United States of America v. Hyundai Motor Company

77 F. Supp. 3d 197, 2015 U.S. Dist. LEXIS 2404, 2015 WL 128597
CourtDistrict Court, District of Columbia
DecidedJanuary 9, 2015
DocketCivil Action No. 2014-1837
StatusPublished
Cited by9 cases

This text of 77 F. Supp. 3d 197 (United States of America v. Hyundai Motor Company) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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United States of America v. Hyundai Motor Company, 77 F. Supp. 3d 197, 2015 U.S. Dist. LEXIS 2404, 2015 WL 128597 (D.D.C. 2015).

Opinion

MEMORANDUM OPINION

TANYA S. CHUTEAN, 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 *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 omit.ted). 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 (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 (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 involving the EPA, where courts accord “broad deference ... to EPA’s expertise in determining an appropriate settlement and to the voluntary agreement of the parties in proposing the settlement.” District of Columbia, 933 F.Supp. at 47.

The CAA requires EPA to provide “a reasonable opportunity by noticé in the Federal Register to persons who are not named as parties or intervenors to the action” to submit comments on the decree before it is entered. 42 U.S.C. § 7413(g).

III. DISCUSSION

a. Fairness

Courts must consider both procedural and substantive fairness in their analysis of proposed consent decrees. District of Columbia, 933 F.Supp. at 48. “A review of the fairness of a proposed consent decree requires an assessment of the good faith of the parties, the opinions of the counsel, and the possible risks involved in litigation if the settlement is not approved. A consent decree is substantively fair if it incorporates concepts of corrective justice and accountability^]” Envtl. Def., 329 F.Supp.2d at 70 (internal quotations and citations omitted).

The consent decree proposed in this litigation is fair. All the parties in *200 volved — the United States, CARB, and the Defendants — support entry of the decree. (Mot. 1). There is no suggestion of impropriety in the negotiation of the agreement, and all the parties were represented and advised by competent technical and legal staff. (Mot. 7-8). The parties .have reached an agreement that remedies the alleged violations and holds Defendants accountable for emissions testing and reporting going forward. In addition, the United States complied with the notice-and-comment procedures required by the CAA and received six comments, all of which received due consideration.

b. Adequacy, Reasonableness, and Appropriateness

When assessing whether the consent decree is adequate, reasonable, and appropriate, courts “focus on the extent to which the decree is confined to the dispute between the parties and whether the decree adequately accomplishes its purported goal.” Envtl. Def., 329 F.Supp.2d at 71. This does not mean a court may “impose its own judgments ... [but] [rjather, the court must determine whether the proposed consent decree is reasonable from an objective point of view.” Id. (internal quotations and citation omitted).

The parties agree that the scope and purpose of the consent decree is to end this civil action and address “alleged Clean Air Act and related California Health and Safety Code violations based on Defendants’ sale of more than one million vehicles that will emit more than four million metric tons of greenhouse gases in excess of what the automakers certified to EPA.” (Mot. 1).

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77 F. Supp. 3d 197, 2015 U.S. Dist. LEXIS 2404, 2015 WL 128597, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-of-america-v-hyundai-motor-company-dcd-2015.