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Enforcement

Toyota Clean Air Act Emissions Defect Reporting Settlement Information Sheet

(Washington, DC – January 14, 2021) – The Department of Justice and the Environmental Protection Agency (EPA) announced today a settlement with Toyota for alleged failures to comply with its obligations under the Clean Air Act to monitor the vehicles for potential defects in emissions controls and report to the EPA, as well as failing to file reports describing the substance and progress of recalls. Under the terms of the settlement, Toyota will take steps to ensure compliance and pay a civil penalty of $180 million.

The defendants in this action are Toyota Motor Corporation, Toyota Motor North America, Inc., Toyota Motor Sales U.S.A., Inc., and Toyota Motor Engineering & Manufacturing North America, Inc. (collectively “Toyota”).

Violations

From approximately 2005 to 2015, Toyota circumvented EPA oversight provisions under the Clean Air Act and avoided or delayed recalls of defective emission control systems by systematically failing to submit reports to EPA of defects to emission related parts and corresponding recalls. Toyota materially delayed reporting an estimated 78 defects to EPA, reporting some defects years later than the law requires. All told, Toyota was late in filing hundreds of mandatory reports related to emission-related defects and recalls. Toyota’s failures constituted violations of section 203(a)(2) of the Clean Air Act, 42 U.S.C. § 7522(a)(2).

Even if properly designed and certified, motor vehicles may fail to perform as designed because of a defect. The defect may be, for example, a design or manufacturing error, a malfunctioning part, or an error in the software that controls vehicle functions. If the defect affects one of the many vehicle components designed to control emissions, the vehicle may, in actual use, emit more air pollution.

Clean Air Act regulations require light-duty motor vehicle manufacturers to notify EPA when 25 or more vehicles in a given model year have the same defect in an emission-related part. Manufacturers must also report to EPA when they perform a recall to correct defects in emission-related parts, and update EPA on the progress of such recalls. These mandatory reporting requirements are central to the Clean Air Act’s purpose of protecting human health and the environment from harmful air pollution. They encourage manufacturers to investigate and voluntarily address defects that may result in excess emissions, and they provide EPA information regarding emission-related defects for the agency to use in its oversight of manufacturers’ compliance.

As a result of its conduct, Toyota deprived EPA of timely information regarding emission defects and recalls and avoided the early oversight on emission defects contemplated by the regulations. In its oversight role, EPA may investigate defects, influence manufacturers to conduct a voluntary recall, or order a mandatory recall. Toyota’s conduct likely resulted in delayed or avoided recalls, lengthening the time that unrepaired vehicles with emission defects remained on the road.

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Injunctive Relief

The settlement requires Toyota to comply with the regulations at 40 C.F.R. Part 85 Subpart T (“Emission Defect Reporting Requirements”). Toyota must also initiate an internal investigation of potential defects under certain conditions (i.e., 1% or 500 unscreened warranty claims concerning a particular emission-related component, or 25 reports from service technicians at Toyota dealers concerning a particular emission-related component). Further, Toyota will provide EPA with supplemental reporting on its internal investigations and its recalls. This supplemental reporting will provide transparency that will help facilitate EPA oversight.

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Health Effects and Environmental Benefits

Air pollution emitted from transportation contributes to smog, and to poor air quality, which has negative impacts on the health and welfare of U.S. citizens. Pollutants that contribute to poor air quality include particulate matter (PM), nitrogen oxides (NOx), and volatile organic compounds (VOCs).

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Civil Penalty

Under the settlement, Toyota will pay a civil penalty of $180 million.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the Southern District of New York, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.

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Contact

For more information, contact:

Lauren Tozzi
Vehicle and Engine Enforcement Branch
Air Enforcement Division
Office of Enforcement and Compliance Assurance
U. S. Environmental Protection Agency
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
tozzi.lauren@epa.gov

Evan Belser
Air Enforcement Division
Office of Enforcement and Compliance Assurance
U. S. Environmental Protection Agency
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
belser.evan@epa.gov

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