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FCA diesel case in hands of Calif. judge

Keith Laing
Detroit News Washington Bureau

Washington — Fiat Chrysler Automobiles NV will defend itself against allegations over diesel-emission violations in federal court in San Francisco rather than Detroit, after U.S. officials successfully requested to move the venue of the lawsuit. California courts historically have been more receptive to punishing polluters.

The U.S. Department of Justice’s civil complaint against FCA alleges the automaker failed to disclose software on about 104,000 diesel-powered pickups and SUVs that regulators said could be similar to the “defeat devices” Volkswagen AG used to cheat emissions-testing on millions of its diesel cars.

The Justice Department and Environmental Protection Agency have alleged FCA did not disclose at least eight auxiliary emission control devices on Jeep Grand Cherokees and Ram 1500 pickups from the 2014-16 model years with 3-liter diesel engines. Automakers can legally use software to deactivate a vehicle’s emission control system in certain conditions, but regulators require the disclosures when companies apply for certificates that are required to sell cars in the U.S.

FCA has denied the company’s diesel engines have any kind of illegal software or defeat devices, noting they have cooperated with federal regulators since the investigation was launched. They also note that Volkswagen’s software was used in far more vehicles and it was activated during emission tests to purposely dupe federal regulators, unlike the FCA software which regulators have said was just not properly disclosed.

“FCA US has been working with the U.S. Environmental Protection Agency and the California Air Resources Board for many months, including extensive testing of the vehicles, to clarify issues related to the company’s emissions control technology in model-year 2014-2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles,” the company said in a statement provided to The Detroit News.

“The company intends to defend itself vigorously, particularly against any claims that the company engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

The company has warned shareholders it could face fines of up to $4.6 billion if federal regulators conclude the company installed pollution-control defeat devices. It has also announced a potential fix for its diesel-powered 2017 Jeep Grand Cherokee and Ram 1500 that it says can also address regulators’ concerns about its 2014-2016 versions of the vehicles that have been under the microscope for most of the year.

Environmentalists believe the case’s move to California could result in a tougher ruling against FCA. They note that California is historically much more aggressive with its emissions enforcement than Michigan and the Trump administration has already taken steps to possibly roll back stringent U.S. gas mileage rules.

“It’s hard to speculate about what’s happening in Washington, but I can vouch for California,” National Resource Defense Council attorney Max Baumhefner said. “Regardless of what’s happening in Washington, California is going to aggressively pursue companies that cheat on emissions tests.”

On the other hand, a federal judge in Detroit in April sentenced Volkswagen to a record $2.8 billion fine and three years of probation after the automaker pleaded guilty to three criminal charges for its 10-year conspiracy to rig nearly 600,000 diesel cars to cheat U.S. emissions standards.

Still, Jack Nerad, executive editorial director at Kelley Blue Book, said federal regulators are likely to find a more favorable judicial audience in California than they might have in Detroit.

“It is likely that the Justice Department’s emissions violation case against FCA regarding some of the company’s recent diesel-powered vehicles might find a more receptive judiciary in California than in Michigan,” Nerad said. “While some might find it troubling that jurisprudence differs from one state to another, there is little doubt that if the case were pursued in California, the state with among the most restrictive emission laws in the country, it might well fare better than if it were adjudicated in Michigan, the American home of FCA and the U.S. auto industry.”

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