NHTSA Expands Early Warning Reporting and Recall Management Requirements

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On August 20, 2013, the National Highway Traffic Safety Administration (NHTSA) promulgated a final rule that imposes additional obligations on vehicle and equipment manufacturers in reporting safety information to NHTSA and notifying owners about recalls. These newly-enacted changes require manufacturers to provide more detailed data through early warning reporting (EWR), compel manufacturers to supply free online access to recall information searchable by vehicle identification number (VIN), and modify the information required to be provided in a Part 573 report. Many significant changes in this rule will take effect in October 2013, and the new rule is to be implemented in full by August 2014.

First, this final rule expands the information that certain vehicle manufacturers will be required to report to NHTSA as part of their early warning reporting (EWR). The purpose of these reports is to assist the agency in identifying potential safety defects. Existing EWR regulation calls on vehicle and equipment manufacturers to provide to NHTSA—on a quarterly basis for some manufacturers—information about incidents involving death, injury, or property damage, consumer complaints, warranty claims, and field reports. Under the new rule, certain manufacturers will in addition be obligated to disclose the vehicle type involved in the incident, the fuel or propulsion system, the stability control systems, and crash avoidance technologies. (The requirement to specify the fuel or propulsion system for each light vehicle, out of nine defined categories, reflects the agency's recognition of developing energy technologies that did not exist or were not in widespread commercial use when EWR regulations were first promulgated.) These additions to EWR reporting affect manufacturers of light vehicles in particular.

Under the new EWR provisions, light vehicle manufacturers will also have to report data for four added vehicle components: electronic stability control (ESC), forward collision avoidance (FCA), lane departure prevention (LDP), and backover prevention. Buses, emergency vehicles, and medium and heavy vehicles will additionally need to report data for ESC and roll stability control (RSC).

Second, the new final rule adds to a manufacturer's responsibilities after it announces a recall. In line with the mandates in the Moving Ahead for Progress in the 21st Century Act (MAP-21 Act), NHTSA will require manufacturers of large volume cars, light trucks and motorcycles to provide a free online database that allows consumers to search for recall information by VIN. Each database must report, by VIN, whether a vehicle has been subject to a safety recall, and, if so, whether the vehicle has received the manufacturer's free remedy. Information on uncompleted recalls must remain in the database for at least fifteen years. Further, the database must be linked in a conspicuous place on the manufacturer's main United States' website, and cannot include sales or marketing messages. Each manufacturer must permit its VIN-searchable recall data to be securely transferred to NHTSA, so the agency can maintain an aggregate database on its own website, which currently allows searching only by vehicle make and model. Manufacturers will be obligated to update their own databases on a weekly basis, beginning in August 2014.

These database procedures were adopted in lieu of the agency's primary proposal that would have required manufacturers to submit daily information to NHTSA regarding changes in recall remedy status for each VIN, a proposal criticized by the industry as onerous. While the new final rule applies only to larger manufacturers of light vehicles—those who manufacture 25,000 or more light vehicles, or 5,000 or more motorcycles, annually—the agency signaled that it might issue a notice of proposed rulemaking in the future to expand these post-recall requirements to smaller light vehicle manufacturers or manufacturers of other vehicles.

Third, the new final rule changes the information that must be submitted in a manufacturer's Part 573 defect or noncompliance report. Once the rule takes effect, manufacturers will be required to submit new information within five business days of when the manufacturer confirms its accuracy. This provision differs from the present rule, which requires generally that the information be submitted as it becomes available, and the agency's original proposed amendment, which would have required that the information be provided within five business days of becoming available. The final rule also did not adopt a proposal that would have required manufacturers to review their Part 573 reports for completeness and accuracy 90 days after launching their recall campaigns.

Beyond specificity on timing, the Part 573 report will now also need to include a description of the risk associated with the defect or noncompliance, like that required to be included in a Part 577 notification to vehicle owners. It will not prohibit manufacturers from including disclaimers that disavow the presence of a safety-related defect or noncompliance in the Part 573 report: negative feedback on that initial proposal carried the day. Finally, manufacturers recalling motor vehicle equipment must now also report the brand name, model name, and model number of the equipment recalled.

Fourth, although the final rule does not change the Part 577 regulation prohibiting a manufacturer from including a disclaimer in recall notifications, Part 577 notices will have to change in other ways. Manufacturers now will be required to mail Part 577 notices to owners and purchasers no later than 60 days from the date the manufacturer files its Part 573 notice, even if the remedy is not yet available. A subsequent notice must then be mailed when the remedy becomes available. The phrase "IMPORTANT SAFETY RECALL" will need to appear at the top of all of the notices, with the VIN included conspicuously. The envelope for the notices must use a standardized label that includes the logos of the U.S. Department of Transportation and NHTSA, and a statement in red text that the letter includes important safety recall information.

Fifth, the new final rule modifies foreign defect reporting regulations. Under both the current and new reporting rules, manufacturers selling vehicles in the United States must submit annually to NHTSA a list of each of its models that is identical or substantially similar to a model they sell or plan to sell in a foreign country. Previously, these lists could only be submitted by mail, fax, or e-mail, and were not readily searchable. Starting in August 2014, manufacturers must upload the lists directly to NHTSA's electronic database, just as they do with EWR reports.

The changes to the EWR system, the databases searchable by VIN, and the electronic submission of documents to NHTSA all take effect in August 2014. The new envelope labels must be used by February 2014. The remaining changes to the safety recall reporting and notification requirements become effective in October 2013.