Opinion ID: 718611
Heading Depth: 2
Heading Rank: 2

Heading: Impermissible Burden on Interstate Commerce

Text: 68 With respect to AIA's Commerce Clause claim, we note preliminarily that the district court's analysis rested in large part on its view that the New York statute imposes no substantive performance requirement and that the commerce claim therefore suffered the same infirmity as the preemption claims. Since we conclude, as discussed above, that summary judgment dismissing the preemption claims was inappropriate, the summary dismissal of the Commerce Clause claims was, to that extent, likewise inappropriate. 69 We also note the existence of other questions of fact to be resolved with respect to AIA's contention that the New York bumper statute impermissibly burdens commerce. If state regulation, though not distinguishing between articles of commerce on the basis of their domestic or out-of-state origins, affects interstate commerce, the regulation will not be found to burden commerce impermissibly unless, on balance, the detriments to interstate commerce clearly outweigh the benefits to legitimate local public interests: 70 Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.... If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities. 71 Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970); see also Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 36-37, 100 S.Ct. 2009, 2015-16, 64 L.Ed.2d 702 (1980); Hughes v. Oklahoma, 441 U.S. 322, 331, 99 S.Ct. 1727, 1733-34, 60 L.Ed.2d 250 (1979). 72 In the present case, there are factual questions on both sides of the scales. The legislative history of the New York bumper statute indicates that the legislators sought to make available to consumers information that would allow them intelligently to compare vehicles with respect to safety, repair costs, and insurance costs. For example, one of the statute's sponsors stated: 73 Specifications regarding the strength of a vehicle bumper on impact can be a major criterion for many consumers who are safety conscious and would like to have this information available to them at the time of purchase. 74 (Memorandum in Support dated July 16, 1992, by Assemblyman Ivan C. Lafayette and Senator Serphin R. Maltese, at 1.) Similarly, the State Attorney General urged the Governor to approve the statute on the grounds, inter alia, that 75 a stronger bumper will reduce the likelihood that the car will require expensive repairs after a low speed collision. Thus, this bill could help to contain insurance costs, because the cost of repairs is factored into the determination of insurance premiums for property damage liability coverage. Consumers also commonly now agree to assume higher insurance deductible costs when accidents occur. 76 (Attorney General's Memorandum at 2.) The New York bumper statute itself requires that the label state that [t]he stronger the bumper, the less likely the car will require repair after a low-speed collision. N.Y. Veh. & Traf. L. § 416-a(1). 77 Yet, the validity of the legislative assumptions that a stronger bumper will mean less damage and lower insurance premiums is debatable. For example, AIA submitted an affidavit from an automotive engineer stating that the notion that stronger bumpers will decrease costs is superficial because (a) stronger bumpers increase a car's weight, thereby generally increasing exhaust emissions and decreasing fuel economy, and (b) some bumper impacts have resulted in unusually expensive repairs even though the bumper system itself was not damaged.... (Affidavit of Dean M. Bayer, Supervisor, Product Engineering Test Laboratories, Inland-Fisher Guide Division of General Motors Corporation, February 1, 1993 (Bayer Aff.), p 22.) 78 Moreover, NHTSA itself has repeatedly considered implementing bumper-information disclosure requirements and has consistently declined to do so, finding that for consumers attempting to compare insurance and accident-repair costs, bumper-capability information is of little, if any, value. For example, a NHTSA study of insurance rate structures conducted from June 1974 through January 1976 produced the conclusion 79 that ... premium rates are not influenced to any great degree by vehicle damage susceptibility or safety characteristics. Although it may be economically logical that a degree of cost savings (via premium reduction) could be applied to those vehicles having superior characteristics, the current premium structure would minimize the effect of those vehicle related characteristics since premiums are primarily influenced by driver and geographical factors in addition to the price of the car. 80 55 Fed.Reg. 24,284, 24,287 (June 15, 1990) (NHTSA denial of petition for rulemaking (quoting Development of Vehicle Rating Systems for Automobile Consumer Information Study, General Electric Co., March 1976, DOT-45-4-00903)). NHTSA studies between 1985 and 1987 to develop an effective consumer information program on the damageability of new car bumper systems, which would provide consumers with comparative bumper cost information related to vehicle purchasing decisions similarly failed to produce a consistent positive correlation between damage induced in laboratory bumper tests and insurance accident repair costs. Id. at 24,288. In 1990, NHTSA again considered imposing bumper information-disclosure requirements but elected not to do so, finding, inter alia, that new data confirmed its earlier conclusions that there is not ... a consistent positive correlation between damage induced in laboratory bumper tests and insurance accident repair costs; that premium rates are not influenced to any great degree by vehicle damage susceptibility; and that specific components, such as bumpers, do not significantly affect the premium costs of auto insurance. Id. at 24,284. The NHTSA studies and the engineer's affidavit thus reveal substantial questions as to whether in fact significant benefits are created by the New York bumper statute. 81 There also are genuine issues as to the degree of the burden on manufacturers resulting from the required testing. AIA submitted affidavits from manufacturers to the effect that compliance with the statute annually would cost each major manufacturer hundreds of thousands of dollars. (See, e.g., Bayer Aff. pp 16, 20 (tests by General Motors to determine the speeds to be inserted in the labels would take more than 145 eight-hour shifts and cost more than $15,000 per model tested); Affidavit of Michael E. Klima, Design Analysis Manager, Toyota Motor Sales, U.S.A., Inc., February 2, 1993, at p 15 (for Toyota, labor expenses of at least $300,000, plus the cost of the test vehicles); Affidavit of Michael Love, Compliance Manager for Porsche Cars North America, Inc., February 2, 1993, at p 7 (for Porsche, at least $25,000 for each of four models).) 82 On the other hand, the State submitted an affidavit by the President of the Insurance Institute for Highway Safety stating that [t]o minimize manufacturers' costs to comply with [the New York bumper statute] attributable to vehicle testing, the Institute is prepared to conduct such testing on vehicles supplied by the manufacturers ... at no cost to the manufacturers. (Affidavit of Brian O'Neill, July 23, 1993, at p 20.) Whether this would be a viable procedure and whether costs could thereby be significantly decreased is unclear. The resolution of that question is, on the present record, inappropriate for summary judgment. 83 Since there are genuine factual issues as to both the claimed burdens and the putative benefits created by the New York bumper statute, we remand for further development of the record in order to permit the district court to apply the Pike v. Bruce Church balancing test.