Dirty Truck Engines to Cost Volvo $72 Million

WASHINGTON (CN) - Volvo Powertrain must pay $72 million for making nonroad engines that do not comply with Clean Air Act emissions standards, a federal judge ruled

Though the actions violate an earlier settlement with the government, the consent decree did not address how to penalize the violation in question, Chief U.S. District Judge Royce Lamberth found. As such, Lamberth said the court went "on to exercise its equitable authority and discretion to fashion a remedy. "

The government took aim against truck engines in 1998, alleging that a feature of their fuel-injection systems violated the Clean Air Act.

"Those fuel injection systems were operated by computer software, which the government alleged had been programmed to operate differently at highway speeds than under the standardized conditions of federal emissions testing, thereby improving the fuel economy of the engines but causing them to emit nitrogen oxide at levels well above the legal limit," Lamberth explained.

The engine makers and the federal government negotiated settlement terms that bound the manufacturers to several consent decrees requiring them to meet new emissions standards for heavy-duty diesel engines and nonroad compression-ignition engines with a horsepower of at least 300 but less than 750.

Volvo Truck Corp., which later became Volvo Powertrain, signed the decree, but a competing engine manufacturer suggested that 11 different types of engines manufactured at one of its facilities in Sweden had been making nonroad engines that did not comply with the consent decree.

After concluding that the company was in violation, the government slapped it with a hefty $72 million in penalties, for which Volvo sought judicial review. There are 8,534 engines at issue, and each one is required to meet the standards for 2006 model engines, though "none did," according to the ruling.

Lamberth ruled that the consent decree did encompass the engines made by Volvo, and that the penalty was appropriate for breaching the settlement agreement.

"The court will exercise its equitable authority and enter a separate judgment of $72,006,337 against Volvo Powertrain and in favor of the United States," Lamberth wrote, avoiding the ambiguity of penalty provision of the decree.

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