Court Opinion

ID: 4565393
Source: CourtListenerOpinion
Date Created: 2020-09-14 22:00:59.053298+00
Date Added: 2024-06-11T09:12:21.338196
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA

 UNITED STATES OF AMERICA,

                 Plaintiff,

 v.
                                      No. 16-cv-1687(EGS)

 HARLEY DAVIDSON, INC., et al.,

                 Defendants.

                         MEMORANDUM OPINION

      Pending before the Court is the United States’ Motion to

Enter Consent Decree (“Consent Decree Mot.”). The proposed

consent decree lodged with the Court resolves claims the United

States asserts against the defendants (collectively, “Harley-

Davidson”) for certain violations of the Clean Air Act (“CAA”),

42 U.S.C. §§ 7521 et seq. Three amici curiae, a group of state

and local governments (“SLG”), the Natural Resources Defense

Council and Conservation Law Foundation (“CLF/NRDC”), and the

Sierra Club oppose the entry of the consent decree. Upon careful

consideration of the motion, the arguments of Harley-Davidson

and amici curiae, the relevant law, and for the reasons set

forth below, the Court GRANTS the United States’ motion.

                                  1
I. Background

     A. Factual

  The complaint alleges three types of CAA violations by the

defendants: (1) “Harley-Davidson manufactured and sold 12,682

motorcycles that were not certified by the [Environmental

Protection Agency (“EPA”)] as required by the Act”; (2) “Harley-

Davidson manufactured and sold over 339,392 ‘Super Tuners’ in

violation of the Act’s ‘defeat device’ prohibition”; and (3)

“Harley-Davidson’s sale of the Super Tuners caused 339,392

violations of the Act’s ‘tampering’ provision.” United States’

Motion to Enter Consent Decree (“Consent Decree Mot.”), ECF No.

7 at 3. Super Tuners, among other things, increase the power and

performance of motorcycles. Id. at 6.

     With respect to the first type of violation, applicable

provisions of the CAA and its implementing regulations

“prohibit[] manufacturers of new motor vehicles from selling,

offering for sale, and introducing or delivering for

introduction into commerce such vehicles unless they are covered

by a Certificate of Conformity (“COC”) issued by EPA.” Id. at 4.

The complaint alleges that Harley-Davidson sold 12,682 new

motorcycles that were not covered by a COC. Id.

     With respect to the second type of violation, applicable

provisions of the CAA “prohibit[] any person from manufacturing,

selling, offering for sale, or installing, any part or component

                                2
(referred to generally as a ‘defeat device’) where a principal

effect of the [defeat device] is to bypass, defeat, or render

inoperative any device or element of design installed on or in a

vehicle/engine in compliance with [applicable] regulations . . .

.” Id. at 5. The United States explains that the installation of

a defeat device “undermines the whole certification program[]

because the vehicle is no longer in a configuration that has

been demonstrated to meet emission standards.” Id. The complaint

alleges that Harley-Davidson’s manufacture and sale of the Super

Tuners resulted in at least 339,392 violations of the CAA’s

defeat device prohibition. Id. at 6.

     With respect to the third type of violation, applicable

provisions of the CAA prohibit the “tampering” with “any device

or element of design installed on a motor vehicle in compliance

with the regulations promulgated under” the applicable

provisions of the CAA. Id. The complaint alleges that Harley-

Davidson violated the tampering provision by selling the Super

Tuners and that its “actions caused the installation of at least

339,392 [Super] Tuners in violation of the CAA’s tampering

provision.” Id. at 7. The government explains that such

tampering results in increased emissions. Id. at 8.

                                3
     B. Procedural

     On August 18, 2016, the United States filed a three-count

complaint against Harley-Davidson, alleging violations of the

CAA. See generally Compl., ECF No. 1. On that same date, it

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

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

Court refers to this consent decree as the “superseded consent

decree.” The government requested that the Court take no action

pending publication of the consent decree in the Federal

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

would advise the Court of any action that may be required. Id.

at 1. Thereafter, on July 20, 2017, the United States filed a

new consent decree, ECF No. 6, and following publication in the

Federal Register and the running of the comment period, the

government on December 11, 2017 moved for an Order Entering

Consent Decree. See Consent Decree Mot., ECF No. 7. The Court

refers to the new consent decree as the “consent decree” or

“decree.” The consent decree is identical to the superseded

consent decree except that it no longer contains a mitigation

project. Amici oppose entering the consent decree because it no

longer contains that project nor an alternative mitigation

project.

                                4
C. Consent Decree

The consent decree requires Harley-Davidson to:

     (1) Cease manufacturing, selling, and/or
     distributing for use in the United States any
     Tuning Product that has` not been authorized
     by the California Air Resources Board (“CARB”)
     or the EPA. Harley-Davidson has reported that
     it has met this requirement;

     (2) Offer to buy back Super-Tuners supplied
     to its dealers but not yet sold to the ultimate
     purchaser, and to destroy the illegal Tuners
     bought back. Harley-Davidson has reported that
     it has met this requirement;

     (3) Deny warranty claims (and instruct its
     dealers to do so as well) where the claim is
     for a functional defect for a motorcycle tuned
     by a Tuning Product described in paragraph
     (1);

     (4) For sales abroad, mark uncertified Tuning
     Products as “Not Authorized For Use In, Or
     Export   To,   The   United  States  or   its
     Territories” and to agree to a reporting and
     tracking system allowing EPA to monitor
     whether     Harley-Davidson    sells    large
     quantities of the uncertified Tuning Products
     to Canada and Mexico so that U.S. Citizens
     could purchase them there and bring them back
     to the U.S.;

     (5) Conduct annual tailpipe emissions tests
     on motorcycles that have been modified with
     its most popular certified “kit” (tuning
     product combined with aftermarket part(s));

     (6) Obtain an EPA-issued COC before selling,
     offering for sale, importing, introducing, or
     delivering for introduction into commerce a
     new motorcycle;

     (7) Report semi-annually to assist the EPA in
     monitoring compliance;

                            5
          (8) Pay stipulated     penalties   for   decree
          violations; and

          (9)   Pay a civil penalty of $12 million.

Consent Decree Mot., ECF No. 7 at 9-12.

     The consent decree does not contain a mitigation project

that would have required Harley-Davidson to pay $3 million to

non-party The American Lung Association of the Northeast

(“ALANE”) “to mitigate emissions of hydrocarbons and oxides of

nitrogen by replacing old, higher polluting woodstoves with

emissions-certified wood stoves.” Id. at 2. On June 5, 2017,

when the superseded consent decree was pending, and before the

United States moved for its entry, the-then Attorney General

issued a new policy entitled Prohibition on Settlement Payments

to Third Parties (“Third-Party Payment Policy” or “Policy”)

which prohibits, except for a payment that “directly remedies

the harm that is sought to be redressed, including, for example,

harm to the environment,” Department of Justice “attorneys from

entering into a civil or criminal settlement that ‘directs or

provides for a payment or loan to any non-governmental person or

entity that is not a party to the dispute.’” United States’

Resp. to Br. by Amici Curiae Opposed to the Consent Decree

(“Resp.”), ECF No. 16 at 6 (quoting Third-Party Payment Policy

at 1). The United States explains that after this policy was

issued, it became concerned about the inclusion of the

                                 6
mitigation project in the superseded consent decree, sought to

renegotiate it, but was unable to negotiate an acceptable

revised or alternative project with Harley-Davidson. Consent

Decree Mot., ECF No. 7 at 14-15.

       The United States notes that it held a 30-day public

comment period on the consent decree, received comments which it

carefully considered, and concluded that none of the comments

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

decree. Id. at 3.

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.’”

                                   7
United States v. Hyundai Motor Co., 77 F. Supp. 3d 197, 199

(D.D.C. 2015) (quoting U.S. 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

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

States v. Akzo Coatings of America, 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

Environment, 718 F.2d at 1126 (citing Metropolitan Housing

Development Corp. v. Village 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.

                                8
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 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 decree is 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.”).

                                9
       A. The Consent Decree is 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

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 United States argues that the process was adversarial,

that the United States is the enforcer of the CAA and Harley-

Davidson vigorously defended itself, and that the parties

negotiated for over a year. Consent Decree Mot., ECF No. 7 at

15. Furthermore, the United States argues, both sides were

represented by experienced counsel and technical staff and

                               10
accordingly were fully equipped to determine the strengths and

litigation risks of their respective positions. Id. at 16.

     The United States argues that the “settlement is

substantively fair because it imposes an appropriate civil

penalty and require[s] Harley-Davidson, an industry leader, to

stop selling the illegal Tuners and to implement the other

elements of a comprehensive, nationwide program of compliance

measures.” Consent Decree Mot., ECF No. 7 at 17. Thus, according

to the United States, it holds the defendants appropriately

accountable for their violations of law. Id.

     Regarding the mitigation project, the United States states

that “[a]fter the parties were unable to reach agreement on an

alternative to the [mitigation] project, the United States

considered whether it was better to proceed with the consent

decree without the woodstove project or to forgo settling the

case and, instead, proceed to litigate its claims against

Harley-Davidson.” Id. Considering the litigation risks and

delays as compared with the injunctive relief and civil penalty,

all of which was immediately obtainable, the United States

decided to move forward with the revised consent decree. Id.

     SLG argues that the consent decree is procedurally unfair

because the dealings that resulted in the elimination of the

mitigation project “lacked adversarial vigor” since “[t]he

United States obtained nothing of value in exchange for

                               11
eliminating the $3 million mitigation project.” Br. of State and

Local Gov’t Amici in Opp’n to United States’ Mot. to Enter

Consent Decree (“SLG Br.”), ECF No. 12 at 26. 1

     There is nothing in the record to suggest that the removal

of the mitigation project was the result of any collusion

between the parties. Rather, the United States in its discretion

determined that the Third-Party Payment Policy prohibited the

inclusion of the project and approached Harley-Davidson to

renegotiate that aspect of the consent decree. When the parties

were unable to reach an agreement on an alternative to the

mitigation project, the United States determined that settling

the case without that provision—but going forward with the

injunctive relief and civil penalty—was preferable to forgoing

settling it and taking on the litigation risks that would

result. Given the narrow scope of this Court’s review, the Court

cannot say that the United States’ assessment was unreasonable.

United States v. Chevron, 380 F. Supp. 29 1104, 1112-13 (N.D.

Calif. 2005). Furthermore, understood in this light, it is

apparent that the government did get something in return for the

1 SLG complains that the United States provided no details nor
declarations to support its assertion that the process was
adversarial. SLG Br., ECF No. 12 at 25. However, SLG points to
no authority indicating that the provision of such declarations
is required, and is able to cite only two examples where
declarations were provided.

                                12
removal of the mitigation project after the policy change—it

settled the case, obtained injunctive relief, and obtained a

civil penalty.

     Next, SLG argues that the consent decree is procedurally

unfair because the United States did not consult with the states

regarding the removal of the mitigation project. SLG Br., ECF

No. 12 at 26. However, SLG concedes that there is no “absolute

requirement that the United States allow the States or other

third parties to participate directly in negotiations with a

defendant.” SLG Br., ECF No. 12 at 30. There is no indication

that the United States’ decision not to consult with the states

was done in bad faith. United States v. Cannons Eng’g Corp., 899
F.2d 79, 93 (1st Cir. 1990) (“So long as it operates in good

faith, the EPA is at liberty to negotiate the settlement with

whomever it chooses.”). This is especially so given that the

record does not indicate that the states were consulted

regarding the superseded consent decree.

     Finally, SLG argues that the consent decree is procedurally

unfair because “the United States failed to . . .   adequately

respond to comments and consider reasonable alternatives to the

mitigation project” submitted in response to the consent decree.

SLG Br., ECF No. 12 at 26. The record indicates that during the

30-day public comment period, comments were received objecting

to the removal of the mitigation project and suggesting

                               13
alternative projects. Consent Decree Mot., Ex. 1, ECF No. 7-1 at

13-60. The record further shows that the United States did not

substantively respond to those comments because they did not

address the provisions of the consent decree lodged with the

Court. Consent Decree Mot., Ex. 2, ECF No. 7-2 at 2-10.

     The Court takes into consideration the United States’

failure to address the comments objecting to the removal of the

mitigation project and suggested alternatives. Although the

United States asserts a rationale for not responding to the

comments objecting to the removal of the mitigation project from

the consent decree, the United States should have done so. See

Akzo Coatings of America, Inc., 949 F.2d at 1435 (“The good

faith efforts of the parties to the decree are evidenced by the

voluminous record, the arms-length negotiation process and the

manifested willingness of EPA to thoroughly consider all oral

and written comments made with regard to the proposed decree.”).

But the Court cannot find that this failure, without more,

renders the decree procedurally unfair.

     This is even more so because the Court has considered the

comments and amici make many of the same arguments in the

briefing before this Court. See United States v. City of

Waterloo, 2016 WL 254725 at *6 (N.D. Iowa Jan. 20, 2016)

(“courts must take under serious consideration any comments

received during [the public comment] period”). The Court has

                               14
also considered the United States’ detailed responses to the

comments that were received in the proceeding before this Court.

See Consent Decree Mot., ECF No. 7 at 19 (disagreeing with

commenters’ assertions that mitigation is a required element of

a settlement); 20-23 (disagreeing with commenters who asserted

that the settlement does not adequately compensate the public or

provide adequate punishment because the mitigation project was

removed); 24 (disagreeing with commenters who argued that the

penalty was too low); 27-32 (responding to objections to the

removal of the mitigation project).

     With regard to considering reasonable alternatives to the

mitigation project, SLG argues that it would have been “simple”

to have ensured that the mitigation project did not run afoul of

the Third-Party Payment Policy by requiring that the mitigation

funds be spent nationwide, id. at 27; and propose a number of

alternatives to the mitigation project, id. at 17-29. The United

States notes that it “undertook significant efforts to negotiate

with Harley-Davidson to modify the proposed woodstove project or

agree upon an alternative project that would redress the harm

from Harley-Davidson’s violations in a manner that did not run

afoul of the Policy . . [but] the parties were unable to reach

agreement on a revised or alternative mitigation project.”

Consent Decree Mot., ECF No. 7 at 31. The United States points

out that “[it] cannot unilaterally dictate the terms of

                               15
settlement; both parties must agree.” Id. at 31 n.18. The

adoption of the Third-Party Payment Policy clearly put the

United States at a bargaining disadvantage when it sought to

renegotiate the mitigation project, but the Court cannot find

that this renders the consent decree procedurally unfair given

that the United States determined that the policy applied to the

decree.

     NRDC/CLF argues that the consent decree is procedurally

unfair for a number of reasons. First, NRDC/CLF argues that the

government gave contradictory reasons for the removal of the

mitigation project, asserting that the government first delayed

seeking entry of the consent decree because of public comments

received, later conceded that the mitigation project was omitted

due to concerns about whether it would be barred by the Third-

Party Payment Policy, but now claiming that the initial delay

was unrelated to the issuance of that policy. Br. of Amici

Curiae Natural Resources Defense Council and Conservation Law

Foundation in Opp’n to Mot. for Entry of Consent Decree

(“NRDC/CLF Br.”), ECF No. 15 at 12-13. NRDC/CLF, however,

misunderstands the relevant portion of the record in this case.

On December 11, 2017, the Court granted the United States’

request for an extension of time to serve the Complaint until 30

days after such time, if any, that: (1) the Court disapproves a

motion by the United States for entry of a consent decree; or

                               16
(2) the United States notifies the Court that it no longer

supports the entry of a consent decree. Minute Order (Dec. 12,

2017). The United States has consistently stated that the

mitigation project was removed because of the Third-Party

Payment Policy.

     Next, NRDC/CLF argues that the Third-Party Payment Policy

does not apply to the mitigation project, a position they assert

is confirmed by a January 9, 2018 Memorandum from the Acting

Assistant Attorney General providing guidance to attorneys in

the Environment and Natural Resources Division of the Department

of Justice (“ENRD Memorandum”) in implementing the policy.

NRDC/CLF Br., ECF No. 15 at 13-14. SLG and Sierra Club also

argue that the Third-Party Payment Policy does not apply to the

mitigation project. Specifically, SLG argues that the Third-

Party Payment Policy does not prohibit the mitigation project

and that the removal of the mitigation project is inconsistent

with EPA policy. SLG Br., ECF No. 12 at 19-23. Sierra Club

argues that the Third-Party Payment Policy does not apply to the

superseded consent decree, and even if it did, the mitigation

project falls within an exception to that policy. Br. of Amicus

Curiae Sierra Club in Opp’n to the United States’ Mot. to Enter

the Proposed Consent Decree (“Sierra Club Br.”), ECF No. 14 at

23-25.

                               17
     The United States responds that it properly applied the

Third-Party Payment Policy to remove the mitigation project

because the superseded consent decree included a third-party

payment covered by the Policy—specifically payments by Harley-

Davidson to non-party ALANE, Resp., ECF No. 16 at 8; and that

the mitigation project did not fall within the policy’s limited

exception for payments that “directly remedy the harm” because

the alleged harms are widely dispersed throughout the United

States, whereas ALANE operates only in the Northeast and the

project would likely have been performed in only one state, id.

The United States further argues that guidance in the ENRD

Memorandum reinforces the conclusion DOJ had reached earlier

because, among other things, it provides that “excess emissions

nationwide could be addressed through a project that addresses

the relevant harm in areas in multiple regions of the United

states, or that otherwise would make widely distributed areas

eligible for mitigation . . .” Id. at 9 (quoting ENRD Memorandum

at 4).2 Given the narrow scope of this Court’s review, see

Chevron, 380 F. Supp. 29 at 1112-13; the United States’

2 Although the ENRD Memorandum was issued on January 9, 2018,
approximately six months after the consent decree was lodged,
the Court credits the United States’ argument that the guidance
in that memorandum was developed over time and ultimately signed
by the same Acting Assistant Attorney General who has authority
to approve the consent decree.
                               18
assessment of the applicability of the policy to the superseded

consent decree is not unreasonable. 3

     Sierra Club also argues that the United States failed in

its motion for entry of the consent decree to “squarely assert”

that the Third-Party Payment Policy applies to the consent

decree, noting that the motion fails to justify the United

States’ reliance on the policy. Sierra Club Br., ECF No. 14    at

23, 26-28. However, in the motion pending before the Court, the

United States states that “[b]ecause the superseded consent

decree required [Harley-Davidson] to pay a non-governmental

third-party organization to carry out the project, the project

came within the prohibition against third party payments.”

Consent Decree Mot., ECF No. 7 at 29.

     NRDC/CLF also argues that a robust, arms-length negotiation

regarding the mitigation project could not have taken place

because the Third-Party Payment Policy was issued on June 5,

2017, less than six weeks before the consent decree was filed on

July 20, 2017. The United States responds that this argument is

meritless because concerns about third-party payment practices

3
 Sierra Club also asserts that the Third-Party Payment policy
“has no reasonable basis in the Clean Air Act, or any other law
or policy.” Sierra Club Br., ECF No. 14 at 28. The United States
responds—and the Court agrees—that the Attorney General has the
authority to supervise and direct the litigation of the United
States. 28 U.S.C. §§ 516, 519. Moreover, the policy is not
inconsistent with the CAA because it prohibits third-party
payments, not mitigation.
                                19
in settlements was identified as a concern when new leadership

joined the Department of Justice in 2017 and that “confidential

discussions [with Harley-Davidson] took place over several

months.” Resp., ECF No. 16 at 11. The Court finds the United

States’ explanation to be reasonable.

     Regarding the substantive fairness of the consent decree,

the Court considers whether Harley-Davidson is being held

accountable and pays for the harm it allegedly caused. Cannons

Eng’g Corp., 899 F.2d at 87. Sierra Club questions the

substantive fairness of the decree because in removing the

mitigation project, “[t]he United States voluntarily abandoned a

substantial public benefit, without gaining any corresponding

substantive or procedural return.” Sierra Club Br., ECF No. 14

at 11. Sierra Club also argues that the $12 million penalty is

inconsistent with EPA’s penalty policy and does not recoup the

economic benefit Harley-Davidson gained as a result of selling

the illegal Tuners. Id. at 16-20. NRDC/CLF argues that the

“[c]onsent [d]ecree is not substantively fair because it does

not require Harley-Davidson to offset the harm for which it is

legally responsible” since it no longer contains the mitigation

project. NRDC/CLF Br., ECF No. 15 at 15.

     The United States responds that there was no objection to

the $12 million penalty as being inadequate before the

mitigation project was removed, and that commenters are wrong to

                               20
suggest that the penalty is inadequate now that the $3 million

mitigation project has been removed because mitigation is not a

penalty. Consent Decree Mot., ECF No. 7 at 21-22. The United

States further responds that CAA settlements do not require the

inclusion of mitigation projects. Resp., ECF No. 16 at 5.

     Pursuant to the narrow scope of the Court’s review, the

Court is persuaded that the consent decree is substantively

fair. Harley-Davidson has agreed to stop selling the illegal

tuners, it has agreed to a comprehensive compliance program, and

the penalty is commensurate with other mobile source

settlements, here amounting to “the largest civil penalty ever

obtained for the unlawful sale of aftermarket defeat devices.”

Resp., ECF No. 16 at 3-5. The Court is persuaded that the

removal of the mitigation project does not make the civil

penalty inadequate. And because mitigation is not a required

element of a CAA settlement agreement, the Court is not

persuaded that the removal of the mitigation project renders the

consent decree substantively unfair. The Court is unpersuaded by

Sierra Club’s argument that the United States “voluntarily

abandoned” the mitigation project. Rather, the United States

determined that the mitigation project was inconsistent with the

Third-Party Payment Policy. The adoption of that policy clearly

put the United States at a bargaining disadvantage when it

sought to renegotiate the mitigation project, but the Court

                               21
cannot find that this renders the consent decree substantively

unfair.

     Accordingly, for all these reasons, the Court finds that

the consent decree is fair.

          B. The Consent Decree is 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 Environmental Defense v. Leavitt, 329 F.

Supp. 2d 55, 71 (D.D.C. 2004)).

     The United States argues that the first factor has been met

because: (1) “it brings [Harley Davidson] into compliance with

the CAA . . . ensur[ing] that motorcycles with Harley-Davidson

tuning products meet applicable emissions standards;” (2)

“decreases the likelihood that Harley-Davidson’s illegal Tuners

will be sold in the United States; (3) “discourage[s] motorcycle

                                  22
owners from tampering with their motorcycles;” and (4) “ensures

Harley-Davidson’s future compliance with the CAA”. Consent

Decree Mot., ECF No. 7 at 18.

     The United States argues that the second factor has been

met because: (1) the civil penalty of $12 million was negotiated

in good faith as part of the overall settlement; (2) the

government considered the applicable statutory penalty factors

of “[a] the gravity of the violation, [b] the economic benefit

or savings (if any) resulting from the violation, [c] the size

of the violator’s business, [d] the violator’s history of

compliance with this subchapter, [e] action taken to remedy the

violation, [f] the effect of the penalty on the violator’s

ability to continue in business, and [g] such other matters as

justice may require,” 42 U.S.C. 7524(b); (3) Harley-Davidson’s

cooperation; and (4) the risks of litigation. Consent Decree

Mot., ECF No. 7 at 21.

     The United States argues that the third factor has been met

because: (1) while it “believes its case on liability is strong

. . . Harley-Davidson ha[s] arguments why they believe they

would prevail in litigation;” (2) “there is uncertainty

concerning how the Court would analyze the various factors that

go into determining the penalty; and (3) even if the

government’s case is strong, litigation would still take a

                                23
number of years and significant discovery would be necessary.”
Id. at 25.

     SLG disputes that factors (1) and (2) have been met because

of the removal of the mitigation project. SLG Br., ECF No. 12 at

17-18. NRDC/CLF argues that these factors have not been met

because the removal of the mitigation project means that there

will be no attempt to “restore the status quo by avoiding

additional air pollution of the same type that occurred as a

result of Harley-Davidson’s violations.” NRDC/CLF Br., ECF no.

15 at 16.

     SLG makes three additional arguments that it contends

weighs against a finding of reasonableness. First, that the

consent decree reduces the original $15 million by 20% because

of the removal of the $3 million mitigation project. Id. at 18.

Second “because it does not include the $3 million mitigation

project, which the parties, based on good faith arms-length

negotiations and the strengths and weaknesses of the

government’s case, had included in the original Consent Decree,

or an equivalent substitute for the mitigation project.” Id. at

23. Third, because the sole mitigation project in the decree was

removed and not replaced with a reasonably equivalent

substitute. SLG Br., ECF No. 12 at 19. 4

4
 In a footnote, SLG also suggests that it was inappropriate for
the United States to revise the consent decree based on the
                                24
      The United States points out that mitigation is not a

required element of a CAA settlement, Consent Decree Mot., ECF

No. 7 at 19; that there was no objection to the $12 million

penalty as being inadequate before the mitigation project was

removed, and that commenters are wrong to suggest that the

penalty is inadequate now that the $3 million mitigation project

has been removed because mitigation is not a penalty. Id. at 21-

22.

      The Court’s role is to assess whether the consent decree is

reasonable from an objective point of view. Appalachian Voices,
38 F. Supp. 3d at 56. On this record, it appears that the

consent decree is technically adequate to accomplish the goal of

cleaning the environment. The decree brings Harley-Davidson into

compliance with the CAA and ensures its future compliance with

the CAA. Furthermore, the decree decreases the likelihood that

the illegal tuners will be sold in the United States and

discourages motorcycle owners from tampering with their

motorcycles.

      As to “whether [the consent decree] will sufficiently

compensate the public for the costs of the remedial measures,”

District of Columbia, 933 F. Supp. at 50; the $12 million civil

Third-Party Payment Policy rather than in response to public
comment. SLG Br., ECF No. 12 at 19 n.4. However, the parties may
agree to modify a consent decree before the Court approves it as
an order of the court.
                                25
penalty was negotiated in good faith taking into account

applicable statutory factors as well as Harley-Davidson’s

cooperation and the risks of litigation. The penalty is

commensurate with other mobile source settlements. The removal

of the mitigation project from the consent decree does not

change this analysis because mitigation is an element of

injunctive relief rather than a civil penalty.

     The final factor in the reasonableness inquiry is “whether

[the consent decree] reflects the relative strength or weakness

of the government's case against the environmental offender.”

District of Columbia, 933 F. Supp. at 50. SLG complains that the

United States has “offered only generalities regarding the

strengths and weaknesses of its case.” SLG Br., ECF No. 12 at

16. However, “[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.”

District of Columbia, 933 F. Supp. at 51. SLG also argues that

the consent decree is “a fortiori, unreasonable given the

absence of any change in the strength of the Government’s case.”

SLG Br., ECF No. 12 at 17. This argument is unpersuasive. A

consent decree naturally embodies compromise. In this case,

after the superseded consent decree was lodged, but before the

United States sought approval of the Court, the Third-Payment

Policy, which affected a provision of the parties’ agreement,

                               26
went into effect. Although this negatively impacted the United

States’ bargaining position when it sought to renegotiate the

mitigation project, that does not result in a finding that the

decree is unreasonable.

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

the consent decree is reasonable.

       C. The Consent Decree is 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 Employers, Inc., 561 F.2d 313, 317 (D.C. Cir.

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

                               27
Corp., 563 F.3d 1448, 1460 (D.C. Cir. 1995) (quoting United

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

1990)).

  The government argues that the consent decree serves the

public interest because it: (1) “furthers the Congressional

goals embodied in the Clean Air Act. By requiring Harley-

Davidson to cease the sale of uncertified motorcycles and

illegal Tuners, the settlement protects air quality and promotes

public health and welfare without litigation delays or costs;”

and (2) “send[s] a clear deterrent signal to the industry that

the Clean Air Act’s mobile source emission standards and defeat

device prohibitions will be vigorously enforced.” Consent Decree

Mot., ECF No. 7 at 27.

     SLG disputes that the Consent Decree is in the public

interest because the mitigation project was eliminated, arguing

that since the mitigation project that was included in the

superseded consent decree served the purposes of the CAA, the

removal of the mitigation project or an appropriate equivalent

“deprives the public of the benefits of the mitigation project.”

SLG Br., ECF No. 12 at 23-24. Similarly, NRDC/CLF argues that

without the mitigation project, the injuries caused by Harley-

Davidson’s alleged violations will not be directly addressed.

NRDC/CLF Br., ECF No. 15 at 17.

                                  28
     Sierra Club argues that the consent decree is not fair,

reasonable, adequate, or in the public interest because it

contains neither a buyback provision nor the mitigation project,

both of which would have mitigated the alleged excess emissions.

Sierra Club Br., ECF No. 14 at 13. Sierra Club also argues that

the United States has not explained why the penalty provision

provides a fair and reasonable resolution of the alleged

violations given that the mitigation project has been

eliminated. Id. at 16.

     The United States responds that the various arguments that

the removal of the mitigation project diminishes the public

interest conceives of the public interest as too narrow, and

that the injunctive relief secured by the decree combined with

“the largest civil penalty ever obtained for the unlawful sale

of aftermarket defeat devices” satisfy the fair, reasonableness

and public interest standards for Court approval of the decree.

Resp., ECF No. 16 at 3-5.

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

to beneficiaries and consistency with the public interest.”

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

The settlement protects air quality and promotes public health

and welfare by requiring Harley-Davidson to cease the sale of

aftermarket products that contain defeat devices, to

disincentivize their continued use, and to confirm its

                               29
compliance with what it has agreed to. Given that the decree

contains “the largest civil penalty ever obtained for the

unlawful sale of aftermarket defeat devices,” it sends a strong

deterrence signal. And while the superseded decree containing

the mitigation project might have been the “best” resolution of

Harley-Davidson’s alleged violations, the Court cannot say that

the decree lodged before the Court is not within “the reaches of

the public interest.” Microsoft Corp., 563 F.3d at 1460.

     Furthermore, the United States has provided a consistent

and reasonable explanation for its decision to renegotiate the

decree following the announcement of the Third-Party Payment

Policy. The adoption of that policy negatively impacted the

United States’ bargaining position when it sought to renegotiate

that aspect of the consent decree. SLG requests that the Court

decline to enter the consent decree and “advise[] the parties

that it will not provide its approval unless the parties lodge a

modified agreement that includes the mitigation project or a

substantially equivalent project.” SLG Br., ECF No. 12 at 24.

The Court declines to do so. See Akzo Coatings of America, Inc.,
949 F.2d at 1435 (the Court “may not modify but only approve or

reject a consent decree”). As my colleague, Judge Tanya S.

Chutkan recently reasoned when declining to require the United

States to renegotiate a proposed consent decree so that it could

include a project not included in the proposed decree, “[i]t

                               30
would not benefit the public to jeopardize this agreement and

potentially mire the government and Defendants in lengthy

litigation with unpredictable results, while simultaneously

delaying the implementation of corrective measures.” Hyundai

Motor Co., 77 F. Supp. 3d at 2015.

IV.   Conclusion

      The Court is sympathetic to amici’s preference for the

substitute consent decree over the one lodged before the Court.

However, this Court is to give “broad deference . . . to EPA’s

expertise in determining an appropriate settlement and to the

voluntary agreement of the parties in proposing the settlement.”

Microsoft Corp., 56 F.3d at 1462 (citing In re Cuyahoga Equip.

Corp., 980 F.2d 110, 118 (2d Cir. 1992)). Moreover, the Court

cannot “substitute its judgment for that of the parties to the

decree.” Akzo Coatings of America, Inc., 949 F.2d at 1435. And

the Court cannot say that the consent decree lodged with the

Court “appears to make a mockery of judicial power.” Microsoft

Corp., 56 F.3d at 1462.

                                31
     Accordingly, for the reasons explained above, the Motion to

Enter Consent Decree is GRANTED. A signed Order Entering Consent

Decree and the Consent Decree accompanies this Memorandum

Opinion.

     SO ORDERED.

Signed:    Emmet G. Sullivan
           United States District Judge
           September 14, 2020

                                32