State Farm Mut. Auto. Ins. Co. v. Department of Transp.

• Decision Date: 01 June 1982
• Docket Number: 81-2221,Nos. 81-2220,s. 81-2220
• Citation: 680 F.2d 206,220 U.S.App.D.C. 170
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Kent Mason, Patricia Warren and Leorlin Boyd, Petitioners, v. DEPARTMENT OF TRANSPORTATION, Drew Lewis, as Secretary, National Highway Traffic Safety Administration, and Raymond A. Peck, Jr., as Administrator, Respondents, Superintendent of Insurance of the State of New York, Automobile Importers of America, Inc., Motor Vehicle Manufacturers Association, et al., Consumer Alert and Pacific Legal Foundation, Intervenors. NATIONAL ASSOCIATION OF INDEPENDENT INSURERS, Automobile Owners Action Council, and Eugene J. Meyung, Petitioners, v. NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, Respondent, Automobile Importers of America, Inc., Consumer Alert and Pacific Legal Foundation, Motor Vehicle Manufacturers Association, et al., Superintendent of Insurance of the State of New York, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 206

680 F.2d 206

220 U.S.App.D.C. 170

STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Kent Mason, Patricia Warren and Leorlin Boyd, Petitioners, v. DEPARTMENT OF TRANSPORTATION, Drew Lewis, as Secretary,

National Highway Traffic Safety Administration,

and Raymond A. Peck, Jr., as

Administrator, Respondents,

Superintendent of Insurance of the State of New York,

Automobile Importers of America, Inc., Motor Vehicle

Manufacturers Association, et al., Consumer Alert and

Pacific Legal Foundation, Intervenors.

NATIONAL ASSOCIATION OF INDEPENDENT INSURERS, Automobile

Owners Action Council, and Eugene J. Meyung, Petitioners, v. NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, Respondent,

Automobile Importers of America, Inc., Consumer Alert and

Pacific Legal Foundation, Motor Vehicle Manufacturers

Association, et al., Superintendent of Insurance of the

State of New York, Intervenors.

Nos. 81-2220, 81-2221.

United States Court of Appeals District of Columbia Circuit.

Argued March 1, 1982.

Decided June 1, 1982.

James F. Fitzpatrick, Washington, D. C., with whom Michael N. Sohn, Merrick B. Garland, John M. Quinn and Robert E. Litan, Washington, D. C., were on the brief, for petitioners in No. 81-2220.

Raymond J. Rasenberger, Washington, D. C., with whom Lawrence C. Merthan, Frank J. Costello and Richard M. Hall, Washington, D. C., were on the brief, for petitioners in No. 81-2221.

David W. Allen, Asst. Chief Counsel, Nat. Highway Traffic Safety Admin., Washington, D. C., with whom Frank Berndt, Chief Counsel, Enid Rubenstein, Allan J. Kam and Eileen T. Leahy, Attys., Nat. Highway Traffic Safety Admin., Washington, D. C., were on the brief, for respondents in Nos. 81-2220 and 81-2221.

Lloyd N. Cutler, Washington, D. C., with whom John H. Pickering, William R. Perlik, Washington, D. C., William H. Crabtree, Michael W. Grice and William L. Weber, Jr., Detroit, Mich., were on the brief, for intervenors Motor Vehicle Mfrs. Ass'n, et al., in Nos. 81-2220 and 81-2221.

Ronald A. Zumbrun, Sacramento, Cal., Raymond M. Momboisse, Washington, D. C. and Sam Kazman, Brooklyn, N. Y., were on the brief for intervenors Consumer Alert and Pacific Legal Foundation, in Nos. 81-2220 and 81-2221.

Robert Abrams and Stanley A. Camhi, New York City, were on the brief for intervenor Superintendent of Ins. of the State of N. Y., in Nos. 81-2220 and 81-2221.

Katherine I. Hall was on the brief for amicus curiae, Center for Auto Safety, Public Citizen, Physicians for Automotive Safety, and the American Academy of Pediatrics, urging reversal of the rescission of Standard 208.

Philip R. Collins, Washington, D. C., was on the brief for amicus curiae, Automotive Occupant Protection Ass'n, urging reversal of the rescission of Standard 208.

Dennis J. Barbour, Washington, D. C., was on the brief for amici curiae, American College of Preventive Medicine and American Public Health Ass'n, urging reversal of the rescission of Standard 208.

A. L. Zwerdling, Washington, D. C., and Stephen I. Schlossberg, Detroit, Mich., were on the brief for amicus curiae, Intern. Union, United Auto., Aerospace & Agr. Implement Workers of America (AFL-CIO), urging reversal of the rescission of Standard 208.

Debbie M. Zuckerman was on the brief for amicus curiae, Epilepsy Foundation of America, urging reversal.

Milton D. Andrews and Lance E. Tunick, Washington, D. C., entered appearances for intervenor Auto. Importers of America, Inc.

Before BAZELON, Senior Circuit Judge, and MIKVA and EDWARDS, Circuit Judges.

Opinion for the court filed by Circuit Judge MIKVA.

Opinion concurring in part filed by Circuit Judge EDWARDS.

MIKVA, Circuit Judge:

Petitioners in this action seek review of a final order by the National Highway Traffic Safety Administration (NHTSA) rescinding the automatic crash protection requirements of Federal Motor Vehicle Safety Standard 208 ten months before the standard's effective date. 46 Fed.Reg. 53,419 (Oct. 29, 1981) (Notice 25). The standard would have required that large and mid-size automobiles manufactured after September 1, 1982, and all automobiles manufactured after September 1, 1983, carry passive restraints such as airbags or "passive" seatbelts. Airbags are cushions stored under the dashboard that, when triggered by a frontal collision, fill with stored or rapidly generated gas to protect the rider from collision with the car's interior. Passive seatbelts, also called "automatic" seatbelts, move into place automatically when a passenger enters a vehicle and closes the door. Petitioners State Farm Mutual Automobile Insurance Company (State Farm) and the National Association of Independent Insurers (NAII) challenge NHTSA's rescission of the standard as arbitrary, capricious, an abuse of discretion, and a violation of law as defined by section 10 of the Administrative Procedure Act, 5 U.S.C. § 706 (1976).

We agree. This case is complicated because it has far-reaching implications and involves a politically controversial safety standard, but the determining principle is simple. An administrative agency, possessing power delegated by the legislative branch of government, must comply with the legislative requirement that its decisions be reasoned and in accordance with the purposes for which power has been delegated. NHTSA's rescission of the safety standard presents a paradigm of arbitrary and capricious agency action because NHTSA drew conclusions that are unsupported by evidence in the record and then artificially narrowed the range of alternatives available to it under its legislative mandate. NHTSA thus failed to demonstrate the reasoned decisionmaking that is the essence of lawful administrative action.

I. BACKGROUND

The procedural history of the case before us is extremely complex. The standard that has now been rescinded was the subject of approximately 60 notices of proposed rulemaking, hearings, amendments, and the like between 1969 and 1981. There were separate adjudications before this court and in the Sixth Circuit, and successful as well as unsuccessful attempts in Congress to control the evolution of the regulation. A number of these events must be described in some detail before we turn to the issues in this case, because they help to put into perspective the course of the agency's action.

A. The Story of Standard 208 and Notice 25

Congress enacted the National Traffic and Motor Vehicle Safety Act of 1966 (the Safety Act), 15 U.S.C. §§ 1381 et seq. (1976 & Supp. IV 1980), in response to the alarming number of deaths and personal injuries on the nation's highways. The stated purpose of the Safety Act was "to reduce traffic accidents and injuries to persons resulting from traffic accidents." 15 U.S.C. § 1381. ¹ The Safety Act directs the Secretary of Transportation or his delegate ² to issue motor vehicle safety standards that "shall be practicable, shall meet the need for motor vehicle safety standards that "shall be practicable, shall meet the need for motor vehicle safety, and shall be stated in objective terms." 15 U.S.C. § 1392(a). In issuing these standards, the Secretary is also directed to consider "relevant available motor vehicle safety data," whether the proposed standard "is reasonable, practicable and appropriate for the particular type of motor vehicle or items of motor vehicle equipment for which it is prescribed," and "the extent to which such standards will contribute to carrying out the purposes" of the Safety Act. 15 U.S.C. § 1392(f)(1), (3), (4). ³

Under these guidelines, the Department of Transportation (DOT) issued the original Standard 208 in 1967, requiring seatbelts in all cars. 32 Fed.Reg. 2408, 2415 (Feb. 3, 1967). By July 1969, however, DOT had concluded that the level of seatbelt use was too low to reduce traffic injuries to an acceptable level. It issued a notice of proposed rulemaking to consider "the prompt development and installation of passive restraint systems," 34 Fed.Reg. 11,148 (July 2, 1969), defined as protective systems that require "no action by vehicle occupants." 36 Fed.Reg. 8296 (May 4, 1971). The agency conducted a lengthy rulemaking proceeding on passive restraint systems. It revised Standard 208 in 1970 to include passive protection requirements, 35 Fed.Reg. 16,927 (Nov. 3, 1970), and after a series of modifications and petitions for reconsideration published a final amendment to Standard 208 in 1972. 37 Fed.Reg. 3911 (Feb. 24, 1972).

The Federal Register during this period provides a strong reminder of how frequently an agency sometimes acts to focus or clarify a regulation before the regulation is promulgated. Not all of the twenty-four notices and amendments to the standard issued between 1970 and 1972 are important to the case presented to us here, but two of these modifications are significant. When the first notice, entitled "Inflatable Occupant Restraint Systems," was published in 1969, the agency's emphasis was clearly on airbags. 34 Fed.Reg. at 11,148. In 1971, however, the agency observed that "some belt-based concepts have been advanced that appear to be capable of meeting the complete passive protection options," leading it to add a new section to the standard "to deal expressly with passive belts." 36 Fed.Reg. 12,858, 12,859 (July 8, 1971).

The second modification relevant here was the subject of a separate notice issued on the same day. For the first time, perhaps because passive seatbelts had expressly been added to the proposed standard, the agency suggested that passive restraint systems contain an "emergency release" mechanism to facilitate extrication of passengers following a crash. The agency cautioned, however, that the emergency release capability could not be allowed to nullify the advantages of the passive restraint system:

In the case of passive safety belts, it would be required that the release not cause belt separation, and that the system be self-restoring after operation of the release. An example of such a system would be a lever...