Opinion ID: 328550
Heading Depth: 1
Heading Rank: 2

Heading: definition of defect

Text: 24 The District Court found that Congress intended to have the manufacturer issue such (defect) notifications not only when there was a cognizable defect in design or manufacture but also when the evidence reveals a large number of failures of components or materials, i. e., failures in performance, regardless of the cause. (Emphasis in original.) 25 The District Court added: This statute is designed specifically to warn a consumer before an accident occurs and a defect in performance, such as a 'large number of failures,' exposes the consumers to dangers of which they should promptly be notified. In its footnote 20, the court amplified: Where the agency shows that there is a prima facie case of a defect in performance through the submission of evidence of a large number of failures of the Wheel, the only defense in such an instance is that this large number of failures did not occur for it is clear the failures of wheels are clear dangers to motor vehicle safety. 43 26 GM concedes that a defect finding can be premised on a significant number of failures in performance but contends that those failures must occur on vehicles operated in conformity with the manufacturer's specifications. 44 Under its definition of defect, GM claims that there is a genuine issue of material fact as to whether a significant number of Wheels have failed on Trucks operated within weight limitations set forth in the owner's manual. 27 For the reasons developed below, we find that the District Court erred in holding that the cause of failures is irrelevant to the defect determination. We also reject GM's specified use formulation of defect as unduly restrictive and not in conformity with legislative intention.
28 This enforcement action is brought pursuant to the Secretary of Transportation's determination under § 113(e) of the Act that the Wheels contain a defect which relates to motor vehicle safety. 45 The definitional section, § 102, defines the two critical terms defect and motor vehicle safety. Section 102(11) provides:  'Defect' includes any defect in performance, construction, components, or materials in motor vehicles or motor vehicle equipment. 46 Section 102(1) provides: 29 Motor vehicle safety means the performance of motor vehicles and motor vehicle equipment in such a manner that the public is protected against unreasonable risk of accidents occurring as a result of the design, construction or performance of motor vehicles . . . 47 30 These provisions indicate that a determination of defect does not require any predicate of a finding identifying engineering, metallurgical, or manufacturing failures. A determination of defect may be based exclusively on the performance record of the vehicle or component. 31 The District Court concluded that the plain language of the sections, when read in conjunction with the statutory purpose to reduce traffic accidents, forcefully demands that defect notifications be sent whenever there are a large number of failures. 48 We find the language of the statute more opague. The Act requires a defect in performance and does not on its face address the core issue, whether the causes of component failures are relevant to the determination of a defect in performance. That is the question we must answer, and we begin our quest by turning to legislative history of the Act.
32 The National Traffic and Motor Vehicle Safety Act of 1966 was a product of the heightened public interest in, and concern over, automotive safety during the mid-1960's. 49 The mounting human and economic cost of auto accidents and attacks by consumer advocates on dangerous vehicle designs prompted numerous legislative proposals dealing with the traffic safety problem. 50 33 An Administration bill was introduced in both chambers in March, 1966. The purpose of the bill, like that of the enacted legislation, was to reduce traffic accidents and the deaths, injuries, and property damage resulting from traffic accidents. 51 Although the bill dealt with all aspects of the traffic safety problem the vehicle, the highway, and the driver it focused on improving the safety of motor vehicles. The emphasis on upgrading motor vehicle safety reflected an understanding that a certain level of driver error and owner carelessness is inevitable. As Senator Ribicoff noted on the opening day of the Senate hearings, the automobile manufacturer has a part to play, taking into account that a human being is never going to be perfect. 52 34 Neither the original House or Senate bills contained a defect notification provision. 53 Shortly after the introduction of the bills, concerns regarding industry practice with respect to notice and repair of defects were voiced in committee hearings. 54 The defect notification provision ultimately incorporated in the Senate bill stemmed from an amendment introduced by Senator Mondale on April 18, 1966. His amendment was prompted by evidence that manufacturers either failed to notify purchasers of defects or merely stated that some unidentified improvements were necessary. The amendment sought to vindicate the owner's right to know what hazards are associated with a particular product by compelling manufacturers to give purchasers fair warning of the specific safety risks presented. Senator Mondale did not explain when defect notices should be issued, beyond stating that they were not required for minor defects but must be sent in all cases involving a safety hazard. 55 35 Senate consideration of this amendment and House examination of similar amendments reaffirmed the need for uniform and prompt notification to vehicle owners of the discovery of any defects related to safety, 56 without further explication of the circumstances requiring manufacturers to furnish notifications. The Senate bill defined defect as any defect in design, construction, components or materials and the Senate Report indicated that the term is used in the sense of an error or mistake in design, manufacture or assembly. 57 The concept of defect in performance did not appear in the Senate bill. That phrase first emerged in the final House bill, in the definition of defect. It was accepted by the conference committee and incorporated into the version subsequently enacted into law. 58 Neither the House Report nor the Conference Report comments on the intended scope of defect or defect in performance. 59 36 Legislative History and GM's Intended Use Formulation 37 In its argument in the District Court, GM seized on the language of the Senate Report and the absence of any meaningful statutory definition to argue that it must be assumed that Congress adopted the common law definition of defect, requiring the plaintiff to demonstrate, at the very least, that his misuse of the product was not the cause of the failure. 60 The District Court properly rejected appellant's contention. The Act was designed as a preventive measure supplementary of and in addition to the common law of negligence and product liability. 61 Determinations of fault or liability relevant to the award of damages at common law are not controlling on the interpretation of the scope of this prophylactic defect notification legislation. 38 In its brief on appeal, GM contends that the District Court's standard ignoring the cause of performance failures cannot be squared with the common meaning of a defect. Appellant puts it that an item of equipment cannot be called 'defective' in any sense if it only fails to operate properly when the applicable instructions and warnings are ignored. 62 39 GM's approach does not measure up to the purpose of the defect notification provision and the statute as a whole. Congress was concerned with the day-to-day performance of motor vehicles in the myriad conditions of use experienced by the public, not the test data compiled by professional drivers on the manufacturer's proving grounds or performance specifications under laboratory conditions. The protection afforded by the Act was not limited to careful drivers who fastidiously observed speed limits and conscientiously complied with manufacturer's instructions on vehicle maintenance and operation. The mood of the statute is fairly identified by the comments of various Senators espousing the proposed legislation even before the notification provision was added by the House, as affording, in the words of Senator Hartke, an added area of safety to an owner who is lackadaisical, who neglects regular maintenance, and doesn't switch his tires, doesn't keep them at proper pressure, and as observant that this is the human factor we are talking about. 63 40 GM's contention that there can be no defect in performance so long as the Wheel does not fail under loads specified by the manufacturer is undermined by its own description of the manner in which purchasers normally operate their trucks. As GM's counsel stated during the administrative proceeding: We know, we always have known, everybody knows that trucks are overloaded on occasion. 64 A 1969 GM letter to the Federal Highway Administrator explained that (i)n the case of trucks . . . the applicable GVW can be exceeded easily and will be exceeded unless the operator takes precautions against so doing and that owners have continued and will continue to exceed these limitations. 65 These statements underscore the realities of operation owners do not always know or pay close attention to the weight of their cargo, and are not always scrupulous to make sure that tires are inflated to specified pressures, and loads carefully balanced front-to-back and side-to-side. 66 The reality of day-to-day operation embraces some to-be-expected overloading of the vehicle and overinflation of the tires, and this provides the proper context in which to evaluate vehicle performance. 41 When pressed at argument on appeal, counsel for GM conceded what could not fairly be denied that it may very well be true that a manufacturer would have an obligation to anticipate some degree of misuse perhaps or failure to maintain and build in some additional margin for his product. The congressional purpose to warn owners about safety hazards requires notice not only where the vehicle fails when used in conformity with manufacturer's instructions, but also when there is an inadequate margin of safety to protect against failures during reasonably expected vehicle operation. 42 Legislative History and the District Court's Definition 43 While the District Court was on sound ground in rejecting GM's specified use theory, it went too far in the other direction when it held that the cause of component failures was irrelevant to the defect determination. That ruling conflicts with the legislative history of the 1966 Act. 44 The Senate Report indicates that the critical definitions which delimit the scope of the bill are those of 'motor vehicle' and 'motor vehicle safety.'  67 The latter definition crystallizes the legislative intention to protect the public against vehicle performance posing an  unreasonable risk of accidents. 68 As the Senate hearings make clear, the word unreasonable was placed in the bill deliberately, to signify a  commonsense balancing of safety benefits and economic cost. 69 A similar concern was expressed in the Senate Report's discussion of factors to be evaluated in setting safety standards for new motor vehicles. The report identified safety as the overriding consideration but agreed with the General Counsel of the Commerce Department that in promulgating standards the Secretary will necessarily consider reasonableness of costs, feasibility and adequate leadtime. 70 In view of the Senate Report's identification of the motor vehicle safety definition as critical to the scope of the entire bill, and the linkage of the terms defect and motor vehicle safety in the notification provision (§ 113, quoted supra note 4), we find the commonsense approach of motor vehicle safety is relevant to the intended meaning of  defect. 71 45 The commonsense limitation reflects an awareness that costs must be considered in determining what safety measures are required by the Act. While some margin of safety must be built-in to protect against failures during day-to-day operation, manufacturers are not required to design vehicles or components that never fail. It would appear economically, if not technologically, infeasible for manufacturers to use tires that do not wear out, lights that never burn out, and brakes that do not need adjusting or relining. Such parts cannot reasonably be termed defective if they fail because of age and wear. 46 Similarly, a commonsense approach would not find defective a wheel that collapsed under a load, say, four times that specified, and, say, twice the load that might be projected as a use (or technical over-use) that could be deemed a realistic expectation. The District Court's decision that a large number of failures, regardless of cause, constituted irrebuttable proof of a defect, ignores these commonsense limitations and must be rejected as incompatible with the discernible legislative intention. 47
48 Amendments to the Act contained in the Motor Vehicle and Schoolbus Safety Amendments of 1974 require manufacturers, in addition to furnishing defect notifications, to correct at their expense defects which relate to motor vehicle safety. The amendments neither alter the Act's definitions of defect and motor vehicle safety nor establish separate criteria for the manufacturer's notification and repair obligations. 72 The House Report on the amendments, issued approximately one month after the District Court's opinion, indicates that the cause of performance failure is relevant to the defect determination. 49 The remedy without charge requirement is intended to require manufacturers to correct at their expense defects in the performance, design, or construction of their products which relate to motor vehicle safety. It is not intended that manufacturers be required to make corrections if they can establish that the condition requiring correction results from the abuse of their products or the failure to adequately maintain them. 73 50 We are aware that subsequent congressional actions may provide a hazardous basis for inferring the intent of an earlier Congress. 74 But here we are dealing with provisions that must be applied together and in relation to each other. What Congress was making clear was that the defects required to be notified were defects that would have to be repaired at the expense of the manufacturer, not at the expense of the consumer. (There is an exception of no present consequence, removing the obligation to repair or replace as to defects covered by notifications or notification directives issued eight years after the first purchase.) 75 51 In general, the contours of the defects the manufacturer must remedy fairly delineate the defects that must be notified. We are on sound ground, then, in turning to the legislative understanding of those contours expressed at a time when it was not making any change in the provisions that define them. In this context, we deem the 1974 House Report, which provides for some defense of abuse, to be a reliable explication of the scope of the original defect notification section. 76 Aware of the tension between its recognition of an abuse defense and the need for prompt notification, Congress added a provisional notification section to permit the agency to effectuate prompt notification of the problem while the defense was being litigated. 77
52 The District Court rested in part on the doctrine (t)hat Courts should give great weight to any reasonable construction of a regulatory statute adopted by the agency charged with the enforcement of that statute. 78 The District Court went astray, however, when it equated the theory advanced by the Government's litigating counsel with the administrative interpretation of the Act. The defect notification directive which the Government is attempting to enforce in this action rests on the agency's finding that a significant number of wheel failures has occurred . . . under loads which are below the wheel strength level specified by the truck builder. 79 The agency's Investigation Report never set forth the theory of Government counsel based on large number of failures, irrespective of cause. The NHTSA's stated position is that (w)hether a defect exists depends solely on the facts of each particular situation. It has explicitly declined to adopt any rule defining safety related defect. 80 That the cause of failure cannot be ignored completely is clear from the 1973 testimony of Administrator Toms before the Senate Commerce Committee, stating that § 113 does not extend to safety problems such as worn brakes or tires that occur in any aging vehicle as a result in normal wear and tear. 81
53 The District Court settled on its definition of defect in part because it feared that an alternative interpretation would force the Government to attempt to show at trial that every failure was not due to owner abuse, thereby negat(ing) any practical value of the notification scheme outlined in the Act. 82 Were this the case, we might well be more receptive to the District Court's approach. As this court recently noted, it is our duty to favor an interpretation which would render the statutory design effective in terms of the policies behind its enactment and to avoid an interpretation which would make such policies more difficult of fulfillment, particularly where, as here, that interpretation is consistent with the plain language of the statute. 83 However, we do not find the District Court's approach necessary to the practical and efficient administration of the defect notification provision. 54 An enforcement proceeding under the Act is a trial de novo with the burden on the Government to prove a violation by a preponderance of the evidence. In discharging its burden in the present action, the Government need only establish a significant number 84 of Wheel failures resulting from operation of Trucks, in fact. 85 Where the Government introduces evidence of a significant number of failures as to which causes like age and expected wear and tear have been negated, it is entitled to rely on a presumption that such failures occurred under conditions of operation that were either within the parameters specified by the manufacturer or reflect reasonably-to-be-expected vehicle abuse (ordinary abuse) or failure to maintain. Where, as here, the relevant component is designed to function without replacement or repair for the life of the vehicle, a prima facie case of defect can be made simply by showing a significant number of failures. 86 The underlying presumption comports with the realities of vehicle operation and promotes fair and efficient enforcement of the statute. 87 55 The presumption arising from proof of a significant number of wheel failures is not irrebuttable. It is here that we depart from the District Court, which tolerated no defense other than proof that the failures did not occur. We hold that the Act permits the manufacturer to establish, as an affirmative defense, that the failures were attributable to gross and unforeseeable owner abuse or unforeseeable neglect of vehicle maintenance. 88 This is in accord with the 1974 House Report and the aforementioned commonsense limitation on the safety requirements of the Act. 89 56 We have pondered the possibility that our approach may enable a manufacturer to attempt to avoid notice and correction obligations by dragging out the enforcement proceedings. That danger would appear inherent in any scheme designed to afford the manufacturers a fair opportunity to establish that gross and unforeseeable owner abuse caused the component failures. The danger is mitigated somewhat by the 1974 amendment allowing the Secretary to order provisional notification pending the resolution of the enforcement action. 90 And a trial on the issue of defect could be avoided whenever the Government introduced cognizable evidence establishing that a significant number of failures occurred on vehicles operated within the manufacturer's specifications or departures therefrom that the manufacturer could not reasonably contend constituted gross abuse. 91