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

Heading: The One-Tire, 30 Percent Standard

Text: 61 As we have noted, NHTSA's Final Rule provides automakers with two options during the phase-in period: They may either comply with the four-tire, 25 percent standard by installing direct, hybrid, or improved indirect systems in new motor vehicles, or comply with the one-tire, 30 percent standard by installing currently available indirect systems in new motor vehicles. Safety Standard, 49 C.F.R. § 571.138 pt. S4.2; Final Rule, 67 Fed. Reg. at 38722-23. The agency found that indirect systems do not warn drivers when two tires on the same side or the same axle of the vehicle are significantly under-inflated, or when all four tires are significantly under-inflated. Notice, 66 Fed. Reg. at 38987; Final Rule, 67 Fed. Reg. at 38716, 38718. According to the agency's mandatory owner's manual statement, these three combinations are relatively common, such that indirect systems do not warn drivers in approximately half [of] the instances in which vehicles have significantly under-inflated tires. Safety Standard, 49 C.F.R. § 571.138 pt. S4.5.2; see also Final Rule, 67 Fed. Reg. at 38718, 38728. 62 The petitioners' principal arguments are that the agency's adoption of a one-tire, 30 percent standard is contrary to the intent of the TREAD Act and, in light of the relative shortcomings of indirect systems, arbitrary and capricious. We agree on both counts.
63 The TREAD Act does not speak in terms of types of TPMSs; it does not state whether the agency's rule must adopt standards that require automakers to install direct, hybrid, or indirect systems. It says only that the Secretary of Transportation shall complete a rulemaking for a regulation to require a warning system in new motor vehicles to indicate to the operator when a tire is significantly under-inflated. TREAD Act § 13 (emphasis added). 64 The petitioners argue that the rule's one-tire, 30 percent standard fails to satisfy this minimum statutory requirement by permitting automakers to install currently available indirect systems, even though such systems do not warn drivers when two tires on the same side or the same axle of the vehicle are significantly under-inflated, or when all four tires are significantly under-inflated. The agency responds that the plain language of the TREAD Act requires only that TPMSs must warn drivers when a tire is significantly under-inflated; it does not expressly state that TPMSs must also warn drivers when two, three, or four tires are significantly under-inflated. The agency therefore suggests that the TREAD Act requires no more than a one-tire TPMS standard. 65 We think that, in light of the language and purpose of the TREAD Act, the petitioners' construction is clearly right and the agency's construction is clearly wrong. Section 13 requires warning systems that indicate when a tire is significantly under inflated. TREAD Act § 13 (emphasis added). The TREAD Act's  a tire plainly means one tire, two tires, three tires, or all four tires, under the elementary rule of statutory construction that the singular (a tire) includes the plural (tires). See 1 U.S.C. § 1 (In determining the meaning of any Act of Congress, unless the context indicates otherwise ... words importing the singular include and apply to several persons, parties, or things.); see also William N. Eskridge, Jr. & Philip P. Frickey, Cases and Materials on Legislation 642-43 (2d ed.1995) (discussing the singular-plural rule). Obviously, if a vehicle has two tires that are significantly under-inflated, then it has a tire that is significantly under-inflated — indeed, it has two instances of a tire that is significantly under-inflated. 25 66 The purpose of the statute, moreover, is to prevent motor vehicle crashes caused by significantly under-inflated tires. It is contrary to that purpose to read the phrase, when a tire is significantly under-inflated, to mean when one tire, and only one tire, is significantly under-inflated, thereby excluding approximately half of the instances in which tires are significantly under-inflated, Safety Standard, 49 C.F.R. § 571.138 pt. S4.5.2; see also Final Rule, 67 Fed. Reg. at 38718, 38728, and raising the risk that blowouts, flat tires, skidding, loss of control, and increased stopping distances will cause accidental injuries or deaths, Final Rule, 67 Fed. Reg. at 38739. 26 67 The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent. Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778. We conclude that the agency's reading of section 13 of the TREAD Act — which permits the agency to adopt a one-tire TPMS standard — is contrary to the unambiguously expressed intent of Congress. Chevron, 467 U.S. at 843, 104 S.Ct. 2778. 27
68 Moreover, even if the Final Rule were not contrary to the intent of the TREAD Act, see id. at 842, 104 S.Ct. 2778, we would conclude that the agency's adoption of the one-tire, 30 percent standard option was arbitrary and capricious, see State Farm, 463 U.S. at 43, 103 S.Ct. 2856. In light of the administrative record, which documents the relative shortcomings of currently available indirect systems, it was unreasonable for NHTSA to adopt standards that allow automakers to install such systems in new motor vehicles. Most significantly, as NHTSA notes and as we have repeated more than once, for each occasion on which an indirect system will detect the presence of one or more significantly under-inflated tires, there will be an occasion on which it will fail to detect them. Safety Standard, 49 C.F.R. § 571.138 pt. S4.5.2; see also Final Rule, 67 Fed. Reg. at 38728. Unlike direct systems, which work in virtually every instance in which one or more tires are significantly under-inflated, indirect systems do not warn drivers in about 50 percent of those instances. Final Rule, 67 Fed. Reg. at 38718. Absent any satisfactory explanation in the rulemaking record, the adoption of a standard that permits installation of plainly inferior systems seems to us to be arbitrary and capricious. State Farm, 463 U.S. at 43, 103 S.Ct. 2856. 69 In the Final Rule, in the respondent's brief, and at oral argument, the agency — supported before us by the intervenor and amicus curiae — advanced three justifications for adopting a safety standard that gives automakers the option to install indirect systems: (1) the lower costs of installing indirect systems in vehicles already equipped with anti-lock braking systems, see Final Rule, 67 Fed. Reg. at 38706, 38725; Respondent's Br. at 31-34, 36-38; (2) the need to encourage innovation in indirect systems, see Final Rule, 67 Fed. Reg. at 38706, 38717, 38725, 38727, 38738; Respondent's Br. at 32, 38-41; and (3) the possibility that direct systems may be less robust than indirect systems, see Respondent's Br. at 10, 31, 37. We have carefully reviewed these arguments and the rulemaking record upon which they are based. For the reasons set forth below, we conclude that, in light of the rulemaking record, these arguments are not satisfactory explanation[s] that includ[e] a `rational connection between the facts found and the choice made.' State Farm, 463 U.S. at 43, 103 S.Ct. 2856 (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962)). 70 1. Costs. NHTSA seeks to justify the one-tire, 30 percent option by noting that, for vehicles already equipped with ABS, the installation of a current indirect TPMS is the least expensive way of complying with a TPMS standard, Final Rule, 67 Fed. Reg. at 38706, and by predicting that [c]onsumers will benefit from the resulting cost savings, id. at 38725; see also Respondent's Br. at 31-34, 36-38. 71 When the agency issued the Final Rule, it included a comprehensive cost/benefit analysis that compared (1) adopting the four-tire, 25 percent standard alone with (2) adopting both the four-tire, 25 percent and the one-tire, 30 percent options together. See id. at 38739-41; see supra at [52]. The agency estimated that adopting the four-tire, 25 percent standard alone would save 45 more lives and prevent or mitigate 3,546 more injuries per year than adopting both options together, at an additional annual net cost of $156 million, or an additional average net cost of $9.74 per vehicle. 28 The agency also estimated that adopting the four-tire standard alone would cost $1.5 million less — i.e., approximately 25 percent less —per equivalent life saved than adopting both options together. Final Rule, 67 Fed. Reg. at 38741. 29 In other words, the agency concluded that adopting the four-tire, 25 percent standard would not only prevent more injuries and save more lives, but would also be more cost effective on a per-life, per-injury basis than adopting both options together. 72 These conclusions highlight what appears to us to be the fundamental flaw in the agency's cost argument. The argument is made without factoring in the substantial safety advantages of direct and hybrid systems. The agency concludes that indirect systems are less expensive to install in vehicles with ABS, id. at 38706, but does not account for the fact that indirect systems fail to warn drivers in about 50 percent of those instances in which tires are significantly under-inflated, Final Rule, 67 Fed. Reg. at 38718; see id. at 38728; Safety Standard, 49 C.F.R. § 571.138 pt. S4.5.2. 73 Of course, the agency was correct to consider the relative costs of adopting or rejecting the one-tire, 30 percent option. See, e.g., State Farm, 463 U.S. at 54, 103 S.Ct. 2856 (The agency is correct to look at the costs as well as the benefits of Standard 208.); Ctr. for Auto Safety v. Peck, 751 F.2d 1336, 1343 (D.C.Cir.1985) (The Safety Act's mandate is not ... categorical. Not all risks of accident or injury are to be eliminated, but only those that are `unreasonable,' and safety standards cannot be imposed unless they are `practicable.' This qualifying language was added to ensure that NHTSA would `consider reasonableness of cost, feasibility and adequate lead time.') (citations omitted); S.Rep. No. 1301, at 6 (1966), reprinted in 1966 U.S.C.C.A.N. 2709, 2714 (The committee recognizes ... that the Secretary will necessarily consider reasonableness of cost, feasibility and adequate lead time.); H.Rep. No. 1776, at 16 (1966), quoted in State Farm, 463 U.S. at 55, 103 S.Ct. 2856 (In establishing standards the Secretary must conform to the requirement that the standard be practicable. This would require consideration of all relevant factors, including ... economic factors.). Yet a conclusion that adopting a one-tire, 30 percent option is cheaper, without more, does not satisfy the APA's arbitrary and capricious standard. Presumably, one could design a still less effective and less expensive warning system to monitor tire pressure in new motor vehicles, but the lower price of such a system, alone, would not justify adoption of an even less rigorous TPMS standard. 74 The notion that cheapest is best is contrary to State Farm. There the Court instructed NHTSA to look at the costs as well as the benefits of motor vehicle safety standards, 463 U.S. at 54, 103 S.Ct. 2856, and to bear in mind that Congress intended safety to be the pre-eminent factor under the [Safety] Act, id. at 55, 103 S.Ct. 2856 (citing S.Rep. No. 1301, at 6, reprinted in 1966 U.S.C.C.A.N. at 2714 (The Committee intends that safety shall be the overriding consideration in the issuance of standards under this bill.); H. Rep. No. 1776, at 16 (Motor vehicle safety is the paramount purpose of this bill and each standard must be related thereto.)). Thus, when NHTSA issues standards under the Safety Act, State Farm requires that the agency weigh safety benefits against economic costs; moreover, State Farm instructs the agency to place a thumb on the safety side of the scale. 75 In this case, the agency chose to include the one-tire, 30 percent option, even though adoption of the four-tire, 25 percent standard alone was a more cost effective means of saving life and limb. Whatever it means to treat safety as the pre-eminent factor, State Farm, 463 U.S. at 55, 103 S.Ct. 2856, it must mean that the economic advantages of a standard cannot be considered without reference to the associated safety concerns. 76 It may, of course, be difficult to weigh economic costs against safety benefits. But the difficulty of the task, does not relieve the agency of its obligation to perform it under the Safety Act, section 13 of the TREAD Act, and State Farm. The agency, instead, presents us with a rulemaking record that does not explain why the costs saved were worth the benefits sacrificed. And the record discloses that the added cost for a system that worked all of the time, rather than half of the time, was less than $10 per car, and that the adoption of the four-tire, 25 percent standard alone was the most cost effective means of preventing crashes caused by significantly under-inflated tires. Compare Final Rule, 67 Fed. Reg. at 38706, 38725 (the agency's cost argument), with id. at 38740-41 (the agency's cost/benefit analysis). We have searched the rulemaking record here in vain for some rational connection between the facts found and the choice made. State Farm, 463 U.S. at 43, 103 S.Ct. 2856 (internal quotation marks omitted). 77 2. Innovation. NHTSA next argues that by permit[ting] manufacturers to continue to use current indirect TPMSs, id. at 38725, the one-tire option will give manufacturers the flexibility needed to innovate and improve the performance of the indirect TPMSs, id., and improve the chances that ways can be found to improve the detection of under-inflation as well as reduce the costs of doing so, id. at 38706. To support this argument, the agency cites public comments from TRW Automotive Electronics, Sumitomo Rubber Industries, and Toyota Motor Corporation indicating that indirect systems could be improved to satisfy higher performance standards. See, e.g., id. at 38710, 38716, 38725, 38727. As the agency notes, these comments anticipate two types of improvements: the development of hybrid systems, see id. at 38706, 38710, 38716, 38725, 38727, 38740, and improvements to indirect systems themselves, see id. at 38710, 38727. Based on these comments, the agency argues that if automakers are permitted to comply with the one-tire standard — instead of being forced to comply with the four-tire standard — they will be more likely to develop hybrid systems or improve indirect systems during the phase-in period. See, e.g., id. at 38706, 38717, 38725, 38727, 38738; Respondent's Br. at 32, 38-41. 78 This argument, finding little or no support in the rulemaking record, is not persuasive. The one-tire option might permit innovation, but it also permits stagnation: It allows automakers to install current indirect systems, without any improvements, in all new motor vehicles. Final Rule, 67 Fed. Reg. at 38706, 38717, 38725; Respondent's Br. at 14, 38-40. The four-tire, 25 percent standard, were it the only one, would require automakers to install direct systems, or to attempt to develop new high-performance, low-cost alternatives, such as hybrid systems or improved indirect systems, for installation in new motor vehicles. Final Rule, 67 Fed. Reg. at 38717-18. In light of these differences, it is difficult to understand — and the agency has not explained — how adding the one-tire option would encourage more innovation than adopting the four-tire standard alone. 30 79 Moreover, the agency's innovation argument focuses exclusively on the future of indirect and hybrid systems, but neglects the future of direct systems. While the agency predicts that hybrid systems could be developed, see id. at 38706, 38710, 38716, 38725, 38727, 38740, and that the performance of indirect systems could be enhanced, see id. at 38710, 38727, it ignores the possibility that the costs of direct systems could be reduced. 31 Perhaps, if the one-tire, 30 percent option were eliminated, the costs of producing and maintaining direct systems would decline, as automakers sought more efficient ways to comply with a four-tire standard. Not having discussed the possibility, the agency submitted no reasons for us to reject it. State Farm, 463 U.S. at 50, 103 S.Ct. 2856. 80 In making this judgment, we are informed by the Supreme Court's observation in State Farm: 81 [T]he [Safety] Act was necessary because the industry was not sufficiently responsive to safety concerns. The Act intended that safety standards not depend on current technology and could be technology-forcing in the sense of inducing the development of superior safety design.... [U]nder the statute, the agency should not defer to the industry's failure to develop safer cars .... 82 State Farm, 463 U.S. at 49, 103 S.Ct. 2856 (citation omitted). 83 3. Robustness. In the Respondent's Brief and during oral argument, NHTSA's counsel argued that the components of direct systems are less robust than the components of indirect systems, and more susceptible to damage from road hazards and routine maintenance, such as tire rotation. Respondent's Br. at 10; see also id. at 31, 37, 103 S.Ct. 2856. In view of the agency's position reflected in the Final Rule, we think this robustness argument to be no more than a makeweight. 32 84 In the Final Rule, under the heading of Unquantified Costs, NHTSA anticipated that there may be other maintenance costs for both direct and indirect TPMS, Final Rule, 67 Fed. Reg. at 38741 (emphasis added), citing the following examples: with indirect TPMSs, there may be problems with wheel speed sensors and component failures, id., and [w]ith direct TPMSs, the pressure sensors may be broken off when tires are changed, id. NHTSA said that it had requested comments on these problems, but received none. Id. Without estimates of these maintenance problems and costs, the agency did not quantify their impact. Id. 85 These remarks, agnostic as to the comparative robustness of direct, hybrid, and indirect systems, do not support counsel's suggestions in appellate briefs and during oral argument that the components of direct systems are less robust than the components of indirect systems, and more susceptible to damage from road hazards and routine maintenance, such as tire rotation. Respondent's Br. at 10; see also id. at 31, 37, 103 S.Ct. 2856. Once NHTSA abandons an argument in a final rule, it cannot revive the same argument for the purposes of safeguarding the rule from judicial review. The short — and sufficient — answer to [NHTSA's] submission is that the courts may not accept appellate counsel's post hoc rationalizations for agency action. State Farm, 463 U.S. at 50, 103 S.Ct. 2856 (citing Burlington Truck Lines, 371 U.S. at 168, 83 S.Ct. 239). 86