The National Highway Traffic Safety Administration slapped Honda with two $35 million civil penalties, for a total of $70 million, for failing to report deaths, injuries, and certain warranty claims to the federal government in violation of the TREAD Act. Including Honda, NHTSA issued more than $126 million in civil penalties in 2014, exceeding the total amount collected by the agency during its 43-year history.
NHTSA’s investigation into Honda’s safety reporting found that the automaker failed to submit early warning (EWR) reports identifying potential or actual safety issues. The first civil penalty resulted from Honda’s failure to report 1,729 death and injury claims to NHTSA between 2003 and 2014. The second civil penalty resolves the manufacturer’s failure to report certain warranty.
In addition to civil penalties, Honda has been ordered to comply with NHTSA oversight requirements. Under a Consent Order, Honda must develop written procedures for compliance with EWR requirements; train appropriate personnel on at least an annual basis, and complete two third-party audits on compliance with its reporting obligations.
The consent order also requires Honda to provide NHTSA’s Early Warning Division with information regarding the unreported death and injury incidents and the warranty claims, so that the agency can analyze these incidents for potential safety concerns. Additional details are available in the audit report prepared for Honda by Bowman and Brooke, and in Honda's Response to NHTSA’s Special Order addressing the violations.
Federal law requires automakers to submit comprehensive EWR reports of potential safety concerns to the Department. These quarterly reports include production information; incidents involving a death or injury; aggregate data on property damage claims, consumer complaints, warranty claims, and field reports; and copies of field reports involving specified vehicle components, a fire, or a rollover. The data are then used to investigate whether safety defects or defect trends exist and warrant further action, including possible recalls.
Including the civil penalties levied against Honda in December, and announced by NHTSA on Jan. 8, the agency issued more than $126 million in civil penalties in 2014, exceeding the total amount collected by the agency during its 43-year history.
“Last year alone, we issued more fines than in NHTSA’s entire history,” U.S. Transportation Secretary Anthony Foxx said in a statement. “These fines reflect the tough stance we will take against those who violate the law.”
In order from highest to lowest, the following civil penalties were issued by NHTSA last year:
Honda: $70 million for failing to both submit early warning reports and warranty claims.
General Motors: $35 million for failure to issue a recall in a timely manner.
Hyundai Motor America: $17.3 million for failure to issue a recall in a timely manner.
Ferrari S.p.A. and Ferrari North America: $3.5 million for failing to submit early warning reports.
General Motors: $441,000, for failing to fully respond to Special Order by due date.
Prevost, a division of Volvo Group Canada; Volvo Industrial de Mexico; and Prevost Car, U.S.: $250,000, the second of six annual installments of a total of $1.5 million in civil penalties, for untimely recalls and untimely submission of early warning reports, and technical service bulletins.
Southern Honda Powersports (a/k/a Big Red Powersports): $25,000, the second of five annual installments of a total of $125,000 in civil penalties, for the sale of unrepaired, recalled vehicles.
Gwinnett Place Nissan: $110,000, for failing to perform recall remedy in new motor vehicles prior to sale and delivery.
Chapman Chevrolet: $50,000, for failing to perform recall remedy in new motor vehicles prior to sale and delivery.
Under current law, NHTSA is limited by a Congressionally-established $35 million cap when it comes to levying penalties, but that could soon change. The Administration's four-year reauthorization bill, the GROW AMERICA Act, proposes to significantly increase the limit to $300 million.