Preemption and the Myth of Agency Omniscience: The Case Study of Roof Crush

1. Preemption and theMyth of Agency Omniscience:The Case Study of Roof Crush Laura MacCleery Director of Public Citizen’s Congress Watch

2. Five Key Points from Institutional Choice Theory • Diffuse public interests lose out to concentrated industry interests in matters of health and safety: • Tort is a needed source of information about hazards and crucial complement to regulation. • Tort is only source of compensation for negligence. • Juries are far less amenable to industry capture than are regulatory agencies. • An evolving duty of care better keeps pace with risks than does regulation, which depends on politics, budgetary factors, agency knowledge, etc. • Tort is economically efficient because it internalizes costs and provides incentives for decision-makers to prevent harm.

3. Roof Crush Rulemaking • Federal Minimum Vehicle Safety Standard (FMVSS 216) for roof crush resistance first issued in 1971 – no meaningful upgrades to standard in 35 years. • Applies pressure to the roof of a vehicle to determine roof strength in a rollover. • It is a performance standard (not design), allowing automakers to use any technology to meet standard. • In 2001 and August 2005, the National Highway Traffic Safety Administration (NHTSA) issued an advanced notice and notice of proposed rulemaking (NPRM) to upgrade standard.

4. Roof Crush in Congress • Also in August 2005, Congress passed SAFETEA-LU, which requires NHTSA to upgrade roof crush resistance as part of comprehensive plan to improve rollover safety. • SAFETEA-LU is silent on preemption but provides deadline of 2008 for final rule.

5. Flaws in the Roof Crush Rule • The proposed rule is weak: 7 out of 10 vehicles on road today already comply and rule would save merely 11 to 44 lives out of 10,000 killed annually in rollover crashes – just one-half of one percent. • A higher standard would be both cost-effective and technically feasible. • Agency rulemaking process did not comply with Executive Order on Federalism. • Agency’s cost-benefit analysis ignored transfer costs to states of preemption (NCSL study).

6. The Public Will Remain at Risk Reverend Lawrence Harris was made a quadriplegic by a 1997 rollover crash in this Ford E-250 van. The proposed rule would require no improvement in this vehicle.

7. Rollover Deaths: A Public Health Crisis • Since 2000, more people in the U.S. have been killed in rollover crashes than died in Vietnam. • Rollover safety improvements considered – and opposed by automakers – since the late 1980s. • SUV boom in 1990s led to widespread use of rollover-prone and aggressive vehicles. • SUVs are cash cows, and could be made on the cheap due to the large number of loopholes (both safety and fuel economy). • In 2005, there were 10,816 deaths in rollover crashes – a 2 percent increase over 2004.

8. Geierv. Honda Motor Company • NHTSA rule permitted compliance through either 1) passive safety belts or 2) airbags. Plaintiff claimed negligence due to lack of airbag. • Government argued for preemption because technological complexity attending introduction of airbags meant that a range of compliance options should be preserved. • Court held claim was impliedly preempted, giving “some weight” to DOT briefs. • Court acknowledged “savings clause” in NHTSA’s organic statute: “Compliance with a […] standard prescribed under this chapter does not exempt a person from liability at common law.” 49 U.S.C. § 30102(a)(9).

9. Geier Is an Exception, Not the Rule • Geier holding quite fact-driven; more like design (technology) standard. Court focused on range and phase-in of compliance options; “tortured” history. • Sprietsma, interpreting similar savings clause, rejects express preemption of common law claim: • “Perfectly rational” to preempt state standards but not common law claims, which “perform an important remedial role in compensating victims” • Bates rejects “inducement test,” holding conflict preemption requires legal conflict: • “A requirement is a rule of law that must be obeyed; an event, such as a jury verdict, that merely motivates an optional decision is not a requirement.” • “[L]ong history” of harmony between state tort law claims and regulatory regime.

10. Why NHTSA Is Unpersuasive • NHTSA states automakers may induce more rollover-prone vehicles (heavier roof): • Lightweight materials can strengthen roof with no weight increase. • The Volvo XC-90 far exceeds proposed standard. NHTSA does not suggest this is unsafe or assess penalties. • Because rollovers are significantly more survivable with a stronger roof, injury risk is lower regardless of rollover propensity. • The tort system best protects public from perverse incentive to raise rollover propensity; a design-neutral standard does not. • Preamble makes mere assertions that are politically motivated; not fact driven. • NHTSA has no expertise in analyzing empirical effects of tort and provides no evidence. • Undermines – rather than enhances – safety mandate assigned to NHTSA by Congress and revisited just last year.

11. Breaking News: Victory for Tort The Associated Press – December 5, 2006 Ford to improve roof strength By KEN THOMAS WASHINGTON Ford Motor Co. plans to enhance the roof strength of some pickups and sport utility vehicles beyond standards proposed last year by the government, the automaker has told regulators. James P. Vondale, Ford's director of automotive safety, said in a Nov. 20 letter to the National Highway Traffic Safety Administration that enacting the NHTSA proposal would lead to "many future vehicles" having roofs comparable in strength to the Volvo XC90 SUV. That vehicle can withstand 3.5 times its own weight. NHTSA in August 2005 proposed a new roof strength standard that would require a vehicle's roof to withstand a force equal to 2.5 times the vehicle's weight, increasing it from the current standard of 1.5 times the weight.

12. Plaintiff verdicts incent but do not compel change in product; are compensatory in nature. Evolutionary duty of care that encompasses all foreseeable risks. High-stakes interest of affected parties can overcome high barriers to information acquisition and understanding. Alert system for public of regulatory failures and deterrence of other tort-feasors. Source: Wagner, Wendy, “When All Else Fails: Regulating Risky Products Through Regulation,” __ Georgetown L. J. __ (2006) (forthcoming). Some Substantial Benefits of Tort

13. Aspects of Regulatory Failure • Performance standards (as NHTSA issues) leave open door for dangerous designs. • Agency ossification produces long delay in upgrade of rules (35 years). • Passivity in information acquisition (agencies do not have or use subpoena power; must clear requests thru OMB). • Participation barriers high; game restricted to experts and industry. • Agency secrecy (NHTSA guards turf, actively concealing risk information from public). • Political distortions: risk of industry “capture” of regulators (revolving door). • No remedy for omissions, loopholes or weak standards. Source: Vladeck, David. “Preemption and Regulatory Failure,” 33 Pepperdine Law Review (2005).

14. Preserving a Remedy andPublic Access to Data • Roof crush is case study: industry capture of agency will produce exceedingly weak rule “grandfathering” in 70 percent of current vehicle fleet. • Most compelling information on risks related to roof crush was brought to light through litigation, including Ford/Firestone revelations that pushed Congress to act. • NHTSA budget is one-third, in real dollars, of what it was in 1970, while the number of vehicles on the road continues to climb.

15. A Productive Balance • Co-existence of “savings clause” and express preemption of state standards reflects thoughtful Congressional design: • tort provides incentives for regulatory and other advances while compensating victims of negligence. • Concentrating power in agencies would exacerbate capture problems and further drive down health and safety standards. • It would also leave victims of regulatory failures, omissions, funding shortfalls, ossification, pure politics, scientific distortion, and federal negligence uncompensated, dependent on public money for medical costs, and without a means of alerting the public of serious and emerging risks.

16. Information Heals:Bates v. Dow Agrosciences “By encouraging plaintiffs to bring suit for injuries . . . a state tort action such as the kind under review may aid in the exposure of new dangers associated with pesticides. Successful actions … may lead manufacturers to petition EPA to allow more detailed labeling of their products; alternatively, EPA itself may decide that revised labels are required in light of the new information that has been brought to its attention through common law suits. In addition, the specter of damage actions may provide manufacturers with added dynamic incentives to continue to keep abreast of all possible injuries stemming from use of their product so as to forestall such actions through product improvement.” - Citing Ferebee, 736 F.2d, at 1541-42.

17. Thank you for your time and consideration. Sources on file with author or at: www.citizen.org