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When trial lawyers design government agencies, and cars, too

The House Energy and Commerce's Subcommittee on Commerce, Trade, and Consumer Protection has a mark-up session scheduled for 2 p.m. today to make changes to the Motor Vehicle Safety Act. As described in the briefing memo, the legislation would create a new arm of government -- the Center for Vehicle Electronics and Emerging Technologies -- impose new safety standards and require new equipment (event data recorders). As with the Senate version of the bill, the "transparency and accountability" section invites litigation. From the briefing memo:

The legislation would increase transparency by requiring that more "Early Warning Reporting" data be made available to the public. This data is submitted by the vehicle manufacturer to NHTSA every quarter. The legislation would further improve public accessibility to information on the NHTSA website, and would encourage consumers, as well as manufacturer, dealer, and auto repair and mechanic personnel, to report potential defects to the agency.

The legislation would add oversight to NHTSA's investigations by enabling a citizen who files a petition to NHTSA requesting a defect investigation to seek judicial review if the petition is rejected.

The legislation would also increase the responsibility of manufacturers for information supplied to NHTSA by requiring a senior executive responsible for safety within the United States to certify the accuracy of information submitted to NHTSA in response to investigations.

Not surprisingly, the American Association of Justice today embraced the provisions, along with increased civil penalties, in a news release, "Consumers Need More Disclosure, New Safeguards to Improve Vehicle Safety."

Trial lawyers need access to raw, easily misrepresented reports and consumer complaints, the AAJ argues: "Further public disclosure of 'early warning' data that auto manufacturers submit to NHTSA quarterly will provide consumers with the ultimate weapon - the ability to know if there might be a problem with their vehicle or one they plan on purchasing."

Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, testified on the House legislation earlier this month. In his statement, McCurdy objected to several of the litigation-inviting provisions mentioned above:

Congress must balance the desire for more public information with valuable product information. The purpose of early warning data is to enable NHTSA to identify trends and take action sooner, not to create an EBay or Amazon.com where competitors can surf for company trade secrets or lawyers can shop for clients. Safety legislation should empower engineers, not trial lawyers.

Congress will need to avoid the possibility of creating a system of "regulation by litigation." Congress should not enact measures that will have the unintended effect of slowing, not accelerating, action on safety matters. If every petition denial is subject to judicial review, NHTSA will be forced to spend substantial resources and time responding to every petition, regardless of its merit, in anticipation of judicial review. This will not serve the agency, the industry or the public well.

The way the bill is shaping up, it doesn't appear that the consumers are really a priority.

P.S. The Senate Commerce Committee has released a summary of its hearing Wednesday, on the Senate version of the bill, S. 3302. Chairman Jay Rockefeller (D-WV) also issued a prepared statement.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.