Settlement reached in Mercedes mold lawsuit

The deal will compensate drivers who have paid for repairs

A settlement was reached in a class-action lawsuit against Mercedes-Benz that claimed the heating, ventilation and air-conditioning units in many of the brand’s cars were moldy.

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The suit against Mercedes and parent company, Daimler AG, alleged the HVAC systems in several 2001-to-2018 vehicles, including Mercedes E-Class and Maybach models, caused “highly unpleasant” odors that “cause respiratory problems and aggravate allergies.”

The settlement will compensate drivers who have already paid for repairs and provide maintenance to impacted drivers moving forward, per court documents released Friday.

TickerSecurityLastChangeChange %
DMLRYDAIMLER AG UNSP ADR EACH REP 1 ORD SHS12.915-0.12-0.88%

Plaintiffs in the suit argued Mercedes knew or should have known about the mildew issue but failed to reimburse customers for repair costs or provide an in-warranty fix.

The suit also alleged the luxury carmaker knew about the problem as early as 2008 when customers initiated an arbitration proceeding about the issue, in which Mercedes lost. As well, the company received several complaints from concerned drivers over that span.

“Mercedes won’t fix the musty smell from HVAC,” one customer wrote on Reddit. “On the 8th month of ownership, I started smelling a musty moldy smell through the AC vents. This gets aggravated and can be prominently smelled during the first 30 seconds of start."

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Neither Mercedes or Daimler immediately responded to a request for comment from FOX Business, but Daimler filed a motion to dismiss a mold suit earlier this year, arguing the plaintiffs wrongly linked the two companies when they are separate entities.

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That motion was dismissed by U.S. District Judge Amy Totenberg.

Daimler’s stock as dropped more than 4 percent in the past month.

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