Protective Orders and NHTSA

The National Highway Traffic Safety Administration’s whirlwind makeover continues. Monday, the agency published two Federal Register Notices – one inviting comments on a forthcoming guidance document about the sharing of safety defect information discovered in civil litigation and a second notice proposing rulemaking to codify procedures for the assessment of civil penalties.

After years of treating trial lawyers like Kryptonite, the agency has decided that using the information attorneys toiled to extract from a recalcitrant defendant with deep pockets would not rob NHTSA of its super crime-fighting powers. We all know that there are great stinking piles of corporate malfeasance moldering under seal in courtrooms all over this great nation. Yesterday’s notice seeks to shine a little light by sharing the agency’s thinking on the value of that information. NHTSA is recommending “that all parties include a provision in any protective order or settlement agreement that – despite whatever other restrictions on confidentiality are imposed, and whether entered into by consent or judicial fiat – specifically allows for disclosure of relevant motor vehicle safety information to NHTSA and other applicable authorities.”

As the agency noted, “protective orders, settlement agreements, or other confidentiality provisions prohibit vehicle safety-related information from being transmitted to NHTSA, such limitations are contrary to established principles of public policy and law.” With no apparent sense of irony, the Federal Register Notice mentions the GM ignition switch defect as an example of “how vital early identification of motor vehicle risks or defects is for the safety and welfare of the American public.”

In February 2014, NHTSA dissed Lance Cooper, a Marietta, Georgia lawyer who represented the family of a victim of a fatal crash caused by the General Motors ignition switch defect. Based on documents obtained over 18 months of discovery, Cooper warned NHTSA that GM had known about the defect for nine years and that it was only recalling a tiny fraction of the vehicles affected by a low torque condition that could cause the ignition switch to rotate out of run and into accessory position, causing the vehicle to lose power brakes and steering and disabling the airbag. He requested NHTSA that NHTSA open a Timeliness Query, which it did – but without ever acknowledging Cooper’s contribution. Petty and stupid, to boot.

The plaintiffs’ bar, will no doubt welcome NHTSA’s change of heart and have lots to say about it. We don’t believe that automakers will be as enthusiastic. But, how will they argue for the right to keep safety problems from the public? Fortunately for them, an enforcement guidance document doesn’t compel litigants to help NHTSA, but it does encourage them. Before it issues a final Enforcement Guidance Bulletin, NHTSA wants the public to weigh in on specific best practices with attention to the practical impact, and the relative costs and benefits of implementing various practices.

The civil penalties proposal satisfies a directive of Moving Ahead for Progress in the 21st Century Act is issue a rule “providing an interpretation of these penalty factors,” and to update its regulations to reflect the new increased statutory civil penalty maximums for odometer fraud and for lying to the government. Hoo boy – you could erase the deficit by penalizing manufacturers for all of the lies they tell NHTSA.  

This provision will allow NHTSA to directly levy court-enforceable penalties. As The Safety Record has explained, in the past, the agency could reach settlement agreements with automakers and levy pretty significant fines. But to bring an automaker to court, the agency had to go through the U.S. Department of Justice (See NHTSA Consent Orders and Civil Justice). In this notice, NHTSA argues that “MAP–21 vests authority, responsibility, and discretion in the Secretary to impose civil penalties for violations of the Safety Act.” It is proposing to adopt informal procedures which will allow violators to choose between paying the money immediately, or drag it out for months in an informal hearing.  An automaker’s three choices would be: pay the demanded penalty; provide an informal response; or request a hearing. The agency envisions tasking the Assistant Chief Counsel for Litigation and Enforcement with initiating the proceedings by serving notice of the civil penalty and charging him or her with having violated one or more laws, along with the specific factual allegations and informing the violator of the options for responding.

NHTSA promises that “any assessment of civil penalties will be made only after considering the nature, circumstances, extent and gravity of the violation. As appropriate, the determination will include consideration of the nature of the defect or noncompliance; knowledge by the respondent of its obligations under 49  U.S.C. chapter 301; the severity of the risk of injury posed by the defect or non-compliance; the occurrence or absence or injury; the number of motor vehicles or items of motor vehicle equipment distributed with the defect or noncompliance; actions taken by the respondent to identify, investigate, or mitigate the condition; the appropriateness of such penalty in relation to the size of the business of the respondent, including the potential for undue adverse economic impacts; and other relevant and appropriate factors.”

The Safety Record sees in these notice more signs that playtime is over for the auto industry.

But, strictly speaking, the window for change may be short. The Obama administration and its current pick for NHTSA Administrator Mark Rosekind, have another year at the helm. The next president might not be as interested in keeping the agency’s focus on improving its performance as a public health agency, so hopefully the agency will keep moving forward.

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