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Record-breaking $100 million environmental law penalty

The cleanliness of the sky, air and ecosystem are often the primary issue in environmental litigation. And when it comes to the increase in penalties and judgments against corporations for clean air violations, the sky is apparently the limit.

In a recent press release from the Environmental Protection Agency (EPA), it was stated that automobile manufacturers Hyundai and Kia will pay a civil penalty of $100 million for Clean Air Act violations involving their vehicles exceeding EPA emissions standards. The complaint alleged that these companies made false statements regarding emissions compliance in more than a million automobiles sold between 2012 and 2013. Although these vehicles did not conform to EPA standards, Kia and Hyundai allegedly claimed emissions credits for compliance during this time.

This is the largest penalty in the history of Clean Air Act litigation, and the financial penalties do not stop there.

In addition to the $100 million penalty, Hyundai and Kia will also pay approximately $50 million in an effort to bring their practices into compliance and avoid further violations of this kind.

Kia and Hyundai will also give up nearly five million greenhouse gas credits, worth roughly $200 million, which these auto makers initially claimed. Gas credits of this kind are available for auto makers who use the proper emissions testing and certification practices. Because millions of vehicles from Kia and Hyundai had emissions that surpassed the limit for which these credits are earned, they companies were required to forfeit them.

With this landmark litigation, the EPA is showing its commitment to protecting the quality of air through litigation with stark clarity. For businesses of all sizes, this case is an effective cautionary tale with a clear message: You cannot be too careful. As tempting as it might be, do not cut corners in terms of environmental compliance, and make sure you are prepared for litigation.

While the EPA cannot stop every business from committing regulatory violations, if the agency finds a violation in your business's environmental practices, the sky is the limit for the penalties it could face.

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