U.S. v. General Motors Corp.

Citation171 U.S.App.D.C. 27,518 F.2d 420
Decision Date04 August 1975
Docket NumberNo. 74-1656,74-1656
PartiesUNITED STATES of America v. GENERAL MOTORS CORPORATION, a corporation, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action 3298-70).

Lloyd N. Cutler, Washington, D. C., with whom Timothy B. Dyk, C. Boyden Gray and Ronald J. Greene, Washington, D. C., were on the brief for appellant.

Nathan Dodell, Asst. U. S. Atty., with whom Earl J. Silbert, U. S. Atty., was on the brief for appellee. Arnold T. Aikens, Asst. U. S. Atty., also entered an appearance for appellee.

Bruce L. Montgomery, Washington, D. C., with whom Michael N. Sohn and Charles R. Halpern, Washington, D. C., were on the brief for Ralph Nader et al., as amici curiae urging affirmance.

Before TAMM and LEVENTHAL, Circuit Judges, and MERHIGE, * United States District Judge for the Eastern District of Virginia.

LEVENTHAL, Circuit Judge:

This case represents the first appellate examination of the defect notification provisions of the National Traffic and Motor Vehicle Safety Act of 1966. 1

The Government filed an action in the District Court for a declaration that General Motors Corporation (GM) violated this Act by failing to notify purchasers of 3/4 ton 1960-65 model year Chevrolet and GMC pickup trucks (Trucks) equipped with three-piece 15 X 5.50 Kelsey-Hayes disc wheels (Wheels) of a defect in the Wheels relating to motor vehicle safety. The District Court concluded that a "defect" existed whenever there was "a large number of failures of components or materials, i. e., failures in performance, regardless of the cause." 2 Finding that undisputed facts established a large number of Wheel failures, the District Court granted the Government's motion for summary judgment and ordered GM to issue defect notifications as required by the Act. 3 GM appeals this determination, particularly challenging this definition of "defect."

This case focuses on the meaning of § 113 of the Act, set forth in pertinent part in the margin. 4 The statutory framework places primary responsibility on the manufacturer to notify purchasers of "any defect in any motor vehicle or motor vehicle equipment produced by such manufacturer which he determines, in good faith, relates to motor vehicle safety." The manufacturer may base his defect determination on his own studies, information supplied by purchasers and dealers, or the Secretary of Transportation's finding that the equipment "contains a defect." 5 Judicial involvement in the defect notification process takes place only in cases where the Secretary, after affording the manufacturer an opportunity to present its views, reaffirms his defect determination by directing the manufacturer to issue notices and the manufacturer continues to challenge the finding by refusing to comply. In such cases, the Government may bring an action in United States district court to restrain the manufacturer's violation of the directive. 6 The District Court enforcement proceeding affords the manufacturer a trial de novo with the burden of proof on the Government to establish the existence of a safety-related defect. 7

The primary question presented by this appeal is whether the District Court erred in concluding that undisputed proof of a large number of Wheel failures conclusively established a "defect" within the meaning of the Act, and that the cause of such failures was immaterial. GM contends that no defect exists unless a significant number of failures occur in vehicles operated in conformity with the manufacturer's specifications. Specifically, GM argues that the Wheel failures were a product of owner abuse overloading the Trucks with heavy campers or special bodies and that the Wheels are suitable for uses that comply with the weight limitations set forth in the owner's manual. Alternatively, GM asserts that prior letters sent to owners describing the dangers created by overloading Trucks equipped with the Kelsey-Hayes wheels comply with the requirements of the Act and constitute a defense against the present enforcement action.

Our survey of the Act's purpose and legislative history leads us to reject both the definition of defect urged by the Government and adopted by the District Court and the definition put forth by GM. We find that a vehicle or component "contains a defect" if it is subject to a significant number of failures in normal operation, including failures either occurring during specified use or resulting from owner abuse (including inadequate maintenance) that is reasonably foreseeable 8 (ordinary abuse), but excluding failures attributable to normal deterioration of a component as a result of age and wear. Whether a defect exists in a particular case thus turns on the nature of the component involved, the circumstances in which the failures occurred, and the number of failures experienced. Where, as here, the component is designed to function without replacement over the lifetime of the vehicle, 9 the Government may discharge its burden of establishing a defect by showing a significant number of failures without making any showing of cause. But in all cases the manufacturer may prove, as an affirmative defense, that the failures resulted from unforeseeable owner abuse (gross abuse) or unforeseeable neglect of vehicle maintenance.

This view of the legislative contemplation leads us to conclude that the District Court's grant of summary judgment must be reversed, because there are presently genuine issues of material fact regarding GM's defense that the Wheel failures stem from unforeseeable overloading of the Trucks.

I. BACKGROUND

We begin with a brief description of the vehicle component involved in this case, the administrative proceedings culminating in the present enforcement action, and the proceedings in the District Court.

A. The Kelsey-Hayes Wheel

The three-piece 15 X 5.50 Kelsey-Hayes disc wheel was introduced by GM in the fall of 1959, the beginning of the 1960 model year, as an option on its 3/4 ton Chevrolet Series 20 and GMC Series 1500 pickup trucks. The Wheels proved to be an extremely popular option a total of 810,000 Wheels were installed on approximately 200,000 of the 321,743 GM trucks manufactured during the 1960-65 model years. 10 This popularity apparently stemmed from the fact that the Wheel could be used with a tube-type tire capable of being changed in the field. 11

The load carrying capabilities of the trucks equipped with Kelsey-Hayes wheels depended on which of three different tube tires was selected by the purchaser. The maximum load capacity of a truck is its gross vehicle weight (GVW) the sum of the curb (empty) weight of the truck itself and the maximum load. The gross vehicle weights of Trucks here involved ranged from 5,500 lbs. with 700 X 15 6-ply tires, to 6,000 lbs. with 700 X 15 8-ply tires, and 6700 lbs. with 7.50 X 15 8-ply tires. While the maximum load capacity of the Kelsey-Hayes wheel was 2060 lbs., the tire-wheel capacity, combining the Wheel with the tires identified in the previous sentence, was 1520 lbs., 1800 lbs., and 2060 lbs., respectively. 12 The GVW of the Trucks is thus significantly less than the figure obtained by multiplying the tire-wheel capacity by four. This deviation from a simple multiple of the tire-wheel capacity stems in part from the manner in which load weights are distributed between the front and rear wheels.

Each Truck came with a permanently affixed GVW plate stating that the maximum GVW rating was 7500 lbs. This 7500 lb. figure on the plate is in excess of the 5500 lb. GVW of Trucks with the standard wheel and tire, available without extra charge, 13 and in excess of the GVW of Trucks with the Kelsey-Hayes optional wheel (which ranged from 5500 to 6700 lbs.).

Information on the tire-wheel capacity of particular tire-wheel combinations was set forth in the owner's manual in a table marked "Tire Inflation Tables for Highway Service." Also in the owner's manual was a table listing gross vehicle weights, referred to in some manuals as "load capacity chart." This table listed gross vehicle weights for various combinations of tires for front and rear wheels (sometimes with notations of necessary equipment such as heavy duty springs). However, this table did not show gross vehicle weight for any of the 15-inch tires used with the Kelsey-Hayes wheels. 14

General Motors discontinued the Wheel as an available option at the end of the 1965 model year. 15

B. Administrative Proceedings

A September 4, 1968, letter from Ralph Nader, the noted exponent of consumer causes, reported an injury-producing accident caused by the failure of a Kelsey-Hayes wheel. This prompted the National Highway Safety Bureau (NHSB) (now the National Highway Traffic Safety Administration) to initiate an investigation to determine whether the Wheel contained a safety-related defect. 16 General Motors indicated, in response to NHSB inquiries, that its records revealed 53 Wheel failures. 17 GM disputed NHSB's engineering reports which suggested a manufacturing defect, stating that its engineers had determined that the failures "were not caused by a defect but rather by the type of loading to which the wheels were subjected." 18 Part I of NHSB's Investigation Report, dated April 2, 1969, concluded that "(s)afety-related defects still exist in 15 X 5.5 three-piece disc wheels which are in active use" and recommended that "all such wheels" be "replaced as early as possible." 19

Following the completion of the initial investigation, meetings were held between NHSB personnel and GM representatives. Although persisting in its claim that there was no defect and therefore no obligation under the Act to issue notifications, GM advised the agency on April 19, 1969, of its plans to notify each owner of a truck equipped with Kelsey-Hayes wheels of the dangers posed...

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