What’s the Goal? Improving Vehicle Safety or More Litigation?

The Senate Commerce Committee held a hearing Wednesday, “S. 3302, The Motor Vehicle Safety Act of 2010,” prompted by the various auto recalls. In the interest of safety, the proponents run the risk of enacting legislation that will add so many new costs to the vehicles that fewer people will be able to afford to own cars. There’s all the new, expensive equipment that could be mandated, the vast array of additional regulations with their associated costs, and new opportunities for trial lawyers to sue for multi-billion-dollar damages.

The improvements in safety, all speculative, the additional costs, as sure as the sun will rise.

The witnesses’ prepared statements are not online (just excerpts), so we’ll cite the May 6 prepared statement from a previous House hearing from Dave McCurdy, president and CEO of the Alliance for Automobile Manufacturers. McCurdy offered a series of positive recommendations for enhancing vehicle safety, and warned against the unintended consequences:

There are always tradeoffs and competing demands when writing legislation. Congress will need to balance some proposals with consumer concerns and marketplace concerns.

  • For example, Congress will need to balance the desire for more data with privacy protections for consumers. NHTSA spent many years assessing the data to be collected by electronic data recorders, and we are in the middle of the phase-in period for that standard, so we need time to assess the impact of the first rule before we start writing the next rule. Looking forward, we will continue to urge Congress to honor the privacy of consumers. Information stored on an electronic data recorder is the sole property of the vehicle owner and should not be accessed by anyone without the owner’s permission or a court order.
  • 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.
  • Finally, Congress will need to preserve basic fairness and due process under the law. The Alliance does not oppose an increase in civil penalties, but penalties must be capped at some reasonable level. The proposed five-fold increase is surprising since two years ago this committee set a cap of $15 million-per-offense on penalties that could be assessed to manufacturers of other types of consumer products.

Reading through the legislation — especially Title III, Transparency and Accountability — we’re struck by how similar the approach is to the Consumer Product Safety Improvement Act (CPSIA), with the databases and reporting and vast array of other regulatory impositions. The motor vehicle regulation bills are coming through the same committees as did the CPSIA, and the former Senate Commerce Committee counsel who wrote much of the CPSIA — David Strickland — is now the head of the National Highway Traffic Safety Administration. Joan Claybrook, who as head of the “consumer group” Public Citizen advocated passage of the CPSIA, testified on the motor vehicle bill, as well.

Same actors, same approach. And how well did the CPSIA turn out for consumers?

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