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Toyota Vehicle Recall

FEDERAL REGULATION OF DEFECTIVE VEHICLES

National Highway Traffic Safety Administration

MYTHS AND LIMITATIONS OF THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION (NHTSA), POLITICS AND THE REVOLVING DOOR

The Purpose of NHTSA

The National Highway Traffic Safety Administration (NHTSA), U.S. Department of Transportation, is the federal agency responsible for issuing and enforcing safety standards regarding the manufacture of motor vehicles and for investigating defective vehicles.

The Secretary of Transportation delegated to NHTSA the authority to administer the National Highway Traffic and Motor Vehicle Safety Act of 1966 (“the Safety Act.”) The basic purpose of the Safety Act is “to reduce traffic accidents and deaths and injuries resulting from traffic accidents,” and per its legislative history “the imposition of mandatory procedures to insure such notification of purchasers and correction of all safety-related defects.”

The Safety Act requires a manufacturer to notify purchasers of safety-related defects and to remedy the defect, which is commonly known as a recall. The Safety Act also gives NHTSA the authority to investigate defects, and to require manufacturers to recall vehicles and/or equipment which have a safety-related defect. NHTSA may also penalize the manufacturer for failing to fulfill its recall responsibilities.

Limitations of NHTSA

It is not uncommon for defendant manufacturers in product liability cases to attempt to portray the federal government in Washington, D.C. as a massive professional staff that thoroughly reviews, tests, and even “approves” vehicles before they are allowed to be marketed. This is a gross mischaracterization.

Overworked and Understaffed

NHTSA is a relatively small agency, with only about 630 employees, and many other important responsibilities. Only approximately 100 of the agency’s workforce are assigned to the enforcement area, about half of which are assigned to the Office of Defects Investigation (ODI). ODI is overworked and understaffed. ODI is responsible for investigating safety-related defects in the nation’s fleet of over 220 million motor vehicles, and hundreds of millions of items of motor vehicle equipment, including tires and child safety seats. Of ODI’s staff of approximately 50, only some 15-20 have been engineers or investigators who directly run safety defect investigations. In a typical year, ODI opens only 80 -100 defect investigations.

The motor vehicle industry has actively participated in NHTSA rulemakings. And historically, NHTSA has been considerably dependent upon the industry for technical information. In other words, it is very difficult for NHTSA to issue a safety standard to which the industry is adamantly opposed, particularly in a deregulatory environment, unless the agency has been expressly ordered to do so by Congress.

Politics

NHTSA front car crash

Sometimes NHTSA makes drastic changes in its rulemaking after administrations change. The head of the agency, the Administrator of NHTSA, is a political appointee. Major rulemaking proposed by NHTSA has to be approved by the Office of the Secretary of Transportation, and the Secretary is also a political appointee, and also by the Office of Management and Budget, which is part of the Executive Office of the President. Consequently, major decisions on issuing, amending, and/or rescinding Federal Motor Vehicle Safety Standards (FMVSSs), are generally made by political appointees, not by NHTSA’s expert career technical staff.

Federal Motor Vehicle Safety Standards (FMVSS)

NHTSA regulates the safety of vehicles by issuing regulations known as Federal Motor Vehicle Safety Standards (FMVSSs), and by investigating safety-related defects. FMVSSs are minimum performance standards that NHTSA has issued for certain aspects of performance in motor vehicles and equipment. As performance standards, they do not mandate technology, and they are minimum, not maximum or optimal, standards. NHTSA has urged manufacturers to exceed these minimum standards

A FMVSS is Only a Minimum Standard

The Safety Act defines a motor vehicle safety standard as a “minimum” standard for motor vehicle or motor vehicle equipment performance. 49 United States Code § 30102(a)(9). Thus, a FMVSS does not establish the state of the art, or an optimal level of performance, but rather a minimum level of performance that a manufacturer must meet in order to sell its product. It has long been NHTSA’s position that a FMVSS “establishes only a minimum performance level.”

A manufacturer’s compliance with these minimum standards does not relieve a manufacturer from its common law duty to design safe vehicles. Congress has made it clear that compliance with a FMVSS does not constitute a defense in a product liability suit. 49 U.S.C. § 30103. See H.R. Rep. No. 1776, 89th Cong. 2nd Sess. (1966) at 24 (“It is intended, and this subsection [§ 108(c) of the original Safety Act] specifically establishes, that compliance with safety standards is not to be a defense or otherwise to affect the rights of parties under common law particularly those relating to warranty, contract, and tort liability.”) In other words, FMVSSs do not define a manufacturer’s total or complete responsibility for the safe design of its motor vehicles; and mere compliance with applicable Federal Motor Vehicle Safety Standards does not relieve a manufacturer of its duty to safely design its products. Federal Motor Vehicle Safety Standards are not intended to define what is a safe product under all circumstances, or to relieve a manufacturer from its responsibility to design a safe product.

Further, Federal Motor Vehicle Safety Standards do not cover every aspect of performance of motor vehicles and equipment. The agency does not have the resources to perform such a huge and nearly infinite undertaking. By way of example, FMVSS 209, Seat Belt Assemblies, provides only certain minimum performance requirements for seat belt assemblies, but does not test seat belts dynamically in a crash test or a sled test, with an anthropomorphic dummy and injury criteria. In fact, none of NHTSA’s Federal Motor Vehicle Safety Standards, including FMVSS 208, Occupant Crash Protection, contain a dynamic crash test or sled test of rear seat restraints. Most items on the vehicle, and most aspects of performance, are not regulated. Rather, Federal Motor Vehicle Safety Standards cover only a limited number of aspects of performance

NHTSA has repeatedly urged manufacturers to design their products to do more than merely meet the minimum “floor” required in NHTSA’s standards. Unfortunately for consumers, the truth is that many manufacturers have treated the standards more like ceilings on safety performance than floors from which to improve safety.

There are now more than fifty Federal Motor Vehicle Safety Standards. They are identified by numbers, for example FMVSS 208. The Federal Motor Vehicle Safety Standards are located in section 571 of volume 49 of the Code of Federal Regulations. The 100 series of FMVSS are crash avoidance standards, governing such things as windshield wipers (FMVSS 104), headlamps (FMVSS 108), and tires (FMVSS 109 and 119). The 200 series are crashworthiness standards, regulating devices such as air bags (FMVSS 208), child safety seats (FMVSS 213), and roof crush (FMVSS 216). The 300 series are post-crash standards governing issues like fuel system leakage (FMVSS 301) and flammability of interior materials.

It is significant to note that a Federal Motor Vehicle Safety Standard does not exist for every item of motor vehicle equipment. There is also not a FMVSS for every safety risk. For example, there is no FMVSS for rollover resistance.

NHTSA has the general authority in the Safety Act to modify, upgrade any or all of the other Federal Motor Vehicle Safety Standards, but, as a practical matter, is limited by resources, and politics.

Manufacturers Self-Certify Compliance with Federal Motor Vehicle Safety Standards

Although NHTSA has the authority to monitor and investigate compliance with Federal Motor Vehicle Safety Standards through its Office of Vehicle Safety Compliance (OVSC), the duty to certify compliance with these regulations resides with the manufacturer. It is the responsibility of the manufacturer of motor vehicles and/or motor vehicle equipment (e.g., tires) to certify that each motor vehicle or item of equipment is in compliance with the minimum performance requirements of all applicable Federal Motor Vehicle Safety Standards . This process is known as “self-certification.” Thus, NHTSA does not issue approval tags, stickers or labels for vehicles or equipment, either before or after their first sale. NHTSA does not “approve” or “certify” that vehicles and equipment meet FMVSSs, or that they are “safe.” In that respect, NHTSA’s function is quite different from that of the Food and Drug Administration (FDA), which must approve drugs and medical devices before they can be sold.

Furthermore, NHTSA, through its Office of Vehicle Safety Compliance does not specify the type of quality control program that a manufacturer should employ. That decision left to the manufacturer. Again, NHTSA does not function like the FDA, or for that matter the Agriculture Department’s meat inspectors. There is no NHTSA “stamp of approval” that goes on any item of motor vehicle equipment (such as brakes, seatbelts, airbags, transmissions) or on motor vehicles, only the self-certification by the manufacturer.

Testing Is Not Even Required!

Technically, the Safety Act does not actually even direct a manufacturer to conduct testing before it certifies that its vehicles or equipment comply with FMVSSs. Although the public generally assumes that a prudent car manufacturer does in fact conduct actual testing of its vehicles before they are sold, the manufacturer is free to determine compliance by engineering judgment, computer simulations, or any other means. In fact, unless there is a specific request from NHTSA in a particular enforcement investigation, manufacturers do not routinely report to NHTSA their compliance testing or other bases for their self-certification of compliance with applicable FMVSSs.

NHTSA’s Compliance Office Has Very Limited Resources

NHTSA car crash

NHTSA’s Office of Vehicle Safety Compliance (OVSC) has limited resources, and consequently conducts only very limited surveillance testing. As a result of a limited budget,OVSC does not, by any means, test every, or even most, makes and models or items of motor vehicle equipment products for compliance with Federal Motor Vehicle Safety Standards. OVSC has a professional staff of about 30 to enforce the agency’s standards. OVSC enforces not only Federal Motor Vehicle Safety Standards , but also other regulations, such as NHTSA’s consumer information regulations, see, 49 Code of Federal Regulations Part 575, theft prevention standard (49 C.F.R. Part 541),automotive contents labeling (49 C.F.R. Part 583), vehicle identification number content (49 C.F.R. Part 565), manufacturer identification (49 C.F.R. Part 566), certification regulation (49 C.F.R. Part 567), second stage manufacturers (49 C.F.R. Part 568), and others. In other words NHTSA’s Office of Vehicle Safety Compliance is understaffed and overworked.

Compliance with Federal Motor Vehicle Safety Standards Does Not Mean That a Vehicle Contains No Defect

Even if a brand new vehicle complies with all applicable Federal Motor Vehicle Safety Standards, that does not mean that the vehicle is not defective! Even if a brand new vehicle complies with all applicable Federal Motor Vehicle Safety Standards, that does not mean that the vehicle cannot or should not be recalled for safety problems. Most of the components on a vehicle, and most aspects of performance, are not regulated by Federal Motor Vehicle Safety Standards.

Closure of ODI Investigation Does Not Mean NHTSA Found “No Defect”

The closure of a NHTSA ODI defect investigation where there has been no recall is a matter of discretion. Such a closure does not mean that the agency found “no defect” or found that the product is “safe.” Although ODI may close a defect investigation because a defect pattern or trend has not been established, ODI does not make findings of “no defect.” For example, in a letter to Ford dated May 22, 1998, NHTSA stated that: “we were disappointed to learn that Ford outside products liability counsel have been characterizing ODI’s decision to close the Bronco II investigation as a decision that the vehicles under investigation did not contain safety-related defects. As we have repeatedly emphasized to Ford and other manufacturers, ODI does not make “no defect decisions.”

The Revolving Door At NHTSA

On March 9, 2009, the Washington Post reported “that as many as 33 former National Highway Traffic Safety Administration employees and Transportation Department appointees left those jobs in recent years and now work for automakers as lawyers, consultants and lobbyists and in other jobs that deal with government safety probes, recalls and regulations.”

There is no law prohibiting these former NHTSA employees or officials from immediately taking more lucrative jobs with the auto industry. This apparent conflict of interest reared its ugly head in the recent Congressional hearings over the rash of fatalities and injuries caused by complaints of sudden unintended acceleration in vehicle manufactured by Toyota. Two former NHTSA employees, Christopher Santucci and Chris Tinto are now employed with Toyota. In 2003, when NHTSA was supposedly investigating Toyota for complaints of sudden unintended acceleration, Santucci left and was hired by Toyota. Tinto had left NHTSA years earlier to work for Toyota. The Congressional hearings revealed a Toyota internal memo lauding the efforts and effectiveness of Santucci and Tinto and that it may have saved Toyota 100 million dollars. The “revolving door” raises two immediate questions: First, did any of these former NHTSA employees turn their heads or overlook defects and problems with the expectation that they would be generously rewarded with lucrative employment with the very same car companies they were supposed to be investigating ?; and secondly, will the current NHTSA officials also give lenient treatment to Toyota, in exchange for an implied promise of future employment?

SUMMARY OF NHTSA

NHTSA does not approve or certify the safety of vehicles. NHTSA has asked manufacturers to do more than merely meet the minimum “floor” required in the agency’s standards. The motor vehicle industry has considerable influence on NTHSA rulemaking. It is very difficult for NHTSA to issue an FMVSS (or to amend an existing FMVSS to adopt a more stringent requirement) to which the industry is adamantly opposed, particularly in a deregulatory environment.

It is highly inaccurate to conclude or to even suggest that a vehicle is safe because the vehicle supposedly complied with applicable Federal Motor Vehicle Safety Standards, as they are only minimum standards covering a limited number of aspects of performance. That a vehicle complied with applicable FMVSSs when it was manufactured does not mean that it is “safe” under all circumstances, or that its design represented the state-of-the-art at that time, or that the manufacturer is relieved of the responsibility to design a safe product.

NHTSA has limited resources, is restricted by politics, and the “revolving door” causes concern about the veracity of its investigations.

MISREPRESENTATIONS ABOUT NHTSA ADVANCED BY CAR MANUFACTURERS

Gary Eto recently interviewed Allan Kam, the former Senior Enforcement Attorney at NHTSA from 1975-2000. Mr. Kam indicated that when defending product liability suits for alleged defects, that motor vehicle manufacturers have “foisted many myths about NHTSA and its regulatory scheme.”

Below are several such falsehoods:

  • the safety recall that we (the manufacturer) conducted was voluntary
  • NHTSA investigated the matter and found “no defect”
  • NHTSA gave us a clean bill of health
  • NHTSA declined to investigate the allegation (or denied a petition to investigate the alleged defect), so the Government found no merit to the allegation
  • NHTSA carefully regulates the safety of motor vehicles and motor vehicle equipment. If there were a safety problem, as plaintiff alleges, NHTSA would have ordered a recall
  • The Government wouldn’t have permitted us to sell it if it wasn’t safe
  • Federal motor vehicle safety standards (FMVSSs) are optimum standards

Since the vehicle (or equipment) complied with FMVSSs, it was per se safe. For example:

  • The trailer was safe because it met the Government’s underride standard (FMVSSs 223, 224)
  • The vehicle was safe (or cannot be defective) (or was state-of-the art on rollover protection) because it met the Government’s roof crush standard (FMVSS 216)
  • The tire was not defective because it exceeded the Government’s standards (FMVSSs 109, 119)
  • The booster seat was appropriate for a 32-pound child because NHTSA’s standard (FMVSS 213) allowed it
  • The police car was safe, notwithstanding the fatal fuel-fed fire following the rear-end collision, because the car met NHTSA’s fuel systems integrity standard (FMVSS 301).

More NHTSA Falsehoods

  • Rollover is so complicated and unique that the Government’s expert auto safety agency has been unable to issue a safety standard on rollover
  • The Government made us equip the car with an aggressive air bag
  • The Government prohibited us from adding additional warnings about airbags
  • The Government mandates the design of the vehicle’s safety features
  • The federal Government in Washington, D.C. approved the product (by implication, just like the Food and Drug Administration approves drugs)
  • NHTSA tests all products for compliance with FMVSSs, and if there were a noncompliance, NHTSA would have caught it
  • The Government’s own compliance testing proves that the product at issue passes all requirements of the NHTSA standard
  • NHTSA would have penalized us if we had done anything wrong
  • NHTSA would have fined us and forced us to recall had we failed to comply with our obligations under the federal Safety Act
  • The fact that NHTSA allowed our limited service campaign is proof that no further (or more comprehensive) campaign was not warranted
  • If a larger recall would have been appropriate, NHTSA would have ordered it
  • A manufacturer would not dare to lie to NHTSA

NHTSA has a comprehensive regulatory scheme in this area, and therefore:

  1. The court should find implied preemption
  2. The court should defer to NHTSA’s primary jurisdiction
  3. The court should stay this class action pending a potential defect investigation by NHTSA

Perhaps the biggest misrepresentation of all:

Since NHTSA is the expert safety agency, with a large professional staff of engineers, statisticians, and other technical experts, the agency’s decisions are all science-driven, and politics never enters into NHTSA decision making

CONCLUSION

The primary purpose of lawsuits against manufacturers for defective vehicles is to encourage the manufacture of safer vehicles by providing an economic incentive for improved product safety. Absent lawsuits by plaintiffs product liability attorneys, the motor vehicle manufacturing industry has no incentive to design the safe vehicles as federal regulations are only minimum standards, and because federal regulators are limited by resources and politics.