Toyota Settles State Suit Over Smog Equipment

Toyota Motor Corp. has agreed to pay $7.9 million to settle a lawsuit with California over smog- control equipment on thousands of cars plying state highways.

The agreement announced Tuesday reverses an earlier order by the California Air Resources Board for a massive recall of cars in California but leaves pending a similar lawsuit brought by U.S. regulators who alleged 2.2 million cars nationwide may be polluting the air without the auto owners’ knowledge.

Under the terms of the settlement, the Japanese auto maker acknowledges no wrongdoing but agrees to pay millions to state clean-air programs and hasten the introduction of low-polluting, advanced-technology cars. The agreement settles a 4-year-old recall order and subsequent lawsuit.

“There was never any extra emissions or pollution here. No defect was ever established nor were any vehicles recalled and none will be recalled, so customers need have no concerns about their cars,” said Mike Michels, spokesman for Toyota Motor Sales USA. “This was about a technicality of the computer program and how it diagnosed itself.”

At the heart of the dispute, state regulators charged that computer systems on board 330,000 Toyota cars from model years 1996-98 lacked the ability to check for vapor leaks in hoses, gas caps and engine components.

So-called evaporative emissions are not insignificant; they can account for up to 25% of a car’s emissions, according to the ARB.

But the auto maker contended that the smog-control systems complied with state requirements, and the two parties agreed to submit the case to an administrative law judge.

The judge concluded that ARB testing did not conclusively demonstrate Toyota vehicles were out of compliance with California regulations, but the judge agreed that Toyota failed to fully disclose required sufficient information to alert the ARB to the problem before Toyota received approval.

Under terms of the settlement, Toyota agreed to fund a package valued at $7.9 million.

A $1.2-million contribution will go to the California Air Pollution Control Fund. The state uses this fund to educate the public and provide programs to minimize the output of smog-forming emissions from various sources.

And $4.3 million will go toward supplemental environmental projects, to be agreed upon jointly between ARB and Toyota.

Those funds could be used for projects including the purchase of low-polluting lawn mowers, research into clean technologies and pollution cleanups in low-income neighborhoods.

“We are pleased that we have reached an agreement in this case. We believe that this settlement will not only benefit the owners of the vehicles but all Californians,” said ARB Executive Officer Michael Kenny.

Also, Toyota will extend warranties for defects that may occur in the evaporative emission control system of the Toyota model year cars in question from three years to 14 years or 150,000 miles.

Toyota agreed to accelerate development and introduction of near-zero-emission cars, from the gasoline-electric hybrid Prius to cars that produce virtually no air pollutants. The extended warranty and the early compliance efforts are valued at $2.4 million.