### IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

~JNITED STATES OF AMERICA; CALIFORNIA AIR RESOURCES :••'i 

### Plaintiffs,
v. HYUNDAI MOTOR COMPANY; H~'~.7NDAI MOTOR AMERICA; KIA MOTORS CORPORATION; KIA MOTORS AMERICA; H~.'UNDAI AMERICA TECHNICAL CENTER,INC., Defendants Case No. Judge

CONSENT DECREE Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 1 of 44

1:14-cv-1837TABLE OF CONTENTS I. 1NTRODUCTION................................................................................................................1 II. JURISDICTION AND VENUE ..........................................................................................2 III. APPLICABILITY IV. DEFINITIONS .....................................................................................................................5 V. CIVIL PENALTIES .............................................................................................................7 VI. CORRECTION OF GREENHOUSE GAS EMISSION CREDITS ....................................9 VII. CORRECTIVE MEASURES ............................................................................................10 VIII. STIPULATED PENALTIES .............................................................................................11 IX. FORCE MAJEURE ...........................................................................................................14 X, DISPUTE RESOLUTION .................................................................................................16 XI. INFORMATION COLLECTION AND RETENTION .....................................................18 XII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS ..........................................20 xlil. ~u~ i ~ ................................ XIV. NOTICES............................ XV. EFFECTIVE DATE............. XVI. RETENTION OF JURISDI( XVII. MODIFICATION................. XVIII. TERMINATION ................., XIX. PUBLIC PARTICIPATION. ~X. SIGNATORIES/SERVICE.. XXI. INTEGRATION ................... XXII. FINAL JUDGMENT ..,........ ........................................................................................23 ........................................................................................23 ........................................................................................25 ~N ...................................................................................25 ........................................................................................25 ........................................................................................26 ........................................................................................27

.......................................................................................27 ........................................................................................27 ........................................................................................28 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 2 of 44L INTRODUCTION WHEREAS,Plaintiffs, the United States ofAmerica,on behalfofthe United States Environmental Protection Agency ("EPA"),and the California Air Resources Board ("GARB"), have filed a complaint in this action concurrently with this Consent Decree,alleging that Defendants,Hyundai Motor Company ("Hyundai Motor"),Hyundai Motor America {"Hyundai America"),Kia Motors Corporation ("Kia Motors"),Kia Motors America {"I~ia America"),and Hyundai America Technical Center, Inc. {"HATCI")(collectively, "Defendants")violated Section 203(x)(1)ofthe Clean Air Act {"Act"), 42 U.S.C. § 7522(x)(1), and California Health and Safety Code Section 43212; WHEREAS,the Complaint alleges that Defendants sold, offered for sale, introduced into commerce,delivered for introduction into commerce,or imported into the United States (or caused the foregoing with respect to)new motor vehicles from model year 2012 and model year 2013 that did not conform to the design specifications in Defendants' applications for Certificates ofConformity that purportedly covered these vehicles. In particular, the road load forces for the subject vehicles were higher than specified in the application, which resulted in Defendants overstating fuel efficiency and understating greenhouse gas emissions. The Complaint further alleges that the reported road load forces were determined through the use of protocols that were not in conformance with specified test procedures; WHEREAS,the Complaint does not allege that Defendants sold or otherwise introduced into commerce motor vehicles that were not certified to California emission standards for the model.years at issue; WHEREAS,Defendants deny the violations alleged in the Complaint; maintain they have been and.remain in compliance with the Clean Air Act and its implementing regulations and with 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 3 of 44the California Health and Safety Code and its implementing regulations pertaining to the performance ofcoastdown testing procedures; and.do not admit any liability to the United States or CARB arising out ofthe transactions or occurrences alleged in the Complaint; WHEREAS,on November 2, 2012,EPA and Hyundai America and Kia America announced that Defendants would lower their fuel. economy estimates far certain model year 2011, 201.2, and 2013 vehicles after testing by the companies independently and jointly with EPA found discrepancies between.agency testing results and data submitted by the companies. WHEREAS,on November 2,2012,Hyundai America and Kia America initiated a voluntary customer reimbursement program for current and former vehicle owners who had purchased model year 2011-2013 vehicles that are subject to this Consent Decree; WHEREAS,Defendants worked cooperatively with EPA in the period leading up to November 2,2012,upon learning ofthe alleged testing issues described in the Complaint; WHEREAS,the Parties recognize, and the Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by the Parties in good faith and will avoid litigation between:the Parties and that.this Consent Decree is fair, reasonable, and in the public interest. NOW, THEREFORE,before the taking offurther testimony, without the adjudication or admission ofany issue offact or law,and with the consent ofthe Parties, IT IS HEREBY ADJUDGED,ORDERED,AND DECREED as follows: II. JURISDICTION AND VENUE This Court has jurisdiction over the subject matter ofthis action, pursuant to 2$ U.S.C. §§ 1331, 1345,and 1355,and Section 205 ofthe Act,42 U.S.C. § 7524,and over the Parties consenting hereto Solely for purposes ofthis Consent Decree,venue lies in this District

F 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 4 of 44pursuant to Section 205 ofthe Act,42 U.S.C. § 7524,because the Administrator has her principal place ofbusiness here. Solely for purposes ofthe Complaint,this Decree,and any action to enforce this Decree,Defendants consent to the Court's jurisdiction and consent to
venue in this District. Solely for purposes ofthis Consent Decree and the Complaint,Defendants waive all objections and defenses that they may have do the Court's jurisdiction over Defendants and to venue in this District and agree not to challenge this Court's jurisdiction to enter and enforce this Decree. 2. Solely for purposes ofthe Consent Decree,this Court has supplemental jurisdiction over CARB's state law claim alleged in the Complaint pursuant to 28 U.S.C. § 1367(a)because it is related to the federal claim and forms part ofthe same case or controversy. 3. For purposes ofthis Consent Decree,Defendants agree that the Complaint states claims upon which reliefmay be granted pursuant to Section 203(a)(1)ofthe Act,42 U.S.C. § 7522(a)(1), and California Health and Safety Code Section 43212. III. APPLICABILITY 4. Upon entry ofthe Consent Decree,the obligations ofthis Decree apply to and are .binding upon the United States and CARE,and upon Defendants and any successors, assigns, or other entities or persons otherwise bound by law. Ifa Defendant proposes to sell ownership of the corporate entity responsible for implementing Appendix A and Appendix B to this Consent Decree,the Defendant shall give written notice ofthe Consent Decree to any successors in interest prior to the transfer ofthe corporate entity, The Defendant shall notify the Unzted States 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 5 of 44and CARB,in accordance with the notice provision set forth in Paragraph 59,ofany such
successor in interest at least 30 Days prior do the closing ofsuch transfer. 5. No transfer ofownership or operation ofa Defendant entity responsible for implementing Appendix A and Appendix B to this Decree,whether in compliance with the procedures ofthis Paragraph or otherwise, relieves Defendants oftheir obligation to ensure that the terms ofthe Decree are implemented,unless (1)the transferee agrees to undertake the obligations required by this Decree and to be substituted for the Defendants as a Party under the, Decree and thus be bound by the terms thereof,(2)the United. States consents to relieve Defendants oftheir obligations, and (3)the Court approves a joint motion from the United States, Defendant,and the transferee requesting that the Court approve a modification substituting the transferee as a Defendant responsible for complying with the terms and conditions ofthe Consent Decree. IfDefendants do not secure the agreement ofthe United States to a joint motion,then Defendants and the transferee may file, without the agreement ofthe United States, a motion requesting the Court to approve a modification substituting the transferee as the Defendant responsible for complying with some or all ofthe terms and conditions ofthe Consent Decree. The United States may file an opposition to the motion. The motion to modify shall be granted unless Defendants and the transferee: (i)fail to show that the transferee has the financial and technical ability to assume the obligations and liabilities ofthe Consent Decree; or (ii)the Court finds other good cause for denying the motion. 6. Defendants shall provide a copy ofthis Consent Decree to all appropriate officers, employees,and agents whose duties might reasonably include compliance with any provision of this Decree,

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 6 of 447. In any action to enforce this Consent Decree,Defendants shall not raise as a defense the failure by any ofits officers, directors, employees,agents, or contractors to take any actions necessary to comply with the provisions ofthis Consent Decree. IV. DEFINITIONS 8. Terms used in this Consent Decree that are defined in the federal Clean Air Act ("Act"),42 U.S.C. §§ 7401-7b71q,or in regulations promulgated pursuant to Title II ofthe Act, shall have the meanings assigned to them in the Act or such regulations, unless otherwise provided in this Decree. Whenever the terms sef forth below are used in this Consent Decree,the following definitions shall apply:
a. "AB&T"shall refer to the averaging, banking,and trading ("AB&T") program codified at 40 C.F.R. § 86.1865-12(k); b. "AB&T Report" shall. mean each report required by 40 C.F.R. §§ 86.1865- 

## ~z~1~~2~ ~a s6.is~i-i2~e>;
c. "GARB"shall mean the California Air Resources Board; d. "Complaint" shall mean the complaint filed.by the United States and C~1RB in this action;
e. "Consent Decree" or "Decree" shall mean this Decree, including its appendices; f. "Day" shall mean a calendar day unless expressly stated to be a business day. In computing any period oftime under this Consent Decree, where the last day would fall on a Saturday, Sunday,or federal holiday, the period shall run until the close of business ofthe next business day; 

### 0 Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 7 of 44g. "Defendants" shall mean Hyundai Motor Company,Hyundai Motor America,Kia Motors Corporation, Kia Motors America,and Hyundai America Technical Center,Inc.; "Defendant" shall mean one ofthe aforementioned entities, as applicable; h. "EPA" shall mean the United States Environmental Protection Agency and any ofits successor departments or agencies; i. `affective Date" shall have the definition provided in Section XV; j. "HATCI" shall mean Defendant Hyundai America Technical Center, Inc.; k. "Hyundai America" shall mean Defendant, Hyundai Motor America; 1. "Hyundai Motor" shall mean Defendant Hyundai Motor Company; m, "Kia America" shall mean Defendant, Kia Motors America;
n. "Kia Motors" shall mean Defendant Kia Motors Corporation;
o. "Model Year" shall mean the model year as defined in 40 C.F.R. §§ 85.2301-05; p. "OTAQ"shall mean EYA's Office ofTransportation and Air Quality; q. "Paragraph" shall mean a portion ofthis Decree identified by an arabic numeral;
r. "Parties" shall mean the United States, CARB,and Defendants;
s. "Projected Highest-Selling Subconfiguration" shall mean that subconfiguration projected to be the highest-selling pursuant to the internal criteria used by Hyundai America and Kia America,respectively; t. "Section" shall mean a portion ofthis Decree identified by a roman numeral;


### 0 Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 8 of 44u. "Subconfiguration" shall mean a unique combination within a vehicle configuration ofequivalent test weight,road-load horsepower,and any other operational characteristics or parameters which may significantly affect fuel economy within a vehicle configuration;
v. "United States" shall mean the United States ofAmerica,acting on behalf

~ •. V. CIVIL PENALTIES 9. Defendants shall not deduct any penalties paid under this Decree pursuant to this Section or Section VIII (Stipulated Penalties) in calculating their federal or any state income tax. Civil penal to be paid to the United States: 10. Within 15 Days after the Effective Date,Defendants shall pay to the United States the sum ofninety-three million six hundred fifty-six thousand six hundred dollars {$93,656,600)

as a civil penalty. 11. Defendants shall pay the civil penalty due to the United States by FedWire Electronic Funds Transfer ("EFT")to the U.S. Department ofJustice in accordance with written instructions to be provided to Defendants, after the Effective Date, by the Financial Litigation Unit ("FLU")ofthe United States Attorney's Office for the District of Columbia, 555 Fourth Streets,N.W.,Washington,D.C.,(202)514-7211. The payment instructions provided by the FLU shall include a Consolidated Debt Collection System ("CDCS")number, which Defendants shall use to identify all payments required to be made in accordance with this Consent Decree. The FLU will provide the payment instructions to:

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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 9 of 44For Hyundai: INTERNATIONAL FINANCE TEAM Hyundai Motor Company 12 Heolleung-ro, Seocho-gu, Seoul, 137-938, Korea +82 2 3464 2330 parksb(cr~~nyundai.com

For Kia: INTERNATIONAL FINANCE TEAM Kia Motors Corporation 12 Heolleung-ro, Seocho-gu, Seoul, 137-938,Korea +82 2 3464 5491 shin'ae~ man )Okia.com

At the time ofpa}Tment, Defendants shall send a copy ofthe EFT authorization form and the EFT transaction record, together with a transmittal letter, which shall state that the payment is for the Clean Air Act civil penalty owed pursuant to the Consent Decree in United States et al. v. Hyundai Motor Company et al., (i)to EPA via email at acctsreceivable.cinwd@epa.gov or via regular mail at EPA Cincinnati Finance Office, 26 Martin Luther King Drive, Cincinnati, Ohio, 45268;(ii) to the United States and EPA via email or regular mail in accordance with Section XIV (Notices). Such notices shall reference the CDCS number,civil action number,and DOJ case number 90-5-2-1-10753. Civil penalty to be paid to CARB: 12. Within 15 Days after the Effective Date,Defendants shall pay to CARB the sum ofsix million three hundred forty-three thousand four hundred dollars ($6,343,400)as a civil penalty. 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 10 of 4413. Defendants shall pay the civil penalty due to CARE by EFT payable to the "California Air Pollution Control Fund" in accordance with written instructions provided to Defendants' counsel. At the time ofpayment,Defendants shall send a copy ofthe EFT authorization form and the EFT transaction record,together with a transmittal letter, which shall state that the payment is for the civil penalty owed pursuant to the Consent Decree in United States et al. v. Hyundai Motor Company et al., (i)to CARB via email at awang@arb.ca.gov, lbrown@arb.ca.gov,epeter@arb.ca.gov,and asharma@arb.ca.gov; and (ii)to CARB and counsel for CARB via regular mail in accordance with. Section XIV (Notices). Such notices shall reference the civil action number. VL CORRECTION OF GREENHOUSE GAS EMISSION CREDITS 14. Within 30 Days ofthe Effective Date, or within 30 Days ofwhen EPA's Office of Transportation and Air Quality ("OTAQ")provides processing instructions, whichever is later, and in accordance with those processing instructions:
a. Hyundai Motor shall amend its model year 2011-2013 AB&T reports such that Hyundai Motor's resulting credit balance is 2,700,000 credits less than would be the balance if calculated using the greenhouse gas emission data Hyundai Motor originally submitted in its applications for Certificates ofConformity for these model years. The credit adjustments shall be permanent; b. Kia Motors shall amend its model year 2011-2013 AB&T reports such that Hyundai Motor's resulting credit balance is 2,050,000 credits less than would be the balance ifcalculated using the greenhouse gas emission data Kia Motors originally submitted in its applications for Certificates ofConformity for these model years. The

~~ 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 11 of 44credit adjustments shall be permanent. 15. Within 60 Days ofthe Effective Date, or within 60 Days after OTAQ provides creditprocessing instructions, whichever is later, each Defendant shall provide written notice that it has complied with the preceding Paragraph in this Section by sending a Notice in accordance with Section XIV ofthis Consent Decree (Notices). VII. CORRECTIVE MEASURES 16. Defendants shall comply with the requirements and deadlines specified in Appendix A ("Additional Corrective Measures")and Appendix B ("Coastdown Auditing of Production Vehicles"). 17. Defendants shall provide directly to EPA's OTAQ the raw test data from which Defendants derived the road load forces stated in their applications for all model year 2015 and 2016 Certificates ofConformity. Defendants shall provide this data concurrently with each corresponding application, or within 30 Days ofthe Effective Date,whichever is later. 18. Defendants shall submit required reports as specified in Appendices A and B. 19. Defendants sha11 submit annual reports that provide information describing the progress toward the requirements ofAppendices A and B. Defendants shall submit the first annual progress report on October 1, ZO15 describing Defendants' corrective efforts since the Effective Date ofthis Consent Decree. Defendants shall submit annual progress reports each year thereafter on the first business day ofOctober until the termination ofthe Consent Decree. 20. Each report submitted by Defendants under this Section and the notice required in Paragraph 15 shall be signed by an official ofthe submitting party and include the following certification:
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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 12 of 44Icertify under penalty oflaw that this document and all.attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information, the information submitted is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information,including the possibility offine and imprisonmentfor knowing violations. 21. The certification requirement in Paragraph 20 does not apply to emergency or similar notifications where compliance would be impractical. 22. The reporting requirements ofthis Consent Decree do not relieve Defendants of any reporting obligations required by the Act or implementing regulations, or by any other federal, state, or local law,regulation, permit, or other requirement. 23. Any information provided pursuant to this Consent Decree may be used by the United States and CARB in any proceeding to enforce the provisions ofthis Consent Decree and
as otherwise permitted by law. VIII. STIPULATED PENALTIES 24. Defendants shall be liable for stipulated penalties to the United States or CARB for violations ofthis Consent Decree as specified below,unless excused under Section IX (Force Majeure). 25. IfDefendants fail to pay the civil penalties required to be paid to the United States
or CARE by the deadline in Paragraphs 10 and 12,Defendants shall pay,to the Plaintifffor which payment is late, both interest at the rate specified in 28 U.S.C. § 1961 and a stipulated penalty of$5,000 per Day for each Day and for each penalty that is late. 26. Ifa Defendant fails to perform any obligation required by Section VII (Corrective Measures)or Appendix A or Appendix B according to all applicable requirements and by the 11 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 13 of 44deadlines specified in Section VII and the appendices,that Defendant shall pay to the United States a stipulated penalty of $3,000 per Day for each Day that performance is overdue. 27. Ifa Defendant fails to correct its respective AB&T Report by the required number ofcredits by the deadline set forth in Paragraph 14 and provide the required notification set forth in Paragraph 15,that Defendant shall pay to the United States a stipulated penalty of$5,000 per Day for each Day that the Defendant has failed to comply with each Paragraph. 28. Stipulated penalties under this Section shall begin to accrue on the Day after performance is due or on the Day a violation occurs, whichever is applicable, and shall continue to accrue until performance is satisfactorily completed or until the violation ceases. Stipulated penalties shall accrue simultaneously for separate violations ofthis Consent Decree. 29. Defendants shall pay any stipulated penalty within 30 Days ofreceiving written demand from the United States or CARB,as applicable. 30. The United States or CARB,as applicable, may in the unreviewable exercise ofits discretion, reduce or waive stipulated penalties otherwise due to it under this Consent Decree. 31. Stipulated penalties shall continue to accrue as provided in Paragraph 28,during any Dispute Resolution,but need not be paid until the following:
a. Ifthe dispute is resolved by agreement ofthe Parties or by a decision of EPA or CARE that is not appealed to the Court,Defendants shall pay accrued penalties determined to be owing,together with interest, to the United States or CARB,as applicable, within 30 Days ofthe Effective Date ofthe agreement or the receipt ofEPA's or CARB's decision or order. b, Ifthe dispute is appealed to the Court and the United States or CARB



## ~►a Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 14 of 44prevails in whole or in part, Defendants shall pay all accrued penalties determined by the Court to be owing,together with interest, within 60 Days ofreceiving the Court's decision or order, except as provided in subparagraph c, below. Ifany Party appeals the District Court's decision, Defendants shall pay all accrued penalties determined to be owing,together with interest, within 15 Days of receiving the decision from the final appellate court. 32. Defendants shall pay stipulated penalties owing to the United States or CARE in the manner set forth and with the confirmation notices required by Paragraphs 11 and 13,except that the transmittal letter shall state that the payment is for stipulated penalties and shall state for which violation{s)the penalties are being paid. 33. Ifa Defendant fails to pay stipulated penalties according to the terms ofthis Consent Decree,such Defendants shall be liable for interest on such penalties, as provided for in 2$ U.S.C. § 1961, accruing as ofthe date payment became due. Nothing in this Paragraph shall be construed to limit the United States or CARB from seeking any remedy otherwise provided by law for Defendants' failure to pay any stipulated penalties. 34. Subject to the provisions of Section XII (Effect.of Settlement/Reservation of Rights), the stipulated penalties provided for in this Consent Decree shall be in addition to any other rights, remedies, or sanctions (including, but not limited to, statutory penalties, additional injunctive relief, mitigation or offset measures,and/or contempt)available to the United States ar GARB for Defendants' violation ofthis Consent Decree or applicable law.

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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 15 of 44IX. FORCE MAJEURE 35. "Force majeure," for purposes ofthis Consent Decree, is defined as any event arising from causes beyond the control ofa Defendant, ofany entity controlled by a Defendant, or ofa Defendant's contractors, that delays or prevents the performance ofany obligation under this Consent Decree or otherwise causes a violation ofany provision ofthis Consent Decree despite the Defendant's best efforts to fulfill the obligation. The requirement that each Defendant exercise "best efforts to fulfill the obligation" includes using best efforts to anticipate any potential force majeure event and best efforts to address the effects ofany such event (a)as it is occurring and (b)after it has occurred to prevent.or minimize any resulting delay to the greatest extent possible. "Force Majeure" does not include Defendants' financial inability to perform any obligation under this,Consent Decree. 36. Ifany event occurs or has occurred that may delay the performance of, or otherwise cause a violation of, any obligation under this Consent Decree,as to which a Defendant intends to assert a claim offorce majeure, such Defendant shall provide written notice to the United States and CARB in accordance with Section XIV (Notices)within 14 Days of when Defendant first recognized that the event might cause a delay. The notice shall include an explanation and description ofthe reasons for the delay; the anticipated duration ofthe delay; all actions taken or to be taken to prevent or minimize the delay; a schedule for implementation of any measures to be taken to prevent or mitigate the delay or the effect.ofthe delay; the Defendant's rationale for attributing such delay to a force majeure event if it intends to assert such a claim; and a statement as to whether, in the opinion ofthe Defendant, such event may cause or contribute to an endangerment to public health, welfare or the environment, The
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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 16 of 44Defendant shall include with any notice all. available documentation supporting the claim that the delay was attributable to a force majeure event. Failure to comply with the above requirements shall preclude a Defendant from asserting any claim.offorce majeure for that event for the period oftime ofsuch failure to comply,and for any additional delay caused by such failure. Defendants shall be deemed to know ofany circumstance of which Defendants,any entity controlled by Defendants, or Defendants' contractors knew or should have known. 37. IfEPA,after a reasonable opportunity for review and comment by CARB,agrees that the delay or anticipated delay is attributable to a force majeure event,the time for performance ofthe obligations under this Consent Decree that are affected by the force majeure event will be extended by EPA for such time as is necessary to complete those obligations. An extension ofthe time for performance ofthe obligations affected by the force majeure event shall not, ofitself, extend the time for performance ofany other obligation. EPA will notify Defendants in writing ofthe length ofthe extension, ifany,for performance ofthe obligations affected by the force majeure event. 38. IfEPA,after a reasonable opportunity for review and comment by CARB,does not agree that the delay or anticipated delay has been or will be caused by a force majeure event, EPA will notify Defendants in writing ofits decision. 39. Ifa Defendant elects to invoke the dispute resolution procedures set forth in Section X (Dispute Resolution), it shall do so no later than 21 Days after receipt ofnotice by EPA. In any such proceeding,Defendants shall have the burden ofdemonstrating by a preponderance ofthe evidence that the delay or anticipated delay has been or will be caused by a force majeure event,that the duration ofthe delay or the extension sought was or will be
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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 17 of 44warranted under the circumstances,that best efforts were exercised to avoid and mitigate the effects ofthe delay, and that Defendants complied with the requirements ofParagraphs 35 and ~6, ifDefendant carries this burden, the delay at issue shall be deemed not to be a violation by Defendant ofthe affected obligation ofthis Consent Decree identified to EPA and the Court. X. DISPUTE RESOLUTION 40. Unless otherwise expressly provided for in this Consent Decree,the dispute resolution procedures ofthis Section shall be the exclusive mechanism to resolve disputes arising under or with respect to this Consent Decree: Defendants' failure to seek resolution ofa dispute under this Section shall preclude Defendants from raising any such potentially disputed issue as a defense to an action by the United States or CARB to enforce any obligation ofDefendants arising under this Decree. 41. Informal Dispute Resolution. Any dispute subject to Dispute Resolution under this Consent Decree shall first be the subject ofinformal negotiations. The dispute shall be considered to have arisen when Defendants send the United States and CARB a written Notice of Dispute. Such Notice ofDispute shall state clearly the matter in dispute. The period ofinformal negotiations shall not exceed 30 Days from the date the dispute arises, unless that period is modified by written agreement. Ifthe Parties cannot resolve a dispute by informal negotiations, then the position advanced by the United States, after consultation with CARE,shall be considered binding unless, within 14 Days after the conclusion ofthe informal negotiation period, Defendants invoke formal dispute resolution procedures as set forth below. 42. Formal Dispute Resolution. Defendants shall invoke formal dispute resolution procedures, within the time period provided in the preceding Paragraph, by serving on the United
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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 18 of 44States and GARB a written Statement.ofPosition.regarding the matter in dispute. The Statement ofPosition sha11 include,but need not be limited to, any factual data, analysis, or opinion supporting Defendants' position and any supporting documentation relied upon.by Defendants. 43. The United States, after consultation with CARB,shall serve its Statement of Position within 45 Days ofreceipt ofDefendants' Statement ofPosition. The United States' Statement ofPosition, as applicable, shall include, but need not be limited to,any factual data, analysis, or opinion supporting that position and any supporting documentation relied upon by the United States. The United States' Statement ofPosition shall be binding on Defendants, unless Defendants file a motion for judicial review ofthe dispute in accordance with the following Paragraph. 44. Defendants may seek judicial review ofthe dispute by filing with the Court and serving on the United States and CARB,in accordance with Section XIV (Notices), a motion requesting judicial resolution ofthe dispute. The motion must be filed within 30 Days ofreceipt ofthe United States' Statement ofPosition pursuant to the preceding Paragraph. The motion shall contain.a written statement ofDefendants' position on the matter in dispute, including any supporting factual data, analysis, opinion, or documentation,and shall set forth the relief requested and any schedule within which the dispute must be resolved for orderly implementation ofthe Consent Decree. 45. The United States shall respond to Defendants' motion within the time period allowed by the Local Rules ofthis Court. Defendants may file ~ reply memorandum to the extent permitted by the Local Rules.

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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 19 of 4446. Standard ofReview. Except as otherwise provided in this Consent Decree,in any dispute brought under Paragraph 44,Defendants shall bear the burden ofproving that their actions were in compliance with this Consent Decree; or, ifthe dispute concerns the interpretation ofthis Consent Decree,the dispute shall be resolved.in accordance with applicable principles oflaw. 47. The invocation ofdispute resolution.procedures under this Section shall not,by itself, extend,postpone, or affect in any way any obligation ofDefendants under this Consent Decree, unless and until final resolution ofthe dispute so provides. Stipulated penalties with respect to the disputed matter shall continue to accrue from the first Day ofnoncompliance,but payment shall be stayed pending resolution ofthe dispute as provided in Paragraph 31. If Defendants do not prevail on the disputed issue, stipulated penalties shall be assessed and paid as provided in Section VIII (Stipulated Penalties). XI. INFORMATION COLLECTION AND RETENTION 48. Until three years after the termination ofthis Consent Decree,Defendants shall retain, and shall instruct their contractors and agents to preserve, all non-identical copies ofall documents,records, or other information (including documents,records,or other information in electronic form)in their or their contractors' or agents' possession or control, or that come into their or their contractors' or agents' possession or control, and that relate to Defendants' performance oftheir obligations under this Consent Decree. This information-retention requirement shall apply regardless ofany contrary corporate or institutional policies or procedures. At any time during this information-retention period, upon request by the United

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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 20 of 44States or GARB,Defendants shall provide copies ofany documents,records, or other information required to be maintained under this Paragraph. 49. At the conclusion ofthe information-retention period provided in the preceding Paragraph,Defendants shall notify the United States and CARB at least 90 Days prior to the destruction ofany documents,records, or other information subject to the requirements ofthe preceding Paragraph and,upon request by the United States or CARB,Defendants shall deliver any such documents,records, or other information to EPA or CARB,as applicable. Defendants may assert that certain documents,records, or other information is privileged under the attorneyclient privilege or any other privilege recognized by federal or California law. IfDefendants assert such a privilege, it shall provide the following: (a)the title ofthe document,record,or information;(b)the date ofthe document,record, or information; (c)the name and title ofeach author ofthe document,record, or information;(d)the name and title ofeach addressee and recipient; (e)a description ofthe subject ofthe document,record, or information; and (~ the privilege asserted by Defendants. However,Defendants shall not make a claim ofprivilege or protection regarding test data and factual information, and the portion ofany documents or other records reciting test data and factual information,that Defendants are required to create or generate pursuant to Sections VI and VII ofthis Consent Decree. 50. Defendants may also assert that information required to be provided under this Consent Decree is protected as Confidential Business Information ("CBI")under 40 C.F.R. Part 2 and/or the California Public Records Act. As to any information that Defendants seek to protect as CBI,Defendants shall follow the procedures set forth in 40 C.F.R. Part.land/or the California Public Records Act.
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### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 21 of 4451. This Consent Decree in no way limits or affects any right ofentry and inspection,
or any right to obtain information, held by the United States or CARB pursuant to applicable federal or state laws,regulations, or permits,nor does it limit or affect any duty or obligation of Defendants to maintain documents,records, or other information imposed by applicable federal
or state laws,regulations, or permits. XII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS 52. This Consent Decree resolves a) the civil claims ofthe United States for civil penalties and injunctive relief against Defendants arising under Section 203 ofthe Act,42 U.S.C. § 7522,and the applicable implementing regulations codified at 40 C.F.R. Part 86, Subparts B and S,and .Part 600 (with respect to carbon-related exhaust emissions),for the vehicles in the following table for claims that (i)the vehicles are not covered by a Certificate of Conformity,and (ii)that Defendants did not properly test vehicles for purposes of obtaining Certificates ofConformity; and arising under Sections 204, 205,2U6, 2U7,and 208 ofthe Act, 42 U.S.C. §§ 7523, 7524, 7525, 7541,and 7542,and the applicable implementing regulations codified at 40 C.F.R. Part 86, Subparts B and.S,and Part 600 (with respect to carbon-related exhaust emissions), through the date oflodging for the vehicles in the following table for claims that (i)the vehicles are not covered by a Certificate ofConformity, or (ii)tl~a~ Defendants did not properly test vehicles for purposes ofobtaining Certificates ofConformity; and

1.1 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 22 of 44b) the civil claims ofCARB for civil penalties and injunctive reliefunder California Health.and Safety Code Section 43212 and its implementing regulations for the vehicles in the following table.

..- ~ .._ Accent Automatic .._ Manual Azera 3.3lAutomatic 1.8 LAutomatic 1.8 L Manual 1.8 L Blue Automatic Elantra 1.8LGTAutomatic 1.8 l6T Manual Elantra Cou e Automatic E~antra Cou e Manual 5.0 L Automatic Genesis 3.8 LAutomatic 3.8 L Cou e Automatic Hyundai 3.8lCoupe Manual 2.4 lShort Automatic 4wd Santa Fe 2.4 L S ort Automatic 2wd 2.O~T S ort Automatic 4wd 2.OLT S ort Automatic 2wd 2.4LAutomatic4wd 2.4LAutomatic 2wd Tucson 2.4L Manual 4wd 2.4L Manual 2wd 2A~ Automatic 2wd 2.OL Manual Zwd Automatic Veloster manual Turbo Automatic Turbo Manual Automatic Rio Manual Eco Automatic Sorento 2.4LAutomatic4wdSlDl 2.4 Automatic 2wd SIDI 1.6LSoul Eco 1.6 LSoul Automatic Soul 1.6LSoul Manual Kia 2.0 L Soul Eco 2.0 LSoul Automatic Z.OLSouI Manual 2.4 L Automatic 4wd 2.4 lAutomatic 2 wd Sportage 2.4 L Manual 4wd 2.4 L Manual 2wd 2.0 L Automatic 2wd 2.0 L Automatic 4wd ..• ~ ..- Accent 1.8LAutomatic 1.8LManua)

_ Azera 3.3~Automatic 1.8 LAutomatic Elantra 1.81 Manual 2.0 LTourin Automatic 2.0 LTouring Manual 5.0 L Automatic Genesis 4.6LAutornatic Hyundai 5.0 L R-5 ec 3.8lAutomatic Sonata H brid 2.4L Automatic 4wd 2.4~ Automati c 2wd Tucson 2.4L Manual 4wd 2.4L Manual 2wd 2.OLAutomatic 2wd 2.OL Manual 2wd Veloster Automatic Manual O tima H brid Rio Automatic Manual Sorento 2.4lAutomatic4wdSlDi 2.4 L Automatic 2wd SIDI 1.6 l Soul Eco 1.6 LSoul Automatic Soul 1.6 LSoul Manual Kia 2.OLSouI Eco 2.0 LSoul Automatic 2.0 L Soul Manual 2.4 lAuto matic 4wd 2.4 L Automatic 2wd Sportage 2.4 L Manual 4wd 2.4 L Manual 2wd 2.0 LAutomatic 2wd 2.0 L Automatic 4wd

..- ~ ..- Elantra 1.8 LAutomatic Hyundai 1.8 L Manual Sonata H brid Kia O tima H brid 21 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 23 of 4453. The United States and CARB reserve all legal and equitable remedies available to enforce the provisions ofthis Consent Decree. This Consent Decree shall not be construed to limit the rights ofthe United States or CARB to obtain penalties or injunctive reliefunder the Clean Air Act or implementing regulations, or under other federal or state laws,regulations, or permit conditions, except as expressly specified in Paragraph 52. 54. In any subsequent administrative or judicial proceeding initiated by the United States or CARB for injunctive relief, civil penalties, or other appropriate relief, Defendants shall not assert, and may not maintain, any defense or claim based upon.the principles ofwaiver, res judicata, collateral estoppel, issue preclusion, claim preclusion,claim-splitting, or other defenses based upon any contention that the claims raised by the United States or CARB in the subsequent proceeding were or should have been brought in the instant case, except with respect to claims that have been specifically resolved pursuant to Paragraph 52. 55. This Consent Decree is not a permit, or a modification ofany permit,under any federal, state, or local laws or regulations. Defendants are responsible for achieving and maintaining complete compliance with all applicable federal, state, and local laws,regulations, and permits; and Defendants' compliance with this Consent Decree shall be no defense to any action commenced pursuant to any such laws,regulations, or permits, except as set forth herein. The United States and CARB do not, by their consent to the entry ofthis Consent Decree, warrant or aver in any manner that Defendants' compliance with any aspect ofthis Consent Decree will result in compliance with.provisions ofthe Clean Air Act or with any other provisions offederal, state, or local laws,regulations, or permits.

22 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 24 of 4456. This Consent Decree does not limit or afFect the rights ofDefendants or ofthe United States or CARE against any third parties, not.party to this Consent Decree,nor does it limit the rights ofthird parties, not party to this Consent Decree,against Defendants, except as otherwise provided by law. 57. This Consent Decree shall not be construed to create rights in, or grant any cause ofaction to,any third party not party to this Consent Decree. XIII. COSTS 58. The Parties shall bear their own costs ofthis action, including attorneys' fees, except that the United States and CARB shall be entitled to collect the costs (including attorneys' fees)incurred in any action necessary to collect any portion ofthe civil penalties or any stipulated penalties due but not paid by Defendants. XIV. NOTICES 59. Unless otherwise specified in this Decree,whenever notifications, submissions, or communications are required by this Consent Decree, they shall be made in writing and addressed as follows:

To the United States: EES Case Management Unit Environment and Natural Resources Division U.S. Department ofJustice P.O. Box 7611 Washington,DC 20044-7611 eescdcopy. enrd@usdoj . gov Re: DOJ No. 90-5-2-1-10753

To the United States or EPA: Director, Air Enforcement Division Office ofCivil Enforcement Office ofEnforcement and Compliance Assurance U.S. Environmental Protection Agency 23 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 25 of 441200 Pennsylvania Ave.,N.W. WJC-South,Room 1119 Mailcode 2242A Washington,DC 204b0
To OTAQ: Director, Compliance Division Office ofTransportation and Air Quality Office ofAir and Radiation U.S. Environmental Protection Agency 2565 Plymouth Road Ann Arbor, MI 48105
To CARB: Ellen M.Peter, ChiefCounsel California Air Resources Board P.O. Box 2815 Sacramento, CA 95812
To Counsel for CARB: Barbara C. Spiegel, Deputy Attorney General Office ofthe Attorney General 455 Golden Gate Avenue, Suite 11000 San Francisco, CA 941.02
To Hyundai Motor: Head ofInternational Legal Team Hyundai Motor Company 12 Heolleung-ro Seocho-Gu, Seoul,Republic ofKorea
To Hyundai America: Executive Vice President &General Counsel Hyundai Motor America 10550 Talbert Avenue Fountain Valley, CA 92708
To Kia Motors: Head ofInternational Legal Team Kia Motors Corporation 12 Heolleung-ro Seocho-Gu, Seoul,Republic ofKorea

m 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 26 of 44To Kia America: Executive Vice President &General Counsel Kia Motiors America 111 Peters Canyon Road Irvine, CA 92606-1790

To HATCI: General Counsel Hyundai America Technical Center,Inc. 6800 Geddes Road Superior Township, MI 48198 60. Any Party may,by written notice to the other Parties, change its designated notice recipient or notice address provided above, or may add an additional notice recipient. 61. Notices submitted pursuant to this Section shall be deemed submitted upon mailing, unless otherwise provided in this Consent Decree or by mutual agreement ofthe Parties in writing. XV. EFFECTIVE DATE 62. The Effective Date ofthis Consent Decree shall. be the date upon which.this Consent Decree is entered by the Court, as recorded on the Court's docket. XVI. RETENTION OF JURISDICTION 63. The Court shall retain jurisdiction over this case until termination ofthis Consent Decree,for the purpose ofresolving disputes arising under this Decree or entering orders modifying this Decree,pursuant to Sections X and XVII,or effectuating or enforcing compliance with the terms ofthis Decree. XVII. MODIFICATION 64. The terms ofthis Consent Decree may be modified only by a subsequent written agreement signed by all the Parties. Where the modification constitutes a material change to this Decree, it shall be effective only upon approval by the Court. 25 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 27 of 4465. Any disputes concerning modification ofthis Decree shall be resolved pursuant to Section X (Dispute Resolution),provided., however,that, instead ofthe burden ofproofprovided by Paragraph 46,the Party seeking the modification bears the burden ofdemonstrating that it is entitled to the requested modification in accordance with Federal Rule ofCivil Procedure b0(b). XVIII. TERMINATION 66. After Defendants have completed the requirements of Section VI and Section VII and have paid the civil penalty and any accrued stipulated penalties as required by this Consent Decree,Defendants may serve upon the United States and CARB a request for termination, stating that Defendants have satisfied those requirements,together with all necessary supporting documentation. 67. Following receipt by the United States and CARB ofDefendants' request for termination, the Parties shall confer informally concerning the request and any disagreement that the Parties may have as to whether Defendants have satisfactorily complied with the requirements for termination ofthis Consent Decree. ifthe United States and CARE agree that the Decree may be terminated,the Parties shall submit,for the Court's approval, a joint stipulation terminating the Decree. 68. Ifthe United States or CARB does not agree that the Decree may be terminated, Defendants may invoke Dispute Resolution under Section X. However,Defendants shall not seek Dispute Resolution ofany dispute regarding termination unti145 Days after service ofits request for termination.

m 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 28 of 44XIX. PUBLIC PARTICIPATION 69. This Consent Decree shall be lodged with the Court.for a period ofnot less than 30 Days for public notice and comment in accordance with 28 C.F.R. § 50.7. The United States
reserves the right to withdraw or withhold its consent ifthe comments regarding the Consent Decxee disclose facts or considerations indicating that the Consent Decree is inappropriate, improper, or inadequate. Defendants consent to entry ofthis Consent Decree without further notice and agree not to withdraw from or oppose entry ofthis Consent Decree by the Court or to challenge any provision ofthe Decree, unless the United States has notified Defendants in writing that it no longer supports entry ofthe Decree. XX. SIGNATORIES/SERVICE 70. Each undersigned representative ofDefendants, CARB,and the Acting Assistant Attorney General for the Environment and Natural Resources Division ofthe Department of Justice certifies that he or she is fully authorized to enter into the terms and conditions ofthis Consent Decree and to execute and legally bind the Party he or she represents to this document. 71. This Consent Decree may be signed in counterparts, and its validity shall not be challenged on that basis. Defendants agree to accept service ofprocess by mail with respect to all matters arising under or relating to this Consent Decree and to waive the formal service requirements set forth in Rules 4 and S ofthe Federal Rules ofCivil Procedure and any applicable Local Rules ofthis Court including,but not limited to, service ofa summons. XXI. INTEGRATION 72. This Consent Decree constitutes the final, complete,and exclusive agreement and understanding among the Parties with respect to the settlement embodied in the Decree and
f~l 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 29 of 44supersedes all prior agreements and understandings, whether oral or written, concerning the settlement embodied herein. No other document,nor any representation, inducement,agreement, understanding, or promise, constitutes any part ofthis Decree or the settlement it represents,nor shall it be used in construing the terms ofthis Decree. XXII. FINAL JUDGIYIENT 73. Upon approval and entry ofthis Consent Decree by the Court,this Consent Decree shall constitute a final judgment ofthe Court as to the United States, CARB,and Defendants.

Dated and entered this ~day of ,2014



### ITNITED STATES DISTRICT JUDGE

~►~;3 Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 30 of 44Signature Page to Consent Decree in United States et al. v. Hyundai Motor Company et al.
FOR THE UNITED STATES OF AMERICA:



## I~ a~ Date SAM HIRSCH Acting Assistant Attorney General Environment and Natural Resources Division U.S. Department ofJustice

Date JA N T. BARBEAU Senior Attorney Environmental Enforcement Section Environment and Natural Resources Division U.S. Department ofJustice Washington,DC 20044-7611 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 31 of 44Signature Page to Consent Decree in United States et al. v. Hyundai Motor Company et al. FOR THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY: 

# (0 Z~S l~ Date Office of~~orcement and Compliance Assurance U.S. Environmental Protection Agency 1200 Pennsylvania Avenue,N.W. Washington,DC 20460 

# /~ ~z~-/~ Date SUSAN SHINKIVIAN Director, Office ofCivil Enforcement Office ofEnforcement and Compliance Assurance U.S. Environmental Protection Agency 1200 Pennsylvania Avenue,N.W. Washington,D , 20460 

## ~U ~~ a~ Date HILLIP ROOKS Director, it Enforcement Division, Office ofCivil Enforcement Office ofEnforcement and Compliance Assurance U.S. Environmental Protection Agency 1200 Pennsylvania Avenue,N.W. Washington,DC 20460 

### OG~-. l5 2v~ ~f Date EVAN BELSER Attorney Adviser Air Enforcement Division Office ofCivil Enforcement Office ofEnforcement and Compliance Assurance U.S. Environmental Protection Agency 1200 Pennsylvania Ave.,NW Washington,DC 20460 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 32 of 44Signature Page to Consent Decree in United States et al. v. Hyundai Motor Company et al. FOR THE CALIFORNIA AIR RESOURCES BOARD:

~~~~ Date HARD .COREY Executive Officer California Air Resources Board 1001 I Street Sacramento, CA 95814
Approved as to form:

Date BARBARA C. SPIEGEL Deputy Attorney General California Office ofthe Attorney General 455 Golden Gate Avenue, Suite 11000 San Francisco, CA 94109 Attorney for Plaintiff California Air Resources Board 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 33 of 44Signature Page to Consent Decree in United States et al. v. Hyundaa Motor Company et al.

`~~ fin. , Date FOR HYUNDAI MOTOR COMPANY:

CHAE YOUNG RIM Vice President ofLegal Group Hyundai Motor Company 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 34 of 44Signature Page to Consent Decree in United States et al. v. Hyundai Motor Company et al.
FOR HYUNDAI MOTOR AMERICA: 

# ~~= ~ ~~ Dat W.GERALD F ANNERY JR. Executive Vice President & Gener~fl Counsel Hyundai Motor America 10550 Talbert Avenue Fountain Valley, CA 92708 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 35 of 44Signature Page to Consent Decree in United States et al. v. Hyundai Motor Company et al.
FOR HIA MOTORS CORPORATION:



# ~ ~ Date CHAE YOUNG RIM Vice President ofLegal Group Kia Motors Corporation 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 36 of 44Signature Page to Consent Decree in United States et al. v. Hyundai MotoN Company et al.

FOR KIA MOTORS AMERICA:

Date JOHN YOON Executive Vice President &General Counsel Kia Motors America 111 Peters Canyon Road Irvine, CA 92606-1790 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 37 of 44Signature Page to Consent Decree in United States et al. v. Hyundai Motor Company et al.

FOR HYUNDAI AMERICA TECHNICAL CENTER,INC.:

~~ l Date MARK TORIGIAN General Counsel Hyundai America Technical Center, Inc. 6800 Geddes Road Superior Township, MI 48198 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 38 of 44APPENDIX A: ADDITIONAL CORRECTIVE MEASURES Defendants shall undertake additional corrective measures,as specified below,to change their testing and training processes for purposes ofcertifying their motor vehicles in the United States automotive market pursuant to 40 C.F.R. Part 86. Defendants shall comply with the requirements ofthis Appendix A and Section VIT ofthe Consent Decree (collectively, "Corrective Measures"). 1. Independent Certification Group By no later than the Effective Date ofthe Consent Decree,Defendants shall form an independent certification group ("Independent Group" or "Group")for the purpose of performing and managing Corrective Measures by no later than the dates set.forth in this Appendix A.The members ofthe Independent Group shall have no role in Defendants' vehicle development. At least one representative ofthe Independent Group shall be from HATCI.The HATCI representative in the Crroup shall be a HATCI Senior Manager ofCertification and Compliance or a direct report to that manager. 2. Certification Training By January 1, 2016,the Independent Group shall train all managers,engineers, technicians, contractors and other persons responsible for the certification ofmotor vehicles for the United States market ("Certification Personnel")in the relevant procedures and methods before they engage in certification testing. Certification Personnel shall receive training sessions on aspects ofcertification for which they are responsible, which may include one or more ofthe following sessions: {a) certification {including coastdown)testing; {b) 4,000 mile certification vehicle preparation; (c) emission test cell maintenance and calibration procedures; (d) emission regulations; and (e) test data management systems. After January 1, 2016,the Independent Group shall provide periodic training updates to Certification Personnel. 3. Establishment ofa Certification Testin~Program By January 1, 2016,the Independent Group shall manage,supervise and conduct certification testing. The Independent Group may utilize testing facilities and technicians

Page 1 of3 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 39 of 44assigned to other organizations provided that the Independent Group controls the certification testing. 4. Obtaining and Testing ofthe Certification Test Vehicle By January 1, 2016,the Independent Group shall be responsible for obtaining and testing ofthe certification test vehicles, specifically: (a) taking custody ofthe certification vehicles; {b) confirming that the configuration ofthe certification vehicles is representative ofthe relevant production.vehicles; and (c) testing the certification vehicles. Review ofCertification Test Data for Accuracy By January 1, 201b,the Independent Group shall confirm the accuracy ofall certification test data, including all data submitted to the EPA. b. Supervision ofCertification Personnel By January 1, 2016,the Independent Group shall supervise all Certification Personnel, providing appropriate training as prescribed in this Appendix A,and control access to certification vehicles. 7. Enhanced Data.Management and Review of Coast Down Data By January 1, 2016,the Independent Group shall oversee a centralized database to ensure quality and control ofcoast down data from testing ofthe Defendants' vehicles. The Independent Group shall periodically perform a qualify check ofDefendants' coast down data, including analyzing coast down data from comparable vehicles to determine whether Defendants' data is consistent with results expected for vehicles ofthat type. 8. Annual Progress Reports As specified in Paragraph 19 of Section VII (Corrective Measures)ofthe Consent Decree,Defendants shall submit annual progress reports that provide information describing the progress toward meeting the requirements ofthis Appendix A. 9. Revised Coast Down Testing Protocol Defendants' first progress report pursuant to Paragraph 19 of Section VII (Corrective Measures)shall include their current written coast down testing protocol and an explanation of the material changes made to the current protocol since November 2,2012,

Page 2 of 3 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 40 of 4410. Completion Report No later than April 1, 2018,Defendants shall submit to the Plaintiffs a Corrective Measures Completion Report. The report shall provide sufficient information to verify the completion ofthe measures in Section VII ofthe Consent Decree {Corrective Measures)and the additional measures set forth in this Appendix A.

Page 3 of 3 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 41 of 44APPENDIX B: COASTDOWN AUDITING OF PRODUCTION VEHICLES Defendants shall conduct coastdown auditing ofproduction vehicles ("Audit"), as specified below,for model year 2015 and 201b vehicles to ensure that the road load values for production vehicles conform to the road load values specified in Defendants' applications for Certificates ofConformity. 1. Vehicle Auditing Defendants shall Audit one randomly selected production vehicle from the Projected Highest-Selling Subconfigurations from model year 2015 as follows: 201SMY Hyundai Vehicles

• Accent * Azera • Elantra • Equus • Genesis Santa Fe • Sonata • Sonata Hybrid • Tucson * Veloster ZO15MY Kia Vehicles

• Cadenza * Forte • K900 + Optima • Optima Hybrid • Rio + Sedona • Sorrento • Soul • Sportage Consistent with the foregoing,Defendants shall Audit one randomly selected production vehicle from the Projected Highest-Selling Subconfigurations from model year 2016 vehicles as follows:

Page 1 of3 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 42 of 442016MY Hyundai Vehicles

• Accent • Azera • Elantra * Equus • Genesis • Santa Fe • Sonata Sonata Hybrid * Sonata Plug-in Hybrid • Tucson • Veloster 2016MY Kia Vehicles

• Cadenza • Forte • K900 * Optima • Optima Hybrid • Rio ~ Sedona • Sorrento • Soul • Sportage Defendants shall complete the Audit ofmodel year 2015 and 2016 vehicles by no later than the end ofthe calendar year for which the audited.model year is named. In addition to the vehicles listed above,Defendants shall Audit one randomly selected production vehicle from the Projected Highest-Selling Subconfiguration from any and all groups ofmodel year 2015 and 201b vehicles that are not included in the lists above. Each Audit shall assess how each production vehicle's road load force compares to that which was described in the application for the Certificate ofConformity covering that. particular subconfiguration. 2. Selection ofAudit Vehicles Defendants shall conduct the auditing required by this Appendix B on production vehicles procured from Hyundai or Kia.After Defendants receive a production vehicle, Defendants shall ensure that the vehicle's tire specifications,ride height, weight and wheel alignment conform to the design specifications for such vehicle, and that the vehicle is in the condition and adjustment recommended by the manufacturer for normal operation. The production vehicle must be aged with approximately 4,000 miles. A hybrid and plug-in hybrid production vehicle must be aged with approximately 3,000 to 10,000 miles. Page 2of3 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 43 of 443. Audit Testing Procedures Defendants shall perform each coastdown Audit according to the same protocol used for purposes ofobtaining an EPA Certificate ofConformity for that subconfiguration, and in a manner consistent with the Defendants' revised Coast Down Testing Protocol. used under Appendix A.Defendants shall ensure that the Audits are performed in the United States and.that the specific personnel performing these Audits do so without knowledge ofthe coastdown test results contained in the vehicle certification applications. 4. Test Track Defendants shall conduct the coastdown Audit on a test track meeting the requirements of SAE J2263. 5. Submission ofReports Defendants shall provide the test data and a summary report on the results ofall Audit tests (collectively, "summary report")directly to EPA's OTAQ as specified in Section XIV {Notices)by no later than August 31 ofthe calendar year for which the audited model year is named for vehicles audited from January 1 to June 30,and by no later than.February 28 ofthe calendar year following the named audited model year for vehicles audited from July 1 ~o December 31. Defendants must provide the following information for each test: (1) The make and model ofthe vehicles tested; (2) The vehicle identification number and engine serial number for the vehicles tested; (3) A description ofthe applicable model/subconfiguration perameters (including canine, equivalent test weight, road-load horsepower, axle ratio, engine code,transmission class, transmission configuration and basic engine); {4) Any steps Defendants took to modify the production vehicles tested to ensure that the vehicle's tire specifications, ride height, weight and wheel alignment conform to the design specifications for such vehicles; {5) The date and time oftesting; (6) The mileage ofthe vehicles at the start ofthe coastidown test; (7) The ambient temperature at the start and finish ofthe test; and {8) The raw coastdown data from each coastdown test and the associated road load values from the Audit testing. Where appropriate, as provided.in the Consent Decree,Defendants may label the summary report/data as Confidential Business Information.

Page 3 of 3 

### Case 1:14-cv-01837 Document 2-1 Filed 11/03/14 Page 44 of 44