Engine maker to pay $1.67 billion to California, EPA in Ram pickup pollution case

California and the U.S. Environmental Protection Agency on Wednesday finalized a $1.67 billion settlement with truck engine maker Cummins — the largest civil penalty ever assessed under the federal Clean Air Act — after the company installed devices on more than 600,000 Ram pickup trucks that regulators said illegally bypassed emission tests, resulting in ten of thousands of tons of excess pollution.

The penalty is the second largest the EPA has ever recovered under any environmental law, behind the $20 billion settlement in the 2010 BP Deepwater Horizon platform explosion and oil spill, which killed 11 people and dumped 210 million gallons of oil into the Gulf of Mexico.

According to the EPA, the U.S. Justice Department and the California Air Resources Board, Cummins, a multi-national corporation based in Columbus, Indiana, illegally installed “defeat devices” in the engines of 630,000 Ram 2500 and 3500 pickup truck engines in the model years 2013-2019.

The devices enabled the engines to pass EPA emissions tests. But during normal driving, they defeated emission controls systems like sensors and onboard computers. That allowed the trucks to emit more pollution than federal and state health laws allow, often increasing mileage or engine power, the EPA said.

As part of the settlement, the company is required to recall the trucks so the engines can be fixed, and to fully offset the excess emissions from the 2013-2019 Ram trucks that were equipped with defeat devices. The latter will require Cummins spending an additional $325 million to fund projects to reduce air pollution in California and across the United States, including replacing old locomotive engines with newer, cleaner ones.

“We won’t let greedy corporations cheat their way to success and run over the health and well being of consumers and the environment,” California Attorney General Rob Bonta said at a news conference Wednesday.

The repair involves free software updates for the truck owners, EPA officials said. Cummins has said it already has begun the recall and repair program required by the settlement.

The settlement agreement’s broad outlines were first announced last month. Details were filed in federal court in Washington D.C., on Wednesday. Under it, the federal government will receive $1.478 billion, and the California attorney general’s office and Air Resources Board will receive $197 million.

In a news release, Cummins said it cooperated with federal and state regulators.

“Cummins conducted an extensive internal review and worked collaboratively with the regulators for more than four years,” the company said. “The company has seen no evidence that anyone acted in bad faith and does not admit wrongdoing.”

On Wednesday, federal officials and state officials rebuffed that claim.

“They knew what they did, they got caught, and we held them accountable,” Bonta said.

Cummins, founded in 1919, employs 73,000 people, and in 2022 earned $2.2 billion on $28 billion in sales.

The Ram trucks with the defeat devices were made by Fiat Chrysler Automobiles. Ram pickups are now made by Stellantis NV, which was formed in 2021 through the merger of FCA and Groupe PSA.

In addition to the defeat devices, Cummins also failed to disclosed auxiliary emission control devices on about 330,000 Ram 2500 and 3500 pickup truck engines in the 2019-2023 model years that curbed emissions control requirements, the EPA said.

“For more than a decade, Cummins engaged in a brazen scheme to violate the Clean Air Act,” said David Uhlmann, chief of the EPA’s enforcement division. “Cummins did not stop breaking the law even after EPA began investigating the company.”

Defeat devices on engines increase pollution of nitrogen oxides, which contribute to forming smog. Nitrogen oxides aggravate respiratory conditions, particularly asthma, and can contribute to asthma attacks in children. People who live near freeways are particularly impacted.

The Cummins case is the latest in a series of crackdowns by California and the federal government on vehicle and engine companies who regulators said tried to evade pollution rules. Volkswagen AG, Mercedes-Benz Group and other manufacturers have agreed to similar settlements over the past decade, for more than $4.3 billion in civil penalties, including Wednesday’s case.

“These results should send a powerful message that emission cheating will not be tolerated,” said Assistant Attorney General Todd Kim of the U.S. Justice Department’s Environment and Natural Resources Division.