Justice Department Subpoenas Automakers Over California Emissions Pact

Matt Posky
by Matt Posky

The Justice Department has issued civil subpoenas to the four major automakers’ that voluntary agreed to adopt a Californian compromise on vehicle emission requirements. The antitrust investigation seeks to determine whether or not BMW, Ford, Honda, and Volkswagen were in violation of federal competition laws by agreeing with each other to adhere to stricter emissions standards penned by California.

With the Trump administration working for years to roll back emissions standards, California has been doing everything in its power to maintain its ability to self-regulate and gain support for higher emission standards. Under the agreement with the Golden State, the companies promised to meet annual emission improvement targets of 3.7 percent and defer to the state’s authority to set its own emissions standards.

The DOJ reached out to the carmakers in August to assess whether they had coordinated with each other before agreeing to the state’s adjusted guidelines — as any previous communications on the issue would raise the possibility of an antitrust violation. Congressional Democrats have also bashed the investigation as being too partisan, while the EPA continues to claim the only tenable solution is one national standard.

Mary Nichols, chair of the California Air Resources Board, has previously stated that the state worked with each automaker individually, suggesting that all parties were careful to not to break any rules. But her assurance doesn’t seem to have been sufficient, since the DOJ is now issuing civil investigative demands.

According to The Wall Street Journal, the subpoenas don’t actually obligate the automakers to hand over internal documents but does force them to answer any questions relation to collusion directly. If evidence emerges later that they were lying, it can be used against them — because they definitely aren’t going to say “of course we colluded.”

That leaves little incentive for them to fess up to any misdeeds, but we have seen manufacturers confess to cooperating illegally in the past in the hopes of receiving a lesser penance. Of course, that only goes if they actually violated antitrust laws.

From The Wall Street Journal:

The Justice Department’s top antitrust official, Makan Delrahim, in Senate testimony in September said the probe wasn’t political, describing the investigation as a fact-finding mission. He said companies can’t cooperate among themselves, even to advance socially laudable goals.

BMW and Honda said they are cooperating with the department. Spokesmen for Ford, Volkswagen and the Justice Department declined to comment.

[Image: Michael Vi/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Jeff S Jeff S on Nov 11, 2019

    @FreedMike--Agree having come of age during that time you are correct. I was raised in Houston and lived there for 28 years and saw the change from a predominantly Democratic state to the transition to Republican starting in the 70's. I remember when Houston's first indoor Mall, Sharpstown Mall opened in the Fall of 1961, it had segregated restrooms and water fountains which in 2 years time were eliminated. I also remember the poll tax which was eliminated just before the Civil Rights Act was past. True President Johnson was a racist at one time but let's give Johnson credit for getting the Civil Rights Act passed an act that President Kennedy most likely could not get passed because of being from Massachusetts. Johnson called in every political favor that was owed him and worked tirelessly to get the Civil Rights Act passed which was the right thing to do but it did hurt the Democratic Party in the South. Also true that Goldwater was not a racist but he interpreted the Civil Rights Act in the strictest Constitutional way. Goldwater was not the most popular candidate but he was a man of his word and did not play political games. I currently live in Kentucky for the past 32 years and have seen the shift from a Democratic to a Republican state. The shift was more gradual in Kentucky and it did not happen as soon as it did in the rest of the South. Clinton did carry Kentucky in both 92 and 96 and Carter in 76 but for the most part in recent years it has been solid Republican except the recent Governors race which had a very unpopular Governor Mat Bevin (Republican) versus Andy Beshear (Democrat). Bevin has demanded a recount because he lost by 5,000 votes but if it would have been another Republican that Republican would have probably won by a large margin. Kentucky had state emissions inspections for a number of years until the past 10 years when the state agreed to use reformulated gas in order to wave the EPA required emission inspection mandate for the higher populated areas of Louisville, Lexington, and Northern Kentucky (Boone, Campbell, and Kenton Cos) which is basically the Cincinnati metropolitan area.

  • Oberkanone Oberkanone on Nov 11, 2019

    California has at it's disposal tools to control vehicle emissions without controlling emissions standards for the nation. Vehicle registration fees, vehicle excise tax, plate fees, and more.