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PR AMERICAN HONDA AGREES TO $267 MILLION SETTLEMENT TO RESOLVE CLEAN AIR ACT VIOLATIONS Largest Clean Air Act Settlement in History

Release Date: 06/08/98
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FOR IMMEDIATE RELEASE ENR
MONDAY, JUNE 8, 1998

AMERICAN HONDA AGREES TO $267 MILLION SETTLEMENT
TO RESOLVE CLEAN AIR ACT VIOLATIONS

Largest Clean Air Act Settlement in History

WASHINGTON, D.C. -- American Honda Motor Co., Inc. (“Honda”)will spend $267 million to settle allegations that it violatedthe Clean Air Act by selling vehicles with disabled emissioncontrol diagnostic systems, the Justice Department, theEnvironmental Protection Agency, and the California Air ResourcesBoard (“CARB”) announced today. The settlement is the largestever under the Clean Air Act. It includes $12.6 million in civilpenalties — the largest civil penalty in Clean Air Act history.

“This settlement is good for the environment and good for American consumers,” said U.S. Department of Justice AttorneyGeneral Janet Reno. “It will help eliminate thousands of tons ofexhaust emissions from more than 1.6 million vehicles across ournation. And it will help save Honda owners money because theywill get an early warning that their car needs repair.”

Carol M. Browner, EPA Administrator said, “Today'ssettlement is proof that this Administration is vigorouslyenforcing the Clean Air Act to ensure the protection of publichealth and the environment for all Americans.”

The United States alleged that Honda disabled the misfiremonitoring device on 1.6 million 1996 and 1997 model yearAccords, Civics, Preludes, Odysseys, and Acuras, as well as 1995Honda Civics. The complaint also alleged that Honda failed toreport this fact when applying for Certificates of Conformity,which allow for vehicles to be legally sold if they meet federalemission standards.

The misfire monitoring device is part of an enhancedcomputer system, known as the “On-Board Diagnostic System("OBD"),” which checks a vehicle’s emission performance when thevehicle is in use. When the misfire device is disabled during anengine misfire, the system’s malfunction indicator light will notoperate. Because the vehicle’s owner is unaware that the engine needs to be serviced, increased exhaust emissions of hydrocarbonsand damage to the vehicle’s catalyst may occur.

Under an agreement filed today with the U.S. District Courtfor the District of Columbia, and a related agreement betweenHonda and CARB, Honda will extend the emissions warranty for allaffected models to 14 years/150,000 miles, provide an enginecheck and any emissions-related repairs needed between 50,000 and75,000 miles of use, and provide a free tune up between 75,000and 150,000 miles of use, at a cost to Honda of at least $250,000million. In addition, Honda will spend, under the federal andState agreements, $17.1 million, including $12.6 million in civilpenalties -- the largest ever under the Clean Air Act -- and $4.5million to implement environmental projects to reduce pollution.


"The settlement we announce today vindicates the Clean AirAct's goal of protecting our environment while avoiding a long,costly lawsuit," said Wilma A. Lewis, U.S. Attorney for theDistrict of Columbia. "We stand ready to ensure that those whoviolate environmental laws are held accountable and prosecutedwhenever the facts warrant such action."

Honda cooperated with EPA and DOJ during the investigation.

Stressing the importance of a vehicle’s on-board diagnosticsystem, EPA noted that auto mechanics rely on the diagnosticsystem to find and correct engine problems. If vehiclemanufacturers do not fully comply with the OBD rules, problemsmay be overlooked and the results could be harmful to theenvironment and costly to the consumer. State emission regulatorsalso rely on the data stored on this diagnostic tool to identifyemission problems.

If Honda’s violations had been left undetected, EPAestimates that more than 8,000 tons of hydrocarbons would havebeen emitted into the atmosphere by misfiring cars. Hydrocarbonsare a component of ozone, which can aggravate respiratoryconditions such as asthma.

A notice of the proposed settlement will be published in theFederal Register, beginning a 30-day public comment period andmust be approved by the court.
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