Interpretation ID: FERBLTR.CRS

Gabriel J. Ferber, Esquire
Nesper, Ferber & DiGiacomo, LLP
501 James Audubon Drive, Suite 300
Amherst, NY 14228

Re: Superior Auto Sales, Inc.

NSA-32 RSH; RII-10/R93-017

Dear Mr. Ferber:

This is in response to your letter of August 27, 1996, to Marilynne E. Jacobs, Director of the National Highway Traffic Safety Administration's (NHTSA's) Office of Vehicle Safety Compliance (OVSC), regarding 117 vehicles that were imported from Canada by your client, Superior Auto Sales, Inc. (Superior). As described in your letter, and in prior correspondence with OVSC, these vehicles, which consisted of 1994 and 1995 Model Year Plymouth Acclaims, Dodge Spirits, and Mazda Protégés, were not equipped with automatic restraints in the front outboard passenger seating position, as required by Federal Motor Vehicle Safety Standard (FMVSS) No. 208, Occupant Crash Protection. You nevertheless contend that all of these vehicles should be deemed in compliance with that standard, with the exception of seven Mazda Protégés that are the subject of separate correspondence.

To support this contention you cite paragraph S4.1.4.1 of the standard, which provides, in relevant part:

A vehicle shall not be deemed to be in non-compliance with this standard if its manufacturer establishes that it did not know in the exercise of due care that such vehicle is not in conformity with this standard.

Your letter contends that Superior is a manufacturer within the meaning of this provision by virtue of the fact that it is a vehicle importer. Moreover, you claim that even though Superior exercised due care, it did not know that the vehicles in question did not comply with FMVSS No. 208. In support of this claim, you note that OVSC released the vehicles in question even though the conformity packages that Superior submitted for them included a vehicle identification number (VIN) deciphering chart that provided the means for the agency to ascertain that each of those vehicles was equipped with a driver side air bag and a passenger side manual seat belt.

To further support your claim that Superior did not have knowledge of the noncompliance in issue, you describe the standard as containing language "so obtuse (sic) as to defy understanding." You characterize "the complexity of the language" found in FMVSS No. 208 as "the very reason that NHTSA incorporated the 'due care' provisions of the Safety Act into the regulation." To support this contention, you cite language from the preamble of a notice of proposed rulemaking to amend the standard that was issued by NHTSA in 1985. That language states

The agency recognizes that because of the complexity of the requirements of Standard No. 208, manufacturers are concerned that the rule state that the due care provision of the National Traffic and Motor Vehicle Safety Act . . . applies to compliance with [this] standard.

50 FR 14589, 14592 (April 12, 1985). You interpret this statement as representing NHTSA's "recogni[tion] at the outset that the language of Standard 208 was so complex that mistakes in interpretation were likely to occur" and that "it would be unfair to penalize affected parties who made such mistakes notwithstanding due care." Accordingly, you assert that the vehicles that Superior "imported in the exercise of due care and without knowledge of their nonconformity must . . . be deemed to be in compliance with Standard 208."

Contrary to your interpretation, NHTSA did not incorporate the due care provision of the Safety Act into FMVSS No. 208 to relieve manufacturers from liability for noncompliances resulting from mistaken interpretations of the standard's language. The agency instead added the due care provision to address a concern expressed by manufacturers, grounded on the belief (disputed by NHTSA) that there was excessive variability in FMVSS No. 208 crash test results, that a noncompliance might be determined to exist on the basis of a single test failure, even though the vast majority of similar vehicles actually complied. NHTSA stated its intention to amend the standard to incorporate the due care provision in the final rule reinstituting the automatic restraint requirements published at 49 FR 28962 on July 17, 1984. As reflected in the enclosed excerpt from that document (at 49 FR 29006), NHTSA was motivated to add the due care language to assure manufacturers

that the agency would exercise appropriate discretion in compliance cases based on apparent failures to satisfy the performance requirements of the standard in OVSC crash tests.

We agree that Superior is a "manufacturer" within the meaning of 49 U.S.C. 30102(a)(5) because it imports motor vehicles for resale. However, the due care language in FMVSS No. 208 cannot be relied upon by registered importers (RIs) to insulate themselves from liability for importing vehicles from Canada that do not comply with the standard. To properly exercise its responsibilities, an RI must be aware of the standards that apply to each of the vehicles that it imports and conform the vehicle to those standards when necessary. The principal difference between vehicles manufactured for the U.S. and the Canadian markets is that Canadian vehicles are not required to comply with the automatic restraint requirements of FMVSS No. 208. For that reason, the only passenger cars manufactured for the Canadian market that NHTSA has determined to be eligible for importation into the United States are those manufactured before September 1, 1989, the date on which the automatic restraint requirements were extended to a manufacturer's entire passenger car production, or those manufactured after that date that are equipped with an automatic restraint system that complies with FMVSS No. 208. Before importing a vehicle from Canada manufactured on or after September 1, 1989, the RI must therefore ensure that it complies with the automatic restraint requirements in the same manner as FMVSS No. 208 allows for vehicles produced for the U.S. market on the vehicle's date of manufacture.

As a factual matter, we dispute your assertion that the operative language of FMVSS No. 208 is "complex" or "obtuse." It is clear from S4.1.4.1 of FMVSS No. 208 that the authority to manufacture vehicles with a driver's side air bag and no automatic protection on the passenger side expired as of September 1, 1993 (i.e., it did not apply to model year 1994 or newer vehicles). Even if it could not discern those requirements from the language of the standard, Superior could have made appropriate inquiry with the vehicle's manufacturer or with NHTSA. Finally, if an RI is in fact confused as to the automatic restraint requirements that pertain to any given vehicle, it could not demonstrate that it exercised due care by importing the vehicle despite that confusion.

Your letter implies that Superior was misled by OVSC's "approval" of compliance packages that it submitted for vehicles that were not equipped with required passenger side automatic restraints. The conformity statements included in those packages contained Superior's certification that those vehicles were manufactured in compliance with FMVSS No. 208. OVSC's approval of the compliance packages was predicated on that certification by Superior. OVSC cannot be charged with knowledge that the vehicles it approved for release were not equipped with required automatic restraints simply because a VIN deciphering chart that would have revealed that information was included in the compliance packages. Given the thousands of compliance packages that it must process each month, OVSC cannot be expected to decipher every VIN to ensure that the RI's certification contains no inaccuracies. It is perverse to assert that merely because OVSC did not catch Superior's false statements, Superior is excused from having made them. Moreover, in each case, Superior's false certification preceded OVSC's release of the vehicle, so that release cannot have provided any basis for Superior's actions.

Your letter further cites NHTSA and Center for Auto Safety research reports for the proposition that automatic seat belts, the devices that Superior apparently would install in the vehicles in question in the event of a recall, are less safe than the manual seat belts with which those vehicles are now equipped. In light of these reports, you contend that it would be arbitrary, capricious, and an abuse of discretion for NHTSA to order a recall. On the contrary, it would be improper for the agency not to require compliance with the existing requirements of a standard in its administration of the vehicle importation program. FMVSS No. 208 requires that passenger cars manufactured on or after September 1, 1993 be equipped with passenger side automatic restraints regardless of whether they have a driver's side air bag. This requirement was adopted in a protracted rulemaking proceeding in which the agency solicited and addressed numerous comments from the public. The requirement for automatic restraints in both front outboard seating positions is buttressed by the action of Congress in enacting the Intermodal Surface Transportation Efficiency Act of 1991, section 2508(a)(1), which mandated that FMVSS No. 208 be amended to require air bags in those locations. (See 49 U.S.C. 30127.)

Your letter requests a hearing if NHTSA believes that Superior has not established that in the exercise of due care it did not have reason to know that the vehicles it imported were not in conformity with FMVSS No. 208. We have provided you with our analysis of this issue, as presented in your letter. Based on that analysis, it is unlikely that any further discussion would alter our opinion that the due care defense is unavailable to Superior and similarly situated RIs in this circumstance. Therefore, we decline to hold the hearing you have requested.

If you have any further questions regarding this matter, please contact Coleman Sachs of my staff at 202-366-5238.

Sincerely,

John Womack

Acting Chief Counsel

Enclosure

ref:208

d:10/25/96