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:

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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.
Clay Friedman – Co-leader
Clayton is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice, multidisciplinary teams with decades of experience crafting effective strategies to help deter or mitigate the risk of enforcement actions and litigation.
Judy Jagdmann
Judy is a partner in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based in the Richmond office. She brings experience serving as chair and commissioner of the Virginia State Corporate Commission (VSCC) from 2006 through 2022, which includes regulating the utilities, insurance, banking, and securities industries. She also served as Virginia’s attorney general from 2005-2006.
Stephen Piepgrass
Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on enforcement actions, investigations, and litigation. Stephen primarily represents clients engaging with, or being investigated by, state attorneys general and other state or local governmental enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, with a particular focus on heavily regulated industries.
Avi Schick
A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
Michael Yaghi
Michael is a partner in the firm’s State Attorneys General and Regulatory Investigations, Strategy + Enforcement (RISE) Practice Groups, nationwide teams that advise clients on consumer protection enforcement matters and other regulatory issues.
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.
Tim Bado
Tim is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, where he represents corporations and individuals facing potential civil and criminal exposure. Tim’s experience in government investigations, enforcement actions, and white-collar litigation spans a number of industries, including financial services, pharmaceutical, health care, and government contracting, among others.
Chris Carlson
Chris Carlson represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
Natalia Jacobo
Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice. She focuses her practice on two primary areas: government contracting and state attorney general work.
Namrata Kang
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Michael Lafleur
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Susan Nikdel
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Whitney Shephard
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Trey Smith
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