By David Shepardson
WASHINGTON (Reuters) -Truck engine maker Cummins agreed to settle a lawsuit filed Wednesday by the Justice Department and California and pay a record-setting fine of about $1.65 billion for installing defeat devices on hundreds of thousands of engines.
In December, the Justice Department said Cummins had agreed in principle to the settlement the government said was the largest-ever civil penalty for a Clean Air Act violation. Under the proposed settlement subject to court approval, Cummins will pay $1.48 billion to the federal government and $164 million to California, according to court documents.
The lawsuit said Cummins allegedly installed so-called “defeat devices” to bypass or disable emissions controls such as emission sensors and onboard computers.
Cummins said the settlement filed Wednesday is “consistent with the previously announced settlement terms” and “do not involve any additional financial commitments beyond those disclosed by Cummins” last month.
The lawsuit said Cummins used defeat devices on 630,000 2013 to 2019 RAM 2500 and 3500 pickup truck engines to cheat emissions control requirements. The government also said Cummins had undisclosed auxiliary emission control devices on 330,000 2019 to 2023 RAM 2500 and 3500 pickup truck engines but they did not result in excess emissions.
U.S. Attorney General Merrick Garland said preliminary estimates suggest Cummins defeat devices “caused them to produce thousands of tons of excess emissions of nitrogen oxides.”
Cummins said earlier it expects to take a $2.04 billion charge in the fourth quarter to resolve claims relating to the engines. “The company has seen no evidence that anyone acted in bad faith and does not admit wrongdoing,” Cummins said.
RAM-owner Stellantis declined to comment. The 960,000 vehicles have been recalled and emissions controls software updated. Cummins must pay higher penalties if at least 85% of recalled vehicles do not get software updates.
Cummins first announced in April 2019 it was internally reviewing its emissions certification process and compliance.
In August 2022, the U.S. business of Fiat Chrysler Automobiles — now part of Stellantis — pleaded guilty to criminal conspiracy and paid nearly $300 million to resolve a Justice Department diesel-emissions fraud probe.
Volkswagen paid $1.45 billion in U.S. civil penalties in 2017 after the German automaker in 2015 disclosed it had cheated emissions tests by installing defeat devices” in 11 million vehicles worldwide, using sophisticated software to reduce emissions only during emissions tests.
(Reporting by David Shepardson; Editing by Chizu Nomiyama and Jonathan Oatis)
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