Safety data a trade secret?

 

 

 

David Lazarus
San Francisco Chronicle
1/7/07

Before you buy a car, would you want to know how many complaints people had made to the manufacturer about defects, or how many warranty claims had been paid, or how many dealers had reported problems with the vehicle?

Federal law says you have a right to such info. But the Bush administration and the auto industry are quietly trying to change that.

In 2000, Congress passed the Transportation, Recall Enhancement, Accountability and Documentation Act to address regulators' failure to spot defects in Firestone tires that were linked to numerous deaths.

Under the act, vehicle and parts manufacturers are required to report all consumer complaints, warranty payments and dealers' field reports in the event of an injury or death involving a potentially defective product.

Or they will be once the act is finally implemented after years of legal wrangling. It looks like that could soon happen -- but with significant alterations.

While the data will still go to government officials, rule changes sought by the auto industry and backed by the Bush administration would deem information like consumer complaints and warranty payments "trade secrets" and thus prevent the public from gaining access.

This doesn't sit well with consumer advocates, who see public disclosure of auto-safety data as a crucial early-warning system to prevent repeats of the Firestone debacle.

"Consumers are the people who get killed or injured when vehicles are defective," said Joan Claybrook, president of Public Citizen, a Washington watchdog group.

"Everyone in America has an interest in demanding that this information be publicly available," she said.

As it stands, Claybrook acknowledged, it looks like the auto industry might prevail when the National Highway Traffic Safety Administration issues a final ruling on the changes, perhaps later this year.

"The Bush administration has pretty much closed down regulatory agencies as much as it can," she said. Claybrook ran NHTSA during the Carter administration.

Last week, another interested party in the matter, the American Association for Justice (formerly the Association of Trial Lawyers of America), submitted a letter to NHTSA calling for the proposed changes to be scrapped because they violate the letter and spirit of the Freedom of Information Act.

"These unwarranted rule changes by the federal agency charged with ensuring the public's safety allow the automobile industry to hide information about the safety of their vehicles and ultimately evade responsibility for negligence," said Jon Haber, the association's chief executive.

Other regulatory agencies, including the Food and Drug Administration and the Federal Trade Commission, routinely make information available to consumers about potentially dangerous products.

However, the changes advocated by NHTSA would reclassify consumer complaints, warranty payments and field reports from dealers as confidential data, thus preventing consumer advocates or product-liability lawyers from being alerted to potentially defective parts or vehicles.

"This information provides an early warning when there's problem," said Don Slavik, a Milwaukee lawyer who focuses on product-liability cases involving the auto industry. "It lets the public know even before federal authorities have had a chance to investigate."

A spokeswoman for NHTSA declined to comment on the rationale for the rule changes or how they would serve the public interest.

But a filing by the agency in the Federal Register says the changes are needed because disclosing consumer complaints, warranty payments and dealers' field reports "will cause substantial competitive harm (to manufacturers) and will impair the government's ability to obtain this information in the future."

In essence, the agency is agreeing with manufacturers' concerns that revealing data about potentially defective products would place companies at a competitive disadvantage in the marketplace, and that such data therefore should be kept under wraps.

"In view of the competitive value of these data, NHTSA has tentatively concluded that the release of ... consumer complaint data would cause substantive harm to the competitive position of the manufacturer that collected and reported them," the filing says.

It adds that manufacturers might be tempted to scale back their reporting of consumer complaints if such information were to be publicly available, although it doesn't explain why regulators couldn't just impose fines if a company failed to submit required data.

The rule changes are backed by virtually every leading vehicle-industry trade group, including the Alliance of Automobile Manufacturers.

Asked to comment on why the public shouldn't have access to how many complaints have been received about a specific vehicle, an alliance spokesman said only that this information is a resource "for the industry and the National Highway Traffic Safety Administration to use to help further enhance the safety of automobiles."

In its Federal Register filing, NHTSA says that "the commercial value of consumer complaint data is well recognized. Complaint data are a valuable data source used by companies to help them identify areas of concern, including product performance, to consumers and provide guidance on where to allocate their limited resources."

It adds that disclosing complaint numbers "would provide competitors with aggregated data on the performance of entire product lines and key, individual systems and/or components."

Public Citizen's Claybrook said this should be the least of anyone's worries.

"If disclosing this information can save lives, it should be disclosed," she said. "Everyone should tell their elected representatives that this is important to them."

Or you can visit the Web site of the National Highway Transportation Safety Administration at nhtsa.gov and follow the links to an e-mail form.