United States v. Volvo Powertrain Corporation
411 U.S. App. D.C. 139
D.C. Cir.2014Background
- Consent decree obligates Volvo Powertrain to ensure nonroad engines meet 2006 NO standards; engines manufactured at facilities owned or operated by VTC fall within decree regardless of ownership at time of manufacture.
- Volvo Penta engines (8,354) were manufactured at Volvo Powertrain’s Skövde facility but certified under Penta; dispute whether nonroad pull-ahead applies to these engines.
- District court held Volvo Powertrain liable for Penta engines’ failure to meet 2006 NO standards and ordered ~$72 million (penalties plus interest).
- Subsequently, entities agreed 80/20 US-ARB split and adjusted interest, final judgment totaling $71,625,640.
- Volvo Powertrain challenges the scope of the decree, the remedy, and pre-demand interest; court reviews de novo the decree construction and abuse-of-discretion the remedy, within dispute-resolution framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether nonroad pull-ahead applies to Volvo Penta engines | Volvo Powertrain: paragraph 110 excludes Penta from the decree | United States: engines manufactured at a Volvo facility fall within ‘all’ nonroad engines | Yes, applies to Volvo Penta engines manufactured at Powertrain facility |
| Whether district court could fashion a remedy beyond the stipulated penalties | Penalties limited to the stipulated formula | Court has equitable discretion when decree is silent on breach consequences | District court could craft an equitable remedy beyond strict formula |
| Whether pre-demand interest is proper | Interest should accrue to penalties | Interest may be allowed per dispute resolution; pre-demand issue preserved | Challenge to pre-demand interest forfeited; affirmed interest as awarded |
| Whether contempt standards apply to decree interpretation | Contempt standards govern enforcement | Contract-interpretation governs; no contempt proven | Contempt standards not applied; contract-interpretation standard applied |
| Whether extrinsic evidence of negotiations should affect interpretation | Circumstances show nonroad pull-ahead inapplicable | Parol evidence not allowed if decree unambiguous | Nonroad pull-ahead unambiguous; extrinsic evidence not considered |
Key Cases Cited
- United States v. Microsoft Corp., 147 F.3d 935 (D.C. Cir. 1998) (contempt standards for enforcing consent decrees discussed (clear and unambiguous language))
- Segar v. Mukasey, 508 F.3d 16 (D.C. Cir. 2007) (consent decree interpreted as contract; reasonable meaning of language)
- Richardson v. Edwards, 127 F.3d 97 (D.C. Cir. 1997) (contract-like interpretation of decree language; reasonable person standard)
- Nix v. Billington, 448 F.3d 411 (D.C. Cir. 2006) (de novo review of decree construction; contract-law framework)
- Whitman v. Am. Trucking Ass'ns, 531 U.S. 457 (U.S. 2001) (elephants-in-mouseholes; plain meaning controls when unambiguous)
- Caterpillar, Inc., 227 F. Supp. 2d 73 (D.D.C. 2002) (penalties under consent-decree formula; comparative enforcement context)