Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Center for Auto Safety, Inc. v. National Highway Traffic Safety Administration

September 30, 2004


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiffs challenge the policy of the National Highway Traffic Safety Administration ("NHTSA"), including its 1998 letter to manufacturers, permitting "regional recalls" of defective motor vehicles. Plaintiffs ask the Court to invalidate the 1998 letter and the practice of regional recalls and to enjoin NHTSA from approving future regional recalls. They contend that: (1) the practice of allowing regional recalls violates the National Traffic and Motor Vehicle Safety Act ("Safety Act"), 49 U.S.C. § 30101 et seq.; (2) the 1998 letter amounts to a de facto legislative rule issued without the benefit of notice and comment in violation of the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 553 and 706(2)(D); and (3) the 1998 letter is arbitrary and capricious and an abuse of discretion in violation of the APA, 5 U.S.C. § 706(2)(A). (Compl. ¶¶ 27-32.)

Plaintiffs have moved for summary judgment on these claims, and defendant has moved to dismiss, arguing that plaintiffs lack standing and fail to state a claim. For the reasons stated below, the Court will grant defendant's motion to dismiss and deny plaintiffs' motion for summary judgment.


I. The Parties

The Center for Auto Safety and Public Citizen are non-profit consumer organizations that advocate for strong federal safety standards to protect drivers and passengers. (Compl. ¶¶ 2-3.) They bring this action on behalf of their members who have been excluded from recalls because of the location of their residence. The Department of Transportation ("DOT") is the federal agency charged with ensuring safe transportation, and NHTSA, an agency within DOT, is charged with carrying out the Safety Act. 49 C.F.R. § 1.50(a).

II. Statutory Framework

The Safety Act seeks to ensure the safety of motor vehicles, and it authorizes the Secretary of Transportation to undertake various activities to that end.*fn1 49 U.S.C. § 30101 ("The purpose of this chapter is to reduce traffic accidents and deaths and injuries resulting from traffic accidents.") For example, the Safety Act directs the Secretary of Transportation to issue motor vehicle safety standards. 49 U.S.C. § 30111(a). No motor vehicle or motor vehicle equipment may be sold unless it complies with these safety standards. 49 U.S.C. §§ 30112(a), 30115.

At issue here are the Safety Act's notification and remedy -- or "recall" -- procedures, which are triggered when a "defect"*fn2 related to "motor vehicle safety"*fn3 is identified. A defect may be identified -- and thus notification and remedy requirements may be triggered -- in one of two ways: (1) by the manufacturer or (2) by NHTSA. 49 U.S.C. §§ 30118(b)(2), (c). First, the statute requires a manufacturer who "learns [that] the vehicle or equipment contains a defect and decides in good faith that the defect is related to motor vehicle safety " to notify "the owners, purchasers, and dealers." 49 U.S.C. § 30118(c)(1) (emphasis added).*fn4

Alternatively, a defect may be identified by NHTSA through its broad investigatory powers. See 49 U.S.C. § 30166(b)(1)(A) (authorizing NHTSA to conduct any inspection or investigation necessary to enforce the statute). NHTSA collects information about possible motor vehicle and equipment defects through a variety of sources, including manufacturers' reports of defects and proposed recalls. 49 C.F.R. §§ 579.2, 573.6. An office within NHTSAthe Office of Defects Investigation ("ODI") -- considers all available information and determines whether to investigate potential defects. 49 C.F.R. § 554.5 (ODI "elicits from every available source and evaluates on a continuing basis any information suggesting the existence of a safety-related defect."). An investigation may lead to administrative enforcement proceedings, which may in turn culminate in an order to the manufacturer to notify consumers of the safetyrelated defect and to provide a remedy. 49 U.S.C. §§ 30118(b)(1) & (2).

Specifically, if after an investigation the manufacturer has not decided to voluntarily issue a 573 Report and conduct a recall, but the agency makes an initial determination that the vehicle contains a safety-related defect, NHTSA must immediately notify the manufacturer of its initial determination. 49 U.S.C. § 30118(a). Then, the manufacturer and any interested party may present, at a public hearing or in writing, "information, views, and arguments showing that there is no defect... or that the defect does not affect motor vehicle safety." 49 U.S.C. § 30118(b)(1); see also 49 C.F.R. § 554.10(b). After considering these arguments, the agency may affirm its initial decision that a motor vehicle or equipment contains a safety-related defect and order the manufacturer to provide notice and a remedy. § 30118(b).

When a defect is identified, regardless of whether it was identified by the manufacturer or the agency, the statute mandates consumer notification. See § 30118(b)(2)(A) (requiring notification after the agency makes a final defect determination); § 30118(c) (requiring notification when a manufacturer identifies a defect related to motor vehicle safety). Notification is intended to inform vehicle owners about safety-related defects and to encourage them to have the defects remedied as quickly as possible. 49 C.F.R. § 577.2. The statute lays out specific requirements to meet this goal. For example, the notice must clearly describe the defect, assess the risk to motor vehicle safety, describe measures to be taken to remedy the defect, and inform the consumer that the manufacturer will provide a remedy free of charge. 49 U.S.C. § 30119(a).*fn5

When describing the defect, the notice must identify the vehicle system or equipment affected, and it must describe the malfunction that may occur as a result of the defect, "any operating or other conditions that may cause the malfunction to occur," and any precautions that might reduce the risk of malfunction. 49 C.F.R. §§ 577.5(e)(1)-(4). "When the manufacturer determines that the defect... may not exist in each such vehicle..., he may include an additional statement to that effect." 49 C.F.R. § 577.5(d) (emphasis added). However, the notice may not include any other disclaimer indicating that "there is no defect, that the defect does not relate to motor vehicle safety, or that the defect is not present in the owner's or lessee's vehicle." 49 C.F.R. § 577.8(a).

Notification about a safety-related defect must be sent to "each person registered under State law as the owner and whose name and address are reasonably ascertainable by the manufacturer" or "to the most recent purchaser known to the manufacturer." 49 U.S.C. § 30119(d).*fn6 If NHTSA determines that the notice did not result in an "adequate number of motor vehicles or items of replacement equipment" being "returned for remedy," it may order the manufacturer to send a second notice. § 30119(e).

To determine whether the manufacturer has reasonably met the notification requirements, the agency is authorized to conduct a hearing at which "[a]ny interested person" may "make written and oral presentations of information, views, and arguments on whether the manufacturer has reasonably met the notification requirements." § 30118(e). If NHTSA determines that the manufacturer has not reasonably met the notification requirements, it may order the manufacturer to take appropriate action. Id.

When notification is required -- that is, when a safety-related defect is present, regardless of whether it was identified by the agency through a hearing or the manufacturer through a 573 Report -- the manufacturer must also "remedy the defect... without charge" by repairing or replacing the vehicle or providing a refund. 49 C.F.R. § 30120(a)(1); see also § 30118(b)(2)(B). At a hearing, the manufacturer and interested persons may present information, views, and argument on, and NHTSA may decide, whether the manufacturer reasonably met the remedy requirements. § 30120(e). If a manufacturer fails to meet the remedy requirements, NHTSA has the authority to order specific action by the manufacturer. Id.

There are two exceptions to the Safety Act's recall requirements. First, a free remedy is not required "if the motor vehicle or replacement equipment was bought by the first purchaser more than 10 calendar years" before notice is given. § 30120(g). Additionally, upon application by the manufacturer, NHTSA may exempt a manufacturer if a defect is "inconsequential to motor vehicle safety," but interested persons must be given an opportunity to provide input on the exemption. § 30120(h).

Interested persons may initiate or challenge a recall by petitioning the agency to take action. First, an interested person may ask the agency to decide whether a motor vehicle contains a defect related to motor vehicle safety, and thus, whether to order a recall. 49 U.S.C. § 30162(a)(2); 49 C.F.R. §§ 552.1, 552.3(b). If the petition is granted, the agency initiates an investigation. 49 C.F.R. § 554.6(a). In addition, interested persons may petition NHTSA to hold a hearing to determine whether a manufacturer has reasonably fulfilled its obligations to provide notice and a remedy. 49 U.S.C. §§ 30118(e), 30120(e); 49 C.F.R. § 557.3.*fn7

III. Regional Recalls

At issue in this case is the situation where a manufacturer identifies a safety-related defect and then conducts a regional recall to address it. This practice began in the mid-1980s. At that time NHTSA permitted manufacturers to conduct recalls in states or regions largely of their own choosing. Between 1992 and 1998, there were eighteen regional recalls, and since the issuance of the NHTSA letter, there have been twenty-two regional recalls. (Pls.' Opp. to Def.'s Mot. to Dismiss ["Pls.' Opp."] Second Decl. of Clarence M. Ditlow ["Second Ditlow Decl."] ¶ 2; Def.'s Opp. to Pls.' Mot. for Summ. J. ["Def.'s Opp."] Decl. of Kenneth N. Weinstein ["Weinstein Decl."] ¶ 9.) All of these have been initiated by manufacturers.*fn8 (Def.'s Opp. at 5; Pls.' Mot. for Summ. J. ["Pls.' Mot."] at 16.) In contrast, during the period from 1992 to 2002, manufacturers initiated approximately 3,000 nationwide recalls. (Weinstein Decl. ¶ 9.) Accordingly, regional recalls represent roughly one percent of all vehicle recalls.

IV. NHTSA Letters

To address the ad hoc nature of manufacturer-initiated regional recalls, NHTSA sent manufacturers a letter in 1997 addressing its "concerns" over recalls structured to remedy "safety-related defects in vehicles located in select regions of the United States." (Pls.' Mot. Decl. of Clarence M. Ditlow ["Ditlow Decl."] Ex. 10 (1997 Letter from NHTSA to manufacturers ["NHTSA 1997 Letter"] at 1.) NHTSA advised that "safety-related defects should be remedied on a nationwide basis, except where manufacturers can demonstrate otherwise," and that its "policy will be to request manufacturers seeking to conduct such recalls to discuss the need for limiting a recall's geographic scope with the agency before the manufacturer makes a public statement concerning the scope of the recall." ( Id.

Furthermore, NHTSA planned to audit all regional recalls to "verify the effectiveness of the recall and to identify the number of vehicles that received the remedy." ( Id.

In 1998, NHTSA sent another letter to manufacturers setting out "policy guidelines" for regional recalls. (Ditlow Decl. Ex. 2 (1998 Letter from NHTSA to manufacturers ["NHTSA 1998 letter"]); see also id. Ex. 11 (Letter of Aug. 12, 1998 from NHTSA to Ford) ["Ford Letter"] (describing the "agency's general policy").)*fn9 This letter reiterates the 1997 letter's statement that "as a general matter, safety-related defects must be remedied on a nationwide basis, unless the manufacturer can justify a limited geographic scope." (NHTSA 1998 Letter at 1.) The letter then describes two categories of weather-related defects: (1) those likely to manifest themselves after just a short-term or single exposure to a particular weather condition, and (2) those likely to occur only after long-term or recurring exposure.*fn10 ( Id. at 1-2.) The agency determined that regional recalls would not be appropriate for the former category because an uncommon weather event or a brief visit to an area where the particular condition was common could trigger the safety hazard. ( Id. at 1-2.) However, as to the latter category, the letter states that the agency "will approve" a regional recall "if the manufacturer is able to demonstrate that the relevant environmental factor (or factors) is significantly more likely to exist in the area proposed for inclusion than in the rest of the United States." ( Id. at 2.) Thus, the manufacturer need only provide notice and a free remedy to those in the identified region, but since it is possible that other vehicles may be exposed to the weather condition -- for example, persons living in "border states" may frequently travel into the identified region -- manufacturers must ensure that vehicles from outside the region that experience the problem are "taken care of appropriately." ( Id.)

In addition to these weather-related regional recalls, NHTSA's 1998 letter addresses "safety problems caused by corrosion from ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.