Cummins Officers and Directors Face Investigation for $1.675 Billion Civil Penalty

Schubert Jonckheer & Kolbe LLP is investigating potential derivative claims on behalf of shareholders of Cummins Inc. (NYSE: CMI) relating to the company’s role in an alleged scandal to violate vehicle emission standards under the Clean Air Act. On December 22, 2023, Cummins agreed to pay a $1.675 billion civil penalty with the U.S. Department of Justice, U.S. Environmental Protection Agency, and the State of California to resolve the allegations. In announcing the settlement, California Attorney General Rob Bonta stated that “Cummins knowingly harmed people’s health and our environment when they skirted state emissions tests and requirements.”

The $1.675 billion civil penalty is the largest amount ever recovered by the DOJ under the Clean Air Act, and the second-largest environmental penalty ever secured. The company will pay an additional $325 million for pollution mitigation projects, bringing the total costs to Cummins to over $2 billion.

Engine manufacturer Cummins was accused of using software “defeat devices” to illegally bypass emission testing and certification requirements on more than 600,000 diesel RAM pickup trucks for model years 2013 to 2019. Under the settlement, Cummins will also complete a nationwide recall to repair and replace the engine control software on these RAM 2500 and RAM 3500 trucks. The company has already accrued $59 million in costs related to recalling certain of these trucks.

The Schubert Firm is investigating potential wrongdoing by Cummins’s directors and officers in connection with these allegations.

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