Multi-billion dollar law suit

The US Environmental Protection Agency (EPA) has brought a civil action against three US companies for the importation and sale on non-compliant Chinese engines that could see penalties of more than US$ 10 billion.

The action relates to 78284 non-compliant small capacity petrol engines for light construction machines sold between September 2002 and November 2006. Powertrain Inc, Wood Sales Co and Tool Mart Inc are alleged to have violated regulations regarding emissions standards, certification, labelling, warranty and record keeping requirements.

If the EPA action is successful, the three defendants could be liable for fines of between US$ 27500 and US$ 37500 for each violation per engine, totalling more than US$ 10 billion.

In 2002, Powertrain and Wood Sales submitted a 163 CC, 3 kW engine manufactured by the Zhejiang Ever Fine Electric Compliance Group Company (Ever Fine) for EPA certification. This was granted on 4 June 2002.

Between 2003 and 2006, Powertrain renewed the certificate of conformity. However, by early 2003 it has severed ties with Ever Fine and began importing engines from another Chinese manufacturer, Shaoxing City Tongyong Engine Mading Co (Tongyong).

The Tongyong engines had different specifications and were not covered by the original or carried-over certificate of conformity.

Between December 2005 and May 2006, Powertrain paid independent engine testing company, Automotive Testing Development Services Inc, to carry out emissions tests on the Tongyong engines. All but a 9.7 kW engine failed to meet emissions standards.

As well as emissions non-compliance, the engine information labels also failed to contain much of the information required by law and contained the wrong engine family designation. Charges for warranty and record keeping violations as well as failing to fully respond to EPA requests means the EPA are making a total of five claims against the defendants.