Toyota To Pay $180M To Settle Lawsuit Over Air Pollution Violations

Toyota Motor Corp. has agreed to pay $180 million to settle claims that the automaker violated the Environmental Protection Agency’s (EPA) emissions regulations for at least 10 years.

The U.S. Attorney’s Office in Manhattan announced the consent decree on January 14, indicating Toyota will pay a substantial penalty for a decade long failure to comply with reporting requirements of the Clean Air Act.

According to a Department of Justice lawsuit (PDF) filed against Toyota this month, the manufacturer failed to report mandatory information about potential defects in their cars which violated EPA regulations, in an attempt to delay or avoid emission-related recalls, resulting in financial benefit to Toyota and excess air pollution from its vehicles.

The Clean Air Act requires 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, and to notify the EPA when they perform a recall to correct defects in emission-related parts, and update EPA on the progress of such recalls.

The DOJ investigation, which was launched in 2016, identified 78 unreported Clean Air Act defects occurring in Toyota vehicles over a ten year period, from 2005 through 2015. Toyota was found to be late in filing hundreds of mandatory reports related to emission-related defects and recalls, some of which were more than eight years late.

The lawsuit indicates Toyota’s managers and staff in Japan knew their company was no longer attempting to track and report whether there were 25 instances of the same emission-related defect in a model year, and that Toyota’s American unit was well aware of the non-compliance, yet did nothing to address the problem.

Officials indicate that as a result of the intentional oversight and failure to report, many vehicles during this timeframe produced excess emissions of harmful air pollutants in violation of the Clean Air Act.

The consent decree indicates Toyota admits and acknowledges these failures in reporting, and has agreed to settle the federal lawsuit by paying the civil penalty. In addition to the penalty, the consent decree requires Toyota to impose training, internal communication, and oversight requirements that will be subject to judicial oversight for the next three years. Toyota will also be required to provide semi-annual compliance reports to the EPA.

The $180 settlement marks the largest civil penalty in U.S. history rendered against an automobile manufacturer for the failure to regulate and report emissions defects.