Insights

When a company learns that it may wind up as a defendant in a multidistrict litigation (or MDL), it may initially feel like a disaster. Between expensive, drawn out, and complicated legal proceedings and the possibility of outsized damages and company-threatening liability, it is difficult to imagine the upside. However, MDLs may not be as unfavorable a forum for defendants as they initially seem.

The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) took its first leap toward removing unintentional regulatory roadblocks for autonomous vehicle (AV) developers. On March 17, NHTSA released a notice of proposed rulemaking (NPRM) to modernize numerous Federal Motor Vehicle Safety Standards (FMVSS), and clarify ambiguities in current occupant protection standards for vehicles equipped with automated driving systems (ADS) that are designed without traditional manual controls.

On March 11, 2016, the National Highway Traffic Safety Administration (NHTSA) released a final enforcement bulletin that set forth “Recommended Best Practices for Protective Orders and Settlement Agreements in Civil Litigation.” In the Agency’s view, restrictions imposed in protective orders and settlement agreements are limiting its access to “critical safety information.” Although federal law may require members of the industry to report this information, in NHTSA’s experience, they do not always do so, or do so timely. And according to the Agency, access to critical safety information identified or discovered in private litigation is essential to enable NHTSA to protect public safety. As a result, the guidance “communicates the Agency’s position that confidentiality provisions should not be used to prevent safety-related information from reaching NHTSA.”

On March 25, 2016, the National Highway Traffic Safety Administration (NHTSA) issued NHTSA Enforcement Guidance Bulletin 2016-01; Guidance on Submission and Treatment of Manufacturer Communications to Dealers, Owners, or Purchasers About a Defect or Noncompliance to (1) inform motor vehicle and motor vehicle equipment manufacturers of their statutory obligations to provide indexes for certain communications they submit to the Agency, (2) provide recommendations for complying with the indexing requirement, and (3) indicate NHTSA’s intention to publicly post all such communications and indexes on its website. The bulletin also expresses NHTSA’s intention to enforce the indexing requirement.

On Wednesday, October 21, 2015, a U.S. House of Representatives subcommittee debated a draft bill that seeks to amend the National Traffic and Motor Vehicle Safety Act, 49 U.S.C. §§ 30101, et seq., "[t]o provide greater transparency, accountability, and safety authority to the National Highway Traffic Safety Administration [NHTSA], and for other purposes." The bill, which has drawn negative comments from NHTSA's administrator, the Federal Trade Commission (FTC), and some Democratic lawmakers, addresses a variety of vehicle safety matters, many of which are focused on emerging technologies and protecting consumer data. Issues include vehicle data privacy, cybersecurity and advanced automotive technologies.

On May 13, 2015, Transportation Secretary Anthony Foxx announced that the National Highway Traffic Safety Administration (NHSTA) intends to expedite its Notice of Proposed Rulemaking to propose a new Federal Motor Vehicle Safety Standard that would require vehicle-to-vehicle (V2V) communication capabilities in all new light vehicles (which includes passenger cars and trucks), as well as minimum performance requirements for these systems. According to Secretary Foxx, speaking last week at Delphi Labs in Silicon Valley, NHTSA intends to issue a proposed rule on V2V technologies in 2015, sooner than its previously announced timeline of 2016.

2014 was a record-breaking year for automobile recalls. Manufacturers recalled nearly 65 million vehicles in 2014, more than twice the previous record. In the wake of these record numbers, and the high profile nature of some of the recalls, Congress appears eager to enhance the automobile defect reporting system and increase the recall completion rate. By the second day of March, lawmakers had introduced two bills that seek to strengthen the authority and funding of the National Highway Traffic Safety Administration (NHTSA), increase transparency to the public of both NHTSA data and auto makers' communications regarding vehicle issues, and compel consumers to participate in recalls. Whether these proposed pieces of legislation pass, and whether they mark the beginning of a trend of stricter regulation, remain to be seen.

The Federal Trade Commission (FTC) and U.S. Environmental Protection Agency (EPA) are both considering tightening rules governing the advertising of vehicle fuel economy. New federal regulations, however, may not stem the recent tide of consumer class actions alleging that auto manufacturers have misled consumers with inaccurate miles-per-gallon (MPG) claims.

On February 3, 2014, the National Highway Traffic Safety Administration (NHTSA) announced that it currently supports, and will eventually require, vehicle-to-vehicle (V2V) communication technology in light vehicles. V2V technology connects vehicles by allowing them to “talk” to each other through the exchange of data, such as speed and location, ten times per second. The technology will initially be utilized to provide warnings to drivers, but ultimately could be combined with self-driving vehicle technology to accelerate, brake, or steer the vehicle automatically. The main intent of V2V technology is to prevent collisions, but it could also be used to provide real-time information related to more efficient routes, thus alleviating traffic congestion, reducing emissions, and saving time.

Self-driving or autonomous vehicle technology continues to develop rapidly. And as the technology continues to gain speed, new laws and rules are being enacted to attempt to ensure that these vehicles are introduced safely. As of now, most of the legal and regulatory developments for autonomous vehicles have occurred at the state level. Continuing the trend, two states, Michigan and California, recently made major strides in further regulating the technology.

On August 20, 2013, the National Highway Traffic Safety Administration (NHTSA) promulgated a final rule that imposes additional obligations on vehicle and equipment manufacturers in reporting safety information to NHTSA and notifying owners about recalls. These newly-enacted changes require manufacturers to provide more detailed data through early warning reporting (EWR), compel manufacturers to supply free online access to recall information searchable by vehicle identification number (VIN), and modify the information required to be provided in a Part 573 report. Many significant changes in this rule will take effect in October 2013, and the new rule is to be implemented in full by August 2014.

On June 24, 2013, the National Highway Traffic Safety Administration (NHTSA) announced a further delay in finalizing a rule requiring that all new vehicles be equipped with a rearview camera designed to avoid "backover" crashes. Though federal law required NHTSA to promulgate regulations to mitigate the risk of backover crashes by February 2011, NHTSA's rulemaking has been delayed multiple times under authority allowing the Secretary of Transportation to modify this timeline if he determines that the statutory deadline cannot be met. In the letter to Congress announcing this most recent delay, the Secretary said that the rearview camera rule likely will not be finalized until January 2015, meaning that compliance would not be required until model year 2017.

The Consumer Product Safety Commission (CPSC) recently voted to approve a proposed rule amending 16 C.F.R. Part 1110 et. al., more commonly known as the '1110 rule.' Released in the Federal Register at 78 FR 28,080, the proposed amendment proffers numerous changes to the rule, including who is required to certify, what information is listed on the certificate, and when and how long the certificates must be issued and maintained. Importantly, if finalized, the rule would require electronic filing of certificates with each shipment as a requirement for imported products to make entry into the United States. In one of the most significant changes discussed below, the CPSC proposes to impose a certification requirement on common carriers, freight forwarders, and third party logistics providers that assume the role of "importer of record" for direct to consumer shipments from foreign manufacturers. 

On March 28, 2013, the Sixth Circuit reinforced the high bar a petitioner faces in contesting rules issued by the National Highway Traffic Safety Administration (NHTSA), rejecting a trucking trade organization's challenge to 2009 roofing safety standards promulgated by the agency.  

On Monday, January 7, 2013, the National Highway Traffic Safety Administration (NHTSA) proposed a rule (FMVSS No. 141, "Minimum Sound Requirements for Hybrid and Electric Vehicles") to establish a federal motor vehicle safety standard (FMVSS) that sets minimum sound requirements for hybrid and electric vehicles, including passenger cars, light trucks and vans, medium and heavy duty trucks and buses, low speed vehicles, and motorcycles. If finalized, the rule will require electric and hybrid vehicles to produce an alert sound loud enough for a nearby pedestrian to reasonably detect the vehicle’s presence, direction, location, and operation, even in urban areas with substantial ambient noise.

Recent regulatory and Congressional action will increase the maximum civil penalties allowable for violations of certain statutes administered by the National Highway Traffic Safety Administration ("NHTSA"). Before the end of 2012, the maximum civil penalty for a series of related violations will rise to $17,350,000. That maximum allowable penalty will more than double to $35,000,000 on October 1, 2013.

On April 16, 2012, the National Highway Traffic Safety Administration ("NHTSA") issued a notice of proposed rulemaking that will affect automobile manufacturers and certain component part manufacturers. NHTSA's proposed rule seeks to modify and expand current Federal Motor Vehicle Safety Standard No. 124 ("FMVSS No. 124"), the standard that regulates Accelerator Control Systems ("ACS"). This widely-applicable proposal covers passenger cars, multipurpose passenger vehicles, trucks and buses, though application of one component of the rule is currently limited by vehicle weight. NHTSA hopes that the proposed rule will "reduce deaths and injuries resulting from uncontrolled vehicle propulsion caused by malfunctions or disconnections in accelerator control systems and from conflicting inputs to the brake and accelerator controls in a vehicle."     

On December 12, 2011, the National Highway Traffic Safety Administration (NHTSA) issued a notice of proposed rulemaking seeking to address safety issues relating to keyless ignition controls. The notice reportedly stems from vehicle owner complaints to NHTSA that have arisen in three situations: one, the driver's inability to power down a moving vehicle when he or she was panicking, for example, when the brakes failed; two, the vehicle rolling away because the driver turned off the propulsion system, but did not put the vehicle into "park"; and three, the driver exiting a vehicle, but unintentionally leaving it running. The complaints NHTSA reviewed highlighted the risks of crashes, and in the third situation, dangers associated with carbon monoxide.

On Wednesday, February 23, 2011, the United States Supreme Court issued a decision that weakens the protection that federal preemption provides automobile manufacturers from tort liability in certain situations. In Williamson v. Mazda Motor of America, Inc., the Court determined that compliance with a Federal Motor Vehicle Safety Standard (FMVSS) does not shield a manufacturer from tort liability when a safety measure proves “inadequate” unless setting out options for compliance is a significant objective of the applicable FMVSS. The Court distinguished its important 2000 preemption decision Geier v. American Honda Motor Co., which found that compliance with a FMVSS did preempt a state common law tort claim, relying in large part on the differences between the safety measures at issue in the two cases.

The U.S. Congress has been working on several versions of legislation which would make it more difficult for foreign manufacturers to avoid suit in the United States. Various committees have held hearings, and several bills have been introduced. The titles of the hearings and legislation are illustrative of where Congress might be going - Protecting the Playroom: Holding Foreign Manufacturers Accountable For Defective Products; Protecting Americans From Unsafe Products Act; Leveling the Playing Field and Protecting Americans- which all suggest a less than subtle bias against foreign companies and in favor of U.S. would-be plaintiffs.