United States
                                 Environmental Protection
                                 Agency
                              Office of Enforcement and
                              Compliance Assurance
                              (2201A)
                                 EPA300-N-98-005
                                 August 1998
&EPA
Volume 1, Number 2
          ABOUT
   Enforcement Alert
   The  Enforcement Alert  is
   published  periodically  by
   EPA's Office of Regulatory
   Enforcement. It informs and
   educates  the public  and
   regulated  community  of
   important   environmental
   enforcement  issues,  recent
   trends  and  significant
   enforcement actions.

   This information should help
   the  regulated  community
   anticipate   and  prevent
   violations    of   federal
   environmental law that could
   otherwise lead to enforcement
   action.

   See Page 2 for useful EPA
   Websites  and  additional
   resources.
   Eric V. Schaeffer
   Director,  Office of
   Regulatory Enforcement
Enforcement Alert
       Office of Regulatory Enforcement
                                             Clean Air Act Prohibits
                                  "Defeat Devices" in Vehicles, Engines
                                  Honda to Spend $267Mil, Ford $7.8 Mil. to Settle Charges
      Under the Clean Air Act (CAA) and
    EPA regulations promulgated under the
    Act, a manufacturer is prohibited from
    selling or offering for sale any new
    motor vehicle or motor vehicle engine
    equipped with any device designed to
    "defeat" the en-
    gines ' emission '
    control system.
      On June 8, EPA
    and DOJ jointly
    announced major
    settlements with
    American Honda
    Motor Company
    and Ford Motor
    Company, resolv-
    ing charges that
    both companies il-
    legally sold ve- ^^^^^^^^^^
    hides and engines
    equipped with defeat devices that pre-
    vent emission-control systems from
    working properly. The two cases are
    described below:

    Honda Case
      In the Honda case, the government
    alleged that Honda disabled the misfire
    monitoring device on 1.6 million 1996
    and 1997 model year Accords, Civics,
    Preludes, Odysseys, and Acuras, as well
    as 1995 Honda Civics. The complaint
    also alleged that Honda failed to report
    this fact when applying for certificates
    of conformity, a necessary prerequi-
    site to selling motor vehicles in this
    country.
                                 http://www. epa.gov/oeca/enfalert
       What the law requires:
  Section 203 (a)(3)(b) of the Clean Air Act
(CAA), 42 U.S.C. Sec. 7522(a)(3)(b), prohib-
its the manufacture, selling, or installation of
any device that bypasses, defeats, or renders
inoperative a required element of the vehicle's
emissions control system.
  Section 203 (a)(l) of the same Act also pro-
hibits the sale of motor vehicles or engines that
are not covered by valid certificates of con-
formity.
  40 CFR Part 86, Subpart A describes the
regulatory requirements for defeat devices.
  The misfire monitoring device is part
of an enhanced computer system,
known as the "On-Board Diagnostic
System (OBD)," which  checks a
vehicle's emission performance when
the vehicle is in use. Since the misfire
               device is disabled
               during an engine
               misfire,    the
               system's malfunc-
               tion indicator light
               will not operate.
               Because    the
               vehicle's owner is
               unaware that the
               engine needs to be
               serviced, increased
               exhaust emissions
               of hydrocarbons
               and damage to the
               vehicle's catalyst
may occur, and mechanics and smog-
check facilities will be deprived of in-
formation stored by the OBD system.
  Under an agreement filed with the
U.S. District Court for the District of
Columbia, and a related agreement be-
tween Honda and the California Air
Resources Board, Honda will extend
the emissions warranty for all affected
models to 14 years/150,000 miles, pro-
vide an engine check and any warranty
repairs needed between 50,000 and
75,000 miles of use, and provide a free
tune up and oil change between 75,000
and 150,000 miles of use, at a cost to
Honda of at least  $250 million.  In ad-
dition, Honda will spend, under the fed-

               continued on back


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                                           Enforcement Alert
eral and state agreements, $17.1 mil-
lion, including $12.6 million in civil
penalties,  and $4.5 million to imple-
ment environmental projects to reduce
pollution.
  If Honda's violations had been left
undetected, EPA estimates that more
than 8,000 tons of hydrocarbons would
have been  emitted into the atmosphere
by misfiring cars. Hydrocarbons are a
component of ozone, which can aggra-
vate  respiratory conditions  such as
asthma.
  EPA commended Honda for its coop-
eration during the investigation. Honda
will notify owners of affected vehicles
three times during the life of the ve-
hicles.
  Contact David  E.  Alexander,
(202) 564-2109.

Ford Case

  In the Ford case, also filed in the U. S.
District Court for the District of Colum-
bia, the company will spend $7.8 mil-
lion to settle allegations that it violated
the CAA by illegally installing a device
that defeats the emission-control sys-
tem in 60,000 1997 Ford Econoline
vans.
  The defeat device involved in this
case was a  sophisticated electronic con-
trol strategy designed to enhance fuel
economy.  According to EPA, the sys-
tem caused smog-causing nitrogen ox-
ide emissions to increase well beyond
the limits of the CAA emission stan-
dards when the vans are driven at high-
way speeds.
  EPA estimates the settlement will pre-
vent thousands of tons of nitrogen ox-
ide from being released into the atmo-
sphere. The smog caused by nitrogen
oxide can aggravate asthma and cause
other respiratory problems.
  The consent decree requires Ford to
deactivate the strategy in all affected
Econolines at an estimated cost of $ 1.3
million, pay $2.5 million in civil pen-
alties, purchase 2,500 tons of nitrogen
oxide credits valued at up to $2.5 mil-
lion to offset the excess emissions, and
spend $1.5 million on projects designed
to reduce future harmful pollutants in
the air.
  Ford voluntarily stopped the sale of
the Econolines and deactivating the
strategy in March  1997 when notified
by EPA that the affected vans may be
in violation of the CAA. The company
also initiated a special service instruc-
tion to dealers to deactivate the strat-
egy in the vans when they are brought
to Ford dealerships for other services.
Ford cooperated with EPA and DOJ
during the entire investigation.
  About  28 percent of the 60,000
Econoline vans equipped with the strat-
egy have been captured through Ford's
special service instruction to date. The
remainder will be recalled.  Owners of
the affected vehicles will receive a re-
call notification letter from Ford. The
company will perform all recall work
free of charge at the convenience of the
vehicle's owner.
  Ford has entered into a separate con-
sent decree with the California Air Re-
source Board. That decree required
Ford to  recall the California-certified
Econolines  and pay civil penalties of
$335,000.
  Contact   David  J.   Gottfried,
(202) 564-1019.
    Useful  Websites
 EPA HOMEPAGE
 http ://www. epa.gov/epahome

 OFFICE OF AIR AND RADIATION
 http://www.epa.gov/oar/oarhome.html

 OFFICE OF MOBILE SOURCES
 (MOTOR VEHICLES, FUELS, NONROAD
 ENGINES)
 http://www.epa.gov/omswww/omshome.htm

 OFFICE OF MOBILE SOURCES
 (AUTOMOBILES AND LIGHT TRUCKS)
 http://www.epa.gov/OMSWWW/ld-hwy.htm
  Enforcement Alert

 Editor: Virginia Bueno,  (202) 564-8684.
    bueno.virginia@epamail.epa.gov.
    Layout & design: Sarah Weaver,
    wea ver. sarah @epamail. epa.go v.
&EPA
     United States
     Environmental Protection Agency
     Office of Regulatory Enforcement
     2201A
     Washington, D.C. 20460

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