Mercedes-Benz Agrees to Pay $1.2 Million Penalty to Settle Clean Air Act Violation

Mercedes-Benz USA and its parent corporation, DaimlerChrysler AG, have agreed to pay
$1.2 million in civil penalties to resolve allegations that they violated the Clean Air Act by failing to promptly notify the Environmental Protection Agency (EPA) about defects in the air pollution controls installed on numerous 1998 to 2006 Mercedes model vehicles, the Justice Department and the EPA announced today.

The Clean Air Act requires auto manufacturers to promptly inform the EPA of defects in emission-related components so that the government can consider whether the defect will cause emission standards to be exceeded and whether a recall is necessary. Both the complaint and the settlement were filed in the U.S. District Court in Washington, D.C.

In response to the EPA's investigation into the matter, Mercedes began voluntary recalls for two of the defects at issue and notified owners that it would extend the warranty coverage to address a third defect, at an estimated cost of about $59 million. Under the terms of the consent decree, Mercedes will also be required to improve its emissions defect investigation and reporting system to ensure future compliance, at an estimated cost of approximately $1 million per year.

"Reliable and effective automobile pollution control systems are essential to protect human health and the environment from harmful automobile emissions," says Sue Ellen Wooldridge, assistant attorney general for the Justice Department's Environment and Natural Resources Division. "Mercedes' failure to alert EPA to a number of defects in emission-related components over a multi-year period is a serious violation because it deprived EPA of the opportunity to promptly determine whether emission standards would be exceeded and whether to order a recall of any
of these vehicles."

The vehicles subject to the voluntary recalls and extended warranties have defective catalytic converters or defective air pumps. The voluntary recalls and extended warranty will reduce the emissions of harmful pollutants caused by the defects by over 500 tons cumulatively. These pollutants include nonmethane hydrocarbons (NMHC), nitrogen oxides (NOx) and carbon monoxide (CO). NMHC and NOx are key ingredients in the production of ozone, a major contributor to cancer-causing smog. CO impairs
breathing and is especially harmful to children, people with asthma and the elderly.

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