Mercedes to pay EPA $1.2 million

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Mercedes-Benz USA and its parent company, DaimlerChrysler AG, yesterday agreed to pay the government $1.2 million for failing to notify the Environmental Protection Agency about air pollution controls defects on numerous 1998 to 2006 Mercedes vehicles.

The settlement, announced by the Justice Department and the EPA, resolves a suspected Clean Air Act violation: The auto manufacturer did not promptly inform the EPA of defects in emission-related parts so the agency could determine whether the emission standards were exceeded and whether a recall was necessary.

Both the complaint and the settlement were filed in the U.S. District Court in the District of Columbia.

"Reliable and effective automobile pollution control systems are essential to protect human health and the environment from harmful automobile emissions," said Assistant Attorney General Sue Ellen Wooldridge, who heads the Justice Department's Environment and Natural Resources Division.

"Mercedes' failure to alert EPA to a number of defects in emission-related components over a multiyear period is a serious violation," she said.

In response to the EPA's investigation, Mercedes began voluntary recalls for two of the defects and notified owners that it would extend the warranty coverage to address a third defect, at an estimated cost of $59 million.

Mercedes U.S. spokeswoman Tracy Darchini wasn't available to comment on the settlement.

Justice Department officials said the vehicles subject to the voluntary recalls and extended warranties have defective catalytic converters or defective air pumps. The voluntary recalls and extended warranty will reduce the emissions of harmful pollutants caused by the defects by more than 500 tons, they said.

The pollutants include non-methane hydrocarbons, nitrogen oxides, which are key ingredients in the production of ozone, a major contributor to cancer-causing smog. Carbon monoxide, another pollutant, impairs breathing and is especially harmful to children, people with asthma and the elderly.

Under the terms of the consent decree, Mercedes will be required to improve its emissions-defect investigation and reporting system to ensure future compliance, at an estimated cost of $1 million per year.

"These defect reporting requirements are a critical part of EPA's program to ensure that vehicles on the road comply with the Clean Air Act's emissions standards," said Catherine R. McCabe, EPA's principal deputy assistant administrator for the Office of Enforcement and Compliance Assurance.

The agreement is subject to a 30-day public comment period and final court approval.