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Distributing the VW settlement money

Good for some, less good for others.

Texas cities will soon get millions of dollars to help clean up air quality, but Houston officials say the plan for distributing all that money isn’t fair.

The money is coming from a settlement in the Volkswagen (VW) emissions cheating scandal. Local governments will be able to use the money to reduce emissions from their vehicles and other equipment.

The Texas Commission on Environmental Quality (TCEQ) plans to give the biggest chunk of the money – more than $73 million – to the San Antonio area, mainly because that city is closer than others to getting in line with federal pollution rules it’s currently violating.

Under the state’s plan, the Houston area, which has worse air quality, would get about $27 million.

The City of Houston says about a quarter of the cheating VW cars that were in Texas were driving in the Houston region.

“So we deserve at least a quarter of those funds, because we’re the ones that were harmed,” said Kris Banks, a government relations assistant with Houston Mayor Sylvester Turner’s office.

See here, here, and here for some background. Mayor Turner expressed his disenchantment with the amount allocated to Houston in a press release; you can see all of the city’s documentation on the matter here. The full TCEQ plan for the VW Environmental Mitigation Trust is here, or you can save yourself some time and read the Texas Vox summary of it. The TCEQ is still accepting feedback on the draft plan through October 8, so send them an email at VWsettle@tceq.texas.gov if you have comments. The Rivard Report has more.

Who gets the VW settlement money?

That’s the fifty million dollar question.

Volkswagen faces billions of dollars in fines in Texas for its admitted cheating on emissions tests, but the potential payday is being held up as the state Attorney General and county officials fight in court over which government agencies will get to claim a share of the proceeds from the German auto giant.

Under Texas law, county governments are entitled to half the award that any legal action against Volkswagen brings – with the remainder going to state coffers. But with more than 20 counties suing Volkswagen in the aftermath of the emissions scandal, Attorney General Ken Paxton is attempting to toss out all but two of the counties from the case, leaving the state in charge and the counties with no chance to claim any of the penalties.

The stakes are high for both the state and counties. A single county could reap tens of millions of dollars in penalties, at a time when low oil and gas prices are straining budgets across Texas and leading to cuts in public services.

“It’s extremely important for the counties. We’re all strapped,” said Anthony Constant, a Corpus Christi attorney representing Dallas and other counties in the suit. “I have no idea what (the AG’s office) is doing or why they’re doing it, but it appears to me they have some concern it would somehow be bad for them if the counties were allowed (to) proceed.”

The Attorney General’s Office declined to comment. But in a filing earlier this year, Paxton argued that it was their office’s right to uphold Texas’ environmental laws and allowing the county lawsuits to proceed would lead to “the unconstitutional result” of Volkswagen being tried and fined multiple times for the same violation.

[…]

In Texas, the company settled violations of the state’s anti-fraud laws for $50 million in November. But Volkswagen still faces far more costly violations of the state’s air pollution laws, which could potentially mean fines of between $50 and $5,000 per day for all 32,000 of its clean diesel vehicles registered in Texas. Some, which were sold under both the Volkswagen and Audi brands, have been on the road close to a decade.

But the process of determining the extent of those penalties is being held up by the infighting between the state and counties over who gets to sue Volkswagen.

After the trial court in Austin ruled the counties could remain in the case, the attorney general’s office filed an appeal in October with the Texas Third Court of Appeals. Sensing an opening, Volkswagen’s attorneys filed a motion to delay the entire trial until the question of the county lawsuits was resolved.

With the matter of the county lawsuits potentially headed to the Supreme Court – a process that can take years – the state and counties’ attorneys both argued against delaying the trial. But in January the appellate court sided with Volkswagen.

See here, here, and here for the background. This settlement is from state-level litigation; there was a separate federal lawsuit settlement that netted money for the state, as only the state was involved. As the story notes, Harris and Fort Bend Counties filed their lawsuits first, then the state got involved, and subsequently tried to boot all the counties out as plaintiffs. I personally see no reason for that, but this is what the judge will have to decide.

Texas settles another lawsuit against VW

Hard to keep track, I know.

Volkswagen will pay the state of Texas $50 million to settle a deceptive trade practices lawsuit brought against the automaker. The settlement is part of an $14.7 billion nationwide agreement to resolve the nation’s largest auto scandal.

Volkswagen mislead consumers by promoting diesel vehicles as “clean” even though the German manufacturer knew the cars were equipped with software to cheat on emissions tests, according to the attorney general’s office.

The carmaker sold nearly 43,000 vehicles in Texas with 2.0 liter and 3.0 liter diesel engines, according to the agreement. The affected VW, Audi and Porsche vehicles include model years 2009 through 2015, according to court documents.

Under the terms of the agreement, VW is prohibited from falsely claiming its vehicles are environmentally friendly, selling cars with devices that can trigger false readings on environmental tests and misrepresenting emission levels.

The carmaker must also establish a $2.7 billion trust fund for projects to lessen the environmental harm caused by excessive Volkswagen emissions. Texas’ share is estimated to be as much as $191 million, according to the attorney general’s office.

See here for some background, and here for the original AG press release on this lawsuit. The FTC also sued a few months after this. The earlier settlement that was announced had to do with the actual environmental damage, which is what the $191 million Texas will get is all about. I presume money from this settlement will go to the defrauded VW vehicle owners, but the details are a little fuzzy to me. I suppose if you were one of those people who bought a VW diesel car, you might contact the AG’s office to see if you’re owed a few bucks now. The Statesman has more.

Texas gets VW lawsuit settlement money

Not bad.

Texas will receive more than $190 million for environmental mitigation under a multibillion-dollar settlement in the Volkswagen emissions cheating scandal approved by a federal judge in San Francisco on Tuesday. Volkswagen buyers will have the option of buybacks or repairs.

U.S. District Judge Charles Breyer authorized the $15 billion agreement, which was first detailed this summer. It awards hundreds of million of dollars to dozens of states and includes a $10 billion buyback program to compensate consumers who bought Volkswagen Group vehicles, including Audis. Under the settlement, the German automaker will establish a $2.7 billion trust fund for projects designed to mitigate environmental harm caused by excess emissions from its vehicles. It also has agreed to pay Texas $50 million in civil penalties and attorneys’ fees for violating a state consumer protection law that bans deceptive advertising.

[…]

Environment Texas called on the state to invest the money in state programs aimed at getting exhaust-spewing or diesel-powered vehicles off the roads, along with rebates to entice people to buy eco-friendly electric vehicles.

“Given Texas’ continuing struggle to reduce harmful air pollution, the state needs to make a greater investment in clean air and the VW funds can help us get there,” the Austin-based group said in a statement. “However, it may be tempting for legislators to play shell games with the VW money and swap it out with dedicated clean air funds, resulting in no net gain for air quality. That would be a harmful mistake.”

See here and here for some background. Terms of the settlement, which covers about 32,000 cars sold in Texas, can be found here. If you might be one of those VW purchasers, you can look up how this affects you. You won’t get full buyback price, but you will get something.

Note that this is not the end of the line for VW litigation. Harris County filed a lawsuit against VW on its own before the state did; Dallas County did so as well. The state wanted them to drop their actions, but they did not. Because those suits were filed in state court, not federal court, they were not part of this agreement. I’ve asked the Harris County Attorney’s office for more information on where that stands. This is what they told me:

There’s no court date set at this time. Here’s some additional details:

The parties have started taking depositions of VW fact witnesses, and we expect those depositions to continue to be scheduled.

We have started reviewing documents that VW has produced in this matter.

The Federal settlement addressed the consumer claims and EPA’s claims for environmental remediation which are different than the civil penalties that Harris County is seeking.

In a recent ruling, Judge Sulak (in Travis County) declined the State of Texas requests to dismiss the claims that the Texas counties that filed after the State filed its claims against VW. The State of Texas is seeking to appeal that ruling. Because Harris County filed its claims prior to the State of Texas, the State of Texas has recognized that its argument on this issue does not apply to Harris County.

So there you have it. More on the federal settlement is here.

Thanks but no thanks, Ken

Harris County will continue to pursue its own lawsuit against VW.

Harris County has responded to Ken Paxton’s request to drop its lawsuit against scandal-plagued Volkswagen. Its answer? A polite no.

[…]

In a reply to Paxton dated Oct. 15, [Harris County Attorney Vince] Ryan wrote, “we were pleased to learn that the Office of the Attorney General has joined Harris County” in the claims against Volkswagen. “We look forward to working together once again in connection with this important effort.”

In other words: No, thanks.

By abandoning their lawsuits, the counties would leave millions of dollars in potential damages on the table.

That’s because under state law, when local governments file such suits, the state is required to join as a “necessary and indispensable party.” In these types of cases, the counties and state split any money.

But the counties would not directly get a share of any damages in the suits Texas is leading.

Any civil penalties recovered in Paxton’s environmental lawsuit would flow into the state’s general fund, while penalties from the consumer protection case will go to the Texas Supreme Court’s judicial fund for programs that provide legal services to poor people, said Cynthia Meyer, a spokeswoman for Paxton’s office. Any other “meaningful restitution” she added, would go directly to consumers duped by Volkswagen’s emissions software.

Ryan’s letter to Paxton noted that, in 1998, Harris County, along with other counties, recovered about $2.2 billion from the tobacco industry through litigation — on top of the billions that the state recovered for itself.

See here, here, and here for the background, and here for a copy of Ryan’s letter. I’m not an attorney, but as I said before I don’t see why Harris or any other county that wants to pursue its own lawsuit should bow to Paxton’s request. It doesn’t make good financial sense to do otherwise, if a county has the resources to handle the litigation itself. Many counties don’t, but Harris does, and that should be good enough. Stick to your guns, Vince.