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United States v. Volvo Powertrain Corp.

ELR Citation: 44 ELR 20161
Nos. 12-5234, (D.C. Cir., 07/18/2014)

The D.C. Circuit upheld a $72 million judgment against an automobile manufacturer for violating a consent decree requiring certain model year 2005 engines to comply with EPA’s model-year 2006 nitrogen oxide (NOx) emissions standard. In 1998, EPA alleged that several major engine manufacturers violated federal law by equipping certain engines with "defeat devices" designed to suppress emissions during EPA tests even though emissions exceeded the legal limit in normal operating conditions. The manufacturers settled the allegations, and each entered into similarly worded consent decrees with the federal government. The consent decrees required the manufacturers to satisfy future EPA emissions standards ahead of schedule, and the decrees' requirements applied to engines "manufactured at any facility owned or operated by" the settling company. The decree at issue in this case is between EPA and Volvo Powertrain Corp. Despite the manufacturer's arguments to the contrary, the decree applies to the 8,354 Volvo Penta engines manufactured at the Volvo Powertrain plant. Although Volvo Penta, not Volvo Powertrain, sought the certificates of conformity in question, the terms of the consent decree impose liability on Volvo Powertrain for its affiliate's engines manufactured at its facility. Nor did the lower court abuse its discretion when it ordered Volvo Powertrain to pay approximately $72 million as a remedy for the violations. The lower court retained equitable discretion to craft a remedy for the violations, and it adequately explained its calculation method.