Interpretation ID: HoganHartson
Patrick M. Raher, Esq.
Hogan & Hartson LLP
Columbia Square
555 Thirteenth Street, NW
Washington, DC 20004
Dear Mr. Raher:
This responds to your letter of May 8, 2007, addressed to Ms. Julie Abraham, concerning the Mercedes-Benz USA, LLC (MBUSA) petition for exemption from the Vehicle Theft Prevention Standards parts marking requirements for the Mercedes-Benz C-Line Chassis vehicles beginning in model year 2008.
Under 49 CFR Part 543.5(a), a manufacturer may, for each model year, petition the National Highway Traffic Safety Administration (NHTSA) for an exemption of one car line from the requirements of the Vehicle Theft Prevention Standard.[1] You submitted your letter in response to an inquiry from NHTSA concerning whether MBUSA and DaimlerChrysler are eligible as separate manufacturers for such exemptions. Given the one car line limitation specified in Part 543, these companies must be eligible as separate manufacturers if they are both to receive an exemption for the same model year. After reviewing the information you provided in your letter and in a telephone conversation with Edward Glancy of my staff, and as discussed below, we conclude that MBUSA and DaimlerChrysler are eligible as separate manufacturers for parts marking exemptions.
The definition of manufacturer for the theft prevention standard program is set forth at 49 U.S.C. 32101(5), and reads as follows:
manufacturer means a person
(A) manufacturing or assembling passenger motor vehicles or passenger motor vehicle equipment; or
(B) importing motor vehicles or motor vehicle equipment for resale.
In considering whether related companies are separately eligible for parts marking exemptions, we believe it is appropriate to consider two issues. First, we consider whether the companies are structured such that they can be considered separate persons under the statutory definition. Second, assuming the answer is yes, we look beyond the corporate structure and consider whether the companies are operationally independent from each other. It is necessary to consider this since a manufacturer could be highly integrated in operation but, for a variety of reasons, use multiple corporations. Also, we separately consider, with respect to the vehicles for which an exemption is sought, whether the vehicles can be considered to have more than one manufacturer and, if so, whether that would affect eligibility for the requested exemption. We note that the statutory provision does not indicate that a person is a manufacturer of a vehicle solely by virtue of ownership or control of another person that is a manufacturer.
As to corporate structure, you indicated in your letter that MBUSA is the authorized importer of Mercedes-Benz and Maybach brand vehicles manufactured by DaimlerChrysler AG (DCAG) in Germany. You stated that DaimlerChrysler Corporation (DCC) builds, markets and sells Chrysler, Dodge and Jeep brands. You stated that MBUSA and DCC operate as separate corporate entities. Based on this information, we conclude that the companies are structured such that they can be considered separate persons under the statutory definition.
As to whether the companies are operationally independent from each other, you stated in your letter that for purposes of design, development, marketing and selling, certifying compliance with safety regulations, compliance with NHTSAs enforcement program, and providing NHTSA with a manufacturer of record responsible for the vehicles, MBUSA and DCC operate as separate corporate entities. You also stated that MBUSA and DCC have different dealer networks, administer different warranty programs and are legally distinct corporate entities. You stated that MBUSA and DCC are linked only by virtue of the fact that both are within the larger corporate structure of DCAG.
In a conversation with Edward Glancy of my staff, you discussed the issue of separation between MBUSA and DCC, with further consideration of DCAG, which manufactures the vehicles that are imported by MBUSA, and also Mercedes Benz U.S. International, Inc. (MBUSI). MBUSI manufactures certain Mercedes Benz vehicles in the United States, which are marketed by MBUSA. You indicated that considering all of these different companies, there is no operational linkage or integration between the companies responsible for Mercedes Benz vehicles and those responsible for DCC vehicles.
Based on the information you provided and noted above, we conclude that MBUSA and DCC are operationally independent from each, and, therefore, separately eligible for theft exemptions.
Finally, as indicated above, we separately consider, with respect to the vehicles for which an exemption is sought, whether the vehicles can be considered to have more than one manufacturer and, if so, whether that would affect eligibility for the requested exemption. For example, if the Mercedes-Benz C-Line Chassis could also be considered to be manufactured by a manufacturer other than MBUSA and that other manufacturers might also be applying for theft exemptions, we would want to consider the effect on eligibility. However, based on the information you provided, this does not appear to be a relevant consideration for this requested exemption.
For the reasons discussed above, we conclude that MBUSA is separately eligible for a theft exemption for the C-Line Chassis, without regard to petitions for exemption from DCC.
We note that the analysis presented in this letter is limited to eligibility for theft exemptions. Before deciding whether the analysis would apply in other contexts, we would want to carefully evaluate the relevant statutory and regulatory requirements and purposes.
If you have questions about this or related issues, please feel free to contact Edward Glancy of my staff at (202) 366-2992.
Sincerely yours,
Anthony M. Cooke
Chief Counsel
ref:543
d.7/12/07