While Cummins has ended federal and state regulatory action by agreeing to pay nearly $2 billion, more payouts may lie ahead for the diesel engine maker and its automaker partner, Stellantis, as they face lawsuits in California courts over the companies' alleged installation of so-called "defeat devices" to sidestep emissions controls on Ram brand trucks.
On Jan. 10, the U.S. Department of Justice and the state of California announced they had reached a settlement agreement with the Indiana-based Cummins to end the regulatory action over accusations against the company for violating federal and state automotive emissions rules.
That action centered on allegations Cummins had designed engines with the ability to bypass or shut down sensors and onboard computer components designed to reduce emissions on some Ram trucks from 2013-2019.
Attorney General Rob Bonta
| Attorney General Rob Bonta Official website
Under the settlement, Cummins would pay a $1.675 billion fine, with $1.48 billion going to the federal government. The remaining nearly $200 million would be paid to California and divided among the California Air Resources Board (CARB) and the California Attorney General's Office.
The company also agreed to pay $325 million more to reduce emissions. That would include $175 million to CARB to mitigate nitrogen oxide.
In all, California would receive $372 million from the settlement, California Attorney General Rob Bonta announced.
According to the Justice Department, the fine marked the largest ever assessed under the Clean Air Act.
The fine and regulatory payouts mark a steep hit for Cummins. According to online financials, the company's annual net income for the 12 months ending in September 2023 stood at $2.8 billion, which is up from $2.15 billion the year before.
Investor, Ram truck owner class actions
However, the financial hits to Cummins and Stellantis from the "defeat device" allegations will likely only continue to grow, thanks to trial lawyers looking to make the companies pay further.
On Jan. 15, a class action lawsuit was filed against Cummins in Los Angeles federal court by attorney Laurence M. Rosen, of the Rosen Law Firm, of L.A. The suit was filed on behalf of Cummins investors, led by named plaintiff Tom Baker, whose state of residence is not provided in the complaint.
The lawsuit asserts Cummins must pay investors for investment income they lost when Cummins' stock value dropped on news of the regulatory settlement. They claim the company wrongly failed to disclose to investors the scope of its alleged actions that led to the imposition of the steep fine.
Other actions are likely to follow. On Jan. 16, for instance, attorneys from the firm of Gainey McKenna & Egleston, of New York, announced their intent to seek plaintiffs and also file a class action lawsuit in Los Angeles federal court on behalf of Cummins investors.
While the investor actions against Cummins are landing, Cummins and automaker Stellantis, which manufactures Ram brand pickups, is also facing a class action lawsuit in connection with the same accusations over the alleged Ram truck engine emissions "defeat devices."
In late December, a collection of high-profile class action law firms filed suit against Stellantis, also known as FCA US LLC, and Cummins in federal court in San Francisco. Attorneys include those from the firms of Baron & Budd, of Encino; Lieff Cabraser Heimann & Bernstein, of New York; Hagens Berman Sobol Shapiro, of Seattle; Carella Byrne Cecchi Brody & Agnello, of Roseland, New Jersey; Seeger Weiss, of New York; the Miller Law Firm, of Rochester, Michigan; and Motley Rice, of Mount Pleasant, South Carolina.
The lawsuit was filed on behalf of Ram truck owners. The plaintiffs' class is led by named plaintiffs Frank Biederman, of Upper Lake; Carl Anders Troedsson, of Tujunga; and James Farinet, of Mar Vista. All three claimed they had purchased new Ram trucks and later learned their vehicles were emitting more nitric oxide and nitrogen dioxide than was legally permitted. They said they would not have purchased the vehicles, if they had known this.
The lawsuit seeks to expand the action to include potentially hundreds of thousands of Ram truck owners throughout the U.S.
The lawsuit accuses Cummins and FCA/Stellantis of allegedly engaging in a civil conspiracy, in violation of federal anti-racketeering laws; and alleged violations of California consumer fraud and false advertising laws, among other alleged violations.
That lawsuit is seeking unspecified restitution, punitive damages and other damages, plus attorney fees.