Ford Transmissions Failure to Hold in Park
On June 10, 1980, NHTSA made an initial determination of defect in Ford vehicles with C-3, C-4, C-6, FMX, and JATCO automatic transmissions. The alleged problem with the transmissions is that a safety defect permits them to slip accidentally from park to reverse. As of the date of determination, NHTSA had received 23,000 complaints about Ford transmissions, including reports of 6,000 accidents, 1,710 injuries, and 98 fatalities--primarily the young and old, unable to save themselves--directly attributable to transmission slippage. As detailed below, this defect finding eventually resulted in a pseudo-recall wherein Ford agreed to mail warning labels to 23 million owners of Fords with these transmissions rather than recall them for mechanical repair.
The Center for Auto Safety first called NHTSA's attention to the problem in July 1977, and shortly thereafter NHTSA instituted an investigation into 1966-79 Ford vehicles with C-6 or FMX transmissions. In the face of apparent administrative inaction by NHTSA, CAS in July 1978, renewed its warnings and asked NHTSA for a recall. CAS produced evidence of 12 deaths and 100 accidents which occurred because of transmission slippage. CAS reminded NHTSA of the long established precedent of the Kelsey-Hayes wheel case (United States v. General Motors Corp., 171 App. D.C. 27, 518 F.2d 420 (1975)) that a significant number of failures alone in normal use is a sufficient legal basis for a recall without determination of a precise cause of failure.
But in October 1978, NHTSA denied the Center's recall request. It did, however, term its investigation a "matter of extremely high priority." NHTSA realized the magnitude of the proposed recall put its investigation on politically sensitive ground. Hence, any action required concrete evidence of defective design.
On August 29, 1978, NHTSA issued a "Consumer Advisory" warning drivers not to leave their vehicles unattended with the engine running for even a few moments. The following month NHTSA conducted an investigation to find out if complaints against Ford transmissions were disproportionately higher than those against other manufacturers or whether the problem was common for all automatic transmissions. The study revealed, contrary to Ford's contentions, that Ford transmissions were 12 times more likely than General Motors' and 14 times more likely than Chryslers' to jump from park-to-reverse when jarred.
In January, 1980, the Center sent NHTSA a copy of a Ford internal memorandum dated June 30, 1971, allegedly showing a flaw in Ford automatic transmissions allowing the shift lever to be improperly placed, although to the driver the slotting appeared proper. On April 11, the CAS petitioned for the discharge of a decision in the park-to-reverse case. May figures revealed the death toll had climbed to 88 and the Center called for "timely" action. It said NHTSA had three years to wrap up the case already but time had run out for 45 Ford owners since the investigation commenced.
Further support for a recall came in the June, 1980 issue of Mother Jones Magazine which provided evidence indicating Ford knew for "at least 10 years" that transmission slippage was "killing people." Yet, in 1971, it "rejected design improvements" which would have cost 3 cents per car and would have resulted in an estimated 90% reduction in park-to-reverse repairs. The design of Ford's 1980 transmission has been modified.
Meanwhile, on June 2, CAS sought a court order requiring Joan Claybrook, then director of NHTSA, to make an initial determination within 30 days as to whether certain Ford vehicles with automatic transmissions have a safety related defect that may cause them to jump from park to reverse.
Ford, on the other hand, claimed its transmissions were basically the same as those installed in millions of other domestic and foreign vehicles. Ford attributed the accidents to the failure of motorists to put gearshift levers firmly in the park position.
Another factor that may have been a positive influence on NHTSA to make an initial determination of defect has been the success of plaintiffs in civil suits against Ford. Mother Jones reported suits in California during the sixties that ended in awards of up to $700,000 against Ford because of transmission problems. The latest successful suit was brought by a Virginia woman after her 1973 Lincoln ran over her leg. After the award, her attorney said the verdict "clearly establishes the legal precedent that the transmission is unsafe."
The NHTSA determination identified two "apparent design errors" in the transmission. Though the NHTSA investigation covered Ford models back to 1969, an eight year statute of limitations narrowed the notice to vehicles built after 1972.
In August, 1980, in accordance with the National Traffic and Motor Vehicle Safety Act of 1966, as amended, NHTSA held hearings at which interested persons were given the opportunity to present data and views as to the existence of a safety-related defect in these transmissions. Two months later, NHTSA Administrator Claybrook sent a memorandum to Secretary of Transportation Goldschmidt announcing her intention to order the recall of 10 million Fords with C-3, C-4 and FMX automatic transmissions. With respect to the JATCO and C-6 transmissions, she stated her belief that a remedy, such as a warning device, might be negotiated with Ford.
Contrary to Administrator Claybrook's findings, on December 31, 1980, Secretary Goldschmidt announced DOT's agreement to close its three and one-half year investigation of the Ford automatic transmissions in exchange for Ford's pledge to send notification and warning labels to owners of almost 23 million Fords.
On March 6, 1981, the Center for Auto Safety filed suit to overturn the agreement between Ford and DOT on the grounds that a mere warning label recall was illegal under the National Traffic and Motor Vehicle Safety Act which required mechanical remedy of defective vehicles and that there was no support in the record showing a label would reduce the number of accidents, deaths and injuries. On August 10, 1982, the U.S. Court of Appeals for the District of Columbia refused to overturn the settlement and ruled that: (1) since a Final Defect Determination had never been made, statutory repair remedy was not required, and (2) while the explanation for the adequacy of the was short, the court would require no more. Center for Auto Safety v. Lewis, 222 App. D.C. 206, 685 F.2d 656 (1982).
On June 16, 1981, Ralph Nader petitioned NHTSA to reopen the Ford P-R defect investigation on the grounds that the labels were not being applied to cars and did not work. On February 17, 1982, the Center for Auto Safety filed an even more detailed petition to reopen the investigation. By that date, there had been at least 20 known fatalities since the December 30, 1980, warning label settlement. On June 18, 1982, the NHTSA denied the petition to reopen the investigation.
On September 3, 1982, the Center wrote to Ford Motor Company Chairman Philip Caldwell asking Ford to voluntarily recall all automatic transmission Fords made from 1966 to early 1980 because the rising costs of litigation against Ford outweighed the cost of a recall. In a report filed with the Security and Exchange Commission in March 1982, Ford admitted that the total amount of damages claimed in lawsuits on these transmissions was more than $1.7 billion with much more expected. In contrast, the Center estimated the cost of a complete recall at no more than $250 million.
As 1983 began, public attention was again beginning to focus on Ford's problems with these transmissions in view of the rising litigation and death tolls. Late in 1982, the known death toll associated with these transmissions reached 200. In July 1983, the House held extensive hearings led by Rep. Timothy Wirth of Colorado who was critical of NHTSA’s failure to obtain a safety recall that remedied the defect. Hearings on Ford Transmission Case Before the Telecommunications, Consumer Protection and Finance Subcomm., House Energy & Commerce Comm., 98th Cong., 1st Sess., Serial No. 98-82 (July 27, 1983).
In December, 1984, the Center for Auto Safety released a study demonstrating that the fatality rate associated with these transmissions had actually increased in the four years since the Ford settlement. By this time, the Center for Auto Safety had learned of over a hundred post-settlement fatalities and on March 6, 1985, petitioned NHTSA seeking an expedited defect investigation. Despite findings by the agency that Ford "park-to-reverse" accidents had resulted in a total of at least 306 deaths, and that the death rate from the defect was higher in 1984 than in any other year in history except one (1980), NHTSA announced on July 12, 1985, that it would not reopen the case.
The Center then filed suit to require the agency to follow its statutory procedures and to grant the petition. On April 16, 1986 the District Court for the District of Columbia ruled against the Center. Center For Auto Safety v. Dole, 1986 WL 4682 D.D.C.,1986. The Court held that the agency's denial of the Center's petition was within the agency's discretionary authority and therefore unreviewable by the court, citing Heckler v. Chaney, 470 U.S. 821, 84 L. Ed. 2d 714, 105 S. Ct. 1649, 15 ELR 20335 (1985). The Court also held, in the alternative, that a narrow scope of review applied in this case, restricting judicial review to the Administrator's statement of reasons. Using this limited review, the court held that the agency's decision to deny the petition was not an arbitrary or capricious act or one contrary to law. However, on September 8, 1987, the U.S. Court of Appeals (D.C.) reversed the district court's ruling. Center for Auto Safety v Dole, 264 App. D.C. 219, 828 F.2d 799 (1987), vacated, on reh 270 App. D.C. 73, 846 F.2d 1532. The appeals court held that the agency's decision denying the petition is reviewable and that the review should encompass all the evidence before the agency. It remanded the case to the district court, which was instructed to undertake this review to see if NHTSA followed its own regulations, which require it to grant defect petitions if there is a "reasonable possibility" that a safety-related defect exists.
However, before the case could be heard on remand, NHTSA's motion for rehearing by the panel was granted, and the Court held that NHTSA's decision not to reopen the investigation of Ford's transmissions was not judicially reviewable, as the "law to apply" in the case did not limit the agency's discretion in such a way as to create a meaningful standard of review of the agency's compliance. Center for Auto Safety v. Dole, 270 App. D.C. 73, 846 F.2d 1532 (1988). The Court thereby vacated its prior opinion and reinstated the April 16, 1986 order of the US District Court for the District of Columbia which denied review of the agency's action. On July 15, 1988, the Center for Auto Safety filed a motion for clarification of the mandate with the court, as the court's decision to vacate did not address the issue of NHTSA's failure to state what nonsafety factors it had considered in its petition denials, notably in its denial of the Ford park-to-reverse petition. This is a violation of the statutory and regulatory requirements which state that NHTSA must publish the "reasons" for a petition denial in the Federal Register. This motion was denied by the court in September, 1988.
In June 1986, the U.S. General Accounting Office issued a report entitled: "Effectiveness of Ford Transmission Settlement Still at Issue", which noted that the benchmark for assessing the settlement's effectiveness was NHTSA's stated expectation that it would significantly reduce the incidence of accident, death, and injury resulting from inadvertent vehicle movement. But GAO found that NHTSA had performed neither the pre nor post settlement analysis necessary to measure the settlement's effectiveness in a statistically valid manner. Specifically, it found that NHTSA's conclusion that the trend of reported incidents and accidents has continued downward, is not valid statistically because it was based on Ford's data base of alleged inadvertent vehicle movement incidents, which did not account for the effects of publicity and intensity of collection efforts on reports.
On the other hand, GAO found that the fatality data, while not a statistically valid basis for an absolute determination of the settlement's effectiveness, showed no overall decline in the Ford park-to-reverse fatality rate in the years following the settlement. The number of transmission fatalities on pre-1980 Fords since the settlement through June 1985 was at least 106. GAO also discovered that the park-reverse fatality rate is much higher for 1970-79 model Fords than for the vehicles of other manufacturers or for post-1980 Fords, which incorporated design changes to correct the problem. The number of known fatalities in the post-1980 Fords through June 1985 was only four, which showed the effectiveness of the Ford design changes in correcting the defect.
On the basis of these findings, GAO recommended that the Secretary of Transportation direct NHTSA to take further action on the Ford park-to-reverse problem.
A private class action was filed on all 1976 through early 1980 model Fords with the C-3, C-4, C-6 and FMX automatic transmissions. The putative class consisted of all owners who had not had an injury producing accident. Preliminary rulings favored the Plaintiffs. See e.g., Walsh v FORD., 106 FRD 378, 1985-2 CCH Trade Cases P 66757 (1985, DC Dist Col) (conditionally certifying three classes pursuant to Rule 23); Walsh v. FORD., 588 F. Supp. 1513, 1984-1 CCH Trade Cases P 65973 (defining jurisdictional requirements of the Magnuson-Moss Warranty Act and denying defendant's motion to dismiss the second amended complaint). However, the Court ultimately dismissed the case, finding: "Class treatment promises gargantuan problems of manageability for counsel and the Court. Alternative judicial avenues offer a superior method of resolving the substance of plaintiffs' claims and providing appropriate relief." Walsh v. FORD., 130 F.R.D. 260, 1990-1 CCH Trade Cases P 69043 (1990, DC Dist. Col), reconsideration den 130 F.R.D. 514, 1990-1 CCH Trade Cases P 69044 (DC Dist. Col).