FCA settles with US EPA, CARB over diesel emissions cheating

10 January 2019

The US Department of Justice (DOJ), the Environmental Protection Agency (EPA), and the California Air Resources Board (CARB) announced today a settlement with Fiat Chrysler Automobiles (FCA) for alleged violations of the US Clean Air Act and California law. Fiat Chrysler has agreed to implement a recall program to repair more than 100,000 noncompliant diesel vehicles sold in the United States, offer an extended warranty on repaired vehicles, and pay a civil penalty of $305 million to settle claims of cheating emission tests and failing to disclose unlawful “defeat devices”. FCA also will implement a program to mitigate excess pollution from these vehicles. The recall and federal mitigation programs are estimated to cost up to $185 million.

Under a separate settlement with California, FCA will pay an additional $19 million to mitigate excess emissions from more than 13,000 of the noncompliant vehicles in California. The state of California has also entered into another settlement with FCA resolving alleged violations of California consumer protection laws. In addition, in a separate administrative agreement with the US Customs and Border Protection, FCA will pay a $6 million civil penalty to resolve allegations of illegally importing 1,700 noncompliant vehicles.

The settlement resolves claims of EPA and CARB relating to FCA’s use of defeat devices to cheat emission tests. The defeat devices—in this case, software functions—reduced the effectiveness of the emission control system during normal on-road driving conditions. The affected vehicles are model year 2014 through 2016 Ram 1500 and Jeep Grand Cherokee vehicles equipped with EcoDiesel 3.0 L engines.

The settlement does not resolve any potential criminal liability, the EPA said. The settlement also does not resolve any consumer claims or claims by individual owners.

Background. As alleged in the civil complaint filed by the US DOJ on behalf of EPA on May 23, 2017, Fiat Chrysler equipped over 100,000 EcoDiesel Ram 1500 and Jeep Grand Cherokee vehicles (Model Years 2014-2016) sold in the United States with illegal and undisclosed software that causes the emission control system to operate differently during emission control tests than when it is driven on the road. When the vehicle is being tested for compliance with EPA or California emission standards, the software activates full emission controls. In contrast, during real world driving, the software features reduce or deactivate emission controls, reducing the effectiveness of the vehicles’ emission control systems. The United States alleged that one or more of these software features, as configured in Fiat Chrysler’s vehicles, are defeat devices. The result is vehicles that meet emission standards during standard regulatory testing, but that emit air pollutants, including NOx, at a higher rate when the vehicles are on the road, much higher than the EPA and CARB emission standards allow.

The EPA said it discovered these defeat devices in FCA’s vehicles during vehicle emission testing EPA performed in 2015 and 2016 at the National Vehicle and Fuel Emissions Laboratory (NVFEL).

Recall & Mitigation. The settlement requires FCA to implement a recall and repair program to replace the vehicles’ software so that they comply with EPA and CARB emission standards. Fiat Chrysler tested vehicles with the new software and demonstrated to EPA and CARB that the repaired vehicles will meet the applicable emission standards. FCA must repair at least 85% of the vehicles within two years or face penalties. FCA also must test repaired vehicles for five years to ensure the vehicles continue to meet emission standards.

Under the settlement, FCA will implement a federal mitigation program to offset the environmental impacts of the non-compliant vehicles by reducing NOx emissions in the atmosphere. FCA will be required to work with one or more vendors of aftermarket catalytic converters to improve the efficiency of 200,000 converters that will be sold in the 47 states that do not already require the use of the California-mandated high efficiency gasoline vehicle catalysts. Such converters are purchased by vehicle owners to replace out-of-warranty catalytic converters.

Class Action Settlement. In addition to the settlements with the United States and California, the Plaintiffs’ Steering Committee has secured a settlement for consumers from FCA and Bosch. Class members will receive between $990 and $3,075—an aggregate value of over $300 million if all class members participate.

The EPA/California Settlement Consent Decree will be lodged in federal court in the Northern District of California and there will be a period of 30 days for public notice and comment. The penalty is due within 30 days of the court’s entry of the Consent Decree.

Source: US EPA | CARB