Settlement Agreements and Consent Decrees -- 2015

Volvo Powertrain Corp. v. United States   (U.S. Supreme Court)

Court's power to liberally construe consent decrees

A company negotiated a consent decree with EPA over Clean Air Act requirements applicable to diesel engines, and later a subsidiary not involved in the consent decree sought and received EPA approval to import diesel engines. A few years later, EPA sued that company, claiming the engines, most of which were never imported into the United States, violated the consent decree.

A federal judge ordered $72 million in penalties, even though it imposed a penalty beyond what the Clean Air Act authorizes, and the D.C. Circuit affirmed.

The NAM filed an amicus brief arguing that courts should not be able to broaden the terms of the settlement to impose penalties beyond those in the consent decree for actions not subject to the EPA regulations at issue. Our brief and the appeals court decision are summarized here.

This case is now on appeal to the Supreme Court. The NAM, along with the American Petroleum Institute, the American Coatings Association, the Organizatio for International Investment, and the Metals Service Center Institute, filed another brief 3/9/15 urging the Court to review the decision. The brief, submitted by our counsel, Laurence H. Tribe of Harvard, argued that the case presents an important question whether an agency may reinterpret a consent decree to expand its authority beyond its statutory limits and beyond the territorial jurisdiction of the United States. Federal agencies are parties to thousands of consent decrees, and regulated parties often have little choice but to resolve a matter this way rather than to contest it on the merits. Agencies like EPA should not be allowed to operate beyond statutory limits imposed by Congress.

On June 15, 2015, the U.S. Supreme Court denied cert in this case.

Related Documents:
NAM brief  (March 9, 2015)


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