Gear Box Z, Inc., Clean Air Act Settlement

(Washington, DC  – August 30, 2021) Today, the U.S. Department of Justice and the Environmental Protection Agency (EPA) announced a settlement with Gear Box Z, Inc. (GBZ), to resolve alleged violations of the Clean Air Act (CAA) associated with the manufacture, sale, and/or offer to sell aftermarket products that defeat the emissions control systems equipped on diesel pickup trucks.

Nearly all of the products that GBZ manufactured and/or sold were illegal defeat devices. GBZ refused to stop manufacturing and selling these defeat devices, necessitating the filing of a lawsuit in the U.S. District Court for the District of Arizona on January 3, 2020. The United States subsequently filed a motion for a preliminary injunction on August 20, 2020, seeking to enjoin GBZ from selling any of its illegal products while the case was being litigated. After extensive briefing and an all-day evidentiary hearing held on February 17, 2021, the court granted the United States’ motion for a preliminary injunction on March 18, 2021.

Today’s settlement halts the manufacture, sale, and installation of GBZ’s illegal products, prohibits GBZ and its owners from selling or transferring any intellectual property associated with these products, prohibits GBZ and its owners from providing technical support for these products, prohibits GBZ and its owners from investing in or obtaining revenue from defeat devices, and imposes substantial stipulated penalties if GBZ or its owners continue to manufacture or sell any aftermarket defeat devices in the future. In addition, the proposed consent decree also requires GBZ and its owners to pay a civil penalty of $10,000 over approximately three years due to its demonstrated financial inability to pay a higher penalty.

This case resolution is part of the EPA’s National Compliance Initiative for the EPA, entitled Stopping Aftermarket Defeat Devices for Vehicles and Engines. EPA is vigorously pursuing enforcement against those who violate the defeat device and tampering prohibitions of the Clean Air Act. For an example of another similar civil judicial settlement, see the EPA’s settlement with Punch It Performance. To report a violation, send an email to [email protected] or submit the information through the EPA’s website.

• Overview
• Preliminary Injunction Order
• Violations
• Injunctive Relief
• Pollutant Impacts
• Health Effects and Environmental Benefits
• Civil Penalty
• Comment
• For More Information, Contact

Overview

GBZ is a small company based in Colorado City, Arizona, that manufactured, marketed, and sold aftermarket automotive products for diesel pickup trucks nationwide. Prior to shutting down, GBZ sold its products to downstream distributors and retailers and also individual customers through its website.

Preliminary Injunction Order

On March 18, 2021, the U.S. District Court for the District of Arizona granted the United States’ motion for a preliminary injunction against GBZ. The court enjoined GBZ from “(1) selling, offering for sale, or transferring any products or components listed in [an attachment to the Order], or any materially similar products; and (2) selling, offering for sale, or transferring any intellectual property associated with the products listed in [the attachment] to this Order, or any materially similar products.”

In its opinion granting the request for a preliminary injunction, the court held: (1) that the United States was likely to prevail on the merits of the claims in its complaint that the manufacture and sale of the defeat devices violate Section 203(a)(3)(B) of the CAA, (2) that the continued selling of these defeat devices will result in irreparable harm, which the court called “obvious,” noting that such emissions of harmful pollutants damage human health and the environment; (3) that balancing the interest of the United States in preventing harm to human health and the environment against the financial interests of GBZ in this case tips in favor of human health and the environment; and (4) the injunction is in the public interest, since “Congress enacted the CAA to combat air pollution, which itself is a declaration of public policy.”  

The court also addressed an amicus curiae brief, filed on behalf of a trade association, which argued that the CAA’s prohibition on defeat devices does not apply to motor vehicles used for racing or competition purposes. The United States filed a response arguing that there is no competition motorsports “exclusion” in the CAA’s definition of “motor vehicle,” nor is there any “exemption” from the CAA’s defeat device prohibition for parts used on vehicles used in competition motorsports. The court held that any discussion of such an exclusion or exemption would be “entirely hypothetical,” and thus moot because “Defendant has not produced a single piece of evidence that a single one of its products has been used on a motor sports vehicle.” 

Similarly, the court dismissed GBZ’s claim that it is entitled to an exemption because its products are used for maintenance purposes. The court noted that no evidence on the record suggests that GBZ’s products are used for purposes of maintenance and repair. The court further observed that GBZ’s own statements and those of its customers show that the products are used for purposes other than maintenance and repair. Thus, the court held that there is no evidence that the purported maintenance exemption applies to GBZ’s products. 

Violations

Between January 2015 and April 2017, GBZ manufactured, sold, and/or offered to sell at least 8,300 aftermarket defeat devices designed for diesel pickup trucks. GBZ sold thousands more until the court prohibited GBZ from continuing to sell its products in March 2021. The products GBZ manufactured and sold include electronic tuning devices (“tuners”) that disable filters, catalysts, exhaust gas recirculation (EGR) systems, and other critical emissions control devices or alter engine performance. GBZ also manufactured and sold hardware products designed to disable or bypass EGR systems equipped on diesel pickup trucks and marketed and sold empty exhaust pipes (a.k.a., “straight pipes”) that enable removal of emissions controls.

These emissions control devices were installed on motor vehicles and motor vehicle engines by original equipment manufacturers (i.e., truck manufacturers) in order to comply with Clean Air Act emission standards. GBZ’s aftermarket products were designed for use with numerous models of vehicles, including diesel trucks manufactured by Ford, GM, and Dodge. Accordingly, the EPA alleges that each act of manufacturing and each sale constitutes a violation of Section 203(a)(3)(B) of the CAA, 42 U.S.C. § 7522(a)(3)(B).

Injunctive Relief

The Consent Decree contains provisions that halt the continued manufacture and sale of GBZ’s products. The provisions also apply to both GBZ and its owners, Jerry and James Black. The Consent Decree contains the following injunctive relief:

Under the Consent Decree, GBZ must not manufacture, sell, offer to sell, or install in a motor vehicle or motor vehicle engine any of the products that were the subject of the court’s preliminary injunction order. The Consent Decree also requires GBZ to destroy subject products left in GBZ’s inventory. In addition, the Consent Decree requires GBZ to:

• cease technical support for the violative products;
• deny all warranty claims for the violative products;
• not sell or transfer any intellectual property associated with the violative products; and
• surrender all intellectual property to EPA, destroy any remaining intellectual property in their possession after surrender to EPA, and instruct any other persons or entities with possession of GBZ’s intellectual property to do the same.

The Consent Decree also prohibits GBZ from possessing any ownership interest in any entity that GBZ knows, or with reasonable diligence should know, manufactures, sells, offers to sell, distributes, or installs any defeat devices, assist any entity with such activity, or earn any income from the distribution or installation of any defeat devices.

Pollutant Impacts

Today’s vehicles emit far less pollution than vehicles of the past. This is made possible by careful engine calibrations, and the use of filters and catalysts in the exhaust system. Aftermarket defeat devices undo this progress and pollute the air we breathe. The emissions impact depends on the original vehicle design and the extent of the vehicle modifications. EPA testing has shown that a vehicle’s emissions increase drastically (tens or hundreds of times, depending on the pollutant) when its emissions controls are removed.

Here, GBZ’s defeat devices enabled the removal of the EGR systems, filters, catalysts, and other emissions control systems that are necessary to treat air pollution formed in the engine before it is emitted into the ambient air.

Health Effects and Environmental Benefits

The Clean Air Act aims to reduce emissions from mobile sources of air pollution, including nitrogen oxides (NO_x). Mobile sources of air pollution contribute approximately 58% of the nation’s NO_x emissions. EPA testing demonstrates that installing aftermarket parts can result in increased NO_x emissions from mobile sources.

NO_x emissions pose significant health and environmental concerns. NO_x form when fuel burns at high temperatures. NO_x can travel long distances, causing a variety of health and environmental problems in locations far from their emissions source, including ozone and smog. NO_x also contribute to the formation of particulate matter (PM) through chemical reactions in the atmosphere, and PM can cause asthma, difficult or painful breathing, and chronic bronchitis, especially in children and the elderly. It is also a major cause of substantial visibility impairment in many parts of the United States.

The key health effects categories associated with ambient PM include premature mortality, aggravation of respiratory and cardiovascular disease, aggravated asthma, and acute respiratory symptoms including aggravated coughing and difficult or painful breathing, chronic bronchitis, and decreased lung function that can be experienced as shortness of breath. Symptoms of immunological effects such as wheezing and increased allergenicity have also been observed. Diesel exhaust PM is of special concern. The EPA’s Clean Air Scientific Advisory Committee has concluded that diesel exhaust is likely carcinogenic to humans.

EPA estimates that this settlement will prevent the future sale of approximately 3,600 illegal products per year. EPA further estimates that the products GBZ sold between January 2015 and April 2017 may result in more than 7.5 million pounds of excess NO_x emissions and 170,000 pounds of excess PM emissions over the anticipated remaining life of the diesel pickup trucks equipped with GBZ’s defeat devices. This enforcement action will prevent additional excess emissions that would have resulted from the continued sale of these illegal products.

Civil Penalty

GBZ and its owners will pay a civil penalty of $10,000 in four payments of $2,500 (plus interest) over approximately three years due to its demonstrated financial inability to pay a higher penalty.

Comment

The proposed settlement, lodged in the U.S. District Court for the District of Arizona, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.

For More Information, Contact:

Ryan Bickmore
Attorney-Advisor
U.S. Environmental Protection Agency, OECA
(303) 312-6502
[email protected]

Denise Leong
Attorney-Advisor
U.S. Environmental Protection Agency, Region 9
(415) 972-3409
[email protected]

Janice Chan
Environmental Protection Specialist
U.S. Environmental Protection Agency, Region 9 (ENF-2-1)
(415) 972-3308
[email protected]