Separations, Blow-Outs, and Fallout: A Treadise on the Regulatory Aftermath of the Ford-Firestone Tire Recall
107 Pages Posted: 9 Apr 2004
This article is the second of a two-part series on the TREAD Act. The first article, entitled "Don't TREAD On Me," appeared in the Fall 2001 edition of the Buffalo Law Review. That article appeared shortly after passage of the TREAD Act and focused on three primary areas: (1) the high-profile events leading to the Ford-Firestone recalls; (2) the congressional investigations into the situation; and (3) the statutory requirements of the TREAD Act. Readers of that article will recall that, in response to Ford and Firestone's actions and inactions as well as the lack of information available to NHTSA, Congress amended the Vehicle Safety Act to require that NHTSA issue a series of implementing rulemakings to address perceived shortcomings in automotive safety law. Congress intended for NHTSA to undertake several key rulemakings to enhance its ability to carry out key provisions of the Vehicle Safety Act, namely, those provisions that allow NHTSA to identify vehicles and equipment that have safety-related defects.
At the heart of these rulemakings is a three-pronged string of obligations to report: (1) overseas recalls and "other safety campaigns;" (2) "early warning" information; and (3) sales of defective or noncompliant tires. The most extensive reporting rule is "early warning," which authorizes NHTSA to require manufacturers to provide information to the extent that such information may assist in identifying safety-related defects. The purpose of requiring comprehensive early warning data is "to ensure that NHTSA's Office of Defects Investigation (ODI) has relevant data to promptly identify possible safety defects." That some of this data would come from sources located overseas reflects congressional intent that the TREAD Act in part apply extraterritorially, which in turn requires a sensitivity to U.S. law by affected multinational companies.
Since publication of the first article in Fall 2001, NHTSA has implemented the congressional directives. NHTSA has also issued various amendments and interpretations. This article examines these developments, picking up from the point in time where the first one left off. It is divided into three major sections: (1) "Background," which discusses the impact of the TREAD Act on both the automotive industry and NHTSA, as well as summarizes the congressional activities since passage of the Act; (2) "TREAD's Reporting Rules," which analyzes the requirements of TREAD's three-pronged reporting scheme; and (3) "Increased Penalties," which summarizes the increased civil and criminal penalties meant to buttress the new reporting requirements. The reader may find it helpful to reference the first article for needed supplemental historical information.
Keywords: TREAD Act, National Highway Traffic Safety Administration, NHTSA, automotive recalls, vehicle recalls
JEL Classification: K23, K13, K32
Suggested Citation: Suggested Citation