Pep Boys Agrees to $5 Million Clean Air Act Settlement on Chinese Vehicles
The Environmental Protection Agency has announced that the Pep Boys automotive aftermarket and service chain has agreed to take corrective measures and pay $5 million in civil penalties to settle claims that it violated the Clean Air Act by importing and selling motorcycles, recreational vehicles, and generators manufactured in China that do not comply with U.S. environmental requirements. In addition, the EPA announced that Baja, Inc., which supplied the non-compliant vehicles to Pep Boys, is also settling with the U.S.
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The settlement, which was lodged in the U.S. District Court for the District of Columbia on May 10, 2010, is subject to a 30-day public comment period and approval by the federal court before becoming effective.
(Importers of foreign made vehicles and engines are required to comply with the same Clean Air Act requirements that apply to those selling domestic products. EPA stated that this settlement demonstrates that it will take strong action to ensure that importers comply with these obligations.)
Largest Clean Air Act Vehicle and Engine Importation Case in History
EPA stated that the Pep Boys case is the largest vehicle and engine importation case brought by the U.S. to date under the Clean Air Act, both in number of vehicles and engines imported and penalty paid. The complaint, which was filed simultaneously with the settlement in federal court in the District of Columbia, alleges that Pep Boys and Baja imported and sold at least 241,000 illegal vehicles and engines from 2004 through 2009 that were not certified to meet federal emission standards.
The complaint further alleges that Pep Boys failed to provide purchasers with the full emission-system warranty required by the Clean Air Act and imported and sold vehicles and engines without the proper emission control information labels.
The illegal vehicles and engines were built by more than 35 different manufacturers in China. EPA and Customs and Border Protection officials discovered the violations through inspections conducted at Pep Boys stores, at U.S. ports, and through a review of importation documents provided to EPA by the company.
Vehicles/Engines to be Exported/Destroyed (Offsets & Warranties Also Required)
The settlement agreement requires Pep Boys to export or destroy over 1,300 non-compliant vehicles and engines—and to mitigate the adverse environmental effects of equipment already sold to consumers (estimated by EPA at 620 tons of excess hydrocarbon and nitrogen oxide emissions, and more than 6,520 tons of excess carbon monoxide emissions).
In addition, under the settlement, Pep Boys will implement projects to offset the excess emissions including offering discounted push or electric lawn mowers in exchange for older, more polluting gas-powered mowers.
The settlement also requires Pep Boys and Baja to offer a free extended emission warranty on certain vehicle and engine models, to reimburse consumers for emission-related repair expenses, and to implement rigorous corporate compliance plans. (Baja also agreed to pay a penalty of $25,000, an amount that was reduced substantially in light of Baja’s current financial condition.)
EPA press release (dated 05/10/10) on Pep Boys settlement available at http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/b14a70e1f812ccb18525771f00598dd0!OpenDocument.