Toyota to Pay U.S. $180 Million Emissions Reporting Penalty (3)

Jan. 14, 2021, 4:33 PM; Updated: Jan. 14, 2021, 8:01 PM

Toyota Motor Corp. has agreed to pay $180 million to settle the federal government’s claims that it systematically violated Clean Air Act reporting requirements for defects in emission control parts, according to a Thursday filing in a New York federal court.

Prosecutors said it’s the biggest emissions-related civil reporting penalty ever negotiated.

The company delayed filing hundreds of reports over a decade for about 78 emissions-related defects, the Justice Department said in its complaint filed in the U.S. District Court for the Southern District of New York.

The act requires manufacturers to notify the Environmental Protection Agency when 25 or more vehicles or engines in a given model year have the same defect for a part installed to comply with emissions standards. Makers also must report when they perform a recall to correct emissions defects and update the EPA on their progress.

Toyota ‘Failed’

“Time and again, Toyota managers and staff in Japan identified the discrepancy between the company’s procedures and the plain language of the federal requirements, but failed to bring Toyota into compliance,” the Justice Department said.

The company acknowledged in the consent decree that it routinely filed reports to the EPA late, or in some cases, failed to file the reports at all, from 2005 until a self-disclosure of non-compliance in 2015.

A Toyota spokesperson said in Thursday “this delay in reporting resulted in a negligible emissions impact, if any.”

“Nonetheless, we recognize that some of our reporting protocols fell short of our own high standards, and we are pleased to have resolved this matter,” according to the statement.

The $180 million penalty is “the largest civil penalty for violations of EPA’s emissions-reporting requirements,” according to a statement by the U.S. Attorney’s Office.

“This settlement is yet another important milestone settlement for this administration, and it continues our unwavering commitment to ensuring that our environmental laws as written, including EPA’s regulations, are rigorously enforced,” said Jeffrey Bossert Clark, who just stepped down as assistant attorney general of the Environment and Natural Resources Division.

The settlement was one of the final issues Clark worked on before announcing his resignation Thursday.

Some outside lawyers criticized the Justice Department for not including mitigation requirements in the Toyota deal. Earlier this week, Clark issued a memo constraining the pursuit of certain types of mitigation in enforcement cases.

“It’s more than suspicious that the political head of the Justice Department’s environment division issues an 11th hour ideological memo discouraging mitigation relief in enforcement settlements, two days before announcing a consent decree with Toyota that involved ‘excess emissions of air pollutants'—with no mitigation of that illegal, air pollution, at all,” John Walke, senior attorney for the Natural Resources Defense Council, said in an email. “Then, he just walked out the door.”

Toyota represented itself.

The case is United States v. Toyota Motor Corp., S.D.N.Y., No. 1:21-cv-00323, 1/14/21.

(Adds comment from John Walke in final paragraphs.)

To contact the reporter on this story: Maya Earls in Washington at mearls@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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