United States v. Volvo Powertrain Corporation

758 F.3d 330, 411 U.S. App. D.C. 139, 44 Envtl. L. Rep. (Envtl. Law Inst.) 20161, 2014 WL 3537802, 79 ERC (BNA) 1102, 2014 U.S. App. LEXIS 13723
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 18, 2014
Docket12-5234
StatusPublished
Cited by24 cases

This text of 758 F.3d 330 (United States v. Volvo Powertrain Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Volvo Powertrain Corporation, 758 F.3d 330, 411 U.S. App. D.C. 139, 44 Envtl. L. Rep. (Envtl. Law Inst.) 20161, 2014 WL 3537802, 79 ERC (BNA) 1102, 2014 U.S. App. LEXIS 13723 (D.C. Cir. 2014).

Opinion

Opinion for the Court filed by Circuit Judge SRINIVASAN.

SRINIVASAN, Circuit Judge:

Under the Clean Air Act, manufacturers of new motor vehicle engines need to obtain certificates of conformity from the Environmental Protection Agency before selling their engines in the United States. To obtain the certificates, manufacturers must verify that their engines comply with EPA emissions standards. In 1998, EPA alleged that several major engine manufacturers had violated federal law by equipping certain engines with “defeat devices” designed to suppress emissions during EPA tests even though emissions exceeded the legal limit in normal operating conditions. The manufacturers settled the allegations, and each entered into similarly worded consent decrees with the federal government.

*334 The consent decrees required the manufacturers to satisfy future EPA emissions standards ahead of schedule. In particular, the decrees provided that certain model year 2005 engines for which the manufacturers sought certificates of conformity would meet model year 2006 limits on emissions of oxides of nitrogen (NOx). The decrees’ requirements apply to engines “manufactured at any facility owned or operated by” the settling companies.

Volvo Powertrain Corporation, a wholly owned subsidiary of the Swedish conglomerate AB Volvo, is one of the companies subject to such a decree. Volvo Power-train owns and operates a facility in Skóvde, Sweden, where it and other Volvo subsidiaries manufacture engines. Another wholly owned Volvo subsidiary, AB Volvo Penta, sought certificates of conformity from EPA for 8,354 model year 2005 engines manufactured at the Skóvde facility. Those engines did not comply with EPA’s model year 2006 NOx emissions standard.

Volvo Powertrain now argues that the consent decree has no application to the Volvo Penta engines even though, under the language of the decree, the engines were manufactured at a “facility owned or operated by” a settling company. The district court disagreed, and it held Volvo Powertrain liable for the failure of the 2005 engines to satisfy the 2006 emissions standard. As a remedy, the court ordered Volvo Powertrain to pay approximately $72 million, an amount calculated in accordance with the consent decree’s schedule of stipulated penalties for violations of the decree’s requirements.

We agree with the district court that the consent decree applies to the 8,354 Volvo Penta engines manufactured at the Volvo Powertrain plant. Although Volvo Penta, not Volvo Powertrain, sought the certificates of conformity in question, we read the terms of the consent decree to impose liability on Volvo Powertrain for its affiliate’s engines manufactured at its facility. We also conclude that the district court committed no abuse of discretion when it ordered Volvo Powertrain to pay approximately $72 million as a remedy for the violations of the decree. We therefore affirm the judgment of the district court.

I.

A.

The Clean Air Act requires the EPA Administrator to prescribe standards for emissions of air pollutants from new motor vehicles and motor vehicle engines if the emissions “cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” Clean Air Act § 202(a)(1), 42 U.S.C. § 7521(a)(1). A manufacturer who desires to sell new motor vehicle engines in the United States must conduct tests to show that the engines meet emissions standards prescribed under section 202. See id. § 206(a)(1), 42 U.S.C. § 7525(a)(1); see also 40 C.F.R. § 89.119(a)-(b). If the engine meets EPA standards, the agency issues a “certifícate of conformity” allowing the manufacturer to sell the engines in the United States for up to one year. See Clean Air Act § 206(a)(1), 42 U.S.C. § 7525(a)(1). It is unlawful to sell new motor vehicle engines in the United States or to import new engines into the country without a certificate of conformity. See id. § 203(a)(1), 42 U.S.C. § 7522(a)(1).

The Clean Air Act also allows the State of California to adopt and enforce emissions standards for new motor vehicles and motor vehicle engines if California determines that its standards “will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.” Id. § 209(b)(1), 42 U.S.C. § 7543(b)(1); see also Chamber of Com *335 merce of the U.S. v. EPA, 642 F.3d 192, 196 (D.C.Cir.2011). A vehicle or engine generally cannot be sold in California or imported into the state until the California Air Resources Board certifies compliance with state emissions standards. See Cal. Health & Safety Code §§ 43151-43153 (Deering 2014). Certificates issued by the California Air Resources Board are called “executive orders.”

The pollutants subject to emissions limits under the Clean Air Act and California law include oxides of nitrogen, or NOx. See Clean Air Act § 202(a)(3)(A)(i), 42 U.S.C. § 7521(a)(3)(A)9(i); 40 C.F.R. § 89.112; Cal.Code Regs. tit. 13, § 2423. NOx emissions contribute to the formation of fine particulate matter, also known as PM2i5, as well as ground-level ozone, a primary component of smog. See North Carolina v. EPA 531 F.3d 896, 903 (D.C.Cir.2008). Elevated levels of fine particulate matter have been linked to “adverse human health consequences such as premature death, lung and cardiovascular disease, and asthma.” Catawba Cnty. v. EPA, 571 F.3d 20, 26 (D.C.Cir.2009). And “even at very low levels,” inhalation of ozone “can cause serious health problems by damaging lung tissue and sensitizing lungs to other irritants.” Ass’n of Irritated Residents v. EPA, 686 F.3d 668, 671 n. 1 (9th Cir.2012).

In 1998, the United States brought enforcement actions in federal district court against seven major engine manufacturers, alleging that they had been using “defeat devices” to meet EPA standards for NOx emissions. The devices enabled the engines to meet EPA emissions standards in laboratory testing even though the engines produced NOx emissions far above the applicable limit in ordinary use. See Crete Carrier Corp. v. EPA, 363 F.3d 490, 491 (D.C.Cir.2004). The manufacturers collectively negotiated settlement terms with the federal government.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Andi Gjoci v. DOS
D.C. Circuit, 2026
United States v. Facebook, Inc.
136 F.4th 1129 (D.C. Circuit, 2025)
United States v. Terrell Armstead
116 F.4th 519 (D.C. Circuit, 2024)
United States v. Philip Morris USA
District of Columbia, 2023
In Re Max E. Salas
District of Columbia, 2022
Pao Tatneft v. Ukraine
21 F.4th 829 (D.C. Circuit, 2021)
Paul Morrissey v. Alejandro Mayorkas
17 F.4th 1150 (D.C. Circuit, 2021)
Shoshone-Bannock v. Kempthorne
District of Columbia, 2020
Pigford v. Perdue
330 F. Supp. 3d 1 (D.C. Circuit, 2018)
Pigford v. Veneman
District of Columbia, 2018
Lannan Foundation v. Gingold
District of Columbia, 2017
Lannan Found. v. Gingold
300 F. Supp. 3d 1 (D.C. Circuit, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
758 F.3d 330, 411 U.S. App. D.C. 139, 44 Envtl. L. Rep. (Envtl. Law Inst.) 20161, 2014 WL 3537802, 79 ERC (BNA) 1102, 2014 U.S. App. LEXIS 13723, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-volvo-powertrain-corporation-cadc-2014.