United States v. International Harvester Company

• Decision Date: 09 July 1974
• Docket Number: Civ. A. No. 1990-73.
• Citation: 387 F. Supp. 1338
• Parties: UNITED STATES of America, Plaintiff, v. INTERNATIONAL HARVESTER COMPANY, Defendant.
• Court: U.S. District Court — District of Columbia

387 F. Supp. 1338

UNITED STATES of America, Plaintiff, v. INTERNATIONAL HARVESTER COMPANY, Defendant.

Civ. A. No. 1990-73.

United States District Court, District of Columbia.

July 9, 1974.

Robert M. Werdig, Jr., Asst. U. S. Atty., Washington, D. C., for the United States.

Bert W. Rein, Bruce L. McDonald, Washington, D. C., for International Harvester Co.

MEMORANDUM AND ORDER

GESELL, District Judge.

This complaint in seventeen counts charges violations of Title I of the National Traffic and Motor Vehicle Safety Act, 15 U.S.C. § 1391 et seq. Defendant is alleged to have failed to make timely reports and to provide certain information allegedly required under applicable regulations in connection with various campaigns designed to correct vehicle safety defects. Fines totaling $389,000 and an injunction are sought. International Harvester moved for dismissal or, alternatively, for a stay pending administrative proceedings, and both sides have cross-moved for summary judgment. After full briefs, accompanied by voluminous affidavits, the matter came on to be heard.

The Act provides that whoever violates its reporting provisions "shall be subject to a civil penalty of not to exceed $1,000 for each such violation." 15 U.S. C. § 1398(a). It also permits the National Highway Traffic Safety Administration, which administers the Act, to seek injunctive relief to restrain violations. 15 U.S.C. § 1399(a). Plaintiff filed this action seeking an injunction and imposition of the maximum $1,000 fine for each of the alleged violations without previously notifying defendant of its intention to do so or conducting administrative discussions of any kind between the parties. Nor has it published procedural rules indicating the manner in which it reached its decision to seek such enforcement. Defendant bases its motion to dismiss on the ground that it is entitled to a hearing, in accordance with published procedures, before judicial enforcement can be sought.

On examination of the relevant statutes, the Court is satisfied that defendant need not have been consulted or even notified prior to the filing of suit under the Act. The agency "may" compromise any civil penalty, 15 U.S.C. § 1398(b), but this permissive language negates the contention that an attempt to compromise is mandatory. And although the agency is directed, where practicable, to "give notice to any person against whom an action for injunctive relief is contemplated and afford him an opportunity to present his views, and, except in the case of a knowing and willful violation, . . . afford him reasonable opportunity to achieve compliance," that provision is immediately followed by the caveat that "failure to give such notice and afford such opportunity shall not preclude the granting of appropriate relief." 15 U.S.C. § 1399(a).

This finding also disposes of defendant's demand for published procedures. If the agency does decide to hold hearings on alleged violations of the National Traffic and Motor Vehicle Safety Act, it undoubtedly must do so on the basis of regulations published in accordance with the Administrative Procedure Act, 5 U.S.C. § 552(a)(1). W. G. Cosby Transfer & Storage Corp. v. Froehlke, 480 F.2d 498 (4th Cir. 1973); Gonzalez v. Freeman, 118 U.S.App.D.C. 180, 334 F.2d 570 (1964). However, the statutory language quoted above convinces the Court that no such procedures need be followed if all prior consultation is avoided. This conclusion is bolstered by the Court's finding, discussed below, that a trial de novo is required prior to judicial enforcement of a civil penalty set without consulting the party to be punished. Under such a procedure, the due process considerations that lie behind the publication requirement in § 552 will be fully satisfied at trial, and the agency's decision to seek enforcement becomes — by its own choice — not an adjudication but merely a decision to prosecute. Such a preliminary determination requires the exercise of considerable discretion, and it does not itself deprive defendant of any property interest. Published procedures are therefore neither appropriate nor required.

Turning to the merits, it is apparent from the cross-motions that this controversy cannot be settled by summary judgment. Defendant contends that many of the violations alleged did not in fact occur and certainly as to those a trial is necessary, since issues of fact are still in dispute. In addition, the Court, sitting as a court of equity, must hear evidence before acting on a prayer for injunctive relief. This is particularly true in light of the statutory language noted above, which favors prior consultation, and of plaintiff's decision simultaneously to seek monetary and injunctive relief.

The parties also disagree with regard to the scope of the Court's review at trial. Defendant asserts that it is entitled to a trial de novo at which the Government must justify its proposed sanctions by a preponderance of the evidence. Plaintiff, on the other hand, contends that judicial review of the propriety of those sanctions is barred altogether because the assessment of penalties under the National Traffic and Motor Vehicle Safety Act is "committed to agency discretion by law." 5 U.S.C. § 701(a) (2). Alternatively, plaintiff argues that the Secretary's decision may only be overturned if it is found to have been "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2) (A).

Plaintiff fails to attach sufficient significance to the fact that this case involves not a company's atttempt to gain judicial review of agency action but rather the Government's attempt to obtain judicial enforcement of such action. In such a situation, the Court will not lightly assume that Congress intended it blindly to enforce an executive decision, cf. United States v. J. B. Williams Co., ...