Toyota Motor Company on Thursday settled a civil lawsuit with the Department of Justice and Environmental Protection Agency, in which it will pay $180 million—the largest civil penalty ever for violations of the EPA’s emission-reporting requirements under the Clean Air Act.

According to the Department of Justice’s complaint, Toyota “systematically violated these reporting requirements over the course of a decade” by materially delaying the filing of “hundreds of reports about approximately 78 emission-related defects” in millions of its vehicles. “Some reports were filed as late as eight years after they were due and only when Toyota finally disclosed its years of noncompliance to EPA,” the agency said.

Egregious compliance failures: From approximately 2005 until at least late 2015, Toyota “routinely failed to comply with [EPA] reporting requirements,” the Justice Department said. In addition to the delay in disclosing the 78 emission-related defects, the company failed to file 20 voluntary emissions recall reports and more than 200 quarterly reports.

“Time and again, Toyota managers and staff in Japan identified the discrepancy between the company’s procedures and the plain language of the federal requirements but failed to bring Toyota into compliance,” the complaint stated. Moreover, Toyota’s American unit, responsible for submitting the reports to the EPA, knew of Toyota’s noncompliance but chose to ignore it, the agency said.

“Toyota shut its eyes to the noncompliance, failing to provide proper training, attention, and oversight to its Clean Air Act reporting obligations,” said Audrey Strauss, acting U.S. Attorney for the Southern District of New York. “Toyota’s actions undermined EPA’s self-disclosure system and likely led to delayed or avoided emission-related recalls, resulting in financial benefit to Toyota and excess emissions of air pollutants.”

Compliance obligations: The injunctive provisions require Toyota to follow compliance and reporting practices designed to ensure timely investigation of emission-related defects and timely reporting to the EPA, as well as include training, communication, and oversight requirements. The consent decree, in which Toyota admitted and accepted responsibility for its actions, remains subject to a period of public comment and court approval.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal, enforcement, technology, and more.

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