On January 12th, 2017, the U.S. Environmental Protection Agency (“EPA”) issued a notice of violation to Fiat Chrysler Automobiles N.V. and FCA US LLC, a wholly owned subsidiary thereof, for alleged violations of the Clean Air Act (“CAA”). The EPA claim asserts that the light-duty models year 2014, 2015, and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0 liter diesel engines are equipped with engine management software that was undisclosed to the EPA. The secretly installed software allowed more than 100,000 of Fiat Chrysler’s diesel vehicles to emit pollutants above legal levels.
The EPA’s concern finds its origin in regulations promulgated by the agency to fulfill the mandate of the CAA. At issue here is 40 C.F.R. Part 86 which sets the standards and test procedures for light duty motor vehicles. The regulation works in tandem with section 203 of the CAA, 42 U.S.C. § 7522 outlining the compliance provisions. Light duty vehicles are required to meet emission standards for air pollutants, including nitrogen oxides, before the EPA will approve the introduction of the vehicles into U.S. commerce. As a part of the certification process, automakers are required to disclose and explain all software including auxiliary emission control devices.
Auxiliary control devices exist to calibrate an engine’s performance and control emission levels. Although federal regulations do allow diesel cars to shut off emission controls in some limited instances the EPA believes that Fiat Chrysler’s software shuts off the emission controls in too many instances. The accusation involves the same technology utilized in the recent Volkswagen case, but arguably is less serious. Volkswagen’s software was designed to shut down emissions controls completely during normal driving conditions making it an illegal defeat device. Fiat Chrysler’s technology cannot be categorized as a defeat device because it does not operate during all road conditions, however, the EPA feels that the software essentially functions like as such.
Sergio Marchionne, chief executive of Fiat Chrysler insists that the auto manufacturer did not take any illegal action. The company claims that it spent months responding to questions from federal regulators and diligently participated in efforts to address all concerns regarding the software. The collaboration between the Company and the Government led to extensive software changes and all software information was disclosed from the outset. Marchionne insists that the dispute is a difference of opinion as to whether the calibrations met the regulations or not.
It appears that Fiat Chrysler might be taking this stance to differentiate itself even more from Volkswagen. The seriousness of Volkswagen’s actions lies in the executive’s action to hide from the EPA the software code they knew was operating contrary to the regulations. The software code in the Volkswagen case was written to perform differently during EPA testing, then on the open road. It was made to deceive– leading Volkswagen to plead guilty to criminal conspiracy. The EPA, clearly feels that Fiat Chrysler is guilty, but seems to agree—probably not as guilty as Volkswagen.
The EPA admits that its claim against Fiat Chrysler is the result of stricter testing following the Volkswagen case. Media outlets suggest that the timing of the suit has been an attempt to enforce EPA regulations as best the agency can before the Trump Administration acts on its campaign promises to limit EPA reach.
Brandy Nickoloff is a second year law student at Wake Forest University School of Law. She holds an undergraduate degree in Business Management from Grove City College, a small liberal arts college located one hour north of her hometown of Pittsburgh, PA. Upon graduation she plans to pursue a career in transactional law.