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FCA Consent Decree January 10, 2019

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FCA Consent Decree January 10, 2019 Case 3:17-md-02777-EMC Document 484-1 Filed 01/10/19 Page 1 of 224 1 LEIGH P. RENDÉ (PA Bar No. 203452) JOSEPH W.C. WARREN (DC Bar No. 452913) 2 Environment and Natural Resources Division Environmental Enforcement Section P.O. Box 7611, Ben Franklin Station 3 Washington, DC 20044-7611 Telephone: (202) 514-1461 4 Email: [email protected] Email: [email protected] 5 Counsel for the United States 6 XAVIER BECERRA Attorney General of California 7 NICKLAS A. AKERS Senior Assistant Attorney General 8 JUDITH A. FIORENTINI (CA Bar No. 201747) Supervising Deputy Attorney General 9 JON F. WORM (CA Bar No. 248260) LAUREL M. CARNES (CA Bar No. 285690) Deputy Attorneys General 10 600 West Broadway, Suite 1800 San Diego, CA 92101 11 Telephone: (619) 738-9325 Email: [email protected] 12 Email: [email protected] Email: [email protected] 13 Counsel for the People of the State of California 14 UNITED STATES DISTRICT COURT 15 NORTHERN DISTRICT OF CALIFORNIA 16 SAN FRANCISCO DIVISION 17 IN RE: CHRYSLER-DODGE-JEEP No. 3:17-md-02777-EMC 18 ECODIESEL MARKETING, SALES PRACTICES, AND PRODUCTS CONSENT DECREE 19 LIABILITY LITIGATION Hon. Edward M. Chen 20 21 22 23 24 25 CONSENT DECREE 3:17-md-2777-EMC Case 3:17-md-02777-EMC Document 484-1 Filed 01/10/19 Page 2 of 224 1 UNITED STATES, 2 Plaintiff, 3 v. 4 FCA US LLC, 3:17-cv-3446-EMC 5 FIAT CHRYSLER AUTOMOBILES N.V., V.M. MOTORI S.P.A., and 6 V.M. NORTH AMERICA, INC., 7 Defendants. 8 PEOPLE OF THE STATE OF CALIFORNIA, 9 Plaintiff, 10 v. 11 FCA US LLC, 12 FIAT CHRYSLER AUTOMOBILES N.V., V.M. MOTORI S.P.A., and 13 V.M. NORTH AMERICA, INC., 14 Defendants. 15 16 17 18 19 20 21 22 23 24 25 CONSENT DECREE 3:17-md-2777-EMC Case 3:17-md-02777-EMC Document 484-1 Filed 01/10/19 Page 3 of 224 1 TABLE OF CONTENTS 2 BACKGROUND ...........................................................................................................................1 I. JURISDICTION AND VENUE .....................................................................................................3 3 II. APPLICABILITY ..........................................................................................................................4 4 III. DEFINITIONS ...............................................................................................................................5 5 IV. CIVIL PENALTY ........................................................................................................................19 V. APPROVAL OF SUBMISSIONS; U.S./CALIFORNIA DECISION-MAKING .......................20 6 VI. INJUNCTIVE MEASURES ........................................................................................................23 7 A. Modification of Subject Vehicles and Post-Entry Compliance Testing .................................23 8 B. Emissions Modification Recall Program .................................................................................58 C. Corporate Compliance Requirements .....................................................................................79 9 D. Mitigation Program .................................................................................................................98 10 VII. REPORTING REQUIREMENTS ..............................................................................................102 11 VIII. STIPULATED PENALTIES .....................................................................................................105 IX. FORCE MAJEURE ....................................................................................................................122 12 X. DISPUTE RESOLUTION .........................................................................................................124 13 XI. INFORMATION COLLECTION AND RETENTION AND CBI ...........................................127 14 XII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS ..................................................130 XIII. COSTS ........................................................................................................................................135 15 XIV. NOTICES ...................................................................................................................................135 16 XV. EFFECTIVE DATE ...................................................................................................................137 17 XVI. RETENTION OF JURISDICTION ...........................................................................................137 XVII. MODIFICATION .......................................................................................................................137 18 XVIII. TERMINATION ........................................................................................................................138 19 XIX. PUBLIC PARTICIPATION .......................................................................................................139 20 XX. SIGNATORIES/SERVICE ........................................................................................................139 XXI. INTEGRATION .........................................................................................................................139 21 XXII. 26 U.S.C. § 162(F)(2)(A)(II) IDENTIFICATION .....................................................................140 22 XXIII. FINAL JUDGMENT ..................................................................................................................140 23 XXIV. APPENDICES AND DOCUMENTS INCORPORATED BY REFERENCE ..........................141 24 25 CONSENT DECREE 3:17-md-2777-EMC Case 3:17-md-02777-EMC Document 484-1 Filed 01/10/19 Page 4 of 224 1 BACKGROUND 2 Plaintiff United States of America, on behalf of the United States Environmental Protection 3 Agency, filed a complaint in this action on May 23, 2017, against FCA US LLC (“FCA”), Fiat Chrysler 4 Automobiles N.V., V.M. Motori S.P.A., and V.M. North America, Inc. (“U.S. Complaint”) alleging that 5 Defendants violated Sections 203(a)(1) and (a)(2) of the Clean Air Act, 42 U.S.C. §§ 7522(a)(1), (a)(2), 6 and that FCA US LLC, V.M. Motori S.P.A., and V.M. North America, Inc. violated Sections 7 203(a)(3)(A) and (3)(B) of the Clean Air Act, 42 U.S.C. §§ 7522(a)(3)(A) and (3)(B), with regard to 8 approximately 103,828 model year (“MY”) 2014 to 2016 Ram 1500 and MY 2014 to 2016 Jeep Grand 9 Cherokee vehicles equipped with 3.0 liter EcoDiesel engines (“Subject Vehicles”). Defendants have 10 determined that the actual number of Subject Vehicles manufactured is 101,482. 11 The U.S. Complaint alleges that each Subject Vehicle contains, as part of the electronic control 12 module, certain software functions and calibrations that cause the emission control system of those 13 vehicles to perform differently (i.e., to underperform or shut off) during normal vehicle operation and 14 use than during emissions testing. The U.S. Complaint alleges that these software functions and 15 calibrations are undisclosed “Auxiliary Emission Control Devices” (“AECDs”) in violation of the Act 16 and that they are also prohibited Defeat Devices under the Act. The U.S. Complaint also alleges that 17 during normal vehicle operation and use, the Subject Vehicles emit increased levels of NOx. The U.S. 18 Complaint alleges and asserts four claims for relief related to the presence of the Defeat Devices in the 19 Subject Vehicles. 20 The People of the State of California, by and through the California Air Resources Board 21 (“CARB”), and Xavier Becerra, Attorney General of the State of California, filed a complaint on 22 January 9, 2019, against FCA US LLC, Fiat Chrysler Automobiles N.V., V.M. Motori S.P.A., and V.M. 23 North America, Inc. (“California Complaint”) alleging that, in connection with the certification, 24 marketing, distribution, and sale of approximately 14,000 Subject Vehicles in California, Defendants 25 CONSENT DECREE 3:17-md-2777-EMC 1 Case 3:17-md-02777-EMC Document 484-1 Filed 01/10/19 Page 5 of 224 1 violated 42 U.S.C. § 7604(a)(1); California Health and Safety Code §§ 43016, 43017, 43151, 43152, 2 43153, 43154, 43205, 43211, and 43212; 13 C.C.R. §§ 1961, 1961.2, 1965, 1968.2, and 2037, and the 3 40 C.F.R. sections incorporated therein by reference; and California Business and Professions Code §§ 4 17200 et seq., 17500 et seq., and 17580.5. 5 The California Complaint alleges, in relevant part, that each Subject Vehicle contains, as part of 6 the electronic control module, certain software functions and calibrations that cause the emission control 7 system of those vehicles to perform differently (i.e., to underperform or shut off) during normal vehicle 8 operation and use as compared to during emissions testing. The California Complaint alleges that these 9 software functions and calibrations are undisclosed AECDs in violation of California and federal law, 10 and that they are also prohibited Defeat Devices under California and federal law. The California 11 Complaint also alleges that during normal vehicle operation and use, the Subject Vehicles emit 12 increased levels of NOx. The California Complaint seeks, among other things, civil penalties, injunctive 13 relief, mitigation, costs and other equitable relief related to the presence of the Defeat Devices in the 14 Subject Vehicles. 15 In 2017, EPA and CARB issued a Certificate of Conformity and an Executive Order, 16 respectively, for the EcoDiesel Jeep Grand Cherokees and Ram 1500s for MY 2017. As a result, to 17 remedy the alleged violations in the Subject Vehicles, Defendants proposed to update
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