FCA US: The Jeep and Ram Truck Maker That Paid $305 Million to Resolve EPA Defeat Device Allegations for Its Diesel Engines

FCA US LLC, the American subsidiary of Fiat Chrysler Automobiles that produces Jeep, Ram, Dodge, and Chrysler vehicles, agreed to pay approximately $305 million in civil penalties and recall roughly 100,000 diesel-powered Jeep Grand Cherokee and Ram 1500 pickup trucks equipped with the 3.0-liter EcoDiesel engine after the Environmental Protection Agency and the Department of Justice found the company had installed software in those vehicles that produced materially different emissions in formal testing conditions than the vehicles generated during real-world on-road operation — conduct the agencies characterized as the use of a defeat device in violation of the Clean Air Act.DOCUMENTED

The FCA US resolution followed the agency's earlier action against Volkswagen, whose 2015 defeat device scandal had prompted the EPA to dramatically intensify its scrutiny of diesel vehicle emissions testing, and was part of a broader wave of diesel emissions enforcement that found multiple automakers had engaged in practices that caused vehicles to produce lower regulated pollutant emissions — particularly nitrogen oxides — in certification testing than in everyday driving.

The Defeat Device Standard

The Clean Air Act prohibits the sale or installation of defeat devices — any device, system, or element of design that bypasses, defeats, or renders inoperative emission controls when a vehicle is in normal operation and use. The EPA's defeat device standard has been interpreted to cover software calibrations that detect the conditions of formal emission certification testing — specific speed profiles, temperature ranges, steering wheel positions, or other parameters that uniquely characterize the test cycle — and activate different emissions control strategies during those conditions than the vehicle uses during normal driving. When a vehicle's emissions control strategy is more aggressive during testing than during driving, the EPA receives certification data that does not accurately represent the vehicle's real-world emission performance, and consumers who purchase the vehicle on the basis of its certified emissions are receiving a vehicle with actual emission performance materially worse than the certificate represents.REVIEWED

The EPA's investigation of FCA US identified eight undisclosed auxiliary emissions control devices in the EcoDiesel calibration software — software functions that the agency found caused the vehicles to use different, more emissions-compliant control strategies during formal certification testing than during typical driving conditions. The agency's investigation included the same type of real-world emissions testing that had revealed the Volkswagen defeat device: measuring actual tailpipe emissions from production vehicles driven on public roads under normal conditions, then comparing those measurements to the certification test results. The gap between real-world and test-cycle nitrogen oxide emissions was the evidentiary foundation for the defeat device finding.DOCUMENTED

The Undisclosed Auxiliary Emissions Control Functions

Under EPA certification regulations, vehicle manufacturers must disclose all auxiliary emissions control devices — any software or hardware element that can affect the operation of the emissions control system — when applying for a certificate of conformity. The purpose of this disclosure requirement is to allow the EPA to evaluate whether auxiliary control functions are justified by legitimate engineering needs or constitute defeats of the emissions control system. When FCA US submitted its EcoDiesel certification applications without disclosing the eight auxiliary emissions control functions the EPA later identified, it deprived the agency of the information needed to assess those functions during the certification process — and ultimately received certification for vehicles whose actual emissions performance the application did not accurately represent.REVIEWED

The failure to disclose auxiliary emissions control functions was itself a certification violation independent of whether the specific functions constituted defeat devices — the Clean Air Act requires complete and accurate disclosure of all elements of design that affect emissions, and omitting eight software functions from the certification submission was a straightforward violation of that disclosure obligation. The defeat device finding was the more serious of the two violations, but both contributed to the FCA US consent decree's scope and the civil penalty assessment.

Software that tells a diesel engine to clean up its emissions when the test equipment is plugged in and relax when normal driving resumes is not an engineering compromise. It is a certification fraud — and the consumers who bought the vehicles as clean diesels paid for performance the vehicles were calibrated to hide during testing.

The Recall and Remedy

The consent decree's recall requirement obligated FCA US to modify the EcoDiesel calibration software in approximately 100,000 vehicles already in service — a significant undertaking given the number of vehicles affected and the need to develop, validate, and deploy software modifications that would bring the vehicles into compliance with the emission limits for which they were certified without unacceptably degrading engine performance or fuel economy. Recalled vehicle owners were required to bring their vehicles to dealerships for the software update, and FCA US was responsible for providing the update at no cost to consumers. The EPA monitored the recall's implementation to verify that the software modifications achieved the required emission reductions and that FCA US was making adequate progress toward completing the recall across the affected vehicle population.DOCUMENTED

For consumers who had purchased EcoDiesel vehicles specifically because of their certified fuel economy and emission characteristics, the defeat device finding created a consumer harm dimension that the civil penalty and recall addressed from a regulatory perspective but did not fully resolve. Consumers who had made vehicle selection decisions based on the certified emission performance received vehicles that did not perform as represented, and the recall software modification may have affected the fuel economy or performance characteristics that had influenced some buyers' decisions — creating the type of consumer harm that, in the Volkswagen case, was addressed through a separate consumer compensation program.

Criminal Accountability

The civil consent decree with FCA US was accompanied by related criminal proceedings against individual executives who had knowledge of the undisclosed auxiliary emissions control functions and participated in the certification process. The DOJ's pursuit of individual criminal accountability in the diesel emissions enforcement context reflected the department's stated priority of holding executives personally responsible for corporate fraud rather than allowing institutions to settle civil liability without consequences for the responsible individuals. Criminal charges in vehicle emissions defeat device cases have resulted in convictions and sentences for individuals at multiple automakers, establishing a pattern of personal accountability that goes beyond the corporate civil settlements.DOCUMENTED

The FCA US resolution, combined with the earlier Volkswagen settlement and parallel actions against other automakers, fundamentally changed how the EPA approached diesel vehicle emissions certification — introducing enhanced real-world testing requirements and more rigorous scrutiny of auxiliary emissions control device disclosures that all manufacturers must now navigate during the certification process. The defeat device enforcement campaign has been the most significant regulatory development in vehicle emissions compliance in decades, and its legacy extends well beyond the specific companies and vehicles involved in the enforcement actions.

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