Useful Life. For
example, if the test vehicle has 50,000 miles, Defendants must
install the Emissions Modification and age the vehicle for the
equivalent of 70,000 miles, for a total of the equivalent of
120,000 miles. If the vehicle has 80,000 miles, Defendants
must install the Emissions Modification and then age the
vehicle for the equivalent of 60,000 miles for a total of the
equivalent of 140,000 miles that will be treated as the
equivalent of 120,000 miles. To generate the DF, Defendants
must run emissions tests on the vehicles according to the
following intervals: (1) as received, (2) at the Modified
baseline, (3) at 30,000 miles, and (4) at 60,000 miles. Before
the baseline test, degreening for between 500 and 1000 miles is
to be conducted including Preconditioning. As an alternative to
the previously-described procedure, Defendants may acquire a
Generation 1 vehicle of any mileage and install a new
powertrain and exhaust system and age the resulting vehicle to
the equivalent of 120,000 miles on the Customized SRC.
b. Generation 2 SUV and Generation 2 PC Full Useful Life
Aging: Defendants must conduct aging to the equivalent of
Full Useful Life on the Customized SRC. For purposes of this
subparagraph, Defendants procured two GEN 2 SUVs and two
GEN 2 PCs with approximately 20,000 customer driven miles
and then ran the Customized SRC with an average mileage
share of TCM Step 3 of approximately thirty-two (32) percent
for approximately 50,000 miles. For the remaining miles to
Full Useful Life, Defendants will age the vehicle according to
subparagraph 4.3.2(i)(a) using the Customized SRC.
c. Generation 2 SUV and Generation 2 PC DF Estimates:
Defendants must submit a deterioration factor estimate for
GEN 2 SUVs based on GEN 2 SUV engineering test vehicle
data, subject to EPA/CARB approval. EPA/CARB will use this
DF estimate in evaluating the Full Useful Life performance of
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
GEN 2 SUVs submitted to the agencies for evaluation.
Defendants must submit a DF estimate for GEN 2 PCs. To do
so, Defendants will further age a GEN 2 SUV to the equivalent
of FUL for a GEN 2 PC based on the number of regenerations
for GEN 2 PCs set forth in Paragraph 2.22 and submit a DF
estimate based on test results for this GEN 2 SUV at FUL and
from GEN 2 SUV engineering test vehicle data. EPA/CARB
will use this DF estimate in evaluating the Full Useful Life
performance of GEN 2 PCs submitted to the agencies for
evaluation.
ii. Fuel economy measured by using the FTP, US06, SC03, HWFET, and 20°
F FTP test procedures, based on A-to-B testing for each Generation using
the same basic testing conditions, including but not limited to fuel and the
test conditions for Condition A testing set forth in subparagraph 3.1.12 of
this Appendix B, on the same vehicle that compares Condition A, vehicles
with the Master Series Calibration installed and purposefully modified to
represent on road emissions in accordance with the specifications of
subparagraph 3.1.12 and Condition B, vehicles with the Proposed
Emissions Modification installed;
iii. Fuel economy and emissions test results for all fuel economy data vehicles
as required by 40 C.F.R. Part 600 to determine the fuel economy label
values of each model type, and the fuel economy label values for each
model type as determined by the B-to-C testing set forth in subparagraph
3.1.12 of this Appendix B; and
iv. All emissions results at 50 degrees Fahrenheit and 20 degrees Fahrenheit
over the FTP test cycle (no specific compliance limits).
4.3.3 For formaldehyde emissions, in lieu of test results, Defendants may
provide a statement in the Proposed Emissions Modification that the Modified Vehicles
comply with the emissions standard for formaldehyde, in accordance with 40 C.F.R. §
86.1829-01(b)(iii)(E).
4.3.4 If Defendants cannot meet the mileage specifications of subparagraph
4.3.2, EPA/CARB may provide approval for any Generation based on Official Durability
Data generated by running the applicable test vehicle on the Customized SRC to the
equivalent of 75% Full Useful Life; provided, however, that Defendants must also submit
projected durability data, to 120,000 miles. For projected durability data to 120,000
miles, Defendants must apply the IRAF, and then apply an upward adjustment of 5% in
anticipation of increased emissions deterioration during the second half of useful life. The
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PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
procedure for generating the IRAF, as described in Paragraph 2.50 of this Appendix B,
must be described in the Emissions Modification Proposal.
4.3.5 Defendants must complete Official Durability Data testing for all
Generations no later than the applicable Final Submittal Deadline specified in Paragraph
4.2. Such data must include without limitation:
i. For each Generation, Defendants must provide all data from all Durability
Demonstration tests on the DDVs and the Backup Vehicles that
Defendants conducted using preliminary software and Calibration data.
Defendants must also provide to EPA and CARB all software and
Calibration data changes made during the course of durability testing. All
Official Durability Data test results must demonstrate compliance with the
applicable emissions standards or Maximum Emissions Modification
Limits.
ii. Defendants must provide EPA and CARB with all Full Useful Life
emissions durability testing results at a minimum of 75% of Full Useful
Life mileage for each Generation, within 3 weeks of completing such
testing, and include any adjustments to DFs observed concerning vehicles
that have been modified pursuant to the Approved Emissions
Modification. Subsequently, Defendants must complete 100% Full Useful
Life emissions durability testing and provide EPA and CARB with all
testing results within 3 weeks of completing such testing, including such
data demonstrating that the Modified Vehicles remain compliant for
120,000 miles.
4.3.6 A complete and extensively detailed list of each and every AECD and EI-
AECD, including descriptions of SCR Inducements, that the Modified Vehicles,
including all electronic control modules, will have after receiving the applicable Proposed
Emissions Modification. For any AECD that results in a reduction in effectiveness of the
Emission Control System, the list must include the rationale for why the AECD is not a
Defeat Device. Non-existent EI-AECD counters, as that term is defined in Cal. Code
Regs. tit. 13, § 1968.2, will constitute only one noncompliance. No further EI-AECD
counters will be requested by EPA/CARB. EPA/CARB will approve only those AECDs
that are not Defeat Devices (and that are consistent with EPA and CARB policies and
guidelines for approval of AECDs). Defendants must provide a list of all EI-AECD
counters existing at the time the Proposed Emissions Modification is submitted.
4.3.7 A description of the procedure for developing the IRAF, as approved by
EPA/CARB, for each Generation.
4.3.8 A description of any and all reasonably predictable changes, adverse or
otherwise, on vehicle attributes which may reasonably be important to vehicle owners,
including: fuel economy, reliability, durability, Noise Vibration and Harshness, vehicle
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28 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
performance (for example, 0-60 mph time, top speed, etc.), and drivability, including
transmission shifting characteristics.
4.3.9 A description of any and all reasonably predictable changes, adverse or
otherwise, on aspects of vehicle maintenance which may reasonably be important to
vehicle owners, including but not limited to oil changes, EGR cleaning, DEF refill, and
DPF replacement.
4.3.10 A draft Emissions Modification Disclosure for EPA/CARB Approval
regarding the Proposed Emissions Modification, designed for dissemination to Eligible
Owners, Eligible Lessees and, as applicable, prospective purchasers, as required under
subparagraph 3.1.18, that describes in plain language:
i. The Proposed Emissions Modification generally, including but not limited
to, if applicable, any increased emissions resulting from the Proposed
Emissions Modification relative to the levels contained in the previously
issued certificates of conformity for the vehicles;
ii. All software changes;
iii. All hardware changes, including but not limited to any and all future
recalls associated with the Proposed Emissions Modification, such as any
modifications of the OBD system;
iv. To the extent Defendants elect not to retain original parts associated with
the Master Series Calibration for future service of vehicles that have not
received an Approved Emissions Modification, Defendants must include
in the Emissions Modification Disclosure an explanation in plain language
that such parts may not be available after a certain time. Defendants must
also describe the potential effect this may have on Eligible Vehicles,
including the potential that in the event parts that are no longer available
need to be replaced, the ECU associated with an Approved Emissions
Modification may need to be installed on the vehicle;
v. Any and all reasonably predictable changes, resulting from the Proposed
Emissions Modification, including the following:
a. Reliability, durability, fuel economy, Noise Vibration and
Harshness, vehicle performance (for example, 0-60 mph time,
top speed, etc.), drivability (including transmission shifting
characteristics), and any other vehicle attributes that may
reasonably be important to vehicle owners; and
b. Oil changes, EGR cleaning, DEF refill, DPF replacement, and
any other aspects of vehicle maintenance that may reasonably
be important to vehicle owners;
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29 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
vi. A basic summary of how Eligible Owners and Eligible Lessees can obtain
the Proposed Emissions Modification and the logistics involved in doing
so;
vii. OBD system limitations that make identification and repair of any
components difficult or even impossible, compromise warranty coverage,
or may reduce the effectiveness of inspection and maintenance program
vehicle inspections; and
viii. Any other disclosures required under Appendix A of the Consent Decree
and under this Appendix B.
4.3.11 A draft Extended Emissions Warranty statement in plain language
intended for dissemination to Eligible Owners, Eligible Lessees, and, as applicable,
prospective purchasers.
4.3.12 A list of all parts, including part identification numbers, covered by the
Extended Emissions Warranty (the “Extended Emissions Warranty Parts Coverage List”).
Defendants must include in this proposal:
i. All parts replaced, installed, repaired, upgraded, or otherwise modified as
part of the Proposed Emissions Modification;
ii. All emission control system parts and all engine long block parts;
iii. All other parts and components which can reasonably be impacted by
effects of the Approved Emissions Modification; and
iv. All parts enumerated in subparagraphs 3.9.1 (i) – (vi) and 3.9.2 of this
Appendix B.
4.3.13 Draft labels for EPA/CARB approval, with correct label values for each
model type corresponding to the Emissions Modification Proposal, designed to be
permanently affixed to each and every Modified Vehicle, as required under subparagraph
3.1.13 of this Appendix B.
4.3.14 For the ECU, the complete software functional description document in
the German language, and the table of contents of the functional description document in
the English language, the compiled software files (e.g., .HEX Files), and the complete
memory map (e.g., .A2L File); for the TCU AL551 transmission, a .HEX file containing
data and software code, and an .A2L file containing a description of map addressing and
measure points; and for the TCU AL1000 transmission, a .HEX file containing data and
software code, and an .A2L file containing a description of map addressing and measure
points. For each of the TCU AL551 transmission and the TCU AL1000 transmission,
Defendants must also submit a list that identifies all core software functions that are not
included in the submission. Such list must also include all descriptive information that is
available to Defendants, and include sufficient information for EPA/CARB to identify
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30 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
and understand which modules and/or software functions have been excluded from the
submissions, provided that in the event such information is not in Defendants’ possession
and Defendants are unable through best efforts to obtain such information from third
parties, Defendants must document and submit to EPA/CARB all efforts to obtain such
information. Submissions required under this subparagraph must include all such data
applicable to the vehicles eligible for modification under the Proposed Emissions
Modification before and after application of the Proposed Emissions Modification.
Additionally, Defendants must submit a description of any changes to the code
functionality on any controller on the vehicle that was for the purpose of removing or
modifying to make compliant a Defeat Device, a previously unapproved AECD, or a
previously noncompliant Calibration, including a description of all Defeat Devices,
previously undisclosed AECDs, previously unapproved AECDs, and previously
noncompliant Calibrations in the original software for any computer module that
contained a Defeat Device, an undisclosed AECD, a previously unapproved AECD, or
previously noncompliant Calibration, and how such software functions were removed or
modified to be made compliant and any Calibration changes resulting from the Proposed
Emissions Modification. Defendants must provide additional documents, software files,
memory maps, and English language translations of excerpts of the functional description
document in response to reasonable requests by EPA/CARB.
4.3.15 Repair instructions concerning the Modified Vehicles that Defendants
must, upon receiving EPA/CARB’s Notice of Approved Emissions Modification,
distribute to Dealers, in accordance with Cal. Code Regs. tit. 13, § 1969. Defendants must
also provide contemporaneously to EPA and CARB a copy of each communication
concerning the Approved Emissions Modification directed at Dealers.
4.3.16 For each Generation, all software analysis by FEV, and any subcontractors
of FEV (together, “FEV”), which shall include FEV’s analysis of (a) the Master Series
Calibration (including analysis of the ECU and the TCU) and (b) the Proposed Emissions
Modification Calibrations (including analysis of the ECU and the TCU) (the “Final FEV
Analysis”), and (c) all related analysis, emissions test results, reports, and other data
created or recorded by FEV to date (the “Underlying Data”). In the event that the Final
FEV Analysis is not complete on or before the applicable Final Submission Deadline,
Defendants shall provide with the proposal the Underlying Data and the most recent
report available from FEV, and must subsequently submit the Underlying Data and the
Final FEV Analysis upon completion and no later than November 30, 2017 with respect
to the analysis of the ECU, and February 28, 2018 with respect to the analysis of the
TCU.
4.3.17 An affidavit from, for proposals concerning Audi and Volkswagen
vehicles, a United States Volkswagen Group of America corporate official, a German
Volkswagen AG corporate official, and a German AUDI AG corporate official, and for
proposals concerning Porsche vehicles, a German Volkswagen AG corporate official, a
German AUDI AG corporate official, a United States Porsche corporate official, and a
German Porsche AG corporate official certifying, in accordance with Paragraphs 34-36
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of the Consent Decree, that once the Emissions Modification is applied, the resulting
Modified Vehicle contains no Defeat Devices.
4.3.18 Certification, in accordance with Paragraphs 34-36 of the Consent Decree,
with respect to all information contained in the Emissions Modification Proposal.
4.4 Emissions Modification Proposal, Part B: For any Emissions Modification
Proposal, Defendants must submit the following information in a submission clearly marked as
“Proposed Emissions Modification, Part B: [corresponding test group or combination of test
groups of 3.0 Liter Subject Vehicles].”
4.4.1 Statement of OBD Compliance: A statement, if applicable, based on the
OBD demonstrations to date, that Defendants believe the OBD system fully complies
with the requirements of Cal. Code Regs. tit. 13, § 1968.2.
4.4.2 Statement of OBD Noncompliances: A statement, if applicable, based on
the OBD demonstrations to date, that Defendants believe the OBD system does not fully
comply with Cal. Code Regs. tit. 13, § 1968. Defendants must specify, and provide a
description of, all known and expected OBD noncompliances, including, if applicable, all
(1) proposed OBD noncompliances under the Permissible OBD Noncompliance List, (2)
proposed Alternate Noncompliances, and (3) all proposed additional OBD
noncompliances and associated Additional Warranty Extensions.
4.4.3 For Critical OBD Demonstrations defined in this Appendix B, all data
necessary for EPA and CARB to evaluate Defendants’ demonstrations of OBD
compliance, using the protocols and processes required under Cal. Code Regs. tit. 13, §
1968.2(h).
4.4.4 A summary table for the Proposed Emissions Modification Calibration,
monitoring checklist, descriptions of monitoring strategies that were changed between the
original Calibration and the Proposed Emissions Modification Calibration, and testing
and reporting as required by Cal. Code Regs. tit. 13, § 1968.2(j)(1) (i.e., verification of
standardized requirements on production vehicles).
4.4.5 A list of proposed test vehicles, including VIN, odometer reading, and
model year, to be used for purposes of OBD PVE testing, pursuant to Cal. Code Regs.,
tit. 13, § 1968.2(j)(2)(2.2.2) and (2.2.3), as required under subparagraph 6.1.7 of this
Appendix B.
4.5 Emissions Modification Proposal, Part C: For any Emissions Modification
Proposal, Defendants must submit the following information in a submission clearly marked as
“Proposed Emissions Modification, Part C: [corresponding test group or combination of test
groups of 3.0 Liter Subject Vehicles].”
4.5.1 PEMS Test Results. All emission data from PEMS testing on one vehicle
from each Generation that has received the Proposed Emissions Modification, and from
PEMS A-to-B testing comparing (A) vehicles with the Master Series Calibration with (B)
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vehicles with the Proposed Emissions Modification applied. PEMS A-to-B testing is to
be conducted using two vehicles of the same Generation, engine type, and body type,
with the vehicles chasing each other on the road. PEMS testing must be conducted on one
Generation 2.2 SUV vehicle and one Generation 2 PC vehicle that have each received the
Proposed Emissions Modification. Defendants must generate these data by testing over
the Urban/Downtown Los Angeles Route and the Combined Uphill/Downhill and
Highway Route. Defendants must submit all raw data generated by the PEMS testing,
including speed, load, and second-by-second emissions data, etc., in a CSV format that
can be imported into a spreadsheet or database. From these data, Defendants must
calculate average emissions results for NOx, THC, CO, and CO2.
4.5.2 In-use Compliance Test Results. All emissions data from in-use vehicles
that have received the applicable Proposed Emissions Modification, including data
demonstrating compliance to the applicable emissions standard, over the Required
Emissions Test Procedures (FTP, US06, SC03, and HWFET), accounting for IRAFs and
DF as measured in the durability runs. For each Proposed Emissions Modification, two
in-use vehicles are required. For all Proposed Emissions Modifications for Model Year
2012 and prior years, each in-use vehicle must have between 80,000 – 100,000 miles,
accumulated before the vehicle received the applicable Approved Emissions
Modification. At a minimum, one of the two in-use vehicles must have accumulated at
least 90,000 miles. For all Proposed Emissions Modifications for Model Year 2013 and
newer, each Model Year must have accumulated at least 15,000 miles on average per
year in use.
V. APPROVAL OR DISAPPROVAL OF PROPOSED EMISSIONS
MODIFICATIONS
5.1 EPA/CARB will approve or disapprove each Proposed Emissions Modification
according to the schedule and criteria in this Appendix B.
5.1.1 Approve: If EPA/CARB determine that a Proposed Emissions
Modification satisfies all requirements herein, then EPA/CARB will timely notify
Defendants by letter clearly titled: “Approved Emissions Modification: [corresponding
test group or combination of test groups of 3.0 Liter Subject Vehicles],” after which
Defendants must implement the Approved Emissions Modification in accordance with
the schedules and procedures set forth in Appendix A of the Consent Decree.
5.1.2 Disapprove:
i. Generation 1.1 and 1.2:
a. If EPA/CARB determine that a Proposed Emissions
Modification fails to satisfy any requirement herein, then
EPA/CARB will timely notify Defendants by letter clearly
titled: “Notice of Disapproval of Proposed Emissions
Modification: [corresponding test group or combination of test
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groups of 3.0 Liter Subject Vehicles]” that identifies the bases
for the disapproval. Within 30 Days of EPA/CARB’s letter(s),
Defendants may provide a proposed remedy, and within 90
Days of EPA/CARB’s letter(s), Defendants may submit one
revised Proposed Emissions Modification that must resolve all
of EPA/CARB’s bases for disapproval. EPA/CARB will then
issue either a “Final Notice(s) of Disapproval of Proposed
Emissions Modification: [corresponding test group or
combination of test groups of 3.0 Liter Subject Vehicles]” or
an “Approved Emissions Modification: [corresponding test
group or combination of test groups of 3.0 Liter Subject
Vehicles].”
b. Defendants may dispute EPA/CARB’s Final Notice(s) of
Disapproval of a Proposed Emissions Modification in
accordance with the dispute resolution procedures set forth in
Section IX of the Consent Decree (Dispute Resolution).
ii. Generation 2.1, Generation 2.2 SUV, Generation 2 PC:
a. If EPA/CARB determine that a Proposed Emissions
Modification fails to satisfy any requirement herein, then
EPA/CARB will timely notify Defendants by letter clearly
titled: “Notice of Disapproval of Proposed Emissions
Modification: [corresponding test group or combination of test
groups of 3.0 Liter Subject Vehicles]” that identifies the bases
for the disapproval.
b. If, in a single proposal, Defendants proposed to comply with
Tier 2/Bin 5 and LEV 2/ULEV, or, in the alternative, the
Maximum Emissions Modification Limits in accordance with
subparagraph 4.3.1, and EPA/CARB determine that such
proposal fails to demonstrate compliance with Tier 2/Bin 5 and
LEV 2/ULEV, but demonstrates compliance with the
Maximum Emissions Modification Limits and satisfies all
other requirements herein, EPA/CARB will timely notify
Defendants by letter clearly titled: “Notice of Disapproval in
Part and Approval in Part of Proposed Emissions Modification:
[corresponding test group or combination of test groups of 3.0
Liter Subject Vehicles]” that identifies the bases for the
disapproval.
c. Within 30 Days of EPA/CARB’s letter(s) described above,
Defendants may provide a proposed remedy, and within 90
Days of EPA/CARB’s letter(s), Defendants may submit one
revised Proposed Emissions Modification that must resolve all
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of EPA/CARB’s bases for disapproval. EPA/CARB will then
issue a “Final Notice(s) of Disapproval of Proposed Emissions
Modification: [corresponding test group or combination of test
groups of 3.0 Liter Subject Vehicles],” an “Approved
Emissions Modification: [corresponding test group or
combination of test groups of 3.0 Liter Subject Vehicles],” or a
“Final Notice(s) of Disapproval in Part and Approval in Part of
Proposed Emissions Modification [corresponding test group or
combination of test groups of 3.0 Liter Subject Vehicles].”
d. Defendants may dispute EPA/CARB’s Final Notice(s) of
Disapproval of a Proposed Emissions Modification in
accordance with the dispute resolution procedures set forth in
Section IX of the Consent Decree (Dispute Resolution).
5.1.3 If, in their review, EPA/CARB identify any off-cycle increase or increases
in emissions that could potentially be the result of a Defeat Device, then, within 30 Days
of notice of the increase or increases by EPA/CARB, Defendants must supplement its
Proposed Emissions Modification with a detailed technical explanation of the cause of
the increase or increases. EPA/CARB will provide available information to Defendants
concerning the increase or increases in emissions. EPA/CARB’s response time to
approve or disapprove the Proposed Emissions Modification shall be extended to no less
than 20 Days from its receipt of Defendants’ supplement.
5.1.4 As stated in Section VIII (Stipulated Penalties and Other Stipulated
Remedies for Noncompliance), EPA/CARB reserve all rights and authorities to impose
consequences in the event the agencies discover a Defeat Device in any Modified Vehicle
after either agency approved the corresponding Emissions Modification for that Modified
Vehicle.
VI. IN-USE COMPLIANCE ASSURANCE FOR MODIFIED VEHICLES
6.1 In each of the five calendar years following the Effective Date of the Consent
Decree, for two vehicles from each of (a) GEN 1.1, (b) GEN 1.2, (c) GEN 2 SUV, and (d) GEN
2 PC on which Defendants have performed an Approved Emissions Modification, Defendants
must, no later than October 1 of each year (except as otherwise provided herein):
6.1.1. Notify EPA and CARB 30 Days prior to conducting all in-use testing so
that the agencies can arrange to observe the testing.
6.1.2. Use the regulatory in-use compliance vehicle selection process to select
vehicles to be tested, as required under 40 C.F.R. § 86.1845-04 and Cal. Code Regs. tit.
13, § 2137, except that vehicles tested may include those that are up to the Full Useful
Life in terms of mileage and age, shall be reasonably maintained and may not be
excluded solely for lack of maintenance records, multiple owners and/or repairs due to
the Emissions Modification. EPA/CARB reserve the right to specify to Defendants the
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test group, model, and mileage targets for the two vehicles to be tested, provided that
EPA/CARB provide such specifications to Defendants by December 1 of the year
preceding the year in which testing will be conducted. Defendants must then randomly
select the vehicles within such specifications. Vehicles used for the Final OBD
demonstration may not be used to satisfy the requirements of this Section VI (In-Use
Compliance Assurance for Modified Vehicles).
6.1.3. Provide EPA and CARB all downloads of all standardized OBD data, in
accordance with Cal. Code Regs. tit. 13, § 1968.2, of the tested vehicles. This data shall
be collected both pre- and post-testing, on the as-received vehicles.
6.1.4. Generate all emissions data from two in-use Modified Vehicles for each
Generation within the Full Useful Life mileage (i.e., 120,000 miles for each Generation)
over all required test cycles (FTP, US06, SC03, and HWFET) accounting for Infrequent
Regeneration Adjustment Factors, and provide all these data to EPA and CARB.
Defendants must complete the tests and provide to EPA and CARB the results, no later
than October 1 of each year.
6.1.5. If the test results of any one in-use Modified Vehicle fails the applicable
emissions standard for Full Useful Life in high altitude testing, Defendants must formally
notify the agencies within 72 hours of the failure. In the event of such failure, Defendants
must follow the manufacturer in-use confirmatory testing program, as defined in 40
C.F.R. § 86.1846-01(b). The criteria used for such additional in-use vehicle testing and
any additional reporting requirements must be identical to the official regulatory in-use
testing and reporting program under 40 C.F.R. § 86.1846-01, except that vehicles
selected for additional testing may include vehicles up to the applicable Full Useful Life
in terms of mileage and age, shall be reasonably maintained and shall not be excluded
solely for such things as lack of maintenance records, multiple owners and/or repairs as a
result of the Emissions Modification. As stated in Section VIII (Stipulated Penalties and
Other Stipulated Remedies for Noncompliance), EPA and CARB reserve all rights and
authorities to impose consequences if a Modified Vehicle fails an applicable emissions
standard during the Full Useful Life period.
6.1.6. If the test results of any one in-use Modified Vehicle fails the applicable
emissions standard for Full Useful Life in sea level testing, Defendants must formally
notify the agencies within 72 hours of the failure. In the event of such failure, Defendants
must conduct an In-Use Confirmatory Program. Prior to conducting the In-Use
Confirmatory Program, the Defendants must submit a test plan for EPA/CARB review
and approval. The criteria used for such additional in-use vehicle testing and any
additional reporting requirements must be identical to the official regulatory in-use
testing and reporting program under 40 C.F.R. § 86.1846-01, except that vehicles
selected for additional testing may include vehicles up to the applicable Full Useful Life
in terms of mileage and age, shall be reasonably maintained and shall not be excluded
solely for such things as lack of maintenance records, multiple owners and/or repairs as a
result of the Emissions Modification. As stated in Section VIII (Stipulated Penalties and
Other Stipulated Remedies for Noncompliance), EPA and CARB reserve all rights and
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MDL No. 2672 CRB (JSC)
authorities to impose consequences if a Modified Vehicle fails an applicable emissions
standard during the Full Useful Life period.
6.1.7. For each Approved Emission Modification, Defendants must perform
OBD testing and reporting, in accordance with the requirements of Cal. Code Regs. tit.
13, §§ 1968.2 (j)(2) and (3) (i.e., verification of monitoring requirements on production
vehicles, and verification and reporting of in-use monitoring performance on production
vehicles, respectively). Pursuant to these regulations, Defendants must complete
reporting under Cal. Code Regs. tit. 13, § 1968.2(j)(2) within 180 calendar Days after the
first 3.0 Liter Subject Vehicle is modified in accordance with an Approved Emissions
Modification, and must complete data collection and reporting required under Cal. Code
Regs. tit. 13, § 1968.2(j)(3) within 360 calendar Days after the first 3.0 Liter Subject
Vehicle is modified in accordance with the applicable Approved Emissions Modification.
In the event this testing demonstrates that any Modified Vehicles do not comply with the
applicable OBD requirements, Defendants must submit a remedial plan to EPA and
CARB for any such noncompliant Modified Vehicles.
6.1.8. Starting on April 30, 2018, and annually for the following 5 years,
Defendants must provide EPA and CARB with a “Report on In-Use Compliance
Assurance for Modified Vehicles” that summarizes the testing performed pursuant to this
Section in the preceding year. The two vehicles tested under this Section shall be two of
the vehicles procured by the Defendants during the Defendants’ compliance with the in-
use reporting and compliance requirements in 40 C.F.R. § 86.1845-04 and Cal. Code
Regs. tit. 13, § 2137.
6.1.9. Defendants must certify all In-Use Compliance test results required under
this Section VI, and submitted to EPA and CARB, in accordance with the certification
requirements of Paragraphs 34-36 of the Consent Decree.
VII. ADDITIONAL REQUIREMENTS
7.1 FEV Software Analysis. Defendants shall continue to pay for, provide test
vehicles, and otherwise cooperate with FEV’s analysis of the software in the ECU and TCU of
the Subject 3.0 Liter Vehicles and Proposed Emissions Modifications specified in subparagraph
4.3.16.
7.2 For all Generations, Defendants may not sell or cause to be sold, resell or cause to
be resold, or lease or cause to be leased, any 3.0 Liter Subject Vehicle in Defendants’ possession,
or obtained by Defendants in the future, until:
7.2.1. Defendants complete at least the equivalent of 100% Full Useful Life
durability testing on an Official Durability Vehicle aged on the Customized SRC, and
Defendants provide all data to EPA and CARB;
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PARTIAL CONSENT DECREE
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7.2.2. Defendants complete the Critical OBD Demonstration Testing on a
vehicle aged on the Customized SRC to the equivalent of 75% of Full Useful Life, and
Defendants provide all data to EPA/CARB;
7.2.3. Defendants remedy any and all OBD noncompliances that are not
provided for under this Appendix B and that are known at the time the OBD
demonstration required under subparagraph 7.2.2 is completed, and Defendants provide
all necessary data and information showing noncompliances reported under
subparagraph 7.2.2 are remedied;
7.2.4. Defendants perform an applicable Approved Emissions Modification on
any such vehicle and comply with all other requirements applicable to such vehicle
under this Appendix B;
7.2.5. Defendants execute all emission-related service actions and repairs
required to bring the vehicle into compliance with this Appendix B, apply any and all
other recalls concerning the vehicle, and execute any other required service actions;
7.2.6. Defendants submit a Proposed Plan for Sale and Lease of Modified
Vehicles, including the materials set forth below:
i. A statement that the Modified Vehicles comply with the requirements in
this Appendix B;
ii. If the Modified Vehicles do not comply with this Appendix B, a statement
of all actions to be undertaken to alter the Emissions Modification to
ensure compliance with this Appendix B;
iii. As necessary, an updated list of OBD noncompliances that were identified
during the testing required under subparagraph 7.2.2; and
iv. Defendants certify the Proposed Plan for Sale and Lease of Modified
Vehicles in accordance with the certification requirements set forth in
Paragraphs 4.3.17 of this Appendix B;
7.2.7. EPA/CARB approve the Proposed Plan for Sale and Lease of Modified
Vehicles. EPA/CARB will respond to the proposal within 14 Days of submittal;
7.2.8. For five years following the Effective Date of this Appendix B,
Defendants must submit quarterly reports, certified in accordance with the certification
requirements under Paragraphs 34-36 of the Consent Decree, to EPA/CARB to include
the following information:
i. Each vehicle, by VIN, that has been acquired by Defendants, modified
with an Approved Emissions Modification (including Modified Vehicles
that have been returned to Eligible Owners and Lessors), sold, exported, or
destroyed, including the dates of each occurrence; and
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ii. By VIN, the repairs and alterations to each 3.0 Liter Subject Vehicle
conducted to remedy OBD noncompliances and other defects in the
relevant Approved Emissions Modification.
7.3 If the Final OBD Demonstration; Full (or equivalent) Useful Life Durability;
testing, data, or reports created or recorded by FEV; or tests by EPA/CARB show that Modified
Vehicles do not comply with this Appendix B, or if a substantial number of Modified Vehicles
exceed the applicable emissions standards in-use, the Approved Emissions Modification shall be
suspended. When an Approved Emissions Modification is suspended, it may not be applied, and
no sales, leases, or exports, of relevant Modified Vehicles will be permitted, until such time
Defendants correct the defects in the Approved Emissions Modification in accordance with the
applicable regulations.
7.4 Defendants must make all disclosures to vehicle owners as required by the
Consent Decree and consistent with Appendix A. These requirements are meant to ensure
owners are able to make an informed decision about participation in the Emissions Modification
and the availability of the Extended Emissions Warranty.
7.5 Defendants must also comply with any additional labeling, disclosure, and
warranty requirements set forth in Appendix A.
7.6 Defendants may not terminate the Emissions Modification Program.
VIII. STIPULATED PENALTIES AND OTHER STIPULATED REMEDIES FOR
NONCOMPLIANCE
8.1 With respect to Defendants’ noncompliance with the provisions of this Appendix
B, EPA and CARB reserve all rights to address such noncompliance under applicable laws and
regulations, including without limitation, civil, criminal, and administrative enforcement
authorities, such as the imposition of penalties and equitable remedies.
8.2 Defendants must pay stipulated penalties to the United States and CARB, and be
liable for the following remedies, for each violation of this Appendix B, in accordance with the
following paragraphs. Except as otherwise provided herein, 75% of any stipulated penalties due
under these subparagraphs shall be paid to the United States, and 25% shall be paid to CARB.
8.2.1. Failure to Disclose AECDs. If, after issuing a Notice of Approved
Emissions Modification, EPA/CARB determine that Defendants failed to provide a
complete list of each AECD and EI-AECD in the Emissions Modification Proposal that
EPA/CARB approved, Defendants must pay to the United States and CARB a stipulated
penalty of $150,000 for each AECD and $2,000,000 for each EI-AECD not included in
the list.
8.2.2. Failure to Comply with Labeling Requirements. If Defendants fail to
permanently affix a label to any 3.0 Liter Subject Vehicle, as required under
subparagraph 3.1.13 before such vehicle is sold, leased, offered for sale or lease,
otherwise introduced into commerce, or returned to the Eligible Owner or Eligible
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PARTIAL CONSENT DECREE
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Lessee, or if the information included in any label is incorrect, Defendants must pay to
the United States and CARB a stipulated penalty of $15 per label, per vehicle, and for
each Day that Defendants fail to apply the required label, provided that if Defendants
affix the label within 30 Days of selling or leasing the vehicle or returning the vehicle to
the Eligible Owner or Lessee, no stipulated penalty shall be required for that vehicle.
8.2.3. Failure to Perform Emissions Modification. If Defendants sell or lease,
offer for sale or lease, or otherwise introduce into commerce, or return to an Eligible
Owner or Lessee who requested an Emissions Modification, any 3.0 Liter Subject
Vehicle that has not received the applicable Approved Emissions Modification,
Defendants must (1) make a Mitigation Trust Payment to the Trust Account in
accordance with the Consent Decree in the amount of $50,000 per vehicle; and (2) offer
to buy back and terminate the leases for each and every such vehicle, in accordance with
the terms and requirements of Appendix A of the Consent Decree. For each such vehicle
that Defendants fail to buy back or execute a lease termination, as applicable, within 18
months following EPA/CARB’s demand for the stipulated remedy under this
subparagraph, Defendants must pay a Mitigation Trust Payment to the Trust Account in
accordance with the Consent Decree in the amount of $25,000 per vehicle.
8.2.4. Failure to Comply with the Applicable Emissions Standard or Limitation.
If any test required under this Appendix B, or such other compliance test, as specified in
this Appendix B and conducted by EPA/CARB, demonstrates that any Modified Vehicle
Test Group exceeds the applicable emissions standard or Maximum Emissions
Modification Limit, the following stipulated remedies apply.
i. Defendants must pay a Mitigation Trust Payment to the Trust Account in
accordance with the Consent Decree, an amount based on Formula 1. The
Mitigation Trust Payment amount shall be calculated based on the
emissions exceedance demonstrated by testing conducted during the 1
year period preceding the EPA/CARB demand for payment. EPA/CARB
may issue a separate demand for an additional Mitigation Trust Payment
for each year in which the Modified Vehicle exceeds the applicable
emissions limit. For Modified Vehicles that exceed more than one
emissions limit, the amount of exceedance will be based on the greatest
amount by which any emissions limit is exceeded.
Formula 1
[Vehicles not removed from service (number of vehicles in the
applicable Generation less the number of vehicles Defendants
demonstrate are bought back and destroyed)] x [g/mile (amount of
exceedance)] x [15,000 miles] x [grams to tons conversion factor]
x [70,000] = [Mitigation Trust Payment in dollars]
8.2.5. Failure to Provide EPA or CARB with Test Vehicles. If Defendants fail to
provide any test vehicle within 45 Days of a request by EPA/CARB, as provided in
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PARTIAL CONSENT DECREE
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subparagraph 3.1.14, Defendants must pay to the United States and CARB the following
stipulated penalties for each test vehicle and for each Day the vehicles are not provided:
$5,000 1st through 14th Day
$20,000 15th through 30th Day
$50,000 31st Day and beyond
8.2.6. Failure to Remove Defeat Devices. If, after EPA/CARB approve the
applicable Emissions Modification, Defendants install software, or a Dealer installs
software provided by Defendants, for purposes of modifying the vehicle as provided
under this Appendix B, and subsequent to such installation, the vehicle contains a Defeat
Device, Defendants must offer to buy back, and terminate the leases for, each and every
such vehicle that has been purchased or leased, or that has been returned to an Eligible
Owner or Lessee who requested an Emissions Modification, and Defendants must also
pay to the United States and CARB a stipulated penalty of $25,000,000 for each Defeat
Device (but not for each vehicle that contains such Defeat Device).
8.2.7. Failure to Complete Final OBD Demonstration Testing. If Defendants fail
to complete the Final OBD Demonstration testing by the dates required under
subparagraph 3.1.11, Defendants must pay to the United States and CARB (at a 50/50
split) the following stipulated penalty for each Day that Defendants fail to complete such
testing:
$5,000 1st through 14th Day
$20,000 15th through 30th Day
$75,000 31st Day and beyond
8.2.8. Failure to Comply with OBD System Requirements. If the Final OBD
Demonstration testing, or such other test conducted by EPA/CARB pursuant to the OBD
enforcement regulation Cal. Code Regs. tit. 13, § 1968.5, demonstrates that the Modified
Vehicles do not meet the OBD System Requirements set forth in this Appendix B,
Defendants must pay to the United States and CARB (at a 50/50 split) a stipulated
penalty of $15,000,000 for each noncompliance (but not for each vehicle that contains
such noncompliance) demonstrated by the test(s), and Defendants must also continue to
conduct the in-use compliance testing required under Section VI of this Appendix B for
an additional 3 year period. If such additional in-use compliance testing demonstrates that
the Modified Vehicles exceed any of the applicable emissions standards, then the
stipulated remedies under subparagraph 8.2.4 apply.
8.2.9. Failure to Install Hardware Required for Generation 1.1 and Generation
1.2 Vehicles. If Defendants fail to install on any Generation 1.1 or Generation 1.2 3.0
Liter Subject Vehicle the applicable hardware, as required under subparagraphs 3.2.1 and
3.3.1, Defendants must recall each and every such vehicle and install the required
hardware, and must pay to the United States and CARB a stipulated penalty of $500 per
vehicle per device that Defendants fail to install.
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PARTIAL CONSENT DECREE
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8.2.10. Failure to Install Hardware Required for Generation 2.1 Vehicles. If
Defendants fail to install on any Generation 2.1 3.0 Liter Subject Vehicle the applicable
hardware, as required under subparagraph 3.4.1, Defendants must recall each and every
such vehicle and install the required hardware and must pay to the United States and
CARB a stipulated penalty of $500 per vehicle per device that Defendants fail to install.
8.2.11. Failure to Install Hardware Required for Generation 2 Passenger Cars. If
Defendants fail to install on any Generation 2 PC 3.0 Liter Subject Vehicle the applicable
hardware, as required under subparagraph 3.6.1, Defendants must recall each and every
such vehicle and install the required hardware and must pay to the United States and
CARB (at a 50/50 split) a stipulated penalty of $500 per vehicle per device that
Defendants fail to install.
8.2.12. Failure to Honor Warranty. If Defendants fail to honor the Extended
Emissions Warranty under Paragraph 3.9 of this Appendix B, including by failing to
cover all costs of parts and labor, or by failing to pay for or provide a loaner car for
repairs of more than 3 hours, Defendants must pay to the United States and CARB (at a
50/50 split) a stipulated penalty of $40,000 per failure, except for failing to pay for or
provide a loaner car, for which Defendants must pay a stipulated penalty of $1,000 per
failure.
8.2.13. Failure to Disseminate the Emissions Modification Disclosure and the
Additional Emissions Warranty Extensions. If Defendants fail to timely execute the
disclosures required under subparagraphs 3.1.9 or 3.1.18, Defendants must pay to the
United States and CARB (at a 50/50 split) the following stipulated penalties for each Day
such notice is not provided:
$2,000 1st through 14th Day
$10,000 15th through 30th Day
$50,000 31st Day and beyond
8.2.14. Failure to Maintain a VIN-Searchable Database with the Required
Emissions Modifications Disclosures and Specifying Warranty Coverage. If Defendants
fail to maintain an accurate and complete database specifying the warranty coverage for
each 3.0 Liter Subject Vehicle, the Defendants must pay to the United States and CARB
(at a 50/50 split) the following stipulated penalties for each Day the database is not
maintained, and for each covered part omitted:
$2,000 1st through 14th Day
$10,000 15th through 30th Day
$50,000 31st Day and beyond
8.2.15. Failure to Comply with In-Use Compliance Testing, Notice, or Reporting
Requirements. If Defendants fail to conduct the tests or fail to comply with the reporting
or notice requirements under Section VI of this Appendix B (In-Use Compliance
Assurance), Defendants must make Mitigation Trust Payments to the Trust Account in
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 143 of 164
42 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
accordance with the Consent Decree in the following amounts for each requirement
Defendants fail to meet, and for each Day of such failure:
$50,000 1st through 14th Day
$100,000 15th through 30th Day
$500,000 31st Day and beyond
8.2.16. Failure to Comply with Other Testing Requirements. If Defendants fail to
conduct any other test or timely submit the results as required under this Appendix B,
including any test Defendants are required to conduct after EPA and CARB issue a
Notice of Approved Emissions Modification, but excluding tests required under Section
VI of this Appendix B, Defendants must pay to the United States and CARB (in a 50/50
split) the following stipulated penalties for each requirement Defendants failed to meet,
and for each Day of such failure:
$5,000 1st through 14th Day
$20,000 15th through 30th Day
$50,000 31st Day and beyond
8.2.17. Failure to Comply with Other Notice or Reporting Requirements. If
Defendants fail to meet any of the other notice or reporting requirements under this
Appendix B, Defendants must pay to the United States and CARB (at a 50/50 split) the
following stipulated penalty for each requirement and for each Day Defendants fail to
meet such requirements:
$2,000 1st through 14th Day
$5,000 15th through 30th Day
$25,000 31st Day and beyond
8.2.18. Failure to Comply with an Approved Emissions Modification. Except as
otherwise provided herein, if an Emissions Modification performed by or on behalf of
Defendants fails to conform to any of the requirements of the applicable Approved
Emissions Modification, Defendants must pay to the United States and CARB (at a 50/50
split) a stipulated penalty of $5,000 for each nonconformance with the Approved
Emissions Modification and for each Modified Vehicle that contains a nonconformance.
8.3 These stipulated penalties in this Appendix B shall not apply if, at any time prior
to instituting an Emission Modification Program, the Defendants decide not to pursue an
Emission Modification Program.
IX. DISPUTE RESOLUTION
9.1 Disputes under this Appendix B shall be governed by the dispute resolution
procedures set forth in Section IX of the Consent Decree.
9.2 With respect to any dispute under this Appendix B, in any judicial proceeding
conducted pursuant to the dispute resolution procedures set forth in Section IX of the Consent
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 144 of 164
43 APPENDIX B TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Decree, Defendants shall have the burden of demonstrating that EPA/CARB’s determination or
action was arbitrary and capricious or otherwise not in accordance with the law based on the
administrative record.
X. SUBMISSIONS
10.1 Except as otherwise provided herein, Defendants must provide EPA and CARB
with all correspondence required hereunder concurrently, by the method and in the form
specified in Section XIII (Notices) of the Consent Decree.
10.2 EPA and CARB will provide Defendants with all correspondence required
hereunder by the method and in the form specified in Section XIII (Notices) of the Consent
Decree.
XI. CONFIDENTIAL BUSINESS INFORMATION
11.1 Defendants may assert claims that their Submissions contain Confidential
Business Information, as specified in the Consent Decree.
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 145 of 164
APPENDIX B-1 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix B-1
Maximum Emissions Modification Limits
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 146 of 164
1 APPENDIX B-1 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Gen 1.1 - Tier 2, Bin 7 with 0.01 g/mi PM Emission Standards.
NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) Formaldehyde
(g/mi)
NMHC+NOx
(g/mi)
Test
Procedure
50
kmi
120
kmi
50
kmi
120
kmi
4
kmi
50
kmi
120
kmi
50
kmi
120
kmi 50 kmi 120
kmi 4 kmi
FTP 75 0.11 0.15 0.075 0.090 / 3.4 4.2 0.01 0.01 0.015 0.018 / FTP@1620m
HWY FET 0.15 0.20 / / / / / / / / / /
SFTP
Composite 1.44 @ 120 kmi / / / 0.09 0.09 / / /
US06 / / / / 11.8 19.3 19.3 / / / / 0.6
SC03 / / / / 4.0 6.4 6.4 / / / / 0.44
“/” = no applicable limit
Note: California limits, if different from federal limits, are designated in brackets (“[]”)
Gen 1.2 (Audi Q7) Tier 2, Bin 6 Emission Standards.
NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) Formaldehyde
(g/mi)
NMHC+NOx
(g/mi)
Test
Procedure
50
kmi
120
kmi 50 kmi 120
kmi 4 kmi 50
kmi
120
kmi
50
kmi
120
kmi
50
kmi
120
kmi 4 kmi
FTP 75 0.08 0.10 0.075 0.090 / 3.4 4.2 0.01 0.01 0.015 0.018 / FTP@1620m
HWY FET 0.11 0.13 / / / / / / / / / /
SFTP
Composite 1.43 @ 120 kmi / / / 0.08 0.08 / / /
US06 / / / / 11.8 19.3 19.3 / / / / 0.6
SC03 / / / / 4.0 6.4 6.4 / / / / 0.44
“/” = no applicable limit
Note: California limits, if different from federal limits, are designated in brackets (“[]”)
Gen 1.2 (VW Touareg) Tier 2, Bin 6 Emission Standards.
NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) Formaldehyde
(g/mi)
NMHC+NOx
(g/mi)
Test
Procedure
50
kmi
120
kmi
50
kmi
120
kmi 4 kmi 50
kmi
120
kmi
50
kmi
120
kmi
50
kmi
120
kmi 4 kmi
FTP 75 0.08 0.10 0.075 0.090 3.4 4.2 0.01 0.01 0.015 0.018 FTP@1620m
HWY FET 0.11 0.13 / / / / / / / / / /
SFTP
Composite 1.00 @ 120 kmi / / / 0.07 0.07 / / /
US06 / / / / 10.5 16.9 16.9 / / / / 0.4
SC03 / / / / 3.5 5.6 5.6 / / / / 0.31
“/” = no applicable limit
Note: California limits, if different from federal limits, are designated in brackets (“[]”)
Gen 2.1 (Audi Q7) Tier 2, Bin 5 [LEV2 ULEV] Emission Standards and Maximum Emissions Modification Limits.
NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) Formaldehyde
(g/mi)
NMHC+NO
x (g/mi)
Test
Procedure
50
kmi
120
kmi 50 kmi 120
kmi
4
kmi
50
kmi
120
kmi
4
kmi
50
kmi
120
kmi 50 kmi 120
kmi 4 kmi
FTP 75 / / /
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 147 of 164
2 APPENDIX B-1 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
FTP@1620
m
0.0
5
0.0
7
0.075
[0.040
]
0.090
[0.055
]
3.4
[1.7
]
4.2
[2.1
]
0.0
1
0.0
1
0.015
[0.008
]
0.018
[0.011
]
HWY FET 0.0
7
0.0
9 / / / / / / / / / / /
SFTP
Composite 1.41 @ 120 kmi [/] / / / / 0.0
8 [/]
0.0
8 [/] / / /
US06 / / / / 11.
8
19.
3 [/]
19.
3 [/]
0.0
8 [/] / / / / 0.60
SC03 / / / / 4.0 6.4
[/]
6.4
[/]
/ / / / / 0.44
“/” = no applicable limit
Note: California limits, if different from federal limits, are designated in brackets (“[]”)
The maximum emissions modification limits are 0.09 and 0.11 g/mi NOx for 50 kmi and 120 kmi, respectively, using
FTP75 and FTP@1620m test procedures; all other limits remain unchanged.
Gen 2.1 (VW Touareg and Porsche Cayenne) Tier 2, Bin 5 [LEV2 ULEV] Emission Standards and Maximum Emissions
Modification Limits.
NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) Formaldehyde
(g/mi)
NMHC+NOx
(g/mi)
Test
Procedure
50
kmi
120
kmi 50 kmi 120
kmi
4
kmi
50
kmi
120
kmi
4
kmi
50
kmi
120
kmi 50 kmi 120
kmi 4 kmi
FTP 75 0.05 0.07 0.075
[0.040]
0.090
[0.055] / 3.4
[1.7]
4.2
[2.1] / 0.01 0.01 0.015
[0.008]
0.018
[0.011] / FTP@1620m
HWY FET 0.07 0.09 / / / / / / / / / / /
SFTP
Composite 0.99 @ 120 kmi [/] / / / / 0.07
[/]
0.07
[/] / / /
US06 / / / / 10.5 16.9 16.9 0.07
[/] / / / / 0.40
SC03 / / / / 3.5 5.6
[/]
5.6
[/] / / / / / 0.31
“/” = no applicable limit
Note: California limits, if different from federal limits, are designated in brackets (“[]”)
The maximum emissions modification limits are 0.09 and 0.11 g/mi NOx for 50 kmi and 120 kmi, respectively, using
FTP75 and FTP@1620m test procedures; all other limits remain unchanged.
Gen 2.2 (VW Touareg and Porsche Cayenne) Tier 2, Bin 5 [LEV2 ULEV] Emission Standards and Maximum Emissions
Modification Limits.
NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) Formaldehyde
(g/mi)
NMHC+NO
x (g/mi)
Test
Procedures
50
kmi
120
kmi 50 kmi 120
kmi
4
kmi
50
kmi
120
kmi
4
kmi
50
kmi
120
kmi 50 kmi 120
kmi 4 kmi
FTP 75 0.0
5
0.0
7
0.075
[0.040
]
0.090
[0.055
]
/
3.4
[1.7
]
4.2
[2.1
]
/ 0.0
1
0.0
1
0.015
[0.008
]
0.018
[0.011
]
/ FTP@1620
m
HWY FET 0.0
7
0.0
9 / / / / / / / / / / /
SFTP
Composite 0.99 @ 120 kmi[/] / / / / 0.0
7 [/]
0.0
7 [/] / / /
US06 / / / / 10.
5
16.
9 [/]
16.
9 [/]
0.0
7 [/] / / / / 0.40
SC03 / / / / 3.5 5.6
[/]
5.6
[/] / / / / / 0.31
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 148 of 164
3 APPENDIX B-1 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
“/” = no applicable limit
Note: California limits, if different from federal limits, are designated in brackets (“[]”)
The maximum emissions modification limits are 0.09 and 0.11 g/mi NOx for 50 kmi and 120 kmi, respectively, using
FTP75 and FTP@1620m test procedures; all other limits remain unchanged.
Gen 2 PC Tier 2, Bin 5 [LEV2 ULEV] Emission Standards and Maximum Emissions Modification Limits.
NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) Formaldehyde
(g/mi)
NMHC+NOx
(g/mi)
Test
Procedures
50
kmi
120
kmi 50 kmi 120
kmi
4
kmi
50
kmi
120
kmi
4
kmi
50
kmi
120
kmi 50 kmi 120
kmi 4 kmi
FTP 75 0.05 0.07 0.075
[0.040]
0.090
[0.055] / 3.4
[1.7]
4.2
[2.1] / 0.01 0.01 0.015
[0.008]
0.018
[0.011] / FTP@1620m
HWY FET 0.07 0.09 / / / / / / / / / / /
SFTP
Composite 0.65 @ 120 kmi[/] / / / / 0.07
[/]
0.07
[/] / / /
US06 / / / / 8.0 11.1 11.1
[/]
0.07
[/] / / / / 0.14
SC03 / / / / 2.7 3.7
[/]
3.7
[/] / / / / / 0.20
“/” = no applicable limit
Note: California limits, if different from federal limits, are designated in brackets (“[]”)
The maximum emissions modification limits are 0.09 and 0.11 g/mi NOx for 50 kmi and 120 kmi, respectively, and 0.075
and 0.090 g/mi NMOG for 50 kmi and 120 kmi, respectively using FTP75 and FTP@1620m test procedures; all other
limits remain unchanged.
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 149 of 164
APPENDIX B-2 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix B-2
Permissible OBD Noncompliances
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 150 of 164
This list represents the allowable OBD noncompliances but does not indicate
that any particular noncompliance is present on any particular vehicle.
1 APPENDIX B-2 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
PERMISSIBLE OBD NONCOMPLIANCES FOR GEN 1.1, 1.2
1 Acceleration/steering angle sensor - rationality monitoring
2 Ambient air temperature sensor monitoring - incorrect fault code
3 ATF temperature sensor - rationality monitoring
4 Boost system monitoring - incorrect fault code
5 Boost system monitoring - underboost malfunction criteria
6 CSERS monitoring - individual elements (MY 10/11/12 only)
7 CSERS monitoring - no emission threshold monitor (MY 10/11/12 only)
8 Cylinder pressure sensor - rationality monitoring
9 DOC monitoring malfunction criteria exceedance
10 Downstream NOx sensor - monitoring frequency
11 DPF filter monitoring malfunction criteria exceedance
12 DPF monitoring - monitor demonstration
13 DPF monitoring - monitor robustness
14 EGR cooling system component monitoring
15 EGR micro catalyst - no monitoring
16 EGR system monitoring - low flow and response malfunction criteria
17 Fuel system monitoring - no monitoring of idle balance control
18 Fuel system monitoring - no monitoring of time to closed loop
19 Fuel system quantity and timing monitoring - frequency and fault demonstration
20 Fuel system quantity and timing monitoring - malfunction criteria exceedance
21 NOx sensors - monitoring frequency
22 Other emission control strategies - SCR temperature control
23 Other emission control system - cylinder pressure based injection timing control monitoring
24 SCR system monitoring - delivery performance malfunction criteria
25 SCR system monitoring - wrong medium detection
26 Standardization - EI-AECD tracking (MY 10 only)
27 Standardization - NOx sensors CVN (MY 09 only)
28 Standardized test results - fuel system monitoring
29 Upstream NOx sensor - monitoring frequency
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 151 of 164
This list represents the allowable OBD noncompliances but does not indicate
that any particular noncompliance is present on any particular vehicle.
2 APPENDIX B-2 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
PERMISSIBLE OBD NONCOMPLIANCES FOR GEN 2.1 & 2.2 SUV, GEN 2 PC
1 Acceleration/steering angle sensor - rationality monitoring
2 ATF sensor - rationality monitoring
3 Boost pressure monitoring - incorrect fault code
4 Catalyzed DPF - no monitoring of NHMC conversion (MY 15/16 only)
5 CSERS monitoring - individual elements
6 CSERS monitoring - no emission threshold monitor
7 Cylinder pressure sensor - rationality monitoring
8 DOC - no monitoring of feedgas generation (MY 15/16 only)
9 DOC monitoring malfunction criteria exceedance
10 DPF filter monitoring malfunction criteria exceedance
11 EGR system monitoring - low flow malfunction criteria
12 Fuel system components - no monitoring of tolerance compensation features (MY 15/16 only)
13 Fuel system quantity and timing monitoring - malfunction criteria exceedance
14 Grill shutter components - no monitoring (Porsche Cayenne MY 15/16 only)
15 NOx sensors - monitoring frequency
16 Other emission control strategies - SCR temperature control
17 Other emission control system - cylinder based injection timing control monitoring
18 SCR system monitoring - delivery performance malfunction criteria
19 Standardization - Exhaust sensor heater readiness
20 Standardization - fuel system test results
21 Start-stop system components - no monitoring (PC MY 15/16 only)
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 152 of 164
APPENDIX B-3 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix B-3
Test Vehicles
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 153 of 164
Summary Family Grouping GenerationFamilyEmission Level (most stringent)SFTP Emission LevelTransmissionDDV/DF Confi-guration*UAF Confi-guration*OBD Confi-gurationOBD Confi-guration(Critical/Final)Emission compliance Configuration*A - B - C Confi-guration*Touareg MY 09-10 LDT4Q7 MY 09-10 LDT4Touareg MY 11-12 LDT3Q7 MY 11-12 LDT4Q7 MY 13-15 LDT4Touareg MY 13-16 LDT3Cayenne MY 13-16 LDT3A6 MY 14-16 PCA7 MY 14-16 PCA8 MY 14-16 PCQ5 MY 14-16 LDT2* Configuration means that the subject vehicle will represent the test weight class and road load horsepower by means of dynamometer derivation. Q7Gen 1.1 SUV Tier2 Bin7LDT4 at FULagainst FUL standardAL750 6Q Q7Q7 FULQ7 Q7Q7Gen 2 SUVTier2 Bin5/ULEV IILDT3 at FUL against 4kmi and FUL standardAL1000 8QQ7Gen 1.2 SUV Tier2 Bin6LDT3 at FULagainst FUL standardAL1000 8QTouaregTouaregTouaregGen 2 PCTier2 Bin5/ULEV IIPC at FULagainst 4kmi and FUL standardAL551 8QQ7 FULTouareg 75% FULTouareg FULA6 75% FULA6 FULA7 A6Q7Q7Q5A7Q7Q71APPENDIX B-3 TO SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC)Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 154 of 164
UAF, OBD Demo, Durability, Family Grouping with the SW Field Fix MasterFamilyCompliance withtestvehicleTransmission SCRcarry over to other family member ModelsUAFUAFVIN /OdometerOBD DemoOBDVIN /OdometerDurabilityDurability VIN/OdometerTouareg MY 09 / 10Q7 MY 09 / 10Touareg MY 11 / 12Q7 MY 11 / 12Q7 MY 13-15Touareg MY 13 - 16Cayenne MY 13 - 16A7 MY 14-16A6 MY 14-16A8 MY 14 - 16Q5 MY 14 - 16DF 310E two OBD Demo vehicle aged customized to 120 kmi (customer vehicle with less than 60 kmi to start)DF derived on the basis of three vehicles DDV vehicle agedcustomized to 120kmi (see Appendix BSection 4.3.2(i)(a)) DDV vehicle agedcustomized to 120kmi (see Appendix BSection 4.3.2(i)(a))two OBD Demo vehicle aged customized to 120 kmi (customer vehicle with less than 60 kmi to start)2x Touareg MY 16see representative vehicle Touareg MY 16 @ 75% FULWVGEP9BP4FD0001889 76354 miWVGEP9BP4FD0001889 76354 miWVGEP9BP4FD00735875039 miGen 1.1 LDT 3 & 4 MY 09_10Tier 2Bin 7Q7 AL750 6QGen 2 LDT3&4 MY 13_16Tier 2 Bin 5 / ULEV IITouareg MY 16 OBD Demo vehicles aged in customized SRC to equivalent of 120 kmiAL1000 8QGen 1.2 LDT 3 & 4 MY 11_12Tier 2 Bin 6Q7 AL1000 8QDF 500 BGen 2 PC MY 14_16Tier 2 Bin 5 / ULEV IIA6/A7 MY15 OBD Demo vehicles aged in customized SRC to equivalent of 120 kmiAL551 8QDF 500 BDF 500 BCarry across from Gen2 LDT 3/4 with additional milesWVGFK7A98AD000800104446 miWA1WMAFE4BD009779 about 32000miWVGEP9BP4FD0001889 76354 miWVGEP9BP4FD000340WVGEP9BP0FD000268A7 @ 75-100% FULDDV or representative 75% FUL aged vehicle (customized SRC)1 x A6 MY 15see representative vehicleWVGFK7A98AD000800104446 miWVGFK7A97AD000299 (71200 mi)AND another car pendingCarry across from Gen2 LDT 3/4 since same family WA1WMAFE4BD009779 about 32000miWA1VMAFE5BD002528about 20000miWAU2MAFC4FN011211about 70000 miWAUFMAFC3FN003182 about 71770mi2APPENDIX B-3 TO SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC)Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 155 of 164
Emission Compliance Family Grouping with the SW Field Fix MasterEmission Compliance FamilyCompliance withtestvehicleTransmission SCRCompliance determination methodFamily member ModelsEmission compliance Test Vehiclesodometervehicle(Nov. 7, 2016)desired equivalent MileageTouareg MY 09 / 10Q7 MY 09 / 10Touareg MY 11 / 12Q7 MY 11/12 Touareg MY 13/14/15/16Cayenne MY 13/14/15/16A6 MY 14-16A7 MY 14-16A8 MY 14 - 16Q5 MY 14 - 16FUL aged vehicle (with customized SRC) DF 500 BAL551 8QTier 2 Bin 5 / ULEV II PC A7Gen 2 PC MY 14_16Tier 2 Bin 5 / ULEV II more stringent standard using LDT4 configurationTouareg MY 15 AL1000 8QDF 500 BDF 500 BAL1000 8Q120.000 miTouareg AL750 6QQ7FUL aged vehicle (with customized SRC) DF 310EFUL aged vehicle (with customized SRC) FUL aged vehicle (with customized SRC) Q7 MY 13/14/15WAU2MAFC4FN011211about 70000 mi 120.000 miGen 2 LDT 3/4 MY 13_16104446 miWVGFK7A98AD000800installation of new powertrain and exhaust system120.000 miWVGEP9BP0FD0007358 orWVGEP9BP4FD0001889 dependent of availability70017 mior 76354 miexpected measurement start @ 120 kmi equivalent120.000 miGen 1.1 SUVGen 1.2 SUVTier 2 Bin 7 LTD4Tier 2 Bin 6 LTD3 more stringent standard using LDT4 configurationWA1LMAFE3BD008903 about 35000 mi3APPENDIX B-3 TO SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC)Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 156 of 164
Customer Impact NOx and Fuel economy A to B AND B to CA-to-B testingtestvehicleCarry OverJustification VINodometervehicleGen 1.1 LDT 3 & 4 MY 09_10Q7Touareg MY 09/ 10, Q7 MY 9/10worst FE in familymore stringent standard using LDT4 configurationWA1AM74L09D03546592851 mi installation of new powertrain and exhaust systemGen 1.2 LDT 3 & 4 MY 11_12Q7Touareg MY 11/ 12, Q7 MY 11/12worst FE in familymore stringent standard using LDT4 configurationWA1WMAFEXCD00155784806 miinstallation of new powertrain and exhaust systemQ7 MY 13- 15Touareg MY 13-16Cayenne MY 13-16A6/A7 MY 16A8 MY 14/15/16A6/A7 MY 14/15Q5 MY 15/16WA1VMAFP6EA08408226567 miWVGEP9BP0FD000268 or WP1AF2A23GKA474687484 mi or 0 miGen 2 PC MY 14_16Q5 MY 14worst FE in familymore stringent standard using LDT2 configurationGen 2 LDT 3/4 MY 13_16 Touareg MY 15 or Cayenne MY 16worst FE in familymore stringent standard using LDT4 configuration4APPENDIX B-3 TO SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC)Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 157 of 164
In Use V6 TDIIN USE V6 TDI2009 2010 2011 2012 2013 2014 2015 2016Audi Q7 LDT 4Gen 1.1 LDT 3 & 4 MY 09_10Gen 1.1 LDT 3 & 4 MY 09_10Gen 1.2 LDT 3 & 4 MY 11_12Gen 1.2 LDT 3 & 4 MY 11_12Gen 2 LDT 3 & 4 MY 13_15Gen 2 LDT 3 & 4 MY 13_15Gen 2 LDT 3 & 4 MY 13_15-VW Touareg LDT 3Gen 1.1 LDT 3 & 4 MY 09_10Gen 1.1 LDT 3 & 4 MY 09_10Gen 1.2 LDT 3 & 4 MY 11_12Gen 1.2 LDT 3 & 4 MY 11_12Gen 2 LDT 3 & 4 MY 13_16Gen 2 LDT 3 & 4 MY 13_16Gen 2 LDT 3 & 4 MY 13_16Gen 2 LDT 3 & 4 MY 13_16Porsche Cayenne LDT 3Gen 2 LDT 3 & 4 MY 13_16Gen 2 LDT 3 & 4 MY 13_16Gen 2 LDT 3 & 4 MY 13_16Gen 2 LDT 3 & 4 MY 13_16Audi A6/A7 PC-Gen 2 PC 14_16 Gen 2 PC 14_16 Gen 2 PC 14_16Audi A8 PC-Gen 2 PC 14_16 Gen 2 PC 14_16 Gen 2 PC 14_16Audi Q5 PC-Gen 2 PC 14_16 Gen 2 PC 14_16 Gen 2 PC 14_16Gen 2Gen 1Model Year5APPENDIX B-3 TO SECOND PARTIAL CONSENT DECREE MDL No. 2672 CRB (JSC)Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 158 of 164
APPENDIX B-4 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Appendix B-4
PEMS Routes
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 159 of 164
1 APPENDIX B-4 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
COMBINED TEST ROUTE
(Freeway and Uphill/Downhill)
OUT-bound
Summary: 44.7 mi (1 hour, 7 min)
Route Parsing
A1, Freeway, ARB to Ontario intersection of East 4 th and Vineyard Avenue(~27.7 miles)
A2, Uphill, East 4 th and Vineyard Avenue to Mount Baldy, Fire Department) (~17 miles)
B1, Downhill, Mount Baldy, Fire Department to East 4th and Vineyard Avenue(~17.9miles)
B2, Freeway, East 4th and Vineyard Avenue to ARB (~28.5 miles)
Depart 9528 Telstar Ave, El Monte CA 91731
Head east on Telstar Ave toward Fletcher Ave
0.4 mi Turn right onto Flair Dr
0.2 mi Turn right to merge onto I-10 E
26.2 mi Take exit 54 for Vineyard Ave
Use the left 2 lanes to turn left onto N Vineyard Ave
Head north on N Vineyard Ave toward E Harvard Privado
4.2 mi Use the left 2 lanes to turn left onto E Foothill Blvd
5.1 mi Turn right onto Monte Vista Ave
2.8 mi Continue onto Padua Ave
7.2 mi Turn right onto Mt Baldy Rd
Total Distance 44.7 mi
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 160 of 164
2 APPENDIX B-4 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
COMBINED TEST ROUTE (CONTINUED)
IN-Bound
Summary: 46.1 mi (61 min)
Depart 6736 Mount Baldy Road, Mount Baldy, CA 91759
Head west on Mt Baldy Rd toward Central Ave
7.2 mi Turn left onto Padua Ave
1.8 mi Continue onto Monte Vista Ave
2.8 mi Turn left onto Palo Verde St
344 ft Use the left 2 lanes to turn left to merge onto I-10 E toward San Bernardino
Head northeast on I-10 E
5.0 mi Take exit 54 for Vineyard Ave
0.2 mi Use the left 2 lanes to turn left onto N Vineyard Ave
Destination will be on the left
1101-1119 N Vineyard Ave, Ontario CA 91764
0.5 mi Get on I-10 W
26.5 mi Follow I-10 W to Temple City Blvd in Rosemead. Take exit 27 from I-10 W
1.2 mi Take Loftus Dr to Telstar Ave in El Monte
Total Distance
46.1 mi
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 161 of 164
3 APPENDIX B-4 TO SECOND
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
URBAN/DOWNTOWN LOS ANGELES ROUTE
Summary: 16.6 miles (61 minutes)
Depart 3000 S Hoover St, Los Angeles, CA 90007
Head south on S Hoover St
0.5mi Turn RIGHT on W Jefferson Blvd 0.3mi Use the second turn lane from the left to turn LEFT
onto N. Grand Ave.
0.4mi Turn LEFT on S. Vermont Ave. 276ft Turn RIGHT onto the CA-110/I-110 fwy ramp
0.5mi Turn RIGHT on W. Exposition Blvd. 82ft Keep RIGHT at the fork and follow the signs for CA-
110/I-110
1.0mi Turn RIGHT on S. Western Ave. 0.2mi Keep LEFT at the second fork and follow the sign for I-
110 South - San Pedro
2.4mi Turn RIGHT onto W. Olympic Blvd. 0.3mi Merge LEFT onto the I-110 South - San Pedro
3.6mi Turn RIGHT onto San Julian St. 1.5mi Continue on the CA-110 South/I-110 South towards
Exposition Blvd.Take Exit 20 B from I-110 S
446ft Turn LEFT onto E. 11th St. 1.8mi Take the Exposition Blvd. Exit (20B)
361ft Turn LEFT onto S. San Pedro St. 0.3mi Use the right two lanes to slightly turn and continue
STRAIGHT on W. Exposition Blvd.
1.2mi Continue STRAIGHT as S. San Pedro St. becomes Judge
John Aiso St. 0.6mi Turn RIGHT onto S. Vermont Ave.
0.2mi Turn LEFT on E. Temple St. 0.5mi Turn RIGHT onto W. Jefferson Blvd.
0.3mi Turn RIGHT onto N. Broadway 0.4mi 850 W Jefferson Blvd, Los Angeles, CA 90007
0.3mi Turn LEFT onto W. Cesar E. Chavez Ave.
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 162 of 164
MITIGATION ALLOCATION APPENDIX
TO SECOND PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Initial 3.0 Liter
Mitigation Allocation Appendix
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 163 of 164
INITIAL 3.0 LITER MITIGATION ALLOCATION APPENDIX
INITIAL SUBACCOUNTS INITIAL ALLOCATIONS $ INITIAL ALLOCATIONS
Puerto Rico $ 625,000.00 0.28%
North Dakota $ 625,000.00 0.28%
Hawaii $ 625,000.00 0.28%
Mississi i $ 625,000.00 0.28%
West Vir inia $ 625,000.00 0.28%
District of Columbia $ 625,000.00 0.28%
South Dakota $ 625,000.00 0.28%
W omin $ 625,000.00 0.28%
Alaska $ 625,000.00 0.28%
Delaware $ 625,000.00 0.28%
Arkansas $ 696,692.86 0.31%
Nebraska $ 719,535.25 0.32%
Maine $ 796,628.31 0.350
Kansas $ 870,866.08 0390
Rhode Island $ 873,721.37 0.39%
Vermont $ 890,853.17 0.40%
Montana $ 1,002,209.81 0.45%
Iowa $ 1,022,196.90 0.45%
New Mexico $ 1,082,158.17 0.48%
Idaho $ 1,102,145.26 0.49%
Kentuck $ 1,330,569.15 0.59%
New Ham shire $ 1,370,543.33 0.61%
Alabama $ 1,396,241.02 0.62%
Oklahoma $ 1,835,957.01 0.82%
Louisiana $ 1,838,812.30 0.82%
Indiana $ 2,015,840.82 0.90
Missouri $ 2,067,236.19 0.92%
South Carolina $ 2,258,541.20 1.00%
Nevada $ 2,618,308.82 1.16%
Utah $ 2,821,035.03 1.25%
Tennessee $ 3,352,120.57 1.49%
Minnesota $ 3,363,541.76 1.49%
Wisconsin $ 3,523,438.48 1.57%
Arizona $ 3,646,216.32 1.62%
Ohio $ 3,883,206.11 1.73%
Connecticut $ 4,085 932.31 1.82%a
Michi an $ 4,477,108.22 1.99%
Ma land $ 4,668,413.23 2.07%
Ore on $ 4,728,374.50 2.10%
North Carolina $ 4,868,284.13 2.16%
Geor is $ 5,519,292.21 2.45%
Massachusetts $ 5,990,416.48 2.66%
Vir inia $ 6,044,667.16 2.69%
New Jerse $ 6,886,980.25 3.06%
Colorado $ 7,432,342.28 3.30%
Penns Ivania $ 7,829,228.79 3.480
Washin ton $ 8,788,609.12 3.91%
New York $ 10,299,062.08 4.58%
Illinois $ 10,978,623.15 4.88%
Florida $ 13,899,593.63 6.18%
Texas $ 17 377,347.34 7.72%
California $ 41,356,145.05 18.38%
TRIBESl $ 4,795 063.51 2.13°/a
ADM I N $ 2,250,000.00 1.00°/a
TRIBAL ADMIN $ 95,901.27 0.04%
Grand Total $ $ 225,000,000.00 100.00Yo
1 "Tribes" mean "Indian tribe" as defined in the First Partial Consent Decree.
1 MITIGATION ALLOCATION APPENDIX
TO SECOND PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
Case 3:15-md-02672-CRB Document 2520-1 Filed 12/20/16 Page 164 of 164