UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES, et al.;

Plaintiffs, 

v.

DAIMLER AG, et al.,

Defendants.

Civ. Action No. 20-2564 (EGS)

Memorandum Opinion

Pending before the Court are the United States’ Motion to 

Enter Consent Decree, ECF No. 7,1 and the State of California’s 

Motion to Enter California Partial Consent Decree, ECF No. 9. 

The proposed consent decrees lodged with the Court resolve 

claims the United States and the California Attorney General’s 

Office, on behalf of the California Air Resources Board 

(“CARB”), assert against the Defendants Daimler AG and MercedesBenz USA, LLC (collectively, “Daimler”) for certain violations 

of California law and the Clean Air Act (“CAA”), 42 U.S.C. §§ 

7521 et seq. See Unopposed Mot. Enter Consent Decree (“Gov’t’s 

Mot.”), ECF No. 7 at 8; Calif. Mot. Enter Calif. Partial Consent 

Decree (“Calif. Mot.”), ECF No. 9 at 2. 

1 When citing electronic filings throughout this Opinion, the 

Court cites to the ECF page number, not the page number of the 

filed document.
2

Upon careful consideration of the motions, the arguments 

therein, the relevant law, and for the reasons set forth below, 

the Court GRANTS the United States’ motion and California’s 

motion.

I. Background

A. Factual and Procedural History

On September 14, 2020, the United States filed a complaint

against Daimler, alleging four types of violations of the CAA

arising from the sale of “more than 250,000 diesel-engine vans 

and passenger cars in the United States that contain undisclosed 

auxiliary emission control devices (AECDs) and unlawful ‘defeat 

devices’ used to circumvent emissions testing.” See Gov’t’s 

Mot., ECF No. 7 at 9. 

With respect to the first type of violation, Section 

203(a)(1) of the CAA “prohibits vehicle manufacturers from 

selling any new motor vehicle in the United States that is not

covered by a valid certificate of conformity (COC) issued by the 

Environmental Protection Agency (EPA).” Id. According to the 

allegations in the government’s complaint, Daimler allegedly 

“failed to disclose numerous AECDs installed in its diesel 

vehicles when applying for COCs, meaning that the vehicles were 

not covered by a valid COC issued under EPA’s regulations when 

Daimler sold them to consumers.” Id. at 9-10. With respect to 

the second type of violation, Section 203(a)(3)(B) of the CAA 
3

prohibits “knowingly selling or installing a part or component 

in a vehicle to bypass, defeat, or render inoperative any aspect 

of the vehicle’s emissions control system, unless certain narrow 

exceptions apply.” Id. at 10. The complaint alleges that Daimler 

installed “unlawful defeat devices that cause the vehicles’ 

emissions control systems to perform less effectively during 

normal driving than they perform while undergoing federal 

emissions testing.” Id. With respect to the third type of 

violation, Section 203(a)(3)(A) of the CAA prohibits “tampering 

with a vehicle’s emissions control system by removing or 

rendering inoperative a part installed to comply with the CAA.” 

Id. The complaint alleges that, by installing undisclosed AECDs 

and defeat devices in the affected vehicles prior to their sale, 

Daimler tampered with the vehicles. Id. With respect to the 

fourth type of violation, Section 203(a)(2) of the CAA “requires 

vehicle manufacturers to provide information required under 

Section 208 of the CAA, including information that the EPA 

Administrator requires to determine compliance with the Act.” 

Id. at 11. The complaint alleges that Daimler failed to provide 

information regarding the undisclosed AECDs and defeat devices 

to the EPA, which the EPA needed to determine whether the 

company was in compliance with the CAA. Id.

On the same day it filed the complaint, the government

lodged a consent decree that had been agreed to and signed by 
4

all parties. See Notice Lodging Consent Decree, ECF No. 2. The 

government requested that the Court take no action pending 

publication of the proposed consent decree in the Federal 

Register and the running of the comment period, stating that it 

would move for entry of the proposed consent decree as a final 

order at a later date. Id. at 1-2. 

Also on September 14, 2020, the California Attorney 

General’s Office, on behalf of CARB, filed a separate elevencount complaint against Daimler under Civil Action Number 20-cv2565 (“California Action”). See Compl., ECF No. 1, California v. 

Daimler AG, No. 20-cv-2565 (D.D.C. Sept. 14, 2020) (EGS).

Similar to the above, the complaint in the California Action

alleged that Daimler violated certain provisions of the CAA, the 

California Health and Safety Code, the California Business and 

Professions Code, and the California Code of Regulations. See 

Calif. Mot., ECF No. 9 at 2. The complaint alleged, among other 

things, that the affected diesel vehicles contained undisclosed 

AECDs and defeat devices, “as well as several unreported, 

unapproved running changes and field fixes that have resulted 

in, and continue to result in, increased NOx emissions from each 

Subject Vehicle in excess of California limits.” Id. The State 

of California lodged a partial consent decree on the same day it 

filed its complaint. Notice Lodging, ECF No. 3, California v. 

Daimler AG, No. 20-cv-2565 (D.D.C. Sept. 14, 2020) (EGS). The 
5

State of California indicated that it would submit a motion 

requesting entry of the proposed partial consent decree at a 

future date. Id. at 2.

The Court thereafter consolidated the California Action 

with this case pursuant to Federal Rule of Civil Procedure 

42(a), see Min. Order (Sept. 14, 2020), California v. Daimler 

AG, No. 20-cv-2565 (D.D.C. Sept. 14, 2020) (EGS); and the 

California Action was terminated on September 23, 2020. On 

December 17, 2020, the United States filed its motion for an 

order entering a consent decree (“Consent Decree”),2 Gov’t’s 

Mot., ECF No. 7, and the State of California joined in the 

United States’ motion the same day, see Calif.’s Notice Joinder, 

ECF No. 8. The State of California subsequently filed its motion 

for an order entering the partial consent decree (“California 

Partial Consent Decree”). Calif. Mot., ECF No. 9. Daimler does 

not oppose the motions. See Gov’t’s Mot., ECF No. 7 at 7; Calif. 

Mot., ECF No. 9 at 1.

2 The government notes that during the notice-and-comment period, 

the parties discovered typographical errors in the initial 

proposed consent decree lodged on September 14, 2020. The 

errors, which did not relate to any of the public comments 

received, were corrected, but the Consent Decree the parties ask 

this Court to adopt is otherwise the same. See Gov’t’s Mot., ECF 

No. 7 at 9 n.1; Calif. Notice Joinder, ECF No. 8 at 1 n.1.
6

B. The Consent Decree And The California Partial Consent 

Decree

The Consent Decree requires Daimler to:

(1) fix its vehicles at no cost to consumers; 

(2) offer an extended warranty on all parts 

expected to be impacted by the fix; 

(3) conduct future testing of the affected 

vehicles to demonstrate compliance with 

emissions standards for their full useful 

life;

(4) perform projects to fully mitigate damage 

caused to the Nation’s air;

(5) implement new corporate compliance 

measures to discourage future cheating; and

(6) pay a civil penalty of $875 million, plus 

retroactive stipulated penalties of about 

$70.3 million.

Gov’t’s Mot., ECF No. 7 at 11. The settlement’s total value will 

reach $1.5 billion, according to the government. Id. 

The government notes that it held a 30-day public comment 

period on the Consent Decree, received 16 comments which it 

carefully considered, and concluded that none of the comments 

provided a basis for withholding its consent to the entry of the 

decree. Id. at 15-16.

The California Partial Consent Decree requires Daimler to

make a $110,000,000 payment to CARB and a $17,500,000 payment to 

the California Attorney General. Calif. Mot., ECF No. 9 at 3-5. 

The California Partial Consent Decree also resolves: (1) all 
7

civil claims for relief that were or could have been brought 

under Section 17200 of the California Business & Professions 

Code “to the extent that those claims are predicated on 

allegations that Daimler engaged in unlawful business acts or 

practices,” within the meaning of the provision, “by virtue of 

having violated certain provisions of California and [f]ederal 

law”; and (2) all claims related to the affected vehicles and 

the allegations in the California Complaint or “facts disclosed 

to California before the lodging of the Consent Decree” that the 

California Attorney General could have brought pursuant to 

certain provisions of California law and federal law. Id.

Finally, the California Partial Consent Decree enjoins Daimler 

from: (1) introducing any vehicles that contain undisclosed 

AECDs or defeat devices, or that otherwise fail to comply with 

certain California Health and Safety Code provisions; (2) 

“engaging in unlawful business acts or practices, within the 

meaning of California Business and Professions Code § 17200 et 

seq.,” by violating certain California Health and Safety Code 

provisions; (3) failing to notify relevant authorities if 

Daimler has reason to believe that a vehicle with an undisclosed 

AECD or defeat device has been sold or offered for sale; (4) 

failing to comply with any injunctive terms obtained that apply 

to the vehicles at issue or Daimler; and (5) submitting “a copy 

of any report filed under Paragraph 44” of the Consent Decree to 
8

the California Attorney General. Ex. 1 to Calif. Mot. (“Calif. 

Partial Consent Decree”), ECF No. 9-1 at 9-10.

The California Partial Consent Decree was not subject to 

any notice and comment requirements. Calif. Mot., ECF No. 9 at 

1.

II. Standard for Entry of Consent Decree

The “generally applicable” standard for the review of a 

consent decree in the District of Columbia Circuit is whether 

the consent decree “fairly and reasonably resolves the 

controversy in a manner consistent with the public interest.” 

Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1206 n.1 (D.C. 

Cir. 2004) (quoting New York v. Microsoft Corp., 231 F. Supp. 2d 

203, 205 (D.D.C. 2002)) (citing Citizens for a Better Env’t v. 

Gorsuch, 718 F.2d 111, 1126 (D.C. Cir. 1983)). “[P]rior to 

approving a consent decree a court must satisfy itself of the 

settlement’s overall fairness to beneficiaries and consistency 

with the public interest.” Citizens for a Better Env’t, 718 F.2d 

at 1126 (internal quotation marks and citation omitted). 

“Approval of a settlement is a judicial act that is 

committed to the informed discretion of the trial court.” United 

States v. Hyundai Motor Co., 77 F. Supp. 3d 197, 199 (D.D.C. 

2015) (quoting United States v. District of Columbia, 933 F. 

Supp. 42, 47 (D.D.C. 1996)). The Court is not to “substitute its 

judgment” for that of the parties to the decree and “may not 
9

modify but only approve or reject a consent decree.” United 

States v. Akzo Coatings of Am., Inc., 949 F.2d 1409, 1435 (6th 

Cir. 1991). “Naturally, the agreement reached normally embodies 

a compromise; in exchange for the saving of cost and elimination 

of risk, the parties each give up something they might have won 

had they proceeded with litigation.” United States v. Armour & 

Co., 402 U.S. 673, 681-82 (1971).

“The trial court in approving a settlement need not inquire 

into the precise legal rights of the parties nor reach and 

resolve the merits of the claim or controversy, but need only 

determine that the settlement is fair, adequate, reasonable and 

appropriate under the particular facts and that there has been 

valid consent by the concerned parties.” Citizens for a Better 

Env’t, 718 F.2d at 1126 (citing Metro. Hous. Dev. Corp. v. Vill.

of Arlington Heights, 616 F.2d 1006, 2014 (7th Cir. 1980)). 

“[I]t is precisely the desire to avoid a protracted examination 

of the parties’ legal rights which underlies consent decrees. 

Not only the parties, but the general public as well, benefit 

from the saving of time and money that results from the 

voluntary settlement of litigation. Thus, ‘[v]oluntary 

settlement of civil controversies is in high judicial favor.’” 

Id. (quoting Autera v. Robinson, 419 F.2d 1197, 1199 (D.C. Cir. 

1969)). That said, “[a] decree, even entered as a pretrial 

settlement, is a judicial act, and therefore the district judge 
10

is not obliged to accept one that, on its face and even after 

government explanation, appears to make a mockery of judicial 

power.” Microsoft Corp., 56 F.3d at 1462. “Finally, broad 

deference should be afforded to EPA’s expertise in determining 

an appropriate settlement and to the voluntary agreement of the 

parties in proposing the settlement.” District of Columbia, 933 

F. Supp. at 48 (citing In re Cuyahoga Equip. Corp., 980 F.2d 

110, 118 (2d Cir. 1992)).

III. Analysis

The Court must determine whether the government has met its 

burden to demonstrate that the consent decrees are fair, 

reasonable, and in the public interest. United States v. Davis, 

11 F. Supp. 2d 183, 189 (D.R.I. 1998) (“The United States is 

obliged to proffer sufficient facts and reasons to establish 

that these factors have been satisfied and that approval is 

warranted.”).

A. The Consent Decrees Are Fair

“A review of the fairness of a proposed consent decree 

requires an assessment of the good faith of the parties, the 

opinions of the counsel, and the possible risks involved in 

litigation if the settlement is not approved.” District of 

Columbia, 933 F. Supp. at 48 (quoting United States v. Hooker 

Chem. & Plastics Corp., 607 F. Supp. 1052, 1057 (W.D.N.Y. 

1985)). “Fairness incorporates both procedural and substantive 
11

components.” United States v. Telluride Co., 849 F. Supp. 1400, 

1402 (D. Colo. 1994). “An assessment of procedural fairness 

involves looking ‘to the negotiating process and attempt[ing] to 

gauge its candor, openness, and bargaining balance.’” District 

of Columbia, 933 F. Supp. at 47 (quoting Telluride Co., 849 F. 

Supp. at 1402). “A consent decree that is substantively fair 

incorporates ‘concepts of corrective justice and accountability: 

a party should bear the cost of harm for which it is legally 

responsible.’” Id. at 47 (quoting United States v. Cannons Eng'g 

Corp., 899 F.2d 79, 87 (1st Cir. 1990)).

The Consent Decree and the California Partial Consent 

Decree proposed in this litigation are fair. Regarding the 

procedural fairness of the consent decrees, all of the parties 

involved support entry of the decree. See Gov’t’s Mot., ECF No. 

7 at 7; Calif. Mot., ECF No. 9 at 1. Each party was represented 

by experienced counsel and engaged in settlement negotiations 

that lasted more than three years, resulting in the drafting of,

and agreement on, the provisions of the consent decrees. Gov’t’s 

Mot., ECF No. 7 at 17. Furthermore, “there is no suggestion of 

impropriety in the negotiation of the agreement[s],” Hyundai 

Motor Corp., 77 F. Supp. 3d at 200; rather, the consent decrees 

are “a reflection of the parties’ arms-length efforts to reach a 

just and equitable outcome,” Gov’t’s Mot., ECF No. 7 at 17. In 

addition, the United States complied with the CAA’s required 
12

notice-and-comment procedures and duly considered each of the 16 

comments it received. Id. Regarding the substantive fairness of 

the consent decrees, “[t]he proposed settlement requires Daimler 

to atone for its misconduct” through repairing affected 

vehicles, mitigating excess NOx emitted into the air, taking 

steps to prevent future environmental violations, and paying

substantial financial penalties. Id. at 18; see also Calif. 

Mot., ECF No. 9 at 4.

Accordingly, the Court finds that the consent decrees are

fair.

B. The Consent Decrees Are Reasonable 

“In examining the reasonableness of a decree there are 

three factors for the Court to consider: (1) whether the decree 

is technically adequate to accomplish the goal of cleaning the 

environment, (2) whether it will sufficiently compensate the 

public for the costs of the remedial measures, and (3) whether 

it reflects the relative strength or weakness of the 

government’s case against the environmental offender.” District 

of Columbia, 933 F. Supp. at 50 (quoting Telluride, 849 F. Supp. 

at 1402). “‘[T]he court must determine whether the proposed 

consent decree is reasonable from an objective point of view.’” 

Appalachian Voices v. McCarthy, 38 F. Supp. 3d 52, 56 (D.D.C. 

2014) (quoting Env’t Def. v. Leavitt, 329 F. Supp. 2d 55, 71 

(D.D.C. 2004)).
13

The United States argues that the first factor has been met 

because the Consent Decree will force Daimler to: (1) “bring the 

majority of the affected vehicles into compliance with 

applicable NOx emission standards”; (2) “perform projects to 

fully mitigate excess NOx emitted into the air”; and (3) 

“implement corporate governance reforms to help ensure 

compliance with the CAA in the future.” Gov’t’s Mot., ECF No. 7 

at 19. In addition, the State of California argues that the 

California Partial Consent Decree is reasonable, noting that the 

relief provided is “substantial, and it directly addresses the 

violations alleged by California.” Calif. Mot., ECF No. 9 at 3. 

The Court agrees. Based on the current record, it appears that 

the consent decrees are “technically adequate to accomplish the 

goal of cleaning the environment,” District of Columbia, 933 F. 

Supp. at 51; will bring Daimler into compliance with the CAA and 

ensure future compliance with the CAA; and will increase the 

likelihood that Daimler will meet its obligations going forward.

With regard to “whether [the consent decrees] will 

sufficiently compensate the public for the costs of remedial 

measures,” District of Columbia, 933 F. Supp. at 50; the 

substantial financial penalties in the Consent Decree and the 

California Partial Consent Decree were negotiated in good faith 

taking into account applicable statutory factors, as well as 

Daimler’s cooperation and the risks of litigation. In addition, 
14

the penalties are commensurate with other mobile source 

settlements. See Gov’t’s Mot., ECF No. 7 at 20.

The final factor in the reasonableness inquiry is “whether 

[the consent decrees] reflect[] the relative strength or 

weakness of the government’s case against the environmental 

offender.” District of Columbia, 933 F. Supp. at 50. “While it 

is true that the [agreements] may have extracted less than was 

possible from the defendant, it must be remembered that a 

consent decree by its very nature will contain elements of 

compromise.” Id. at 51. Here, the government notes that the 

settlement “includes compromises,” but that it also “includes 

significant injunctive relief to benefit the Nation’s air and 

the citizens who breathe it and a substantial civil penalty to 

punish and deter Daimler and would-be violators.” Gov’t’s Mot., 

ECF No. 7 at 21. Furthermore, the consent decrees provide relief 

to the parties now, as compared to the potential years of 

litigation the parties could face if the United States and 

California elected to pursue their claims to trial. See District 

of Columbia, 933 F. Supp. at 51 (“[I]t is almost axiomatic that 

voluntary compliance on an issue where there is a potential 

disagreement is a better alternative than the uncertainty of 

litigation over that issue.”).

Accordingly, for all of these reasons, the Court finds that 

the consent decrees are reasonable.
15

C. The Consent Decrees Are In The Public Interest

“A settlement agreement which seeks to enforce a statute 

must be consistent with the public objectives sought to be 

attained by Congress.” Stewart v. Rubin, 948 F. Supp. 1077, 1087 

(D.D.C. 1996). The purpose of the CAA is “to protect and enhance 

the quality of the Nation’s air resources so as to promote the 

public health and welfare and the productive capacity of its 

population.” 42 U.S.C. § 7401(b)(1). The Court’s inquiry is 

limited. “[P]rior to approving a consent decree a court must 

satisfy itself of the settlement’s ‘overall fairness to 

beneficiaries and consistency with the public interest.’” United 

States v. Trucking Emps., Inc., 561 F.2d 313, 317 (D.C. Cir. 

1977) (quoting United States v. Allegheny-Ludlum Indus., 517 

F.2d 826, 850 (5th Cir. 1975)). “‘[T]he [district] court’s 

function is not to determine whether the resulting array of 

rights and liabilities is the one that will best serve society, 

but only to confirm that the resulting settlement is within the 

reaches of the public interest.’” United States v. Microsoft 

Corp., 563 F.3d 1448, 1460 (D.C. Cir. 1995) (quoting United 

States v. W. Elec. Co., 900 F.2d 283, 325 (D.C. Cir. 1990)).

The Court is satisfied with the decree’s “overall fairness 

to beneficiaries and consistency with the public interest.” 

Trucking Emps., Inc., 561 F.2d at 317 (citations omitted). As 

described above, the consent decrees further the goal of the CAA 
16

and California law provisions by “secur[ing] significant 

injunctive relief to bring the affected vehicles into compliance 

with the law, mitigate[ing] excess NOx emissions; and 

promot[ing] compliance in the future.” Gov’t’s Mot., ECF No. 7 

at 22; see also Calif. Mot., ECF No. 9 at 2 (“The California 

Partial Consent Decree, along with the US/CARB/Daimler Consent 

Decree, form an integration resolution to remedy the violations 

alleged in the California Complaint. The relief provided is 

substantial, and it directly addresses the violations alleged by 

California.”). The substantial financial penalties provided for 

in the consent decrees also send a strong deterrence signal to 

other manufacturers who may consider installing undisclosed 

AECDs or defeat devices in their vehicles.

Accordingly, for all of these reasons, the Court finds that 

the consent decrees are in the public interest.
17 

IV. Conclusion

For the reasons explained above, the United States’ Motion

to Enter Consent Decree, ECF No. 7, and the State of 

California’s Motion to Enter California Partial Consent Decree, 

ECF No. 9, are GRANTED. A signed Order entering the Consent 

Decree and California Partial Consent Decree, as well as the 

Consent Decree and California Partial Consent Decree, 

accompanies this Memorandum Opinion. 

SO ORDERED. 

Signed: Emmet G. Sullivan 

United States District Judge 

March 9, 2021