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.)

As laid out in a Consent Order, Forest River was ostensibly fined for its failure to launch recalls in two instances, in which it merely issued TSBs. NHTSA told Forest River in February and March, respectively, that sending out a TSB for Rockwood and Flagstaff camper trailers with loose wiring in a heating element that could result in a fire, and a second TSB regarding Palomino camper trailers manufactured without an exhaust vent which could lead to carbon-monoxide exposure or a fire, was not how Things Are Done. Both safety violations demanded recalls – which Forest River only launched after NHTSA told it to do so.

Other crimes in the Consent Order’s laundry list included: a failure to respond adequately to a Special Order, failure to file early warning reports, failure to file recall quarterly progress reports and a failure to notify the agency of Canadian recalls.

But the timeline of this penalty actually goes back six years ago to a church bus crash and through cases brought by civil litigators – which eventually caught the attention of government regulators. On June 9, The Safety Record Blog published a two-part story about a 2009 fatal rollover in Mississippi that resulted in a civil liability settlement, a class-action lawsuit, two recalls and an agency Audit Query. (See A Bus Crash, Litigation and a Surprising Result Part I, Part II)

To recap: In July 2009, two members of the Shreveport, La. First Baptist Church youth group died and 21 passengers aboard a 42-passenger 2007 Starcraft XLT International 3200 bus manufactured by Forest River were injured. The group was enroute to Macon, Georgia to attend a youth ministry camp, when the left rear tire of the Starcraft bus suffered a catastrophic tread separation, prompting a loss of control that caused the bus to roll over one and a half times.

The company had built the bus on a Navistar chassis certified to a certain fully loaded weight. But in outfitting the bus with extra seats and a cargo room for customers such as churches, Forest River had cut the chassis in half and extended it to make it longer. Frame rails were also added to the rear of the bus to extend it even further for the cargo area. As re-configured by Forest River, the bus was no longer safe to carry a full load of passengers and their luggage.

Overloading has long been a safety issue affecting the recreational vehicles, 15-passenger vans and shuttle buses. Encumbering a vehicle with more passengers and cargo than its weight rating can support strains tires to point of failure, and change a vehicle’s dynamics in pre-crash maneuvers, making it more prone to loss-of-control crashes and rollovers. The combination of a catastrophic tread separation and an overloaded vehicle often has deadly consequences for occupants in vehicles that offer little occupant protection in crashes.

The victims sued Forest River. John Davidson, a Jackson, Mississippi lawyer who represented some of the plaintiffs discovered this loaded weight discrepancy in the First Baptist’s bus, and other, similar medium-sized buses. He also discovered, in deposition testimony, that none of Forest River’s engineers actually had engineering degrees, and the company had no industrial scales to weigh their products. The personal injury cases were settled in December 2012.

Forest River followed up in February 2013 with a small recall in which it determined that 399 XLT buses originally certified for 19,500 lbs. would have to be recertified to a GVWR of 20,500 pounds “to accommodate certain load conditions.” Starcraft offered to install additional lead springs to the rear suspension, upgrade the original four rear tires, re-labelled the buses correctly. Other units would have seats removed with a reimbursement of $1,500 per seat. In its legally mandated Part 573 chronology, Forest River did not mention the crash, injuries or deaths; it simply mentioned that a “warranty claim” prompted the review.

Meanwhile two other churches filed cases against Forest River in separate class-action lawsuits. The Church of Christ in Charleston, South Carolina and the New Mount Zion African Methodist Episcopal Church, of Tallahassee, Florida filed a separate class claims, making similar allegations that Forest River had sold buses at loaded weights that were improperly certified. Forest River disputed the claims but agreed to settle the case.

The July 2014 settlement offered the same remedy extended to Starcraft XLT owners in the recall two years earlier. The settlement also required Forest River to notify the U.S. Department of Justice within 10 days of the final approval of the settlement. On August 4, Forest River notified that U.S. District Court in Charleston that it had notified NHTSA, the Department of Justice and states Attorneys General.

Forest River, however, never did file a Part 573, even though the class-action settlement constituted an expansion of the 2013 recall.

On September 30, about two months after Forest River notified the agency, NHTSA opened an Audit Query into the company’s reporting practices. In October, NHTSA sent Forest River a Special Order asking it to produce all of its missing records to NHTSA. When Forest River said that it just wasn’t possible, the agency started fining them $7,000 a day.

And that brings us to today. Despite the path from crash to fine, the bus debacle only got a brief mention. Buried in a section entitled Remedying Past Noncompliance was this:

No later than 30 calendar days after the execution of this Consent Order, Forest

River shall submit to NHTSA a Part 573 Report to include all vehicles subject to the settlement agreement in The Church of Christ at Azalea Drive v. Forest River, Inc., et al., Case No. 2:11-cv-03371-PMD in the U.S. District Court for the District of South Carolina and New Mount Zion African Methodist Episcopal Church, Tallahassee, Florida v. Forest River, Inc., et al., Case No.4:12-cv-00221-MW-CAS in the U.S. District Court for the Northern District of Florida not already covered by Recall No. 13V-100.

We’ve said it before. We’ll say it again: Civil litigation matters.