This is one of the largest consumer lawsuits affecting more than 475,000 diesel cars in the U.S. The settlement gives Volkswagen owners the option to sell their vehicle back or get a free fix.
"The settlement is fair, reasonable and adequate," U.S. District Judge Charles Breyer wrote in his order.
The German carmaker will also pay $4.7 billion for environmental programs and promotion of zero-emissions vehicles.
"Judge Breyer is making them pay the price. Volkswagen chose to poison our families with dangerous pollution just to pad its pocketbook," Kathryn Phillips, California director for the Sierra Club environmental group, said.
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