Document ID: NHTSA-2006-26140-0167
Agency: nhtsa
Document Type: Rule
Title: Confidential Business Information
Posted Date: 2007-10-19T04:00Z

[Federal Register: October 19, 2007 (Volume 72, Number 202)]
[Rules and Regulations]               
[Page 59433-59470]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19oc07-17]                         

[[Page 59433]]

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Part IV

Department of Transportation

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National Highway Traffic Safety Administration

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49 CFR Part 512

Confidential Business Information; Final Rule

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 512

[Docket No. NHTSA-06-26140; Notice 2]
RIN 2127-AJ95

 
Confidential Business Information

AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule addresses the confidentiality of certain 
information that manufacturers of motor vehicles and motor vehicle 
equipment submit to NHTSA pursuant to the early warning reporting (EWR) 
rule. The agency is establishing class determinations that certain 
categories of EWR information are confidential, based on Exemption 4 of 
the Freedom of Information Act (FOIA). These categories of EWR data are 
production numbers (other than for light vehicles), the numbers of 
consumer complaints, the numbers of warranty claims (warranty 
adjustments in the tire industry), the numbers of field reports, copies 
of field reports and common green tire identifier information. In 
addition, based on the privacy interests protected by FOIA Exemption 6, 
the rule includes a class determination encompassing the last six (6) 
characters of the vehicle identification numbers (VINs) which are 
reported in certain EWR submissions involving deaths and injuries. This 
final rule also clarifies the agency's general requirements regarding 
confidentiality markings in submissions in electronic media.

DATES: This final rule is effective on November 19, 2007. If you wish 
to submit a petition for reconsideration of this rule, your petition 
must be received by December 3, 2007.

ADDRESSES: Petitions for reconsideration should refer to the docket 
number and be submitted to: Administrator, National Highway Traffic 
Safety Administration, 1200 New Jersey Avenue, SE., West Building 
Fourth Floor, Washington, DC 20590, with a copy to the DOT docket. 
Copies to the docket may be submitted electronically through the 
Federal E-Rulemaking Portal at http://www.regulations.gov. Follow the 

online instructions for submitting comments.
    You may call Docket Management at 202-366-9324. The Docket room 
(ground floor Room W12-140, 1200 New Jersey Avenue, SE.) hours are from 
9 a.m. to 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Michael Kido, Office of Chief Counsel, 
NHTSA, telephone (202) 366-5263, 1200 New Jersey Avenue, SE., 
Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
    A. National Traffic and Motor Vehicle Safety Act
    B. TREAD Act--Early Warning Reporting
    C. Confidentiality of EWR Data
    D. Litigation Challenging the 2003-2004 CBI Rule
II. 2006 Notice of Proposed Rulemaking
III. The Final Rule
    A. Determinations of the Confidentiality of EWR Data Are Based 
on FOIA Exemptions 4 and 6
    B. Approach--Class Determinations v. Individual Assessments
    C. Class Determinations Based on FOIA Exemption 4
    1. Production Numbers
    2. Consumer Complaints
    3. Warranty Claims
    4. Field Reports
    5. Common Green Tire Identifiers
    D. Class Determination Based on FOIA Exemption 6
IV. Exemption 3
V. Other EWR Data
VI. Identification of Confidential Business Information Located in 
Electronic Files
VII. Updated Agency Contact Information
VIII. Data Quality Act Issues
IX. Privacy Act Statement
X. Regulatory Analyses and Notices
    A. Executive Order 12866 and DOT Regulatory Policies and 
Procedures
    B. Regulatory Flexibility Act
    C. Executive Order 13132 (Federalism)
    D. Unfunded Mandate Reform Act
    E. Executive Order 12988 (Civil Justice Reform)
    F. Paperwork Reduction Act
    G. Executive Order 13045
    H. Regulation Identifier Number (RIN)

I. Background

    On October 31, 2006, NHTSA published a notice of proposed 
rulemaking (NPRM) regarding the confidentiality of certain early 
warning reporting (EWR) data submitted to the agency by manufacturers 
of motor vehicles and motor vehicle equipment. 71 FR 63738. In that 
notice, the agency proposed to create class determinations that 
specified EWR data would be confidential based on the criteria 
applicable to required submissions under Exemption 4 of the Freedom of 
Information Act (FOIA). In addition, some of the data in VINs would be 
confidential based on FOIA Exemption 6. The October 2006 NPRM also 
proposed to clarify requirements applicable to persons seeking 
confidential treatment for information contained on electronic media. 
In this final rule, the agency adopts the proposed class determinations 
and amends the submission process for requesting confidential treatment 
for information on electronic media. The background and genesis of this 
rulemaking is summarized below.

A. National Traffic and Motor Vehicle Safety Act

    In 1966, Congress enacted the National Traffic and Motor Vehicle 
Safety Act (Safety Act) with the purpose of reducing traffic accidents 
and deaths and injuries to persons resulting from traffic accidents. 49 
U.S.C. 30101.\1\ Since it was amended in 1974, the Safety Act has 
contained a series of provisions that address motor vehicles and motor 
vehicle equipment that contain a potential or actual defect that is 
related to motor vehicle safety.\2\
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    \1\ Pub. L. 89-563, 80 Stat. 718. This preamble will use the 
current citations to the United States Code. In 1994, the Safety 
Act, as amended, was repealed, reenacted, and recodified without 
material change as part of the recodification of Title 49 of the 
United States Code. See Pub. L. 103-272, 108 Stat. 745, 1379, 1385 
(1994) (repealing); id. at 745, 941-73 (1994) (reenacting and 
recodifying without substantive changes).
    \2\ Pub. L. 93-492, 88 Stat. 1470 (1974).
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    The Safety Act requires a manufacturer to notify NHTSA and the 
vehicle or equipment owners if it learns of a defect and decides in 
good faith that the defect is related to motor vehicle safety. 49 
U.S.C. 30118(c). This duty is independent of any action by NHTSA.\3\ 
Ordinarily, a manufacturer's notice is followed by the manufacturer's 
provision of a free remedy to owners of defective vehicles and 
equipment. See 49 U.S.C. 30120. Collectively, the manufacturer's notice 
and remedy are known as a recall.
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    \3\ United States v. General Motors Corp., 574 F. Supp. 1047, 
1049 (D.D.C. 1983).
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    Congress also provided NHTSA with considerable investigative and 
enforcement authority. The Safety Act authorizes NHTSA to conduct 
investigations and to require manufacturers to submit reports to enable 
the agency to determine whether the manufacturer has complied with or 
is complying with the statute, including its duty to conduct recalls 
when warranted. 49 U.S.C. 30166(b), (e). An investigation may culminate 
in an order to the manufacturer to provide notification of a safety-
related defect or a noncompliance to owners of the vehicle or 
equipment. 49 U.S.C. 30118(a), (b).

B. TREAD Act--Early Warning Reporting

    For several decades preceding the enactment of the Transportation 
Recall Enhancement, Accountability, and

[[Page 59435]]

Documentation (TREAD) Act of 2000,\4\ the Safety Act provided for 
limited submissions of information by a manufacturer to NHTSA prior to 
the manufacturer's submission of a notice of a safety-related defect. 
See 49 U.S.C. 30118(c); 49 CFR part 573. Manufacturers were required to 
submit copies of technical service bulletins and other communications 
to the agency. See 49 U.S.C. 30166(f); 573.8 (1999); 66 FR 6532, 6533 
(Jan. 22, 2001). NHTSA also received consumer complaints. At times, 
this information provided a basis for opening an investigation and at 
times it did not. This practical limitation on NHTSA's investigations 
manifested itself in 2000 when it was revealed that under the limited 
level of reporting then required, the agency had not been provided 
sufficient information to identify defects in Firestone tires mounted 
on Ford Explorers. 66 FR at 6534. There were numerous fatalities before 
NHTSA opened an investigation and Firestone conducted recalls of its 
tires.
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    \4\ Pub. L. 106-414, 114 Stat. 1800.
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    In response to these and other shortcomings in the Safety Act, on 
November 1, 2000, Congress enacted the TREAD Act. The TREAD Act added 
provisions to the Safety Act that expanded the scope of the information 
manufacturers must submit to NHTSA prior to a manufacturer-initiated 
recall. In relevant part, the TREAD Act required the Secretary of 
Transportation to publish a rule setting out the early warning 
reporting requirements to enhance the agency's ability to carry out the 
Act. 49 U.S.C. 30166(m). In general, the TREAD Act authorized the 
agency to require manufacturers to submit information that may assist 
in the early identification of defects related to motor vehicle safety.
    In July 2002, pursuant to the TREAD Act, NHTSA promulgated the 
Early Warning Reporting (EWR) rule. 67 FR 45822 (July 10, 2002).\5\ 
Generally, the EWR rule required manufacturers of automobiles and other 
light vehicles, medium-heavy trucks and buses, motorcycles, and 
trailers that produce or sell 500 or more vehicles per year in any of 
these industry sectors and manufacturers of child restraints and tires 
(except as to relatively low production tire lines) to submit data 
regarding production numbers (cumulative total vehicles or equipment 
manufactured annually), incidents involving death or injury based on 
claims and notices, property damage claims, consumer complaints, 
warranty claims paid, and field reports on a quarterly basis. See 49 
CFR 579.21-579.26. Collectively this information is referred to as EWR 
data. In this notice, we refer to the vehicle and tire manufacturers 
that report under 49 CFR 579.21-579.24 and 579.26 as larger 
manufacturers.\6\ The information is submitted electronically to the 
agency in a standardized format. See 49 CFR 579.29.
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    \5\ Thereafter, NHTSA published amendments to the EWR rule. As 
used herein, the references to the EWR rule are to the rule as 
amended. The reader should note that the discussion of the EWR rule 
in this notice is a summary. The full text of the rule and 
associated Federal Register notices should be consulted for a 
complete description.
    \6\ Manufacturers other than larger vehicle and tire 
manufacturers and child restraint manufacturers have limited EWR 
obligations. See 49 CFR 579.27.
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    More specifically, the categories of information on which these 
manufacturers of light vehicles, medium-heavy vehicles and buses, 
motorcycles, trailers, tires and child restraints generally report 
under the EWR rule are:

     Production. These manufacturers must report the number 
of vehicles, child restraint systems, and tires, by make, model, and 
model (or production) year, during the reporting period and the 
prior nine model years (prior four years for child restraint systems 
and tires).
     Deaths. These manufacturers must report certain 
specified information about each incident involving a death that 
occurred in the United States that is identified in a claim (as 
defined) against and received by the manufacturer. They must also 
report information about incidents involving a death in the United 
States that is identified in a notice received by the manufacturer 
alleging or proving that the death was caused by a possible defect 
in the manufacturer's product. Finally, they must report on each 
death occurring in a foreign country that is identified in a claim 
against the manufacturer involving the manufacturer's product, or 
one that is identical or substantially similar to a product that the 
manufacturer has offered for sale in the United States.
     Injuries. These manufacturers must report certain 
specified information about each incident involving an injury that 
is identified in a claim against and received by the manufacturer, 
or that is identified in a notice received by the manufacturer which 
notice alleges or proves that the injury was caused by a possible 
defect in the manufacturer's product.
     Property damage claims. These manufacturers (other than 
child restraint system manufacturers) must report the numbers of 
claims for property damage that are related to alleged problems with 
certain specified components and systems, regardless of the amount 
of such claims.
     Consumer complaints. These manufacturers (other than 
tire manufacturers) must report the numbers of consumer complaints 
they receive that are related to problems with certain specified 
components and systems. Manufacturers of child restraint systems 
must report the combined number of such consumer complaints and 
warranty claims.
     Warranty claims. These manufacturers must report the 
number of warranty claims (adjustments for tire manufacturers), 
including extended warranty and good will, they pay that are related 
to problems with certain specified components and systems. As noted 
above, manufacturers of child restraint systems must combine these 
with the number of reportable consumer complaints.
     Field reports. These manufacturers (other than tire 
manufacturers) must report the total number of field reports they 
receive from the manufacturer's employees, representatives, and 
dealers, and from fleets, that are related to problems with certain 
specified components and systems. In addition, manufacturers must 
provide copies of field reports received from their employees, 
representatives, and fleets, but are not required to provide copies 
of reports received from dealers and product evaluation reports.
    Tire manufacturers must also provide information on their common 
green tire lines:
     Common green tires. Tire manufacturers must identify 
tires that are produced to the same internal specifications but that 
have, or may have, different external characteristics and may be 
sold under different tire line names.

C. Confidentiality of EWR Data

    The EWR rule did not address the confidentiality of EWR data. It 
noted, however, that this issue would be considered as part of the 
proposed amendments to NHTSA's confidential business information rule. 
See 67 FR at 45866, n.6.
    In July of 2003, NHTSA addressed the confidentiality of EWR data in 
its general rule on Confidential Business Information (CBI). 49 CFR 
Part 512, 68 FR 44209 (July 28, 2003). The 2003 CBI rule addressed the 
confidentiality of EWR information in a new Appendix C, which set forth 
class determinations treating certain EWR information as confidential 
based on FOIA Exemption 4. In particular, the rule determined that EWR 
data on production numbers (except light vehicles), consumer 
complaints, warranty claims, and field reports including copies of 
field reports, were confidential. 49 CFR Part 512 Appendix C (2003). 
The agency based these class determinations on the substantial 
competitive harm and impairment standards of FOIA Exemption 4. See 5 
U.S.C. 552(b)(4); 49 CFR Part 512 App. C (2003). The 2003 CBI rule did 
not resolve the confidentiality of EWR data on deaths and injuries, or 
on property damage claims.
    In April 2004, NHTSA amended the CBI rule in its response to 
administrative petitions for reconsideration of the July 2003 rule. 69

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FR 21409 (April 21, 2004). Specifically, the agency added two class 
determinations to Appendix C. One class determination, based on FOIA 
Exemption 4, covered common green tire identifiers submitted by tire 
manufacturers under the EWR rule, 49 CFR 579.26(d). A second class 
determination, based on FOIA Exemption 6, covered the last six (6) 
characters of vehicle identification numbers (VINs) contained in EWR 
death and injury reports. See, e.g. 49 CFR 579.21(b)(2).

D. Litigation Challenging the 2003-2004 CBI Rule

    Public Citizen filed a lawsuit challenging NHTSA's class 
determinations in Appendix C to 49 CFR Part 512. The Rubber 
Manufacturers Association (RMA) intervened and asserted, among other 
things, that in light of a disclosure provision in the TREAD Act,\7\ 
NHTSA was precluded from disclosing all EWR data, subject to a limited 
exclusion. In a March 31, 2006 decision, the United States District 
Court for the District of Columbia addressed some of Public Citizen's 
claims. The Court upheld the agency's authority to promulgate the 
regulation making categorical confidentiality determinations for 
classes of EWR data. Public Citizen, Inc. v. Mineta, 427 F. Supp. 2d 7, 
12-14 (D.D.C. 2006). The Court concluded, however, that NHTSA had not 
provided adequate notice and an opportunity to comment on those 
determinations in the proposed rule. Id. at 14-17. The Court remanded 
the matter to NHTSA but did not address the parties' other claims. Id. 
Thereafter, in a supplemental opinion, the Court addressed RMA's claim 
that the disclosure of EWR data was precluded by the disclosure 
provision in the TREAD Act and FOIA Exemption 3, 5 U.S.C. 552(b)(3), 
which provides for the withholding of information when disclosure of 
that information is prohibited by another statute.\8\ Public Citizen, 
Inc. v. Mineta, 444 F. Supp. 2d 12 (D.D.C. 2006). The District Court 
held that the TREAD Act's disclosure provision was not an Exemption 3 
statute. RMA appealed the District Court's judgment to the U.S. Court 
of Appeals for the District of Columbia Circuit (No. 06-5304) and that 
case is currently pending.
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    \7\ 49 U.S.C. 30166(m)(4)(C). In reference to information 
provided by manufacturers pursuant to the EWR rule, this provision 
states: ``Disclosure. None of the information collected pursuant to 
the final rule promulgated under paragraph (1) [the EWR rule] shall 
be disclosed pursuant to section 30167(b) unless the Secretary 
determines the disclosure of such information will assist in 
carrying out sections 30117(b) and 30118 through 30121.''
    \8\ Exemption 3 applies when information is ``specifically 
exempted from disclosure by statute (other than section 552b of this 
title) provided that such statute (A) requires that the matters be 
withheld from the public in such a manner as to leave no discretion 
on the issue, or (B) establishes particular criteria for withholding 
or refers to particular types of matters to be withheld''. 5 U.S.C. 
552(b)(3).
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II. 2006 Notice of Proposed Rulemaking

    In light of the District Court's decisions, on October 31, 2006, 
NHTSA published an NPRM addressing the confidentiality of certain EWR 
information. In short, the agency proposed class determinations that 
production numbers for reporting sectors other than light vehicles, 
consumer complaints, warranty claims (warranty adjustments in the tire 
industry), field reports (including copies of field reports) and common 
green tire identifier information would be confidential. This proposal 
was based on the criteria in FOIA Exemption 4. 71 FR at 63741-42. Under 
Exemption 4, where the submission of information to the government is 
mandatory, as is reporting required by the EWR rule, the information is 
confidential if its disclosure is likely to cause substantial harm to 
the competitive position of the person from whom the information was 
obtained or to impair the Government's ability to obtain necessary 
information in the future. This proposal was consistent with the 2003 
and 2004 rules, and was based on the docket for that rulemaking. See 
NHTSA Docket No. 2002-12150 (available at http://dms.dot.gov which is being transferred to http://www.regulations.gov).

    More particularly, in formulating the proposal, NHTSA considered 
comments from a diverse cross-section of the automotive industry and a 
non-governmental organization. Commenters included the Automotive 
Occupant Restraints Council (AORC), Bendix Commercial Vehicle Systems 
(Bendix), Blue Bird Body Company (Blue Bird), Enterprise Fleet Services 
(Enterprise), Harley-Davidson Motor Company (Harley-Davidson), the 
Juvenile Products Manufacturers Association (JPMA), the Motor and 
Equipment Manufacturers Association and the Original Equipment 
Suppliers Association (MEMA/OESA), Hella North America (Hella) (which 
primarily referred to the comments from MEMA/OESA), the Motorcycle 
Industry Council, the Tire Industry Association (TIA), Utilimaster 
Corporation (Utilimaster), WABCO North America (WABCO), and Workhorse 
Custom Chassis (Workhorse). NHTSA also considered comments by Public 
Citizen and its litigation group.
    As in the previously remanded rule, the agency's October 2006 NPRM 
also proposed creating a class determination for the last six (6) 
characters of VINs of vehicles allegedly involved in deaths and 
injuries reported in the EWR data. See 71 FR at 63745 and 69 FR at 
21416. This was based on Exemption 6 of the FOIA, which provides for 
withholding information that, if disclosed, would constitute a clearly 
unwarranted invasion of personal privacy. We noted our ability to 
obtain personal information regarding individual owners and past owners 
using a VIN and expressed our concern over the disclosure of full VINs 
of vehicles reportedly involved in an event resulting in an injury or 
fatality. Notwithstanding this limited redaction, we noted that the 
public would be able to identify the make, model, and model year of the 
vehicle involved in an injury- or fatality-producing incident reported 
through EWR data.
    The NPRM published in October of 2006 explained that we were not 
proposing class determinations of confidentiality of other categories 
of EWR information, namely, information on incidents involving deaths 
and injuries, and on property damage claims. See id. at 63745-46. 
Further, the agency noted that the issue of whether the TREAD Act 
disclosure provision qualifies as a FOIA Exemption 3 statute was 
pending in the Court of Appeals and indicated that the agency would act 
in a manner consistent with that ruling once issued.
    Apart from the confidentiality of EWR data, the NPRM proposed 
clarifications to the submission procedures to address recurring 
problems encountered by the agency with requests for confidential 
treatment contained on electronic media such as CDs or DVDs.
    In response to the October 2006 NPRM, a number of trade 
associations representing a variety of automotive sectors, companies, 
consumer groups and individuals submitted comments. The industry 
commenters included the Alliance of Automobile Manufacturers (the 
Alliance), Association of International Automobile Manufacturers 
(AIAM), General Motors North America (GM), National Marine 
Manufacturers Association (National Marine), Nissan North America 
(Nissan), Rubber Manufacturers Association (RMA), Truck Manufacturers 
Association (TMA), and Utility Trailer Manufacturing (Utility)--all of 
which generally supported the proposed class determinations based on 
FOIA Exemptions 4 and 6.

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    Non-industry commenters included numerous individual consumers and 
groups (Public Citizen, American Association for Justice (AAJ), and 
Quality Control Systems (Quality Control)).\9\ These commenters 
generally criticized the proposed class determinations and asked that 
the agency withdraw its proposal. Many individual commenters also 
appear to have mistakenly believed that the proposal would affect 
information (e.g., consumer complaints and information produced during 
defect investigations) that is already made available to the public 
through the agency's Web site.
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    \9\ The vast majority of individuals who commented appeared to 
believe that the agency, in light of the class determinations, would 
cease making public information pertaining to defect investigations 
and recalls. The class determinations adopted today address only EWR 
data and do not pertain to other information that the agency 
currently discloses to the public. The agency will continue to make 
this information publicly available.
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III. The Final Rule

    The rule that NHTSA is publishing today creates class 
determinations that EWR data on production numbers (other than for 
light vehicles), the numbers of consumer complaints, warranty claims 
and field reports, copies of field report documents, and common green 
tire identifier information are confidential. These class 
determinations, which are included in a new Appendix C to 49 CFR Part 
512, are based on FOIA Exemption 4. Second, the rule creates a class 
determination based on FOIA Exemption 6 that covers the last six (6) 
characters of VINs contained in EWR reports pertaining to incidents 
involving death or injury. These 6 characters would be redacted from 
injury or fatality information contained in EWR submissions. Thus, 
absent an individual manufacturer's request for confidentiality for 
particular EWR death and injury reports, these reports would be 
released to the public, except for the last 6 characters of a VIN. This 
class determination is in a new Appendix D to 49 CFR Part 512.
    The agency also is modifying the procedural provisions of 49 CFR 
512.6 with respect to the submission of information contained on 
electronic media for confidential treatment. The rule adopts a slightly 
modified version of the changes proposed in our NPRM by permitting some 
flexibility in the identification of confidential information and 
pagination requirements. Details of the new procedures are discussed 
under Section VI. Identifying Confidential Business Information Located 
in Electronic Files.
    Finally, this rule updates the agency's contact information to 
reflect the Department of Transportation's new address. This change is 
incorporated into 49 CFR 512.7.
    Our rationale for the final rule follows.

A. Determinations of the Confidentiality of EWR Data Are Based on FOIA 
Exemptions 4 and 6

    The confidentiality of most EWR data is based on FOIA Exemption 4, 
5 U.S.C. 552(b)(4). FOIA Exemption 4 provides for the withholding of 
``trade secrets and commercial or financial information obtained from a 
person and privileged or confidential''. Under Exemption 4, the 
standard for assessing the confidentiality of information that parties 
are required to submit to the government is whether ``disclosure of the 
information is likely to have either of the following effects: (1) To 
impair the Government's ability to obtain necessary information in the 
future; or (2) to cause substantial competitive harm to the competitive 
position of the person from whom the information was obtained.'' \10\ 
National Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. 
Cir. 1974). These two alternative tests are referred to as the 
impairment prong and the competitive harm prong.
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    \10\ The term ``trade secrets'' has been narrowly defined by the 
Court of Appeals for the District of Columbia Circuit for the 
purpose of FOIA Exemption 4 as encompassing ``a secret, commercially 
valuable plan, formula, process, or device that is used for the 
making, preparing, compounding, or processing of trade commodities 
and that can be said to be the end product of either innovation or 
substantial effort.'' Public Citizen Health Research Group v. FDA, 
704 F.2d 1280, 1288 (D.C. Cir. 1983).
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    Under the competitive harm prong of the National Parks test, there 
must be ``actual competition and a likelihood of substantial 
competitive injury'' from disclosure of the information. CNA Financial 
Corp. v. Donovan, 830 F.2d 1132, 1152 (D.C. Cir. 1987). This standard 
requires only that disclosure of information would ``likely'' cause 
competitive harm, for whatever reasons. McDonnell Douglas Corp. v. U.S. 
Dept. of the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004); see also 
Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 341 (D.C. Cir. 1989). 
Under this prong, the agency assesses the likelihood of substantial 
injury; it does not make that assessment and then further balance it 
against other matters such as the public's interest in the information.
    In fact, the D.C. Circuit has firmly rejected the contention that 
under Exemption 4 a court should gauge whether the competitive harm to 
an entity submitting confidential information from the public 
disclosure of the information is outweighed by the strong public 
interest in the information. As discussed below, in Public Citizen 
Health Research Group v. FDA, 185 F.3d 898, 904-05 (D.C. Cir. 1999), 
the court held that the appropriate balancing is reflected in the test 
of confidentiality set forth in National Parks. There is no further 
balancing of the public's interest in the information.

B. Approach--Class Determinations v. Individual Assessments

    As explained in the NPRM, the District Court in Public Citizen, 
Inc. v. Mineta, 427 F.Supp. 2d 7, 12-14 (D.D.C. 2006), ruled that NHTSA 
had the authority to promulgate the 2003 CBI rule making categorical 
confidentiality determinations for classes of EWR data. See 71 FR at 
63740. Consistent with the District Court's opinion, the agency 
proposed a rule to address the confidentiality of EWR information 
through specific class determinations based on FOIA Exemptions 4 and 6. 
Id. We pointed out that this proposal was largely similar to our prior 
determinations. 71 FR at 63740 and 63741.
    Both industry and non-industry commenters provided views on the 
proposed adoption of class determinations. Industry comments (e.g., 
AIAM, the Alliance, and Nissan) were predicated in part on the 
recurring nature of early warning reporting under 49 CFR Part 579. In 
connection with each quarterly submission of EWR data, manufacturers 
would request confidential treatment for the EWR data and would provide 
the same justifications in each quarterly request. This result, the 
manufacturers maintained, would create significant administrative 
burdens for both the submitting entities and the agency. Nissan added 
that such a burden was not anticipated by the EWR rule and would be 
inconsistent with the TREAD Act's premise against creating undue 
burdens in implementing the EWR program. See also H.R. Rep. No. 106-
954, at 14 (Oct. 10, 2000) (pointing out that the agency's EWR rule 
``may not impose requirements that are unduly burdensome to a 
manufacturer, taking into account the manufacturer's cost of complying 
with such requirements'').
    Non-industry commenters criticized the agency's proposed class 
determination approach. For example, Quality Control suggested that the 
agency apply a presumption of non-confidentiality (i.e., of disclosure) 
to whatever class determinations that the

[[Page 59438]]

agency adopts. Public Citizen asserted that the District Court's 
holding regarding the agency's authority to promulgate class 
determinations based on FOIA exemptions was in error. Thus, Public 
Citizen disputed the legality of creating class determinations. It also 
pointed out that the agency had previously proposed the creation of 
presumptively nonconfidential categories that in Public Citizen's view 
would cover complaints, property damage and paid warranty claims. In 
comments to the agency's prior rulemaking, Public Citizen expressed 
support for class determinations that applied a presumption in favor of 
broad disclosure of EWR information.
    As noted in the summary of this rule, NHTSA has decided to 
promulgate class determinations on the confidentiality of some but not 
all categories of EWR data. In adopting this approach, we have 
considered a number of matters. First, we have considered whether class 
determinations may lawfully be adopted. As explained by the District 
Court, NHTSA may adopt categorical rules to manage the tasks assigned 
to it by Congress under the TREAD Act. Public Citizen, 427 F. Supp. 2d 
at 13.
    Second, we have identified and assessed the alternatives. One 
alternative is to require manufacturers to submit individual requests 
for confidentiality for each quarterly submission of EWR data. A second 
alternative is to adopt binding class determinations. Class 
determinations could be adopted on a category-by-category of EWR data 
basis, where warranted, as was proposed in the October 2006 NPRM and 
had been adopted in the rule that was remanded by the District Court. A 
variation on this approach, which was not proposed, would be class 
determinations that cover all EWR data. A third alternative is 
presumptive categorical determinations of confidentiality.
    In considering the alternatives, two significant concerns are the 
provision of direction to the regulated entities and predictability. 
About 500 manufacturers regularly report EWR data. One general concern 
is providing direction to them regarding the confidentiality of EWR 
data. A related and more specific concern is that the agency convey its 
views, not only on procedures, but on the substance of what they must 
show in seeking confidentiality and/or on whether some or all of the 
information is confidential.
    Another concern is consistency. As detailed in the EWR rule, there 
are common data elements in the EWR submissions. NHTSA is concerned 
that it provides consistent determinations of the confidentiality of 
data reported on the common data elements. The common data elements in 
EWR submissions exist both across and within EWR categories of vehicle 
and equipment manufacturers. For example, most categories of larger 
manufacturers regulated under the EWR rule submit consumer complaint 
data. See 49 CFR 579.21(c) (light vehicles), 579.22(c) (medium heavy 
vehicles and buses), 579.23(c) (motorcycles), 579.24(c) (trailers).\11\ 
And most reporting sectors submit warranty claims data. See 49 CFR 
579.21(c) (light vehicles), 579.22(c) (medium heavy vehicles and 
buses), 579.23(c) (motorcycles), 579.24(c) (trailers), 579.26(c) 
(warranty adjustments in the tire industry).\12\ All the categories of 
vehicle manufacturers submit field reports, as do child restraint 
manufacturers. See 49 CFR 579.21(c) (light vehicles), 579.22(c) (medium 
heavy vehicles and buses), 579.23(c) (motorcycles), 579.24(c) 
(trailers); 579.25(c) (child restraints).
---------------------------------------------------------------------------

    \11\ See also 49 CFR 579.21(c) (child restraint manufacturers 
report combined consumer complaints and warranty claims).
    \12\ See previous footnote.
---------------------------------------------------------------------------

    Within the categories of manufacturers that submit EWR data, there 
are common data elements. For example, all light vehicle manufacturers 
report on the same 18 different systems and components. These include, 
for example, steering systems, air bags, seat belts and wheels. See 49 
CFR 579.21(b)(2), (c). Child restraint manufacturers report on the same 
elements such as buckles and harnesses, and handles. 49 CFR 
579.25(b)(2), (c). And tire manufacturers report on the same items, 
such as the tread and sidewall. 49 CFR 579.26(b)(2), (c). In addition, 
most of the vehicle categories include some of the same and similar 
reporting elements, including brakes, electrical, exterior lighting, 
tires, and wheels. See 49 CFR 579.21(c) (light vehicles), 579.22(c) 
(medium heavy vehicles and buses), 579.23(c) (motorcycles), 579.24(c) 
(trailers). The data elements are largely the same.
    Third, the agency is concerned about the burden on the 
manufacturers in submitting individual requests for confidentiality, 
and the burden on the agency of processing individual requests and 
ruling on them. Also, if NHTSA staff denies a request, the party may 
petition for administrative reconsideration by NHTSA's Chief Counsel, 
who issues the final agency action on the request. 49 CFR 512.19. This 
creates additional burdens on persons seeking confidentiality and on 
the agency.
    NHTSA is also concerned about other aspects of the administration 
of its programs. For example, the agency considers the burdens on small 
businesses.
    If NHTSA were simply to require individual requests for 
confidential treatment with the submission of EWR data on a quarterly 
basis under 49 CFR Part 512 without the Appendices on the 
confidentiality of EWR data (Appendices C and D in today's rule), a 
large number of manufacturers would submit requests for 
confidentiality, without meaningful direction from the agency. In the 
absence of the direction that would be provided by a class 
determination, manufacturers likely would submit a wide variety of 
requests. They would be written in different ways (as requests under 49 
CFR 512.8 now are), with a broad range of statements of fact and 
opinion, and rationales. NHTSA would make ad hoc determinations of the 
confidentiality of the EWR data for which confidentiality was 
requested. Some requests would meet the standards for confidential 
treatment under Exemption 4 of the FOIA, and some would not. Agency 
denials of requests likely would be followed by requests for 
reconsideration. The process would be anything but orderly.
    Moreover, there would be a large number of submissions. Based on 
the assumption that almost all of the 500 larger manufacturers that 
regularly submit EWR data would request confidentiality on a quarterly 
basis, there would be about 2000 requests for confidential treatment of 
EWR data per year.
    The EWR submissions include separate data entries for numerous 
makes/models/model years and systems and components, and the amount of 
information is substantial. Since the inception of the EWR rule, NHTSA 
has received a large volume of data and documents from reporting 
manufacturers. For the period from 2004 through the end of 2006, the 
agency received millions of items of aggregate data from the 
approximately 500 entities that regularly report EWR data to the 
agency.\13\ From the approximately 60 light vehicle manufacturers who 
regularly submit EWR data, the agency has received information 
pertaining to nearly 163 million warranty claims, nearly 9.5 million 
consumer complaints, over 5.8 million field reports, and over half a 
million distinct field report

[[Page 59439]]

documents. Manufacturers in other EWR reporting sectors, in addition to 
reporting detailed quarterly production data, likewise submitted large 
amounts of data. Medium-heavy bus and truck manufacturers submitted 
information regarding over 8.6 million warranty claims, nearly 277,000 
complaints, over 301,000 field reports, and nearly 20,000 distinct 
field report documents; trailer manufacturers submitted information 
covering over 1.3 million warranty claims, nearly 77,000 complaints, 
over 20,000 field reports, and over 400 distinct field report 
documents; and motorcycle manufacturers provided nearly 889,000 
warranty claims, nearly 41,000 complaints, over 26,000 field reports, 
and nearly 26,000 distinct field report documents. Motor vehicle 
equipment manufacturers submitted large volumes of EWR data as well. 
Child restraint manufacturers submitted information on over 50,000 
complaints and warranty claims, over 8,500 field reports, and provided 
over 4,500 distinct field report documents. Tire manufacturers provided 
data on over 1.3 million warranty adjustment claims.
---------------------------------------------------------------------------

    \13\ The term ``aggregate data'' refers to the quarterly 
submissions of the numbers of paid warranty claims, consumer 
complaints, field reports, and property damage claims received by 
the agency.
---------------------------------------------------------------------------

    If the agency were to review requests for confidentiality from 
individual manufacturers, inevitably there would be inconsistent 
resolutions on the confidentiality of data submitted in the numerous 
data elements in EWR reports. These different outcomes would stem from 
the different approaches in manufacturers' requests and different 
assertions in them, different agency staff reviewing different 
requests, and pressure to resolve requests in order to minimize the 
inevitable backlog, discussed below. Thus, a third problem would be 
consistency.
    In addition, a requirement that manufacturers submit individual 
requests for confidentiality would pose a substantial burden on the 
manufacturers and the agency. As noted above, there likely would be 
about 2000 requests for confidentiality of EWR data per year. Most 
would cover the range of EWR data, including production data, consumer 
complaints, warranty claims and field reports. Some, such as would be 
expected from Goodyear based on its historic practices,\14\ would cover 
EWR information on deaths and injuries and property damage claims, 
which are not covered by today's rule. The preparation of these 
requests would impose a substantial burden on the manufacturers. The 
burden would fall disproportionately on the manufacturers that are not 
comparable in size to companies such as Toyota and General Motors, and 
have limited to no experience in requesting confidentiality from NHTSA. 
The preparation of the initial requests would be particularly 
burdensome. Ultimately, NHTSA would deny some of these requests and 
manufacturers would file petitions for reconsideration. Over time, we 
expect that most manufacturers, perhaps with outside assistance, would 
likely be able to submit a request for confidentiality that NHTSA would 
grant. In the long run, the process would become routinized. At this 
stage, a manufacturer would largely repeat what it had said in a 
previous request for confidentiality of EWR data that the agency had 
granted, making that and subsequent quarterly individual assessments 
duplicative. As a result, requiring EWR data submitters to provide a 
detailed written justification for each quarterly submission would be 
difficult to justify, as it would impose burdens on manufacturers that 
are unnecessary given the availability of class determinations under 
the District Court's decision in Public Citizen.
---------------------------------------------------------------------------

    \14\ Goodyear submits quarterly requests for confidentiality of 
EWR data notwithstanding a stay pending a decision by the court on 
the RMA claim that the TREAD Act is a FOIA Exemption 3 statute. 
These requests provide insight into the nature of requests for the 
confidentiality of certain EWR data.
---------------------------------------------------------------------------

    In contrast to these projected 2000 requests, the agency normally 
receives approximately 450 requests for confidential treatment 
annually.\15\ A portion of these are addressed with limited effort 
because they involve information submitted voluntarily, which is 
subject to an objective standard that ordinarily is met based on a 
limited review.\16\ Adding the 2000 requests for confidential treatment 
that would likely accompany EWR submissions, on an annual basis, would 
significantly add to the burden faced by the agency.
---------------------------------------------------------------------------

    \15\ This number was derived from the number of requests for 
confidential treatment that the agency has received over the past 
three calendar years and the expectation that we will receive 
requests for confidentiality of EWR information that would not be 
resolved by this rulemaking.
    \16\ Critical Mass Energy Project v. NRC, 975 F.2d 871 (D.C. 
Cir. 1992).
---------------------------------------------------------------------------

    The agency's experience in processing and responding to 
confidentiality requests, such as those submitted during the course of 
enforcement investigations, provides a foundation for an assessment of 
the burden and its implications. A comparison of the expected number of 
EWR submissions to the number of confidentiality requests that 
manufacturers now submit, which do not involve EWR data, while taking 
content to account, indicates that if the agency were to attempt to 
process individualized requests for confidentiality of EWR data from 
each or most manufacturers that regularly report EWR data, the agency 
would be overwhelmed. There would be considerable additional work from 
logging in, to assigning and controlling assignments, to analyzing the 
requests, to preparing draft letters, to review, to preparation and 
execution of final letters to logging them out. There would also be an 
overall management burden. There are no available resources to do this 
work. A backlog would develop and delays in responding to requests for 
confidentiality of EWR data and other requests for confidentiality 
would ensue. Requests for confidentiality that likely would have merit 
and those that likely would not be favorably received by the agency 
would be caught in the backlog. Consistent with our customary 
practices, the information would be withheld until the agency decides 
whether it is confidential. Disclosure to the public of information, 
including both EWR and non-EWR information, that is the subject of a 
request for confidentiality but that ultimately is determined not to be 
entitled to be withheld under Exemption 4 would be hindered and 
delayed. This likely would include at least some EWR data on deaths and 
injuries. Based on historical actions, it likely would include some 
information submitted by manufacturers in defect investigations. 
Ultimately, the public interest would be impacted. Another effect would 
be the likely diversion of some resources from other agency safety 
efforts, including pursuing other enforcement activities, in order to 
mitigate the delay.\17\
---------------------------------------------------------------------------

    \17\ Public Citizen, within the context of disclosing EWR data, 
noted that ``[t]he categorical disclosure of documents and data 
obtained under the early warning system is essential for the proper 
functioning of the early warning rule''.
---------------------------------------------------------------------------

    In view of the foregoing, requiring and processing individual 
requests for confidential treatment for all EWR data is not a viable 
alternative.
    A second alternative is to proceed by binding rule. If NHTSA were 
to proceed by issuance of class determinations, the agency would take 
advantage of the benefits of rulemaking. Interested parties would know 
NHTSA's assessment of the confidentiality of most of the EWR data.\18\ 
The Supreme Court has long recognized the general preference for 
rulemaking over ad hoc adjudications. In SEC v. Chenery Corp. 332 U.S. 
194, 202 (1947), the Court observed that since an agency, unlike a 
court, does have the ability to make new

[[Page 59440]]

law prospectively through the exercise of its rulemaking powers, it has 
less reason to rely upon ad hoc adjudication to formulate new standards 
of conduct. The Court recognized that the function of implementing the 
act should be performed, as much as possible, through this quasi-
legislative promulgation of rules to be applied in the future.
---------------------------------------------------------------------------

    \18\ The confidentiality of EWR data on deaths, injuries and 
property damage claims is not resolved by today's rule. Most 
manufacturers have not reported claims for deaths. Of those that 
have, NHTSA expects that most manufacturers, except tire companies, 
will not submit individualized requests for confidentiality.
---------------------------------------------------------------------------

    Binding determinations for EWR data are appropriate mechanisms to 
address the confidentiality of the EWR data report submissions. The 
submissions are standardized. The EWR reports contain identical 
informational elements for each regulated manufacturer category under 
the EWR rule. See 49 CFR Part 579, Subpart C. EWR reports are submitted 
pursuant to standardized electronic reporting templates that are used 
repeatedly from reporting period to reporting period. Each manufacturer 
in a regulatory category reports on the same systems and components. 
Each quarterly report provides a snapshot of that manufacturer's 
experience for each of the standard informational elements, making 
these submissions identical with respect to the nature of their content 
between reporting periods.
    Binding determinations eliminate the problems with ad hoc 
determinations. They provide direction to the regulated community. They 
assure consistency. They avoid resource burdens, particularly for small 
businesses. They eliminate the substantial workload that the agency 
would face in processing and addressing requests for confidentiality. 
They also avoid a substantial backlog on processing of requests for 
confidentiality that impacts not only EWR data but other information 
submitted to NHTSA as well. This would result in quicker disclosure to 
the public of information that is not confidential. This is in the 
public interest.
    The District Court recognized the suitability of adopting class 
determinations when it ruled that limited categorical rules that 
address the confidentiality of EWR data are necessary ``to allow the 
agency to administer the EWR program effectively,'' Public Citizen, 427 
F. Supp. 2d at 13, and that the agency was ``justified in making 
categorical rules to manage the tasks assigned to it by Congress under 
the TREAD Act.'' Id. Consistent with this approach, the agency is 
adopting an appropriate method to help it manage the EWR program while 
satisfying its obligations under the FOIA. By adopting class 
determinations, the agency ensures that it applies a consistent and 
reliable approach when addressing the treatment of EWR data. Commenters 
on both sides of this issue also recognize the value of class 
determinations but each favors class determinations that result in 
opposite results--disclosure or withholding.
    A third alternative is presumptive class determinations. In the 
October 2006 NPRM, we explained the practical differences between 
adopting ``binding'' as opposed to ``presumptive'' determinations. 
Binding determinations would alleviate the need for submitters to 
provide a formal written request for confidentiality and supporting 
justification, whereas presumptive determinations would still require 
submitters to provide a written request and supporting justification 
pursuant to 49 CFR Part 512. 71 FR at 63745 n. 19. The agency currently 
uses presumptive determinations for certain classes of information 
detailed in Appendix B of 49 CFR Part 512.
    Presumptive determinations are a middle ground between ad hoc 
determinations and class determinations. In our view, presumptive 
determinations of the confidentiality of EWR data are inappropriate. 
While a presumptive determination would provide direction to the 
regulated community and the public and should avoid inconsistent 
rulings on the confidentiality of the EWR data submitted in 
satisfaction of EWR information requirements, it would not eliminate 
the requirement for individualized requests for confidentiality of EWR 
data. Since the elements and the basis for withholding them would be 
the same, individualized requests for confidentiality of EWR data 
would, as a practical matter, be unnecessary. Thus, they would impose 
an unnecessary burden on manufacturers. Also, the agency would face a 
substantial burden in processing requests for confidentiality under the 
presumptive determination alternative.\19\
---------------------------------------------------------------------------

    \19\ Public Citizen had suggested presumptions in favor of 
disclosure. In view of the general thrust of disclosure under FOIA 
in the absence of an exemption, this is not meaningful.
---------------------------------------------------------------------------

    The EWR data differ from the presumptive classes in 49 CFR Part 512 
Appendix B in important respects. The presumptive class determinations 
in Appendix B cover information that has limiting factors such as a 
finite period of time for which confidentiality is sought or after 
which it ends (e.g., new product plan information for the upcoming 
model year expires once that product arrives or becomes public 
knowledge). Additionally, when reviewing requests for confidential 
treatment covering new product information (e.g., introduction of a new 
model) the agency not infrequently discovers that a manufacturer's 
media center has already publicly released that information, which 
makes it necessary for the agency to check the accuracy of a given 
confidentiality request. As a result, the nature of the information 
covered by Appendix B requires individualized agency review to ensure 
that non-confidential information is readily disclosed to the public. 
The EWR information (other than death, injury and property damage 
claims data, which are not covered) does not raise these concerns.

C. Class Determinations Based on FOIA Exemption 4

    Exemption 4 of the FOIA covers information in federal agency 
records that is commercial or financial information obtained from a 
person that is privileged or confidential. EWR information. 5 U.S.C. 
552(b)(4).
    The terms ``commercial'' or ``financial'' information are given 
their ordinary meanings. Public Citizen Health Research Group v. FDA, 
704 F.2d 1280, 1290 (D.C. Cir. 1983). Records are commercial so long as 
a submitter has a commercial interest in them. Id. EWR data meet this 
element of Exemption 4.\20\
---------------------------------------------------------------------------

    \20\ See the discussion of the categories of EWR information 
below. Those discussions demonstrate that the manufacturers have a 
commercial interest in the data.
---------------------------------------------------------------------------

    Second, the information must be obtained from a ``person.'' The 
word ``person'' encompasses business establishments, including 
corporations. See FlightSafety Servs. v. Dep't of Labor, 326 F.3d 607, 
611 (5th Cir. 2003). EWR data is obtained from manufacturers, which are 
corporate business establishments. Thus, EWR data is obtained from 
persons within the meaning of Exemption 4.
    Third, the information must be confidential.\21\ As noted above, in 
National Parks the Court declared that the term confidential should be 
read to protect governmental and private interests in accordance with a 
two part test: commercial or financial matter is ``confidential'' for 
the purposes of Exemption 4 if disclosure of the information is likely 
to have either of the following effects: (1) To impair the Government's 
ability to obtain necessary information in the future; or (2) to cause 
substantial competitive harm to the competitive position of the person 
from

[[Page 59441]]

whom the information was obtained. 498 F.2d at 770.\22\
---------------------------------------------------------------------------

    \21\ Alternatively, privileged information may be withheld under 
Exemption 4. EWR data is not privileged. See 49 CFR 579.4(c) 
(definition of field report).
    \22\ Impairment to the Government's ability to obtain this 
information in the future serves as an independent basis for 
withholding under Exemption 4. See National Parks, 498 F.2d at 770. 
The case law also strongly points to the availability of a ``third 
prong'' under Exemption 4--that of protecting other Governmental 
interests, such as compliance and program effectiveness. This third 
prong has been recognized, but not formally adopted, by the D.C. 
Circuit. See Critical Mass v. NRC, 975 F.2d 871, 879 (D.C. Cir. 
1992) (noting that Exemption 4 can protect interests beyond 
impairment and competitive harm). See also 9 to 5 Org. for Women 
Office Workers v. Bd. of Governors of the Fed. Res. System, 721 F.2d 
1, 11 (1st Cir. 1983) (adopting a third prong under Exemption 4 
based on the Government's interest in administrative efficiency and 
effectiveness).
---------------------------------------------------------------------------

    Actual competitive harm need not be demonstrated for the purposes 
of the competitive harm prong. Rather, actual competition and a 
likelihood of substantial competitive injury is all that need be shown. 
CNA Financial Corp. v. Donovan, 830 F.2d 1132, 1152 (D.C. Cir. 1987). 
Vehicle and equipment manufacturers that submit EWR data operate in a 
highly competitive environment that is expected to become even more 
competitive.\23\ There is competition for sales.\24\ The industry is 
subject to a variety of competitive factors, including costs, 
competition in consumer-based surveys, and production differences.\25\
---------------------------------------------------------------------------

    \23\ See, e.g. GM Looks to Future, USA TODAY, at 10A (Feb. 7, 
2007) (observing that the changing auto industry and fierce 
competition are forcing GM to undergo structural changes), Micheline 
Maynard, Car Parts Maker Moves to Break its Union Deals, NY TIMES, 
April 1, 2006, at A1 (noting increasingly stiff competition in the 
U.S. auto market), and Joann Muller, Autos: A New Industry, 
BUSINESSWEEK, July 15, 2002, at 98 (reporting on the changing U.S. 
auto market as ``intense'' competition changes the shape of the auto 
industry).
    \24\ See comments of the Alliance and others on competition, 
discussed below under consumer complaints.
    \25\ See, e.g. Ford Ahead on Cost Savings Target for Materials, 
REUTERS, Mar. 16, 2007 (available at http://www.autonews.com) 

(noting challenges to Ford's ability to achieve future cost 
savings), Tony Lewin, Nissan Factory Expertise Will Boost Laguna 
Quality, AUTOMOTIVE NEWS, Oct. 30, 2006 (available at http://www.autonews.com
) (describing implementation of Nissan-developed 

quality control systems into Renault-manufactured vehicles), and 
Domestics Gain in Quality Derby, AUTOMOTIVE NEWS, Aug. 14, 2006 
(available at http://www.autonews.com) (reporting improvements by 

U.S. domestic automobile manufacturers in J.D. Power and Associates' 
Vehicle Dependability Study results).
---------------------------------------------------------------------------

    We now turn to certain categories of information that manufacturers 
must submit under the EWR rule.
1. Production Numbers
    The EWR rule requires larger volume manufacturers of light 
vehicles, medium-heavy vehicles and buses, motorcycles, trailers and 
tires and all child restraint manufacturers to submit production 
figures stating the number of vehicles, tires and child restraint 
systems, generally by make, model, and model (or production) year, 
produced during the model year of the reporting period and the prior 
nine model years (prior four years for child restraint systems and 
tires). See 49 CFR 579.21(a), 579.22(a), 579.23(a), 579.24(a), 
579.25(a), 579.26(a).
    In the NPRM, NHTSA proposed to make a class determination that 
production figures in EWR data for motor vehicles, other than light 
vehicles, and for child restraints and tires would not be released to 
the public. The agency based this proposed class determination on the 
competitive harm prong of FOIA Exemption 4, as interpreted in National 
Parks.\26\ 71 FR at 63742.
---------------------------------------------------------------------------

    \26\ The basis for excluding EWR production data on light 
vehicles (``any motor vehicle, except a bus, motorcycle, or trailer, 
with a gross vehicle weight rating of 10,000 lbs or less,'' 49 CFR 
579.4) from the class determination on confidentiality, as noted in 
the NPRM, is that those data are publicly available. Information 
that is already publicly available cannot be withheld by an agency 
under Exemption 4. Niagara Mohawk Power Corp. v. Dep't of Energy, 
169 F.3d 16, 19 (D.C. Cir. 1999). We note that there are limits to 
the production information on light vehicles that is publicly 
available and which therefore is not withheld. The agency has 
granted confidential treatment for data on production of light 
vehicles with particular consumer features.
---------------------------------------------------------------------------

    Numerous parties have provided information to NHTSA on the question 
whether the disclosure of EWR production data, other than for light 
vehicles, would be likely to cause the manufacturer submitting the data 
to suffer competitive harm from the use of the information by 
competitors. The parties have addressed a number of related issues 
including whether EWR production data from reporting sectors other than 
light vehicles is publicly available and the consequences of the 
release of this production information, as well as the potential 
benefits of releasing it.
    Industry commenters stated that the production information was not 
publicly available in the detail that submitters must provide pursuant 
to the EWR rule.\27\ Non-industry groups did not show otherwise.
---------------------------------------------------------------------------

    \27\ For example, some manufacturers' total production of tires 
is publicly available, but the breakdown by model, size and 
production in a specified period is not. Vehicle production data 
that are available, other than for light vehicles, are limited and 
do not approach the same level of detail that these submitters 
provide to the agency in their EWR submissions. See Harley-Davidson 
Form 10-K Annual Report at 31 (Feb. 2, 2007) (stating production 
plans for 2007 by total motorcycle production). See also http://www.jama.org
 (offering total production numbers for individual 

Japanese motorcycle manufacturers).
---------------------------------------------------------------------------

    The Truck Manufacturers Association (TMA) noted that that medium-
heavy truck manufacturer EWR production data are detailed by model. 
They provide a compendium of detailed production data revealing the 
production history and sales trends for each individual model over 
time. TMA explained that these data can provide valuable insights into 
a manufacturer's production and marketing strategies. Since truck 
manufacturers offer a variety of different model lines, if the 
production data were released, competitors would gain valuable insights 
into the marketplace performance of a particular model or group of 
models without bearing any market risk. Competitors could analyze a 
reporting manufacturer's production data for all or select models to 
reach conclusions about a company's production and marketing 
strategies, production capacities, customer preferences and other 
commercially valuable information not otherwise obtainable. Using this 
information, TMA asserted, manufacturers can chart the strengths and 
weaknesses of their competitors' businesses within specific make, model 
and model years. The competitive impact of the disclosure of such 
information is of particular significance to medium truck producers 
since their collective customer base consists largely of fleet 
purchasers. A manufacturer can use medium-heavy vehicle production data 
to react more quickly to its competitors by changing its model 
offerings and shifting its sales and marketing strategies while 
avoiding the substantial costs and risks associated with new product 
development.\28\ TMA used an example to make its point:

    \28\ Manufacturers not only withhold this information from their 
competitors but also from their own suppliers. See Steve Konicki, 
Just-In-Time Autos, Techwebnews, 2001 WLNR 3151365 (May 7, 2001) 
(reporting that Ford Motor Company does not share its production 
data regarding medium and heavy truck applications with one of its 
largest diesel engine suppliers--International Truck and Engine 
Corporation). It is also commonly known that sales numbers, which 
closely track production numbers, are commercially sensitive data 
that companies do not routinely disclose. As an example of this 
practice, ArvinMeritor--a large supplier of various vehicle 
components--declined to disclose its diesel engine sales data, 
citing the data's competitively sensitive nature. Transcript of 
ArvinMeritor, Inc. Analyst Meeting at 38 (Dec. 22, 2005).
---------------------------------------------------------------------------

    Manufacturer A offers a medium-duty truck equipped with a diesel 
engine as standard equipment, and is considering whether to offer an 
optional gasoline engine on this model. Manufacturer A could access 
the EWR data of its competitors, identify similar models, and track 
their sales of similar vehicles equipped with gasoline engines to 
determine (i) its competitors' production capacity for such 
vehicles, (ii) the market acceptance for the gasoline option at

[[Page 59442]]

given points in time, and (iii) customer preference trends over 
time. Based upon this information, Manufacturer A can decide whether 
to offer this option before it invests money and other resources, 
and without bearing the same market risk and uncertainties as its 
competitors. (A similar analysis could be conducted model-by-model 
to evaluate the market acceptance of various vehicle configurations 
---------------------------------------------------------------------------
and features.)

    Utilimaster, a final stage manufacturer of walk-in vans for parcel 
delivery and baking products industry applications, as well as freight 
bodies for general commercial use, stated that production data, if 
disclosed, would likely be used by competitors in their marketing and 
promotional efforts to obtain a competitive advantage against the EWR 
data submitter. Blue Bird, a large manufacturer of buses, school buses 
and motor homes, described production data for its industry, which are 
not publicly available, as highly proprietary and sensitive information 
that would benefit competitors who could use the information to chart 
the strengths and weaknesses of Blue Bird's business within specific 
make, model and model year classifications. The information would 
provide a tool for competitors in conducting market research and 
strategic planning.
    Harley-Davidson, a motorcycle manufacturer, noted that detailed 
motorcycle production data such as submitted under the EWR rule are 
unavailable publicly and explained that the motorcycle business is 
essentially a bundle of niches, including touring, sport trails and a 
number of others. Companies base their product mix decisions on various 
factors. Future company plans are often based on an evolution of 
product direction and experience, including past production. The 
information reveals a company's internal future planning, providing 
competitors with information on a company's future production efforts. 
The Motorcycle Industry Council similarly observed that motorcycle 
production and sales data by model have not been publicly available.
    Utility, a trailer manufacturer, noted that EWR data are organized 
by make, model and model year. This information reflects a company's 
production capacity, sales performance and, in turn, the relative 
success of a company's marketing strategy. Utility asserted that 
competitors could use this sensitive information to monitor a 
manufacturer's current production capacity and over time to ascertain 
the amount of resources that a manufacturer has expended in adding to 
that production capacity. Similarly, it stated that a supplier 
examining the production data of one of its customers, the vehicle 
manufacturer, can confirm its status as a sole supplier, which can 
enhance its position during supply contract negotiations. National 
Marine, a trade group representing boat trailer manufacturers, and its 
affiliate the Trailer Manufacturers Association, added that because 
boat trailer manufacturers typically produce a smaller number of units, 
the disclosure of quarterly production data would permit competitors to 
ascertain information about the number of units sold, potential costs, 
and production concerns of the manufacturers. Such information, it 
noted, can be used competitively against a trailer manufacturer.
    The Juvenile Products Manufacturers Association (JPMA), 
representing manufacturers of child restraint systems, which are 
commonly known as child car seats, explained that the release of EWR 
quarterly production data would provide competitors and new entrants to 
the market with invaluable ``real-time'' ongoing competitive 
information about the reporting manufacturer's production capacity, 
sales and market performance. Such information, which would otherwise 
either be unobtainable or obtainable only through expensive market 
research, would give competitors invaluable insights into the 
operational and market strengths and weaknesses of submitters, enabling 
competitors to target their production and marketing efforts to areas 
where they detect vulnerabilities in a submitter's market position.
    Cooper Tire submitted a study, further confirmed through comments 
from the Rubber Manufacturers Association (RMA), regarding the 
competitive harm that disclosure of otherwise confidential tire 
production numbers would have in the tire industry. The RMA, a trade 
association that includes tire manufacturers, stated that tire 
manufacturers can change the course of tire production in a relatively 
short period of time. If production numbers were released, 
manufacturers could change the production of types, sizes and lines of 
tires after reviewing a competitor's data. The data could indicate 
whether a competitor, for example, could produce sufficient quantities 
to supply a market or could be planning a promotion. EWR production 
data are valuable since they allow competitors to change production 
depending on the production output of a competitor. In addition, if 
released, production volume by stock keeping unit (SKU) could reveal 
marketing plans and vulnerabilities, facilitating targeting by 
competitors.\29\ Similarly, disclosing production volume by tire line 
(and by SKU) could reveal private label (brand) customers' purchases.
---------------------------------------------------------------------------

    \29\ See 49 CFR 579.26(a). The regulations define a stock 
keeping unit as ``the alpha-numeric designation assigned by a 
manufacturer to uniquely identify a tire product. This term is 
sometimes referred to as a product code, a product ID, or a part 
number.'' 49 CFR 579.4(c).
---------------------------------------------------------------------------

    In comments, RMA expanded on the Cooper study, noting that because 
tire manufacturers can alter their production within a relatively short 
period of time, this ability to change production dependent on the 
production output of competitors could significantly affect 
competition. RMA asserted that the quarterly tire production data 
reveal snapshots of the different segments within which a given company 
operates and its concentration of resources within those segments.
    In contrast to the statements by the vehicle, child restraint and 
tire industries on the substantial competitive harm that would result 
from the disclosure of EWR production data, Public Citizen asserted 
that a class determination covering production is irrational. It 
expressed its view that there is no evidence that competitive harm has 
occurred for light vehicle manufacturers whose production numbers have 
been released and stated that NHTSA did not show why disclosure of EWR 
production data will harm only vehicle manufacturers other than light 
vehicle manufacturers.\30\ Public Citizen did not present specifics to 
justify its view favoring the disclosure of the EWR production numbers. 
While Public Citizen's comments on the October 2006 NPRM were filed 
almost a month after the close of the comment period and well after 
other commenters submitted their comments, significantly, Public 
Citizen did not rebut the industry commenters' statements on the 
competitive harm that would flow from the release of EWR production 
data. Other non-industry entities also objected to the proposed class 
determination of confidentiality of EWR production numbers, but none 
provided facts to refute the claims or

[[Page 59443]]

explanations by industry commenters on the competitive effects of 
disclosure.
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    \30\ Public Citizen's Litigation Group had criticized the 
agency's class determination for production numbers. It stated that 
there is no history of prior administrative decisions concluding 
that these data are confidential under Exemption 4 and no 
comprehensive examination of the competitive value of the 
information to each affected industry sector. In the footnote that 
follows, we address competing views of historical decisions which 
generally involve a single product that is the subject of an 
investigation. This notice addresses comments regarding various 
sectors, which Public Citizen did not rebut.
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    The literature further indicates that production numbers, by their 
very nature, are competitively valuable and useful in helping 
manufacturers improve their efficiency and in learning what their 
competitors are producing. See Sidney Hill, Jr., Real Time's Role in 
Product Quality, Manuf'g Bus. Tech., May 1, 2005, at 22 (commenting on 
the value of mining real-time production data to manufacturers). 
Knowledge of what a competitor manufactures and sells are basic pieces 
of information sought by companies. See Laurence A. Carr, Front-Line 
CI, Competitive Intelligence Magazine, March 2001, at 11 (indicating 
that company staff should have detailed information on competitor 
products, marketing strategies, tactics, and programs). Companies 
operating in the automotive sector are no different in this regard. See 
Agostino von Hassell & Mark Bella, Making the Most of Automotive Data, 
Modern Plastics, June 1, 2004, at 16 (noting the importance of 
production and sales numbers in helping to predict the likely volume of 
new orders).
    After carefully considering the comments and other information of 
record, NHTSA has determined that the release of EWR production numbers 
on medium-heavy vehicles and buses, motorcycles, trailers, child 
restraint systems and tires would be likely to result in competitive 
harm to the manufacturer submitting the data.
    The EWR production data, in pertinent part, are a comprehensive 
compendium of information by make, model and model year, for medium-
heavy vehicles and buses, motorcycles, trailers, child restraint 
systems and tires. They are real time data that are updated quarterly. 
They are not publicly available. As noted by numerous commenters, the 
production data are proprietary. The industry expends efforts to 
maintain the confidentiality of their production figures. This was not 
disputed by non-industry commenters.\31\
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    \31\ One matter raised in the comments is the availability of 
production data in individual investigations by NHTSA's Office of 
Defects Investigations, which investigates potential defects in 
vehicles and equipment. The agency noted in the NPRM, for example, 
that production data on child restraints and tires are not 
available. At the opening of an investigation, NHTSA often withholds 
production data or it groups it, as for example grouping a number of 
sizes of tires so that production of individual sizes is not stated. 
At later times in the process, NHTSA has disclosed the number of 
tires in recalls. E.g., Recall (NHTSA) number 07T-005 involving 
certain tires made by Cooper Tire. RMA and Public Citizen have made 
different assertions regarding the agency's historical practices. 
These issues need not be resolved here.
    More importantly, in terms of depth and scope, there are 
significant differences between the body of EWR data and data on the 
production of vehicles in individual investigations. While some 
production data on limited segments may be available for some 
reporting sectors, these data do not approach the level of detail or 
coverage contained in EWR submissions that is likely to cause 
substantial competitive harm to submitters. EWR production data are 
submitted quarterly and cover all models and model lines. In 
contrast, data involving vehicles and equipment in investigations 
typically involve a particular vehicle or equipment model or 
platform across one or several model or production years. The 
release of the production data on a single item is not comparable in 
terms of the scope of information released or the competitive 
effects of the release if the full compendium of EWR production data 
were released.
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    As substantiated by the comments, production numbers reveal 
otherwise unobtainable data relating to business practices and 
marketing strategies. The EWR production data can be used by 
competitors to monitor the evolving and current production, on a model-
by-model basis, of the company that submitted the data. The data also 
reveal a manufacturer's capacity to produce certain products. Using 
this information (if released), competitors could adjust their own 
production volumes to better compete against the manufacturer that 
submitted the EWR data and make other production or marketing-related 
decisions to the substantial detriment of the submitter.
    In a very real sense, production numbers reveal significant parts 
of a company's business plan to competitors. Production numbers reveal 
how the submitting manufacturer concentrates its production efforts. 
For example, RMA explained that the disclosure of tire production data 
would enable manufacturers to analyze their competitors' businesses. 
Cooper Tire added that production numbers reveal substantial 
information related to marketing plans and strategies. Cooper Tire 
further explained that because of the intense level of competition 
within the tire industry and the size differences among competitors, 
the disclosure of production data would make the risk of substantial 
competitive harm high, particularly for smaller manufacturers that 
produce for the replacement market.
    In addition, because production is closely related to sales in the 
ordinary course of business, EWR production data can be used to assess 
a competitor's sales and market performance,\32\ through means 
otherwise unavailable without considerable market research expense. 
Sales data are generally regarded as having high competitive 
importance. This market-related information would be valuable to the 
reporting manufacturer's competitors, who commonly want to know how 
well their competitors' products have been and are selling. The 
competitors would use the production information in their own product 
planning and marketing. Knowledge of what competitors are selling can 
change marketing tactics, result in the redevelopment of strategic 
plans, and lead to key recruitments. Also, since product plans are 
based upon an evolution of production direction and experience, 
disclosure of production information would expose important aspects of 
manufacturers' future product plans to competitors.
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    \32\ See, e.g. http://www.claritas.com/claritas/Default.jsp?ci=2&pn=cs&_bmwusa
.

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    Similarly, EWR production data reveal a variety of valuable 
information related to the success of a competitor's marketing 
strategies. Through common monitoring activities, a company may know 
that a competitor has launched a new product or marketing campaign. But 
the critical information on the success of the campaign is not public. 
EWR data could be used to monitor the success of the campaign, without 
the cost of market research. The competitor could also avoid or 
minimize business risks by using the EWR production data to decide 
whether to launch a parallel effort. Using EWR production data, 
operating strengths and weaknesses of individual submitters would be 
discovered without resorting to costly market research and competitors 
would chart this information and use it to target a submitter's 
vulnerabilities.
    Suppliers to an EWR submitter can, in some instances, use the 
production information to gain a competitive advantage over that 
submitter. Suppliers compete with vehicle manufacturers in negotiations 
over prices. Suppliers can use production information during pricing 
negotiations with EWR submitters to confirm their positions as sole 
suppliers, which can help them secure higher prices for their 
equipment.
    Although non-industry commenters opposed the proposed class 
determination for EWR production data and suggested that production 
data are publicly available, they did not provide facts demonstrating 
that these data are available to the same extent as required by the EWR 
regulation.
    The non-industry commenters also did not provide facts 
contradicting the competitive value of production data to competitors 
or the competitive effects on the submitters that would be likely to 
accompany their disclosure. Their argument on the light vehicle sector 
is largely a non sequitur. Production data for light vehicles have been 
released for a long time. But that does not demonstrate that if they 
had not been

[[Page 59444]]

released, there would not be any competitive harm from a change in 
policy of release. For example, Honda and Toyota went to considerable 
effort to design and produce their initial hybrid vehicles, the Insight 
and the Prius. Each of these vehicles is different. If a competing 
manufacturer were considering entering the regenerative hybrid market, 
information on which models sold well and which did not would be of 
considerable value. Honda and Toyota would have undertaken the market 
risk, but the competitor would benefit from the production numbers with 
highly reduced market research costs. Also, the mere statement that it 
has been released in the light vehicle sector is not a sufficient 
rebuttal to the specific comments from members of other industry 
sectors regulated under the EWR rule.
    For the foregoing reasons, in light of the competitive value of the 
EWR production data on medium-heavy vehicles and buses, motorcycles, 
trailers, child restraints and tires, the manner in which these data 
would be used by competitors and the competitive effects that would be 
likely to follow if the data were disclosed on a wholesale basis to 
competitors, their disclosure is likely to cause substantial harm to 
the competitive positions of the manufacturers that submit the 
data.\33\ This harm would flow from the affirmative use of the 
proprietary data by competitors.
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    \33\ The regulatory language adopted in Appendix C to Part 579 
at the end of this notice varies slightly from the language in the 
NPRM. The language in Appendix C includes clarifications and the 
words ``is likely to cause''. The latter is consistent with the 
terms of NHTSA's assessments of the consequences of the release of 
the EWR information addressed in Appendix C and the standard of 
National Parks.
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2. Consumer Complaints
    The EWR rule requires larger volume manufacturers of light 
vehicles, medium-heavy vehicles and buses, motorcycles, and trailers to 
submit the number of consumer complaints that they have received broken 
out, for each make and model, by specific component categories (e.g., 
steering, brakes), fires and for certain categories (rollovers), all of 
which are binned by code. See 49 CFR 579.21(c), 579.22(c), 579.23(c), 
579.24(c). Manufacturers of child restraints submit combined numbers of 
consumer complaints and warranty claims. See 49 CFR 579.25(c). Consumer 
complaints are defined in the EWR regulation as:

    [A] communication of any kind made by a consumer (or other 
person) to or with a manufacturer addressed to the company, an 
officer thereof or an entity thereof that handles consumer matters, 
a manufacturer Web site that receives consumer complaints, a 
manufacturer electronic mail system that receives such information 
at the corporate level, or that are otherwise received by a unit 
within the manufacturer that receives consumer inquiries or 
complaints, including telephonic complaints, expressing 
dissatisfaction with a product, or relating the unsatisfactory 
performance of a product, or any actual or potential defect in a 
product, or any event that allegedly was caused by any actual or 
potential defect in a product, but not including a claim of any kind 
or a notice involving a fatality or injury.\34\
---------------------------------------------------------------------------

    \34\ 49 CFR 579.4(c).
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    Manufacturers are required to submit EWR data on consumer 
complaints regardless of whether they allege or appear to involve 
safety-related defects. 67 FR at 45849 (July 10, 2002). When NHTSA 
published the EWR rule, the agency expressly contemplated that the 
manufacturers would report a large volume of data and that the agency 
would then screen through this mass of information, looking for 
potential defect trends. See 67 FR 45822, 45865 (July 10, 2002); see 
also 71 FR 63738, 63741 (Oct. 31, 2006); 72 FR 29435, 29437-38 (May 29, 
2007). This has proven true. NHTSA's experience with EWR data has shown 
that the vast bulk of EWR consumer complaint data has not been 
indicative of defect trends. Some consumer complaint EWR data have been 
helpful in identifying a potential defect trend.
    In the NPRM, the agency proposed to make a class determination that 
EWR consumer complaint numbers would not be released to the public. 71 
FR at 63742. The agency based this proposed class determination on 
information on both the competitive harm and impairment prongs of 
National Parks. We first address the likely competitive harm from the 
release of consumer complaint data, then we discuss the impairment to 
the agency's ability to obtain as complete consumer complaint 
information as possible if the information was released.

Competitive Harm

    Numerous parties have provided information to NHTSA on the question 
whether the disclosure of EWR complaint data would be likely to cause 
the submitting manufacturer to suffer competitive harm. This includes 
commenters from the automotive industry and non-industry commenters.
    Commenters from across different sectors of the automotive industry 
addressed the competitive value and use of consumer complaint data. At 
the outset of its comments, the Alliance stressed that there is actual 
competition in the auto industry. Manufacturers compete vigorously for 
new vehicle sales. Two of the elements over which manufacturers compete 
and expend substantial amounts of research money are consumer 
satisfaction and quality in the market for new vehicle sales. The 
Alliance supported its statement by information from Maritz Marketing 
Research, which identified factors considered by consumers in 
purchasing new vehicles, including overall quality and reliability 
(dependability).
    The Alliance further showed that EWR information, including 
consumer complaints, is proprietary and comprehensive in nature. Its 
competitive value is enhanced by its comprehensive nature (for light 
vehicles they involve 18 vehicle systems and components as well as 
fires and rollovers, 49 CFR 579.21(b)(2), (c)) and continuing content 
which permits a model-to-model comparison on the numerous systems and 
components in EWR reports. The release of EWR consumer complaint data 
would permit wholesale industry-wide comparisons of the quality or 
durability of all significant systems or components on models chosen 
for comparison.
    As explained by the Alliance, EWR consumer complaint data provide 
an extremely valuable window into the customer satisfaction of vehicle 
owners and the perceived quality of vehicle models on a make/model/
model-year and system basis. Additionally, the EWR data provide 
valuable insights into a given manufacturer's business practices and 
decisionmaking, including, the methods used to collect consumer 
complaints.
    The Alliance maintained that the comprehensive nature of these 
submissions--covering all makes and models over a multi-year 
timeframe--makes them a valuable compendium of consumer satisfaction 
and quality information that could not be replicated easily at any 
price and could be used by competitors. Citing Worthington Compressors, 
Inc. v. Costle, 662 F.2d 45, 51 (D.C. Cir. 1981), the Alliance pointed 
out that the release of information collected at considerable cost by 
an entity that submitted information to the Government could easily 
have competitive consequences. In the immediate context, the submitters 
have expended considerable sums to gather large volumes of EWR data and 
the release of it would be contrary to the competitive interests of 
these entities and to the benefit of their competitors.
    AIAM's comments focused on the totality and comprehensive nature of 
the EWR data, including consumer complaint data, which give the data

[[Page 59445]]

value that is enhanced by the EWR rule's standardized reporting format. 
AIAM stated that a knowledgeable competitor can view this mosaic of 
information and reach valuable conclusions. The comprehensive body of 
information facilitates manufacturer-to-manufacturer comparisons. It 
would enable one company to use the experience of another to select an 
optimal design, production process and pricing strategy, while avoiding 
the cost and risk that would otherwise be encountered. The data would 
provide useful information about cost and quality. AIAM provided 
examples.
    AIAM also explained that EWR complaint data would provide 
competitors useful information about the quality levels achieved by the 
submitting manufacturer or its suppliers, both for technologies used in 
vehicles and in their accompanying production processes, which permit 
competitors to evaluate a particular technology, process or supplier, 
at a risk and cost that is lower than otherwise attainable, as the 
competitor would not have to develop that information. Using this 
information, AIAM noted, competitors might be able to base decisions to 
pursue certain technologies to a substantial degree on their reviewing 
a submitter's EWR complaint information. Without this information, the 
competitor may have reached a different conclusion. The submitter may 
have expended substantial resources to help it decide whether to pursue 
a particular technology, while the competitor would gain a real world 
evaluation free of cost or the effort of a real world evaluation. This 
would impair the competitive position of the submitter.
    AIAM added that the EWR information would also provide a competitor 
with information about the submitters' cost structure. Competitors 
could evaluate the information and make decisions whether to pursue 
various products or marketing strategies based on an assessment 
pertaining to the submitter's costs. A submitter's relative costs can 
also be evaluated using these data.
    Nissan's comments noted that it uses inputs from customer call 
centers to gauge market responses to new features, to identify areas 
requiring consumer education and to help identify issues that could 
potentially require field or production adjustments. Customer inputs 
including consumer complaints help identify areas where field 
experience is showing an issue warranting further investigation. Nissan 
emphasized that the information is pointer information that may suggest 
further inquiry and is not necessarily indicative of a safety-related 
defect. The information primarily serves independent business reasons. 
If EWR consumer complaint information were publicly available, 
competitors could track that information and learn whether there is a 
market reaction to any new technology, supplier or product changes or 
new marketing effort. It is valuable, as a market reaction can lead a 
competitor to focus on it. The information would be valuable to 
competitors who may be considering deploying similar or competing 
technology. They could rely on Nissan's information in making a 
critical decision such as when to enter the market, which technology or 
suppliers to use, or how to best market the technology. It may be 
indicative of consumer confusion over a new technology. The value of 
this information is in that it would enable competitors to use 
information created by significant input to advance their own 
commercial interests. Complaints, Nissan explained, also reveal company 
practices and the performance of materials and components that are 
successful and those that are not.
    TMA stated that the EWR data that medium-heavy vehicle 
manufacturers report are comprehensive--they involve 22 vehicle systems 
as well as fires and rollovers. The compendium of consumer complaint 
data, laid out model-by-model and system-by-system has great 
competitive value and there are numerous ways in which competitors 
could use these data to their competitive advantage. TMA characterized 
the data as a data bank of quality control information that competitors 
can use to evaluate the performance, reliability and durability of 
various components and systems without the expense and risk associated 
with product development that would normally occur with field-testing 
and ``trial and error'' efforts, while shortening the amount of time 
competitors need to market competing products.
    TMA endorsed a comment by GM as applying with equal force to the 
truck industry. GM had explained that if a supplier offers a newly-
designed system to a vehicle manufacturer, a manufacturer can undertake 
a tear down evaluation and test it, but no practical test duplicates 
the experience gained from hundreds of thousands of miles on the road. 
A vehicle manufacturer that installs the system gains the field 
experience. If EWR data were made available, other manufacturers would 
have access to some of the same information and would be able to make 
their decisions with less testing and analysis. The disclosure of the 
data would force the first manufacturer to subsidize its competitors, 
reducing their costs at the first manufacturer's expense.
    TMA presented a scenario to demonstrate how the information can be 
used:

    [i]t may be well known that Truck Manufacturer A uses Lighting 
Assembly X on one of its truck models. (The manufacturer of lighting 
equipment is typically identifiable on the lamp or lamp assembly.) 
If Manufacturer B is deciding whether to use the same assembly on 
one of its models, Manufacturer B could review the EWR warranty, 
consumer complaint and field report data to evaluate Manufacturer 
A's field experiences with its lighting equipment on that model. As 
a result, Manufacturer B will get all of the benefits of 
Manufacturer A's field experiences with that product--good or bad--
while avoiding the costs, effort and risk that Manufacturer A has 
incurred. Moreover, Manufacturer B could immediately benefit from 
that experience data, while it took Manufacturer A years to be in 
the same position. (Emphasis in original.)

    TMA stated that the disclosure of consumer complaint data would 
provide competitors with valuable and previously unavailable insight 
into the field experience and performance of a submitter's entire 
product line and individual systems and components. TMA stated that 
competitors could use this information to assess the in-use performance 
of parts and systems. It would be used in purchasing, pricing, and 
sourcing decisions, all of which would have competitive impacts. TMA 
added that the release of the information would adversely affect these 
manufacturers' customers, in terms of fleet performance and durability.
    Utility observed that the EWR regulation requires trailer 
manufacturers to provide information relating to each make and model as 
well as for system components. Trailer manufacturers can use EWR 
complaint data to evaluate trailer performance, help identify 
technological and engineering improvements that might better satisfy 
customers and provide guidance to prioritize resources to implement 
these improvements. If these data were released, competitors would gain 
product and component performance data that they could implement into 
marketing strategies. Accordingly, Utility said it would be irreparably 
harmed.
    Harley-Davidson stated that it aggressively seeks consumer contact, 
including opinions. Consumer input would be counted in EWR reports when 
it meets the EWR rule's broad definition of consumer complaint. 
Harley's continued success depends on satisfying

[[Page 59446]]

motorcycle enthusiasts. It asserted that disclosing this added 
feedback, which it obtained through considerable effort, would cause it 
harm. It added that the data are not likely to be related to a 
potential safety issue.
    The Juvenile Products Manufacturers Association (JPMA) observed 
that different manufacturers maintain different information on consumer 
complaints. If the EWR information were disclosed, those with more 
limited submissions would obtain more information about their 
competitors' products than they would be disclosing, which would give 
them unequal access to competitively significant information. In 
addition, EWR information could be used by new entrants to the market 
to obtain valuable competitive information at virtually no cost that 
would otherwise be very expensive or impossible to obtain. JPMA added, 
for the compendium of EWR information on consumer complaints and 
warranty claims broken down by make and model of child car seat, this 
type of quality information on individual products is highly 
proprietary to individual manufacturers. These real time data provide 
ongoing competitive information about each submitter's market 
performance. According to JPMA, the data provide insights into a 
submitter's operational and market strengths and weaknesses by 
revealing the relative field performance through reports on consumer 
complaints and warranty claims of a manufacturer's product line. These 
data are either unobtainable or obtainable only through expensive 
market research.
    Several manufacturers addressed another consequence of disclosure: 
misleading and unfair comparisons of the data. The Alliance stated that 
the disclosure of the comprehensive compendiums of EWR information 
would be misleading to consumers and unfair to the submitting 
manufacturers because consumers would attempt to make comparisons of 
the performance of one model to another, across multiple model years, 
on a quarterly basis, which, as the Alliance observed, can not be done. 
Similarly, AIAM stated that public disclosure of the data would create 
a great potential for misunderstanding and mischaracterization. Reports 
with simple comparisons could affect the competitive positions of 
manufacturers in a way that was unfair. Also, TMA stated, with 
supporting explanation, that manufacturers and consumers could misuse 
it to draw unfair and unsubstantiated and misleading comparisons 
regarding competitors' products. JPMA added that the release of the 
encyclopedia of quality information encompassed in EWR data would cause 
submitters unwarranted competitive harm because the reports will 
include reports that are not safety related. This, JPMA said, will 
result in unwarranted disparagement.
    Several entities acknowledged the limited releases of information 
submitted by the manufacturers during investigations by NHTSA's Office 
of Defects Investigation (ODI). The Alliance stated that the release of 
limited consumer complaint information on specific models in a limited 
number of model years in investigations conducted by NHTSA does not 
support the release of the comprehensive compendium of information in 
EWR data submissions. A limited release is much different from a 
competitive standpoint than the automatic release of the continually 
collected full compendium of quality and customer satisfaction 
information that is represented by the quarterly EWR data submissions. 
Unlike EWR data, the release of data from investigations does not 
permit industry-wide comparisons of the quality or durability of all 
significant components across entire product lines and they are not a 
compendium of quality and customer satisfaction information developed 
over time. Thus, the Alliance concluded that the confidentiality of EWR 
information on consumer complaints should be maintained.
    Similarly, JPMA explained that although its members do not object 
to the release of the numbers of complaints on a specific make or model 
of child restraint within the context of a specific defect 
investigation, the wholesale disclosure of consumer complaint numbers 
by make and model would reveal highly proprietary information 
competitors, providing them with a compendium of quality information 
developed by a submitter.\35\
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    \35\ The Motor Equipment Manufacturers Association/Original 
Equipment Suppliers Association (MEMA/OESA) also opposed treating 
complaint data as not confidential and stressed that quantitative 
differences between defect investigation and EWR submissions made 
comparisons between the two inapposite.
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    On the other hand, non-industry commenters argued that EWR consumer 
complaint data should not be held confidential. Public Citizen agreed 
with NHTSA's statements in the NPRM that ``the commercial value of 
complaint data is well recognized'' and that ``complaint data are a 
valuable data source used by companies to help them identify areas of 
concern including product performance, to consumers and provide 
guidance on where to allocate their limited resources.'' Public Citizen 
added that ``[c]onsumer feedback is vital for companies striving to 
maintain a profitable business.''
    Public Citizen raised issues of public availability of information, 
including information other than EWR data and EWR data.\36\ It 
indicated that, to some extent, information is available through 
industry guides that are available to manufacturers for a fee and 
suggested that NHTSA should explore that. It said that NHTSA must prove 
that other industry groups do not have access to this information. In 
its view, industry can afford expensive trade publications. However, 
the public which would benefit from the data, often has severely 
limited access to these avenues of information, if access even exists.
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    \36\ Public Citizen referred to the Automotive Industry Status 
Report, noting vaguely that it already makes some of the proposed 
exempt information available to manufacturers for a fee. But it did 
not say what information, or compare the breadth or detail of EWR 
reporting to that in the Automotive Industry Status Report. We have 
placed a copy of the Report in the docket. Based on our review, in 
the absence of any specifics from Public Citizen, we do not accept 
its conclusion.
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    Public Citizen asserted that under the EWR rule, only total numbers 
of complaints are provided to the agency, which greatly hinders its 
usefulness. It viewed these data as extremely basic and requiring no 
unnecessary details about company operations or future company plans. 
AAJ raised a policy argument to support its view that the data should 
be disclosed. AAJ argued that in proposing this class determination, 
NHTSA did not adequately mention that complaint data are crucial for 
consumers to make an expensive purchase of an item that has the 
potential to cause bodily injury. It said consumers are entitled to all 
available data to render their decision to purchase a motor vehicle. It 
also asserted that complaints would be valuable to a jury to render a 
verdict. Therefore, in AAJ's view, NHTSA did not reasonably consider 
the public's interest in disclosure and the public has a compelling 
interest in the information, financially and for safety. Neither Public 
Citizen, which filed its comments long after the close of the 
rulemaking comment period and long after the industry representatives 
had submitted comments, nor AAJ provided information rebutting the 
industry commenters' explanations of how the complaint data can be used 
competitively to the significant detriment of the competitive positions 
of the submitters.\37\
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    \37\ Public Citizen's comments also incorrectly assume that the 
collected EWR data only relate to potentially unsafe products.

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[[Page 59447]]

    In the literature, the commercial value of consumer complaint data 
is well recognized. See e.g., Edward Bond & Ross Fink, Meeting the 
Customer Satisfaction Challenge, 43 Industrial Management, Issue 4 
(July 1, 2001) (Noting the importance of measuring customer 
satisfaction, describing customer complaints as a data source to a 
company that can create a ``big benefit'' from small changes); John 
Goodman & Steve Newman, Six Steps to Integrating Complaint Data into QA 
Decisions, 36 Quality Progress, Issue 2 (Feb. 1, 2003) (Stressing the 
importance of complaint data in helping to identify issues with 
products and the data's effectiveness in assisting companies with 
resource allocation decisions to address quality assurance issues); 
Dep't of Commerce, Managing Consumer Complaints (1992) (Complaint data 
may signal how products and services meet or do not meet consumer 
expectations and how products can be better designed. They may signal a 
need for better quality control. Complaint management can save business 
unwanted costs); Michael Graver, Listening to Customers (Recognized as 
a key component to various business strategies, world-class companies 
now measure and manage customer value and satisfaction. These are often 
a key performance measure, a leading indicator of financial 
performance, an important diagnostic measure for continuous improvement 
and a tool to manage competitive advantage); Robert Woodruff, Customer 
Value: The Next Source for Competitive Advantage (1997) (Managers 
consider their customers when determining which improvements are 
needed. Competition for advantage in markets through superior customer 
value delivery); Jane Goodman-Delahunty, Promoting Consumer Complaints 
in the Financial Sector (2001) (Industry providers should affirmatively 
encourage consumer complaints. Consumer complaints can be a valuable 
resource regarding defects in products and services that can otherwise 
result in a loss of business and market share).\38\
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    \38\ See also Heller v. Shaw Industries, 1997 WL 786542 (E.D. 
Pa) at *5 (consumer complaints held confidential).
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    After carefully considering the comments and other information of 
record, NHTSA has determined that the release of EWR consumer complaint 
data on light vehicles, medium-heavy vehicles and buses, motorcycles, 
trailers, and child restraint systems is likely to cause substantial 
harm to the competitive positions of the manufacturers that submit the 
data.
    The EWR consumer complaint data amount to compendiums of 
comprehensive information on consumer complaints. The manufacturers' 
reports cover broad landscapes of makes and models of motor vehicles 
and child restraints, providing information on current models and those 
produced in the previous 10 years for motor vehicles and 4 years for 
child restraints. They address numerous components and systems of 
vehicles and equipment and, for certain vehicles, include rollovers and 
fires. See, e.g., 49 CFR 579.21(b)(2); 49 CFR 579.22(b)(2). The 
comprehensive nature of the compendiums of EWR data on consumer 
complaints is enhanced by their continuing content, which is updated by 
quarterly reports, and by their standardized reporting format. They can 
be used for industry-wide comparisons on these numerous systems and 
components. The amount of consumer complaint data is substantial. For 
the first 15 quarters of EWR data, an average of 65 light vehicle 
manufacturers per quarter reported over 12 million consumer complaints; 
an average of 87 medium-heavy vehicle and bus manufacturers reported 
over 365,000 consumer complaints; an average of 18 motorcycle 
manufacturers per quarter reported nearly 51,000 consumer complaints; 
an average of 285 trailer manufacturers per quarter reported nearly 
97,000 consumer complaints and an average of 20 child restraint 
manufacturers reported a combination of nearly 65,000 consumer 
complaints and warranty claims.
    The manufacturers that submit the data expend considerable sums to 
collect the information. This includes staffing phone centers, 
reviewing mail and considering electronic communications.
    The consumer complaints that are amassed and binned by individual 
manufacturers for EWR reporting are collected for each manufacturer's 
internal use. The data are not publicly available and are highly 
proprietary.\39\ The data could not be replicated easily at any price.
---------------------------------------------------------------------------

    \39\ The disclosure of consumer complaint data in investigations 
is limited. It does not involve a compendium of information that is 
fairly comparable to the EWR data.
---------------------------------------------------------------------------

    Manufacturers compete and expend substantial amounts of research 
money on consumer satisfaction and quality in the market. There is 
competition to introduce new models and features that meet customer 
satisfaction. Companies seek to keep customers satisfied in order to 
maintain and grow their customer base. At the same time, companies seek 
to avoid expenses incurred in rectifying quality problems and the 
associated customer dissatisfaction that attends such problems. It is 
well recognized that consumer complaints are commercially valuable. 
This is recognized in the literature. They are particularly valuable in 
the highly competitive motor vehicle and equipment industries.
    EWR consumer complaint data are a very valuable information 
compendium on customer satisfaction of vehicles and child restraints. 
This data base provides information on perceived problems with the 
company's product. As Harley-Davidson explained, the data are 
reflective of opinions from consumer contact. This is valuable to 
companies, which depend on satisfying customers. Disclosing this added 
feedback, which a submitter obtained through considerable effort, would 
provide useful information to competitors.
    More broadly, the data also reveal market responses to various 
aspects of vehicles and equipment. They provide feedback on new 
features, areas requiring consumer education and issues that could 
potentially require field or production adjustments, regardless of 
safety. Customer inputs such as complaints help identify areas where 
field experience is showing an issue.
    Companies track what competitors are introducing, including product 
modifications and new technologies. Suppliers, which commonly promote 
the introduction and use of their equipment, are known. What is not 
known is whether a product was well received. If the consumer complaint 
information were publicly available, competitors could and likely would 
use it to learn whether there is a market reaction to any new 
technology, supplier or product changes or new marketing effort. The 
information would be valuable to competitors who may be considering 
deploying similar or competing technology. Competitors could rely on 
EWR information in making critical decision such as when to enter the 
market, which technology or suppliers to use, or how to best market the 
technology. The value of this information is in that it would enable 
competitors to use information created by significant input to advance 
their own commercial interests.
    In addition, the EWR consumer complaint information amounts to a 
data bank of quality control information of a manufacturer's products, 
model-by-model and system-by-system. It provides in-use information on 
technologies. Competitors can engage in ``tear downs'' of another 
company's products. They can run lab tests. But

[[Page 59448]]

efforts such as these fall short of providing a good understanding of 
the quality of a product in operation in the field. EWR consumer 
complaint data provide information on the reliability and durability of 
various systems and components. Competitors would use this information 
to evaluate a particular technology or supplier, at a lower risk and 
cost than otherwise attainable, because the competitor would not have 
to develop that information. Using this information, competitors could 
base decisions whether (or not) to employ certain technologies or 
suppliers to a substantial degree on their reviewing a submitter's EWR 
complaint information. While the manufacturer submitting the data would 
have expended substantial resources in deciding whether to install a 
particular technology, the competitor would gain a real world 
evaluation without the time, expense and risk associated with product 
development that would normally occur with field-testing and associated 
pre-production modifications. Beyond selection of a technology, there 
are often questions on the preferable design approach. The EWR 
complaint data would enable one company to use the experience of others 
to select an optimal design. If released, a competitor could view this 
information, a model-to-model comparison on the numerous systems and 
components in EWR reports, and reach valuable conclusions. The release 
of the data would permit wholesale industry-wide comparisons of the 
quality or durability of significant components on models chosen for 
comparison.
    In a similar vein, EWR consumer complaints are useful in evaluating 
field experience and product performance. Complaints (or the absence 
thereof) reveal the performance of materials and components that are 
successful and those that are not. The disclosure of consumer complaint 
data would provide competitors with valuable and previously unavailable 
insight into the field experience and performance of a submitter's 
entire product line and individual systems and components. Competitors 
could use this information to assess the in-use performance of parts 
and systems. EWR consumer complaint data help identify where 
technological and engineering improvements that might better satisfy 
customers and provide guidance to prioritize resources to implement 
these improvements. It could also be used to select a production 
process or make purchasing, pricing, and sourcing decisions, while 
avoiding the cost and risk that would otherwise be encountered. This 
would have competitive impacts.
    The EWR consumer complaint information would also provide a 
competitor with information about the submitter's cost structure. In 
some contexts, the data would reveal rates of problems. These rates are 
an important factor in the costs of various technologies. Competitors 
could evaluate the information and make decisions whether to pursue 
various products or marketing strategies based on an assessment of the 
submitter's costs.
    Additionally, the EWR data provide competitors with valuable 
insights into a given manufacturer's business practices and 
decisionmaking, including the methods used to collect consumer 
complaints.
    Public Citizen agreed that consumer complaint information has 
value. But it disagreed in a general and conclusory manner with the 
proposal's view that EWR consumer complaint data is competitively 
valuable. Public Citizen filed its comments in 2007 long after both the 
close of the comment period on the NPRM and after the industry 
commenters had submitted comments. Its opinions that the reporting of 
only numbers of complaints greatly hinders the data's usefulness and 
that these data are extremely basic and require no unnecessary details 
about company operations or future company plans were contrary to the 
weight of the comments. Public Citizen did not provide facts to rebut 
the statements of the industry commenters.\40\ Moreover, the industry 
has experience in considering consumer complaints and explained the 
value of these EWR data.
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    \40\ Some of Public Citizen's comments were based on a 
misunderstanding of the proposed rule. Public Citizen referred to 
fatalities, injuries and property damage claims, but those were 
outside the scope of the proposed rule.
---------------------------------------------------------------------------

    As the court recognized in Worthington Compressors, Inc. v. Costle, 
662 F.2d 45, 51-52 (D.C. Cir. 1981):

    If * * * competitors can acquire the information only at 
considerable cost, agency disclosure may well benefit the 
competitors at the expense of the submitter. * * * Because 
competition in business turns on the relative costs and 
opportunities faced by members of the same industry, there is a 
potential windfall for competitors to whom valuable information is 
released under FOIA. If those competitors are charged only minimal 
FOIA retrieval costs for the information, rather than the 
considerable costs of private reproduction, they may be getting 
quite a bargain. Such bargains could easily have competitive 
consequences not contemplated as part of FOIA's principal aim of 
promoting openness in government. * * * [T]he essential test is the 
same: whether release of the requested information, given its 
commercial value to competitors and the cost of acquiring it through 
other means, will cause substantial competitive harm to the business 
that submitted it.

    The release of EWR consumer complaint information collected at 
considerable cost by manufacturers would have competitive consequences, 
as recognized in Worthington Compressors. The submitters expend 
considerable sums to gather large volumes of EWR data. Their 
information is valuable and could be used by competitors. The release 
of it would be to the significant benefit of the competitors of the 
submitters and to the detriment of the competitive position of the 
manufacturers that submitted the information.\41\
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    \41\ As an alternative basis for confidentiality, the disclosure 
of the comprehensive compendiums of EWR information would likely 
result in result in consumer misuse. In Worthington Compressors, 662 
F.2d at 53 n.43, the court permitted the consideration of consumer 
misuse of commercial information that is otherwise unavailable. (On 
remand, if the court finds the tests cannot be accurately 
duplicated, it should consider whether competitors or consumers may 
misuse the information to the detriment of appellants' competitive 
positions). The disclosure of the EWR information would be 
misleading to consumers and unfair to the submitting manufacturers. 
Consumers would attempt to make comparisons of the performance of 
one model to another across multiple model years, on a quarterly 
basis, which can not be done. The underlying foundations for the 
data are not the same. Different manufacturers have different 
systems for collecting consumer complaints. Some have wider nets 
than others. The net result would be unfair, unsubstantiated, and 
misleading comparisons. These comparisons would adversely affect the 
competitive positions of manufacturers in a way that was unfair.
    Public Citizen has asserted that this analysis amounts to an 
unwarranted product disparagement theory, and contends that the harm 
occurring from the disclosure of these data amounts to adverse 
public reaction, which is not a cognizable harm under Exemption 4. 
The agency disagrees with this attempt to recharacterize the harm. 
Since the EWR data are competitively sensitive for a valid reason 
under Exemption 4, other potential consequences such as adverse 
public reaction, do not dictate that we treat the information as 
non-confidential. Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 
341 (D.C. Cir. 1989).
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    Public Citizen suggested that the data should be released because 
they involve safety concerns.\42\ This is not a valid characterization 
of the data. By definition, consumer complaint data go well beyond 
safety data. 49 CFR 579.4. Also, our experience over 4 years has been 
that the vast bulk of consumer complaint data are not indicative of 
defect trends.
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    \42\ Public Citizen referred to dangerous products that injure 
and kill people. It also stated that the release of the data will 
encourage the production of better products which ultimately will 
benefit industry. Public Citizen did not support this statement, and 
it is outside the considerations under Exemption 4.
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    Public Citizen had also raised issues about the availability of the 
EWR

[[Page 59449]]

complaint data. These data are not publicly available, as repeatedly 
stated by industry commenters, and Public Citizen has not shown 
otherwise. The limited disclosures of limited consumer complaint data 
by the agency in ODI defect investigations of particular problems in 
specific products do not resemble the breadth or scope of the 
information that is submitted pursuant to the EWR rule. The agency's 
valid reasons for choosing to disclose certain data during 
investigations (e.g., to elicit additional consumer attention 
concerning a possible, specific defect, or to inform consumers of the 
specific scope of an investigation or recall) are not applicable in the 
EWR context. Similarly, the data collected by third-parties such as 
Consumer Reports and other publications is not comparable in depth, 
breadth or scope, and Public Citizen did not show otherwise.
    As the Alliance and others explained, NHTSA's current practice of 
generally disclosing limited, model- and model-year-specific consumer 
complaint numbers when such information relates to specific defect 
investigations does not justify the wholesale release of the EWR data. 
To the extent such limited disclosures are competitively useful, it is 
primarily to identify whether another manufacturer may have a similar 
issue (e.g., uses the same part and has a similar failure experience). 
These limited disclosures do not offer the same market-oriented base of 
information as the comprehensive collection of trend data provided 
pursuant to the EWR rule. Non-industry commenters did not dispute these 
points. As a result, a comparison between publicly available complaint 
data and the compendium of EWR complaint data submitted by 
manufacturers is not valid.

Impairment

    In addition to proposing to hold EWR consumer complaint data 
confidential on grounds of competitive harm from their release, the 
NPRM proposed to hold these data confidential under the impairment 
prong of FOIA Exemption 4. 71 FR 63743. As reflected in that notice, 
manufacturers may obtain and receive customer input and feedback on 
product performance in a variety of ways, and establish differing 
practices for the receipt of customer complaints. The nature and level 
of effort expended by a company is discretionary. It is beneficial to 
NHTSA if a company expends considerable effort. More consumer input 
channels increase the robustness of the available data, which is 
submitted under the EWR program. Consumer complaints provide feedback 
on product performance that can be valuable to NHTSA in identifying 
problems, including potential defects that may point to the presence 
(or absence) of a safety problem. The agency seeks to ensure that it 
receives as much information as possible to identify possible defect 
trends.
    Under the early warning reporting provisions of the Safety Act, 
however, NHTSA may not require a manufacturer of a motor vehicle or 
motor vehicle equipment to maintain or submit records respecting 
information not in the possession of the manufacturer. 49 U.S.C. 
30166(m)(4)(B). In other words, NHTSA may require manufacturers to 
submit reports based on information that they have collected but may 
not require manufacturers to collect and submit information not 
otherwise collected. In view of the fact that the quantity and 
comprehensiveness of the EWR consumer complaint data depend in part on 
the willingness of manufacturers to collect this information through a 
broad and multi-input approach, NHTSA does not want to take steps that 
discourage the collection efforts.
    Both industry and non-industry commenters addressed the agency's 
proposal. Industry commenters stated that a class determination for 
consumer complaints was justified on the basis that disclosure would 
impair the agency's ability to obtain this information in the future.
    The Alliance stated that there are variations in how manufacturers 
conduct their consumer complaint programs. Manufacturers can alter the 
manner in which these programs are conducted based on a variety of 
internal considerations, benefits, and costs. The Alliance cited a 
purpose of the TREAD Act, which is to enhance the ability to carry out 
the Safety Act, a purpose of which is to reduce the number of accidents 
and the fatalities and injuries arising from them. The Alliance 
reiterated an earlier statement by NHTSA (which is of continuing 
validity) that the agency's ability promptly to identify safety related 
defects would not be enhanced if disclosure of EWR data diminishes the 
volume or reliability of the information. Nor would the public interest 
in vehicle safety be served if disclosure has the result of 
discouraging manufacturers from being responsive to consumer concerns 
that may relate to motor vehicle safety or imposing greater costs on 
consumers who need to address such concerns. Confidential treatment of 
those data is necessary to avoid creating a disincentive to the 
continued voluntary creation of the information, since there is no 
requirement to collect the information in the first instance. The 
Alliance concluded that NHTSA's ability to collect comprehensive EWR 
information and, thus, its ability to address defect trends indicated 
by EWR data, will be impaired if the data are released. The Alliance 
also noted that apart from the early warning context, a reduction in 
consumer complaint data would have a deleterious effect on NHTSA's 
ability to conduct the defect investigations that it has opened.
    Utility emphasized that the quality and quantity of information 
relating to consumer feedback that NHTSA receives depends largely on a 
manufacturer's willingness to expend financial and administrative 
efforts to collect such information. It advised that manufacturers who 
currently collect and organize this information would be less inclined 
to do so if the information were disclosed and ended up generating 
frivolous lawsuits, the defense of which further raises the cost of 
doing business.
    AIAM stated that the public disclosure of the complaint information 
would impair NHTSA's interests in promoting safety. If less complete 
information relating to safety issues is provided to the agency faulty 
decisions could follow.
    In contrast, Public Citizen asserted that NHTSA has not shown that 
making the data public would hinder its ability to collect this 
information in the future. In Public Citizen's view, in light of the 
extreme value of consumer complaints to manufacturers, they are 
unlikely to stop collecting this information and unlikely to alter 
their practices in collecting complaints. It added that companies could 
not cease receiving complaints. Public Citizen also asserted that past 
events, such as the Ford/Firestone problems, illustrate the interest of 
the public in EWR data. Public Citizen further stated, without 
citation, that Congress intended for the public to use the data to 
monitor whether NHTSA is fulfilling its obligation to investigate 
significant safety issues. Finally, Public Citizen contended that the 
standard for withholding information under the impairment prong has not 
been met.
    Public Citizen has maintained that the impairment prong of FOIA 
Exemption 4 requires a rough balancing of the importance of the 
information and the extent of the impairment against the public 
interest in disclosure, citing Washington Post v. HHS, 690 F.2d 252, 
269 (D.C. Cir. 1982); Washington Post v. HHS, 865 F.2d 320, 326-27 
(D.C. Cir. 1989). However, in Public Citizen Health Research Group v. 
FDA, 185 F.3d 898, 904-05 (D.C. Cir. 1999), the

[[Page 59450]]

Court rejected ``a consequentialist approach to the public interest in 
disclosure'' as ``inconsistent with the ``[balan[ce of] private and 
public interests' th[at] Congress struck in Exemption 4.'' The Court 
went on to state that ``[t]hat balance is accurately reflected in the 
test of confidentiality'' established by National Parks and that a 
requester cannot ``bolster the case for disclosure by claiming an 
additional public benefit'' in release. Id. at 904. In other words, 
``the public interest side of the balance is not a function of'' among 
others ``any collateral benefits of disclosure.'' Id. Accordingly, an 
Exemption 4 case may not be bolstered by claiming an additional public 
benefit from disclosure of data is beyond the test of National 
Parks.\43\ In the following discussion, we will address the impairment 
that would result from disclosure. While we do not accept the balancing 
test under Exemption 4 advanced by Public Citizen, in the alternative, 
we will address a rough balance between the importance of the 
information and the extent of the impairment against the public 
interest in disclosure.
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    \43\ Public Citizen asserted that a guiding tenet of both FOIA 
and the TREAD Act's early warning system is to ensure that the 
public has the ability to monitor government institutions and 
protect themselves by being informed of potential defects. This is 
unsupported. This is not the guiding tenet of FOIA Exemption 4 and 
this was not the purpose of the early warning rule. The purposes 
were to enhance the Secretary's ability to carry out the Safety Act 
and assist in the identification of defects related to motor vehicle 
safety. 49 U.S.C. 30166(m)(1), (3)(A).
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    NHTSA's Office of Defects Investigations (ODI) has long viewed 
consumer complaints as a critical aspect of the data the agency 
considers to identify potential vehicle and equipment problems. 67 FR 
at 45847 (July 10, 2002). For this reason, NHTSA included consumer 
complaints in EWR reports. 67 FR at 45847-51. Consumer complaint 
information is a useful pointer to areas that, after appropriate 
assessment, may lead to defect investigations and ultimately to the 
remedy of safety defects. The importance of consumer complaints 
increases as warranties expire and the availability of warranty claims 
information correspondingly diminishes. The EWR regulation assures that 
the agency receives information about the amount of complaints received 
by manufacturers as to each of the specified components or systems.
    Our experience in defect investigations has been that companies 
generally receive considerably more consumer inputs than does the 
agency on any actual or potential vehicle problem. 67 FR at 45848. 
Because manufacturers ordinarily receive more complaints than consumers 
send to the agency, the agency must rely on manufacturer efforts to 
continue to amass as much information as possible. Companies may 
receive customer input and feedback on product performance in a variety 
of ways and establish differing practices for the receipt of 
complaints. The EWR definition takes this possibility into account. 
Companies may increase available staff at their toll-free telephone 
numbers or create web-based systems to accept complaints via electronic 
mail. Additional input sources increase the robustness of available 
data, which can be valuable both to the company collecting it and to 
NHTSA in identifying problems--including problems that may point to the 
presence (or absence) of a safety-related defect.
    The disclosure of consumer complaint information would be likely to 
discourage manufacturers' proactive efforts to obtain these data or to 
expend sums to receive more information or to use it more effectively. 
The release of the EWR information would not eliminate manufacturers' 
collection of consumer complaints, but they likely would take steps to 
reduce the collection of complaint data in order to improve their 
numbers. As a direct result, NHTSA would collect considerably less data 
in the future. The agency would be faced with attempting to conduct 
analyses with less robust reporting from manufacturers. NHTSA's ability 
to identify potential safety defect trends would be impaired. Such a 
result would affect the agency's ability to carry out the early warning 
program.\44\ In sum, the disclosure of the information would be likely 
to impair NHTSA's ability to obtain necessary information in the 
future.
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    \44\ Limited disclosure of consumer complaint data collected by 
manufacturers during ODI investigations is different from the 
disclosure of EWR data sought by Public Citizen and others. The 
consumer complaint data released in the course of agency 
investigations is limited. It involves limited models and model 
years and specific alleged problems. EWR data amount to full 
compendiums, across makes, models and model years involving numerous 
systems. The release of consumer complaint data in investigations 
does not negate the competitive value of the EWR data or the likely 
impact that wholesale (rather than piecemeal) disclosure would have 
on submitters. We also note that there are benefits of releasing 
information in investigations, such as providing for public input 
which could enhance the agency's understanding of an issue. Also, 
data collections on consumer assessments by third parties are not 
comparable to the volume and depth of information received under the 
EWR rule.
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    On the other hand, the public would not receive significant, if 
any, safety benefits from the release of EWR consumer complaint 
information. The EWR data cover a wide range of consumer satisfaction 
issues. As explained in the preamble to the EWR rule, we sought to 
obtain complaint information beyond that which would be likely to 
involve safety issues:

    The agency is unwilling to adopt the recommendation that the 
complaint must allege a safety-related defect, as this would unduly 
limit the reporting of consumer complaint information that NHTSA is 
seeking to collect through the early warning reporting rule. As 
stated in the NPRM, based on its past experience with defect 
investigations, the agency does not ``believe that [it] would be 
appropriate to simply require reporting of `safety-related' 
problems, since manufacturers often have a much more narrow view of 
what constitutes a safety-related problem tha[n] we do.'' [66 FR] at 
66202. If the term ``consumer complaint'' were limited to complaints 
specifically alleging a safety-related defect, communications 
expressing dissatisfaction with a product or relating that the 
product did not perform in a satisfactory manner would not 
necessarily be reported to the agency. 67 FR at 45849.

The agency included this category of information in the early warning 
program to ensure the collection of a comprehensive amount of data for 
it to use in its analysis. This has proven true. The vast majority of 
this information has not been indicative of defect trends.

    NHTSA also has balanced the importance of consumer complaints and 
the extent of the impairment to the government against the public 
interest in disclosure. The importance of complaints is well-
established. The magnitude of the numbers of complaints is important to 
us, as in our screening we will look for trends based in part on 
relatively high rates. We believe that, given manufacturers' 
substantial control over information collection, if the numbers of 
consumer complaints were disclosed to the public, it is likely that the 
numbers of consumer complaints would be reduced considerably and, as a 
consequence, our ability to detect potential safety problems would be 
substantially diminished.
    On the other hand, the public interest in disclosure of consumer 
complaints is limited. If the data were released, the public would have 
a generalized awareness of consumer dissatisfaction or a perception of 
a potential or actual problem broken out by the elements provided in 49 
CFR Part 579. But based on EWR complaint data alone, it is not possible 
to identify a safety defect in a particular product. And, unlike ODI 
investigations, a specific potential defect is not identified in EWR 
data. Thus, to the extent balancing is required, the impairment prong

[[Page 59451]]

balancing weighs in favor of nondisclosure of consumer complaint data.
3. Warranty Claims
    The EWR rule requires larger volume manufacturers of light 
vehicles, medium-heavy vehicles and buses, motorcycles, and trailers to 
submit the number of warranty claims, without regard to whether they 
are safety-related, that they have paid, broken out, for each make and 
model, by numerous specific categories of vehicle systems (e.g., 
steering, brakes), fires and for certain categories rollovers--all of 
which are binned by code. See 49 CFR 579.21(c), 579.22(c), 579.23(c), 
579.24(c). In addition, the rule requires manufacturers of tires to 
report warranty adjustments they paid, other than for relatively low 
volume tire lines, on a number of categories of tire failures, such as 
the tread and sidewall. 49 CFR 579.26(c). In the child restraint 
category, warranty claims are combined with consumer complaints. 49 CFR 
579.25(c). Repairs made outside of warranties that are covered by 
``good will'' are also reported under warranty claims and warranty 
adjustments.\45\ 49 CFR 579.4.
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    \45\ These data include ``good will'' repairs that are conducted 
and paid for by the manufacturer outside of the warranty. ``Good 
will'' means ``the repair or replacement of a motor vehicle or item 
of motor vehicle equipment, including labor, paid for by the 
manufacturer, at least in part, when the repair or replacement is 
not covered under warranty, or under a safety recall reported to 
NHTSA under part 573 of this chapter.'' 49 CFR 579.4.
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    The EWR warranty data reflect the costs that manufacturers have 
incurred in satisfying claims for payments arising from problems with 
their products. Ordinarily, those costs are the costs of repairs of 
vehicles or the repair or replacement of equipment. The early warning 
data on warranty claims involve a wide range of issues. For the most 
part they do not reflect defect trends.
    In the NPRM, the agency proposed to make a class determination that 
warranty claims (warranty adjustments in the tire industry) in EWR data 
would not be released to the public. 71 FR at 63743. The agency based 
this proposed class determination on both the competitive harm and 
impairment prongs of National Parks. We first address the competitive 
harm from the release of EWR warranty claims data, then we discuss the 
impairment to the agency's ability to obtain as complete warranty 
information that would follow the release of the information.

Competitive Harm

    Numerous commenters have provided information to the agency on 
whether the disclosure of EWR warranty claims and warranty adjustment 
data (collectively warranty claims) would be likely to cause the 
submitting manufacturer to suffer competitive harm. This includes both 
industry and non-industry groups.
    Commenters from various sectors of the automotive industry 
explained the competitive value and use of EWR warranty claims data as 
well as the competitive harm that the release of the data likely would 
cause. As noted in the discussion of consumer complaints above, at the 
outset of its comments, the Alliance showed manufacturers compete 
vigorously for sales of new vehicles. Similarly, there is substantial 
competition for tire sales. The manufacturers expend substantial 
amounts of research money annually related to quality and consumer 
satisfaction in the market for new sales.
    The EWR warranty data are a comprehensive compendium of warranty 
claims. They cover numerous systems and components (e.g., 18 for light 
vehicles and 22 for medium heavy vehicles), as well as fires and 
rollovers for many reporting industry sectors. They cover makes and 
models going back many years and are updated quarterly. As noted by the 
Alliance, their value is enhanced by their continuing content, which 
permits a model-to-model comparison on the numerous systems and 
components in EWR reports. The data are proprietary and are not 
publicly available.
    Manufacturers have submitted a significant volume of warranty 
claims data to NHTSA under the EWR program. According to comments, the 
manufacturers have expended tens of millions of dollars in reporting 
under the program. The release of EWR warranty data would permit 
wholesale industry-wide comparisons of the quality or durability of all 
significant systems or components on models chosen for comparison. 
Disclosure of this information, as the Alliance explained, would 
financially benefit others who obtain and use the data for purposes 
that would be contrary to the competitive interests of the submitting 
manufacturers.
    The Alliance's discussion of EWR warranty data addressed the 
competitive aspects of those data including the competitive 
consequences of the release of warranty information in a context that 
also addressed consumer complaints and field reports. The Alliance 
explained that the EWR data provide valuable information on quality and 
consumer satisfaction of vehicle owners on a make/model/model-year 
basis.\46\ The Alliance emphasized that warranty claims information is 
particularly sensitive from a competitive standpoint. Additionally, the 
Alliance noted that EWR data provide valuable insights into a given 
manufacturer's business practices and decisionmaking, including the 
application of warranty terms and conditions, the coverage of products 
and systems by a given warranty, and the manufacturer's willingness to 
provide good will adjustments after the end of an official warranty 
period.
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    \46\ The Alliance asserted that the comprehensive nature of 
these submissions--covering all makes and models over a multi-year 
timeframe--makes them a valuable compendium of quality and consumer 
satisfaction information that could not be replicated easily at any 
price and could be used by competitors to follow warranty trends 
that provide a window into submitters' warranty costs. The Alliance, 
citing Worthington Compressors, pointed out that the release of 
information collected at considerable cost by an entity that 
submitted information to the Government could easily have 
competitive consequences. The submitters expend considerable sums to 
gather large volumes of EWR data and the release of it would be 
contrary to the competitive interests of entities that submit the 
information and to the benefit of competitors.
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    The Alliance referred to a report from a consultant, AutoPacific, 
which made several observations regarding the value and use of warranty 
data. Under a competitive harm analysis heading, AutoPacific stated 
that it is well-known that automobile and component manufacturers 
closely guard their warranty data for competitive product design and 
pricing reasons. Comparative component warranty, reliability, and 
durability experiences strongly influence component pricing and 
sourcing decisions. If an original equipment manufacturer (OEM) \47\ 
purchases a component and obtains field experience with that component, 
it can be expected to use that information to make decisions about 
purchases and the prices it will pay. Providing that field experience 
to other manufacturers gives them a free ride at the submitter's 
expense. Auto Pacific also observed that component manufacturers can 
use vehicle manufacturer warranty data in preparing bids for new 
business, planning new business marketing strategies, and estimating 
the likely costs and pricing positions of vehicle manufacturers, with 
whom they may compete for sales in the aftermarket. The warranty claim 
experience at the component level could be useful to them, to the 
detriment of the vehicle manufacturers.
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    \47\ OEMs may be contrasted to aftermarket equipment 
manufacturers that produce replacement equipment.
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    The Alliance pointed out two aspects of warranty claims data that 
are

[[Page 59452]]

particularly sensitive from a competitive standpoint and explained that 
vehicle manufacturers and their dealers would be placed at a particular 
competitive disadvantage should EWR warranty claims information be 
released. Vehicle manufacturers, often through their franchised 
dealers, compete with independent aftermarket parts manufacturers for 
sales of parts used in repairs. Those independent aftermarket parts 
manufacturers would gain a significant competitive advantage from 
having routine access to warranty claims experience on the detailed 
level of EWR reporting. As an example, they would know the trends in 
warranty experience on brakes of various makes and models. The value of 
such information to aftermarket parts manufacturers is evidenced by 
publications sold by the Motor and Equipment Manufacturers Association/
Original Equipment Suppliers Association (MEMA/OESA) that include 
forecasts and historical trend data where available. Aftermarket sales 
in the light duty market, the Alliance estimated, were $197 billion in 
2005.\48\ The sale of these data by aftermarket parts manufacturers 
illustrates the value of the data and the associated competitive harm 
from the release of a comprehensive collection of warranty claims 
experience. With this information, the Alliance explained, aftermarket 
parts manufacturers would know where to target their marketing efforts 
when vehicles come off warranty and benefit from this information at 
the direct expense of the vehicle manufacturers' competitive positions 
and their franchised dealers.\49 \
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    \48\ The Alliance stated that this figure was based on estimates 
from the Automotive Aftermarket Industry Association. However, the 
Association estimates that the amount of business in this area is 
much larger--nearly $270 billion. See http://www.aftermarket.org/ 

(Press Release No. AAIA-26-06 (June 15, 2006) (reporting that 
aftermarket business related to light vehicles for 2006-2007 
increased to $267 billion).
    \49\ Comments by the MEMA/OESA lend further support to the value 
of the data. MEMA/OESA pointed out that the warranty data of 
original equipment manufacturer (OEM) suppliers are of particular 
value to replacement parts and equipment manufacturers and that 
their wholesale disclosure would likely cause these suppliers to 
suffer serious competitive injury if the data are disclosed. It 
explained that this information is highly sought and competitively 
sensitive marketing intelligence. Suppliers would undoubtedly 
benefit from the disclosure of this information.
---------------------------------------------------------------------------

    The Alliance also stated that warranty claims should be withheld 
from public release on grounds of the existence of competition from new 
and potential new entrants to the U.S. market. In particular, it noted 
several Korean-based companies and the possibility of Chinese, Russian 
and European companies entering or reentering the United States market. 
Release of EWR information, it argued, would provide these potential 
competitors with access to an otherwise unavailable collection of 
comprehensive data about manufacturers' experiences with various 
components. These new entrants could benefit by reviewing EWR warranty 
data to estimate the probable ranges of warranty claims rates (and by 
inference, the associated costs), without having to expend resources to 
try to obtain this information privately, such as by paying for market 
research, or to take the risk of entering the market without the 
benefit of this information. Providing this field experience, the 
Alliance stated, would provide them with a free ride at the expense of 
the first manufacturer. The Alliance asserted that this is a 
competitive harm within the meaning of Worthington Compressors, 662 
F.2d at 51-52.
    GM, a manufacturer of both light vehicles and medium-heavy 
vehicles, pointed out it maintains the confidentiality of warranty 
data. It views the data as proprietary and does not disclose 
voluntarily warranty data of the type and scope submitted under the EWR 
rule.\50\ GM explained that manufacturers will be harmed by the 
competitive use of EWR warranty data. Because the EWR warranty claims 
represent costs incurred by manufacturers, counts of warranty claims 
provide an index of a manufacturer's costs. Cost information is 
competitively sensitive.\51 \
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    \50\ GM also explains that its own suppliers do not have full 
access to its warranty data and that any data that GM shares must be 
treated by those suppliers as proprietary information.
    \51\ GM supported the statements in its comments with several 
examples of the manner in which competitors could use the 
information to their benefit and the detriment of the entity 
submitting the data, including reduced testing and analysis, and 
performance issues in the field:
     A supplier offers a newly designed system to OEMs. 
While reverse engineering and testing by multiple OEMs is possible, 
those approaches do not duplicate field experience in numerous 
vehicles. If one OEM (OEM1) installs the system in vehicles, it 
would gain field experience and could use it to make better 
decisions about the future use of the system. If the EWR warranty 
claims data were disclosed, other OEMs would have access to some of 
the same information and would be able to make their decisions with 
less extensive testing and analysis.
     Two OEMs may purchase systems with similar designs from 
the same supplier, but the OEM with a greater sales/production 
volume may learn something about its performance first and use its 
knowledge to improve its product. If the other OEM has access to 
this company's information, it may be able to respond sooner and 
offset OEM1's competitive advantage.
     If two OEMs are using the same systems/components from 
the same supplier, differences in performance of those systems may 
be exposed in the field due to differences in how each of those OEMs 
integrated those systems/components into its vehicle designs. After 
reviewing its competitor's EWR warranty data, an OEM ``may be able 
to alter its vehicle design integration sooner based on differences 
in field performance, which would offset the other OEM's competitive 
advantage.
     Warranty claims information on newly released vehicles 
can be used by competitors to decide what to emulate and what not to 
emulate without the expense of implementing those systems and 
processes.
---------------------------------------------------------------------------

    GM stated that since vehicle manufacturers increasingly purchase 
entire systems (i.e. all components used to perform a specific function 
such as steering, suspension, heating and cooling, occupant restraints, 
or seats) from suppliers, the disclosure of these data would provide 
competitor vehicle manufacturers with the warranty claims experience of 
systems made by various potential suppliers (e.g., for GM) that would 
give these competitors an advantage in selecting suppliers, at the 
expense of the manufacturer whose experience underlies the data.
    Also, competitors could use these data to assess the effectiveness 
of a particular OEM's systems and processes to identify and resolve 
quality and lead time issues. As GM explained, the loss of confidential 
information would force it or another OEM to subsidize other OEMs, 
reducing their costs at GM's expense and destroying GM's competitive 
advantage. GM also pointed out that OEMs compete for replacement part 
sales with other companies and that the release of warranty claims data 
can be used by these aftermarket competitors to make decisions on what 
parts to produce, in what quantities and at what price. This, GM noted, 
is a source of competitive harm.
    AIAM focused on the totality and comprehensive nature of the EWR 
data. AIAM's comments, which were discussed above in the context of 
consumer complaints, applied with at least equal force to warranty 
claims. AIAM stated that EWR warranty data would provide competitors 
useful information about the quality levels and the cost structure of 
the submitter. It would enable one company to use the experience of 
another to select an optimal design, production process and pricing 
strategy, while avoiding the cost and risk that would otherwise be 
encountered. We refer by reference to the discussion of AIAM's comments 
above.\52\
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    \52\ AIAM stated, for example, that a knowledgeable competitor 
can view this mosaic of information and reach valuable conclusions. 
The comprehensive body of EWR information facilitates manufacturer-
to-manufacturer comparisons. EWR warranty data would provide 
competitors useful information about the quality levels achieved by 
the submitting manufacturer or its suppliers, both for technologies 
used in vehicles and in their accompanying production processes, 
which permits competitors to evaluate a particular technology, 
process or supplier, at a risk and cost that is lower than otherwise 
attainable. Using this information, AIAM explained, competitors 
might be able to base decisions and reach conclusions to pursue 
certain technologies to a substantial degree on their reviewing a 
submitter's EWR warranty information. The submitter may have 
expended substantial resources to help it decide whether to pursue a 
particular technology, while the competitor would gain a real world 
evaluation free of cost or the effort of a real world evaluation. 
This would impair the competitive position of the submitter. The EWR 
information would also provide a competitor with information about 
the submitters' cost structure. Claims are an important factor in 
the costs of various technologies. Competitors could evaluate this 
cost information and make decisions about whether to pursue various 
products or marketing strategies based on the submitter's costs 
without undertaking the risks of producing a vehicle with the 
particular technology.

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[[Page 59453]]

    Nissan stated that, in addition to their role as an accounting 
system between manufacturers and their dealers that is designed to 
maintain customer satisfaction, a purpose of warranty systems is to 
quickly identify issues. Warranty data assist manufacturers in 
implementing production adjustments or service actions to ensure that 
products are operating as intended and meeting consumer expectations. 
Nissan pointed out, for example, that warranty claims help the company 
identify areas where the field experience information suggests further 
investigation. The vast majority of these issues, it added, are not 
safety related.
    Nissan discussed the competitive consequences of the release of EWR 
warranty information together with consumer complaints and field 
reports.\53\ Of particular note, warranty data would be valuable in the 
context of vehicle manufacturers' changes of suppliers. Competitors 
could, for instance, learn that the aggregate number of warranty claims 
in a category rose with a change of suppliers. Warranty data also 
provide insight into a company's warranty practices, particularly 
``good will'' after a warranty expires.
---------------------------------------------------------------------------

    \53\ Nissan pointed out the competitive aspects of EWR warranty 
data. EWR warranty claims data help identify areas where field 
experience is showing an issue. The data can reveal market trends in 
both company costs and consumer reaction. Competitors could consider 
the data before deploying new technologies. They would rely on 
Nissan's information in making critical decisions on which 
technology or suppliers to use and when to enter the market and how 
best to market the technology to consumers. Competitors can use this 
information to determine market reactions, supplier or product 
changes, and new marketing efforts. Nissan further noted that this 
information is competitively valuable irrespective of whether the 
specifics of each claim are accessed by competitors because 
competitors can use these data to focus on a particular factor that 
can then be readily identified through reverse engineering.
    Nissan explained that it develops warranty information only 
after significant investment in engineering and/or market research. 
Competitors, including suppliers, could use the information created 
by the significant investment of the manufacturer that submitted the 
data. These data could be used competitively against a submitter.
---------------------------------------------------------------------------

    TMA addressed warranty information as part of its overall comments 
on the competitive harm from disclosure of EWR information. It stated 
that public availability of detailed, comprehensive warranty data for 
each model and model year across numerous components and systems will 
provide significant market intelligence to competitors. TMA pointed out 
that the release of the information would provide competitors with 
valuable information to evaluate the performance, reliability and 
durability of various components, without the expense and risk 
associated with product development that would normally occur with 
field-testing efforts, while shortening the amount of time competitors 
need to market competing products, to the competitive disadvantage of 
the submitting manufacturer.\54\
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    \54\ TMA stated that the EWR data that medium-heavy vehicle 
manufacturers report are comprehensive as they involve numerous 
vehicle systems as well as fires and rollovers. This compendium of 
EWR warranty data, model-by-model and system-by-system, has 
significant competitive value. TMA stated that the disclosure of EWR 
data would provide competitors with valuable and previously 
unavailable insight into the field experience and performance of a 
submitter's entire product line and individual systems and 
components. There are numerous uses that competitors could make of 
these data to their competitive advantage. TMA characterized the EWR 
information as a data bank of quality control information that 
competitors could use to assess the in-use performance of parts and 
systems. A competitor could use the reporting manufacturer's field 
experience, good or bad, while avoiding the costs, effort and risks 
that the reporting manufacturer has incurred. It would be used in 
purchasing, pricing, and sourcing decisions, all of which would have 
competitive impacts. TMA also cited a discussion by GM of EWR 
warranty data as a competitively valuable cost index and explained 
how EWR warranty data can be used.
---------------------------------------------------------------------------

    Blue Bird asserted that EWR warranty data are highly proprietary 
and have a high level of competitive sensitivity. If these data were 
available, competitors would have a free ride in learning about 
warranty experiences for various vehicle systems, components, and 
parts. It also stated that their wholesale disclosure would result in 
competitive harm.
    Harley-Davidson stated that warranty data are generally not 
disclosed by individual motorcycle companies. Warranty claims are part 
of continuous improvement, training programs and efforts to satisfy 
customers. The Motorcycle Industry Council echoed this concern, in 
light of the reservoir of information about customer satisfaction and 
quality concerns, and urged against the disclosure of warranty data.
    Utility explained that it uses warranty claims to help identify 
potential problems early in the life of a trailer and spot trends 
associated with potential problems. By analyzing such data, with its 
suppliers, Utility is able to update components, incorporate new 
technologies and achieve cost savings. Such information in the hands of 
competitors would enable them to assess the in-use performance of 
component parts, which in turn could be integral components of its 
purchasing, pricing and sourcing decisions.
    RMA, on behalf of tire manufacturers, asserted that NHTSA has 
treated tire manufacturer warranty adjustment data as confidential 
business information in the past. RMA asserted that because tire 
manufacturers use warranties as a marketing tool, adjustments are not 
necessarily an indication of tire performance.\55\ It argued in favor 
of a class determination to cover all tire warranty adjustment 
data.\56\ It further contended that since warranty data have been held 
confidential in the context of some investigations, the broader EWR 
warranty data base should be held confidential. As RMA observed, the 
tire industry competes tire line-by-tire line and even size-by-size. 
Tires are marketed by size in a given line.
---------------------------------------------------------------------------

    \55\ RMA stated that it is a party to a consent order with the 
Federal Trade Commission prohibiting the association from collecting 
or disseminating competitively sensitive information, including 
warranty information. It submitted a copy of the order with its 
comments. The order reflects a concern about tire company 
competitors sharing information.
    \56\ RMA suggested that this rulemaking should apply to warranty 
claim data submitted during defect investigations. Such a proposal 
is clearly outside the scope of this rulemaking, which applies to 
EWR data. As RMA has maintained (correctly) in legal proceedings, 
the vast majority of EWR data are not indicative of defect trends. 
Brief at 5-6 and 22; Reply Brief at 1 in Public Citizen v. Peters, 
No. 06-5403 (D.C. Cir.). We are declining RMA's suggestion.
---------------------------------------------------------------------------

    Several manufacturers advanced another consequence of disclosure: 
Misleading and unfair comparisons of the data. The Alliance explained 
that the disclosure of the comprehensive compendiums of EWR information 
would be misleading to consumers and unfair to the submitting 
manufacturers because consumers would attempt to make comparisons of 
the performance of one model to another, across multiple model years, 
on a quarterly basis, which, as the Alliance observed, can not be done. 
Similarly, AIAM stated that public disclosure of the data would create 
a great potential for misunderstanding and mischaracterization. AIAM 
pointed out that automotive warranties vary in

[[Page 59454]]

length and scope of coverage. A model having a higher claims rate may 
simply have a more comprehensive warranty than the second model, rather 
than inferior quality. Reports with simple comparisons could, in AIAM's 
view, affect the competitive positions of manufacturers in a way that 
was unfair. Also, TMA stated, with supporting explanation, that 
manufacturers and consumers could misuse the data to draw unfair and 
unsubstantiated and misleading comparisons regarding competitors' 
products.
    JPMA added that the release of the encyclopedia of quality 
information encompassed in EWR data would cause submitters unwarranted 
competitive harm because the reports will include activities that are 
not safety related. This, JPMA said, will result in unwarranted 
disparagement.
    RMA noted that warranty policies differ among tire manufacturers, 
and from tire to tire. Both consumers and the marketplace influence the 
terms of these warranties. TIA noted that the disclosure of warranty 
data can provide a misleading picture of a tire model's performance 
that would competitively harm the manufacturer. Workhorse Custom 
Chassis also asserted that the wholesale disclosure of these numbers 
would competitively harm EWR submitters in part because of perceived 
problems by potential customers.
    Several entities acknowledged the limited releases of warranty 
information submitted by the manufacturers during investigations by 
NHTSA's ODI. The Alliance stated that the release of this limited 
information on specific models in a limited number of model years in 
investigations conducted by NHTSA does not support the release of the 
comprehensive compendium of information in EWR submissions. A limited 
release is much different from a competitive standpoint than the 
automatic release of the continually collected full compendium of 
quality and customer satisfaction information that is represented by 
the quarterly EWR submissions. Unlike EWR data, the release of data 
from investigations does not permit industry-wide comparisons of the 
quality or durability of all significant components across entire 
product lines and they are not a compendium of quality and customer 
satisfaction information developed over time. Thus, the Alliance 
concluded that the confidentiality of EWR warranty information should 
be maintained.
    GM added that the limited disclosure of warranty information in 
other contexts, such as during defect investigations, typically 
involves a limited number of makes, models, and model years of vehicles 
and are limited to a narrow group of warranty codes. GM concluded that 
the effects of disclosing all EWR warranty data, are, therefore, much 
different from the effects accompanying the disclosure of the more 
limited warranty data the agency currently discloses.
    Similarly, Nissan distinguished the EWR warranty claims data from 
those provided during ODI investigations, noting that the latter have 
limited competitive value compared to EWR warranty data because they do 
not offer the same market-oriented base of information as the 
comprehensive collection of trend data provided under the EWR rule.
    By contrast, non-industry commenters argued in favor of disclosing 
all EWR warranty data. Quality Control and Public Citizen argued that 
the disclosure of this information would permit the public to make 
educated decisions regarding products. Quality Control stated that the 
EWR warranty data should be disclosed because they would be useful to 
the public in spotting potential defect issues. Public Citizen stated 
that the EWR rule requires no unnecessary details about manufacturer 
business operations or future plans. Quality Control and Public Citizen 
did not provide any facts disputing the competitive value of the data 
or the harms of disclosure explained by the industry commenters.
    The literature also refers to the value of warranty claims data. At 
its core, warranty data are commercially valuable because of the myriad 
ways they can be used. See Tom Gelinas, We Got You Covered, Fleet 
Equipment, July 1, 2005, at 36 (noting ArvinMeritor's use of warranty 
data to perform many tasks, such as in the company's OnTrac Call 
Center's early warning system reports, which are used to help engineers 
``determine corrective actions on new or emerging product problems'') 
and Huaiqing Wu, Early Detection of Reliability Problems Using 
Information from Warranty Databases, TECHNOMETRICS, May 31, 2002, at 
120 (explaining the value of using warranty data ``to detect 
potentially serious field reliability problems).
    After carefully considering the comments and other information of 
record, NHTSA has determined that the release of EWR warranty claims 
numbers on light vehicles, medium-heavy vehicles and buses, 
motorcycles, and trailers, and EWR warranty adjustment data on tires is 
likely to cause substantial harm to the competitive positions of the 
manufacturers that submit the data.
    The EWR warranty data are a comprehensive compendium of warranty 
claims paid by manufacturers, for a broad range of products, generally 
by make, model year, going back for years and updated quarterly. They 
address numerous components and systems of vehicles and equipment and 
for certain vehicles include rollovers and fires. See, e.g., 49 CFR 
579.21(b)(2); 49 CFR 579.22(b)(2). The comprehensive nature of the 
compendiums of EWR data on warranty data is enhanced by their 
continuing content, which is updated by quarterly reports, and by their 
standardized reporting format. In general, these data reflect a repair 
or the replacement of an item. They can be used for industry-wide 
comparisons on these numerous systems and components. The amount of EWR 
warranty data is substantial. For the first 15 quarters of EWR data, an 
average of 65 light vehicle manufacturers per quarter reported 204 
million warranty claims; an average of 87 medium--heavy and bus vehicle 
manufacturers per quarter reported nearly 11 million warranty claims; 
an average of 18 motorcycle manufacturers per quarter reported over 1.1 
million warranty claims; an average of 285 trailer manufacturers per 
quarter reported 1.6 million warranty claims and an average of 27 tire 
manufacturers per quarter reported over 1.6 million warranty adjustment 
claims.
    These warranty data are not publicly available. Automobile, system, 
component and equipment manufacturers closely guard their warranty 
data. The compendiums of EWR warranty data submitted by manufacturers 
could not be replicated at all or at least not easily at any price.
    The EWR warranty data are a valuable indicator of the field 
experience of parts and systems in vehicles and tires.\57\ The warranty 
data indicate the reliability and durability of various systems and 
components.
---------------------------------------------------------------------------

    \57\ While this discussion applies to child restraints, they are 
covered under the aggregated submission of consumer complaints and 
warranty claims.
---------------------------------------------------------------------------

    EWR warranty data are a valuable source of information about the 
quality of the range of products, system-by-system, over time sold by a 
manufacturer or its supplier. Warranty information is useful in 
assessing performance, reliability and durability issues. These data 
can be used to select an optimal design and production process.
    Warranty claims help to identify potential problems early in the 
life of a vehicle. By analyzing such data, a

[[Page 59455]]

company is able to update components, incorporate new technologies and 
achieve cost savings. Warranty data assist manufacturers in 
implementing production adjustments or service actions to ensure that 
products are operating as intended and meeting consumer expectations. 
Such information in the hands of competitors would enable them to 
assess the in-use performance of components, identify issues and avoid 
mistakes.
    If EWR warranty data were released, competitors would likely review 
the data to evaluate a particular product, technology or process. The 
EWR data have great bearing on the selection of a design or production 
process. The data are particularly valuable on future design decisions. 
While the manufacturer submitting the data would have borne expenses 
associated with the introduction of the product and the collection of 
the data, competitors would benefit from reduced development costs, 
including costs of testing and analysis. Competitors would also face a 
risk of performance issues in the field that is lower than would 
otherwise be attainable. Wholesale disclosure of EWR warranty data 
eliminates the expense and risk of obtaining this information through 
field testing and trial and error. Using this information, competitors 
could base decisions to pursue certain technologies to a substantial 
degree on their reviewing a submitter's EWR warranty information. The 
competitor would gain a real world evaluation free of the risk or the 
effort and associated cost of a real world evaluation. Thus, the public 
availability of detailed, comprehensive warranty data for each model 
and model year across numerous components and systems will provide 
significant market intelligence to competitors. In short, the release 
of the EWR warranty data would enable one company to use the experience 
of another. The loss of confidential information would force the OEM 
that submitted the EWR data to subsidize other OEMs, reducing their 
costs at the submitter's expense and undercutting its competitive 
advantage. This would impair the competitive position of the 
manufacturer that submitted the EWR data.
    The EWR data have a substantial bearing on purchasing decisions. 
EWR warranty information is useful in making decisions about purchases 
and the prices to be paid. Comparative component warranty, reliability, 
and durability experiences strongly influence component sourcing and 
pricing decisions. Since vehicle manufacturers increasingly purchase 
entire systems (i.e., all components used to perform a specific 
function such as steering, suspension, heating and cooling, occupant 
restraints, or seats) from suppliers, the disclosure of these data 
would provide vehicle manufacturing competitors with the warranty 
claims experience of systems made by various potential suppliers that 
would give these competitors valuable information at the expense of the 
EWR data submitter. Similarly, tire manufacturers have acquired 
complete tires from producers in China. An important question is the 
relative quality of the suppliers' products in the field. Some will be 
more reliable and the subject of fewer warranty claims. Providing that 
field experience to other vehicle manufacturers gives them a free ride 
at the expense of the submitting manufacturer. EWR warranty data would 
provide significant intelligence to a manufacturer making a decision as 
to which supplier to choose and what price to pay. Competitors could 
also learn for instance that the aggregate number of warranty claims in 
a category rose with a change of suppliers.
    Competitors would use the EWR data to follow warranty trends, which 
would provide a window into those competitors' costs and cost 
structure. Because the EWR warranty claims represent costs incurred by 
manufacturers, counts of warranty claims provide an index of a 
manufacturer's costs. Knowing whether costs for various systems are 
relatively high is useful and important information, because 
controlling costs is critical to the success of a business.
    The fact that an owner returned to a dealer for service, further, 
is indicative of customer satisfaction, or the lack thereof. As one 
commenter put it, the EWR information is a reservoir of information 
about customer satisfaction and on the company's efforts to satisfy 
customers.
    Warranty claims data would be valuable to competitors that produce, 
supply or sell aftermarket parts. Aftermarket parts are replacement 
parts for vehicles that have been sold to first purchasers. After the 
warranty on a vehicle expires, owners often have the vehicle repaired 
at shops other than dealerships. While franchised dealers generally 
must use service parts sold to them by vehicle manufacturers, 
independent repair shops have the option of using OEM parts or 
aftermarket parts made by independent manufacturers.
    Vehicle manufacturers, often through parts sales by their dealers, 
compete with independent component manufacturers for sales of 
aftermarket parts used in repairs. Independent aftermarket parts 
manufacturers could use vehicle manufacturer warranty data in targeting 
their marketing effort when vehicles come off warranty. The 
independents could use the EWR warranty data to make decisions on what 
parts to produce, in what quantities and at what price. They could use 
the data in planning marketing strategies, preparing bids for new 
business and estimating the likely costs and pricing positions of 
vehicle manufacturers, with whom they compete for sales in the 
aftermarket. The warranty claim experience at the component level would 
be very useful to them, to the direct expense and detriment of the 
vehicle manufacturers' competitive positions.
    The warranty data also provide insight into a company's warranty 
practices, particularly good will repairs after a warranty expires.
    The EWR data would be especially valuable to new entrants. Several 
manufacturers are currently considering entering or reentering the U.S. 
market. These potential new entrants would be likely to benefit 
competitively from the substantial amount of information contained in 
EWR data by reviewing the warranty history of vehicle manufacturers 
currently in the U.S. market. These data would provide these potential 
entrants with valuable insight into the likely warranty costs and 
issues they would face if they decide to enter the U.S. market.
    Quality Control and Public Citizen provided no facts disputing the 
competitive value of the data or the harms of disclosure raised by the 
industry commenters.\58\
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    \58\ NHTSA disagrees with the analogy that they attempt to draw 
to the release of warranty data in ODI investigations of problems in 
particular vehicles. See the discussion above regarding the 
different impacts of the release of consumer complaint data in ODI 
investigations and EWR consumer complaint data. The same applies to 
EWR warranty data.
---------------------------------------------------------------------------

    The release of EWR warranty claims and warranty adjustment claims 
information submitted by manufacturers would have competitive 
consequences, as recognized in Worthington Compressors, 662 F.2d at 51-
52. The large volumes of EWR warranty data are valuable and likely 
would be used by competitors. For the reasons discussed above, the 
release of this information would be to the significant benefit of the 
competitors of the submitters and to the significant detriment of the 
competitive position of the manufacturers that submitted the 
information.\59\
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    \59\ As an alternative basis for confidentiality, the disclosure 
the comprehensive compendiums of EWR warranty information would 
likely result in consumer misuse. In Worthington Compressors, 662 
F.2d at 53 n.43, the court permitted the consideration of consumer 
misuse of commercial information that is otherwise unavailable. The 
disclosure of the EWR information would be misleading to consumers 
and unfair to the submitting manufacturers. Consumers would attempt 
to make comparisons of the performance of one model to another 
across multiple model years, on a quarterly basis, which is 
problematic. The underlying foundations for the data are not the 
same. Different manufacturers have different warranty coverage, in 
terms of scope of coverage. Some have longer and more extensive 
coverage than others. The net result would be unfair and 
unsubstantiated and misleading comparisons. These comparisons would 
adversely affect the competitive positions of manufacturers in a way 
that would be unfair.
    Public Citizen has asserted that this analysis amounts to an 
unwarranted product disparagement theory, and contends that the harm 
occurring from the disclosure of these data amounts to adverse 
public reaction, which is not a cognizable harm under Exemption 4. 
The agency disagrees with this attempt to recharacterize the harm. 
Since the EWR data are competitively sensitive for a valid reason 
under Exemption 4, other potential consequences such as adverse 
public reaction, do not dictate that we treat the information as 
non-confidential. Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 
341 (D.C. Cir. 1989).

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[[Page 59456]]

Impairment

    In addition to proposing to hold EWR warranty claims data 
confidential on grounds of competitive harm from their release, the 
NPRM proposed to hold these data confidential under the impairment 
prong of FOIA Exemption 4. As reflected in that notice, manufacturers 
have considerable latitude in establishing the scopes and durations of 
their warranties. They have largely unfettered discretion in providing 
good will repairs outside of warranties, which are counted under the 
EWR rule as warranty claims. It is beneficial to NHTSA if a 
manufacturer has broad warranty coverage. More input channels increase 
the robustness of the available data. Warranties have historically 
provided feedback on product performance that can be valuable to NHTSA 
in identifying problems, including potential defects that may point to 
the presence (or absence) of a safety problem. The agency seeks to 
ensure that it receives as much information as possible to identify 
possible defect trends.
    As noted above, under the early warning reporting provisions of the 
Safety Act, NHTSA requires manufacturers of certain motor vehicles and 
motor vehicle equipment to provide reports on only the warranty claims 
that they pay, which are dependent in part on the scope of warranty 
coverage. See 49 U.S.C. 30166(m)(4)(B). NHTSA does not exercise control 
over the warranty coverage provided by manufacturers. In view of the 
fact that the quantity and comprehensiveness of the EWR warranty data 
depend in substantial part on the willingness of manufacturers to 
provide warranty coverage, NHTSA does not want to take steps that 
discourage extensive warranties, including good will.
    Both industry and non-industry commenters addressed the agency's 
proposal. Industry commenters stated that a class determination for 
warranty claims was justified on the basis that disclosure would impair 
the agency's ability to obtain this information in the future. These 
commenters noted that in light of the limitations in 49 U.S.C. 
30166(m)(4)(B), manufacturers could adjust their warranty programs, 
which would affect the amount of data NHTSA receives.
    The Alliance explained that there is wide variation in 
manufacturers' programs. As to warranties, disclosure could cause 
manufacturers to reduce coverage. Manufacturers who offer longer or 
more generous warranty programs may curtail those programs, since 
generous warranty programs can generate a greater number of warranty 
claims and hence may cause a manufacturer's products to appear to be 
less reliable, even if they are not. As a result, the government's 
ability to obtain necessary information in the future will be impaired.
    TMA stated that the release of warranty claims data will likely 
lead to the strict application of manufacturer warranty programs that 
would deny good will and customer accommodation claims falling outside 
of their terms. Also, because manufacturers offer warranty programs 
that vary in length and scope, Utility asserted that manufacturers with 
longer and broader warranty programs will inevitably have more 
information in their possession. If the data were disclosed, 
manufacturers with generous warranty programs will have an incentive to 
curtail their programs in length and scope thereby decreasing the 
volume of information submitted to NHTSA. This would impair NHTSA's 
ability to obtain such information in the future.
    Blue Bird observed that the agency can reasonably anticipate that 
the quality and specificity of this information will be reduced if it 
is disclosed. It asserted that manufacturers would take measures to 
minimize their respective exposures.
    AIAM asserted that the quality of the EWR information, including 
warranty claims information, provided to NHTSA would suffer in part 
because of the generation of additional claims accompanying the 
publicity of warranty data received and disclosed by the agency. These 
additional claims, AIAM asserted, would distort the quality of EWR 
warranty data NHTSA collects.
    TIA argued that if EWR warranty information is not protected, 
companies will produce the bare minimum required. Protecting this 
information, it asserted, would ensure that the agency receives robust 
amounts of data.\60\
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    \60\ TIA also noted that smaller tire dealers, in response to 
the disclosure of the number of claims honored, will be inclined not 
to make any adjustments.
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    Public Citizen disputed the statements that if warranty data were 
disclosed manufacturers would alter their warranty and good will 
policies in order to report fewer claims. It asserted that 
manufacturers are under market pressures to offer good services and 
competitive warranties. In its view, the proposition that warranty 
practices would be altered was speculative and insufficient 
justification. It stated that the practice would only apply to 
potentially unsafe products.
    In the discussion that follows, we will address the impairment that 
likely would result from the disclosure of EWR warranty data. As 
discussed above in the context of consumer complaints, Public Citizen 
believes that under the impairment prong of National Parks, the 
confidentiality of information is determined by a balancing test. While 
we do not accept Public Citizen's view of Exemption 4, in the 
alternative we will address a rough balance between the importance of 
the information and the extent of the impairment against the public 
interest in disclosure.
    Warranty claims data have been and are a critical aspect of the 
data the agency considers to identify trends involving particular 
equipment and systems or components in a particular make, model and 
model year of a product. For this reason, in the EWR rule, NHTSA 
included warranty claims and adjustments in the reporting requirements. 
67 FR at 45852-53. In fact, to obtain as much data as possible, the 
agency defined warranty claims to include not only warranty programs, 
but also extended warranties and good will. Id; see also 49 CFR 579.4 
(definition of warranty claim). Warranty information is a valuable and 
useful pointer to areas that, after appropriate inquiry, may lead to 
defect investigations and ultimately to the remedy of safety defects. 
The more warranty information available to the agency, the more useful 
the warranty data will be in assisting the agency in identifying areas 
for further investigation. Warranty information is particularly 
important since it is generated early in the life of the vehicle,

[[Page 59457]]

thus assisting in the prompt identification of potential defects.
    The disclosure of EWR warranty claims and adjustments would be 
likely to significantly reduce manufacturers' willingness to provide 
expansive warranty coverage or to apply warranty policies in a more 
generous and less restrictive way. Longer warranties, extended 
warranties, good will, and more liberal applications of warranty 
policy, will increase the number of claims paid by manufacturers and, 
therefore, the amount of data available to the agency. Moreover, 
changes in warranty policy caused by a reaction to disclosure of 
warranty data would likely reduce the ability of the agency to compare 
current data with historical data and to explore apparent changes in 
the data.
    Manufacturers have discretion in providing warranty coverage. For 
example, for marketing purposes, manufacturers may choose to make 
available to their customers warranties of longer duration and broader 
coverage (e.g., a company may offer a 5 year/50,000 mile warranty or a 
3 year/36,000 mile warranty), making more warranty claims information 
available to the agency. Hyundai, for example, provides what it calls 
America's Best Warranty: 10 years/100,000 miles powertrain protection 
and 5 years/60,000 limited miles warranty covering nearly every new 
vehicle component. Toyota provides a 5 years/60,000 miles powertrain 
warranty and a 3 years/36,000 miles warranty covering all components 
other than normal wear and maintenance items. General Motors' limited 
warranty generally is for 3 years/36,000 miles, but its powertrain 
protection is for up to 5 years/100,000 miles, although some makes and 
models have different warranties. Ford's warranty generally is for 3 
years/36,000 miles. Chrysler has a lifetime (for as long as you own 
your vehicle) limited powertrain warranty on some models. Extended 
warranties may be purchased for varying time periods. Some are not 
transferable. Thus, not only do warranties differ by manufacturer, they 
also differ based on the targeted market (e.g. luxury v. non-luxury), 
on system components and on the purchaser.
    Similarly, companies can choose strictly to adhere to their 
warranty policy limits or, alternatively, they may adopt policies of 
avoiding customer dissatisfaction by covering repairs arguably no 
longer covered under warranty, either because they may not fall within 
the terms of the warranty or because they fall outside their time or 
mileage parameters. The disclosure of early warning warranty data is 
likely to reduce good will and customer accommodation since such 
efforts will increase the number of warranty claims.\61\ Manufacturers 
would do this because if these data were made public, they could lead 
consumers to assume that the product was of poorer quality than a 
similar competing product made by a manufacturer with a stricter 
approach to allowing warranty or good will claims.
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    \61\ We recognize that this is not a matter of corporate 
generosity. Some companies may choose as a matter of marketing or 
customer relations to apply their warranty policies liberally, thus 
generating additional numbers of warranty claims. Other companies 
may make decisions aimed primarily at avoiding potential warranty 
liability in the context of real or potential disputes. In either 
event, disclosing early warning warranty claims data may discourage 
customer satisfaction and early dispute resolution efforts.
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    The disclosure of warranty claims and adjustment information is 
likely to limit manufacturers' offerings in extensive and extended 
warranties and good will. While the release of the information would 
not eliminate manufacturers' warranty programs, the disclosure of EWR 
warranty information likely would lead substantially to the contraction 
of current warranty policies. Less warranty data would be reported to 
NHTSA. This would result in substantially less robust data bases 
provided to NHTSA to screen for signs of early field problems. NHTSA's 
ability to identify potential safety defect trends would be impaired. 
Such a result would affect the agency's ability to carry out the early 
warning program.\62\ Non-industry commenters provided no information 
countering the comments in the record pointing to the likelihood of 
this risk. In sum, the disclosure of EWR warranty claims, including 
warranty adjustment information, would be likely to impair NHTSA's 
ability to obtain necessary information in the future.
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    \62\ Limited disclosure of a manufacturer's warranty claims data 
in an investigation does not negate the competitive value of the 
data or the likely impact that wholesale (rather than piecemeal) 
disclosure would have on submitters.
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    Such a response by manufacturers would also adversely impact 
consumers, who would be less likely to benefit from more generous 
warranty and good will policies as manufacturers impose restrictions in 
how they honor these policies. A class determination of confidentiality 
avoids these consequences.
    On the other hand, the public would not receive significant, if 
any, safety benefits from the release of EWR warranty information. The 
non-industry commenters raised a safety argument. But they did not 
provide facts to support the argument. The EWR warranty data are not 
safety data. The vast majority of the data are not indicative of a 
safety defect trend. Thus, to the extent that a balancing is required, 
non-release of the warranty data would have very little impact on the 
public. It is outweighed by the benefit to the EWR program.
4. Field Reports
    Field reports are communications from a manufacturer's 
representative or dealer about a malfunction or performance problem. 
See 49 CFR 579.4. The EWR rule requires larger volume manufacturers of 
light vehicles, medium-heavy vehicles and buses, motorcycles and 
trailers, and all manufacturers of child restraints to submit the 
number of field reports that they have received broken out, for each 
make and model, by specific component categories (e.g., steering, 
brakes), and for certain reporting sectors, fire and rollover--all of 
which are binned by code. See 49 CFR 579.21(c), 579.22(c), 579.23(c), 
579.24(c), 579.25(c). Above and beyond the reports of the binned 
numbers of field reports, these manufacturers must also provide copies 
of field reports other than dealer field reports and product evaluation 
field reports. Id.
    The early warning field report data include field reports that are 
not safety-related and those that may involve safety-related defects. 
As noted above, when NHTSA published the EWR rule, the agency expressly 
contemplated that the manufacturers would report a large volume of data 
and that the agency would then screen it for possible defects. NHTSA's 
experience with EWR data has shown that the vast bulk of EWR field 
report information has not been indicative of defect trends.
    In the NPRM, the agency proposed to make a class determination that 
field report information in EWR data would not be released to the 
public. 71 FR at 63744. The agency based this proposed class 
determination on both the competitive harm and impairment prongs of 
National Parks. We first address the likely competitive harm from the 
release of EWR field report information, then we discuss the impairment 
to the agency's ability to obtain as complete field report information 
that would follow the release of the information.

Competitive Harm

    Numerous parties have provided information to NHTSA on the question 
whether the disclosure of EWR field report information would be likely 
to cause the submitting manufacturer to suffer competitive harm. This 
includes comments from the motor vehicle and

[[Page 59458]]

equipment industry and non-industry commenters.
    Commenters from various sectors of the automotive and automotive 
equipment industry addressed the competitive value and use of field 
report data. As noted above, there is competition in the auto industry. 
Manufacturers compete vigorously for sales. They compete in areas that 
include quality and consumer satisfaction, and expend substantial 
amounts of research money on quality and consumer satisfaction in the 
market for sales.
    As noted in comments, the EWR information is a comprehensive 
compendium of field reports. Manufacturers have submitted a significant 
volume of field report data and copies of field reports to NHTSA under 
the EWR program. They cover numerous systems and components, as well as 
fires and rollovers for many reporting industry sectors (e.g., 18 for 
light vehicles and 22 for medium heavy vehicles). They cover makes and 
models going back a number of years and are updated quarterly. As noted 
by the Alliance, their value is enhanced by their continuing content, 
which permits a model-to-model comparison on the numerous systems and 
components in EWR reports. The release of EWR field report information 
would permit wholesale industry-wide comparisons of the quality or 
durability of all significant systems or components on models chosen 
for comparison. The data are not publicly available.
    The Alliance pointed out that the EWR field report data are a 
comprehensive collection of information on the field experience of a 
manufacturer's vehicles on a make/model/model-year and component/system 
basis, pertaining to quality and customer satisfaction. The information 
is treated as proprietary.\63\
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    \63\ The Alliance addressed the competitive consequences of 
disclosing EWR field reports as part of its comments on the 
disclosure of EWR data on consumer complaints, warranty claims and 
field reports. The Alliance emphasized that the comprehensive nature 
of these submissions--covering all makes and models over a multi-
year timeframe that is updated quarterly--makes them a valuable 
compendium of quality and consumer satisfaction information that 
could not be replicated easily at any price and could be used by 
competitors. The Alliance added that the EWR data provide valuable 
insights into a given manufacturer's business practices and 
decisionmaking.
    Citing Worthington Compressors, the Alliance pointed out that 
the release of information collected at considerable cost by an 
entity that submitted information to the Government could easily 
have competitive consequences. The submitters expend considerable 
sums to gather large volumes of EWR data and the release of it would 
be contrary to the competitive interests of entities that submit the 
information. The financial benefit resulting from this effort flows 
to those who obtain the data without significant cost or effort and 
use the data for their own purposes is contrary to the competitive 
interests of the manufacturers who submit the EWR information.
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    The Alliance observed that although the volume of field report 
information submitted is smaller than the volume of warranty claims, 
the information in the copies of field reports contains a great deal of 
detail. The field reports reveal the protocols used to identify, 
evaluate and remedy performance issues and would, in many cases, 
provide a detailed roadmap for performance issues with particular 
components and subsystems. The release of the information would allow 
competitors to improve on components and systems experiencing these 
performance issues, without incurring the full costs of doing so. This 
would cause competitive injury.
    AIAM, as discussed above, stated that the competitive value of the 
EWR data results from the totality and comprehensive nature of the 
information, which gives it value. The information would enable one 
company to use the experience of another to select optimal product 
design, production process and pricing strategies, while avoiding the 
cost and risk that otherwise would be encountered through trial and 
error.
    Similarly, Nissan explained that field reports serve as a useful 
means through which technical staff in the field can communicate with 
those who design, engineer, and manufacture the product. Through field 
reports, the company can discover and address issues, identify supplier 
successes or failures, and obtain useful information in developing 
future products. As with consumer complaints, field reports identify 
areas where field experience is showing an issue warranting further 
investigation.
    TMA addressed field report information as part of its comments on 
the range of EWR information. TMA pointed out that the release of the 
information would provide competitors valuable information to evaluate 
the performance, reliability and durability of various components 
without the expense and risk associated with product development that 
would normally occur with field-testing efforts, while shortening the 
amount of time competitors need to market competing products, to the 
competitive disadvantage of the submitting manufacturer.\64\
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    \64\ TMA stated that the EWR data that medium-heavy vehicle 
manufacturers report are comprehensive; they involve 22 vehicle 
systems as well as fires and rollovers. This compendium of field 
report and other EWR data, laid out model-by-model and system-by-
system has significant competitive value. There are numerous ways in 
which competitors could use these data to their competitive 
advantage. TMA characterized the data as a data bank of quality 
control information that competitors can use to evaluate the 
performance, reliability and durability of various components 
without the expense and risk associated with product development 
that would normally occur with field-testing and ``trial and error'' 
efforts, while shortening the amount of time competitors need to 
market competing products. TMA cited an example on the benefits of 
field testing that a competitor would receive. Also, a competitor 
could use the reporting manufacturer's field experience, good or 
bad, while avoiding the costs, effort and risks that the reporting 
manufacturer has incurred.
    TMA stated that the disclosure of EWR field report data would 
provide competitors with valuable and previously unavailable insight 
into the field experience and performance of a submitter's entire 
product line and individual systems and components. TMA stated that 
competitors could use this information to assess the in-use 
performance of parts and systems. It would be used in purchasing, 
pricing, and sourcing decisions, all of which would have competitive 
impacts.
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    Utilimaster explained that field reports contain performance, 
maintenance or durability issues. Blue Bird stated that EWR field 
report information has a very high level of competitive sensitivity. It 
expressed concern about competitor usage of it to the detriment of its 
competitive position.
    Utility explained that field reports contain valuable ``in-use'' 
information about a manufacturer's product. The reports are used to 
identify and correct potential performance problems, with the intent of 
improving overall field performance. In the hands of competitors, it 
asserted, this information would enable them to avoid similar issues in 
their own products and eliminate the need to invest in research and 
development in improving their own products. This would result in a 
significant competitive advantage. Competitors could also incorporate 
field report information into their marketing strategies.
    Harley-Davidson addressed its field reports as part of its fully 
developed contact system with its dealer network that enables it to do 
what is right and obtain a competitive advantage over its competitors. 
As a result, Harley-Davidson urged that this information not be 
released as a matter of course. The Motorcycle Industry Council 
similarly urged the agency not to disclose EWR field report 
information.
    Equipment suppliers supported the vehicle manufacturers' 
statements. MEMA/OESA stated that field reports are often an invaluable 
source of information for companies in their efforts to improve product 
quality and performance. WABCO also expressed concern over the 
competitive impacts of

[[Page 59459]]

disclosure. It explained that field reports can be used by skilled and 
experienced engineers to spot trends in product reliability and trigger 
follow-up actions.
    Industry commenters raised other concerns related to EWR field 
report disclosure. Although field report information can be useful in 
quickly finding possible problems, not all of this information is 
safety-related. As a result, the information primarily serves 
independent business purposes and merited protection from competitors.
    The Alliance, TMA and others stated that the release of EWR field 
report data would result in misuse, as they had stated with respect to 
consumer complaints and warranty data. More particularly, they raised 
concerns that the disclosure of EWR field report data would lead to 
erroneous conclusions that would cause submitters competitive harm. 
Manufacturers and consumers could misuse it to draw unfair and 
unsubstantiated and misleading comparisons regarding competitors' 
products. See discussion above under consumer complaints.
    The Alliance and others added that the release of limited field 
report information regarding particular concerns on specific models in 
a limited number of model years in investigations by NHTSA's Office of 
Defects Investigations does not support the release of the 
comprehensive compendium of information in EWR submissions. A limited 
release is much different from a competitive standpoint than the 
automatic release of the continually collected, full compendium of EWR 
information across virtually all makes and models, as is represented by 
the quarterly EWR submissions.
    In contrast to industry commenters, the three non-industry groups 
advocated that field report data be released by the agency. In its 
comments, Public Citizen recognized that manufacturers place importance 
on field reports for staying informed about their products' performance 
and dealers' handling of problems. It added that, as with consumer 
complaints, field reports offer vital real world information for a 
company. Like industry groups, its comments addressed consumer 
complaints, warranty data and field reports together. As noted above, 
it contended that NHTSA did not explore the extent to which information 
is available publicly and it emphasized the value of the information to 
the public.\65\ It noted that field reports vary in nature and quality.
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    \65\ Public Citizen's Litigation Group, like some industry 
commenters, had addressed field reports with other EWR data. In its 
view, field reports are materials prepared for a defect 
investigation and are safety related and should be routinely 
disclosable because safety problems cannot provide a basis for 
finding substantial competitive injury. It added field reports vary 
in their quality and quantity, and should not be uniformly withheld. 
It also disputed that product disparagement is a basis for 
protection under Exemption 4. The group also stated that the agency 
has historically determined that this type of information is not 
covered by Exemption 4. Field reports are not prepared for defect 
investigations. They are prepared for business purposes as 
recognized in the EWR definition of field report and in industry 
comments. The statement that they routinely disclose safety problems 
is an unsupported assertion that is not correct. While they vary, 
they all meet the definition of field report and are commercially 
valuable to competitors. The allegations on product disparagement 
are addressed elsewhere.
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    Quality Control cited the statement in the NPRM that competitors 
could use EWR field report information to help them avoid potential 
problems or improve their products without the need to invest in 
research, development or actual market experience. It did not dispute 
this but stated that if true, consumers would not necessarily suffer 
injuries or economic losses. It claimed, however, that this is the 
agency's safety mission. Accordingly, in its view, field reports should 
be disclosed.
    AAJ asserted that the disclosure of EWR field report data is vital 
to the public interest. It stated that disclosing this information 
would allow the public to be fully informed of all potential issues 
affecting a particular vehicle or piece of equipment and could lead to 
necessary safety enhancements. The non-industry groups did not refute 
the numerous specific competitive consequences that would result from 
the release of field report data stated by industry commenters.
    After carefully considering the comments and other information of 
record, NHTSA has determined that the release of EWR field report data 
and copies of field reports on light vehicles, medium-heavy vehicles 
and buses, motorcycles, trailers, and child restraint systems is likely 
to cause substantial harm to the competitive positions of the 
manufacturers that submit the information.
    The EWR field report data amount to compendiums of comprehensive 
information on field reports, both in terms of numbers, binned by make, 
model, model year and specified system or component, and in terms of 
field reports themselves. These cover an extensive range of makes and 
models of motor vehicles, for the reporting period and going back to 
the previous 10 years. They address numerous components and systems of 
vehicles and equipment and for certain vehicles include rollovers and 
fires. The comprehensive nature of the compendiums of EWR data on field 
reports is enhanced by their continuing content, which is updated by 
quarterly reports, and by their standardized reporting format. They can 
be used to compare numerous aspects of vehicles and equipment across 
industry sectors. The amount of field report information is 
substantial. For the first 15 quarters of EWR data, an average of 65 
light vehicle manufacturers per quarter reported nearly 7.6 million 
field reports and submitted over 580,000 field reports; an average of 
87 medium-heavy vehicle and bus manufacturers per quarter reported over 
385,000 field reports and submitted over 26,000 field reports; an 
average of 18 motorcycle manufacturers per quarter reported over 
134,000 field reports and submitted over 26,000 field reports; an 
average of 285 trailer manufacturers per quarter reported over 22,000 
field reports and submitted nearly 500 field reports; and an average of 
20 child restraint manufacturers per quarter reported over 11,000 field 
reports and submitted over 7,500 field reports.
    The manufacturers that submit field report information expend 
considerable sums to initiate and review field reports. The data are 
not publicly available and are highly proprietary. The data could not 
be replicated.
    Field reports reflect the in-use experience of a manufacturer's 
product collected by the company at its expense and with the intent of 
identifying problems associated with its products. Because of the depth 
of coverage required by the EWR rule, the field report numbers reveal a 
manufacturer's experience across its entire product line with respect 
to particular components and systems. These reports reflect a company's 
pursuit of feedback on a particular aspect of a product and can involve 
technical investigations into a problem detected through warranty, 
consumer complaint or other information available to the company. The 
field reports themselves often contain a great deal of detail and even 
those of lesser quality are valuable as an integral part of the whole 
compendium and for their identification of concerns.
    The disclosure of EWR field report information would provide 
competitors with valuable and previously unavailable insight into the 
field experience and performance, including at times reliability and 
durability, of individual systems and components in a submitter's 
entire product line. Field reports reveal aspects of the performance of 
components and materials that appear to be problematic. Competitors 
could use EWR field report

[[Page 59460]]

information in assessing systems and parts with apparent shortcomings 
and identifying technological and engineering improvements that might 
better satisfy customers. If the information were released, competitors 
would gain product and component performance information, both in terms 
of numbers and from information in copies of field reports, developed 
at the cost of the submitting manufacturer, that they could implement. 
Thus, competitors would benefit, while the submitting manufacturer bore 
the cost.
    In addition, the EWR field report data are a compendium of quality 
information of a manufacturer's products, model-by-model, system-by-
system. These data provide in-use information on technologies. 
Competitors can study and run lab tests on a competitor's products. But 
these efforts do not inform the competition of the quality of a product 
based on operation in the field.
    Competitors would use this information to evaluate particular 
technologies, including both technologies that have penetrated 
considerably numerous segments and newly introduced technologies, at a 
risk and cost that is lower than otherwise attainable, because the 
competitor would not have to develop that information. Using this 
information, competitors could base decisions to a substantial degree 
on their reviewing a submitter's EWR field report information. The EWR 
field report information would enable one company to use the experience 
of another in the selection of a design. It could also be used in the 
selection of a production process. The release of the data would permit 
broad comparisons of the quality or durability of components on vehicle 
models chosen for comparison. It would enable the person reviewing the 
materials to substantially avoid similar issues that gave rise to the 
field report. While the manufacturer submitting the information would 
have expended substantial resources in deciding whether to install a 
particular technology and associated design and testing as well as 
follow-up, the competitor would gain a real world evaluation without 
the time, expense and risk associated with product development that 
would normally occur with field-testing.
    The generation of a field report has an associated cost and the 
fact that a manufacturer has completed a field report on a particular 
issue indicates that a manufacturer has made an investment of resources 
to discover and understand that issue. The competitor could use the 
information while avoiding the cost and risk that would otherwise be 
encountered. This would have competitive impacts.
    Competitors can use the field report information to assist in their 
future purchasing (sourcing) decisions, including the technological 
approach, supplier and price. This information provides insights into 
whether a particular supplier has built durable and reliable systems 
and components.
    Additionally, the EWR data provide valuable insights into a given 
manufacturer's business practices and decisionmaking, including, the 
methods used to collect field reports. Field reports, by their nature, 
reveal the process by which a manufacturer examines an issue of 
interest. Further, a field report comprises the protocols a 
manufacturer follows when examining a particular problem and helps 
identify whether a problem (safety or non-safety related) is present in 
its products. Such information is commercially valuable to competitors 
because it provides them with additional insight on how to improve 
their own processes in identifying potential problems.
    EWR field report data are a valuable source of information related 
to customer satisfaction of vehicles. This data base provides 
information on perceived problems with the company's product, which 
gave rise to the field report. This is valuable to companies, which 
depend on satisfying customers. If the field report information were 
publicly available, competitors could and likely would use it to learn 
whether there is a market reaction to any new technology, supplier or 
product changes. The information would be valuable to competitors who 
may be considering deploying similar or competing technology. 
Competitors could rely on EWR information in making critical decision 
such as which technology or suppliers to use.\66\
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    \66\ Also, the EWR data are different from investigation data in 
scope and competitive impact. As discussed above, as for example in 
the context of consumer complaint data, data released in the course 
of agency investigations are limited. The release involves limited 
models and model years and specific alleged problems. EWR data 
amount to full compendiums, across makes, models and model years 
involving numerous systems. Thus the release of field report numbers 
in ODI investigations has no real bearing on release of EWR field 
report data. We note that NHTSA has withheld field reports obtained 
in investigations. See discussion above regarding the release of 
information obgtained in investigations under consumer complaints.
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    Public Citizen recognized the value of the information. It did not, 
however, provide facts to refute comments by industry sources. AAJ and 
Quality Control recognized that other manufacturers can benefit from 
the disclosure of these reports by using them to mitigate similar 
problems they are encountering or by deferring or changing purchasing 
decisions of particular components or technology. They thought that the 
release of the data would benefit the public. However, they did not 
demonstrate how. Also, the benefit to the public is not a factor in 
assessing confidentiality under Exemption 4 of the FOIA.
    The release of EWR field report data and the field reports 
submitted by manufacturers would have competitive consequences, as 
recognized in Worthington Compressors, 662 F.2d at 51-52. The volumes 
of EWR field report information are valuable and could be used by 
competitors. For the reasons discussed above, the release of it would 
be to the significant benefit of the competitors of the submitters and 
to the detriment of the competitive position of the manufacturers that 
submitted the information.\67\
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    \67\ As an alternative basis for confidentiality, the disclosure 
of the comprehensive compendiums of EWR field report information 
would likely result in consumer misuse. In Worthington Compressors, 
662 F.2d at 53 n.43, the court permitted the consideration of 
consumer misuse of commercial information that is otherwise 
unavailable. The disclosure of the EWR information would be 
misleading to consumers and unfair to the submitting manufacturers. 
Consumers would attempt to make comparisons of the performance of 
one model to another across multiple model years, on a quarterly 
basis, which can not be done. The underlying foundations for the 
data are not the same. Different manufacturers have different 
approaches to field reports, in terms of procedures and numbers of 
field reports generated. The net result would be unfair and 
unsubstantiated and misleading comparisons. These comparisons would 
adversely affect the competitive positions of manufacturers in a way 
that was unfair.
    Public Citizen has asserted that this analysis amounts to an 
unwarranted product disparagement theory, and contends that the harm 
occurring from the disclosure of these data amounts to adverse 
public reaction, which is not a cognizable harm under Exemption 4. 
The agency disagrees with this attempt to recharacterize the harm. 
Since the EWR data are competitively sensitive for a valid reason 
under Exemption 4, other potential consequences such as adverse 
public reaction, do not dictate that we treat the information as 
non-confidential. Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 
341 (D.C. Cir. 1989).
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Impairment

    In addition to proposing to hold EWR field report information data 
confidential on grounds of competitive harm from their release, the 
NPRM proposed to hold this information confidential under the 
impairment prong of FOIA Exemption 4. As reflected in that notice, 
manufacturers may obtain and receive feedback on product performance in 
a variety of ways, and establish differing practices for field reports. 
The nature and level of effort expended by a company is

[[Page 59461]]

discretionary. It is beneficial to NHTSA if a company expends 
considerable effort. More inputs increase the robustness of the 
available data. Field reports provide feedback on product performance 
that can be valuable to NHTSA in identifying problems, including 
potential defects that may point to the presence (or absence) of a 
safety problem. The reports themselves, which are submitted under the 
EWR program, contain valuable technical information. The agency seeks 
to ensure that it receives as much information as possible to identify 
possible defect trends.
    As discussed above, under the early warning reporting provisions of 
the Safety Act, NHTSA may not require a manufacturer of a motor vehicle 
or motor vehicle equipment to maintain or submit records respecting 
information not in the possession of the manufacturer. 49 U.S.C. 
30166(m)(4)(B). In view of the fact that the quantity and 
comprehensiveness of the EWR field report data depend in substantial 
part on the willingness of manufacturers to collect this information, 
NHTSA does not want to take steps that discourage the collection 
efforts.
    Both industry and non-industry commenters addressed the agency's 
proposal. Industry commenters stated that a class determination for 
field reports was justified on the basis that disclosure would impair 
the agency's ability to obtain this information in the future, citing 
49 U.S.C. 30166(m)(4)(B). This limitation permitted submitters to 
expand or contract the scope of their programs generating field 
reports.
    The Alliance explained that there is wide variation in 
manufacturers' programs that generate field reports. The Alliance 
stated that the potential for impairment is particularly significant in 
the context of field report information. By protecting field reports, 
NHTSA creates an incentive to encourage free text descriptions or other 
candid analysis in field reports. On the other hand, if the information 
were disclosed, NHTSA could reasonably anticipate that field reports 
would be less thorough or candid. As a result, the government's ability 
to obtain necessary information in the future will be impaired. The 
Alliance added that this would impact ODI defect investigations, which 
consider field reports.
    AIAM stated that disclosure of this information would impair the 
agency's EWR program. It asserted that the quality of the information 
provided to NHTSA would suffer. The natural reaction of the individual 
who writes a field report would be to consider its appearance in the 
press or a contact by an investigator. This would affect the 
thoroughness and candor of the reports.
    TMA explained that field reports play an important role in the 
medium-heavy truck segment. Manufacturers receive frequent reports from 
field personnel, fleet owners and dealers regarding vehicle issues, 
both safety and non-safety. Field reports often contain the drafter's 
evaluations or assessments of a possible system, component or 
performance problem. TMA verified the flexibility that manufacturers 
have in preparation of field reports. It added that the routine 
dissemination of this information would lead to fewer and less reliable 
reports available to the agency in the future to identify promptly 
potential safety defects promptly.
    Blue Bird observed that the agency can reasonably anticipate that 
the quality and specificity of this information will be reduced if it 
is disclosed. It asserted that manufacturers would take measures to 
minimize their respective exposures to competitive harm.
    Utility explained that manufacturers take the initiative to 
generate field reports in an effort to identify product defects and 
analyze possible defect trends. This information is generated and 
studied to improve product quality. But it could be used by plaintiffs 
to help file lawsuits against the submitting manufacturer. Utility 
asserted that manufacturers would react to this situation by generating 
fewer and less comprehensive field reports. This would hamper the 
agency's ability to obtain substantive field reports in the future.
    Other commenters expressed similar concerns and recognized this 
impairment risk. Workhorse Custom Chassis explained that it relies 
extensively on reports from fleets to identify and correct problems but 
was concerned that the accuracy of those reports would be reduced if 
they are routinely disclosed. MEMA/OESA also asserted that the routine 
disclosure of field reports would impact the quality of these reports 
in future submissions.
    On the other hand, Public Citizen disputed the assertion that if 
field report information were disclosed manufacturers would alter their 
field reporting practices. It asserted that manufacturers place 
importance on field reports for staying informed about the performance 
of their products and dealers' handling of problems. Field reports 
offer vital real-world information for a company. In its view, NHTSA 
had not undertaken an adequate investigation relating to manufacturers' 
field reports and had not made an adequate showing of the impairment 
from disclosure of field reports.
    In the discussion that follows, we will address the impairment that 
would result from the disclosure of EWR field report data. As discussed 
above in the context of consumer complaints and warranty claims, Public 
Citizen believes that under the impairment prong of National Parks, the 
confidentiality of information is determined by a balancing test. While 
we do not accept Public Citizen's view of Exemption 4, in the 
alternative, we will address a rough balance between the importance of 
the information and the extent of the impairment against the public 
interest in disclosure.
    Under the EWR reporting program, manufacturers report the numbers 
of field reports, separately, by model and model year, and by system 
and component, to NHTSA. They also provide field reports, except dealer 
field reports and product evaluation field reports. The significance of 
field reports is indicated in part by the EWR definition of field 
report. Under the definition, an alleged failure, malfunction, lack of 
durability or other performance problem has been identified in a 
written communication to the manufacturer from one of its employees, 
representatives, dealers, or a fleet. 49 CFR 579.4(c). Both before and 
after the promulgation of the EWR rule, ODI has reviewed numerous field 
reports over the years and has often found them to be technically rich. 
See 67 FR at 45856.
    The magnitude of the numbers of field reports is important to NHTSA 
because our screening will look for trends based in part on relatively 
high numbers. These trends may result in inquiries to the 
manufacturers. In addition, field reports themselves generally contain 
information that provides insights.
    As with other EWR data (complaint and warranty claims data), the 
agency cannot compel the creation of field reports. Their continued 
creation depends on whether a manufacturer chooses to create them. In 
light of the value of the reports and the discretion that manufacturers 
have in not generating them or in including less detail and fewer 
insights in them, the agency does not want to do anything to discourage 
manufacturers from preparing accurate and comprehensive field reports 
about apparent problems with their products. Nor do we want to detract 
from the candor and specificity with which field reports are written.
    As noted in the comments, if these reports were disclosed, 
manufacturers likely would decide to generate fewer and less 
informative (less candid) field

[[Page 59462]]

reports. Manufacturers would be reluctant to have negative information 
appear in documents that are subject to routine disclosure. As a 
consequence, less information would be available to the agency in its 
efforts to identify potential safety defects promptly. The agency has 
required the submission of hard copies of certain field reports, as 
well as the numbers of all field reports, because the agency believes 
that this information will be especially helpful in identifying the 
existence of defect trends. Thus, the availability of less information 
would be inconsistent with our goals.
    As made clear throughout the comments, disclosure of field reports 
would be likely to discourage candor on the part of field personnel and 
could adversely affect corporate policies and practices with respect to 
their preparation. One association was concerned about appearances of 
the documents in the media. This would have a chilling effect on 
candor. The available evidence shows that the disclosure of the field 
reports and the field report data would likely inhibit a significant 
feature of the agency's program to encourage the collection and 
reporting of information and to identify the potential existence of 
safety defects as soon as they begin to manifest themselves in the 
field. It would also reduce the amount of valuable information 
available to the agency during our defect investigations.
    The field reports themselves are very important to the government. 
The numbers of reports are indicative of potential problems in numerous 
systems and components. Many of the reports provide text that is not 
conveyed by the numerical reports. The views of manufacturers' 
engineers and technicians in reports are often helpful to us. If they 
were disclosed, manufacturers would react by decreasing both the number 
of reports generated and the level of detail contained in these 
reports. Without them, we often would not gain a full understanding of 
the issues, at least not without a steep and time-consuming learning 
curve. The agency would be faced with attempting to conduct analyses 
with considerably less information from manufacturers. NHTSA's ability 
to identify potential safety defect trends would be impaired. Such a 
result would affect the agency's ability to carry out the early warning 
program.\68\ In sum, the disclosure of the field information would be 
likely to impair NHTSA's ability to obtain necessary information in the 
future.
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    \68\ Limited disclosure of field report numbers during agency 
investigations does not negate the value of the data or the likely 
impact that wholesale (rather than piecemeal) disclosure would have 
on submitters. Moreover, NHTSA has granted confidentiality to the 
field reports themselves.
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    We recognize that some of the field reports would be of interest to 
some members of the public. But the public would not receive 
significant, if any, safety benefits from the release of EWR field 
report information. The non-industry commenters raised a safety 
argument. But they did not provide facts to support the argument. The 
EWR field report data are not safety data. The vast majority of the 
data are not indicative of a defect trend. And, standing alone, the EWR 
field report numbers simply indicate that there was a reported problem, 
by system or component. Thus, to the extent that a balancing is 
required, non-release of the data would have very little impact on the 
public. It is outweighed by the benefit to the EWR program. On balance, 
we are in a better position to address potential defects with as robust 
a set of field reports as possible, which benefit the public at large.
5. Common Green Tire Identifiers
    The EWR rule requires reporting tire manufacturers to provide a 
list of common green tire data, including all relevant tire lines, tire 
type codes, stock keeping unit (SKU) number, brand names and brand name 
owners. 49 CFR 579.26(d). ``Common greens'' are tires ``that are 
produced to the same internal specifications but that have, or may 
have, different external characteristics and may be sold under 
different tire, line names.'' 49 CFR 579.4(c). A green tire is an 
assembly of the components of a tire formed in a machine. The green 
tire is placed in a mold where the tire is given its final shape, 
including the tread pattern and information on the sidewall such as the 
tire brand, size and tire identification number. In the mold, the tire 
is cured; it is exposed to high pressure and heat (i.e., 
vulcanization). Tires made from a common green tire have the same 
fundamental construction and composition. Based on the mold, the 
finished tires may and often do have different outward appearances, 
such as different treads and markings to differentiate them from one 
other and, importantly, the tires receive different brand names. Tire 
manufacturers use the term ``common green'' to describe a family of 
tires that are produced from the same ``before cure'' specification but 
are cured in different molds. The practice of using ``common greens'' 
allows maximization of economies of scale in manufacturing tires. The 
common green tire information submitted by individual manufacturers 
reveals which tire lines share the same internal structural and rubber 
compound specifications and the relationships between manufacturers and 
private brand name owners (e.g., tires with names commonly owned by 
large tire retailers).
    In the NPRM, NHTSA proposed to make a class determination that tire 
manufacturers' submissions of EWR common green data would not be 
released to the public. 71 FR at 63744 and 63749. This was based on the 
competitive harm prong of FOIA Exemption 4, as interpreted in National 
Parks.
    Several submissions from RMA and a submission from Cooper Tire 
described the nature of the common green EWR data and explained the 
manner in which competitors can use the data and the competitive 
consequences of their disclosure. RMA stated that the information on 
common green tires in EWR data is not available to the public and can 
not be derived from any public source. It explained that the disclosure 
of this information would cause substantial competitive harm since it 
would allow competitors to know with exact certainty which tires have 
the same specifications even though many are sold under different tire 
brand names. Manufacturers would have insight into their competitors' 
marketing strategies, business plans, pricing data, and future product 
plans. RMA added that substantial competitive harm would result to the 
manufacturer from disclosing the specific business relationships 
between tire manufacturers and private tire brand name owners.
    Cooper Tire's comments, which RMA re-submitted, included a study 
that detailed the nature of common green data. The study asserted that 
common green lists are confidential. The study indicated that tire 
manufacturers are required under the EWR rule to produce information on 
more than 24,000 tire lines. This information includes not only each 
green tire group produced, but each tire line originating from each 
green tire group. The study explained that green tires serve as the 
platform for the production of all tire lines and each individual tire 
SKU. It stated that the release of green tire groups and the 
identification of the green tire source for each finished tire would 
provide a complete and comprehensive road map to a tire manufacturer's 
production and marketing strategy. The study likened the release of 
this information as equivalent to the release of a tire manufacturer's 
business plan.

[[Page 59463]]

    RMA also noted that it has been NHTSA's practice to grant requests 
for confidentiality for common green information. RMA provided copies 
of relatively recent letters that responded to particular requests from 
tire manufacturers covering categories of information that granted 
confidential treatment to common green information submitted to the 
agency.
    Apart from RMA and Cooper Tire, only Quality Control specifically 
addressed common green tires. Quality Control opposed confidential 
treatment for common green tires. But it did not contradict the tire 
industry's repeated statements regarding the use of common green tires 
in the tire industry, the unavailability of information on common green 
tires to the public sector, the competitive value of common green tires 
or the competitive harm that would result from releasing the 
information. Instead, Quality Control asserted that a consideration of 
how to treat common green tire information should include an evaluation 
of its usefulness to researchers and the general public of this 
information in the avoidance of deaths, injuries, and economic losses.
    NHTSA has fully considered the comments and has reached the 
following conclusions. Green tires serve as the basic envelope of tire 
production. Common green tire lists identify the tires that share the 
same internal specifications and construction characteristics. Tire 
manufacturers treat their lists of common green tires as proprietary 
and competitively sensitive information. The EWR common green 
information is not publicly available and broadly applies across 
manufacturers' tire lines.
    The release of common green tire information would identify the 
tires made from the range of common greens. The disclosure of this 
information would allow competitors to know which tires have the same 
specifications and construction. The release of green tire groups and 
the identification of the green tire source for each finished tire 
would provide a complete and comprehensive road map to a tire 
manufacturer's production strategy. It would inform competitors of a 
tire manufacturer's basic economies of scale in tire production. 
Precise insights from another manufacturer's approach would enable a 
competitor to adjust its own production to more effectively compete 
against a competitor's particular tire line.
    Competitors would know which tires, sold under different tire brand 
names, are basically the same. The release of information linking green 
tires and finished tires, often of different labels, would inform 
competitors of a tire manufacturer's marketing approach. Manufacturers 
would, thus, have insight into their competitor's business plans and, 
with additions to and deletions from common green lists reported each 
quarter, future product plans. This information on tires that are 
basically the same can be used selectively by a manufacturer to compete 
against a particular tire line of another manufacturer and can harm the 
company that submitted EWR information by revealing less expensive but 
similarly constructed alternatives to more expensive tire lines. The 
release of common green information would also disclose the specific 
business relationships between tire manufacturers and private tire 
brand name owners. The foregoing demonstrates that the release of EWR 
common green tire information is likely to cause substantial harm to 
the competitive positions of the tire manufacturers that submit EWR 
information.
    As noted above, Quality Control's comments did not contradict the 
tire industry's statements. Quality Control suggested the further 
consideration of an evaluation of the usefulness of the information for 
safety and economic reasons, but it did not provide any information in 
these regards. Nor did it demonstrate the relevance of such 
considerations under FOIA Exemption 4. As discussed above, Exemption 4 
does not involve a balancing of competitive harm to the party that 
provided the information to an agency against possible societal 
interests such as research or provision of information to the public. 
Accordingly, we are adopting a class determination on EWR information 
on common green tires.

D. Class Determination Based on FOIA Exemption 6

    The EWR rule requires larger vehicle manufacturers to submit the 
number of reports alleging that deaths or injuries occurred. These 
reports must contain the vehicle identification number (VIN) of the 
vehicle(s) allegedly involved in these incidents. See 49 CFR 
579.21(b)(2), 579.22(b)(2), 579.23(b)(2), 579.24(b)(2). The agency's 
October 2006 NPRM proposed creating a limited class determination that 
would redact the last six characters of VINs from EWR death and injury 
reports, based on Exemption 6 of the FOIA. 71 FR at 63745 and 63749.
    Each VIN consists of 17 characters. In general, the first eight of 
these characters denote the manufacturer and attributes of the vehicle 
including the make and type of vehicle (e.g., the relevant line, 
series, body, type, model year, engine type and weight rating). The 
ninth digit is a check digit. In the last eight characters, the first 
two represent the vehicle model year and plant of production, and the 
last six are the number sequentially assigned by the manufacturer in 
the production process. See 49 CFR 565.6 (detailing elements of the VIN 
code), SAE Standards J218 (passenger car identification terminology) 
and J272 (vehicle identification number systems).
    VINs can readily be used to track down personal information on an 
individual who owns, or at one point owned, a particular vehicle. Such 
information can include not only the name and address of an individual 
but other information as well.
    Exemption 6 of the FOIA addresses the withholding of ``personnel 
and medical files and similar files the disclosure of which would 
constitute a clearly unwarranted invasion of personal privacy'' to the 
subject of those files. 5 U.S.C. 552(b)(6). Several entities have 
addressed the privacy implications of release of the full VIN.
    Both NHTSA and the Alliance documented their efforts in using VINs 
to obtain personal information on individuals.\69\ When coupled with a 
fatality--or injury--producing incident, VINs can be used to identify 
the owner of the vehicle. The Alliance explained that VINs can be used 
to track down information on individuals. Specifically, it stated that 
it is relatively easy to determine the name, address, social security 
number, home telephone number and other personal identification 
information from a VIN. Because of the relative ease in obtaining this 
information from a VIN, the Alliance urged the agency to consider 
protecting VIN information contained in EWR submissions involving 
fatalities or injuries. The Alliance supported the Agency's proposal, 
with an analysis that addressed the elements for withholding 
information from disclosure under Exemption 6. After pointing out that 
both the Alliance and NHTSA had been able to employ widely available

[[Page 59464]]

databases to access personal information about the owner of a vehicle 
using a VIN, the Alliance asserted that the information met the 
threshold requirement of personal and similar files--information that 
applies to a particular individual. Next, it explained that the 
disclosure of this information would constitute a clearly unwarranted 
invasion of personal privacy. Finally, the Alliance offered a balance 
of the privacy interests at stake with the public interest in 
disclosure. Under an Exemption 6 case it cited, the public interest is 
limited to shedding light on the government's activities. And, 
disclosing the last 6 digits of the VIN would not advance that 
interest. Based on its analysis, the Alliance recommended that the last 
6 digits of VINs in EWR death and injury reports not be disclosed. TMA 
supported the exemption.
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    \69\ See NHTSA Docket 2002-12150, Item Nos. 58 (Alliance's 
discussion of obtaining Social Security Numbers using VINs) and 64 
(websites enabling users to locate personal information using VINs). 
The agency examined a widely available legal database--WESTLAW--and 
several websites that offered to provide personal information on 
individuals using the VIN of a vehicle for a nominal fee. Using 
WESTLAW, the agency could determine the name, address, date of 
birth, and lien information of the vehicle owner using the full VIN. 
In view of this easy identification, the disclosure of full VIN 
information would jeopardize the personal privacy of individuals 
involved in EWR reports of fatalities and injuries arising from 
motor vehicle crashes.
---------------------------------------------------------------------------

    Public Citizen stated that it respected NHTSA's intent to protect 
individual citizen's personal privacy. However, it contended that 
exempting the VIN is unnecessary and advocated that NHTSA abandon its 
proposal. Public Citizen noted that VINs are visible to the public on 
the vehicle's dashboard and are publicly available through police 
reports. Public Citizen contended that the last six figures of a VIN 
serve the important role of allowing members of the public to see if 
their personal records have made it into the early warning data base 
and would aid the public in seeing if multiple records are in reference 
to the same individual vehicle or different vehicles of the same make.
    Under Exemption 6, the information must fall within the category of 
``personal * * * and similar files.'' The EWR information on deaths and 
injuries is submitted by manufacturers electronically into an 
electronic file in the agency's ARTEMIS database. The VIN information 
can easily be used with readily available databases to identify the 
owners of the vehicles in crashes that resulted in deaths or injuries, 
as alleged in claims or notices to the manufacturer. There was no 
dispute in the comments that the threshold requirement of personal and 
similar files was met and NHTSA finds that it has.
    If the threshold requirement is met, the focus of the inquiry turns 
to whether the disclosure of the records ``would constitute a clearly 
unwarranted invasion of personal privacy.'' 5 U.S.C. 552(b)(6). This 
requires a balancing of the public's right to disclosure against the 
individual's right to privacy. The first step is an assessment of the 
privacy interests, if any, that would be threatened by the disclosure. 
In Center for Auto Safety v. NHTSA, 809 F. Supp. 148 (D.D.C. 1993), the 
court recognized the privacy interests in the names and addresses on 
consumer complaints received by NHTSA. The court noted that some of the 
complaints may refer to injuries of a personal and upsetting nature. It 
is possible that persons involved in such incidents would resent 
unsolicited intrusions into their experiences. Id. at 149. The same or 
similar interests exist here, as the EWR data at issue involves 
incidents that resulted in an injury or fatality. For example, it is 
foreseeable that the persons who could readily be identified from VINs 
or surviving family members would be contacted by attorneys and 
consultants, seeking involvement in legal activities related to the 
incident or information for a potentially related matter. Public 
Citizen did not address the interests of the individuals, who have been 
in an incident and had a relationship with a person who died in an 
incident or who was injured in an incident. We conclude that disclosure 
of the complete VINs in death and injury reports at issue would result 
in a substantial threat to individuals' personal privacy interest.
    The second step is an assessment of the public interest in 
disclosure. Under Exemption 6, the concept of public interest is 
limited to shedding light on the government's performance of its 
statutory duties. United States Department of Justice v. Reporters 
Comm. for Freedom of the Press, 489 U.S. 749, 773 (1989); National 
Ass'n of Retired Federal Employees v. Horner, 879 F.2d 873, 879 (D.C. 
Cir. 1989); cf., DOD v. FLRA, 510 U.S. 487, 497 (1994). With the 
limited redaction of part of the VIN under this rulemaking, the public 
would be able to review EWR information on claims for fatalities and 
injuries, including identification of the make, model and model year of 
the vehicle and the component or system implicated in the claim. This 
information apprises the public of significant information. Disclosing 
additional VIN information, with the sequential number unique to the 
vehicle, that would enable someone to identify the owner of the vehicle 
and other personal information would not, however, further serve the 
public interest. If disclosed, it would not answer the question of 
``what the government is up to.'' Reporters Comm., 489 U.S. at 773 
(1989).
    Public Citizen contended that the last six figures of a VIN serve 
the important role of allowing members of the public to see if the 
incident in which they were involved is in the early warning database 
and would aid the public in seeing if multiple records are in reference 
to the same individual vehicle or different vehicles of the same make. 
This does not squarely address the question of what the government is 
up to. In any event, an interested person could review EWR data to see 
the date the make, model and model year of the vehicle, the first part 
of the VIN, the incident date, the numbers of deaths and injuries, the 
State where the incident occurred and the vehicle system or component 
that allegedly contributed to the incident. See, e.g., 49 CFR 
579.21(b)(2). In the first 15 quarters of comprehensive EWR reporting, 
there have been 23,647 reports of deaths and injuries in vehicles based 
on claims and notices. That amounts to 1576 per quarter, or about 30 
per State per quarter on the average. In view of the level of detail in 
EWR reporting, it is highly likely that if a reported incident matched 
the one that the person was involved in, it was reported by the 
manufacturer.\70\ Similarly, multiple records are unlikely given the 
review of data by manufacturers before submission. Neither does the 
need to verify whether multiple records are duplicative outweigh these 
interests, particularly when other information related to those 
incidents would likely be disclosed, such as the time, date, and place 
of the incident. Individuals have a privacy interest when it comes to 
their involvement in a traumatic incident and it is not the province of 
outside parties to be the decision-maker in this regard. In any event, 
while of questionable relevance under Exemption 6, we note that 
redaction of the last six characters provides sufficient information 
for interested parties to determine a vehicle's identity down to its 
engine type and plant of production using the first 11 characters of 
the VIN. Using this information, the public can still ascertain whether 
a particular type of vehicle may be involved in a potential vehicle 
safety issue.\71\
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    \70\ As a practical matter, individuals seeking this type of 
information on their own cases are free to file a Privacy Act 
request with the agency to confirm the inclusion of their cases in 
the EWR database.
    \71\ Public Citizen also stated that the VIN is visible on the 
dashboard and that police reports are publicly available. However, 
it did not explain the likelihood of the public finding a vehicle, 
particularly if it is involved in a fatality and may have been sent 
to a salvage yard. Public Citizen has also not addressed the fact 
that in numerous states police reports are not generally available. 
See, e.g. Cal. Veh. Code section 20012 (placing limits on who may 
obtain accident reports); Mont. Code section 61-7-114 (restricting 
access to accident reports); and Ore. Veh. Code Sec.  802.220 
(limiting disclosure of accident reports).

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[[Page 59465]]

    The final step in an Exemption 6 analysis is weighing the competing 
privacy and public interests against one another. See Ripskis v. HUD, 
746 F.2d 1, 3 (D.C. Cir. 1984). In the case of the EWR VIN information, 
there is a strong privacy interest in not being contacted about a death 
or personal injury, which often involves personal distress. On the 
other hand, the public interest, in terms of information that reveals 
what the government is up to is at most, minimal. Thus, on balance, 
NHTSA has concluded that the privacy interests far outweigh the public 
interest. The balance is similar to that in Center for Auto Safety 
because there is no ascertainable public interest of sufficient 
significance or certainty to outweigh that right. 809 F. Supp. at 
150.\72\ The disclosure of the full VIN would constitute a clearly 
unwarranted invasion of personal privacy. As a result, the balancing 
required by Exemption 6 cuts in favor of protecting the privacy 
interests of those individuals over the interests that others may have 
in learning their identities. NHTSA is, therefore, according 
confidentiality to the last six digits of VINs under FOIA Exemption 6 
using a class determination that is set out separately from the other 
EWR-based class determinations.
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    \72\ See generally Horowitz v. Peace Corps, 428 F.3d 271, 278-79 
(D.C. Cir. 2005) (discussing balancing required under Exemption 6 
and indicating that ``seemingly innocuous information'' can be 
subject to the Exemption's protection).
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    NHTSA is adopting a new class determination in 49 CFR Part 512 
Appendix D that applies only to those VINs that are provided in EWR 
submissions and does not apply as a rule of general application to the 
agency's treatment of VINs in other instances.

IV. Exemption 3

    The Rubber Manufacturers Association (RMA) has historically 
maintained that NHTSA is precluded by statute from releasing all EWR 
data, subject to a limited exception. RMA has relied on a disclosure 
provision of the TREAD Act, 49 U.S.C. 30166(m)(4)(C), which provides:

    Disclosure.--None of the information collected pursuant to the 
final rule promulgated under paragraph (1) shall be disclosed 
pursuant to section 30167(b) unless the Secretary determines the 
disclosure of such information will assist in carrying out sections 
30117(b) and 30118 through 30121.\73\

    \73\ Sections 30117(b) and 30118 through 30121 involve the 
statutory remedy and recall requirements under the Safety Act.
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    RMA has asserted that this provision is a FOIA Exemption 3 statute 
and therefore, NHTSA is precluded from releasing the data.

    RMA's views were rejected by the U.S. District Court for the 
District of Columbia in Public Citizen v. Mineta, 444 F.Supp.2d 12, 16-
18 (2006). In the October 2006 NPRM, we noted that the judgment in that 
case is on appeal to the U.S. Court of Appeals for the District of 
Columbia Circuit (No. 06-5304). 71 FR at 63745. We stated that should 
the Court of Appeals reverse the District Court, the agency may proceed 
to issue a final rule exempting EWR data from disclosure in a manner 
consistent with the D.C. Circuit's decision or terminate the EWR 
Appendix C portion of this rulemaking as unnecessary.
    We did not seek comment on the Exemption 3 issue. RMA provided 
comments nonetheless. Apart from scope issues, the agency rejects RMA's 
views. As our rationale, we incorporate by reference the Brief for the 
Federal Appellee in the pending appeal in Public Citizen v. Peters (No. 
06-5304) (filed July 6, 2007).

V. Other EWR Data

    The data elements of the EWR rule were established in July of 2002. 
The 2003 CBI rule that was remanded by the district court did not 
resolve the confidentiality of EWR information on deaths and injuries, 
which is based on claims and notices, or the confidentiality of 
property damage claims. Those matters were left to individual 
manufacturers to pursue through individual requests for confidentiality 
should the manufacturers choose to pursue them. The October 2006 NPRM 
did not propose to include information on deaths or personal injury, or 
property damage claims (collectively claims data) as part of our 
Exemption 4-based class determinations. We stated that these items 
involve a collection of information, many pieces of which are publicly 
available in court documents and newspaper articles.\74\
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    \74\ See, e.g. http://www.pbs.org/wgbh/pages/frontline/shows/rollover/etc/synopsis.html
 (noting the number of deaths attributed 

to failing Firestone tires mounted on Ford Explorer vehicles), 
http://www.charlestonbusiness.com/pub/12_12/briefs/6704-1.html 

(reporting on lawsuit arising from an alleged failure of a Yokohama 
tire), http://www.cbc.ca/fifth/main_tire.html (noting the number of 

deaths related to alleged failures involving Goodyear tires compiled 
by CBC News), and http://www.cbc.ca/consumers/market/files/cars/dangeroustires/index2.html
 (covering tire design problems and 

mentioning a multi-million dollar award against Dunlop).
---------------------------------------------------------------------------

    RMA submitted comments. RMA's comments are outside the scope of the 
NPRM. Should RMA or its members seek a rule on this issue, they should 
file an administrative petition for rulemaking. See 49 CFR Part 552. To 
be clear, NHTSA is not deciding in this notice that EWR claims data is 
or is not confidential. Insofar as a manufacturer desires confidential 
treatment for EWR claims data, it should submit a request for 
confidentiality for those data to NHTSA in accordance with 49 CFR Part 
512.\75\
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    \75\ The manufacturer that requests confidential treatment 
should address whether the information regarding these categories is 
already available through publicly accessible court documents. See, 
e.g. Lambert v. Goodyear Tire & Rubber Co., Case No. 1:03-CV-00382 
(W.D. Mich.) (June 11, 2003) (death case), Bayanay v. Continental 
Tire, Case No. 6:02-CV-00205 (E.D. Okla.) (April 22, 2002) (death 
case), and Swank v. BridgestoneFirestone, Case No. 1:01-CV-00982 
(M.D. Ala. 2001) (property damage and injury case). The manufacturer 
should also address the obvious legal problem of granting 
confidentiality for information that is already publicly available. 
See Niagara Mohawk Power Corp. v. Dep't of Energy, 169 F.3d 16, 19 
(D.C. Cir. 1999). In any event, in light of the availability of this 
information and its questionable utility by competitors, the 
manufacturer likely will have a substantial burden in showing that 
disclosure of this collected information would result in substantial 
competitive harm.
---------------------------------------------------------------------------

VI. Identification of Confidential Business Information Located in 
Electronic Files

    The NPRM proposed amendments to the agency's regulations for 
requesting confidentiality for certain information submitted to the 
agency on electronic media. See 71 FR at 63736. In practice, NHTSA's 
Confidential Business Information regulations have been applied most 
often to the submissions of information in the context of enforcement 
and rulemaking actions and to other submissions required under the 
agency's regulations, as well as to voluntary submissions. NHTSA 
proposed to add new requirements for identifying confidential 
information submitted in electronic form. In the last few years, 
increasingly, the information that is the subject of a request for 
confidentiality has been submitted on CDs and DVDs, rather than on 
paper. Under the existing regulations, the submitter is required to 
mark each page of a paper submission containing information claimed to 
be confidential with the word ``CONFIDENTIAL''. 49 CFR 512.6. In 
addition, brackets are to be used to designate information claimed to 
be confidential where the entire page is not claimed to be 
confidential. Id. Under the proposed rule, electronic submissions would 
be marked with sequential page numbers or identifiers, confidential 
materials within these submissions would be marked with brackets, 
individual pages

[[Page 59466]]

would be marked as confidential as needed, 71 FR at 63746, and files 
that cannot be marked internally would be named to ensure that NHTSA 
can properly identify material that is claimed as confidential. Id. We 
noted that pagination requirements are not unusual and consistent with 
the rules governing Federal court filings. See 71 FR at 63746 (citing 
requirements of the Federal Rules of Appellate Procedure).
    The agency's proposed amendment to section 512.6, which would 
replace section 512.6(b)(3), read as follows:

    (c) Submissions in electronic format.
    (1) Persons submitting information under this Part may submit 
the information in electronic format. Except for early warning 
reporting data submitted to the agency under 49 CFR 579, the 
information shall be submitted in a physical medium such as a CD-
ROM. The exterior of the medium (e.g., the disk itself) shall be 
permanently labeled with the submitter's name, the subject of the 
information and the word ``CONFIDENTIAL''.
    (2) Pages and materials claimed to be confidential must be 
designated as provided in Sec.  512.6(b)(1)-(2). Files and materials 
that cannot be marked internally, such as video clips or executable 
files, shall be renamed prior to submission so the characters 
``CONF'' or the word ``CONFIDENTIAL'' appear in the file name.
    (3) Each page within an electronic file that is submitted for 
confidential treatment must be individually numbered in the order 
presented with a sequential numeric or alpha-numeric system that 
separately identifies each page contained in that submission.
    (4) Electronic media may be submitted only in commonly available 
and used formats.

    The Alliance and AIAM submitted comments addressing the proposed 
changes to Section 512.6. Both commenters largely agree with the 
proposed changes. AIAM observed that the proposal is workable as is and 
did not foresee any problems with the changes. The Alliance raised 
questions about the practicability, feasibility, and desirability of 
the proposed requirement that electronic pages be marked 
``confidential'' and that brackets be inserted around information 
claimed as confidential. The Alliance voiced similar concerns about the 
proposed requirement that pages in electronic submissions be marked 
with page numbers or other sequential identifiers.
    The Alliance asserted that the contents of some electronic 
submissions cannot be marked with brackets, be stamped as confidential 
or otherwise be numbered or marked with sequential identifiers. 
According to the Alliance, files such as video clips or executable 
files do not have individual pages, cannot be altered, and, therefore, 
cannot be marked. Other files, such as spreadsheet or database files, 
do not have page breaks or do not have the capacity to ``bracket'' 
information. As NHTSA often requests spreadsheet or database files in 
their ``native'' format, the Alliance noted that complying with such 
requests precludes marking these files unless the submitter converts 
the files to another format. In the Alliance's view, the agency's 
analogy in its proposal to the Federal Rules of Appellate Procedure, 
which require that all submissions to the court be paginated, is inapt 
because court documents are still submitted on paper.
    According to the Alliance, its member companies and NHTSA both wish 
to ensure that confidential data are properly identified when 
submitted, that NHTSA can properly review and segregate confidential 
data, and that the burdens placed on those submitting the data are 
reasonable. Given these goals, the Alliance notes that a variety of 
means could produce the same result as NHTSA's proposal.
    The Alliance urged the agency to be both flexible and pragmatic 
when considering the requirements of the final rule. If files or data 
cannot be marked with brackets or individual page notations, it 
suggested that submitters be allowed to designate materials for which 
confidentiality is sought in the request letter and, in this fashion, 
refer the agency to indices or placemarks that exist inside the file in 
their native format. Therefore, the Alliance stated that confidential 
portions of video files could be identified by the ``running time'' 
data embedded in the file. Confidential data within a spreadsheet could 
be identified in a confidentiality request letter designating only 
those columns or rows for which confidential treatment is sought. 
Noting that the language proposed for Section 512.6(c)(3) appeared to 
contemplate that page numbers or sequential markings need only apply to 
those pages for which confidential treatment is sought, the Alliance 
suggested that submitters could provide NHTSA with sufficient 
information to identify confidential data by numbering or marking only 
those pages. An alternative reading--that all pages in an electronic 
submission requesting confidentiality must be marked--would, in its 
view, be unduly burdensome.
    Consistent with these views, the Alliance suggested an alternative 
version of the agency's proposed regulatory text. These alternative 
versions modified both Section 512.6(c)(2)--which contains the agency's 
proposed requirements for brackets and marking individual pages--and 
Section 512.6(c)(3)--setting forth NHTSA's proposed requirements for 
page numbering--by altering Section 512.6(c)(2) to address page 
numbering and Section 512.6(c)(3) to address brackets and page marking. 
In particular, the Alliance suggested the following language:

    (c) Submissions in electronic format.
* * * * *
    (2) Electronic files with content that can be marked with page 
designations must be so marked so that any page can be located using 
the file name and page number. Files with content that has page 
designations shall be identified in the request for confidentiality 
by file name and page numbers or, at the option of the submitter, by 
sequence number. If files cannot be marked with page or sequence 
number designations, then the portions of the files that are claimed 
to be confidential shall be described by other means in the request 
for confidential treatment.
    (3) Electronic files with content that can be marked must be 
marked ``Confidential'' at the top of each page. If only a portion 
of the content of a page is claimed to be confidential, the 
confidential portion shall be designated by brackets. If the 
confidential portion cannot be marked with brackets, it must be 
identified by another method, such as font change or symbols, 
whenever feasible. The submitter must use one method consistently 
for electronic files of the same type within the same submission and 
the method used must be described in the request for 
confidentiality. Files and materials that cannot be marked 
internally, such as video clips or executable files or files 
provided in a format specifically requested by the agency, shall be 
renamed prior to submission so the characters ``Conf'' or the word 
``Confidential'' appear in the file name.

    The Alliance's suggested language differs from the agency's 
proposal in several ways. Marking file content with either page 
numbers, brackets or the legend ``Confidential'' is required only when 
that content can be marked. Where the content cannot be marked, 
submitters may choose other means of identification, including changing 
existing attributes of the content, if these changes are clearly and 
consistently identified in the submitter's request for confidential 
treatment.
    We are modifying our earlier proposal to address the issues raised 
by the Alliance and a governmental issue. The agency agrees that some 
materials do not have paper equivalents or are not, particularly when 
submitted in their original or ``native'' format, capable of being 
marked with brackets, page notations, page numbers or other sequential 
identifiers. We also concur in the Alliance's interpretation that our 
proposed Section 512.6(c)(3) would require numbering or sequential 
marking of only those pages or items for

[[Page 59467]]

which confidential treatment is sought. The Alliance's suggestions for 
page numbering or sequential marking provide for accurate 
identification of confidential information within electronic 
submissions.
    However, in a number of respects, the revisions suggested by the 
Alliance lack sufficient specificity to ensure that confidential 
materials will be adequately identified in a consistent manner. The 
Alliance's suggested revision to proposed Section 512.6(c)(2) provides 
that content files that cannot be marked with page numbers or 
sequential marks be ``described'' by other means. However, the 
categories of materials that ``cannot'' be marked are not adequately 
defined by the Alliance's revision. Also, the ``other means'' suggested 
by the Alliance does not provide sufficient guidance to submitters. The 
agency also notes that when such other means are used, these other 
methods may only be ascertained through examination of the request for 
confidential treatment, which often becomes separated from the 
materials, and not by examination of the information alone.
    There have been other questions pertaining to whether within 
governmental parlance the word confidential refers to confidential 
business information.
    To address the foregoing issues, the final rule specifies that 
pagination or sequential marking is required, except when files are 
submitted in their ``native'' format and only to the extent that the 
native format does not contain, or allow for, any internal indices. For 
example, a video file does not readily lend itself to marking with page 
numbers. Such files do, however, contain indices in their native format 
in the form of individual frames within the file itself. Spreadsheets 
contain internal indices in the form of columns and individual rows. In 
both cases, existing indices within the files serve as a substitute for 
sequential numbering. The final rule requires that those submitters 
seeking confidentiality of files in their native format must state that 
the native format precludes sequential page marking and specify an 
alternate means of identifying specific confidential material within 
the file. If internal indices exist, the submitter must provide an 
explanation of how these internal indices are arranged and apply to 
data within the file. We are also adding a requirement that an 
electronic copy of the submitter's request for confidential treatment 
be provided on the media containing the confidential data to reduce the 
possibility that explanations of alternative marking schemes become 
separated from the data.
    We are also adopting the proposed requirement that electronic media 
may be submitted only in commonly used and available formats to address 
occasional problems the agency has encountered when attempting to 
review files prepared using uncommon software applications, such as 
proprietary databases. To address requests for confidentiality, we must 
be able to open the files and examine the data submitted. We received 
no comments addressing this issue. This requirement would be satisfied 
by the submission of data in widely used formats such as PDF, Word 
documents, and Excel spreadsheets.
    As proposed, requests for confidential treatment for information 
submitted to the agency must provide the information claimed as 
confidential in a physical medium such as a CD-ROM. They may not be 
sent to the agency by e-mail. No comments were received addressing this 
issue either. There have been occasions where manufacturers have 
attempted to submit information claimed as confidential via e-mail. Not 
only was this action not allowed under the existing regulations, but 
tracking requests for confidential treatment submitted in this manner 
is very difficult and far more prone to error than a physical 
submission. Permitting submissions and accompanying requests for 
confidential treatment in this manner affects the agency's ability to 
provide timely responses to these requests and the Chief Counsel's 
office's ability to transmit the information to the relevant office 
within NHTSA. In addition, the Department of Transportation limits the 
overall amount of e-mail information that an individual may maintain, 
which presents problems, including storage issues. We also have 
encountered difficulties in receiving attachments to e-mails that 
contain very large amounts of information. To ensure NHTSA's ability to 
properly track and handle this information, we are requiring that the 
information be placed on appropriate physical media, such as CDs, when 
requesting confidential treatment.
    Finally, a question has been raised whether the word confidential 
could result in confusion. NHTSA's longstanding view has been that the 
word confidential means confidential business information as used in 
the title of 49 CFR part 512 Confidential Business Information and that 
the focus is on information that is exempt from disclosure under FOIA. 
In another context, involving national security information, the word 
confidential has a different meaning. To make clear that we are dealing 
with confidential business information, we are adjusting the proposed 
regulation to use the words confidential business information instead 
of confidential.
    The foregoing changes are included in a new 49 CFR 512.6(c) that 
replaces 49 CFR 512.6(b)(3).

VII. Updated Agency Contact Information

    In June 2007, the agency's offices moved to a new location. The 
current version of 49 CFR part 512 does not yet reflect this change. In 
today's notice, the new mailing address has been substituted at 49 CFR 
part 512.7. The agency's change of address does not require notice. 5 
U.S.C. 553(b).

VIII. Data Quality Act Issues

    Section 515 of the Treasury and General Government Appropriations 
Act for Fiscal Year 2001 (the ``Data Quality Act'') requires agencies 
to take certain affirmative steps to maximize the utility, objectivity, 
and integrity of data agencies disseminate to the public. This final 
rule establishes a number of class determinations applicable to those 
portions of the early warning reporting information determined likely, 
if released, to cause substantial competitive harm and to impair the 
government's ability to obtain data necessary to the operation of the 
agency's defect detection and remediation program. Such submissions are 
entitled to confidential treatment under Exemption 4 of the Freedom of 
Information Act.
    RMA asserted that the class determinations that we proposed failed 
to satisfy the Data Quality Act. It contended that the Data Quality Act 
provides an independent basis to prohibit the disclosure of the EWR 
data the agency determined is not within the purview of Exemption 4. 
The RMA believes that the agency's release of EWR data would reasonably 
suggest to the public that the agency agrees with the data and would be 
relied on by the public as official NHTSA information. The RMA asserted 
that the EWR information is subject to the Data Quality Act because it 
is factual data prepared by third parties, and in the RMA's opinion, 
not covered by any of the 12 exceptions contained in the DOT 
guidelines. The RMA also argued that the final rule does not meet the 
Data Quality Act's ``utility'' requirement and as written would not 
present manufacturers'' data in an accurate, clear, complete and 
unbiased manner and in a proper context.

[[Page 59468]]

    We disagree. Under today's rule, most of the categories of EWR data 
will not be disclosed to the public, except under 49 U.S.C. 30167 or 
court order. We note that the EWR information not addressed in today's 
rule--reports of claims and notices of deaths, personal injury and 
property damage and some production numbers--involves factual matter 
and does not constitute data relied on or developed as part of a 
determination by the agency. Also RMA's members may submit individual 
requests for confidentiality regarding these data. Accordingly, this 
rule does not implicate Data Quality Act concerns.
    Moreover, even if EWR data were subject to the Data Quality Act, 
the early warning program is not subject to the requirements of the 
Data Quality Act because it falls within an express exemption. The OMB 
guidelines define the dissemination of information as agency initiated 
or sponsored distribution of information to the public, but does not 
include responses to requests for agency records under the Freedom of 
Information Act, the Privacy Act, the Federal Advisory Committee Act or 
other similar law. (67 FR 8460). Thus, the Data Quality Act does not 
apply to data that the agency is required to disclose under FOIA, which 
would be the case with the quarterly reported death, injury, and 
property damage claim numbers provided under EWR, but only to 
information that the agency discloses as part of an agency-initiated or 
sponsored dissemination of information.
    Consistent with OMB's guidance, the Department of Transportation 
developed a set of guidelines on information dissemination, which 
includes an exception for ``responses to requests under FOIA, Privacy 
Act, the Federal Advisory Committee Act or other similar laws.'' \76\ 
The information not covered by a class determination of 
confidentiality, or otherwise protected by a FOIA exemption, must be 
released under FOIA.
---------------------------------------------------------------------------

    \76\ DOT's Information Dissemination Quality Guidelines, at 12 
(Effective Oct. 1, 2002). The DOT guidelines are available for 
public inspection at http://dms.dot.gov (click on the ``Data 

Quality'' link and then ``guidelines'').
---------------------------------------------------------------------------

    The process established by Part 512 allows the agency to make 
available to the public information subject to FOIA by determining in 
advance which information is entitled to protection under a FOIA 
exemption. The FOIA provides the analytic foundation for the 
determination of which data will be publicly available and which will 
be protected from public disclosure. Accordingly, this information 
qualifies under the FOIA exception created by the OMB guidelines.\77\
---------------------------------------------------------------------------

    \77\ The FOIA mandates that the agency make broadly available 
information that has already been the subject of a FOIA request 
granted by the agency. An agency must make available for public 
inspection and copying ``records * * * which have been released to 
any person [under FOIA] and which, because of the nature of their 
subject matter, the agency determines have become or are likely to 
become the subject of subsequent requests for substantially the same 
records.'' 5 U.S.C. 552(a)(2)(D). In addition, under the Electronic-
FOIA Amendment of 1996, the information, if created after November 
1, 1996, must be made available in an electronic format to the 
public. 5 U.S.C. 552(a)(2)(E).
---------------------------------------------------------------------------

    Finally, in Public Citizen v. Mineta (D.D.C. Civil No. 04-463), RMA 
dismissed its Data Quality Act claim regarding the CBI rule that 
ultimately was remanded.

IX. Privacy Act Statement

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (65 FR 19477) or you may visit http://dms.dot.gov.

X. Regulatory Analyses and Notices

A. Executive Order 12866 and DOT Regulatory Policies and Procedures

    Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 
51735 (Oct. 4, 1993)), provides for making determinations whether a 
regulatory action is ``significant'' and therefore subject to review by 
the Office of Management and Budget (OMB) and to the requirements of 
the Executive Order. The Order defines a ``significant regulatory 
action'' as one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or Tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    NHTSA has considered the impact of this rulemaking action under 
Executive Order 12866 and the Department of Transportation's regulatory 
policies and procedures (44 FR 11034 (Feb. 26, 1979)). This rulemaking 
action is not significant under E.O. 12866, ``Regulatory Planning and 
Review'' or the Department's regulatory policies and procedures. There 
are no new significant burdens on information submitters or related 
costs that would require the development of a full cost/benefit 
evaluation. As indicated in the preamble, this document would remedy a 
deficiency identified by a Federal court and does not raise any new 
legal or policy issues. This rule does not present novel policy issues. 
Instead, it resolves issues that have been addressed in the past, 
including in litigation.

B. Regulatory Flexibility Act

    We have considered the effects of this rulemaking action under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) This rule will not 
have a significant economic impact on a substantial number of small 
entities. This rule will impose no additional reporting obligations on 
small entities beyond those otherwise required by the Safety Act and 
the early warning reporting regulation. This rule addresses the 
agency's treatment of early warning reporting data and clarifies 
procedures for all submitters, including small entities, with regard to 
confidentiality. The rule protects certain categories of early warning 
reporting information from disclosure to ensure consistency in the 
treatment of information that is likely to cause substantial 
competitive harm to submitters if disclosed.
    In addition, small entities, which generally submit items in hard 
copy format, are expected to and may continue to do so. Those wishing 
to submit information in electronic format would be able to do so using 
the procedures that we are clarifying in this proposal. Therefore, a 
regulatory flexibility analysis is not required for this action.

C. Executive Order 13132 (Federalism)

    NHTSA has examined today's rule pursuant to Executive Order 13132 
(64 FR 43255, August 10, 1999). This action will not have ``federalism 
implications'' because it will not have ``substantial direct effects on 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government,'' as specified in section 1 of the 
Executive Order.

[[Page 59469]]

D. Unfunded Mandate Reform Act

    The Unfunded Mandate Reform Act of 1995 requires agencies to 
prepare a written assessment of the costs, benefits and other effects 
of proposed or final rules that include a Federal mandate likely to 
result in the expenditure by State, local or tribal governments, in the 
aggregate, or by the private sector, of more than $100 million annually 
(adjusted for inflation with a base year of 1995). This rule will not 
result in the expenditure by State, local or tribal governments, in the 
aggregate, or by the private sector, of more than $100 million 
annually.

E. Executive Order 12988 (Civil Justice Reform)

    With respect to the review of the promulgation of a new regulation, 
section 3(b) of Executive Order 12988, ``Civil Justice Reform'' (61 FR 
4729, February 7, 1996) requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) Clearly specifies 
the preemptive effect, if any; (2) clearly specifies any effect on 
existing Federal law or regulation; (3) provides a clear legal standard 
for affected conduct while promoting simplification and burden 
reduction; (4) specifies the retroactive effect, if any; (5) adequately 
defines key terms; and (6) addresses other important issues affecting 
clarity and general draftsmanship under any guidelines issued by the 
Attorney General. This document is consistent with that requirement.
    NHTSA notes that there is no requirement that individuals submit a 
petition for reconsideration or pursue other administrative proceedings 
before they may file suit in court.

F. Paperwork Reduction Act

    The existing requirements of Part 512 are considered to be 
information collection requirements as that term is defined by the 
Office of Budget and Management (OMB) in 5 CFR part 1320. Accordingly, 
the existing Part 512 regulation was submitted to and approved by OMB 
pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). At 
the time that we submitted the prior requirements of Part 512, these 
requirements were approved through January 31, 2008. This rule does not 
revise the existing currently approved information collection under 
Part 512. Instead, the rule contains the same requirements as before 
and only clarifies procedures as to electronically-submitted items to 
the agency for which confidentiality is sought. It does not require 
electronic submissions.

G. Executive Order 13045

    Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any 
rule that: (1) Is determined to be ``economically significant'' as 
defined under E.O. 12866, and (2) concerns an environmental, health or 
safety risk that NHTSA has reason to believe may have a 
disproportionate effect on children. This action does not meet either 
of these criteria.

H. Regulation Identifier Number (RIN)

    The Department of Transportation assigns a regulation identifier 
number (RIN) to each regulatory action listed in the Unified Agenda of 
Federal Regulations. The Regulatory Information Service Center 
publishes the Unified Agenda in April and October of each year. You may 
use the RIN contained in the heading at the beginning of this document 
to find this action in the Unified Agenda.

List of Subjects in 49 CFR Part 512

    Administrative procedure and practice, Confidential business 
information, Freedom of information, Motor vehicle safety, Reporting 
and recordkeeping requirements.

0
In consideration of the foregoing, the National Highway Traffic Safety 
Administration amends 49 CFR Chapter V, Code of Federal Regulations, by 
amending Part 512 as set forth below.
0
1. The authority for Part 512--Confidential Business Information 
continues to read as follows:

    Authority: 49 U.S.C. 322; 5 U.S.C. 552; 49 U.S.C. 30166, 49 
U.S.C. 30167; 49 U.S.C. 32307; 49 U.S.C. 32505; 49 U.S.C. 32708; 49 
U.S.C. 32910; 49 U.S.C. 33116; delegation of authority at 49 CFR 
1.50.

0
2. Section 512.6 is amended by removing paragraph (b)(3) and adding a 
new paragraph (c) to read as follows:

Sec.  512.6  How should I prepare documents when submitting a claim for 
confidentiality?

* * * * *
    (c) Submissions in electronic format--
    (1) Persons submitting information under this Part may submit the 
information in an electronic format. Except for early warning reporting 
data submitted to the agency under 49 CFR part 579, the information 
submitted in an electronic format shall be submitted in a physical 
medium such as a CD-ROM. The exterior of the medium (e.g., the disk 
itself) shall be permanently labeled with the submitter's name, the 
subject of the information and the words ``CONFIDENTIAL BUSINESS 
INFORMATION''.
    (2) Confidential portions of electronic files submitted in other 
than their original format must be marked ``Confidential Business 
Information'' or ``Entire Page Confidential Business Information'' at 
the top of each page. If only a portion of a page is claimed to be 
confidential, that portion shall be designated by brackets. Files 
submitted in their original format that cannot be marked as described 
above must, to the extent practicable, identify confidential 
information by alternative markings using existing attributes within 
the file or means that are accessible through use of the file's 
associated program. When alternative markings are used, such as font 
changes or symbols, the submitter must use one method consistently for 
electronic files of the same type within the same submission. The 
method used for such markings must be described in the request for 
confidentiality. Files and materials that cannot be marked internally, 
such as video clips or executable files or files provided in a format 
specifically requested by the agency, shall be renamed prior to 
submission so the words ``Confidential Bus Info'' appears in the file 
name or, if that is not practicable, the characters ``Conf Bus Info'' 
or ``Conf'' appear. In all cases, a submitter shall provide an 
electronic copy of its request for confidential treatment on any medium 
containing confidential information, except where impracticable.
    (3) Confidential portions of electronic files submitted in other 
than their original format must be marked with consecutive page numbers 
or sequential identifiers so that any page can be identified and 
located using the file name and page number. Confidential portions of 
electronic files submitted in their original format must, if 
practicable, be marked with consecutive page numbers or sequential 
identifiers so that any page can be identified and located using the 
file name and page number. Confidential portions of electronic files 
submitted in their original format that cannot be marked as described 
above must, to the extent practicable, identify the portions of the 
file that are claimed to be confidential through the use of existing 
indices or placeholders embedded within the file. If such indices or 
placeholders exist, the submitter's request for confidential treatment 
shall clearly identify them and the means for locating them within the 
file. If files submitted in their original format cannot be marked with 
page or sequence number designations and do not contain existing 
indices or placeholders for locating confidential information, then the 
portions of the files that are claimed to be confidential shall be 
described by other means in the

[[Page 59470]]

request for confidential treatment. In all cases, submitters shall 
provide an electronic copy of their request for confidential treatment 
on any media containing confidential data except where impracticable.
    (4) Electronic media may be submitted only in commonly available 
and used formats.
0
3. Section 512.7 is revised to read as follows:

Sec.  512.7  Where should I send the information for which I am 
requesting confidentiality?

    A claim for confidential treatment must be submitted in accordance 
with the provisions of this regulation to the Chief Counsel of the 
National Highway Traffic Safety Administration, 1200 New Jersey Avenue, 
SE., West Building W41-227, Washington, DC 20590.

0
4. Appendix C to Part 512 is revised read as follows:

Appendix C to Part 512--Early Warning Reporting Class Determinations

    (a) The Chief Counsel has determined that the following 
information required to be submitted to the agency under 49 CFR 579, 
Subpart C, if released, is likely to cause substantial harm to the 
competitive position of the manufacturer submitting the information 
and is likely to impair the government's ability to obtain necessary 
information in the future:
    (1) Reports and data relating to warranty claim information and 
warranty adjustment information for manufacturers of tires;
    (2) Reports and data relating to field reports, including dealer 
reports, product evaluation reports, and hard copies of field 
reports; and
    (3) Reports and data relating to consumer complaints.
    (b) The Chief Counsel has determined that the following 
information required to be submitted to the agency under 49 CFR 579, 
Subpart C, if released, is likely to cause substantial harm to the 
competitive position of the manufacturer submitting the information:
    (1) Reports of production numbers for child restraint systems, 
tires, and vehicles other than light vehicles, as defined in 49 CFR 
579.4(c); and
    (2) Lists of common green tire identifiers.
0
5. Appendix D to part 512 is redesignated as Appendix E to Part 512 and 
a new Appendix D to Part 512 is added to read as follows:

Appendix D to Part 512--Vehicle Identification Number Information

    The Chief Counsel has determined that the disclosure of the last 
six (6) characters, when disclosed along with the first eleven (11) 
characters, of vehicle identification numbers reported in 
information on incidents involving death or injury pursuant to the 
early warning information requirements of 49 CFR part 579 will 
constitute a clearly unwarranted invasion of personal privacy within 
the meaning of 5 U.S.C. 552(b)(6).
0
6. Newly redesignated Appendix E to Part 512 is revised to read as 
follows:

Appendix E to Part 512--OMB Clearance

    The OMB clearance number for this part 512 is 2127-0025

    Issued on: October 10, 2007.
Nicole R. Nason,
Administrator.
 [FR Doc. E7-20368 Filed 10-18-07; 8:45 am]

BILLING CODE 4910-59-P