Assistant Attorney General Todd Kim Delivers Remarks at the ALI-CLE Environmental Law Conference in Washington, D.C.
Today, the U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) announced a settlement with Derive Systems (Derive) addressing the sale of approximately 363,000 aftermarket products which the United States alleges were designed, in part, to defeat the emissions control systems of cars and trucks in violation of the Clean Air Act.
Over a span of multiple years, Derive sold products, including custom engine tuning software and parts, online and at distributers across the nation under the brand names of “Bully Dog” and “SCT” for use in many types of gasoline and diesel-fueled cars and trucks. Under the terms of the settlement, Derive will spend approximately $6.25 million to bring the company and its products into compliance with the Clean Air Act. Derive will also pay a civil penalty of $300,000.
“For decades, Americans have worked hard to significantly reduce harmful emissions from cars and trucks. Tremendous progress has been made and the air is much cleaner today across the nation. Unfortunately, not everyone is playing by the rules. Today’s settlement will bring Derive Systems and its aftermarket products into compliance with the Clean Air Act, and demonstrates to other manufacturers that products designed to unlawfully thwart vehicle emissions control systems will not be tolerated,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “The Department of Justice will continue to work with our partners at EPA to hold companies who violate environmental laws accountable, and to protect clean air for all Americans.”
“Manufacturers and sellers of automotive emissions control defeat devices should stand up and take notice of this settlement,” said Susan Bodine, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA will protect air quality by vigorously enforcing the Clean Air Act’s prohibition on these devices.”
Derive manufactured and sold custom tuning software designed to access and overwrite the original vehicle manufacturer’s software. Vehicle manufacturers design vehicle software to reduce air pollution, monitor the vehicle’s on-board diagnostics of emissions controls, and otherwise comply with the Clean Air Act. Derive’s software enabled the user to remove emission control components that reduce tailpipe emissions, including catalysts, diesel particulate filters, exhaust gas recirculation systems, elements of on-board diagnostic systems, and other elements of design certified by vehicle manufacturers to comply with the Clean Air Act.
In addition, Derive sold parts or components for motor vehicles and motor vehicle engines that bypass, defeat, or render inoperative elements of design that were installed by the vehicle or engine manufacturer to comply with Clean Air Act emission standards. These handheld products—commonly known as “tuners”—enabled the user to easily turn off emission controls installed and certified by vehicle manufacturers to comply with the Clean Air Act.
Under the terms of the settlement, Derive must stop introducing new noncompliant tuners into commerce and retrofit existing tuners so that they comply with the Clean Air Act. All new and existing tuners offered for sale must have a reasonable basis demonstrating that the use of the products will not adversely affect vehicle emissions. Besides tuners, Derive must limit access to key emission control parameters in their custom tuning software and create a customer verification program for users of the custom tuning software, which includes training about vehicle functions, emission controls, and the Clean Air Act requirements. Derive must stop any marketing that would provide information on how consumers can defeat emission controls in their vehicles, and work with their national distributors to prevent the packaged sale of their products with companion defeat devices. Derive must train their employees to comply with the Clean Air Act. Derive must also pay a penalty of $300,000 based on the company’s demonstrated limited ability to pay a larger amount.
The proposed settlement is subject to a 30-day public comment period and final court approval, and will be lodged in the U.S. District Court for the District of Columbia. To view the consent decree or to submit a comment, visit the department’s website at: www.justice.gov/enrd/Consent_Decrees.html.