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Lawsuit accuses Chrysler, Cummins of VW-like cheating on Dodge trucks

November 14, 2016

Allegations of cheating pollution standards have reached U.S. automakers as Chrysler has been sued by consumers who said the Indiana-made engines in some Dodge trucks were rigged to hide emissions that were as much as 14 times higher than permitted by law.

Chrysler and its diesel technology partner Cummins Inc. hid from consumers that pollutants that were supposed to have been broken down inside the diesel engines instead had a tendency to escape, almost doubling the emissions and reducing the vehicle’s fuel efficiency, according to the lawsuit. The companies are accused of fraud, false advertising and racketeering in the complaint, filed Monday in Detroit federal court on behalf of the owners of almost 500,000 Dodge Ram model trucks.

Cummins spokesman Jon Mills, in an email to IBJ, said the "lawsuit has no merit and contains false and exaggerated claims. We are deeply disappointed in this attempt to tarnish our image and we plan to vigorously defend ourselves.”

The Michigan-based unit of Fiat Chrysler Automobiles NV is the first U.S. carmaker to be sued by consumers. Similar claims were made against German carmakers. Volkswagen AG admitted that it installed devices designed to fool emission testing in 11 million cars worldwide in a scandal that may cost it $19.5 billion. Claims of rigging vehicles have also been made against Mercedes, which has denied the allegations.

“We have robust certification and compliance processes, adhering to all admissions regulations worldwide, and we prohibit the use of ‘defeat’ devices in all of our products,” Mills said.

Unlike the Volkswagen case, government regulators have taken no action against the companies.

“The sheer level of fraud and concealment between Chrysler and Cummins is unconscionable, and we believe we have uncovered a deeply entrenched scheme," Steve Berman, a lawyer for the plaintiffs, said in a written statement. “Chrysler and Cummins spent years lying through their teeth and making empty promises to deliver the cleanest trucks on the marketlip service to deceptively dominate what they saw as a profitable market.”

Cummins shares fell 1.6 percent Monday, to $134.82 each.

Noxious smog

The lawsuit against Fiat Chrysler—created in 2014 through the merger of Chrysler and Fiat—further calls into question the credibility of clean-diesel technology. Excessive emissions from the vehicles exposed the general public to noxious levels of smog, according to the consumer complaint.

The claims involving Dodge Ram pickups from 2007 and 2012 predate the first known sales of emissions-cheating vehicles by Volkswagen by two years.

The alleged fraud was prompted by a regulatory shift in 2001, according to the filing. Companies saw an opportunity for growth after the U.S. Environmental Protection Agency announced stringent new emissions standards for heavy-duty diesel engines effective 2010. Chrysler and Cummins bet they could leapfrog the industry and produce a vehicle to meet those standards three years ahead of schedule, according to the complaint.

Cummins increased its research and development budget by 60 percent from 2002 to 2007, to $321 million, about a quarter of which was dedicated to meeting the new standards. The outcome, though, was a flawed engine with limited capacity for trapping excess emissions, according to the complaint.

Shawn Morgan, a spokeswoman for Fiat Chrysler, declined to immediately comment on the lawsuit.

NOx emissions

Diesel engines, while more fuel-efficient, produce greater volumes of nitrogen oxide pollutants, or NOx. Cummins’s engines had limited capacity to store or dispose of the NOx. Instead of NOx being broken down in a process called regeneration, the pollutant had a tendency to escape from the vehicle, sometimes nearly doubling emissions and reducing the vehicle’s fuel efficiency as much as 4 percent, according to the complaint.

The process concealed the true emissions output and wore down the car’s catalytic converter, which could cost as much as $5,000 to replace.

Reimbursement sought

The companies failed to disclose the engines’ shortcomings, which would have prompted drivers to reconsider Chrysler’s marketing and ultimately the value of the vehicles, according to the complaint. The suit seeks reimbursement and damages for truck owners.

Rushing to the market to beat competitors was only part of the reason for the fraudulent design, according to the complaint. Cummins also sought to “bank emissions credits to spend on other, dirtier engines,” according to the complaint.

VW resolved a major chunk of its dispute in the U.S. in October when a San Francisco federal judge approved a $14.7 billion settlement with drivers intended to get 480,000 cars with polluting 2.0-liter diesel engines off the road by June 2019. The company is still trying to reach a settlement covering about 80,000 VW and Audi models with 3.0-liter diesel engines. This month, the company was accused in a lawsuit of installing defeat devices on more than 100,000 vehicles with 3.0-liter gasoline engines.

The German carmaker’s technology partner Robert Bosch GmbH is also accused in the lawsuits of playing a key role in the development of VW’s emission-cheating technology.

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