Allegations of cheating pollution standards have reached U.S. automakers as Fiat Chrysler Automobiles was sued by consumers who said engines in some Ram pickup trucks were rigged to hide that emissions were as much as 14 times higher than permitted by law.
FCA 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 18.2 billion euros ($19.5 billion). Claims of rigging vehicles have also been made against Mercedes, which has denied the allegations.
Fiat 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 today in U.S. District Court in Detroit on behalf of the owners of almost 500,000 Ram 2500/3500 model trucks.
Ram became its own brand under the FCA umbrella in 2009. Before that, Ram trucks were sold under the Dodge brand.
The lawsuit against FCA -- 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 Ram pickups from 2007 and 2012 predate the first known sales of emissions-cheating vehicles by Volkswagen by two years.
“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 statement. “Chrysler and Cummins spent years lying through their teeth and making empty promises to deliver the cleanest trucks on the market -- lip service to deceptively dominate what they saw as a profitable market.”
FCA said it is reviewing the complaint.
"Based on the information available to it, FCA US does not believe that the claims brought against it are meritorious," FCA said in a statement to Reuters. "FCA US will contest the lawsuit vigorously."
Jon Mills, a spokesman for Cummins, said the lawsuit has no merit and contains false and exaggerated claims.
“Cummins is deeply disappointed in this effort to tarnish our image and we plan to vigorously defend ourselves,” Mills said. “Cummins has a robust certification and compliance process and we prohibit the use of defeat devices in our products. We’re transparent with all governing bodies in these processes, from the disclosure of the design and operation of the emission control systems, to test processes and results.”
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 r&d 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.
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.
The companies failed to disclose the engines’ shortcomings, which would have prompted drivers to reconsider FCA'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.
FCA vs. Cummins
The class action suit comes as Fiat Chrysler and Cummins are fighting over the costs of an emissions recall involving a different, newer population of trucks.
Reuters reported on Oct. 10 that FCA and Cummins have been fighting over the $200 million estimated cost for a recall of 130,000 newer 2500 Ram pickup trucks equipped with Cummins diesel engines that could exceed U.S. pollution limits.
The EPA and California Air Resources Board have demanded a recall of 2013-2015 model year Ram 2500 pickup trucks with 6.7L Cummins diesel engines because moisture can lead to the deactivation of the selective catalyst reduction system, causing excess nitrogen oxide emissions, Cummins said.
Fiat Chrysler has sued Cummins to recover the $60 million it has spent to date repairing 42,000 trucks at its own expense, a company lawyer said in court documents. Settlement talks are ongoing.
Cummins countersued, saying FCA would not cooperate in the recall "for one reason -- money" and said the automaker was "holding both Cummins and its own customers hostage."
When the emissions system fails, the warning light goes on and if the vehicle isn't fixed soon the vehicles go into "limp mode" that allow them to only be driven very slowly.
Reuters contributed to this story.
The case is Bledsoe v. FCA USA LLC, 16-cv-14024, U.S. District Court, Eastern District of Michigan (Detroit).