DTNA, Volvo Ask Court to Revoke Approval Of Navistar’s 2012 EGR Engines by EPA

This story appears in the Sept. 16 print edition of Transport Topics.

Lawyers for Daimler Trucks North America and Volvo Group told a federal court last week that the Environmental Protection Agency should vacate the compliance certificates on most Navistar Inc. MaxxForce engines made in 2012 because the rule EPA used for its approval was invalidated.

However, EPA told the panel of the U.S. District Court of Appeals for the District of Columbia Circuit that the truck makers are too late in their request because the last certificate was issued more than nine months ago, meaning Navistar’s competitors are asking the agency to “unring a bell.”

Attorney Christopher Handman, arguing for DTNA and Volvo, did not offer a specific proposal on what would happen to those trucks should the certificates be lifted. He did say an acceptable solution would be to have Navistar pay additional fines to the U.S. Treasury.

The dispute arose from the need for Navistar to pay nonconformance penalties when the MaxxForce engines could not meet EPA’s stricter 2010 emissions standards for nitrogen oxide compounds. Navistar paid $1,919 per engine from Jan. 31 through Sept. 4, 2012, under the vacated interim rule and then $3,775 per engine under EPA’s final rule, which took effect Sept. 5, 2012.

“It is a common-sense proposition that if the basis of authority for granting the certificates is unlawful, then it necessarily follows that the certificates themselves are unlawful,” Handman told the three-judge panel.

“You can’t unring the bell of lost market share,” Justice Department attorney Michele Walter told the court on behalf of EPA and Navistar.

An EPA court filing before oral arguments said that once the agency grants a certificate, it cannot revoke it absent a proving of fraud.

Navistar is no longer making engines under terms of the old interim rule, and the vast majority of power plants made under those terms have been sold, Walter said.

That renders the DTNA/Volvo request moot, EPA said.

Data from WardsAuto.com show Navistar had U.S. retail sales of 22,780 Class 8 trucks from Feb. 1 through Aug. 31, 2012, a period that correlates closely — but not exactly — with the interim rule.

Handman said his clients are not seeking damages but do believe the court should order the certificates vacated.

The oral arguments are the last stage in the current lawsuit, which was filed in April 2012. Now the three judges will make a decision based on the extensive record and write an opinion, a process that usually takes several months.

Prior to the 2010 tightening of emissions standards, truck and engine makers had to decide on a technological approach for meeting the mandate. All U.S. and Canadian heavy-duty manufacturers except for Navistar chose selective catalytic reduction in combination with some exhaust gas recirculation.

Navistar pursued an EGR-only approach because company executives thought truck buyers would appreciate not having to purchase and maintain diesel exhaust fluid systems that are necessary parts of SCR trucks.

However, Navistar could not get its engines to meet the 0.2 gram of NOx per brake horsepower-hour standard. The Lisle, Ill., manufacturer abandoned its EGR-only approach in July 2012 and shifted to SCR by buying 15-liter engines from Cummins Inc. and SCR aftertreatment systems for its own MaxxForce 13-liter models.

The four parties opposing EPA and Navistar are DTNA and its Detroit Diesel Corp. engine subsidiary and Mack and Volvo Trucks, both parts of the Volvo Group.

DTNA, Volvo, Navistar and EPA  all were asked for comment by Transport Topics, but all said they had nothing to add beyond the court filings and oral arguments.