NHTSA Fines Bus Maker Forest River

Today, the National Highway Traffic Safety Administration levied the maximum penalty against Indiana-based heavy vehicle manufacturer Forest River – $35 million for failing to launch timely recalls and for failing to fulfill a host of reporting obligations to NHTSA.  (Spartan Motors, another manufacturer of heavy vehicles, also got dinged for $9 million yesterday for failing to file Technical Service Bulletins with the agency, and in six cases, failed to launch recalls on safety defects ranging from Tag Axle Wheel Bearing failures to engine cooling fans to sway bar end links.)

CPSC Slaps Office Depot 3.4 Million Times in Chair-tastrophe

The U.S. Consumer Product Safety Commission has fined paper-and-pencil-pusher Office Depot $3.4 million for its failure to report defects in its Gibson Leather and Quantum office chairs. The two shared a common problem – a sudden collapse of the seat base and a common retailer with a high resistance to recalls – but had different failure modes and price points.

The Wrong Fix for the Broken Recall System

Last month, Senators Ed Markey and Richard Blumenthal proposed new legislation that would link car registrations to completing recall repairs. The Repairing Every Car to Avoid Lost Lives (RECALL) Act threatens state DMVs with the loss of five percent of its federal highway funds if they don’t add to their duties checking open recalls for every new and renewed auto registration, and adds to the responsibilities of consumers getting recall repairs done to be properly registered.

Taking on Takata

Lately, the National Highway Traffic Safety Administration has come in like a wrecking ball, knocking aside manufacturers’ excuses for delaying recalls and other sundry sins with multi-million dollar fines – and now aggressive legal action.

Behind the Honda $70 Million Fine

Honda had its turn on the ducking stool yesterday. The Japanese automaker, which had previously disclosed that a data entry glitch led to a failure to report some 1,729 death and injury claims to the National Highway Traffic Safety Administration’s Early Warning Reporting system, got held underwater until it agreed to pay $70 million in fines.  

NHTSA’s Message to the Defense: Call Us Before We Call You

This week, while heads were rolling out the doors of the RenCen (GM headquarters) in downtown Detroit, the Chief Counsel of the National Highway Traffic Safety Administration was laying down the law for defense lawyers at a Chicago legal conference.

Amid the presentations at the American Conference Institute’s 7th Annual Summit on Defending & Managing Automotive Product Liability Litigation devoted to defeating class-actions, the liability of autonomous cars and one of our personal faves –tire aging (with a shout-out to SRS’ Sean Kane!), was a warning from the government.

First, Chief Counsel O. Kevin Vincent lulled them with a feel-good “rah-rah-ree” paean to industry. And then, he made the hair on the back of their necks rise: A manufacturer’s obligation to report a defect within five days of its discovery is the law, and after a long hiatus from doing its job, NHTSA intended to take “an aggressive stance” in enforcing it.

The first offense line in the discovery of a defect was not the Office of Defects Investigation, Vincent said. It was the manufacturers themselves.

“We don’t have analysts, but your clients do. You all have ability to find these defects,” he said.

A manufacturer cannot delay a defect finding, while a safety problem meanders through an internal process involving multiple committees. It cannot hide its knowledge behind a wall of attorney work product and attorney-client privilege. It cannot wait until it’s gotten the supply chain ready to implement the recall.

And it better not wait until after it settles a plaintiff’s case for big bucks. The TREAD Act obligated NHTSA to “follow up on civil litigation that sends up red flags,” he said.  And they’d be looking for signs of foot-dragging in large civil litigation settlements. Not right away, certainly. Civil actions take years, he said. (This gives the safety problem plenty of time to fester.) How much of a settlement was enough to catch NHTSA’s attention? Vincent wouldn’t name a figure.

Toyota’s Billion Dollar Web

Back in 2010, after Toyota announced that a federal grand jury in New York had subpoenaed the company on June 29 for documents regarding relay rod failures in Toyota truck models, we asked if the automaker would be the first to be prosecuted under the Transportation Recall Enhanced Accountability and Documentation Act (TREAD).

Well, right question, wrong defect.

Under the settlement with the Department of Justice announced today, Toyota is banged for $1.2 billion, and prosecution for committing one count of wire fraud is deferred for three years, for the lies it told about the floor mat entrapment and sticky pedal recalls. According to Toyota’s Statement of Facts, the automaker sought to limit its floor mat recalls, even though the entrapment hazard affected other models, and resisted the sticky pedal recall, even though Toyota had addressed the problem in Europe.

“This sends a mixed message,” says Sean Kane, president of Safety Research & Strategies. “On the one hand, a $1.2 billion fine is a very significant hit. But the government’s focus is only on the narrow areas of the floor mats and sticky pedals. The bulk of Toyota vehicles experiencing Unintended Acceleration problems were never recalled.  That billion dollars doesn’t do a thing for Toyota owners stuck with defective vehicles.”

The skeleton of this particular set of lies have been in the public domain for several years. In April 2010, when former Secretary of Transportation Ray LaHood announced that the agency had imposed a $16.4 million fine on Toyota for failing to recall 2.3 million vehicles with defective accelerator pedals – then the largest civil penalty NHTSA had levied against an automaker – the Secretary failed to make public the documents laying out his rationale. In May 2011, NHTSA quietly posted the sternly worded demand letter that explained why Toyota got slapped.

To remind our readers, Toyota recalled the CTS supplied pedal in Europe in September 2009, but waited until January 2010 to recall the pedals in the U.S. However, on October 7, 2009, “a staff member of the Toyota Motor Corporation Product Planning and Management Division sent a copy of an Engineering Design Instruction describing the pedal remedy that was already implemented in Europe to someone at Toyota Motor Engineering and Manufacturing North America, Inc. for the accelerator pedal of a RAV 4 manufactured in Canada. Two weeks later “a member of the TMC PPM inexplicably instructed a member of the TEMA PPM not to implement this Engineering Change Instruction. Furthermore, in November 2009, Toyota provided NHTSA with FTRs regarding sticking accelerator pedals on vehicles in the United States but not with information regarding Toyota’s extensive testing and determinations regarding the cause of the sticking accelerator pedals or an explanation of the significance of the FTRs, the demand letter said.

Don’t Settle, NHTSA

Yesterday, the agency sent General Motors an extraordinary 27-page Special Order compelling the automaker to answer 107 questions about an ignition defect in the 2005-2007 Chevy Cobalt and six other models that claimed at least 13 lives and injured at least 31.

Retired NHTSA senior enforcement lawyer Alan Kam said that he’d never seen anything like it.

We are encouraged by NHTSA’s aggressive and swift action, and we are hoping and wishing and praying for actual enforcement follow-through that benefits and protects consumers, rather than merely burnishes the agency’s image.

We all know – including GM – that a big, fat fine is in their future for failing to launch a recall within five days of discovering a defect, as Marietta, Ga. attorney Lance Cooper found out. Cooper obtained internal documents during the discovery phase of a lawsuit on behalf of the family of the late Brooke Melton, showing that GM engineers discovered in 2004 that the ignition of the 2005 Cobalt could wander from the run to off or accessory position while the vehicle is underway. 

Why Civil Litigation Matters to Safety: GM Edition

If you want to know why civil litigation matters to safety, take these links over to USA Today and read James Healey’s fine coverage of General Motor’s crappy, nine-years-too late 2005 Cobalt and Pontiac G5 recall, and attorney Lance Cooper’s request to the National Highway Traffic Safety Administration for a Timeliness Query investigation. (6 Killed in GM Cars with Faulty Ignition Switch; Lawsuit: GM Knew of Cobalt Ignition Problem; and Lawyer Asks Feds to Explain Recall Timing)  

After settling a lawsuit in which a 29-year-old woman died in crash caused by a defect known within GM since 2004, the automaker announced that it would recall a subset of vehicles plagued by ignition switches that wander from the run to the accessory or off position. These shifts  create an emergency situation while the vehicle is underway, disabling the airbags while cutting off the engine power, power brakes and power steering. The defect, which GM engineers discovered in 2004, before they began selling the 2005 Cobalt, was the central issue in Melton v General Motors.

Brooke Melton, 29, died in 2010 when the ignition switch in her 2005 Cobalt slipped into the accessory position as she drove along Highway 92 in Paulding County, Ga. Melton’s Cobalt skidded into another vehicle; she died of her injuries in the crash.

The incident was initially attributed to Melton simply losing control of her car on a rainy night. But the Melton family sought the counsel of attorney Lance Cooper, after facing a legal claim from the driver in the other vehicle. Cooper, a veteran of motor vehicle defect litigation, saw something that many lawyers would have overlooked and filed suit against GM.  The records he pried out of GM’s hands after 18 months of requests for production and a court order compelling the automaker to produce what it knew about the defect, revealed a long, sorry history. GM engineers had discovered the ignition switch problem during the Cobalt’s production stage, but the company sold them anyway. GM began to receive complaints about the problem almost immediately, and tried to make them go away with an October 2005 TSB covering the 2005 Cobalt and with a later TSB involving later model years of the Cobalt, the Pontiac G5, along with 2006-2007 Chevrolet HHR, the 2005-2006 Pontiac Pursuit in Canada; the 2006-2007 Pontiac Solstice; 2003-2007 Saturn Ion; and 2007 Saturn Sky. This “fix” – an ignition key cover that changed the design from a slot to a key hole – did not solve the problem.

The Toyota Owners Left Holding the Bag

John Biello was not ready for the cruise control malfunction that sent his 2009 Tacoma careening down an exit ramp, then skidding into a rollover last June. But Tuesday, when he and his wife Diane appeared before the Commonwealth of Massachusetts Division of Insurance Board of Appeals to fight an automatic rate increase mandated by state law, Biello was fully prepared to educate the hearing officer about Unintended Acceleration problems in Toyotas.

As the great tide of cash washes from Toyota into the pockets of the U.S. government, attorneys, research institutions and some death and injury victims to settle fines and claims without an admission that the automaker’s electronic throttle control system is defective, owners like John and Diane Biello represent those left to deal with Toyota’s mistakes on their own. The Rehoboth, Massachusetts couple had no counsel, just a compelling account and a binder of public documents showing that Toyota Unintended Acceleration problems continue today and that juries and technical experts recognize what the National Highway Traffic Safety Administration has not: Toyota’s badly designed electronic architecture can cause UA.

“I knew that there had been this unintended acceleration problem. I had read about it a couple of years ago,” John Biello says. “But I thought it pretty much done. I thought the problem was fixed and I didn’t really think my vehicle was involved because I got no Unintended Acceleration recall notices.”

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