The opinion of the court was delivered by: GASCH
This matter is before the Court for a determination respecting what civil penalties, if any, should be assessed against General Motors for failure to send safety-defect notifications in regard to 15 X 5.50 Kelsey-Hayes disc wheels
[hereinafter referred to as WHEELS]. The Secretary of Transportation, through his delegate, ordered the sending of these notifications pursuant to 15 U.S.C. § 1402(e). General Motors resisted. In view of this Court's finding that a safety-related defect does indeed exist, General Motors is now subject to a civil penalty as provided by the National Traffic and Motor Vehicle Safety Act of 1966, as amended, 15 U.S.C. § 1381 et seq. [hereinafter referred to as the Act].
The assessment of civil penalties under the Act is governed by three interrelated sections: 15 U.S.C. §§ 1397, 1398, and 1402. Section 1398 is the starting point in this Court's examination of the statutory direction in this area. That section provides:
(b) Any such civil penalty may be compromised by the Secretary. In determining the amount of such penalty, or the amount agreed upon in compromise, the appropriateness of such penalty to the size of the business of the person charged and the gravity of the violation shall be considered. The amount of such penalty, when finally determined, or the amount agreed upon in compromise, may be deducted from any sums owing by the United States to the person charged. Pub.L. 89-562, Title I, § 109, Sept. 9, 1966, 80 Stat. 723.
Thus, under § 1398, a manufacturer is not liable for civil penalties unless it violates a provision of § 1397. General Motors has violated a section of § 1397 by failing to send the defect notifications, namely, § 1397(e)(4), which directs that no person shall "fail to furnish notification of any defect as required by section 1402 of this title." Section 1402(e) simply states that the Secretary may order the issuance of the defect notification upon his determination of a defect which relates to motor vehicle safety.
The Secretary made such a determination, General Motors failed to comply and the penalty provisions of § 1398 attached upon this Court's finding that the Secretary acted lawfully.
However, the Court's examination does not come to an end upon a finding of liability; the statute sets forth criteria in § 1398(b) to guide the Court in determining the amount of damages. The appropriateness of the penalty is directly related to the size of the business of the person charged and the gravity of the violation.
II. "GOOD FAITH" AND "DUE CARE".
Preliminary to examining the factors relating to the gravity of the violation and the size of the business, it is necessary to address General Motors' argument that the Act should be construed as not to subject a manufacturer to civil penalties if it acted in "good faith" throughout the safety-defect notification proceedings.
General Motors' argument is bottomed upon its reading of §§ 1397(a)(3),
In the former two sections the statute utilizes the terminology "due care" and in the latter section, "good faith." But upon a reading of section 1397, it is clear that Congress was in no way providing a manufacturer using due care a defense to a civil penalty for failure to issue a defect notification. In fact, § 1397(a)(3) relates to failure to issue a certificate of conformity with motor vehicle safety standards as provided by § 1403 and is in no way related to defect notifications. Similarly, § 1397(b)(2) relates to conformity to motor vehicle safety standards, a far different matter from safety defect notifications.
General Motors' attempt to find a good faith defense to a violation of § 1397(a)(4) in § 1402(a) is equally without merit. Section 1402(a) admittedly does apply to defect notifications unlike those sections containing the due care wording. However, Section 1402(a) only applies to those situations where the manufacturer, on its own initiative, determines in "good faith" that a defect exists and on its own initiative sends out the notifications. Here, General Motors did not in any way act on its own in sending out these notices; to the contrary, it was necessary for the Secretary to order the notification pursuant to § 1402(e).
By no stretch of the statutory language can "good faith" be considered a defense to a violation of § 1397(a)(4). There is no reference in that section to a "good faith" defense and surely Congress would have explicitly so provided had they intended that such a defense be available to the manufacturer. Although a statute is passed as a whole, no court can read words from one section of a statute into another section without some indication that Congress intended such a result. ...