Products Liability Law Daily NHTSA issues final rule on factors for determining civil penalty amounts
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Tuesday, March 1, 2016

NHTSA issues final rule on factors for determining civil penalty amounts

By John Dumoulin.

Responding to a requirement of the Moving Ahead for Progress in the 21st Century Act (MAP-21), the National Highway Traffic Safety Administration (NHTSA) has issued a final rule providing an interpretation of the civil penalty factors for determining the amount of a civil penalty or the amount of a compromise under the National Traffic and Motor Vehicle Safety Act (Safety Act). The final rule also amends NHTSA’s regulations to increase penalties and damages for odometer fraud and to include the statutory penalty for knowingly and willfully submitting materially false or misleading information to the Secretary of Transportation after certifying the same information as accurate. The final rule is effective May 2, 2016 (Final Rule81 FR 10520, March 1, 2016).

MAP-21, which was signed into law on July 6, 2012, amends the civil penalty provision of the Safety Act by requiring the Secretary of Transportation to consider various factors in determining the amount of a civil penalty or a compromise. MAP-21 also requires the Secretary to issue a final rule providing an interpretation of these penalty factors. According to NHTSA, MAP-21 includes both general factors and nine discretionary factors for NHTSA to consider, as appropriate, in providing its interpretation.

The Fixing America’s Surface Transportation Act (FAST Act), which was signed into law on December 4, 2015, requires NHTSA to issue a final rule providing an interpretation of the penalty factors of MAP–21 in order for increases in the maximum amount of civil penalties that NHTSA can collect for violations of the Safety Act to become effective.

Notice of proposed rulemaking. NHTSA issued a notice of proposed rulemaking (NPRM) on September 21, 2015 (80 FR 56944). The NPRM provided an interpretation of the general factors and the nine discretionary factors listed in MAP-21. For each of the nine discretionary penalty factors, NHTSA provided an explanation of the agency’s proposed interpretation.

In addition, the NPRM included administrative procedures for NHTSA to follow when assessing civil penalties against persons who violate the Safety Act. These procedures are not included in the final rule. Rather, NHTSA plans to address those procedures separately in a rule it will issue shortly. NHTSA said that given the passage of the FAST Act, and its requirements, NHTSA has decided to finalize the procedures for imposing civil penalties at a later time in order to allow NHTSA to issue the final rule providing an interpretation of the penalty factors in MAP-21 in an expedited manner and to give the agency additional time to consider the comments it received regarding the administrative procedures.

NHTSA received four comments regarding its interpretation of the penalty factors in the NPRM, which NHTSA said were generally supportive of the agency’s interpretation. NHTSA discussed the comments and its responses in the final rule document.

Final rule. The final rule amends the text of several sections in 49 CFR Part 578 (Civil and Criminal Penalties) to provide NHTSA’s interpretation of the civil penalty factors it is required to consider by MAP-21, which are codified at 49 U.S.C. 30165(c). NHTSA made some changes in the final rule based on comments it received on the NPRM.

In addition, the final rule makes changes in 49 CFR Section 578.6 to reflect MAP-21 provisions increasing the penalties and damages for odometer fraud and establishing civil penalties for violations of corporate responsibility provisions of $5,000 per day and a maximum penalty of $1,000,000. The violations of corporate responsibility provisions involve knowingly and willfully submitting materially false or misleading information to the Secretary of Transportation after certifying the information as accurate under the process established pursuant to Section 30166(o).

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