NJ Files Lawsuit Against Nation’s Largest Auto Auction Company For Selling Tampered, Super-Polluting Vehicles
TRENTON – Attorney General Gurbir S. Grewal, Department of Environmental Protection (DEP) Commissioner Catherine R. McCabe and Division of Consumer Affairs (DCA) Director Paul R. Rodriguez today announced multiple legal actions to protect the public from the sale of tampered vehicles that release excessive amounts of air pollution.
To protect the environment and public health, automobile manufacturers are required to reduce pollution from vehicles by installing state of the art emissions control technology that meets air quality standards set by environmental regulators. Despite these clean air requirements, some unscrupulous auto dealers, auctioneers, repair shops and individuals tamper with vehicles by altering or removing the emission control systems or installing software that can disrupt their operation. This tampering violates the law, depletes air quality and threatens public health.
In the first action, Attorney General Grewal and Commissioner McCabe announced a lawsuit against Manheim Remarketing Inc., the nation’s largest vehicle auction company, alleging that it violated New Jersey’s pollution control laws by facilitating the sale of hundreds of tampered vehicles in the state.
According to the Complaint, DEP identified over 200 vehicles offered or sold through Manheim that were clearly disclosed as tampered, and a surprise DEP inspection at a Manheim facility last year found that 28 percent of inspected vehicles were unlawfully tampered. The Complaint seeks to prevent Manheim from allowing sales of tampered vehicles, which would significantly disrupt the resale market for tampered vehicles, sending a strong message to the entire supply chain that New Jersey will not tolerate emissions tampering. The lawsuit also asserts claims against three vehicle dealers that have repeatedly sold tampered vehicles through Manheim.
At the same time, Attorney General Grewal and Director Rodriguez announced that DCA issued Notices of Violation to eight auto dealers who sold tampered cars directly to consumers.
“I’m proud to once again announce bold actions against irresponsible polluters, the result of years of hard investigative work to uncover rampant violations of New Jersey’s environmental laws,” said Attorney General Grewal. “Environmental protection is directly tied to the public’s health, including for environmental justice communities. Tampered vehicles in particular release harmful air emissions that affect our residents’ well-being, but national companies like Manheim refuse to protect our residents from this problem. Today, companies and dealerships across the state are on notice: we will hold accountable anyone in New Jersey who seeks to profit through the sale of these unlawful, polluting vehicles.”
“When someone intentionally tampers with emissions controls, they are not just cheating the market—they are cheating our environment and the health of our communities,” said Commissioner McCabe. “Whether facilitated by a vehicle manufacturer, dealer, reseller, auctioneer, or repair shop, emissions tampering is intolerable. DEP will continue to deploy investigators to conduct surveillance and surprise inspections to ensure that vehicles sold or altered in New Jersey comply with our clean air laws, and we will pursue aggressive enforcement to stop emissions tampering in our state.”
“By filing Notices of Violations against these dealerships, the Division of Consumer Affairs is sending a clear message that we will not permit the sale of dangerous, unlawful vehicles in the State,” said Acting Division of Consumer Affairs Director Paul R. Rodríguez. “New Jersey motor vehicle dealerships have a responsibility to ensure that their vehicles comply with all environmental law.We cannot allow businesses to take advantage of consumers and undermine public health and safety.”
DEP Lawsuit Against Vehicle Dealerships
Manheim operates nearly 80 vehicle auction facilities across the U.S., including two in New Jersey. The larger of Manheim’s New Jersey operations, Manheim New Jersey, is located on 300-plus acres in Mansfield Township. The company’s other New Jersey operation, Manheim Metro Skyline, is located in Fairfield Township, Essex County. Together, the two auction sites offer hundreds of thousands of vehicles for sale annually, many of them allegedly tampered in violation of the State’s pollution control laws.
Filed in New Jersey Superior Court in Mercer County, the State’s lawsuit alleges that Manheim either sold or offered for sale at least hundreds of tampered vehicles between December 2016 and March 2019 – some of which were “clearly and explicitly” listing vehicles with missing pollution control devices or containing deliberately compromised pollution controls.
The complaint also names three New Jersey auto dealerships as defendants – Murphy’s Motors of Fairview, Fargo Auto Sales & Services of Delran and Rezzetti Enterprises of Vineland. The lawsuit accuses each dealership of selling multiple tampered vehicles through Manheim’s New Jersey locations in violation of pollution control laws.
The allegations against the defendants are based on a two-year DEP investigation focused on the sale of unlawfully tampered vehicles, particularly diesel trucks. DEP’s work included extensive reviews of vehicle sales records, as well as unannounced on-site DEP inspections at Manheim and at various New Jersey auto dealerships registered to conduct vehicle sales transactions using Manheim.
These sales have serious impacts for public health.
For example, today’s complaint notes that disabling the exhaust recirculation controls and removing the catalytic converters on a diesel pick-up truck can increase the truck’s emission of ozone-pollution-contributing NOx (nitrogen oxide) by approximately 20 times the federal limit. And removing the diesel particulate filters from diesel trucks can increase PM2.5 emissions by ten times the federal limit. Likewise, the complaint notes, disabling air pollution controls on gasoline-powered vehicles can cause increased tailpipe emissions of NOx, as well as certain volatile organic compounds and carbon monoxide.
Excessive levels of such emissions can contribute to reduced lung function, asthma attacks and other respiratory issues, as well as serious cardiovascular problems such as heart attacks and arrhythmia. This pollution especially burdens environmental justice communities, which are disproportionately affected by air pollution due in part to proximity to highways and high-traffic industrial and commercial centers plagued by exhaust from traveling and idling vehicles.
Between December 2, 2016 and March 15, 2019, Manheim’s two New Jersey auction sites offered a total of more than 850,000 vehicles for sale. Today’s lawsuit alleges that, based on an analysis of Manheim’s records for the period on which DEP focused, Manheim either sold or offered for sale at least 214 vehicles that were “clearly and explicitly” disclosed in sales listings as emissions tampered. The sales listing disclosures that flagged the 214 vehicles as tampered included such statements as “NO CATS,” “ALTERED EMISSIONS” or “EGR DELETE.”
The complaint alleges that the actual number of tampered vehicles offered for sale at Manheim’s two auction facilities “was most likely much higher” than 214 during the period focused on by investigators because “only a fraction” of tampered vehicles are actually identified as tampered.
For example, the complaint notes, DEP conducted an unannounced compliance inspection at Manheim New Jersey in Mansfield on February 25, 2019. DEP’s inspection found that 14 out of 50 trucks inspected – approximately 28 percent – had been tampered.
Also named in today’s five-count lawsuit is defendant Murphy’s Motors of Fairview, which allegedly sold or offered for sale at Manheim’s in-state locations five diesel-powered trucks with tampered emissions. Defendant Fargo Auto Sales & Services of Delran allegedly sold or advertised three tampered diesel trucks and one tampered, gasoline-powered Subaru sedan at those in-state Manheim locations, and defendant Rezzetti Enterprises Inc. of Vineland allegedly sold or advertised four tampered diesel-powered trucks.
The lawsuit seeks an order requiring Manheim to take critical steps to avoid the sale of tampered vehicles to New Jersey buyers in the future. Those precautions include screening vehicle listings for common tampering indicators, and performing basic visual inspections of vehicles at its in-state facilities. At the same time, the complaint also seeks imposition of civil penalties against Manheim and the three defendant auto dealerships. First-time violators of the Air Pollution Control Act are subject to a maximum $10,000 civil penalty. The penalty increases to $25,000 for a second offense and to $50,000 for a third or subsequent violation.
DCA Notices of Violation
In a related action, the State also filed Notices of Violation (NOV) against eight auto dealerships in New Jersey alleging pollution control and Consumer Fraud Act violations. In each case, the NOVs allege that the dealer in question bought at least one tampered vehicle through a Manheim auction and then unlawfully resold that vehicle or advertised it for sale.
For example, one NOV alleges that a South Jersey truck dealer purchased a 2008 Ford diesel pick-up truck through a Manheim auction and subsequently resold it to an individual buyer. The truck was advertised by Manheim as not having a catalytic converter, and in fact lacked this required exhaust emissions device, but that information was not shared with the buyer.