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Novel Citizen Suit Against Automotive Parts Dealer Results in $850K Penalty

Earlier this month, a federal judge ruled that the hosts of the Discovery Channel’s Diesel Brothers show must pay more than $850,000 for violating the Clean Air Act’s (CAA) tampering and defeat device prohibitions. While U.S. EPA has made such violations an enforcement priority, this case marks the first time private citizens have successfully enforced them. So now automakers and aftermarket parts companies face exposure not only from the government but from citizen plaintiffs as well.

The case is also notable because the court exercised its CAA authority to earmark up to $100,000 of any civil penalty for environmental mitigation projects. The court ordered defendants to pay $90,000 of the total civil penalties, which are by default otherwise paid to the U.S. Treasury, to a county-level program that restores tampered diesel trucks to bring them into compliance with the CAA. Diverting these funds from the U.S. Treasury to locally beneficial projects will make similar suits even more attractive to citizen groups.

Background

The case is Utah Physicians for a Healthy Environment v. Diesel Power Gear LLC (UPHE). As detailed in our earlier alert on the court’s summary judgment decision, Chief Judge Robert Shelby ruled that private citizens can use the CAA’s citizen suit provision to sue aftermarket automotive parts companies for violating the CAA’s mobile source provisions that prohibit tampering with an emissions control system or selling or installing products that reduce the effectiveness of those systems. 2019 WL 1126347, at *1. Judge Shelby’s ruling departed from prior consensus that only the government can enforce these provisions.

Following summary judgment, the court held a bench trial to determine liability and assess civil penalties.

Defendants Held Liable for an Expansive Range of Parts

The UPHE court found numerous CAA violations for tampering and marketing/selling defeat devices. 

Defendants tampered with an extensive list of federally-mandated emission controls: (1) oxidation catalysts, (2) diesel particulate filters (DPF), (3) exhaust gas recirculation systems (EGR), (4) selective catalytic reduction systems (SCR), (5) NOx sensors, (6) malfunction indicator lights, and (7) limp mode.

Defendants also installed or marketed many types of defeat devices: (1) straight pipes, (2) delete pipes (including turbo back exhaust pipes and downpipes-back), (3) vertical stacks, (4) delete tunes, and (5) delete kits.

The court found that such actions can cause a diesel truck to emit thirty-six times more NOx and twenty-one times more particulate matter than when the required controls are installed and working properly.

Corporate Officers Held Personally Liable

The UPHE court applied an expansive standard of liability for corporate officers and held the chief executive officer, owner, chief financial officer, and chief operations officer of defendant corporations personally liable for tampering, defeat part installation, and defeat part marketing violations. Adopting the Responsible Corporate Officer Doctrine, the court found these officers liable because they were aware of the violations, had the ability to prevent them, and failed to take any preventative or corrective action.

Permanent Injunction

The UPHE court also took the extraordinary step of permanently enjoining defendants from “removing or rendering inoperative federally required emission control systems in diesel trucks; installing parts or components in diesel trucks that bypass, defeat, or render inoperative federally required emission control systems; offering to sell or selling defeat parts; removing or making inoperable the federally required emission control system, device, or any part thereof; and owning or operating vehicles with disabled emission control systems.” UPHE, No. 2:17-cv-00032-RJS-DBP, slip op. at 56 (D. Utah Mar. 6, 2020). By imposing a permanent injunction, the court retains the power to hold defendants in contempt for future violations.

Outlook

UPHE will surely spark additional CAA mobile source citizen suits. The court’s earmarking of civil penalties for locally-beneficial projects and award of attorney’s fees will catch the attention of both national and local citizen groups.

Moreover, tampering and aftermarket parts remain a top compliance initiative for EPA. Since 2014, EPA has resolved more than 40 civil cases involving more than one million aftermarket defeat devices installed or marketed by parts manufacturers, retailers, commercial fleets, and tampering shops according to Phillip Brooks, Director of EPA’s Air Enforcement Division. Owners, operators, and corporate officers of these businesses should take note, and closely monitor additional enforcement of EPA’s compliance initiative as well as additional litigation spurred by UPHE.

© 2020 Beveridge & Diamond PC National Law Review, Volume X, Number 97
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About this Author

Joshua H. Van Eaton Environmental Litigation Attorney Beveridge & Diamond Washington, DC
Principal

Joshua H. Van Eaton helps clients resolve high-stakes compliance, enforcement, and litigation matters.

He brings the perspective gained from a distinguished U.S. government service career to provide clients with strategic counsel on air, water, and waste issues with a focus on mobile source emissions. He also litigates those matters and advises on proactive environmental compliance strategies.

Prior to joining Beveridge & Diamond, Josh served as Senior Trial Attorney in the Environmental Enforcement Section of the Environment and Natural Resources Division (ENRD) of the U...

202-789-6033
Daniel B. Schulson Environmental & Administrative Attorney Beveridge & Diamond Washington, DC
Principal

Daniel Schulson applies the insight and experience he gained from working in the Office of General Counsel at the U.S. Environmental Protection Agency to clients’ challenges on a broad array of issues.

He assists clients with many aspects of environmental and administrative law, including compliance counseling, permitting, due diligence, audits, commenting on agency rulemakings, administrative enforcement defense, and litigation.

Examples of Dan’s experience include:

  • Providing counsel to the U.S. government-appointed Independent...
202-789-6007
Grant Tolley Environmental Litigation Attorney Beveridge & Diamond Washington, DC
Associate

Grant Tolley maintains a diverse environmental litigation and regulatory practice, working with clients nationwide across industrial sectors. 

Grant joined the firm following his graduation from the Georgetown University Law Center.

Prior to joining Beveridge & Diamond, Grant served as a law clerk for the Environmental Protection Agency (EPA) and worked as a student attorney for the Institute for Public Representation, Environmental Litigation Clinic, where he prepared an amicus brief in support of EPA’s Cross-State Air Pollution Rule Update in a challenge pending before...

202-789-6063
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