Interpretation ID: 77-2.27

TYPE: INTERPRETATION-NHTSA

DATE: 05/03/77

FROM: AUTHOR UNAVAILABLE; Frank Berndt; NHTSA

TO: Messrs. Allen & Korkowski & Associates

TITLE: FMVSR INTERPRETATION

TEXT: This is in reply to your letter of March 3, 1977, to Mr. Oates of this office asking whether your client, a manufacturer of motorcycle accessories, is subject to requirements imposed by 49 CFR Parts 573, 576, and 577 and 15 U.S.C. 1402.

For your reference I am enclosing a copy of a new Part 577 which becomes effective June 28, 1977, that implements Part B of the National Traffic and Motor Vehicle Safety Act (15 U.S.C. 1411 et seq.) effective December 27, 1974. These new sections have superseded Section 1402, to which you referred. Since you apparently are unaware of these changes I am also enclosing a copy of the amended Act.

Because your client manufactures motor vehicle equipment other than original equipment (i.e. accessories) its products appear to be "replacement equipment" as defined by 15 U.S.C. 1419(2)(B). Since Parts 573 and 576 apply only to motor vehicle manufacturers and not to equipment manufacturers you are correct in your conclusion that these regulations are inapplicable to your client. We have proposed, however, that Part 573 be amended to apply to manufacturers of replacement equipment although no action has yet been taken on the proposal. I include a copy of that proposal.

You also asked about the applicability of Section 577.4 which you found to be "silent about the duty of manufacturers of motor vehicle equipment". The Part 577 that you referenced reflects the statutory scheme that was in effect until December 27, 1974, under which a manufacturer of motor vehicle equipment (as contrasted with a vehicle manufacturer who also produced equipment) was not required to notify purchasers of safety-related defects or noncompliances which it, the manufacturer, had discovered. The equipment manufacturer's obligation to notify arose only upon determination of the existence of a safety-related defect or noncompliance by the NHTSA Administrator and in that event Section 577.5 requires the equipment manufacturer to follow the provisions of Section 577.4. The new statutory scheme of 15 U.S.C. 1411 et seq., as reflected in revised Section 577.5, now extends the notification and remedy obligation to safety-related defects and noncompliances discovered by manufacturers of replacement equipment.

Finally, you have asked if there is no duty to retain records how can an equipment manufacturer "observe the requirements of Part 577.4." I assume what you mean is how can it notify "the first purchaser (where known) . . . and any subsequent purchaser to whom a warranty on such . . . item of equipment has been transferred". The actual obligation of a manufacturer of replacement equipment today, however, is that established by 15 U.S.C. 1413(c)(3)(A), in effect since December 27, 1974, and it is to notify "the most recent purchaser known to the manufacturer" (See also new Section 577.7(a)(2)(ii)(A). Congress appears to have recognized that manufacturers of small and less expensive items of motor vehicle equipment generally may not keep records of ultimate purchasers when it authorized our agency to issue a public notice when the public interest requires it (15 U.S.C. 1413(c)(3)(B)). Since there is no obligation for a manufacturer to know the names of its purchasers, NHTSA will accept in good faith an equipment manufacturer's statement as to the extent of its knowledge of its most recent purchasers. Under proposed Section 573.7(c) your client, as a manufacturer of motor vehicle equipment, would be required to maintain certain records including a list of the names and addresses of the "most recent purchasers known to the manufacturer". Such a list would probably at a minimum comprise distributors of the product, might also include the dealers of the distributors, and possibly in some instances the ultimate purchaser. But it is not a requirement that steps be taken to know and list the names and addresses of all ultimate purchasers. If you have further questions after reviewing this letter and its enclosures I will be happy to answer them for you.