Judge OKs $1.2 Billion Compensation in VW Emissions Cheating Scandal

A federal judge in San Francisco granted initial approval Tuesday to a deal worth at least $1.2 billion that aims to compensate the owners of roughly 78,000 Volkswagens with 3-liter engines that were rigged to cheat on emissions tests.

The company previously agreed to spend up to $10 billion compensating owners of roughly 475,000 Volkswagens and Audi vehicles with 2-liter diesel engines -- the bulk of the vehicles caught up in Volkswagen's emissions cheating scandal.

U.S. District Judge Charles Breyer congratulated attorneys for Volkswagen and car owners before granting preliminary approval to the smaller deal involving Volkswagens, Audis and Porsches. He said the settlement was complicated and motivated by economic and environmental concerns.

The deal offers thousands of dollars in compensation to individual car owners on top of buybacks or repairs.

"This settlement marks an important milestone in Volkswagen's efforts to make things right in the United States," said Robert Giuffra, an attorney representing the company.

Owners of 20,000 3-liter models dating back to 2009-2012 that cannot be fixed to meet pollution standards will be offered buybacks or trade-ins. They also will receive compensation ranging from $7,755 to $13,880, according to attorneys representing car owners.

People who bought 58,000 newer cars will get compensation of $7,039 to $16,114. If VW can't fix the newer cars to regulators' satisfaction, then the owners' attorneys are expected to go back to court to seek buybacks. That could push the value of the deal for the 3-liter engines up to $4 billion.

Preliminary approval allows consumers to weigh in on the deal and learn online whether they have an eligible vehicle and how much compensation to expect. Breyer set May 11 for a hearing on final approval.

Volkswagen has now settled most U.S. consumer claims stemming from the emissions scandal and agreed to pay $4.3 billion to settle a U.S. criminal investigation.

The company has acknowledged that the cars were programmed to turn on emissions controls during government lab tests and turn off the controls while on the road.