California Attorney General (AG) Rob Bonta and the California Air Resources Board (the Board) have reached a $46 million agreement with engine manufacturer Cummins Inc. to settle alleged violations of California’s engine emission control and certification requirements.

According to a March 15 statement by Bonta announcing the settlement, California alleged that Cummins made undisclosed changes to approximately 120,000 engines in California after the Board certified the engines for sale and that roughly 2,000 Cummins engines allegedly had undisclosed auxiliary emission control devices that altered the emissions control system.

Bonta’s statement indicates that approximately $42 million of the settlement amount will be paid to the Board — $32 million for penalties and about $9.8 million for “mitigation of the full amount of excess nitrogen oxide emissions created by the non-compliant engines.” Those settlement monies reportedly will go to the Air Pollution Control Fund to support the Board’s mobile source emissions control program and other activities related to the control of air pollution. According to the statement, the remaining $4 million will be paid to the California AG’s Office to settle unfair business practices and public nuisance claims. The statement indicates that the settlement agreement, which must receive court approval, additionally involves “injunctive relief prohibiting Cummins from engaging in similar violations in the future.”

Bonta’s statement indicates that Cummins “fully cooperated” with the Board’s investigation “and will conduct an emissions recall in about 2,000 affected engines to correct the [alleged] violations at no cost to owners.” Additionally, according to the statement, “Cummins has the option to offset a portion of the [$32 million] penalty amount with a project that will increase heavy-duty zero-emissions charging infrastructure in California.”

Relatedly, in January, Cummins agreed to a consent decree with the U.S. Environmental Protection Agency (EPA) and the California AG under which Cummins will pay a $1.642 billion penalty to resolve alleged Clean Air Act violations stemming from its alleged configuration of emissions software features to reduce or deactivate vehicle-engine emission controls. The EPA and California AG alleged that Cummins equipped vehicles with software defeat devices and failed to disclose that vehicles included auxiliary emission control devices as part of the engine certification process.

According to Bonta’s statement regarding the January consent decree, the matter was the largest ever settlement for a Clean Air Act case.

Why It Matters

The recent California-specific settlement demonstrates the leverage that state AGs’ use under their consumer protection acts to bring state administrative agency enforcement actions. The January consent decree involving the EPA, meanwhile, is an example of the potential for federal government and state AG coordination in the environmental space.

Additional articles on State Attorneys General offices in the environmental space:

• New York AG Sues Top Beef Producer for Alleged False “Net-Zero” Claims and Deceptive Trade Practices | Regulatory Oversight
• 11 AGs Sign Letter in Support of GSA’s Proposed Rule on Plastic Packaging | Regulatory Oversight
• North Carolina Court Rules Predecessor Company Liable If AG’s Environmental Lawsuit Succeeds | Regulatory Oversight

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	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
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	Samuel E. “Gene” Fishel Gene is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) practice, based in the Richmond office. He brings extensive regulatory experience, having most recently served as senior assistant attorney general and chief of the Computer Crime Section in the Office of the Attorney General of Virginia, and as special assistant U.S. attorney in the Eastern District of Virginia for 20 years.
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