Mercedes-Benz Pays $1.2 Million for Clean Air Act Violation, Spends $59 Million on Recall

December 21, 2006

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Mercedes-Benz will pay $1.2 million in civil penalties as part of a settlement because it failed to promptly notify EPA about air pollution control defects on numerous 1998 – 2006 model vehicles. Mercedes must also improve its emissions defect investigation and reporting system to ensure future compliance, at an estimated cost of approximately $1 million per year.

After EPA initiated its investigation of this matter, Mercedes commenced voluntary recalls for two of the defects and notified owners that it would extend the warranty coverage to address a third defect. Mercedes will incur an estimated cost of $59 million to implement the recalls and the extended warranty.

“These defect reporting requirements are a critical part of EPA’s program to reduce air pollution by ensuring that vehicles on the road comply with the Clean Air Act’s emissions standards,” said Catherine R. McCabe, principal deputy assistant administrator for the Office of Enforcement and Compliance Assurance.

The Clean Air Act requires auto manufacturers to file a defect information report with EPA not more than 15 working days after an emission-related defect is found to affect 25 or more vehicles, so that EPA may consider whether the defect will cause emission standards to be exceeded and whether a recall is necessary.

The proposed consent decree is subject to a 30-day public comment period and final approval by the U.S. District Court in Washington, D.C.

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