Caterpillar to Pay $2.55 Million for Sales of Engines With Improper Emissions Controls

Caterpillar Inc. will pay $2.55 million to the federal and California governments to settle claims it sold engines without proper emissions controls and violated emissions control reporting and engine labeling regulations, the U.S. Environmental Protection Agency said.

In a lawsuit filed in the U.S. District Court for the District of Columbia on July 28, EPA said that Caterpillar sold more than 590,000 on- and off-road diesel engines that did not have the same emissions control technology the engine-maker told the agency they would have.

Of those engines, which were sold to original equipment manufacturers between February 2002 and November 2006, about 925 actually were installed in vehicles that were later sold to end users without proper emissions controls, the U.S. Department of Justice said in the lawsuit it filed on EPA’s behalf. The complaint alleges Caterpillar violated the Clean Air Act in selling the engines to more than 50 OEMs.

Caterpillar stopped making heavy-duty truck engines in the United States in 2009 (6-16-08, p. 1).

“The enforcement of vehicle emissions standards, labeling and reporting requirements is critical to protecting the air we breathe and ensuring that companies play by the rules,” Cynthia Giles, assistant administrator of EPA’s Office of Enforcement and Compliance Assurance, said in a statement announcing the settlement.

EPA and Caterpillar filed the settlement in a consent decree the same day as the lawsuit. The California Air Resources Board will receive $510,000 of the total to settle its similar allegations against Caterpillar, the settlement stated.

CARB is still finalizing the terms of its settlement, spokeswoman Karen Caesar said.

As part of the settlement, Caterpillar denied EPA’s allegations from the suit.

“Caterpillar denies any wrongdoing, but does agree that the decree represents a good faith effort between the parties to resolve their differences and avoid potentially lengthy litigation,” said Bridget Young, a Caterpillar spokeswoman. “Caterpillar is committed to following the terms of the decree.”

EPA’s complaint alleges Caterpillar presented test engines to the agency that were equipped with aftertreatment devices or fuel-programming software and submitted applications to obtain EPA certification that they conformed to current emissions regulations.

Caterpillar then sold about 590,282 engines that did not have the emissions-control technology, about 925 of which were installed in trucks that were sold to end users without the proper technology, the lawsuit said.

“Generally, Caterpillar shipped the engines and relied on the truck manufacturers to order and obtain the catalysts,” an EPA official said. “However, approximately 925 engines did not receive the correct emission-control device, or were not programmed with the correct fuel injector settings.” The bulk of the penalty is for the 925 engines that made it to the end users.

Caterpillar also did not file a report with EPA when it discovered that its engines did not have working emissions technology, it said.

In addition, Caterpillar sold 56 off-road engines without proper emissions labels, EPA said. Those engines were models C16 and 3456, both in model year 2003.

The engines Caterpillar sold with incorrect emissions controls included heavy-duty truck engine models C10, C11, C12, C13 and C15 in various model years from 2003 to 2006. There were also medium-duty truck engines of models C7 and C9, in years from 2003 to 2006, in addition to off-highway engines, the lawsuit said.

Though EPA’s complaint outlined the models and model years of engines, the agency did not respond to a question asking the quantities of the engine models that were subject to the suit.

Representatives of Navistar International Corp. and Daimler Trucks North America declined to comment on the settlement. Representatives of Volvo Trucks and Mack Trucks said those OEMs did not purchase Caterpillar engines during that time and refused to comment further. A spokesman for Paccar Inc. did not return a request for comment.

“Engines operating without proper emissions controls can emit excess nitrogen oxides, particulate matter and other air pollutants that impact people’s health, potentially causing respiratory illnesses and aggravating asthma,” EPA said in its statement.

Apart from the fine, Caterpillar must reopen a previous recall it had issued to retrofit the affected engines with aftertreatment devices and the correct fuel programming software settings until all the engines are fixed or until the end of the year, whichever comes first, the settlement said.

“The vast majority of these engines have already been addressed in the company’s ongoing recall program,” Caterpillar’s Young said. The company will notify customers of the reopened recall through its normal notification program, she said.

Caterpillar must also permanently retire its banked emissions credits, which equal 17 tons of nitrogen oxide and hydrocarbons, and one ton of particulate matter, to mitigate the emissions from the engines it sold, the EPA official said.