Toyota Motor Corporation Settlement

WASHINGTON, DC, March 7, 2003 --The Department of Justice and the Environmental Protection Agency announced a settlement of the government's lawsuit against Toyota Motor Corporation for Clean Air Act violations involving 2.2 million vehicles manufactured between 1996 and 1998. Under the settlement, Toyota will spend $20 million on a supplemental environmental project to retrofit up to an estimated 3,000 public diesel fleet vehicles to make them run cleaner and extend the evaporative emission control system warranty on affected vehicles (2 pp, 22 K, About PDF) originally sold by Toyota. In addition, Toyota will accelerate its compliance with certain new evaporative emission control requirements, and pay a $500,000 civil penalty. The settlement will cost Toyota an estimated $34 million.

The United States alleged that Toyota sold 2.2 million vehicles which were different from those described in its application for Certificates of Conformity, which allow vehicles to be legally sold if they meet Clean Air Act emission standards and other requirements. The government's lawsuit charged Toyota failed to disclose limitations in the operation of that part of the on-board diagnostic (OBD) system that checks for leaks in vehicles' evaporative emission control systems. As a result, the OBD system would not promptly signal drivers to a problem by lighting their dashboard light. Emission control system leaks need to be noticed and repaired because release of fuel vapors into the atmosphere contributes to ozone pollution.

The supplemental environmental project requires Toyota to spend $20 million to retrofit an estimated 3,000 diesel vehicles, including older, high-polluting school buses and municipal buses (which are not manufactured by Toyota) with pollution control equipment, such as catalytic converters, filters or whole engines. These retrofits, along with the purchase of ultra-low sulfur fuel (which Toyota may to some extent subsidize) is expected to eliminate up to 220 tons of particulate matter emissions, 1,200 tons of hydrocarbon emissions, and 15,000 tons of carbon monoxide emissions. Parties interested in contacting Toyota about these retrofits may contact Toyota's representative, Hamilton Loeb, Esq. by electronic mail at hamiltonloeb@paulhastings.com, by phone at 202 508 9535, and by facsimile at 202 508 8535.

School children near school buses, as well as pedestrians, are particularly likely to experience high exposure to diesel particulate matter. Diesel particulate is classified as a probable human carcinogen and is known to exacerbate the effects of asthma and heart disease. More than 24 million children across the nation ride diesel buses to school.

The settlement also requires Toyota to accelerate, by approximately one year, its compliance with the phase-in of EPA's new "near-zero" evaporative emissions regulation, which requires the capture of more gasoline vapors. Due to this accelerated compliance, about 1.4 million new Toyota vehicles manufactured from 2004 to 2006, which would not yet be subject to the new regulation, will be built with more robust evaporative emission control systems. The accelerated compliance schedule is estimated to cost Toyota about $11 million.

The case, filed in federal District Court in Washington, DC, involves model year 1996 through 1998 vehicles, including some Cambry, Avalon, Corolla, Tercel, Paseo, Lexus, Sienna minivans, 4Runner, RAV4, Tacoma and T100 models. The settlement requires Toyota to notify owners of affected vehicles (2 pp, 22 K, About PDF) of the warranty extension within the next 12 months. The evaporative emission control system warranty will be extended from the current two years or 24,000 miles to 14 years or 150,000 miles. The extended warranty is estimated to cost Toyota about $3 million, and will reduce emissions of hydrocarbons by affected vehicles by an estimated 30 tons, in addition to the 1,200-ton reduction of hydrocarbons achieved by the supplement environmental project.

Owners who have not received a notice within 12 months are encouraged to contact their local Toyota dealer. Owners of affected vehicles who suspect a problem with their evaporative emission control system (including the smell of gasoline vapors) should contact an authorized Toyota dealer for service under the extended evaporative system warranty. Toyota will not cover the cost of repairs or diagnosis for systems other than the evaporative emission system or for repairs performed by parties other than authorized Toyota repair facilities. The malfunction indicator light (on the dashboard) may illuminate for a variety of reasons, including a malfunctioning evaporative emission control system. EPA's investigation did not find a problem with the evaporative emission control system on these vehicles, which is why the government did not consider a recall in this case. For additional information about this extended warranty, owners may contact Toyota or Lexus Customer Relations:

- Toyota: 1-800-331-4331 (Department: Customer Relations)
- Lexus: 1-800-25-LEXUS (Department: Lexus)

The proposed settlement will be published in the Federal Register for 30 days for public comment, and must be approved by the Court.

For more information, contact:

David Alexander
U.S. Environmental Protection Agency
Air Enforcement Division (2242A)
1200 Pennsylvania Avenue, NW
Washington, DC 20460-0001
(202) 564-2109
alexander.david@epa.gov