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.

NHTSA started the week with a bang – wresting from a formerly defiant Fiat Chrysler its signature on a detailed Consent Order, admitting that it violated the Safety Act in myriad ways, agreeing to pay a $105 million fine, buy back some unremedied recalled vehicles and allow a Special Monitor to look over its shoulder.    

Since May 2014, when General Motors signed a Consent Order in the ignition switch defect now officially associated with 124 deaths and 269 injuries, the agency has wrangled 10 such agreements with manufacturers – large and small, suppliers and equipment manufacturers. That’s a Consent Order every six weeks.

And these settlements are not the namby-pamby compromises of as recent vintage as June 2013, when the agency quietly closed its inquiry into Ford’s failure to launch a timely recall. Ford agreed to pay a $17.3 million and NHTSA agreed not to publicize it to make a very embarrassing and unpleasant bit of business go away.

[Ford was fined for failing to recall 2001-2004 Ford Escape and Mazda Tribute vehicles to correct an earlier recall repair to the cruise control cable. Ford had first recalled the vehicles in December 2004 for an accelerator cable that could migrate out of position and become stuck in a wide-open position. Unfortunately, if the repair wasn’t done incorrectly, it could increase the potential for that very dangerous condition. Ford knew it had a problem because by October 2005 it issued a Technical Service Bulletin warning service techs that a failure to follow the correct repair procedures could make things worse, and admonished dealers that all vehicles in their inventory, along with recently delivered vehicles had to have the repair – the installation of a newly designed accelerator cable. Ford did file the TSB with the Recall Management Division, but did not bother to share this news with current owners. The RMD accepted the paperwork without further comment. Nothing happened until 2012 when the Center for Auto Safety filed a petition after the horrific death of 17-year-old Saige Bloom. Bloom was driving her just-purchased 2002 Escape back home when she died in an unintended acceleration crash in Payson, Arizona, with her mother following in another car.  It had only had the first recall repair. (If you want to be thoroughly depressed read NHTSA’s “Tough” Stance on Ford Recall – Eight Years Too Late.)]

So the money looked serious. But, as both parties to the agreement had acted abominably, the settlement language was laden with contingencies such as:

“WHEREAS, information supplied by Ford during the Preliminary Evaluation supports a tentative conclusion that Recall 12V-353 may have been untimely.”

Eighteen months later, the agency and its new Administrator Mark Rosekind were publicly bragging that “in 2014 alone, NHTSA issued more than $126 million in civil penalties, exceeding the total amount collected by the agency during its forty-three year history.” We are just finishing the seventh month of 2015 and the agency has levied $230 million via Consent Orders alone– pushing double 2014’s total.

The 10 Consent Orders are:

2014

May – GM fined $35 million failure to submit timely recall in ignition switch defect
Oct. – Ferrari fined $3.5 million for a failure to submit Early Warning Reports 
Aug. — Hyundai-Kia fined $17.3 million failure to submit timely recall in a brake defect

2105

Jan. Honda — $70 million for failure to submit Early Warning Reports
Feb. Ricon — $1.7 million for continuing to sell defective wheelchair lifts, while recalling the lifts to remedy a  fire hazard
March – Graco fine $10 million for failure to submit timely recall in child seat buckle defect
May –Takata civil penalties held in abeyance. The supplier failed to launch nationwide recalls in airbag inflator defect.
July 10 Forest River $35 million for failure to submit Early Warning Reports and failure to submit timely recall in two cases
July 10 Spartan Motors $9 million for failure to submit Early Warning Reports and failure to provide timely remedies in three recalls.
July 20 Fiat Chrysler Fiat $105 million for a variety of failures in 23 recalls

Consent Orders vs. Settlement Agreements

Consent orders are a relatively new enforcement strategy for the agency. The National Highway Traffic Safety Administration administers the Safety Act, and is authorized to levy civil penalties for its violations, but it cannot compel an automaker to pay them unless the agency goes to court. And, to take that route, the transportation department must do so through the U.S. Attorney General and the Department of Justice.  

In the past, NHTSA eschewed litigation and settled for a compromise – civil penalties in the interest of expediency. Settlement agreements allowed the automaker to deny any wrongdoing, pay the money and go about its business.

Take, for example, in the December 2010 $16 million settlement agreement with Toyota over its decision to wait year recall U.S. pick-up trucks of defective tie rods. In October 2004, the automaker disclosed to NHTSA that it had recalled Hilux and Hilux Surf vehicles sold in Japan for defective relay rods – but not its U.S. counterparts, Toyota 4Runner, the Toyota Truck and Toyota T100. The rods had a tendency to snap, leaving the driver with no steering controls. But Toyota blamed it on driving conditions unique to the Japanese market and said it had no U.S. reports. On September 6, 2005, Toyota finally recalled the defective steering relay rods on its U.S. Toyota pick-ups. Litigation, however, revealed that Toyota had actually received at least 44 reports in the U.S. since as early as 2000, including crashes involving rollovers and injuries, as well as lots of warranty repairs for broken relay rods.

NHTSA had Toyota dead to rights. The automaker clearly lied and straight-up violated the timeliness provisions of the recall regulations, but it was allowed to formally assert its innocence on the record– as it was in its April 2010 $16.4 million settlement with NHTSA for failing to recall sticky accelerator pedals in the U.S., when it had done so in Ireland and the UK and its December 2010 $16.4 million settlement for failing to launch a timely pedal entrapment recall.

NHTSA’s half-a-loaf solution got it a few headlines, but industry still had the upper hand. Settlement agreements appeared to have no deterrence effects – they were bad for safety; and actively injurious to civil litigation victims who suffered great harm from defects that were remedied at industry’s leisure.

Consent orders are very different in substance, tone and legal muscle. For one, they are court-enforceable. Second: denials of wrongdoing are out. Third: fines are only one aspect of the penalty. In these Consent Orders, NHTSA extracted agreements from automakers to perform all kinds of actions from buybacks to the installation of Special Monitors, reports outlining plans and procedures for the “aggressive assessment of defect trends.”

Child seat maker Graco, for example, was given a long list of remedial actions it is required to take, including the development of improved safety messaging, a scientifically tested program to increase the effectiveness of consumer product registration, and increased consumer participation in recalls and to sponsor an annual industry meeting with safety advocates on defect trends in child safety seats.

Allan J. Kam, a retired agency senior enforcement attorney, observed that NHTSA’s use of a Special Monitor in the case of Chrysler Fiat may be the agency “trying to leverage its investigative activities given its limited manpower and resources.”

“This technique puts an obligation for a lot of the legwork to be done by someone other than the Office of Defects Investigation,” he says. “The staff of ODI is overworked and understaffed, and is about the same size as when I came to work for agency in 1975. In the intervening 40-plus years, the size of fleet and the complexity of the vehicles has increased exponentially.”

The Beginning and the Beginning of the End

The last fire-breathing NHTSA administrator was Joan Claybook, who took an aggressive enforcement stance from 1977 to 1981.  Where the Reagan administration tried to pull every last tooth from government regulators and regulations without any anesthetic, the Clinton administration applied marketing. In 1993, President Bill Clinton and Vice President Al Gore launched the Re-Inventing Government Initiative. Regulatory heads were ordered to cut obsolete regulations, reward results, get out of Washington to the grassroots and “negotiate, don’t dictate.”

Gore not only authored the initial report, the National Performance Review, he led the subsequent effort, the National Partnership for Reinventing Government. Agencies were to apply customer service principles to their work and form “regulatory partnerships.” The intent of promoting government-industry cooperation over conflict in service to providing citizens with clean air and water, untainted food and safe products was good. In practice, however, Gore’s the-wolf-shall-dwell-with-the-lamb vision of government-industry relations seemed only to sharpen industry’s appetite for mutton—at least in the auto world.

In the two decades that followed, NHTSA rarely issued a civil penalty. NHTSA forbore all manner of disrespect and flouting of regulations – Part 573 Notice of Defect and Noncompliance submissions in which manufacturers claimed there was no safety defect, and its recall remedies were actually customer satisfaction campaigns. Missing discovery-of-the-defect chronologies were the norm. When NHTSA proposed to disallow automakers’ blatant attempts to use the (49 CFR) Part 573 to draw a cloak of immunity around themselves in litigation, they screamed that it wouldn’t do recalls at all, kicked and held their collective breath until NHTSA obligingly dropped it.

Manufacturers grew relaxed about their mandated Early Warning Reporting obligations. In the face of industry resistance, the agency resorted to cutting bad safety deals – like the ornamental trailer hitch Chrysler Fiat agreed to add to its Jeep Grand Cherokee and Liberty vehicles that in no way will keep their exposed fuel tanks from exploding in rear impacts – when it did anything at all.

But the increasingly rapid cycle of safety crises – Toyota Unintended Acceleration in 2009, the GM ignition switch scandal in 2014; Takata airbag inflators in 2015 was battering the hell out of NHTSA in Congress and in the press. It looked incompetent, apathetic, weak. And it couldn’t go to the Hill and make a case for more resources without flipping that narrative.

It’s hard to pinpoint the exact moment that the agency had tired of its role as industry concierge, but The Safety Record Blog first smelled smoke in January 2014, when the agency took the rare step of demanding that Graco recall more than 5.6 million rear facing infant, convertible and booster seats for buckles that refused to unlatch. On January 14, 2014, the agency it sent a recall request letter, pushing hard against Graco’s assertions that there was no safety problem, and it was their customers’ fault for letting the kiddos drink juice in car seat, gumming up the works. It threatened to go to an even rarer Initial Decision.

Graco, only inclined to recall some of the affected models, submitted a Part 573 with all the caveats manufacturers had been routinely adding. Recall Management Division Chief Jennifer Timian went after Graco, hammer and tong. She called its Part 573 “seriously deficient in numerous respects;” its language and content “incomplete and misleading, to both the agency and consumers,” and told Graco to try again.

Graco’s continued defiance earned it a Timeliness Query and Special Order in March in which it was compelled to explain why it had failed to recall infant seats with the same harness buckle. By July 2014, Graco threw in the towel and added another 1.9 million seats to the March recall. Graco’s resistance earned it its very own $10 million Consent Order. (see Graco’s Perception Problem)  

While The Safety Record Blog has been among the agency’s most vociferous critics, we are heartened to see this new enthusiasm for enforcement. The use of Consent Orders with provisions that call upon violators to take corrective actions is a very positive step. The challenge will be for NHTSA to ensure that violators fulfill the terms of the these orders, even as it will, no doubt, issue more in the future. 

Thirty four years is a long time to wait for the pendulum to swing, but, for now, the momentum is going in the right direction.

When David Strickland went directly from representing industry’s interests as the Administrator of the National Highway Traffic Safety Administration to representing industry’s interests as a member of the Washington D.C. lobbying firm Venable, LLC, he was part of a proud agency tradition of lending the dignity of their public offices to private commercial interests.

The list of former NHTSA officials advising manufacturers or testifying on their behalf is long. (See Strickland Takes Express to Lobbytown) The list of those who have been barred by federal rules and a long-established practice is much shorter, but David Strickland got on that list, too, when an agency lawyer barred him from offering expert testimony in Sachs v. Toyota, a consumer economic loss class action lawsuit in a California Superior Court “alleging that Toyota’s design and sale of its keyless ignition system do not contain sufficiently robust safeguards to prevent drivers from forgetting to turn off the engine before exiting the vehicle.”

Toyota retained Strickland, who was officially designated as an expert in mid-May, to testify on the agency’s efforts regarding FMVSS 114 Anti-Theft and Rollaway Standard – the regulatory and enforcement efforts of NHTSA generally, and Toyota’s efforts to ensure compliance, specifically. Toyota is not the only automaker with a keyless ignition design that allows rollaways and does little to mitigate the carbon monoxide hazard. But it is certainly leading the pack in known deaths – six out of 15 – attributed to CO poisoning that occurred when owners of vehicles with keyless ignitions left their vehicles running.

In a scathing decision letter, Tim Goodman, Assistant Chief Counsel for Litigation and Enforcement, dismantles Strickland, limb by limb.

“We find that there is no basis upon which the Agency should grant an exception to its general prohibition on expert witness testimony to allow Mr. Strickland to testify in this matter. The Agency does not find that granting a deviation from the general prohibition would not potentially interfere with matters of operational necessity.  Likewise, it is impossible to maintain the appearance of impartiality of the Agency among private litigants – one of the three objectives specifically identified by the Kaplan Memo as relevant here – when one of those litigants has the former NHTSA Administrator testifying on its behalf."

And, although no such words were used, the decision fairly seethed with “The nerve of this guy!” 

Former NHTSA employees cannot actually raise their right hands and swear to tell the truth, the whole, truth and nothing but the truth about agency actions. For the last two decades, Part 9 of the Code Of Federal Regulations, which outlines the procedures governing the testimony of federal employees in legal proceedings, along with a 1994 memo authored by former NHTSA counsel Stephen H. Kaplan make the parameters pretty clear – one can talk generally about the agency’s policies or specifically about issues in which you weren’t personally involved without seeking the agency’s permission. But opining on matters directly related to your actions while on the job with the agency is a big no-no, unless you can clear a very high bar.

The reasons for this caution are obvious to most. As Part 9 says: the rules intend to “minimize the possibility of involving the Department in controversial issues not related to its mission; maintain the impartiality of the Department among private litigants; avoid spending the time and money of the United States for private purposes; and to protect confidential, sensitive information and the deliberative processes of the Department.

The Kaplan memo was written in the wake of a lawsuit brought by former Administrator Joan Claybrook and public interest lawyers Ben Kelley, who worked for NHTSA in its earliest days, and David Biss, a former NHTSA scientist who managed research programs to support rulemaking. The suit challenged a new beefed up version of Part 9, which brought former NHTSA employees under its authority and essentially precluded any testimony about NHTSA by its former employees. As Biss recalls, the amendments were at the behest of then-Administrator Diane Steed, who wanted to shut down any former NHTSA employees challenging automakers’ preferred prima facie argument that if NHTSA approved something, or closed an investigation with no defect finding, or if a vehicle met the federal safety standard, a vehicle was therefore safe. The plaintiffs sought a declaratory judgment against the sweeping and Draconian amendments, but the case was settled and the plaintiff accepted the Kaplan memo as a clarification. It has been used as a codicil to the regulation ever since.  

The many NHTSA senior employees now working in the auto sector have understood pretty well the rules surrounding and the limits of their expert testimony. (Even, presumably, Ms. Steed, who made a living post-NHTSA supporting industry.) Sadly, not David Strickland.

Employees who want to testify about “information acquired in the course of an employee performing official duties or because of the employee’s official status must seek a waiver from the agency in advance,” Goodman wrote. Strickland thought he’d just wave the Kaplan memo and dispense with the formalities. Instead of seeking authorization, Strickland called to seek assurances from John Donaldson, the agency’s Assistant Chief Counsel for Legislation and General Law, and it was all good until about a month before the trial, when the plaintiffs in Sachs objected to Strickland as an expert witness.

Goodman’s decision shut that one right down: Donaldson does not handle Part 9, the Assistant Chief Counsel for Litigation and Enforcement does; a phone call doesn’t cut it, and by the way, Donaldson doesn’t remember talking to you.

Toyota needed a hurry-up, quick-quick decision, and Goodman gave them one that said: No. No. and No. Strickland has withdrawn from the case. (But not without delivering an expert report, at no doubt, premium prices.) The last Administrator ushered out of the lucrative expert testimony business by Part 9 concerns was Jerry Curry. In 1997, agency lawyers informed Curry, another train-wreck of an administrator, that regulations prohibited him from testifying in Bronco II cases because he shut down the agency’s investigation into Ford Bronco II rollovers. He was quoted in an LA Times story saying he would no longer testify because he didn’t need “the grief.” We imagine that the family and friends of Bronco II rollover fatalities felt the same way.

Strickland argued that during his tenure as NHTSA Administrator he “did not participate in any testing, testing decisions, compliance reviews or any Agency actions regarding the Toyota Smart Key System,” nor was he “briefed on any Agency activities regarding FMVSS compliance actions concerning keyless ignitions.” He knew nothing about the issues raised in Sachs until Toyota came calling. Strickland allowed that he did have “general involvement regarding FMVSS 114, including the issuance of two NPRMs that partially involved FMVSS 114. . . However, Mr. Strickland opined that his anticipated testimony would not implicate his participation in the review process for those NPRMs.”

But Goodman looked at the same facts and came to the opposite conclusion: Strickland was directly involved and personally involved in aspects pertaining to FMVSS 114, from rulemaking to compliance, and that he planned to testify specifically on matters that lay at the heart of Sachs.

"Mr. Strickland does not propose to rely on his general expertise or knowledge acquired during his employment with the Agency. Instead, he intends to utilize specific information obtained through his direct participation in events related to the rulemaking process and policy considerations for FMVSS 114. Mr. Strickland’s June 8, 2015 expert report and deposition testimony make clear that Toyota offers him not as a "former employee who may rely on some general expertise, or knowledge acquired while that individual worked for the Department," as explained in the Kaplan Memo, but for the precise opposite purpose – to provide specific testimony regarding specific rules promulgated during his tenure as Administrator and their specific application to Toyota products. In fact, Mr. Strickland is specifically designated to testify regarding NHTSA’s evaluation of, and Toyota’s interactions with NHTSA regarding, the Toyota Smart Key” System.

As Goodman noted, the combination of Strickland and Toyota is particularly toxic, given the past history:

“As you are well aware, the Agency has been roundly criticized for its relationship with Toyota in terms of recent enforcement actions, particularly regarding unintended acceleration. Given this history, Mr. Strickland’s testimony, as a former NHTSA Administrator, describing Toyota’s actions or conduct in this matter with approval, will likely diminish the Agency’s ability to pursue a vigorous enforcement review of Toyota moving forward.”

That relationship includes:

Allowing two former ODI staffers, Chris Tinto, Toyota’s Vice President of Regulatory and Technical Affairs, and his assistant manager Chris Santucci, to use their institutional experience to minimize the effect of any Office of Defects Investigations’ past probes of Toyota UA. Always remember and never forget the famous May 2009 email Santucci sent to a colleague about his progress in the negotiations with the agency to close a defect petition into UA Lexus events: “I have discussed our rebuttal with them, and they are welcoming of such a letter, They are struggling with sending an IR letter, because they shouldn’t ask us about floormat issues because the petitioner contends that NHTSA did not investigate throttle issues other than floor mat-related. So they should ask us for non-floor mat related reports, right? But they are concerned that if they ask for these other reports, they will have many reports that just cannot be explained, and since they do not think that they can explain them, they don’t really want them. Does that make sense? I think it is good news for Toyota.”

Partnering with Toyota in the 2010 joint NHTSA-NASA Engineering Safety Center investigation of Toyota UA, during which Toyota failed to provide key parts of its software code and Toyota’s science-for-hire firm Exponent provided a warranty analysis used to dismiss physical evidence of a potential root cause for unintended acceleration. Taking Toyota’s word for it that if its diagnostic system failed to detect an electronic anomaly, there could be no vehicle misbehavior.

And the cherry on the sundae: Toyota’s $1.2 billion fine and a guilty criminal plea on one count of wire fraud for all the lies it told NHTSA about the floor mat entrapment and sticky pedal recalls.

All under the David Strickland’s and former DOT Secretary Ray LaHood’s watch. We’re sorry, Toyota, we know that you’ve spread around an awful lot of cash to make important people pretend that there is nothing wrong with your cars. But, Ray’s currently carrying water for the clients of DLA Piper, a vampire-squid of a law firm with 3,500 lawyers across the globe, which mostly contributes to Democrats. And, Strickland? He’s busy reading up on Part 9.

Flexing its new tough-on-automakers muscle, the National Highway Traffic Safety Administration held a rare public hearing last week to highlight Fiat Chrysler’s dismal recall record. The hearing was short, statements were read into the record, and that a large fine will be levied against Fiat Chrysler (FCA) seems a foregone conclusion. It’s another signal that NHTSA wants to prove it’s going to ramp up enforcement activities after years of neglect and ongoing recall crises that have left the agency’s credibility in tatters.

The evidence NHTSA presented at the hearing, culled from its own investigation and FCA’s responses to its special order request, is damning: In 23 recalls issued between 2013 and May of this year, FCA failed to notify owners about a recall, took months or even years to supply the parts, provided defective replacement parts, lied to NHTSA about the extent of the recall – and sometimes all of the above.

In a series of recalls (13V527, 13V528, and 13V529), FCA recalled about one million Dodge Ram trucks for tie rod ends that could break unexpectedly, causing loss of steering. FCA filed its recall notices with NHTSA on November 6, 2013, and notified owners sometime in January (NHTSA pointed out that FCA gave differing dates in its communications). But after that, NHTSA began receiving complaints of unavailable parts. It turns out that the replacement parts were also defective, and FCA had quietly told the dealers to return them – without telling NHTSA. Although the defect has allegedly been resolved, with limited parts availability many owners are still waiting for a fix. In the meantime, FCA documents confirm that as of March 2015, it had received reports of 32 crashes, with 20 injuries and one death. At least one FCA customer service rep told worried owners there had been no crashes related to tie rod failures.

In one of the tie rod recalls, FCA instructed dealers to immediately replace the tie rod end if they saw a misaligned steering linkage, but if no misalignment was found, owners were told they could come in for a replacement when they received a follow-up letter (apparently as a way to manage parts shortages). That might have worked out okay if FCA had a system that could distinguish between vehicles that had been repaired and vehicles that had only been inspected. But it didn’t – any vehicle that was examined was marked as having received the recall repair; thus they had no way of knowing which trucks were fixed. So FCA was forced to send new letters in May 2015, telling all owners to bring their vehicles in to have the recall completed.

In another example, FCA initiated an October 2012 recall (12V474) of 48,000 Dodge Ram trucks for a pinion gear retaining nut that could come loose, allowing the driveshaft to fall off, causing axle lock up and loss of vehicle control. It subsequently expanded the recall in 2013 (13V038) and 2014 (14V796) after NHTSA found that other model years were experiencing the problem.

FCA didn’t have replacement parts when it initiated the recall, but it announced nine months later that parts were available. NHTSA says that during that time, internal FCA documents show the automaker learned of three crashes, including two with injuries. Two years after FCA launched the recall, the agency says it is still receiving complaints from owners who have been unable to obtain the part.

NHTSA noted FCA frequently failed to file defect notices within the required five-day timeframe. For instance, in October 2014, a supplier notified FCA of a production process issue that had been linked to transmission shift failures, but FCA did not initiate the recall (15V090) until February.  Similarly, in January 2015, FCA learned that some trucks with a maximum speed of 106 mph had tires that could safely be driven only up to 87 mph – it didn’t initiate a recall until May 12. FCA offered no explanation for the delays.

In another instance, FCA failed to properly identify the recall population. FCA missed 65,000 vehicles that should have been included in Recall (15V041), and only added them 14 weeks later after NHTSA realized they were missing.

The information FCA did send to the agency was frequently incomplete, sometimes omitting a schedule for when notices have been or will be sent or including an incomplete chronology.  The company also repeatedly failed to send NHTSA its communications with dealers – at least 32 dealer communications in 12 recalls – preventing the agency from making sure dealers are receiving complete information. The agency also rapped FCA for failing to send recall notices to consumers within the 60-day period after filing its Part 573 defect notices.

Ironically, NHTSA framed its actions in the Jeep Grand Cherokee/Jeep Liberty recall debacle as an example of its new enforcement rigor in the face of industry intransigence.  But, the moral of that story is actually something altogether different.

Readers may recall the looming showdown over the vehicles’ rear-mounted fuel tank that left them vulnerable to explosion in rear impact crashes.  The defect has been linked to more than 250 deaths, including that of 4-year-old Remington Walden, whose family was recently awarded $150 million by a Georgia jury.

The Center for Auto Safety had been pushing NHTSA to address the safety hazard since 2009, and after several years of investigation, NHTSA formally requested that Chrysler conduct a recall. The automaker denied there was a problem and publicly refused to launch one. Instead of a confrontation, then-NHTSA administrator David Strickland, DOT Secretary Ray LaHood and Fiat CEO Sergio Marcchione (see Crazy Ray’s Giveaway!) met in Chicago and cut a deal. FCA got off with a “voluntary campaign” to add a trailer hitch – rather than relocating or shielding the tank.  

In its presentations, NHTSA noted that it “took the unusual step” of performing its own crash tests after FCA refused to prove the hitch would be effective. NHTSA found the hitch provided safety benefits in low and moderate speed crashes despite FCA’s own description of the “fix” as “an opportunity to incrementally improve the performance of certain of the Subject Vehicles in certain types of low-speed impacts.” 

The agency touted its July 2014 Special Order request to FCA pressing the company for explanations on hitch availability. But NHTSA actually learned in January 2014 that FCA had only just started ordering the hitches. The agency didn’t get around to demanding an explanation until six months later.  

The campaign itself wasn’t actually launched until August 2014, four months before Kayla White, a 23-year-old who was eight months pregnant, died in a fiery crash weeks after trying to have the hitch installed only to be told the part wasn’t available. NHTSA revealed at the hearing that the completion rate for the recall is 6 percent for the Grand Cherokee and 32 percent for the Liberty. 

But, it’s a new era, with new players. Fiat asked NHTSA to cancel the hearing, citing its newfound cooperation. NHTSA said no. Instead of several days in 2013 of media fireworks over NHTSA’s demands and Chrysler’s refusals, this hearing lasted for a dry two hours. FCA provided no defenses.

NHTSA made great use of an opportunity to reinforce a new enforcement reality. Holding automakers accountable is step one and a strong signal that NHTSA may be dumping its old “regulatory partners” – industry – for the ones it was supposed to have had all along – the public.

 

 

Inspector Agrees with SRS: NHTSA Ain’t Right

Today, we salute the good men and women of the Department of Transportation’s Office of Inspector General (OIG) for putting their official imprimatur on concerns that The Safety Record has been raising for years. The report, released to selected press on Friday, and to the rest of us slobs on Monday, was entitled: “Inadequate Data and Analysis Undermine NHTSA’s Efforts to Identify and Investigate Vehicle Safety Concerns.”

While the OIG said it in a much nicer way than we ever did – the 42-page report was a laundry list of issues we have long complained about: ODI’s lack of process, the prioritizing by chances of recall success rather than threat to safety; the agency’s penchant for shrouding everything in secrecy; the missing audits on manufacturer’s EWR audits and the lack of enforcement against the scofflaws.

The framework for the report was the GM ignition switch defect, which rapidly grew from a small recall in February 2014 with little information about how the automaker discovered the defect to a Greek tragedy in which the myriad institutional failing of twin protagonists NHTSA and GM took center stage at various hearings. After Deputy Administrator David Friedman testified in an April 2014 U.S. House hearing that an internal review of ODI’s policies and practices was underway, DOT Secretary Anthony Foxx ordered an external review.

EWR data was immediately flagged as a problem – only 24 component categories for 15,000 components, with no coding guidance for manufacturers, “resulting in inconsistent reporting and data that ODI investigative chiefs and vehicle safety advocates consider to be of little use.” Hmm. That sounds familiar.

In October 2012, The Safety Record published Further Tinkering with EWR Unlikely to Make it More Useful, decrying the agency’s proposal to make to add new EWR reporting categories relating to emerging technologies. We highlighted the observations of Alice and Randy Whitfield, who use EWR data extensively, have published their methodology in a peer-reviewed journal and have sued NHTSA successfully for access to EWR data.

"We suggest the implementation of a coding system for light vehicle deaths and injuries claims which links the category of the allegedly failing component with a separate code denoting the type of failure that is alleged. Such a system would take careful planning to propose and to put into practice. But it would be better to begin this planning now than to continue another nine years with an early warning system so lacking in necessary detail that NHTSA’s own analysts don’t rely on it for anything more than performance in a supporting role.”

Then the OIG rapped ODI for failing to have EWR audit procedures in place to verify that manufacturers submit complete and accurate early warning reporting data. We’ve been reporting the manufacturers are not submitting mandated EWR data since we discovered in February 2013 two manufacturers had neglected to file some death and injury claims. We had to sue the agency to find out what action, if any, that officials took to enforce the law. Hint: pretty much nothing. Here are some of the markers The Safety Record began laying down for the agency’s path forward nearly two years ago. You’re welcome:

November 2013 Safety Research & Strategies Sues U.S. DOT in (Another) FOIA Dispute

April 2014 Elective Warning Reports: When Manufacturers Don’t Report Claims

October 2014 October 2014 Elective Warning Reports Redux

The OIG criticized NHTSA for failing to follow “standard statistical practices when analyzing early warning reporting data, such as establishing a base case for what statistical test results would look like in the absence of safety defects.” Actually, NHTSA has been turning its nose up to standard statistical practices in a whole lot of contexts, and we’ve been pointing this out for a while. You can read about it these stories:

July 2011 How NHTSA and NASA Gamed the Toyota Data

September 2011 NHTSAball: How the Agency Plays the Game

And non-profit, The Safety Institute, (founded by Safety Research & Strategies president, Sean Kane), established The Safety Vehicle Watch List for the sole purpose of using peer-reviewed analytic methods to bring a sane process to the task of identifying potential motor vehicle defects that merit further review, using EWR  and the Fatality Analysis Reporting System.  

The report also mentioned two of our longstanding bete noirs: lack of transparency:

April 2012 What NHTSA Doesn’t Want You to Know about Auto Safety

 And lack of process:

September 2012 The Pedal Error Error  

We’ve got more links, docket comments, and lawsuits, but enough about our prescience. The report starred in the first panel of today’s U.S. Senate Commerce Committee hearing updating the members on the Takata recall efforts and NHTSA improvements. Sen. Claire McCaskill (D-MO) – ever so direct – distilled the picture painted by the OIG as “blatant, incompetent, mismanagement…if NHTSA isn’t clear about when to open an investigation we might as well shut it down.”  NHTSA watchdogs Senators Edward Markey (D-MA) and Richard Blumenthal (D-CT) used the occasion to promote their NHTSA EWR and recall improvement bills. Markey also pressed Administrator Mark Rosekind to support a rulemaking to ensure EWR transparency.  

What does the OIG report really tell us? Things may have gotten bad enough to constitute a tipping point.

Industry has had its way with NHTSA for a long time, telling it in various ways to stick it: outright lying about defects, failing to meet reporting requirements, taking a tone in their Part 573 Notices of Defect and Non-Compliance. You name it – any way they could disrespect the agency, they did it. And the major players found willing partners in the last NHTSA Administrator David Strickland, who suffered whiplash during his hasty and circular exit from government to industry, and DOT Secretary and technical illiterate Ray “Nobody-Cares-More-About-Safety-Than-Ray-LaHood” LaHood, who solved defect disasters with political deals that had zero impact on safety.

But back-to-back GM and Takata crises, so soon after Admiral LaHood (un)successfully steered the agency past the shoals of Toyota Unintended Acceleration, have necessitated a severe course correction. Administrator Rosekind appears to be well-suited to clean up their messes. He assured the senators that NHTSA had identified more than twice the number of process improvements as the OIG – a score of NHTSA 44 to the inspector’s 17. The agency accepted Inspector General Calvin L. Scovill III’s suggestions and had already knocked some of them off the list.

Rosekind said today that NHTSA needed to question its assumptions about the information automakers supplied it and “We need to question our assumptions.”

We dare not hope that such a radical notion, for example, might result in the chucking of the agency Bible of assumptions on unintended acceleration, the so-called Silver Book. But the OIG’s break-down of the breakdown in ODI’s operations is a good place to start.

 

NHTSA’s Path Forward has some refreshing acknowledgements of the agency’s problems. But it still soft-pedals why they have gone from one defect crisis to another.  It is notable what is missing: Any mention of the importance of transparency and acknowledgement of the real depth of the culture that has kept the agency from objectively investigating defects.

For example:

In clinging to preconceived notions, NHTSA investigators routinely reject the findings and analyses from outside of the agency or industry.  While the report mentions the Wisconsin trooper, it again ignores the uncomfortable fact that a plaintiff’s lawyer requested the Timeliness Query that plainly informed them that GM had covered up the defect for years and that it had not recalled all affected vehicles. 

The agency’s lack of transparency continues to undermine public confidence in its competence.  The data and documents often used by the agency to reach its conclusions are unavailable to the public preventing validation of their findings.  Of concern – the report states: 

“NHTSA will reach out to the relevant OEM through a pre-investigative notification of interest, promoting OEM accountability by creating a record that NHTSA has informed the OEM of the issue and reiterating the OEM’s responsibility to provide relevant and timely information about the issue to the agency, including information critical to the potential safety system interactions of the issue.”

NHTSA has previously withheld materials it deems “pre-investigative” from the public while creating substantial records of problems that remain out of view. Will this continue?  

It’s encouraging to see that NHTSA is holding the industry accountable to a higher standard.  The bar was set too low for too long.