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Volkswagen Settlement

Rutledge Reaches Settlement with Volkswagen on Behalf of Arkansans

Wed, Jun 29, 2016

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge has reached a settlement requiring Volkswagen to pay more than $570 million nationwide for violating laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing diesel vehicles equipped with illegal and undisclosed defeat device software.

In September 2015, Rutledge joined the executive committee of a multistate investigation into Volkswagen for altering its emissions software. Rutledge says that by participating in the executive committee, attorneys within her office were able to take an active role in the investigation and resolution of this case to ensure that Arkansans receive proper compensation.

The settlement resolves consumer protection claims raised by this multistate investigation, which included 43 states, against Volkswagen AG; Audi AG; Volkswagen Group of America Inc.; Porsche AG; and Porsche Cars, North America Inc. – collectively referred to as Volkswagen.

This settlement is part of a series of agreements that will provide cash payments to affected consumers, requires Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles and prohibits Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.

“Volkswagen intentionally lied to Arkansans and made them believe that their ‘green’ vehicles were better for the environment,” said Attorney General Rutledge. “Arkansas consumers deserve to be treated honestly and fairly when they purchase a vehicle, but Volkswagen violated that trust. This settlement holds them accountable and provides much-owed restitution to consumers.”

The investigation confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the U.S. equipped with “defeat device” software intended to circumvent emissions standards for certain air pollutants and actively concealed the existence of the defeat device from regulators and the general public.

Volkswagen made false statements to Arkansans in their marketing and advertising, misrepresenting the cars as environmentally friendly or “green” and that the cars were compliant with emissions standards.

Under this settlement, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model years 2009 through 2015 at a maximum cost of just over $10 billion. This includes 2,540 vehicles in Arkansas.

Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:

  • A buy back of the vehicle (based on pre-scandal NADA value); or
  • A modification to reduce emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a fix. Owners who choose the modification option would also receive an Extended Emission Warranty and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.

The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and sellers (50 percent of the restitution available to owners) after Sept. 18, 2015 when the emissions-cheating scandal was disclosed.

Additional components of the settlements include:

  • Environmental mitigation fund: Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of nitrogen. This fund, also subject to court approval, is intended to mitigate the total, lifetime excess nitrogen emissions from the 2.0-liter diesel vehicles.
  • Additional payment to the states: In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer-protection laws, amounting to $570 million nationwide. This amount includes $3 million paid for affected vehicles Volkswagen sold and leased in Arkansas.
  • Zero emission vehicles: Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or zero emission vehicles, and supporting infrastructure.
  • Preservation of environmental claims: The settlement by state attorneys general preserves all claims under state environmental laws, and Arkansas maintains the right to seek additional penalties from Volkswagen for its violations of environmental and emissions laws and regulations.

Volkswagen will also pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can utilize for future training and initiatives, including investigations concerning emissions violations, automobile compliance and consumer protection.

The full details of the consumer program will be available online at VWCourtSettlement.com and ftc.gov/VWSettlement.

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Online Payday Lender Settlement

Rutledge Reaches Settlement with Online Payday Lender

Fri, Jun 24, 2016

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge has settled a consumer-protection lawsuit against Western Sky Financial, CashCall Inc., WS Funding, Martin A. Webb and J. Paul Reddam. The entities were accused of conspiring to offer illegal payday loans online to Arkansans while claiming to be affiliated with a Native American tribe.

Under the terms of the settlement, the Arkansas Attorney General’s office will collect $750,000 of which $500,000 will be made available to eligible consumers. The remaining $250,000 will be deposited to the Consumer Education and Enforcement Account. The entities may not offer, fund or collect upon any loan with an interest rate in excess of the maximum rate set out in Arkansas law. Additionally, the settlement voids all current, delinquent, defaulted, charged-off or outstanding lending transaction entered into with Arkansans.

“Arkansans who were in a time of need sought the online lending services of the defendants and were regrettably handed more debt,” said Attorney General Rutledge. “While traditional storefront payday lending has been eliminated in Arkansas, the risk to Arkansans from online payday lenders is quite high. My office will continue to protect consumers against these illegal activities and will notify those who are eligible to receive restitution payments under this settlement.”

The lawsuit, which was filed in October 2013, alleged that the defendants offered online payday loans with interest rates as high as 342 percent, in violation of Arkansas law. Western Sky, based in South Dakota, identifies itself as a tribal entity protected by tribal sovereign immunity. However, Western Sky was not protected by tribal immunity because it was not owned or operated by a tribe. Consumers based in Arkansas, not on tribal lands, used the internet to apply for loans and sign loan documents. CashCall and its subsidiary, WS Funding, are based in California and owned by Reddam. Martin Webb, also known as Butch Webb, owns Western Sky.

According to the 2013 complaint, WS Funding had an agreement with Western Sky in which Western Sky nominally originates the illegal payday loans, then assigns the loans to WS Funding for them to collect. CashCall and its subsidiaries ran virtually every aspect of Western Sky’s operations.

Arkansans had been offered loans in amounts ranging from $850 to $10,000, with corresponding annual percentage rates of between 89 percent and 342 percent.

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Honored for Fighting Drunk Driving and Underage Drinking

Rutledge Honored for Fighting Drunk Driving and Underage Drinking in Arkansas

Fri, Jun 24, 2016

LITTLE ROCK – The Foundation for Advancing Alcohol Responsibility (Responsibility.org) today recognized Arkansas Attorney General Leslie Rutledge as one of the recipients of its 2016 Leadership Awards. Responsibility.org is a national nonprofit that leads the fight against drunk driving and underage drinking and is funded by America’s leading distillers.

Now in its 12th year, the Foundation’s Leadership Awards recognize attorneys general for their strong leadership to prevent drunk driving and underage drinking. Rutledge, along with four additional state attorneys general, received the award during the National Association of Attorneys General Summer Meeting.

“I am honored to partner with Responsibility.org in its fight against underage drinking and drunk driving,” said Attorney General Rutledge. “Like the organization, I believe in continuing conversations with children to ensure they make responsible decisions. This is why I partnered with Responsibility.org on a recent Public Service Announcement encouraging thousands of Arkansas parents and guardians to talk to their children about the dangers of underage drinking. These dangers along with drunk driving are far too great to ignore. It is a privilege to receive the 2016 Leadership Award in recognition of these efforts.”

The public service announcement recorded by Attorney General Rutledge can be viewed here.

“Attorney General Rutledge has played an integral role in keeping drunk drivers off the road and spreading the word about the dangers of underage drinking,” said Ralph Blackman, president and CEO of Responsibility.org. “For the last 25 years, we have led the charge against drunk driving and underage drinking, but we would not be nearly as successful without the support of attorneys general and the active role they play in their local communities. We are honored to work arm-in-arm with Attorney General Rutledge to keep Arkansas’s roads safe and Arkansas’s kids alcohol-free.”

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Rutledge Comments on Arkansas Supreme Court’s Decision on the Legality of Executions

Thu, Jun 23, 2016

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today released a statement in response to the decision from the Arkansas Supreme Court on the legality of Arkansas’s method of execution and the state's associated confidentiality provisions.

“Today's decision from the Arkansas Supreme Court reversing the decision from Circuit Judge Wendell Griffen once again shows that Arkansas’s method of execution by lethal injection is lawful,” said Attorney General Rutledge. “It also upholds important confidentiality provisions passed by the General Assembly to protect drug manufacturers and suppliers from intimidation and harassment. As to the state’s next steps, I will notify the Governor once the stays of executions have been lifted so that he may set execution dates. I know that victims’ families want to see justice carried out, and that is exactly what I will continue to work toward as Attorney General.”

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Rutledge Statement on the Supreme Court’s Decision Regarding the President’s Immigration Action

Thu, Jun 23, 2016

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today released a statement in response to the U.S. Supreme Court’s 4-4 decision in the challenge to President Obama’s executive action on immigration. The tie among the justices leaves in place the Fifth Circuit ruling, which found the action by the President unconstitutional.

“Today’s decision from the U.S. Supreme Court maintains the ruling of the Fifth Circuit, which said the President’s decision to go around Congress and implement changes to immigration law through executive action goes beyond the scope of presidential power,” said Attorney General Rutledge. “This ruling helps restore the balance of power and maintains our system of checks and balances with this president and all future occupants of the White House. This is a strong signal from the Courts: no one person is above the law and no President can rewrite a law to fit a policy agenda.”

Arkansas joined the coalition in December 2014, at the request of then Attorney General-elect Rutledge, along with Alabama, Arizona, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maine, Michigan, Mississippi, Montana, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wisconsin.

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