The U.S. Environmental Protection Agency (EPA) and U.S. Department of Justice have filed and simultaneously settled a civil lawsuit against Toyota Motor Corp., Toyota Motor North America Inc., Toyota Motor Sales U.S.A. Inc. and Toyota Motor Engineering & Manufacturing North America Inc. for “systematic, longstanding” violations of Clean Air Act emission-related defect reporting requirements, which require manufacturers to report potential defects and recalls affecting vehicle components designed to control emissions.
In connection with the settlement, the U.S. has filed a consent decree, agreed to by Toyota, that resolves the government’s complaint through Toyota’s payment of a $180 million civil penalty and the imposition of injunctive relief. The $180 million penalty is the largest civil penalty for violation of EPA’s emission-reporting requirements. The consent decree remains subject to a period of public comment and court approval.
“For a decade Toyota failed to report mandatory information about potential defects in their cars to the EPA, keeping the agency in the dark and evading oversight,” says Susan Bodine, office of enforcement and compliance assurance assistant administrator at EPA. “EPA considers this failure to be a serious violation of the Clean Air Act.”
The complaint filed in Manhattan federal court alleges that from approximately 2005 until at least late 2015, Toyota systematically violated Clean Air Act automobile defect reporting requirements designed to protect public health and the environment from harmful air pollutants.
Clean Air Act regulations require manufacturers to notify EPA by filing an emissions defect information report (EDIR) when 25 or more vehicles or engines in a given model year have the same defect in an emission control part or an element of design installed in order to comply with emission standards and other EPA regulations. The regulations also require vehicle manufacturers to file a voluntary emissions recall report (VERR) with EPA when they perform a recall to correct defects in emission-related parts and to update EPA on the progress of such recalls through quarterly reports. These mandatory reporting requirements are critical to the Clean Air Act’s purpose of protecting human health and the environment from harmful air pollutants: They encourage manufacturers to investigate and voluntarily address defects that may result in excess emissions of harmful air pollutants and provide EPA with important information about emission-related defects for use in its oversight of manufacturers.
As a result of its conduct, Toyota deprived EPA of timely information regarding emission-related defects and recalls and avoided the early focus on emission defects contemplated by the regulations. Toyota’s conduct likely resulted in delayed or avoided recalls, with Toyota obtaining a significant economic benefit, pushing costs onto consumers and lengthening the time that unrepaired vehicles with emission-related defects remained on the road.
Toyota admits, acknowledges and accepts responsibility for what is included in the consent decree.
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