U.S. v. General Motors Corp.

• Decision Date: 14 October 1977
• Docket Number: Nos. 76-1744 and 76-1745,s. 76-1744 and 76-1745
• Citation: 565 F.2d 754
• Parties: UNITED STATES of America v. GENERAL MOTORS CORPORATION, Appellant. GENERAL MOTORS CORPORATION, Appellant, v. Brock ADAMS, Secretary of Transportation, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 754

565 F.2d 754

184 U.S.App.D.C. 179

UNITED STATES of America v. GENERAL MOTORS CORPORATION, Appellant.

GENERAL MOTORS CORPORATION, Appellant, v. Brock ADAMS, Secretary of Transportation, et al.

Nos. 76-1744 and 76-1745.

United States Court of Appeals District of Columbia Circuit.

Argued Sept. 16, 1977.

Decided Oct. 14, 1977.

James Robertson, Washington, D. C., with whom John H. Pickering and A. Stephen Hut, Jr., Washington, D. C., were on the brief, for appellant.

Neil H. Koslowe, Atty., Dept. of Justice, Washington, D. C., with whom Earl J. Silbert, U. S. Atty., Barbara Allen Babcock, Acting Asst. Atty. Gen., and William Kanter, Atty., Dept. of Justice, Washington, D. C., were on the brief, for appellees.

Before WRIGHT, ROBINSON, and MacKINNON, Circuit Judges.

Opinion for the court filed by J. SKELLY WRIGHT, Circuit Judge.

J. SKELLY WRIGHT, Circuit Judge.

On December 19, 1974 the Administrator of the National Highway Traffic Safety Administration (NHTSA), acting pursuant to his authority under the National Traffic and Motor Vehicle Safety Act, determined that Rochester Quadrajet carburetors installed in 1965 Chevrolets and 1966 Chevrolets and Buicks contained a "defect which relates to motor vehicle safety" and that the manufacturer was therefore required to notify owners of the potential danger. See 15 U.S.C. §§ 1391, 1397, 1402 (1970). ¹ General Motors did not comply with the notice order; instead, it filed suit to have the order declared null and void. At the same time the Administrator brought suit to enforce the order and to impose a civil penalty on General Motors for its refusal to comply. The two cases were consolidated and, after substantial discovery, the District Court granted the Government's motion for summary judgment and fined General Motors $400,000 the maximum statutory penalty. ² This appeal followed. It is our conclusion that the grant of summary judgment was appropriate, but that the penalty should not have been imposed absent briefs or argument on point, or any form of hearing. We therefore remand this case to the District Court for further consideration of the penalty question.

I

Under the National Traffic and Motor Vehicle Safety Act (Safety Act), manufacturers are required to notify purchasers of motor vehicles containing "a defect which relates to motor vehicle safety," 15 U.S.C. § 1402(e) (1970), as determined by the Administrator of NHTSA. General Motors has conceded, both in the District Court and in this appeal, that the Government successfully established the existence of a "defect" in the Rochester Quadrajet carburetors. When these carburetors were manufactured holes were drilled into them; these holes were later sealed by inserting metal plugs. One of the holes, in the fuel inlet portion of the carburetor, was sealed by a plug known as the "fuel inlet plug." If this plug becomes dislodged gasoline can spill directly into the engine, resulting in a fire under the hood. According to the affidavit of one of General Motors' own employees, a number of these fuel inlet plugs were improperly inserted during the assembly process. ³ While only figures maintained in General Motors' central as opposed to its regional offices have been available in this litigation, and while all incidents of carburetor failures clearly may not be reported, the record discloses at least 665 reported incidents of engine compartment fires in vehicles equipped with the Rochester Quadrajet carburetor. ⁴ As General Motors recognized, under prior case law this evidence clearly establishes as a matter of law that the vehicles in question contain a "defect" within the meaning of the Act. ⁵

General Motors, however, argues that summary judgment was inappropriate because material questions of fact exist as to whether this defect "relates to motor vehicle safety." "Motor vehicle safety" is defined in the Act to mean

the performance of motor vehicles or motor vehicle equipment in such a manner that the public is protected against unreasonable risk of accidents occurring as a result of the design, construction or performance of motor vehicles and is also protected against unreasonable risk of death or injury to persons in the event accidents do occur, and includes nonoperational safety of such vehicles.

15 U.S.C. § 1391(1) (1970). According to General Motors, the defect in the Rochester Quadrajet carburetor does not or at least may not pose an "unreasonable risk" of accidents or injuries.

In United States v. General Motors Corp. (Wheels), 171 U.S.App.D.C. 27, 518 F.2d 420, 435 (1975), we held that a "commonsense" approach must be adopted in construing the Safety Act and, particularly, the term "unreasonable." ⁶ Applying such an approach, we can see no question but that engine fires, which may occur on thoroughfares where pulling over and standing outside the car is difficult or dangerous, or which may take the driver by surprise and quickly spread to the passenger compartment, are extremely dangerous for all involved and should be considered an unreasonable risk to safety. Indeed, this conclusion appears to be mandated by our recent decision in United States v. General Motors Corp. (Pitman Arm), 183 U.S.App.D.C. 30, 561 F.2d 923 (Nos. 75-1751 & 75-1752, decided June 28, 1977), where we held summary judgment to be appropriate where the evidence, as in this case, was uncontradicted as to the critical facts: that failures in the vehicles' steering pitman arms occurred in the past while the vehicles were being driven and that such failures cause the driver to lose control of the car. ⁷

In appealing the summary judgment in this case, General Motors seeks to call into question this commonsense conclusion as to what is an unreasonable risk by relying on affidavits of two of its employees presenting predictions as to the likely number of carburetor failures and resulting injuries in the future. The party opposing a motion for summary judgment is, of course, entitled to all favorable inferences in determining whether a genuine issue of material fact has been raised. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); United States v. General Motors Corp. (Wheels), supra, 518 F.2d at 441. Therefore, we do not consider the credibility of the affidavits or the general trustworthiness of predictions offered by General Motors. Our affirmance of the District Court's summary judgment order rests on the fact that, even if the numbers contained in these affidavits were established to be accurate predictions this would not relieve General Motors of its obligation to inform the vehicle owners in question of the admitted defect in the cars they are operating.

General Motors' first affidavit seeks to predict the number of injuries likely to be suffered in the future as a result of dislodgment of fuel inlet plugs in 1965 Chevrolets and 1966 Chevrolets and Buicks. Taking into account the number of such vehicles still on the road, and assuming 665 prior fires and between one and 15 prior injuries as a result of these fires, General Motors' manager of Analysis and Product Assurance predicts between less than one and three injuries in the future. ⁸ The second affidavit is addressed not to the likely number of injuries, but rather to predictions of instances of future plug failure. In this affidavit a General Motors Staff Analysis Engineer concludes that dislodgment of the fuel inlet plugs is due in part to a process of thermal expansion known as "creep" and that, given the age of the cars in question, "virtually all creep to which they were theoretically subject has already occurred." Thus it is his view "that the number of future plug failures will be negligible." ⁹

Apparently General Motors' position is that since, given the passage of time and the reduction in the number of vehicles on the road, many or most of the failures and injuries resulting from this defective carburetor have already occurred, it is no longer required to take any action to protect against those failures that it admits will occur in the future. Significantly, General Motors does not even suggest that all "creep" has ceased or that all failures that will occur have already occurred. Rather, it argues only that these failures should somehow be viewed as "negligible" as capable of being ignored and that the risk posed by the certain occurrence of at least some engine fires in the future should therefore be considered not "unreasonable." We disagree.

The basic purpose of the Safety Act is to reduce motor vehicle accidents, injuries, and property damage. ¹⁰ In adopting the notification provisions of the Act the Senate Commerce Committee found that "(d)eficiencies in past industry practices relating to the notification and curing of manufacturing defects necessitate the imposition of mandatory procedures to insure such notification of purchasers and correction of all safety-related defects." S. Rep. No. 1301, 89th Cong., 2d Sess. 4 (1966), U.S.Code Cong. & Admin.News 1966, p. 2712 (emphasis added). In our view, where a defect a term used in the sense of an "error or mistake" ¹¹ has been established in a motor vehicle, and where this defect results in hazards as potentially dangerous as a sudden engine fire, and where there is no dispute that at least some such hazards, in this case fires, can definitely be expected to occur in the future, then the defect must be viewed as one "related to motor vehicle safety," ¹² and the Act's basic purpose of protecting the public requires that notification be provided.

In this case it is clear, with the gift of hindsight, that this purpose would have been best served had a notification order been issued some seven years ago. At that time NHTSA, relying substantially on information provided by General Motors predicting a substantial decrease in future carburetor failures, decided not to require notification. General Motors' predictions later proved wholly inaccurate, and the order...