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NHTSA'S Final Ruling on Reporting Is Fair, Says Miller Canfield

August 26, 2004

The National Highway Traffic Safety Administration’s (NHTSA) recent decision to treat as confidential certain automotive field performance data relating to warranty, field reports and consumer complaints has spurred yet another debate over TREAD Act reporting. NHTSA’s ruling on confidential treatment of this data is fair; however, say product safety attorneys at Miller, Canfield, Paddock and Stone, P.L.C. Miller Canfield works with automotive suppliers and manufacturers to define and meet TREAD reporting requirements.

“NHTSA has wisely taken a balanced approach to this important issue,” said Brian Westenberg, Miller Canfield attorney specializing in matters relating to the TREAD Act. “Information concerning vehicle fatalities and injuries, foreign recalls and property damage accidents will continue to be made available to the public.”

Massive amounts of field performance data has been collected by NHTSA from auto manufacturers and suppliers around the globe under authority of the TREAD Act, which began in November 2000. The TREAD Act authorizes NHTSA to collect this data on a periodic basis. It is intended to help the agency and the auto industry identify potential defects in motor vehicles. The debate now looming is whether to make all – or only part – of this data available for public consumption.

“Releasing the remaining TREAD data into the public domain – such as field reports, warranty claims and unsubstantiated customer complaints – would only confuse the public, cause competitive harm within the industry and have a chilling effect on NHTSA’s ability to collect this data from manufacturers,” Westenberg adds.

Manufacturers – and ultimately consumers – have paid a high price for this data collection effort. Four quarters of TREAD data have been collected by NHTSA as of July 2004, constituting hundreds of millions of records. Reporting costs are estimated by industry analysts to be as high as $2 billion, which is about 50 times the cost estimated by NHTSA to collect and report this data.

In early 2005, the Office of Management and Budget will require NHTSA to demonstrate that TREAD reporting requirements have yielded benefits to motor vehicle safety in the U.S. and is worth the burden placed on manufacturers worldwide. “The jury is still out on whether this massive and very expensive data collection effort has made automobile travel safer in the United States. So far, there seems to be no demonstrable return on this extraordinary investment,” Westenberg added.

TREAD requirements have placed a tremendous responsibility on equipment manufacturers. “Although a common misconception is that it only affects U.S. companies,” Westenberg notes. “European and Asian manufacturers and suppliers that sell products in the U.S. must comply with TREAD, and it’s just a matter of time before one or more of these manufacturers face the U.S. Department of Justice for failing to report.” The TREAD Act imposes significant civil and/or criminal penalties for manufacturers that knowingly fail to report field data to NHTSA.

Miller Canfield product safety attorneys Stephen Ott and Brian Westenberg recently contributed to the writing of the “Information Kit on TREAD Act Reporting,” published by the Automotive Industry Action Group. The kit is designed to help manufacturers clarify some of the key milestones, deliverables and action steps to meet the terms of the TREAD Act. To receive an information kit, please call 248.267.3337.

The 330-attorney law firm of Miller, Canfield, Paddock and Stone, P.L.C. was established in Detroit in 1852 and has offices in Ann Arbor, Detroit, Grand Rapids, Howell, Kalamazoo, Lansing, Monroe, and Troy, Michigan. Other offices are located in New York City, Pensacola, Florida, Washington, D.C., Windsor, Ontario, and in Gdynia, Katowice, and Warsaw, Poland. Visit www.millercanfield.com.