• (a) Each manufacturer shall furnish to NHTSA’s Early Warning Division (NVS-217) a copy of all notices, bulletins, and other communications (including those transmitted by computer, telefax, or other electronic means and including warranty and policy extension communiqués and product improvement bulletins) other than those required to be submitted pursuant to § 573.6(c)(10) of this chapter, sent to more than one manufacturer, distributor, dealer, lessor, lessee, owner, or purchaser, in the United States, regarding any defect in its vehicles or items of equipment (including any failure or malfunction beyond normal deterioration in use, or any failure of performance, or any flaw or unintended deviation from design specifications), whether or not such defect is safety-related.
• (b) Each manufacturer shall furnish to NHTSA a copy of each communication relating to a customer satisfaction campaign, consumer advisory, recall, or other safety activity involving the repair or replacement of motor vehicles or equipment, that the manufacturer issued to, or made available to, more than one dealer, distributor, lessor, lessee, other manufacturer, owner, or purchaser, in the United States.
• (c) If a notice or communication is required to be submitted under both paragraphs (a) and (b) of this section, it need only be submitted once.
• (d) Each copy shall be in readable form and shall be submitted not later than five working days after the end of the month in which it is issued. However, a document described in paragraph (b) of this section and issued before July 1, 2003, need not be submitted.
It has been made clear that the National Highway Traffic Safety Administration (NHTSA) intends to vigorously pursue violators and impose penalties for non-compliance. Effective May 2, 2016, those penalties were increased from $7,000 per violation to $21,000 per violation and overall maximum raises from $35 million to $105 million. Penalties apply to all motor vehicle manufacturers and by statute, trailer manufacturers are considered motor vehicle manufacturers.
On March 25, NHTSA issued a notice further ratcheting up its enforcement activity concerning compliance of motor vehicle manufacturers with 49 CFR 579.5, which requires manufacturers to submit to NHTSA copies of communications such as notices and technical service bulletins to dealers, owners or purchasers of their vehicles. After an analysis of the bulletin and discussions with NHTSA officials, NATM wanted to bring this to the attention of its members in light of other recent activities from NHTSA.
In releasing Enforcement Guidance Bulletin 2016-01, the Agency reminds manufacturers of a statutory requirement that all such submissions be accompanied by an index page indicating the make, model and model year of the affected vehicles and a concise summary of the subject matter of the communication. This requirement has been in effect since Oct. 1, 2012. The bulletin notes that since issuing the original 2012 requirement “no manufacturer to date has submitted compliant indexes” and that “to come into full compliance with the law, a manufacturer must submit complete indexes to the communications it previously submitted to the Agency.”
Further, the bulletin states that manufacturers may not simply supplement earlier submissions of communications by providing an index, but that all prior submissions must be re-submitted. This requirement does not apply to recall communications but does apply to all other submissions required pursuant to 579.5. The bulletin continues, “the Agency expects manufacturers to make a good faith effort to expeditiously comply with the requirement to provide an index to accompany the communications they submit to the Agency.” NHTSA intends to exercise its enforcement discretion and allow manufacturers “a reasonable period of time” to come into compliance. Retroactive submissions must be made and the Agency intends to take into consideration the volume of re-submissions when determining what constitutes a reasonable period of time for a given manufacturer. According to the notice, “All manufacturers must begin immediately making a reasonable good faith effort to take steps to comply expeditiously for both retroactive and future submissions.” (Emphasis added.) NHTSA has advised NATM that indexes can contain information from multiple submissions rather than a separate file for each submission.
Failure to comply with the index requirement and the re-submissions noted in the bulletin carries potential civil penalties of up to $21,000 per violation per day up to a maximum penalty of $105 million for a series of related daily violations. Though no particular software is required, the bulletin requests that manufacturers submit indexes as searchable Microsoft Excel files. Concise summaries of the subject matter “should identify the defect or noncompliance, describe the effect of the defect or non-compliance, and describe the purpose or type of the communication.” NHTSA has made further recommendations concerning the specific format for indexes on their website at www-odi.nhtsa.dot.gov/mc.
Manufacturers are encouraged to visit this site as well as look for future communications from NATM as additional guidance on this topic is released. Since every manufacturer’s situation will be unique, companies are also encouraged to consult with legal counsel to ensure compliance. Should you have any questions, please contact NATM headquarters at NATMHQ@natm.com.