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Automobiles

Manufacture

Throughout the twentieth century, automakers were required to conform to ever stricter standards regarding the manufacture of their vehicles. These rules were designed to improve the safety, fuel consumption, and emissions of the auto.

Safety Standards As autos increased in number and became larger and faster, and people traveled more miles a year in them, the number of motor vehicle deaths and injuries rose. By 1965, some 50,000 people were being killed in motor vehicle accidents every year, making automobiles the leading cause of accidental death for all age groups and the overall leading cause of death for the population below age 44. Between 1945 and 1995, 2 million people died and about 200 million were injured in auto accidents—many more than were wounded and injured in all the wars in the nation's history combined.

Beginning in the 1960s, consumer and automobile safety advocates began to press for federal safety standards for the manufacture of automobiles that would reduce such harrowing statistics. The most famous of these advocates was RALPH NADER, who published a 1965 book on the deficiencies of auto safety, called Unsafe at Any Speed: The Designed-in Dangers of the American Automobile. From 1965 to 1995, more than 50 safety standards were imposed on vehicle manufacturers, regulating the construction of windshields, safety belts, head restraints, brakes, tires, lighting, door strength, roof strength, and bumper strength.

In 1966, Congress passed the National Traffic and Motor Vehicle Act (15 U.S.C.A. § 1381 note, 1391 et seq. [1995]), which established a new federal regulatory agency, the National Highway Safety Bureau, later renamed the National Highway Traffic Safety Administration (NHTSA). NHTSA was given a mandate to establish and enforce rules that would force manufacturers to build vehicles that could better avoid and withstand accidents. It was also given the power to require manufacturers to recall and repair defects in their motor vehicles and the authority to coordinate state programs aimed at improving driver behavior. Also in 1966, Congress passed the Highway Safety Act (23 U.S.C.A. §§ 105, 303 note, et seq. [1995]), which provided for federal guidance and funding to states for the creation of highway safety programs.

As a result of these new laws, 19 federal safety regulations came into effect on January 1, 1968. The regulations specified accident avoidance standards governing such vehicle features as brakes, tires, windshields, lights, and transmission

Ralph Nader, author of Unsafe at Any Speed, in 1967. In his book, Nader documents the resistance of the automobile industry to the implementation of safety features.
AP/WIDE WORLD PHOTOS

controls. They also mandated more costly crash-protection standards. These included occupant-protection requirements for SEAT BELTS, energy-absorbing steering wheels and bumpers, head restraints, padded instrument panels, and stronger side doors. These auto safety standards significantly reduced traffic fatalities. Between 1968 and 1979, the annual motor vehicle death rate decreased 35.2 percent, from 5.4 to 3.5 deaths per 100 million vehicle miles.

The seat belt requirement is usually considered the most important and effective safety standard. According to one study, seat belts that attach across both the lap and the shoulder reduce the probability of serious injury in an accident by 64 percent and of fatalities by 32 percent for front-seat occupants. However, because people do not always use restraints that require their active participation, autos began to be required to have passive restraint systems such as automatic seat belts and air bags. Air bags pop out instantly in a crash and form a cushion that prevents the occupants from hitting the windshield or dashboard. These devices can substantially reduce the motor vehicle death rate. Cars made after 1990 must have either automatic seat belts or air bags, for front-seat occupants.

However, many auto safety experts point out that regulations on the manufacture of automobiles can only go so far in reducing injuries. Studies indicate that only 13 percent of auto accidents result from mechanical failure, and of those that do, most are caused by poor maintenance, not inadequate design or construction. Other analysts assert that safety regulations cause a phenomenon known as offsetting behavior. According to this theory, people will drive more dangerously because they know their risk of injury is lower, putting themselves, their passengers, and other drivers, passengers, and pedestrians at greater risk and thereby offsetting the gain in safety caused by stricter manufacturing standards.

The NHTSA may also authorize recalls of cars on the road that it deems are safety hazards. In a recall, the federal government mandates that a manufacturer must repair all the vehicles that it has made that have a specific problem.

Between 1976 and 1980, the NHTSA authorized the recall of over 39 million vehicles. Recall is a controversial policy. One problem with it is that, typically, only 50 percent of auto owners respond to recall notices.

NO-FAULT AUTOMOBILE INSURANCE

Ever since the invention of automobiles, there have been automobile accidents. And with those accidents have come legal disputes about who was most at fault in causing them—and who should be forced to pay damages. The U.S. legal and political systems have struggled to determine the best way to handle the large number of legal disputes related to automobile accidents. Although the states vary in their procedures, two basic approaches have evolved. The first and older approach is the traditional liability litigation system, which attempts to determine, usually through jury trials, who is more liable, or more at fault, and must pay damages. The second and more recent approach is no-fault insurance, which simply allows each party to be compensated, regardless of fault, by its own insurance company for accident damages. Both approaches have their advantages and disadvantages, and the debate about which is better continues.

The traditional liability litigation system developed out of the English COMMON LAW. Under this system, anyone who suffers an injury from a wrong or negligent act of another is free to sue the other party for damages. For example, someone who is paralyzed in an automobile accident and becomes confined to a wheelchair may sue the other driver or drivers involved in the accident. Whether or not the injured person receives payment for those damages is largely dependent on a determination of who was more at fault in causing the accident. If, in a court of law, it is determined that the other driver is at fault, then the injured person may collect a large sum from the other driver or, if the other driver has liability insurance, from the other driver's insurance company; if it is determined that the other driver is not at fault, the injured person may not receive any payments beyond those from her or his own insurance company.

This system of resolving disputes is also called the TORT litigation process. In relation to automobile accidents, a tort is a civil (as opposed to criminal) wrong that causes an accident—for example, failure to practice caution while driving, thus causing a collision with another car and injuries to its passengers.

As time passed and auto accidents became more frequent, some people began to point out problems in the liability litigation system for resolving accident disputes. They noted that, owing to the complicated nature of many automobile accidents, it often took a great deal of time to determine who was at fault. As a result, many accident victims had to wait a considerable period before they could receive adequate compensation for their injuries. Other victims who may have been unable to work because of injuries, frequently settled for smaller amounts or even waived their right to a trial, in order to receive faster payment from insurance companies. Other critics of the liability litigation process claimed that the awards granted in auto accident cases varied greatly. Some people were overpaid, and others underpaid, for their damages. A better system, critics maintained, would make all drivers share in the cost of accidents. These critics began to press for a no-fault insurance system as an alternative to liability litigation.

As early as 1946, the Province of Saskatchewan, Canada, enacted no-fault auto insurance. Under a no-fault system, those involved in an accident are compensated for their physical injuries up to a certain limit; even the driver who causes the accident is paid for damages. In its purest form, no-fault automobile insurance does not allow those involved in an accident to sue each other, nor can any party recover damages for pain and suffering. However, no-fault plans are often combined with traditional liability systems to allow accident victims to sue when damages exceed a certain threshold. For example, in New York, it is possible to sue to recover for economic damages greater than $50,000 or for pain and suffering because of death or serious injury. No-fault insurance plans are always compulsory, and every driver who wishes to register a vehicle must obtain at least the minimum standard of no-fault insurance.

In the United States, no-fault automobile insurance was first enacted by Massachusetts in 1971 (Mass. Gen. Laws Ann. ch. 90 § 34A et seq. [West 1995]) in response to public dissatisfaction with long, drawn-out, and expensive court cases for compensation of losses suffered in traffic accidents. In the same year, Congress considered no-fault as a comprehensive national automobile insurance plan, but the proposal never became law. That unsuccessful bill evolved into the National Standards for No-Fault Insurance Plans Act, which would have set federal standards for state no-fault insurance laws. It too did not pass. Opponents of the bill claimed that the states should be allowed to experiment with this new approach before a national plan was adopted. By the mid-1990s, roughly half the states had enacted no-fault insurance plans.

In arguing for no-fault insurance, advocates pointed out a number of advantages, including faster benefits payment and more equal damages awards to accident victims. They claimed that no-fault insurance would reduce the number of traffic-related court cases, thereby freeing up the courts to consider other cases. No-fault, they argued, would also reduce the cost of car insurance premiums as the legal costs associated with settling auto-related cases decreased. Since the establishment of no-fault insurance in many states, no-fault advocates have bolstered their cause even more by pointing to statistics showing that no-fault plans increase the percentage of insurance benefits payments that go to victims rather than to lawyers and court costs. According to those statistics, in states without no-fault insurance, only forty-eight cents of each dollar spent for insurance premiums goes to those injured in accidents, whereas thirty-two cents goes to court costs and lawyers' fees. However, under the no-fault system in force in Michigan, for example, seventy-three cents of each insurance premium dollar goes to accident victims and four cents goes to court costs and lawyers' fees (Carper 1992).

On the other side of the issue, critics make a number of different points against no-fault insurance. Many, including trial lawyers and some consumer advocates, object to no-fault insurance's elimination of or substantial restrictions on the right to sue for damages. Many states, for example, allow injured parties to sue for "pain and suffering" only if they have sustained specific injuries such as dismemberment, disfigurement, or fracture. Often, "soft-tissue" injuries like whiplash are not allowed as adequate grounds for a lawsuit. Critics also maintain that no-fault insurance takes away the incentive to drive safely. Under the system of no-fault insurance, careless, negligent drivers are entitled to the same compensation in an accident as are careful, responsible drivers. In addition, critics of no-fault insurance cite evidence that the system has not reduced insurance premiums. Under no-fault plans, they argue, the number of persons receiving benefits payments has increased, thus offsetting the reduction in legal costs.

It remains to be seen whether no-fault insurance will continue to spread to other states. Nevada and Pennsylvania have tried no-fault insurance plans and repealed them, with Nevada returning to a financial responsibility law and mandatory liability and property damage insurance. California has considered no-fault insurance for many years but has never adopted it. Some states are looking at compromise plans that preserve elements of both the traditional liability litigation system and the no-fault system. These plans, such as the one in New York, compensate all accident victims, regardless of fault, for basic economic losses—including medical and hospital expenses and lost wages or services—and in the process eliminate small cases where litigation is least cost-effective. At the same time, such plans preserve the right to sue for damages in cases of death or serious injury or when damages exceed a certain amount.

In the end, the question of how to handle auto accident disputes will be decided on the basis of which system—liability litigation, no-fault insurance, or a compromise between the two—is deemed better at limiting costs and at the same time preserving the value of fairness that underlies the U.S. system of justice.

FURTHER READINGS

Lascher, Edward L., Jr., and Michael R. Powers, eds. 2001. The Economics and Politics of Choice No-Fault Insurance. Boston: Kluwer Academic Publishers.

Liao, Y-Ping, and Michelle J. White. 2002."No-Fault for Motor Vehicles: an Economic Analysis." American Law and Economics Review 4 (fall): 258–94.

Mandell, Mark S. 1999. "What's Wrong with Auto No-Fault: S. 625, the Auto-Choice Reform Act." Trial Lawyers Quarterly 29 (winter): 31–42.

Schwartz, Gary T. 2000. "Auto No-Fault and First-Party Insurance: Advantages and Problems." Southern California Law Review 73 (March): 611–75.

CROSS-REFERENCES

Insurance; Tort Law.

Emissions Standards Emissions standards are intended to reduce the amount of pollution coming from a car's exhaust system. Autos are major contributors to AIR POLLUTION. Some cities, such as Los Angeles, have notorious problems with smog, a situation that can cause serious health problems for those with respiratory problems such as asthma and bronchitis. Air pollution also damages plants, reduces crop yields, lowers visibility, and causes acid rain. In 1970, Congress passed the Clean Air Act Amendments (Pub. L. No. 91-604, 84 Stat. 1676–1713 [42 U.S.C.A. § 7403 et seq. (1995)]), which set an ambitious goal of eliminating, by 1975, 90 to 95 percent of the emissions of hydrocarbons, carbon monoxide, and oxides of nitrogen as measured in 1968 automobiles. Manufacturers did not meet the target date for achieving this goal, and the deadline was extended. Also, the new emissions standards caused problems because they reduced fuel economy and vehicle performance.

Congress modified emissions standards in the 1977 Clean Air Act Amendments (42U.S.C.A. § 7401 et seq.) and in the Clean Air Act Amendments of 1990 (Pub. L. No. 101-549, 104 Stat. 2399 [42 U.S.C.A. § 7401 et seq. (1995)]). The modified standards, as defined and monitored by the ENVIRONMENTAL PROTECTION AGENCY (EPA), included new requirements for states with low air quality to implement inspection and maintenance programs for all cars. These inspections were designed to ensure that vehicle emissions systems were working properly. In 1992, the EPA implemented strict emissions testing requirements for 18 states and 33 cities with excessive levels of carbon monoxide and ozone.

California has been a leader in setting air quality standards. In 1989, it announced new guidelines that called for the phasing out of gasfueled cars in southern California by the year 2010.

Critics maintain that federal emissions regulations have been too costly and that regulators should focus on reducing the emissions of more significant polluters, such as power plants and factories.

Fuel Efficiency Standards In the 1975 Energy Policy and Conservation Act (Pub. L. No. 94-163, 89 Stat. 871 [codified as amended in scattered sections of 12 U.S.C.A., 15 U.S.C.A., and 42 U.S.C.A.]), Congress created a set of corporate average fuel economy (CAFE) standards for new cars manufactured in the United States. The secretary of transportation was empowered with overseeing these standards. The standards mandated that each car manufacturer achieve an average fuel economy of 27.5 miles per gallon (mpg) for its entire fleet of cars by 1985. Manufacturers that did not achieve these standards were to be fined. In 1980, an additional sales tax at purchase was placed upon "gas guzzlers" (cars that fail to achieve certain levels of fuel economy). The more a car's gas mileage is below a set standard—which was 22.5 mpg in 1986—the greater the tax. For example, a 1986 car that achieved less than 12.5 mpg was charged an additional sales tax of $3,850. Some members of Congress have lobbied for fuel efficiency standards as high as a 40 mpg fleet average for auto manufacturers.

The fleet-average fuel efficiency of cars nearly doubled between 1973 and 1984. However, detractors of fuel efficiency standards maintain that the increase in efficiency was not entirely due to federal standards. They argue that fuel efficiency would have risen without regulation, in response to higher gas prices and consumer demand for more efficient cars.

Import Quotas Faced with increasingly stiff competition from Japan and Europe, U.S. car manufacturers in the early 1980s pressed the federal government to limit the number of foreign cars imported into the United States. The administration of President RONALD REAGAN responded by negotiating quotas, or limits, on Japanese car imports from 1981 to 1985. The Japanese voluntarily continued quotas on their car exports through the late 1980s, and quotas on pickup trucks from Japan remained in effect through the mid-1990s.

Tort Law and Automobile Manufacturing Courts have established that manufacturers may be held liable and sued for property damage and personal suffering caused by the products they have manufactured. Automobile manufacturers, like all manufacturers, are thus subject to PRODUCT LIABILITY LAW. Anyone who suffers harm, injury, or property damage from an improperly made auto may sue for damages. Actions that involve a breach of the manufacturer's responsibility to provide a reasonably safe vehicle are called TORTS.

Courts have found that auto manufacturers have a duty to reasonably design their vehicle against foreseeable accidents. The most important legal concept in this area is crashworthiness—a manufacturer's responsibility to make the car reasonably safe in the event of a crash. The standard of crashworthiness makes it possible to hold manufacturers liable for a defect that causes or enhances injuries suffered in a crash, even if that defect did not cause the crash itself. Auto injuries are often the result of a "second collision," when the occupant's body strikes the interior of the car or strikes an exterior object after being thrown from the vehicle. Second collisions can occur when the seat belt fails, for example. Other examples of failures in crash-worthiness include instruments that protrude on a dashboard or a fuel tank that explodes after impact. A landmark case in this area of manufacturer liability is Larsen v. General Motors Corp., 391 F.2d 495 (8th Cir. 1968), in which an individual was compensated for injuries suffered when his head struck a steering wheel in an accident. In another significant case, Grimshaw v. Ford Motor Co., 119 Cal. App. Ct. 3d 757, 174 Cal. Rptr. 348 (1981), a California jury required Ford Motor Company to pay $125 million in PUNITIVE DAMAGES (later lowered to $3.5 million) to a teenager who was severely burned in a fire that resulted when his Ford Pinto was rear-ended and the fuel tank exploded.

Automakers may also be held liable for failure to warn of a product's dangerous tendencies. Manufacturers have, for example, been sued for failing to warn drivers that certain vehicles had a tendency to roll over in some conditions.

One of the more high-profile cases involving defects in automobiles and their parts involved Ford Motor Company and the tire manufacturer Bridgestone/Firestone. On May 2, 2000, the NHTSA began an investigation involving Firestone tires. By that time, the agency had received 90 complaints from consumers who had suffered accidents because the tread on the tires of their Ford Explorers had allegedly caused their vehicles to roll over. These accidents had resulted in at least 27 injuries and four deaths. On August 9, 2000, Bridgestone/Firestone announced the recall of 6.5 million tires, many of which were standard equipment on Explorers.

Ford and Bridgestone/Firestone eventually faced more than 1,000 lawsuits in state and federal court. Many of these cases were settled, including several cases that had been followed closely by the national media. In one case, Marisa Rodriguez of Texas suffered permanent paralysis in 1998 when a faulty tire in the Ford Explorer in which she was riding caused the vehicle to roll over. Rodriguez sought damages of $1 billion when she brought suit in the U.S. District Court for the Southern District of Texas, though she eventually settled the case for a reported $6 million.

By 2002, the total number of fatalities had increased to more than 271, with more than 1,000 injuries. By February 2003, several CLASS ACTION and other suits were pending against Bridgestone/Firestone. In 2001, Congress conducted a series of hearings investigating the Ford and Bridgestone/Firestone fiasco. Congress eventually enacted the Transportation Recall Enhancement, Accountability, and Documentation Act, Pub. L. No. 106-414, 114 Stat. 1800 (49U.S.C.A. §§ 30101 et seq.). It provides criminal penalties for misleading the Secretary of Transportation with respect to vehicle and equipment-related safety defects. Although the provisions of the statute do not apply to the Firestone/Ford cases.

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