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United States v. Hyundai Motor Co.

United States District Court, D. Columbia.

January 9, 2015

UNITED STATES OF AMERICA et al., Plaintiffs,
v.
HYUNDAI MOTOR COMPANY et al., Defendants

For UNITED STATES OF AMERICA, Plaintiff: Jason Tyler Barbeau, U.S. DEPARTMENT OF JUSTICE, Washington, DC.

For CALIFORNIA AIR RESOURCES BOARD, Plaintiff: Barbara Caroline Spiegel, LEAD ATTORNEY, CALIFORNIA OFFICE OF THE ATTORNEY GENERAL, San Francisco, CA.

For HYUNDAI MOTOR COMPANY, HYUNDAI MOTOR AMERICA, HYUNDAI AMERICA TECHNICAL CENTER, INC., Defendants: Justin Aaron Savage, LEAD ATTORNEY, HOGAN LOVELLS, Washington, DC.

Page 198

MEMORANDUM OPINION

TANYA S. CHUTKAN, United States District Judge.

Before the Court is the United States' unopposed motion to enter a consent decree. Having reviewed the Complaint, proposed Consent Decree and the motion, the Court finds that the agreement is fair, adequate, reasonable, appropriate, and serves the public interest. Therefore, the motion is granted and the Court will enter the consent decree.

I. BACKGROUND

This case arises from alleged violations of the Clean Air Act (" CAA" ) and related California Health and Safety Code violations by defendants Hyundai Motor Company, Hyundai Motor America, Kia Motors Corporation, Kia Motors America, and Hyundai America Technical Center, Inc. (collectively, " Defendants" ). The United States, on behalf of the United States Environmental Protection Agency (" EPA" ) and in conjunction with the California Air Resources Board (" CARB" ), seeks monetary penalties and injunctive relief against Defendants for allegedly falsifying fuel economy and greenhouse gas emissions claims for over one million Hyundai and Kia vehicles with model years 2012 and 2013 (the " Subject Vehicles" ).

The alleged violations occurred as a result of a discrepancy between the applications Defendants submitted for Certificates of Conformity and the actual specifications of the Subject Vehicles. Certificates of Conformity are required for new model vehicles pursuant to the CAA and include various specifications

Page 199

related to vehicle emissions. If a vehicle which is nominally covered by a given Certificate does not actually meet the specifications in that Certificate, the EPA deems that vehicle not covered by the Certificate at all, leaving it in violation of the CAA. In this case, Defendants submitted applications for Certificates which reported the Subject Vehicles' road load force. Road load force directly impacts the calculation of fuel economy rates and whether a vehicle meets air pollution emission standards. EPA determined that the road load force for the Subject Vehicles did not match the specifications in their Certificates due to Defendants' improper testing, analysis, and reporting. The Subject Vehicles had a higher road load force than Defendants' originally represented, meaning the vehicles had lower fuel economy and higher emissions compared to what Defendants stated in their applications. Because the actual road load force did not match the road load force in the Certificates, the Subject Vehicles were allegedly in violation of the CAA. See 42 U.S.C. § § 7522-24.

CARB also seeks penalties for violations of California Health and Safety Code Section 43212 for the same improper testing and reporting as it related to CARB test procedures. Defendants sold more than 126,000 Subject Vehicles in the State of California. (Mot. 3).

II. LEGAL STANDARD

" Approval of a settlement is a judicial act that is committed to the informed discretion of the trial court." United States v. District of Columbia, 933 F.Supp. 42, 47 (D.D.C. 1996) (citation omitted). A court reviewing a consent decree must " determine that the settlement is fair, adequate, reasonable and appropriate under the particular facts and that there has been valid consent by the concerned parties." Citizens for a Better Env't v. Gorsuch, 718 F.2d 1117, 1126, 231 U.S.App.D.C. 79 (D.C. Cir. 1983) (citation omitted); Envtl. Def. v. Leavitt, 329 F.Supp.2d 55, 70 (D.D.C. 2004); see also Massachusetts v. Microsoft, 373 F.3d 1199, 1206 n.1, 362 U.S.App.D.C. 152 (D.C. Cir. 2004) (noting the general requirement that a consent decree must " fairly and reasonably resolve the controversy in a manner consistent with the public interest" ) (internal quotations and citation omitted). Settlement is highly favored, as " [n]ot only the parties, but the general public as well, benefit from the saving of time and money that results from the voluntary settlement of litigation." Gorsuch, 718 F.2d at 1126. This is particularly true in cases ...


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