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Justice Department Preparing Fiat Chrysler Lawsuit over Diesel Emissions

Bloomberg News reported that the U.S. Justice Department is preparing a lawsuit against Fiat Chrysler after failing to settle EPA claims that the company’s diesel engines used software to cheat emissions tests — just as Volkswagen did.

The suit may be filed before Fiat Chrysler appears in San Francisco’s U.S. District Court for the Northern District of California on May 24 to answer a private civil complaint by a group seeking to achieve a class-action status among 104,000 vehicle owners after the U.S. Environmental Protection Agency (EPA) accused Fiat Chrysler of using illegal software in its 2017 line of diesel vehicles.

Fiat Chrysler Automobiles NV faces similar allegations and in the same federal courthouse as Volkswagen AG, which settled with the federal government in January 2017 and agreed to pay $4.3 billion in civil and criminal penalties.

Volkswagen had previously agreed to a June 2016 settlement to compensate 550,00 consumers with up to $10 billion to buy back vehicles and terminate leases, plus a commitment to spend $4.7 billion to mitigate pollution and make investments that support zero-emissions vehicle technology.

Sources told Bloomberg that the governmentis preparing to file a lawsuit within the next week over Fiat Chrysler’s alleged willful violations of the U.S. Clean Air Act and California’s stricter standards. The proposed federal complaint is reported to allege that Fiat Chrysler used an illegal software algorithm in its computerized fuel management system to work during auto emissions testing, and then turn off during operational use.

Fiat Chrysler claims it did nothing wrong, and the company intends to defend itself. Fiat Chrysler emailed Bloomberg to state: “The company believes that any litigation would be counterproductive to ongoing discussions with the U.S. Environmental Protection Agency and the California Air Resources Board.”

The company has installed what it refers to as a software patch in 2017 model year diesel vehicles, and has offered to install the patch in 2014 through 2016 year vehicles to mitigate any legal liability from an EPA emissions violation issued in January.

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