Posted 5 January, 2026
Iowa joined a coalition of 50 attorneys general announcing a $149,673,750 settlement with Mercedes-Benz USA for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling, and leasing vehicles equipped with illegal and undisclosed emissions defeat devices.
The states allege that more than 211,000 diesel passenger vehicles were equipped with the undisclosed emissions defeat devices from 2008 to 2016. Mercedes allegedly engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance, that it would otherwise not be able to meet without the devices when attempting to comply with applicable emission standards. Mercedes hid the existence of the defeat devices from state and federal regulators and from Iowans purchasing the diesel vehicles.
Mercedes-Benz USA has agreed to pay $120 million to the states on the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a consumer relief program that extends to the estimated 39,565 vehicles that had not been repaired or permanently removed from the road by August 1, 2023. The consumer relief program provides:
- Eligible Iowans with $2,000 per subject vehicle following the installation of approved emission modification software (at no cost to the Iowa); and
- An extended warranty
Iowa was involved in similar multi-state settlements with Volkswagen, Fiat Chrysler and German engineering company Robert Bosch GmbH. Iowa will receive $3,130,271 through today’s settlement to be deposited in a state fund for future consumer litigation or education purposes.