Opinion ID: 783159
Heading Depth: 2
Heading Rank: 3

Heading: The Phase-in Period and the 25 Percent Option

Text: 87 In addition to challenging the agency's one-tire, 30 percent option, the petitioners target two other parts of the agency's Final Rule: (1) the three-year phase-in period, see Safety Standard, 49 C.F.R. § 571.138 pt. S7; Final Rule, 67 Fed. Reg. at 38738; and (2) the 25 percent aspect of the four-tire, 25 percent standard, see Safety Standard, 49 C.F.R. § 571.138 pt. S4.2.1(a); Final Rule, 67 Fed. Reg. at 38705. These arguments are without merit.
88 When the agency published the Notice of Proposed Rulemaking, it noted that section 13 of the TREAD Act requires that the Final Rule be issued by November 1, 2001, and take effect by November 1, 2003. Notice, 66 Fed. Reg. at 38997. The agency sought comment on whether vehicle manufacturers will be able to meet the statutory deadline, and whether TPMS manufacturers will be able to supply enough TPMSs to meet the demand under either of the alternatives proposed in this NPRM [i.e., the four-tire, 20 percent standard, and the three-tire, 25 percent standard]. Id. In the commentary that followed, the Alliance of Automobile Manufacturers — the intervenors in these proceedings — proposed a more gradual phase-in period, to allow for sufficient `prove-out' of developing TPMS technologies. Final Rule, 67 Fed. Reg. at 38737-38. No commenter opposed a phase-in of the TPMS requirements during the rulemaking proceedings. Id. at 38737. 89 When the agency issued the Final Rule, it accepted the Alliance's comment, and remain[ed] concerned that TPMS manufacturers will not be able to produce enough systems and parts to supply 16 million vehicles annually by November 1, 2003. Id. at 38738. These findings, which the petitioners have not disputed, plainly raise reasonable concerns. The agency's adoption of a three-year phase-in period was not arbitrary and capricious. 90
91 As we have noted, in the Notice of Proposed Rulemaking, the agency proposed two alternatives: a four-tire, 20 percent standard, and a three-tire, 25 percent standard. Notice, 66 Fed. Reg. at 38983. Then, in the draft final rule, the agency shifted both standards, proposing an option for automakers to meet either a four-tire, 25 percent standard or a one-tire, 30 percent standard. Final Rule, 67 Fed. Reg. at 38717. The petitioners argue that the agency's shift from 20 to 25 percent in the four-tire standard was arbitrary and capricious. To support this argument, the petitioners observe that according to the agency's own findings, current direct systems are already able to detect under-inflation levels equal to or greater than 20 percent. 92 As we have noted, however, the agency explained the shift from a four-tire, 20 percent standard to a four-tire, 25 percent standard in the Final Rule: 93 The agency ... adjust[ed] ... the four-tire option to 25 percent (instead of 20 percent) so that improved indirect TPMSs and hybrid TPMSs could be used to comply with the TPMS standard. 94 Id. at 38717-18. The agency supported this justification with a cost/benefit analysis, which concluded that the net cost per equivalent life saved of the four-tire, 20 percent standard was between $5.1 million and $5.3 million, whereas the net cost per equivalent life saved of the four-tire, 25 percent standard was $4.3 million. Id. at 38717. The agency concluded that the difference in benefits between TPMSs meeting four-tire, 20 percent requirements and TPMSs meeting four-tire, 25 percent requirements should not be substantial. Id. at 38706. Given that the 25 percent standard was a substantially more cost effective means of preventing injuries and saving lives than the 20 percent standard, we conclude that it was reasonable for NHTSA to adopt the former and reject the latter.
95 In addition to these two arguments, the petitioners also argue that the Final Rule is contrary to the intent of the TREAD Act insofar as it (1) defines the term significantly under inflated in contradictory ways by including both 25 percent and 30 percent options, and (2) permits many new motor vehicles to be made without any TPMSs during the phase-in period, which extends three years beyond November 1, 2003, the effective date prescribed by the Act. 96 These arguments also lack merit. First, the TREAD Act does not instruct the agency to define the term significantly under inflated at all, let alone require the agency to define the term as a specific percentage below placard pressure — e.g., 25 percent — rather than as a range between two percentages — e.g., between 25 and 30 percent. See TREAD Act § 13. Second, the Safety Act expressly instructs the Secretary of Transportation to issue practicable safety standards. 49 U.S.C. 30111(a). As we have explained, the agency found that it would not be practicable to require TPMS manufacturers to produce and automakers to install TPMSs in all new motor vehicles by November 1, 2003. Final Rule, 67 Fed. Reg. at 38737-38.