In a recently released statement, Fiat Chrysler Automobiles announced that it has reached final settlements with federal and state agencies, as well as private class action suits, over its 3.0-liter EcoDiesel V-6 engine, which regulators allege was designed to cheat emissions tests. Though the company maintains that it did not deliberately install defeat devices in its vehicles, it has agreed to pay nearly $800 million in total to settle civil, environmental, and consumer claims.
The settlement reportedly includes a total of $311 million in fines, as much as $280 million to settle owner claims, and about $100 million worth of extended warranties. FCA will also pay more than $70 million in state penalties, in addition to the $20 million it will pay to the state of California. FCA didn’t admit to any wrongdoing as part of the agreement. Parts supplier Bosch, which provided some of the components, has agreed to pay $27.5 million.
Under the terms of the settlement, the automaker agreed to implement a recall program to repair more than 100,000 out-of-compliance pickup tricks and SUVs, offer an extended warranty on those vehicles and pay a civil penalty of $305 million to settle claims of “cheating on emission tests and failing to disclose unlawful defeat devices,” the Justice Department said. Separately, the company agreed to pay certain vehicle owners $990 to $3,075 each — an amount that could total more than $300 million — to settle class-action claims.
“Fiat Chrysler deceived consumers and the federal government by installing [software] on these vehicles that undermined important clean air protections,” said Andrew Wheeler, acting administrator of the Environmental Protection Agency. “Today’s settlement sends a clear and strong signal to manufacturers and consumers alike—the Trump administration will vigorously enforce the nation’s laws designed to protect the environment and public health.”
In a statement, FCA said that these settlements, “do not change the Company’s position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests. Further, the consent decree and settlement agreements contain no finding or admission with regard to any alleged violations of vehicle emissions rules.”
While the company did not acknowledge wrongdoing, Assistant Attorney General for Environment and Natural Resources Jeffrey Bossert Clark argued that the settlement makes it clear that the automaker engaged in wrongdoing.
“There’s nothing to be disappointed about that,” Clark said. “You wouldn’t pay $331 million to the federal government if there were not a serious problem.”
The Fiat Chrysler case dates to the final days of the Obama administration in early 2017, when the EPA accused the company of installing software that enables certain diesel trucks to emit far more pollutants than emissions laws allow. The company, which is based in London and was formed by a 2014 merger between U.S. automaker Chrysler and Italian automaker Fiat, denied those accusations, insisting that its software met regulatory requirements.
EPA Acting Administrator Andrew Wheeler told reporters that EPA career staff had to go to extraordinary lengths to identify how the automaker had deceived regulators. “And that was no easy feat,”.
Wheeler and other top officials emphasized the fact that Fiat Chrysler is a multinational corporation, as opposed to a U.S. one.
In May 2017, the Justice Department filed a civil complaint alleging that Fiat Chrysler installed software designed to evade emission controls in its popular vehicles. The complaint alleged that the vehicles were “equipped with software functions that were not disclosed to regulators during the certification application process, and that the vehicles contain defeat devices.”
A defeat device is any technology that disables or interferes with a vehicle’s emissions controls in a way that allows a vehicle to meet government standards in a lab setting, even if it emits more pollution during real-world driving conditions.