Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
On May 10, 2018, our Specialty segment received a Notice of Violation from the U.S. Environmental Protection Agency ("EPA") alleging that certain performance-related parts that we sold in 2015, 2016, 2017 and 2018 violated the provisions of the Clean Air Act that prohibit the sale of parts that alter or defeat the emission control system of a motor vehicle. The parties have been attempting to negotiate a settlement of this matter without success. On January 29, 2021, the EPA initiated a civil administrative proceeding against us in this matter seeking a monetary penalty for parts sold between January 1, 2015 and August 28, 2018. Any penalty that is likely to be imposed is not expected to have a material effect on our financial position, results of operations or cash flows.
During 2021, we received notices of alleged violations of federal stormwater regulations from EPA Region 3 (regarding facilities in Maryland and Pennsylvania) and Region 4 (regarding facilities in Alabama, Georgia, and Tennessee). In response to the Region 3 notice, we negotiated an Administrative Order on Consent (“AOC”) to further investigate and if necessary make improvements at the identified facilities. We negotiated a second AOC requiring payment of $130,000 in penalties, which was paid in December 2021. In response to the Region 4 notice, we negotiated an AOC to further investigate and if necessary make improvements at the identified facilities. Region 4 has advised us that it intends to seek penalties, but we have not yet received a demand. We do not expect that any proposed penalty will have a material effect on our financial position, results of operations or cash flows.
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In addition, we are from time to time subject to various claims and lawsuits incidental to our business. In the opinion of management, currently outstanding claims and suits will not, individually or in the aggregate, have a material adverse effect on our financial position, results of operations or cash flows.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
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