The U.S. Department of Transportation (USDOT)’s National Highway Traffic Safety Administration (NHTSA) requires that each manufacturer of motor vehicles, equipment, and/or accessories provide full transparency regarding product safety and compliance to all applicable Federal Motor Vehicle Safety Standards (FMVSS) in effect on the date of manufacture.

NHTSA provides multiple processes, and requires all manufacturers of motor vehicles, equipment, and/or accessories to submit all Manufacturer Communications (MC), which include but are not limited to “notices, bulletins, and other communications including warranty and policy extensions and product improvement communication sent to dealers, distributors, owners, purchasers, lessors, or lessees regarding any defect, failure or malfunction beyond normal deterioration in use, failure of performance, flaw or other unintended deviation from design specifications whether it is safety-related or not”, under penalty of law for failing to timely or completely do so.

Per numerous U.S. federal statutes, including 49 U.S.C. §§ 30112 (PDF), 30115 (PDF), and 30116 (PDF), a motor vehicle manufacturer must ensure all its vehicles are fully compliant to all applicable statutes and regulations (“laws”) prior to manufacture for sale, sale, offer for sale, introduction, or delivery for introduction in interstate commerce. Pragmatically, such determination of full compliance can only be determined through a compliance testing and verification process.

Part 573 defines the responsibilities of manufacturers of motor vehicle equipment and motor vehicles, to report to NHTSA all defects and FMVSS noncompliances for every motor vehicle and every item of motor vehicle equipment and accessory.

Specifically, Part 573 requires manufacturers to:

• Maintain lists of owners, purchasers, dealers, and distributors notified of defective and noncomplying motor vehicles and motor vehicle original and replacement equipment.


• Report to NHTSA all defects in motor vehicles and all defects in motor vehicle equipment and accessories, that have been used on public roads and/or transacted beyond the direct control of the manufacturer;


• Report to NHTSA all FMVSS noncompliances in all motor vehicles and all FMVSS noncompliances in all motor vehicle equipment and accessories, that have been used on public roads and/or transacted beyond the direct control of the manufacturer;


• Provide quarterly reports on all defect and noncompliance recall campaigns, for a minimum of eight (8) quarters (two years, and NHTSA may require additional on a case-by-case basis); and


• Provide representative, indexed samples of actual communications with owners, dealers, and distributors regarding recalls.

Part 573 reports are required to be made within five (5) working days after a defect or a FMVSS noncompliance in a motor vehicle or item of equipment or accessory has been determined to exist and be safety related.

NHTSA may require a manufacturer to implement an accelerated remedy program if it determines that:

• There is a risk of serious injury or death if the remedy program is not accelerated;


• Acceleration of the remedy program can be reasonably achieved by expanding the sources of replacement parts, expanding the number of authorized repair facilities, or both; and


• The manufacturer’s remedy program is not likely to be capable of completion within a reasonable time.

NHTSA may hold a hearing determining that a recall has not been implemented correctly and issue an order for a special recall, up to and including an order to repurchase all vehicles affected by the recall.

NHTSA may levy civil penalties and may apply for declaratory and injunctive relief to enforce payment of such penalties. NHTSA may also confiscate unsold vehicles and start forfeiture procedures.

Motor vehicle recalls are either initiated by the motor vehicle manufacturer (voluntary) or initiated by NHTSA (mandatory). During a so-called voluntary recall, the motor vehicle manufacturer immediately reports the existence of a safety defect or noncompliance violation of the FMVSS to NHTSA in a prescribed format (Part 573) through the NHTSA online portal, proposes a remedy to correct this situation, and demonstrates that such a remedy will be without charge to the vehicle owners (Part 577). After NHTSA reviews and discusses the recall with the motor vehicle manufacturer, the manufacturer may need to update the disclosure; if NHTSA approves the amended proposed remedy, then the motor vehicle manufacturer implements the recall and updates NHTSA on progress until the recall is completed. Generally with voluntary recalls, no penalties are levied.

For NHTSA to force a mandatory recall, the manufacturer has seriously erred, either demonstrated resistance to due care, tardiness in reporting the existence of a safety defect or noncompliance violation, and/or insufficient effort offering a proper remedy to effect a full and permanent corrective action. Mandatory recalls are in the minority, where the recall report is not made voluntarily but instead originates from NHTSA consequent to a National Transportation Safety Board (NTSB) accident investigation, a safety or compliance test ordered by NHTSA that demonstrated the vehicle failed to comply, or from customer complaints. In all of these cases, NHTSA will initiate a defect and/or noncompliance investigation, usually conducted by the Office of Defects Investigation (ODI) or the Office of Vehicle Safety Compliance (OVSC) using NHTSA OVSC-contracted test laboratories. If the investigation confirms the existence of a safety defect or a violation of the FMVSS, NHTSA will contact the manufacturer and issue a mandatory recall order. Depending on the circumstances, substantial civil penalties can and have been levied, as well as civil and/or criminal charges.

It is important to understand that NHTSA has the ultimate authority to oversee the recall, reporting, notification, and remedy processes, not the manufacturers. While NHTSA does not “personally” remedy the vehicles or otherwise execute the details of all these processes by itself, NHTSA retains veto authority for anything it does not agree with, and manufacturers are merely the decentralized means to implement the processes. Thus, every single aspect of these processes must be fully transparent to NHTSA, so that it can make fully informed decisions and approvals.

Part 577 requires a manufacturer of motor vehicles, equipment, and/or accessories to notify owners, dealers, and distributors about a safety defect or FMVSS noncompliance that has recently been reported to NHTSA.

NHTSA does not allow a manufacturer to communicate with owners, dealers, or distributors prior to reporting to NHTSA and/or without oversight by NHTSA; to do so would equate with a “secret recall”, which is a separate violation that NHTSA could prosecute.

Even the proposed notification letter must be submitted to NHTSA for review; frequently, NHTSA will respond with required edits, which triggers re-submission, re-review, etc., before the final draft of the letter can be approved, printed, and mailed to owners, dealers, and distributors.

Specifically, Part 577 requires manufacturers to:

• Use the information from the Part 573 report, to generate notifications in accordance with NHTSA’s prescribed format.


• Provide NHTSA a representative copy of all notifications.


• Furnish notification no later than 60 days from the related Part 573 report.


• Provide notification in writing via postal mail.


• Maintain records of all such notifications.

Part 577 notifications are required to be made within sixty (60) calendar days after making the related Part 573 report to NHTSA.

Part 578 warns of prescribed amounts for civil penalties for regulatory violations, and explains the numerous general and discretionary civil penalty factors that it considers when prosecuting manufacturers.

For summaries of two case studies of the range of regulatory enforcement actions taken by NHTSA against three-wheel motor vehicle manufacturers for violations of the FMVSS, including mandatory recalls, consequent government orders, lawsuits, countersuits, consent judgments, penalties, charges, and fines, see NHTSA Regulatory Enforcement v. Three-Wheel Motorcycle Manufacturers Wildfire and ZAP.

Part 579 requires a manufacturer of motor vehicles, equipment, and/or accessories to report potential defects. This is typically a prelude to what could become a Service Bulletin or recall.

According to various sources including NHTSA, the Transportation Recall Enhancement, Accountability and Documentation Act of 2000 (TREAD) was enacted in response to fatalities related to Ford Explorers fitted with Bridgestone/Firestone P235/75R15 ATX, ATX II, and Wilderness AT tires (“Ford Explorer rollovers” or “Firestone and Ford tire controversy”). The name “TREAD” is a reference to a tire tread, since tire tread separation failures motivated the legislation. As explained by NHTSA Administrator J.W.Runge (PDF), TREAD was developed when legislators, NHTSA, and manufacturers of motor vehicles and tires came together to create a comprehensive and wide-ranging surveillance system to collect and analyze millions of disparate pieces of data, that individually may not seem to rise to the level of a recall, but in the aggregate can evidence patterns and trends of real concern.

• For example, if in the 1980s and 1990s motor vehicle and tire manufacturers had already been quarterly reporting about deaths, injuries, accidents, property damage, etc. as they are now required to do, then NHTSA would have been able to easily see in the data the statistical outlier of Bridgestone/Firestone tires with higher incidences of tread separation. NHTSA would also have been able to correlate such failures with factors such as tire age, geographical location vis-à-vis operating temperature (hot locales were especially affected, like Arizona and Saudi Arabia), particular tire designs, and Bridgestone/Firestone’s Decatur, IL manufacturing facility.


• This early warning reporting system could have justified U.S. Federal investigations starting many years earlier, resulting in timely determination of root cause(s), contributing causes, and factors. Ultimately, if a surveillance system like TREAD’s Early Warning Reporting (EWR) had already existed, it could have prevented up to 271 deaths and over 800 injuries in the U.S., and many hundreds more internationally, just regarding the Ford Explorer rollovers.

NHTSA uses TREAD to require all motor vehicle manufacturers, including equipment and low-volume manufacturers, to report: Manufacturer Communications (MC) (Service Bulletins, TSB; see § 579.5); Foreign Recalls and Other Safety Campaigns of Substantially Similar Vehicles Listing (SSVL) (see § 579.4(d); compare § 579.12); and Fatality Claims and Notices (aka Deaths and Injuries (“D&I”); for example, see § 579.27(b))

• For example, if a motorcycle manufacturer produces less than 5000 vehicles annually, then minimum reporting is required in accordance with § 579.27(c)(3) and (c)(5) and/or (c)(6), and data must be coded in the report exactly as specified in § 579.23(b)(2).
  
  
• But if a motorcycle manufacturer intends to or actually exceeds 5000 or more annually, then additional reporting is required in accordance with § 579.23 beginning with January 1 of that year, called Early Warning Reporting (EWR), including Production Information, Property Damage Claims, Consumer Complaints, Warranty Claims, Field Reports, etc.