Toyota paid almost $50 million in civil penalty settlements in 2010 for untimely recalls of various vehicles to correct unintended acceleration and steering control related safety defects. Thereafter, Congress began consideration of proposed legislation that, among other things would increase maximum civil penalties from $15 million (not adjusted for inflation) to $200 million or even $300 million. These legislative efforts never became law.
However on December 14, 2011, the Senate Commerce Committee reported out new legislation, The Motor Vehicle and Highway Safety Improvement Act of 2011, which, among a host of other things, including appropriations for the NHTSA, seeks to increase the maximum civil penalty amount to $250 million. So, the necessity and justification for such a large increase is again an issue. How the agency will apply such a large range of penalties in the context of untimely reporting is also an issue. With respect to the first issue, members of Congress appear to believe that the NHTSA needs a much, much bigger stick to yield in enforcement actions concerning the timeliness of defect and noncompliance reports and recalls. With respect to the latter issue, Congress offers up factors to consider in determining the amount of a given penalty but provides little helpful guidance on how those factors would be fairly considered against a much broader range and magnitude of possible penalty amounts. This article explores these issues.
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