Fiat Chrysler Faces Consumer Suit Over Emission Software

By Shayna Posses

Law360, New York (January 13, 2017, 6:22 PM EST) ­­

The morning after the Environmental Protection Agency’s Thursday announcement that Fiat Chrysler installed and didn’t disclose engine software allowing over 100,000 vehicles to produce excessive nitrogen oxide emissions, an Alabama man brought a federal court suit alleging the automaker misled customers as well as regulators.

R.D. Warren’s Friday suit comes on the heels of the EPA announcing that Fiat Chrysler

Automobiles NV and FCA US LLC failed to disclose engine management software in 2014, 2015 and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0 liter diesel engines sold in the U.S. and issuing a notice of violation.

EPA enforcement head Cynthia Giles said the agency isn’t yet ready to call the software a “defeat device,” which is designed to evade testing, but did say the software is designed to allow vehicles to meet pollution standards under testing conditions while letting the NOx levels increase at high speeds or during extended driving periods.

Fiat Chrysler is also under investigation by the U.S. Justice Department over its alleged failure to disclose this software, according to Friday news reports citing people familiar with the matter.

Warren’s complaint draws heavily on the EPA’s notice, contending that Fiat Chrysler intentionally installed defeat devices on about 104,000 diesel Dodge and Jeep vehicles sold in the United States while marketing them as environmentally friendly.

“Although defendants successfully marketed these expensive cars as ‘clean,’ their environmentally­friendly representations were a sham,” Warren said. “Defendants did not actually make cars with those desirable and advertised attributes.”

Instead, Warren alleged, the auto giant used defeat devices to make it seem like the cars did what they said they would. The devices work by switching on the full emissions control systems in the diesel vehicles only when the car is undergoing emissions testing and shutting them off after, the complaint says.

While this might make the cars more fun to drive, the vehicles simultaneously spew more NOx into the environment than is allowed under the Clean Air Act and state regulations, the complaint says.

The EPA’s notice of CAA violations is the result of the latest in a series of investigations into carmakers’ emissions engineering practices, including Volkswagen AG.

On Wednesday, the U.S. Department of Justice announced that six high­ranking VW executives have been indicted for their alleged roles in an almost decade­long conspiracy behind the company’s emissions cheating scandal.

That news coincided with a $4.3 billion settlement disclosed by VW, under which the company will plead guilty to three criminal felony counts — conspiracy to defraud the U.S., obstruction of justice and importing goods by using false statements — over the emissions scheme.

And a California federal judge in October finalized a $14.7 billion settlement allowing 475,000 owners of affected VW and Audi 2­liter diesel vehicles to sell their cars back to the company or get them fixed.

James F. McDonough III, who represents Warren, told Law360 in a Friday email that the emissions issue at the center of the Volkswagen scandal isn’t an isolated incident. “Despite marketing the vehicles as ‘environmentally friendly’ and charging premium prices, Fiat Chrysler was also using software to manipulate the emissions output of certain Dodge and Jeep ‘EcoDiesel’ vehicles,” he said. “We are working around the clock talking to owners of these vehicles nationwide and are going to set things right.”

As far as he knows, Warren’s proposed class action was the first to be filed in light of the EPA’s announcement, the attorney said. Warren alleges that he and other car owners wouldn’t have bought their Fiat Chrysler vehicles had they known they contained defeat devices, bringing a number of claims, including fraudulent concealment, breach of contract and breach of express and implied warranties, as well as violations of Alabama’s Deceptive Trade Practices Act.

He seeks to represent a class of Alabama owners and lessees — current and former — of defeat device vehicles, including 2014 to 2016 Jeep Grand Cherokees, 2014 to 2016 Dodge Ram 1500 vehicles and any other car powered by the company’s 3.0L EcoDiesel Engine. Warren also wants to represent a nationwide class.

An FCA representative declined to comment on the litigation Friday, but pointed to the company’s statement responding to the EPA’s action. “FCA US intends to work with the incoming administration to present its case and resolve this matter fairly and equitably and to assure the EPA and FCA US customers that the company’s diesel­powered vehicles meet all applicable regulatory requirements,” the company said.

Warren is represented by W. Lewis Garrison Jr., Christopher Hood, Taylor C. Bartlett, James F. McDonough III and Travis E. Lynch of Heninger Garrison Davis LLC and K. Stephen Jackson of Jackson & Tucker PC. Counsel information for Fiat Chrysler wasn’t immediately available.

The suit is R.D. Warren et al. v. Fiat Chrysler Automobiles N.V. et al., suit number 7:17­cv­00059, in the U.S. District Court for the Northern District of Alabama.

Additional reporting by Juan Carlos Rodriguez and Emily Field. Editing by Emily Kokoll.

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