U.S. v. General Motors Corp.

Decision Date08 March 1988
Docket Number87-5235,Nos. 87-5170,s. 87-5170
Citation841 F.2d 400
PartiesUNITED STATES of America, Appellant, v. GENERAL MOTORS CORPORATION. (Two Cases)
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (Civil Action No. 83-02220).

Douglas Letter, Dept. of Justice, with whom Richard K. Willard, Asst. Atty. Gen., Dept. of Justice, Joseph E. diGenova, U.S. Atty., Erika Z. Jones, Chief Counsel, Kenneth N. Weinstein, Deputy Asst. General Counsel, David W. Allen, Asst. Chief Counsel, Enid Rubenstein and Eileen T. Leahy, Nat. Highway Traffic Safety Admin., were on the brief for appellant. William Kanter, Dept. of Justice, Washington, D.C., also entered an appearance, for appellants.

Thomas A. Gottschalk, with whom Frederick M. Rowe and Jeffrey A. Rosen, Washington, D.C., were on the brief, for appellee.

Milton D. Andrews, Lance E. Tunick, Washington, D.C., Charles H. Lockwood, II, Detroit, Mich., and John T. Whattley were on the brief, for amicus curiae, Auto. Importers of America, Inc.

William H. Crabtree, Edward P. Good, Detroit, Mich., Stephen M. Shapiro, Andrew L. Frey and Kenneth S. Geller, Washington, D.C., were on the brief, for amicus curiae, Motor Vehicle Mfrs. Ass'n of the U.S., Inc., et al.

Before EDWARDS, STARR and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge STARR.

STARR, Circuit Judge:

The United States brought this action against General Motors Corporation ("GM") alleging various violations of the National Traffic and Motor Vehicle Safety Act of 1966, as amended, 15 U.S.C. Sec. 1381 et seq. (1982) ("the Act") arising out of allegedly defective brakes in GM's 1980 model X-cars. Following a lengthy bench trial, United States District Judge Thomas Penfield Jackson entered judgment for GM.

We hold that, under the particular circumstances of this case, the Government failed to meet its burden of demonstrating a class-wide defect and therefore affirm.

I

The District Court set forth the facts of the case in a reported opinion, United States v. General Motors Corp., 656 F.Supp. 1555 (D.D.C.1987). Judge Jackson's thorough and careful recitation will be generously relied upon here.

A

GM began developing the X-car in 1975. During the developmental phase, GM personnel subjected various models of the X-car to durability testing. In 1978, GM's engineering staff subjected model X-cars to a new, and particularly abusive, durability test. Drivers in these tests registered complaints of "premature" rear-wheel lock-ups, a phenomenon which we shall presently describe in detail. See Part III, infra. GM engineers investigated these complaints and concluded that the incidents were single rear-wheel lock-ups.

In mid-December 1978, GM formed a special task force to examine the X-car's brake system. A few weeks later, the task force recommended against delaying production of the X-car, but suggested a number of design changes to the brake system. Specifically, the task force recommended changes in three component parts of the rear-brake assembly: (1) replacement of existing rear brake linings with "less aggressive" linings in automatic transmission vehicles; (2) use of a "finned" drum in place of a "smooth" drum; and (3) a change from a 41% proportioning valve to a 27% valve. 1 These changes were phased in as the car went into production in 1979; as a result, GM produced 1980 model X-cars with several different brake configurations. 2

The National Highway and Traffic Safety Agency ("NHTSA") opened a formal investigation of the X-car's braking system in July 1981. This investigation was prompted by an unusually high number of consumer complaints about rear-wheel lock-up. In July 1981, GM voluntarily agreed to recall 47,371 manual transmission X-cars equipped with the original 41% proportioning valve. See supra note 2. The manufacturer replaced the valves on those cars with the 27% proportioning valve, see supra note 1; therefore, the only X-cars left on the road fitted with the 41% proportioning valve were automatic transmission vehicles. In voluntarily taking this remedial action, however, GM did not concede the existence of a defect.

Meanwhile, NHTSA continued its investigation into the X-car. In January 1983, the agency issued an initial determination that all 1980 X-cars with the more aggressive rear-brake linings--both manuals and automatics--had a safety defect. NHTSA did not hide its candle under a bushel; to the contrary, the agency's defect determination was accompanied by widespread publicity. Of especial relevance in this case, NHTSA released to the television networks a film-clip showing an X-car spinning out of control; this film-clip, featured prominently on the nightly news, was viewed by an estimated 53 million viewers. Faced with NHTSA's action and the concomitant publicity, GM promptly agreed voluntarily to recall all 1980 X-cars equipped with manual transmissions and certain of its early-production cars with automatic transmissions.

In March 1983, NHTSA favored GM with a request for production of documents, requiring the manufacturer to produce all internal documents relating to the problem of premature rear-wheel lock-up. In the ensuing document production, NHTSA obtained copies of certain documents, prepared during X-car preproduction testing, that expressed concerns within the bowels of GM's bureaucracy about the X-car's lock-up problem. Based on the consumer complaints and GM's documents, NHTSA referred the matter to the Department of Justice, which filed the complaint in this action in August 1983.

We pause in our narrative to observe that in all previously reported recall cases NHTSA first determined, through the administrative procedures specified in 15 U.S.C. Sec. 1412, that a defect in fact existed in the vehicle in question. 3 Upon conclusion of the administrative proceedings, NHTSA then and only then brought actions to obtain enforcement of its orders. In this case, however, NHTSA followed a unique course; the agency proceeded directly to court without completing the administrative process. Although GM argued before Judge Jackson that the Act requires NHTSA to complete its administrative proceedings before repairing to court, the trial court rejected this contention, United States v. General Motors Corp., 574 F.Supp. 1047, 1048-49 (D.D.C.1983), and GM has not renewed it on appeal.

B

NHTSA's complaint alleged, in brief, that GM's 1980 model X-cars were defective because the rear wheels of the vehicle were predisposed to lock up prematurely upon the driver's application of the brakes. Count I charged that, prior to the X-car's production, GM either determined or should have determined "that the rear braking system, for reasons relating to several distinct components of that system, caused premature rear wheel lock-up, with consequent loss of vehicle control." Complaint at 26, Joint Appendix ("J.A.") at 67. Count II alleged that this condition was aggravated by excessive corrosion, over time, of the front braking components. As to both counts, NHTSA alleged that GM violated the Act by failing to notify the Secretary and remedy the defect. Counts III and IV charged that GM's limited recalls in 1981 and 1983 with respect to some 1980 model X-cars were inadequate. 4 Count IV asserted that GM failed to include NHTSA's "hotline" telephone number in one of its prior recall notices, in violation of a NHTSA regulation, 49 C.F.R. Sec. 577.5(g)(1)(vii) (1981). The Government sought injunctive, declaratory, and monetary relief, including an order directing GM to recall and repair all of its 1980 X-cars.

Trial began in March 1984. The evidentiary record, consisting of testimony from 33 witnesses, 16,291 pages of transcript and 3,694 exhibits, was closed over a year later in May 1985. The trial itself consumed 113 court days. In a meticulous opinion, Judge Jackson rendered his decision in favor of GM in April 1987. The United States then brought this appeal.

II

The legal framework governing our inquiry can be briefly stated. Congress enacted the National Traffic and Motor Vehicle Safety Act of 1966 for the purpose of "reduc[ing] traffic accidents and deaths and injuries to persons resulting from traffic accidents." 15 U.S.C. Sec. 1381 (1982). Section 1411 under which the United States brought Counts I and II of the complaint, requires a manufacturer which obtains knowledge of a safety-related defect in its motor vehicles to notify the Secretary of Transportation and to remedy the defect in accordance with procedures set forth at section 1414. 5 Section 1412 confers authority on the Secretary to order a manufacturer to remedy a safety-related defect upon the Secretary's determination, in accordance with prescribed administrative procedures, that a defect exists. Under section 1399, jurisdiction is vested in federal district courts to restrain violations of the Act.

Section 1391 defines the term "defect." The definition is, unfortunately, circular. Section 1391 states broadly that the term "defect" includes "any defect in performance, construction, components, or materials in motor vehicles or motor vehicle equipment." 15 U.S.C. Sec. 1391(11) (1982). Happily, two decisions of this court have furnished that pivotal term with more specific content. See United States v. General Motors Corp., 518 F.2d 420 (D.C.Cir.1975) ("Wheels "); United States v. General Motors Corp., 561 F.2d 923 (D.C.Cir.1977) cert. denied 434 U.S. 1033, 98 S.Ct. 765, 54 L.Ed.2d 780 (1978) ("Pitman Arms ").

Wheels

At issue in Wheels were alleged defects in pickup trucks that caused broken wheels. In that suit, GM acknowledged that the wheels were indeed breaking, but contended that NHTSA had failed to carry its burden of showing that the failures did not result from owner misuse. Writing for the court, Judge Leventhal stated that NHTSA was entitled to a...

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  • Clarke v. TRW, INC.
    • United States
    • U.S. District Court — Northern District of New York
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    ...contains a defect if it is subject to a significant number of failures in normal operation....'" United States v. General Motors Corp., 841 F.2d 400, 404 (D.C.Cir. 1988) ("Brakes") (citing United States v. General Motors, 518 F.2d 420, 427 (D.C.Cir. 1975) ("Wheels")) (internal quotations an......
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    • University of Pennsylvania Law Review Vol. 170 No. 2, January 2022
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