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Harley-Davidson Does Not Have to Fund Reducing Wood-Stove Pollution As Part of Its Fine for Emissions Defeat Devices
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By Marianne Jennings

 

Beginning in January 2008, Harley-Davidson manufactured and sold two types of tuners, which Harley-Davidson owners then hooked up to their bikes in order to increase power and performance. Also known as “after-market defeat devices,” the addition of this part (and Harley sold 350,000 of them) increased emissions of hydrocarbons and nitrogen oxides (NOx) from the motorcycles.  The tuners were sold at Harley-Davidson dealerships across the country.

 

However, Harley had certified to the EPA that its motorcycles met certain levels of emissions.  Sale of the devices meant that the certification was only accurate until the owners installed the super tuners.  Hiroko Tabuchi, “U.S. Reduces Harley’s Fine Meant to Cut Pollution,” New York Times, July 21, 2017, .... Sales of emissions defat devices is illegal.

 

In August 2016, Harley-Davidson reached a settlement with the Environmental Protection Agency (EPA) to stop selling the “super tuners.” As part of the settlement, Harley agreed to stop selling the super tuners and pay a $12 million fine.  In addition, Harley was required to contribute $3 million to a project that was working on a substitute for cleaner-burning wood stoves.  You can read the consent decree here.

 

 During the Obama administration, federal agencies used this type of split fine extensively in settling cases.  Companies would settle by agreeing to pay a fine and make donations to certain foundations, research projects, etc.  Sometimes the donations made to non-profit organizations were not related to the issue that was the subject of the settlement.  For example, BP was required to pay for shore restoration projects. Volkswagen was required to finance vehicle-charging stations.  Duke Energy had to pay for soil restoration projects in a settlement of an air pollution case. Tatiana Schlossberg and Horoko Tabuchi, “Settlements for Company Sins Can No Longer Aid Other Projec...

 

 

In June 2017, the Trump administration Justice Department issued a new policy that prohibited requirements that companies fund private projects as part of a settlement. In a memo from Attorney General Jeff Sessions, the new policy is that settlements cannot involve payments to individuals or organizations that were not parties to the original civil suit or who were not harmed by the conduct being fined. Compensation for victims of violations can continue to be compensated but loans or payments to non-government entities or persons not parties to a suit are prohibited. The memo policy is now the subject of a bill in Congress that would require all funds obtained in a settlement beyond compensation for victims would go directly to the U.S. Treasury to benefit all citizens.

 As a result, the Justice Department lifted the $3 million payment Harley-Davidson was to make for the wood-burning stove project.

 

DISCUSSION STARTERS

 

Explain the new Justice Department policy.

 

Why is a law needed if the Justice Department has changed to policy?