FCA Chief Sergio Marchionne insists that the company has done nothing wrong and plans to fight the class-action suit.
Fiat Chrysler Automobiles and Cummins engines, which has long made engines for FCA, disclosed that they are prepared to fight a class-action lawsuit accusing them of cheating on diesel emissions tests just like Volkswagen.
Lawyers representing owners of older 2500 and 3500 Dodge Ram trucks filed a class-action lawsuit in U.S. District Court in Detroit last year, asserting the companies “conspired to knowingly deceive consumers and regulators of illegally high levels of diesel.”
The suit accuses the automakers of fraud, violating the Racketeer Influenced and Corrupt Organizations Act, known as RICO, and consumer-protection laws by intentionally misleading the public, concealing emissions levels and illegally selling noncompliant polluting vehicles.
Volkswagen AG ran afoul of federal and state laws across the United States after it was discovered that the automaker cheated on emissions tests. So far the company has paid more than $15 billion in fines levied by governments in North and South America as well as Europe.
(FCA 3Q earnings jump into the black. Click Here for the story.)
The suit filed by Seattle lawyer Steve Berman, who has been active in the litigation now surrounding VW, said the emissions catalysts are not durable and do not meet emission standards, and that at times emissions are nearly 10 times legal limits.
Engines like this 6.7-liter diesel from Cummins are part of the allegations that FCA and Cummins cheated on diesel emissions tests.
Fiat Chrysler said in a statement it “does not believe that the claims brought against it are meritorious” and the company “will contest this lawsuit vigorously.”
Cummins officials also said the lawsuit “has no merit. We are obviously disappointed in the effort to tarnish our image and we plan to vigorously defend ourselves.” The suit comes as Fiat Chrysler and Cummins are fighting over the costs of an emissions recall involving a different, newer population of trucks.
(Click Here for details about Audi being sued over cheat device for gasoline engine emissions.)
Meanwhile reports indicate Fiat Chrysler and Cummins have been fighting over estimated costs for a recall of 130,000 newer 2500 Ram pickup trucks equipped with Cummins diesel engines that could exceed U.S. pollution limits.
The U.S. Environmental Protection Agency and California Air Resources Board have demanded a recall of 2013-2015 model year Ram 2500 pickup trucks with 6.7-liter Cummins diesel engines because moisture can lead to the deactivation of the selective catalyst reduction system, causing excess nitrogen oxide emissions, Cummins said.
FCA also is being investigated by the Securities Exchange Commission, which is investigating whether FCA has misled investors with phony sales reports.
(To see more about the auto market peaking during a challenging time, Click Here.)
Sergio Marchionne, FCA’s CEO, has insisted FCA did nothing wrong but has restated the company’s monthly sales reports and changed the company’s reporting procedures while denying any deliberate wrongdoing.