[Federal Register: July 28, 2003 (Volume 68, Number 144)]
[Rules and Regulations]
[Page 44209-44232]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28jy03-15]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 512
[Docket No. NHTSA-02-12150; Notice 2]
RIN 2127-AI13
Confidential Business Information
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT
ACTION: Final rule
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SUMMARY: This document amends the regulation on Confidential Business
Information to simplify and update the regulation to reflect
developments in the law and to address the application of the
regulation to the early warning reporting regulation issued pursuant to
the Transportation Recall Enhancement, Accountability, and
Documentation (TREAD) Act.
DATES: This rule is effective on September 11, 2003. If you wish to
submit a petition for reconsideration of this rule, your petition must
be received by September 11, 2003.
ADDRESSES: Petitions for reconsideration should refer to the docket
number and be submitted to: Administrator, Room 5220, National Highway
Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC
20590.
FOR FURTHER INFORMATION CONTACT: For questions relating to procedures
under Part 512, contact Lloyd Guerci or Otto Matheke. For questions
relating to the treatment of material under the early warning reporting
regulations, contact Lloyd Guerci or Michael Kido. For questions
relating to the early warning regulation itself, contact Lloyd Guerci
or Andrew DiMarsico. All can be reached in the Office of the Chief
Counsel at the National Highway Traffic Safety Administration, 400 7th
Street SW., Room 5219, Washington, DC 20590. They can be reached by
telephone at (202) 366-5263.
Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit
http://dms.dot.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Comments Received
III. Overview of the Comments
IV. Overview of the Final Rule
V. Specific Provisions of Part 512
A. Subpart A--General Provisions
B. Subpart B--Submission Requirements
1. Copies of Submissions
2. Personal Information
3. Stamp Each Page
C. Subpart C--Additional Requirements
1. Duty to Amend
2. Third Parties
D. Subpart D--Agency Determination
1. Time to Request Reconsideration or to Respond When a FOIA
Request is Pending
2. Whether Voluntarily Submitted Materials Should Be Returned
Following a Denial of a Confidentiality Request
3. Class Determinations
E. Subpart E--Agency Treatment of Information
VI. Early Warning Reporting Information
A. Summary of the Early Warning Reporting Requirements
B. Application of the FOIA to the Early Warning Reporting
Program
1. The TREAD Act and the FOIA Exemptions
2. The Early Warning Reporting Information and FOIA Exemption
[[Page 44210]]
C. Specific Types of Information to be Provided Under the Early
Warning Regulation
1. Production Numbers
2. Claims and Notices Involving Death, Personal Injury and
Property Damage
3. Information Regarding Warranty Claims
4. Field Reports
5. Consumer Complaints
VII. Appendix A: FOIA Exemption 3 and the TREAD Act Disclosure
Provision
VIII. Appendix B: Confidential Business Information Case Law
Analysis
IX. Regulatory Analyses and Notices
A. Executive Order 12866 and DOT Regulatory Policies and
Procedures
B. Regulatory Flexibility Act
C. National Environmental Policy Act
D. Executive Order 13132 (Federalism)
E. Unfunded Mandate Reform Act
F. Executive Order 12778 (Civil Justice Reform)
G. Paperwork Reduction Act
H. Executive Order 13045
I. National Technology Transfer and Advancement Act
J. Data Quality Act
K. Regulation Identifier Number (RIN)
I. Background
On April 30, 2002, NHTSA published a Notice of Proposed Rulemaking
(NPRM) to amend 49 CFR part 512, Confidential Business Information
(part 512). The proposal was intended to make the regulation clearer
and easier to follow, particularly for organizations or individuals who
do not submit materials to the agency on a regular or frequent basis,
and to update specific sections of the regulation to reflect
developments in the law. The agency proposed to reorganize the
provisions of part 512 and to use a question and answer format,
designed to guide the reader through the procedural steps of making a
claim for confidential treatment of business information. The NPRM also
addressed a variety of procedural matters relating to such claims.
The agency sought comment on whether it should create a series of
class determinations of information presumed not to cause substantial
competitive harm, in addition to those classes already contained in
Appendix B to Part 512 applicable to information the disclosure of
which has been determined to cause substantial competitive harm.
Although the final rule establishing the early warning reporting
obligations had not yet been issued, the agency sought comment on
whether to establish class determinations relating to the early warning
reporting information.
II. Comments Received
The comment period closed on July 1, 2002. The agency received
timely comments from various sectors of the automotive industry,
including vehicle manufacturers, tire manufacturers, supplier and
equipment manufacturers, and other interested parties. Comments were
received from the following trade associations: the Alliance of
Automobile Manufacturers (Alliance), the Association of International
Automobile Manufacturers (AIAM), the Rubber Manufacturers Association
(RMA), the Tire Industry Association (TIA), the Motor and Equipment
Manufacturers Association and the Original Equipment Suppliers
Association (MEMA/OESA), the Automotive Occupant Restraints Council
(AORC), the Juvenile Products Manufacturers Association (JPMA), the
Truck Manufacturers Association (TMA) and the Motorcycle Industry
Council (MIC). Comments were received also from individual
manufacturers: General Motors North America (GM), Cooper Tire (Cooper),
Utilimaster, Blue Bird Body Company (Blue Bird), Bendix, Harley-
Davidson Motorcycle Company (Harley-Davidson), WABCO North America
(WABCO), Meritor-WABCO, and Workhorse Custom Chassis (Workhorse).
Enterprise Rent-A-Car Company (Enterprise) and the Washington Legal
Foundation (WLF) also filed comments.
On October 17, 2002, representatives of Public Citizen met with the
agency and requested the opportunity to file comments three months
after the closing of the comment period. As was noted in a memo to the
docket, the agency informed Public Citizen that, consistent with its
longstanding practice, the agency would consider late filed comments to
the extent possible.\1\ Public Citizen filed its comments on November
27, 2002.
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\1\ The agency's analysis is scheduled to begin promptly after
the comment period closes and, in general, we expect all comments to
be filed within the specified period. We analyze the comments and
all other available data to make decisions on how to shape our final
rules. Allowing commenters to file late provides an unfair
opportunity to critique the comments of those who submitted their
comments in a timely manner. In some rulemakings it is possible to
consider late comments without delaying the agency's decision
making. In general, however, we only consider late comments to the
extent they are filed before the agency has made significant
progress towards the next step in the regulatory process and to the
extent that they critique the agency's proposal.
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III. Overview of the Comments
Most of the comments supported the NPRM's approach to make Part 512
easier to read and to update the substantive description of what
constitutes confidential business information to conform to
developments in the law. Many commenters expressed concern over the
number of copies the agency was considering requiring to be filed, the
agency's request that certain submitters redact personal identifiers,
and various other aspects of the proposal. Objections were also raised
to the concept of establishing categories of information presumed not
to cause substantial competitive harm if disclosed.
The majority of the comments responded to the agency's request that
commenters address the early warning reporting requirements, which were
proposed on December 21, 2001. See 66 FR 66190. Most of the business
interests argued that the TREAD Act's disclosure provision in 49 U.S.C.
30166(m)(4)(C) created a categorical, statutory exemption for
information submitted pursuant to the early warning reporting
regulations, unless the Administrator makes certain findings specified
in 49 U.S.C. 30167(b). This position was presented with the most detail
in the comments filed by the RMA.
Many of the comments also expressed substantive concerns that the
early warning data, given that it is ``raw'' and comprehensive in
scope, could be misleading, available for misuse, and create public
confusion. Many business interests presented arguments as to why the
disclosure of specific elements of the early warning data would be
competitively harmful within their particular sections of the motor
vehicle or equipment industry. In addition, many commenters expressed
concern that the public disclosure of the early warning information
would be unfair to those companies that proactively seek out and
collect customer feedback and field data.
The Alliance and Public Citizen did not adopt the view that the
TREAD Act created a statutory exemption from disclosure. Public Citizen
and the Alliance agreed with much of the analysis set forth in an
internal departmental memo, dated October 27, 2000, and placed into the
public docket on March 6, 2001. That memo expressed the view of NHTSA's
Chief Counsel that the TREAD Act's disclosure provision did not create
a statutory categorical exemption because of the manner in which it
referenced 49 U.S.C. 30167(b). The memo concluded that the provision
instead indicated a Congressional intent that NHTSA determine the
confidentiality of the early warning reporting data in the same manner
as it treated other data submitted to the agency; i.e., under Exemption
4 of the Freedom of Information Act (FOIA), 5 U.S.C. 502(b)(4).
The Alliance suggested that, in accordance with the October 27,
2000 memo, the agency could apply either Exemption 4 (confidential
business
[[Page 44211]]
information) or Exemption 7 (investigative records), and further argued
that either exemption allows the agency to retain the data as
confidential. The Alliance asserted that Congress considered the early
warning data to be pre-investigative screening information of the type
NHTSA traditionally considers part of its internal deliberative
process, and intended that the information be confidential until such
time as a defect investigation is opened. The Alliance contended that
the effect of Section 30166(m)(4)(C) was to modify a presumption in
Section 30167(b) generally favoring disclosure.
Public Citizen argued that the TREAD Act did not create a
categorical, statutory exemption from disclosure, and that a class
determination that information does not presumptively create
competitive harm should apply to information about consumer complaints,
warranty data and property damage claims. Public Citizen further
contended that it is reasonable to disclose each of the other
categories of information because it is summary data by make and model
and therefore, in Public Citizen's view, not competitively harmful.
Public Citizen also asserted that reports of death and injuries and
field reports are materials prepared as part of a defect investigation
and therefore should be disclosed.
IV. Overview of the Final Rule
In the NPRM, we proposed changes to part 512 that were designed
primarily to simplify and improve the clarity of the regulation and to
update specific sections of the regulation to reflect current case law
and legislation. The proposal was intended to ensure the efficient
processing of requests for confidential treatment and the proper
protection for sensitive business information received by NHTSA.
In a newly captioned Subpart A, the final rule includes the general
provisions that establish the purpose, scope, and applicability of the
regulation governing claims for confidential treatment, and that define
the terms used in the regulation. Additionally, the final rule revises
the definition of confidential business information to reflect
developments in the law.
The final rule addresses the number of copies to be submitted to
the agency when information is claimed to be confidential. The
following must accompany any claim for confidential treatment: (1) A
complete copy of the submission, (2) a copy of a public version of the
submission and (3) either a second complete copy of the submission or,
alternatively, only those portions of the submission containing the
material relating to the request for confidential treatment, with any
appropriate sections within the pages marked in accordance with this
rule. Those filing comments to rulemakings must additionally submit a
copy of the public version to the docket. The submissions must also be
marked in accordance with this final rule.
The final rule has eliminated the requirement that submitters
redact personal identifying information from their submissions. The
final rule specifies in Subpart B the manner in which information
submitted to NHTSA and claimed to be confidential must be marked and
identifies the supporting documentation that must accompany each
submission. Each page containing information claimed to be confidential
must be marked. If an entire page is claimed to be confidential, the
markings must indicate this clearly. If portions of a page are claimed
to be confidential, they must be marked by enclosing them within
brackets ``[ ].''
The final rule clarifies issues relating to the duty to amend
claims for confidential treatment. It also provides that, when
confidentiality is claimed for information obtained by the submitter
from a third party, such as a supplier, the submitter is responsible
for obtaining from the third party the information that is necessary to
comply with the submission requirements of Part 512, including the
requirement to submit a certificate and supporting information.
We have decided against the creation of categories of information
presumed not to cause substantial competitive harm for a variety of
reasons, including the fact that such a presumption is duplicative of
existing law. Class determinations are intended to reduce or eliminate
the need for individual consideration of information that, by its
nature, has been determined to cause substantial competitive harm if
released. Class determinations alleviate the unnecessary burden of
filing individual claims for confidential treatment. Information not
subject to one of the class determinations is already presumed to be
publicly available. Submitters must make individual claims relating to
the information and carry the burden of showing that disclosure would
either likely cause substantial competitive harm or, if the information
is voluntarily submitted, that it is not ordinarily released to the
public.
We nonetheless remain concerned that submitters may routinely seek
confidential treatment for information the agency has consistently
determined would not cause competitive harm if released. We will take
appropriate action to discourage those who repeatedly file claims for
confidential treatment despite our consistent rejection of similar
requests.
Consistent with the analysis contained in the October 27, 2000
memo, we have determined that Section 30166(m)(4)(C) of the TREAD Act
did not create a categorical statutory exemption pursuant to Exemption
3 of the FOIA applicable to all early warning reporting information. We
have decided to consider the confidentiality of early warning reporting
information pursuant to Exemption 4 of the FOIA, which exempts
confidential business information from disclosure. We have created a
series of class determinations covering those portions of the early
warning reporting information we have determined are entitled to
confidential treatment. We are permitting the information in these
classes to be submitted and given confidential treatment without the
filing of a part 512 justification and the accompanying certificate.
V. Specific Provisions of Part 512
A. Subpart A--General Provisions
The agency proposed to include in Subpart A the general provisions
that establish the purpose, scope, and applicability of the regulation
governing claims for confidential treatment, and that define the terms
used in the regulation. In addition, we proposed to revise the
definition of confidential business information to reflect developments
in the law.
The agency did not receive any comments objecting to these portions
of the regulation, and is adopting the proposed changes to this subpart
without modification.
B. Subpart B--Submission Requirements
The agency proposed to delineate in Subpart B the specific
requirements that submitters must follow when they request confidential
treatment for materials submitted to NHTSA. The NPRM described the
information required to be submitted with a confidentiality request,
how documents were to be marked, how many copies would be required,
where materials were to be submitted and what supporting documentation
would be needed. The comments raised no concerns regarding most
provisions contained in proposed Subpart B, but several commenters
objected to certain of its features.
[[Page 44212]]
1. Copies of Submissions
Part 512 previously provided that submitters send to the Chief
Counsel two copies of documents containing information claimed to be
confidential and one copy of a public version of the documents, from
which portions claimed to be confidential were redacted. Submitters
were also to send a second copy of the public version of the document
to the appropriate program office within NHTSA (typically those engaged
in the development of motor vehicle safety--Enforcement, Rulemaking or
Applied Research). Thus, the submitter sent the agency two confidential
sets of documents and two public sets of documents.
We proposed changing the regulation to require the submitters to
send to the Office of the Chief Counsel one confidential and one public
set of submitted documents. The submitter could also send, along with
the confidential set, any non-confidential information the submitter
wanted NHTSA to consider along with its request. We also proposed that
submitters send a confidential and a public set of the documents to the
appropriate program office.
A number of comments characterized this proposal as requiring the
creation of a ``third version'' of the submitted materials, and argued
that it would significantly increase the time, expense, and difficulty
associated with the exercise of the statutory right to protection of
confidential commercial and financial information. JPMA and others
suggested instead that the agency require submitters to furnish two
copies of the complete submission and one or two redacted versions.
The agency did not intend to require the creation of any ``third
version'' of submitted documents. The agency believes that some
companies may find it easier to send the Chief Counsel only those
material for which confidential treatment is sought, especially when
the amount of material claimed to be confidential is small in
comparison to the whole submission or when it is limited to documents
that are easily severable from the whole. We have accordingly modified
this provision to provide this option when submitting confidentiality
claims.
Each claim for confidential treatment must be accompanied with the
following: (1) A complete copy of the submission, (2) a copy of a
public version of the submission and (3) either a second complete copy
of the submission or, alternatively, only those portions of the
submission containing the material relating to the request for
confidential treatment, with any appropriate sections within the pages
marked in accordance with this rule. Those individuals who are filing
comments to rulemakings must additionally file an electronic or hard
copy of the public version to the docket. All submissions must be
appropriately marked in accordance with this final rule. Information
for which the submitter requests confidential treatment may be
submitted electronically or in an electronic format. Submitters should
also provide any special software necessary to review the submitted
materials.
The Chief Counsel will distribute the complete copy and the public
version of the material to the program office for its use, and will use
the additional marked copy or set of material to evaluate the claim for
confidential treatment. This will provide the program office
expeditiously with the information necessary for program activity and
ensure that the program office is aware of which material is claimed to
be confidential and which is not. This process will also provide the
Chief Counsel with the information needed to consider the claim for
confidential treatment. Generally, this will simply be the material for
which confidential treatment is sought. The submitter may also include
any additional information it wishes the Chief Counsel to evaluate in
considering the claim.
2. Personal Information
The agency proposed to include in Part 512 a request that
submitters remove personal information, such as names, addresses and
telephone numbers of consumers, from the redacted version of submitted
materials, to protect the privacy of individuals. The agency's policy
has been to redact personal identifiers from all owner complaints
(whether filed directly with the agency or from documents obtained from
manufacturers in the course of a defect investigation) before placing
them on the public record. The policy was designed to encourage the
submission of information by protecting personal privacy concerns. The
agency believes that consumers may be less willing to make complaints
if their personal contact and other information are made publicly
available.
In Center for Auto Safety v. National Highway Traffic Safety
Administration, 809 F. Supp. 148 (D.D.C. 1993), the Center for Auto
Safety sought release of the names and addresses of consumers who filed
complaints directly with the agency. The court analyzed the possible
effects of disclosure, balancing the interests of the individuals
filing complaints with the asserted public interest in obtaining not
only the substance of the complaint, which was publicly available, but
also the identities of those filing them. The Court ruled that the
privacy of the complainants will be recognized and protected because
``there is no ascertainable public interest of sufficient significance
or certainty to outweigh [a complainant's privacy] right'' that would
justify the release of this personal contact information provided by
consumers. Id. at 150. Thus, the court upheld the agency's decision not
to release the names of, and other personal information about, those
voluntarily providing information to the agency.\2\
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\2\ Public Citizen expressed opposition to the agency's practice
of providing a release option on its Vehicle Owner Questionnaires to
allow the agency to share consumer names with manufacturers but not
a similar release option with respect to advocacy groups.
Manufacturers have a legal obligation to investigate vehicle
problems and make timely defect determinations. The release of
information to them, with the owner's permission, assists in their
performance of their legal responsibilities by enabling them to
investigate reports of vehicle problems. Advocacy groups and other
members of the public have no such statutory obligation.
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The same policy concerns apply to personal identifiers on copies of
information submitted by manufacturers. The judicially recognized
privacy interest in protecting the personal identifiers and contact
information when a consumer complains to the agency is at least as
strong when applied to a consumer who complains directly to the
company, and is in all likelihood unaware that the company may be
required to send that communication to the government, which, in turn,
will place it into a publicly accessible file.
Many comments, including those from TMA and the Alliance, objected
to the proposed requirement that submitters remove personal
information, pointing out that the legal burden of reviewing and
redacting personal identifiers lay with the agency, not with the
private submitters of the information. TMA also argued that relying on
submitters to redact the information might lead to inconsistent
approaches and cause confusion over what personal identifiers are or
are not redacted.
In light of the comments, we have revised the proposed regulation
to eliminate this requirement. The agency nonetheless would appreciate
submissions, in addition to the complete copy, of redacted versions
deleting any personal identifiers from any companies willing to provide
them.
[[Page 44213]]
3. Stamp Each Page
The proposal specified the manner in which information submitted to
NHTSA and claimed to be confidential must be marked, and identified the
supporting documentation that must accompany each submission. The NPRM
intended to continue the requirement that each page containing
information claimed to be confidential be marked as such. The markings
would indicate if an entire page was claimed to be confidential or
would identify with brackets any particular portions of a page claimed
to be confidential.
This proposal was intended to avoid misunderstanding by
establishing a system through which companies could provide the agency
with clear direction as to which portions of the pages or documents
were claimed to be confidential. To allow the pages with confidential
information to be identified easily, the proposal provided also that
each page claimed to contain confidential information must be numbered.
The RMA claimed that the combination of this feature with other
parts of the proposed regulation would create an unreasonable burden
and violate the Paperwork Reduction Act. The RMA was concerned with the
combined effect of presumably requiring three versions of the same
information, stamping each appropriate page with the word
``confidential,'' potentially redacting personal information, and the
potential application of all the requirements to each quarterly
submission of the early warning reporting information.
As noted above, we have made various modifications to address many
of these concerns. We have clarified that we did not intend to require
a so-called third version of each submission, have eliminated the
proposal to require the redaction of personal identifiers, and have
addressed the early warning reporting information through a series of
class determinations covering those portions we have determined are
entitled to confidential treatment under Exemption 4 of the FOIA.
In sum, we believe that this final rule simplifies the process for
submitting confidentiality claims, allows for the more efficient
handling of those claims within the agency and imposes no additional
burden on those submitting the information. The final early warning
reporting regulation likewise clarified those reporting obligations
and, we believe, assuages many of the concerns raised by the RMA.
Those providing submissions electronically must either separate the
material that is confidential from that which is not, or find an
alternative method of marking those pages that are confidential. We
note that companies increasingly are supplying information required as
part of a defect or noncompliance investigation in electronic formats.
C. Subpart C--Additional Requirements
In Subpart C, the agency proposed to retain additional requirements
from the existing regulation that submitters must follow when certain
circumstances apply. The NPRM stated that we did not intend to change
these requirements substantively, only to clarify the requirements and
assemble them in a single subpart.
The requirements contained in this portion of the proposed rule
covered such issues as the submitter's continuing obligation to amend
information provided in support of a claim for confidential treatment,
the manner in which confidential treatment is to be claimed for
multiple items of information or for information submitted by a third
party, the steps submitters must take if they need an extension of time
to claim confidential treatment, and the consequences for noncompliance
with part 512.
The final rule includes the requirement that submitters specify
with their claim the length of time for which confidential treatment is
sought. The information supporting the confidentiality request must
include adequate justification for the time period specified in the
claim.
The agency did not receive comments objecting to the proposed
reorganization of these provisions into Subpart C, or to most of the
specific requirements contained in this portion of the proposal.
Objections were raised, however, regarding two provisions of the
proposal:
1. Duty To Amend
The existing regulation provides that submitters of information
``shall promptly amend supporting information'' justifying a claim for
confidential treatment ``if the submitter obtains information upon the
basis of which the submitter knows that the supporting information was
incorrect when provided, or that the supporting information, though
correct when provided, is no longer correct and the circumstances are
such that a failure to amend the supporting information is in substance
a knowing concealment.'' 49 CFR 512.4(i). The NPRM proposed to revise
this language to provide that submitters ``shall promptly amend any
information under Sec. 512.4 of this part whenever the submitter knows
or becomes aware that the information was incorrect at the time it was
provided to NHTSA, or that the information, although correct when
provided to NHTSA, is no longer correct.''
Several comments, including those submitted by TMA and AIAM,
objected to this proposed change on the grounds that it would impose an
unreasonable burden on submitters to monitor submissions constantly in
order to avoid civil penalties. Workhorse expressed concern that, by
removing the ``knowing concealment'' standard, the rule would subject
submitters to civil penalties based on ``constructive knowledge.''
Business interests urged the agency not to adopt the proposed changes.
Public Citizen, on the other hand, considers the ``knowing
concealment'' standard ``too weak'' and believes it allows situations
in which materials that are no longer confidential receive continued
protection ``long after the conditions justifying its confidentiality
have been removed.''
We note that the agency requires the submitter to identify the
length of time for which confidential treatment is sought. The agency
will evaluate these requests when determining whether to grant
confidential treatment and will release information once the time
period for which confidential treatment is granted has lapsed. If the
time period between the grant and the possible disclosure is long, the
agency may seek reconfirmation, with appropriate support, that the
information remains confidential.
The comments show that the proposed language could impose
substantial and unnecessary burdens on submitters to monitor
information previously submitted to the agency without providing
additional benefit, since the agency is able to monitor the time for
which confidential treatment is granted and is able to reassess a
confidentiality grant should the information be requested. Accordingly,
we have revised the final rule to clarify that the duty to amend
relates to the supporting information submitted to justify the claim
for confidential treatment, not to the substance of the reported
information itself. In addition, we have revised the rule further so
that, as before, the duty to amend is triggered only when circumstances
are such that a failure to amend the supporting information would
constitute a knowing concealment.
2. Third Parties
In the NPRM, the agency proposed that, when confidentiality is
claimed for information obtained by the submitter
[[Page 44214]]
from a third party, such as a supplier, the submitter is responsible
for obtaining from the third party the information that is necessary to
comply with the requirements of this regulation, including the
requirement to submit a certificate of confidentiality.
The agency received several comments, all from suppliers, raising
questions concerning this aspect of the agency's proposal. MEMA/OESA,
AORC, Bendix, and WABCO, among others, argued that they should have the
opportunity to request confidentiality directly with respect to
information that they submit to their customers, and should be able to
deal directly with the agency regarding information that is not
available to the original submitter.
The agency believes these comments reflect a misunderstanding of
the proposed regulation. The proposed regulation would not prevent
suppliers from submitting information to the agency or seeking
confidential treatment directly. This provision of the NPRM merely
provided that if a person submits information that was obtained from a
third party (such as an automobile manufacturer submitting information
obtained from a supplier, a supplier submitting information obtained
from a vehicle manufacturer, a contractor submitting information
obtained from a subcontractor, or a similar situation involving wholly
different parties), and if the submitter seeks confidential treatment
for the information, it must obtain adequate supporting documentation
to justify the claim. For example, it may be appropriate, or even
necessary, to obtain and submit a Certificate in Support of the Request
for Confidentiality that was prepared by the entity from which the
information was obtained. In the absence of adequate supporting
information, the agency will have no choice but to make the information
public. Accordingly, this provision of the proposed rule is adopted
without change.
D. Subpart D--Agency Determination
NHTSA proposed in the NPRM to delineate the confidentiality
standards and procedures used by the agency to render a confidentiality
determination. We also proposed to state that the agency may render
determinations involving classes of information and that submitters may
request reconsideration if they disagree with an agency decision. We
indicated that we were proposing to clarify these provisions and
assemble them into a single subpart. We indicated also that we were
proposing some substantive changes to these portions of the regulation.
The majority of the comments related to the submission and
protection of early warning reporting information, but a few additional
issues were also addressed:
1.Time To Request Reconsideration or To Respond When a FOIA Request Is
Pending
Part 512 previously provided that, if a request for confidential
treatment is denied in whole or in part, the agency would inform the
submitter of its right to petition for reconsideration of the denial
within ten working days after receiving notice of the agency's
decision. The NPRM proposed no changes to this aspect of the rule. A
number of comments, primarily from smaller businesses, requested that
this period of time be extended.
Blue Bird, for example, asserted that small-to medium-sized
companies should have ``the opportunity to undertake the type of
expanded review which the Company would need in cases where it must
fully consider and present all possible arguments and justifications to
protect what [it considers to be] proprietary, competitively sensitive
information.'' In addition, MEMA/OESA asserted that ``requests for
reconsideration where sensitive company documents are otherwise at risk
will often require the input of many company employees * * * [and that]
the ten-day period under the current and proposed rules * * * provides
insufficient time.'' These comments recommended that the period of time
should be extended from 10 working days to 20 working days or 30
calendar days.
Upon consideration of the difficulties faced by small companies
(Blue Bird) and the potential need to coordinate responses with widely
dispersed employees (MEMA/OESA), the agency has decided to adopt the
commenters' request to extend the period of time to request
reconsideration of denials of confidential treatment rendered by the
agency, from ten working days to twenty working days.
In related comments, citing sections 512.22 and 512.23 of the
regulation, which appear in Subpart E and relate to modifications of
confidentiality decisions and the public release of confidential
information under certain limited circumstances, the WLF recommended
that ``the agency should [n]ever give less than ten (10) day advance
notice to [a] company before releasing business documents.'' Although
not specifically raised in any other comments, the agency notes that
several portions of part 512 provide submitters of information with ten
working days within which to seek review of agency decisions.
For example, if a petition for reconsideration is denied in whole
or in part under Section 512.19 (also in subpart D), or if the agency
determines that an earlier determination of confidentiality should be
modified under section 512.22 or that information previously determined
or claimed to be confidential will be disclosed under section 512.23
(in subpart E), the submitter is advised that the information will be
made available to the public not less than ten working days after the
date on which notification of the agency's action is received.
The reasons that support an extension from ten working days to
twenty working days for requesting reconsideration also justify the
extension of these other time periods. Nonetheless, while we are
revising the regulations to provide a period of twenty working days,
rather than ten, in each of the sections referenced above, we are
reserving the right to shorten these periods when the agency finds it
to be in the public interest.
WLF asserted that the NPRM would provide ``an inadequate amount of
time to businesses to review and respond to FOIA requests submitted to
the [agency] by third parties,'' and recommended that the agency
``provide the third-party FOIA request to the affected business within
three (3) business days after receiving it * * * [and] copies of all
correspondence between the agency and the FOIA requester.''
The agency notes that while the WLF's comments asserted that they
concern notice to businesses upon the agency's receipt of a FOIA
request for the information, the sections of the NPRM that WLF cites do
not relate to these circumstances. Moreover, the agency does not
believe that additional notice to submitters is needed at the time a
FOIA request is received. Unlike many other Federal agencies, NHTSA
does not wait until it has received a FOIA request before asking a
submitter to justify the withholding of information. Instead, NHTSA's
regulation provides that submitters must support their claims for
confidential treatment at the time of submission. See 49 CFR 512.4. The
agency would not expect, nor would we welcome, any additional materials
from a submitter simply because a FOIA request has been filed. If a
submitter disagrees with the agency's confidentiality determination
(whether or not it is made in the context of a FOIA request), it can
then request reconsideration. Therefore, there is no need to notify
submitters if a FOIA
[[Page 44215]]
request is received by the agency for submitted information.
2. Whether Voluntarily Submitted Materials Should Be Returned Following
a Denial of a Confidentiality Request
Bendix suggested that Section 512.18 should be amended to
``clarify'' that information voluntarily provided to the agency subject
to a claim for confidential treatment should be returned to the
submitter if the agency denies the request for confidential treatment.
Such information may be submitted as part of a rulemaking, research
activity or a request for interpretation of our statutes and
regulations.
We note that the Federal Records Act imposes limitations on the
agency's ability to return information voluntarily submitted to the
agency. That Act mandates the maintenance and preservation of federal
records.\3\ It does not contemplate the return of records to individual
submitters. Those providing technical or market information as part of
a rulemaking or in connection with the agency's research activity do so
voluntarily and with knowledge of the standards applicable to the
treatment of the data. Further, we believe we can respond to
interpretation requests while maintaining the confidentiality of any
information. Accordingly, we are not adopting this suggestion.
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\3\ The Act defines a ``federal record'' as consisting of ``all
books, papers, maps, photographs, machine readable materials, or
other documentary materials, regardless of physical form or
characteristics, made or received by an agency of the United States
Government under Federal law or in connection with the transaction
of public business and preserved or appropriate for preservation by
that agency or its legitimate successor as evidence of the
organization, functions, policies, decisions, procedures,
operations, or other activities of the Government or because of the
informational value of data in them.'' 44 U.S.C. 3301. The disposal
of these records is governed by 44 U.S.C. 3314 and related
provisions of the Act. See 44 U.S.C. 3302, et seq.
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3. Class Determinations
The NPRM proposed no specific changes to the already established
class determinations applicable to information found to cause
substantial competitive harm if released. Appendix B to part 512
currently contains three such determinations. These classes are
blueprints and engineering drawings (under certain circumstances),
future specific model plans, and anticipated vehicle or equipment
production or sales figures (in some cases, for limited periods of
time).
The NPRM sought comment with regard to whether the agency should
also consider the establishment of class determinations applicable to
categories of information that presumptively would not cause
substantial competitive harm if released. The proposal suggested that
such class determinations, if established, would be applicable only to
compelled information. The agency did not intend that any such class
determinations would be applicable to information voluntarily submitted
to the agency. Such information is subject to disclosure under a
different legal standard and only upon a showing that the company
customarily discloses the information to the public.
We have decided against the creation of class determinations trying
to address categories of information the release of which would be
presumed not to cause substantial competitive harm. Such class
determinations are unnecessary because all data the agency requires to
be submitted is already presumptively subject to disclosure under FOIA
unless shown to be subject to a FOIA exemption or covered by a class
determination. Class determinations merely set forth those categories
in which it is unnecessary to make individual submissions regarding the
release of data that by its very nature would cause substantial
competitive harm or impair the Government's ability to obtain the
information in the future. In addition, we have concluded that some of
the areas we posed as candidates for such treatment, such as testing
conducted pursuant to ``known'' procedures, would require specific
evaluation, thus rendering the class determination futile.
We nonetheless remain concerned that submitters may routinely seek
confidential treatment for information the agency has consistently
determined would not cause competitive harm if released. We will take
appropriate action to discourage those who repeatedly file claims for
confidential treatment despite our consistent rejection of similar
requests.
E. Subpart E--Agency Treatment of Information
In Subpart E, the proposal described the manner in which
information claimed to be confidential would be treated by the agency.
The proposal intended to continue the practice of providing that any
information identified and claimed to be confidential would be
protected from disclosure by the agency pending an agency decision, and
would continue to be treated confidentially as if the submitter's
request for confidential treatment were granted, except under certain
limited circumstances.
The Alliance suggested that the final rule should explicitly state
that information claimed to be confidential would remain confidential
pending the agency's administrative determination that the information
is not entitled to confidential treatment. The NPRM expressly proposed
such protection during the administrative reconsideration process:
``Upon receipt of a timely petition for reconsideration * * * the
submitted information will remain confidential, pending a determination
regarding the petition.'' The Alliance also suggested an express
regulatory provision maintaining the confidentiality of material
pending any judicial review of the agency's final administrative action
regarding confidential treatment.
The agency will continue to treat as confidential any information
that remains subject to an administrative review. This includes both
the initial determination and the agency's response to any petition for
reconsideration. The agency declines, however, to adopt the Alliance's
suggestion that we continue automatically to treat such information as
confidential pending judicial review. The agency will make the
information publicly available, consistent with its administrative
decision, unless ordered otherwise by a court of competent
jurisdiction. We recognize that if we were to make information
available immediately following the denial of a petition for
reconsideration, it would obviate the submitters' right to judicial
review. Accordingly, the regulation will provide that the agency will
allow the submitter twenty working days within which to obtain a court
order (e.g., through a temporary restraining order) requiring the
agency to maintain the confidentiality of information pending judicial
review. We have chosen twenty working days to be consistent with the
other time periods incorporated into this final rule. We also recognize
that, while the basis and arguments for the confidentiality claim
should have been fully developed by the time a submitter seeks judicial
review of our determination, additional work may be necessary before a
lawsuit is filed. In the absence of a judicial order to the contrary,
information we have determined is not entitled to confidential
treatment will be placed into the public record twenty working days
after receipt of the agency's decision on reconsideration. As in other
contexts, we reserve the right to shorten this period if we find that
it is in the public interest to do so.
The proposal also provided that a grant of confidentiality may be
modified
[[Page 44216]]
under certain circumstances, including newly discovered or changed
facts, a change in applicable law, a change in a class determination,
or a finding that the prior determination was erroneous.
The proposal further incorporated certain statutory provisions
under which information that has been claimed or determined to be
entitled to confidential treatment may nonetheless be publicly released
in some situations, including releases made to Congress, pursuant to a
court order, to the Secretary of Transportation or to other Executive
agencies in accordance with applicable law, with the consent of the
submitter, and to contractors (subject to certain conditions).
The agency's existing regulation also listed three additional
situations under which information determined to be confidential may
nonetheless be disclosed to the public. The proposed rule explained
that the Cost Savings Act and the Vehicle Safety Act have been repealed
and their pertinent provisions have been codified under title 49 of the
United States Code. Accordingly, the NPRM proposed to modify part 512
in a manner consistent with these statutory changes. We are adopting
these revisions.
VI. Early Warning Reporting Information
The NPRM sought public comment on how the agency should handle the
data to be submitted under the new early warning reporting regulation.
Although the final rule prescribing the early warning reporting
requirements had not yet been issued, the agency received numerous
comments with regard to that data.
Some business interests argued that the TREAD Act itself prohibits
the disclosure of any early warning reporting information under
Exemption 3 of the Freedom of Information Act (FOIA). Others argued
that Exemption 4 of the FOIA, applicable to confidential business
information, governs whether the information should be disclosed. All
business interests contended that release of the early warning data is
likely to cause substantial competitive harm and many pointed out that
disclosure is likely to impair the agency's ability to obtain the
material in the future. Public Citizen, while agreeing that Exemption 4
is applicable, argued that all the data should be released because it
is summary in nature, is important to the identification of potential
defects and is often released in the course of individual defect
determinations.
As the Court of Appeal for the District of Columbia Circuit
recently noted, the Freedom of Information Act is premised on public
access to information within enumerated bounds ensuring that the
government's proper functions are not impeded:
``Public access to government documents'' is the ``fundamental
principle'' that animates FOIA. John Doe Agency v. John Doe Corp.,
493 U.S. 146, 151 (1989). ``Congress recognized, however, that
public disclosure is not always in the public interest.'' CIA v.
Sims, 471 U.S. 159, 166-67 (1985). Accordingly, FOIA represents a
balance struck by Congress between the public's right to know and
the government's legitimate interest in keeping certain information
confidential. John Doe Agency, 493 U.S. at 152. To that end, FOIA
mandates disclosure of government records unless the requested
information falls within one of nine enumerated exemptions, see 5
U.S.C. 552(b). While these exemptions are to be ``narrowly
construed,'' FBI v. Abramson, 456 U.S. 615, 630 (1982), courts must
not fail to give them a ``meaningful reach and application,'' John
Doe Agency, 493 U.S. at 152. The government bears the burden of
proving that the withheld information falls within the exemptions it
invokes. 5 U.S.C. 552(a)(4)(b).
See Center for National Security Studies, et. al. v. U.S. Department of
Justice, 331 F.3d 918 (D.C. Cir. 2003).
We have determined that the confidentiality of the early warning
submissions should be reviewed under Exemption 4 of FOIA relating to
confidential business information. Below we briefly set forth the early
warning reporting requirements and the arguments made in favor and
against disclosure. We then apply the principles set forth in National
Parks & Conservation Ass'n v. Morton (National Parks), 498 F.2d 765
(D.C. Cir. 1974), and its progeny to each element of the early warning
reporting information.
A. Summary of the Early Warning Reporting Requirements
The bulk of the early warning reporting requirements apply to
larger manufacturers of motor vehicles, and all manufacturers of child
restraint systems and tires (see 49 CFR part 579). In general, vehicle
manufacturers must submit quarterly reports with regard to the
following categories of vehicles, if they produce 500 or more vehicles
of a category annually: light vehicles, medium-heavy vehicles and all
buses, trailers, and motorcycles. The reporting information required of
these manufacturers is summarized below:
[sbull] Deaths. These manufacturers must report certain
specified information about each incident involving a death that
occurred in the United States that is identified in a claim (as
defined) against and received by the manufacturer. They must also
report information about incidents involving a death in the United
States that is identified in a notice received by the manufacturer
alleging or proving that the death was caused by a possible defect
in the manufacturer's product. Finally, they must report on each
death occurring in foreign countries that is identified in a claim
against the manufacturer involving the manufacturer's product, or
one that is identical or substantially similar to a product that the
manufacturer has offered for sale in the United States.
[sbull] Injuries. These manufacturers must report certain
specified information about each incident involving an injury that
occurred in the United States that is identified in a claim against
and received by the manufacturer, or that is identified in a notice
received by the manufacturer which notice alleges or proves that the
injury was caused by a possible defect in the manufacturer's
product.
[sbull] Property damage. These manufacturers (other than child
restraint system manufacturers) must report the numbers of claims
for property damage that occurred in the United States that are
related to alleged problems with certain specified components and
systems, regardless of the amount of such claims.
[sbull] Consumer complaints. These manufacturers (other than
tire manufacturers) must report the numbers of consumer complaints
they receive that are related to problems with certain specified
components and systems that occurred in the United States.
Manufacturers of child restraint systems must report the combined
number of such consumer complaints and warranty claims, as discussed
below.
[sbull] Warranty claims information. These manufacturers must
report the number of warranty claims (adjustments for tire
manufacturers), including extended warranty and good will, they
receive that are related to problems with certain specified
components and systems that occurred in the United States. As noted
above, manufacturers of child restraint systems must combine these
with the number of reportable consumer complaints.
[sbull] Field reports. These manufacturers (other than tire
manufacturers) must report the total number of field reports they
receive from the manufacturer's employees, representatives, and
dealers, and from fleets, that are related to problems with certain
specified components and systems that occurred in the United States.
In addition, manufacturers must provide copies of certain field
reports received from their employees, representatives, and fleets,
but are not required to provide copies of reports received from
dealers.
[sbull] Production. These manufacturers must report the number
of vehicles, child restraint systems, and tires, by make, model, and
model year, during the reporting period and the prior nine model
years (prior four years for child restraint systems and tires).
In addition, these manufacturers must submit to the agency, on a
one-time basis, historical data relating to the number of warranty
claims/adjustments and field reports for each calendar quarter during
the three-year period
[[Page 44217]]
from July 1, 2000 through June 30, 2003.\4\
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\4\ The early warning regulation contains definitions and
explanations that provide further context to these requirements and
that are not repeated here.
---------------------------------------------------------------------------
Smaller manufacturers (as defined in the early warning rule), and
manufacturers of original motor vehicle equipment or replacement
equipment other than child restraint systems and tires, are required to
submit reports containing information about claims and notices of
deaths allegedly caused by their products, but are not required to
submit other information.
B. Application of the FOIA to the Early Warning Reporting Program
The TREAD Act's disclosure provision applies to information
provided under 49 U.S.C. 30166(m), which was added to the Vehicle
Safety Act in the aftermath of hearings held in connection with NHTSA's
investigation of Firestone ATX and Wilderness AT tires. That statutory
section mandates that the agency initiate a rulemaking ``to establish
early warning reporting requirements for manufacturers of motor
vehicles and motor vehicle equipment to enhance the Secretary's ability
to carry out the provisions of this chapter.'' 49 U.S.C. 30166(m)(1).
Section 30166(m)(3) sets forth the type of information Congress
expected the rulemaking to include. Congress specifically directed the
agency to require the submission of information relating to repair and/
or replacement campaigns. The Act provides for the submission of data
on claims submitted to the manufacturer for serious injuries (including
death) and aggregate statistical data on property damage from alleged
defects in a motor vehicle or in motor vehicle equipment that may
assist in the identification of defects. 49 U.S.C. 30166(m)(3)(A).
Congress also specifically provided for manufacturers to submit
information relating to claims of death or serious injury alleged to be
caused by a defect where the manufacturer receives actual notice. 49
U.S.C. 30166(m)(3)(C).
Congress recognized that additional types of information may be
useful to the agency in carrying out its mission to identify safety
related defects. In Section 30166(m)(3)(B), Congress gave the agency
the authority to mandate the submission of ``other data'' in addition
to the information described above ``to the extent that such
information may assist in the identification of defects related to
motor vehicle safety in motor vehicles and motor vehicle equipment in
the United States.'' Pursuant to that authority, NHTSA's early warning
reporting rule requires the submission of information relating, among
others, to warranty claims, field reports and consumer complaints.
Congress also considered the extent to which the data submitted as
part of the early warning reporting regulation should be subject to
public disclosure or, alternatively, the extent to which it should be
held confidential to enhance the agency's ability to identify potential
safety defects. The TREAD Act's disclosure provision, Section
30166(m)(4)(C), reads:
None of the information collected pursuant to the final rule
promulgated under paragraph (1) shall be disclosed pursuant to
section 30167(b) unless the Secretary determines the disclosure of
such information will assist in carrying out sections 30117(b) and
30118 through 30121.\5\
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\5\ Section 30167(B) provides: ``Subject to subsection (a) of
this section, the Secretary shall disclose information obtained
under this chapter related to a defect or noncompliance that the
Secretary decides will assist in carrying out sections 30117(b) and
30118-30121 of this title or that is required to be disclosed under
section 30118(a) of this title. A requirement to disclosure
information under this subsection is in addition to the requirements
of section 552 of title 5.''
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1. The TREAD Act and the FOIA Exemptions
In a letter to Secretary Slater dated October 20, 2000, days after
passage of the TREAD Act, but before President Clinton signed the Act
into law, Public Citizen objected to the disclosure provision.\6\
Public Citizen was concerned that the provision would be construed to
prohibit the disclosure of any early warning reporting data:
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\6\ Public Citizen's letter appears in the docket as an
attachment to the comments submitted by the RMA.
The secrecy provision in sec. 3(b)(4)(c) is imposed upon all
safety defect information collected as part of the bill's ``early
warning reporting requirements'' rulemaking. We believe that the
secrecy provision thwarts the clear purpose of the legislation--to
protect the public from defect cover-ups--and may drastically reduce
public access to safety defect information. Under that section, the
Secretary shall not disclose defect and early warning information
about lawsuits, consumer complaints, deaths, injuries, component
failures or consumer satisfaction campaigns unless you determine
that disclosure will assist in carrying out the law. This inverts
existing law, as the current presumption of 49 U.S.C. sec. 30167(b)
is to favor the disclosure over and above the disclosure
requirements of the Freedom of Information Act (FOIA). Indeed, the
function of this reversal in presumptions is to create a categorical
exemption under FOIA's exemption three, and thus to keep information
submitted under the new rule totally secret, probably indefinitely.
---------------------------------------------------------------------------
(Emphasis in original)\7\
\7\ Exemption 3 applies to material ``specifically exempted from
disclosure by statute (other than section 552b of this title),
provided that such statute (A) requires that the matters be withheld
from the public in such a manner as to leave no discretion on the
issue, or (B) establishes particular criteria for withholding or
refers to particular types of matters to be withheld.'' 5 U.S.C.
552(b)(3).
---------------------------------------------------------------------------
NHTSA's Chief Counsel considered and rejected this view of the
TREAD Act's disclosure provision in an internal departmental memo,
which was subsequently placed in the public record. That memo stated in
part:
Ms. Claybrook's letter seems to suggest that the variation in
language could be interpreted to prevent the disclosure of any early
warning information submitted to the agency in the absence of a
decision by the Secretary that disclosure of the information ``will
assist in carrying out'' the purposes of the Act. However, the
legislation clearly requires that such a decision be made prior to
disclosure only when the disclosure is being made under section
30167(b), which by its terms is invoked only when the disclosure
involves information that has been determined to be entitled to
confidential treatment.
Moreover, section 30167(b) provides specifically that ``A
requirement to disclose information under this subsection is in
addition to the requirements of [the FOIA].'' Accordingly, neither
section 30167(b) nor paragraph (4)(C) would affect the agency's
initial decision regarding whether information submitted to the
agency is entitled to confidential treatment. Such decisions will
continue to be made in accordance with Exemption 4 of [the FOIA],
the Trade Secrets Act and the agency's regulations concerning the
treatment of confidential business information, 49 CFR part 512.\8\
\8\ Memo from Frank Seales, Chief Counsel, NHTSA, to Rosalind
Knapp, Acting General Counsel of the Department of Transportation,
at 2 (Oct. 27, 2000) (emphasis in original).
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In its comments to this rulemaking, Public Citizen agreed that
Section 30166(m)(4)(C) permits the agency to consider the early warning
information under Exemption 4 of the FOIA. Public Citizen claimed that
the effect of the provision is to alter a preexisting presumption in
Section 30167(b) from one of disclosure to nondisclosure in the absence
of the specified findings of the Secretary. Public Citizen also
clarified that its ``statements about the possible meaning of the bill
were concerned with its potential for legal manipulation by the
industry, i.e., what in the worst case it could mean, rather than any
suggestion of what it should or actually does mean in agency
practice.''
The RMA argued that the TREAD Act provision falls within Exemption
3(b) of the FOIA, which negates disclosure when Congress has
established particular criteria for withholding
[[Page 44218]]
information or has referred to particular types of matters to be
withheld. The RMA asserted that the reference in the disclosure
provision to the rulemaking required by Section 30166(m)(1) is
sufficient to bring the statute within the purview of Exemption 3.
According to the RMA, the analysis prepared by the agency in the
October 27, 2000 memorandum would render the statutory provision
meaningless and violate a central tenet of statutory construction.
The RMA, as well as individual tire makers and many other
manufacturers, further argued that the information required by the
early warning reporting regulation would lead to substantial
competitive harm if disclosed. In addition, they suggest that
disclosure would lead to less candor from field personnel, resulting in
less reliable information, and would discourage marketing efforts that
lead to more complete and useful data.
The Alliance suggested that the provision assumes the
confidentiality of the early warning reporting data because information
cannot be disclosed under section 30167(b) unless it is otherwise
confidential. The Alliance asserted that the information may be found
to be confidential under either Exemption 4 or Exemption 7 of the FOIA.
The Alliance submitted affidavit evidence to support its claim that
disclosure of the early warning reporting information would lead to
substantial competitive harm within the automotive industry. General
Motors also submitted comments explaining how, in its view, substantial
competitive harm is likely to result if the data were disclosed.
The TREAD Act mandated that NHTSA collect and maintain information
in a manner not previously followed by the agency. Historically, the
agency has received information relating specifically to a particular
alleged defect or noncompliance, including engineering drawings,
warranty claim information, customer complaints, field reports and
lawsuit information. Manufacturers submitting information in response
to the agency's information requests frequently seek confidential
treatment for portions of the information submitted. The agency reviews
those requests in accordance with Exemption 4 of the FOIA.
The early warning reporting regulation requires regular periodic
submissions of data that relate not simply to alleged problems, but to
all of a manufacturer's products. These submissions are not necessarily
indicative of any problem needing investigation. We do not believe that
the language of Section 30166(m)(4)(C), and the colloquy accompanying
its enactment (See Appendix A), expresses a Congressional mandate to
treat all early warning reporting information confidentially. Instead,
we believe that Congress expected the agency to review the
confidentiality of early warning reporting information under Exemption
4 of the FOIA, but to apply Section 30167(b) in a more restrictive
manner to that data than to other information received by the
agency.\9\
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\9\ We must give meaning to all words and phrases of a statute,
and therefore we must give meaning to the reference in Section
30166(m)(4)(C) to the preexisting Section 30167(b). See, e.g., TRW
Inc. v. Andrews, 534 U.S. 19, 31 (2001) (``It is `a cardinal
principle of statutory construction that a statute ought, upon the
whole, to be construed that, if it can be prevented, no clause,
sentence, or word shall be superfluous, void, or insignificant' '')
and United States v. Menasche, 348 U.S. 528, 538-539 (1955)(``It is
our duty ``to give effect, if possible, to every clause and word of
a statute.' '' We must also ensure that our construction of the
statute does not render the TREAD Act provision meaningless or
duplicative of existing law. See, e.g., Dunn v. Commodity Futures
Trading Commission, 519 U.S. 465, 472 (1997) (``Our reading of the
exemption is therefore also consonant with the doctrine that
legislative enactments should not be construed to render their
provisions mere surplusage'').
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As many of the commenters pointed out, Section 30167(b) applies
only after we have determined that information is entitled to
confidential treatment. The provision permits the disclosure of
confidential information whenever the Secretary, in his discretion,
believes that the information can be useful in carrying out the
agency's defect identification and remediation function. In contrast,
the TREAD Act's disclosure provision does not permit the disclosure of
confidential early warning reporting information unless the Secretary
specifically finds that disclosure is necessary to carry out the
agency's responsibility to identify potential safety-related defects.
Thus, the basis for justifying disclosure of the early warning
reporting information is significantly more stringent than that for all
other material submitted to the agency and found entitled to
confidential treatment under the FOIA.
Both Public Citizen and the Alliance construed the TREAD Act
provision in a manner consistent with our analysis. Public Citizen
stated that the provision ``inverts existing law, as the current
presumption of 49 U.S.C. Sec. 30167(b) is to favor disclosure over and
above the disclosure requirements of the Freedom of Information Act
(FOIA).''\10\ The Alliance similarly argued that Congress enacted the
TREAD Act aware that the Vehicle Safety Act contained a provision
generally favoring disclosure of information, even if it is otherwise
confidential, when deemed necessary to assist in carrying out the
agency's defect remediation function. According to the Alliance,
Congress intended to neutralize that presumption and to disfavor
disclosure of the early warning information:
[U]nder longstanding NHTSA practice, nonconfidential information
related to potential defects or noncompliances under investigation
by the agency is routinely available in the agency's public
reference reading room, without need for a Secretarial
``determination'' under Sec. 30167(b), even though NHTSA could
lawfully invoke FOIA Exemption Seven (relating to law enforcement
investigations) to protect this information. Thus, as a practical
matter, information in NHTSA's possession is not even considered for
release under Sec. 30167(b) of the Safety Act, unless and until
that information is already entitled to confidential treatment under
one of the Freedom of Information Act exemptions. (Emphases in
original.)
\10\ In its comments, Public Citizen expressed its view that the
provision is not an Exemption 3 statute, stating that ``while the
TREAD Act provision may reverse a presumption available for certain
information under Section 30167(b), the language of the statute
falls far short of creating a withholding statute or exemption from
FOIA.'' (Emphasis in original.)
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As set forth in the October 27, 2000 memo, the agency disagrees
with the assertion presented by the RMA and other business interests
that the TREAD Act provision categorically prohibits the disclosure of
any early warning reporting information pursuant to Exemption 3 of the
FOIA. Our analysis of the arguments in favor of the application of FOIA
Exemption 3, and our reasons for rejecting those arguments are
amplified in Appendix A to this Final Rule. In sum, we believe the
TREAD Act provision intended the Secretary initially to determine which
information is entitled to confidential treatment as confidential
business information, and, if so and only then, to consider whether
disclosure is nonetheless necessary for the agency to fulfill its
responsibilities to detect and enforce the laws governing the recall of
vehicles and equipment containing safety related defects.
2. The Early Warning Reporting Information and FOIA Exemption 4
Consistent with the October 27, 2000 memo, we have determined that
the confidentiality of the early warning reporting information should
be construed under Exemption 4 of the FOIA. Exemption 4 protects
information from disclosure that are ``trade secrets and commercial or
financial information obtained from a person and privileged or
confidential.'' 5 U.S.C. 552(b)(4). Information is confidential if its
disclosure is likely ``(1) to impair the Government's ability to obtain
necessary
[[Page 44219]]
information in the future; or (2) to cause substantial harm to the
competitive position of the person from whom the information was
obtained.'' National Parks, 498 F.2d at 770. See also Center for Auto
Safety v. National Highway Traffic Safety Administration (CAS v.
NHTSA), 244 F.3d 144, 147-48 (D.C. Cir. 2001) (discussing application
of Exemption 4 to mandatory submissions).\11\
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\11\ A different standard applies to information that is
submitted voluntarily to a government agency. See Critical Mass
Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C.
Cir. 1992) (en banc). Since all the information provided under the
early warning reporting regulation is ``required,'' Critical Mass
does not apply.
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Business interests contended that the early warning reporting
information is entitled to protection under both prongs. They argued
that early warning submissions would provide insight into the field
experience and performance of a submitter's entire product line.
Business enterprises were concerned that this information could then be
analyzed by competitors to assess various factors, such as a
submitter's experience with a particular supplier, production cycles,
and the reliability of that submitter's products. Many of the
commenters also pointed out that the disclosure of information may
deter candor and discourage efforts to obtain reliable information from
the field.
The RMA asserted that disclosure of early warning reporting
information would harm individual competitors. The Alliance echoed
these concerns and emphasized that the information would be valuable to
competitors, particularly within the context of competition among its
member companies, aftermarket parts manufacturers, potential new
entrants, and franchised dealers. Many commenters pointed out that the
early warning reporting information constitutes a unique and
comprehensive compilation of information not otherwise available, and,
while subject to misinterpretation by the public, is especially
valuable to competitors.
The Alliance submitted affidavit evidence with its comments from an
automotive marketing consultant to support its claim that the early
warning reporting information relates to issues of importance to new
car buyers, and therefore that the material is likely to be used (and
potentially misused) in the competitive marketplace. The Alliance
pointed out that the most significant factors cited by automobile
consumers when choosing a vehicle relate to reliability, quality and
dependability--all factors upon which the early warning reporting
information is likely to shed some light.
The Alliance and others expressed concern over the potential misuse
of the early warning reporting information, either by competing
companies or others who may draw conclusions from the data that,
according to the Alliance and others, may be unwarranted. The Alliance
stated that in addition to ``[t]he unfairness of subjecting the
submitting manufacturers to the competitive harm that would flow from
the disclosure of [early warning information],'' any comparison of this
information by the public would not be valid because of the differences
in warranty periods among manufacturers.
GM reiterated this concern. Workhorse similarly wrote that
disclosure of early warning information would create ``a serious risk
that the public will be misled by disclosing such raw, unverified
data'' and lead to ``consumer confusion and manufacturer harm.'' The
RMA, while arguing that the potential misuse should support a blanket
prohibition from disclosure, also asserted that the early warning
reporting information is commercially valuable, and that its value is
directly related to the extent of its confidentiality.
The Alliance recognized and did not take issue with NHTSA's current
practice of releasing similar types of information submitted during
specific defect investigations, but argued that this ``does not justify
the release of the comprehensive compilations of information''
collected under the early warning reporting rule. The Alliance
explained that ``[a] limited release of information that is relevant
to, and specific to, an individual defect investigation is much
different from a competitive standpoint than the automatic release of
the continually collected, full compendium of quality and customer
satisfaction information that is represented by the complete `early
warning' submission each quarter.''
Because of the comprehensive nature of the early warning
information, the Alliance argued that these submissions ``should * * *
be protected by a class determination presuming their confidentiality
and * * * should not have to be accompanied by a traditional part 512
justification with each quarterly submission.'' The Alliance added that
NHTSA's ``long-standing practice of releasing information limited in
terms of scope and timeframe related to consumer complaints, warranty
claims, property damage claims, field reports, etc., when this
information has been submitted in connection with an individual,
specific defect investigation does not defeat the presumptive
confidentiality of the comprehensive collection of such information.''
AIAM asserted a similar argument in favor of protecting early
warning information, claiming that its main point of contention ``lies
with a comprehensive disclosure of all, unscreened early warning
information.'' The AIAM added that ``we recognize that, in appropriate
instances, portions of the early warning information could still be
disclosed to the public.'' AIAM explained that such releases could
occur ``after NHTSA has processed and evaluated early warning
information and decided to pursue an investigation about a particular
vehicle/component.''
GM also distinguished between the disclosures that NHTSA currently
makes during defect investigations and the disclosures that would occur
if the class determinations the agency proposed for warranty
information were made. The company explained that its responses to
agency information requests ``often include warranty data for a limited
number of makes, models, and years.''
Public Citizen argued that most of the information to be submitted
under the early warning reporting rule is summary in nature and not
specific enough to qualify for confidential treatment. Public Citizen
also contended that because information to be submitted is similar or
identical to the type of information submitted as part of a defect
investigation, it should be treated as it currently is in a defect
investigation. Public Citizen noted that the agency had speculated
early in the development of the early warning reporting regulation that
it thought manufacturers may not seek confidential treatment of the
early warning reporting information.
We believe that the information submitted in the course of a defect
investigation is qualitatively and quantitatively different from the
comprehensive compendium of pre-investigation information to be
submitted under the early warning reporting rule, and further that the
competitive harm caused by the disclosure of some of the early warning
reporting data is substantial. While the early warning reporting
information will generally not be as specific as the data submitted
during a defect investigation into a defined and particular problem,
each company must provide data with regard to each product it
manufacturers. The information relating to certain elements of
reporting provides specific information that competitors are likely to
find valuable and, at the same time,
[[Page 44220]]
provides comparative data across each manufacturer's entire product
line.
The U.S. Court of Appeals for the D.C. Circuit has also recognized
that a collection of information may be found likely to cause
substantial competitive harm even if some of the individual pieces of
data are not independently entitled to confidential treatment. See
Trans-Pacific Policing Agreement v. United States Customs Service, 177
F.3d 1022 (D.C. Cir. 1999).\12\ See also Center for National Security
Studies, et. al. v. U.S. Dept. of Justice, 331 F.3d 918 (D.C. Cir.
2003) (finding that Exemption 7 protects a comprehensive list of names
and other personal information even though individual pieces of
information have been otherwise revealed). We further note that the
D.C. Circuit has acknowledged that potential consumer misuse, with
competitive consequences, is a legitimate factor to consider when
determining the confidentiality of the information required to be
submitted to the agency. See Worthington Compressors v. Costle, 662
F.2d 45, 52 n.43 (D.C. Cir. 1981)(trial court should consider ``whether
competitors or consumers may misuse the information to the detriment''
of the submitters' competitive positions).\13\
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\12\ We do not agree with Public Citizen's assertion that the
analysis in Trans-Pacific is limited to its facts and has no
applicability to other, similar situations. Trans-Pacific neither
compels the protection of the information here, nor does it compel
its disclosure. The case supports consideration of any substantial
competitive harm arising from the disclosure of a comprehensive
compendium of information, even if the disclosure of individual
pieces of that compendium are not competitively harmful.
\13\ NHTSA has long maintained that public embarrassment per se
(that is, in the absence of substantial competitive harm or a
deleterious effect on a government program) is not a basis for
confidential treatment. The record here, however, provides support
that public disclosure of some of the early warning reporting
information may lead to mischaracterizations causing substantial
competitive harm and may lead to less, rather than more, reporting.
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NHTSA has consistently recognized the importance of providing
accurate (and complete) information to the public about motor vehicle
safety. The agency issues Consumer Advisories to help instruct
consumers on the proper use of automotive products and encourages the
public to refer to its New Car Assessment Program (NCAP) when choosing
a vehicle to purchase. In developing the NCAP program, the agency
expressed its belief that ``if consumers have valid comparative
information on important motor vehicle characteristics, they will use
that information in their vehicle purchase decisions.'' See 52 FR 31691
(Aug. 21, 1987). The agency has even rescinded certain aspects of its
Consumer Information programs after concluding that the data may
mislead consumers and, therefore, will not provide valuable safety
information. See 60 FR 32918 (June 26, 1985).
Some of the commenters also raised the possibility that NHTSA's
release of early warning information would impair both the agency's
ability to obtain this information in the future and the quality of the
information that the agency receives. For example, AIAM noted that
``[d]espite the manufacturer's intent to the contrary, individuals who
prepare field reports may be less thorough or candid if they know that
their reports will be available to the general public and not just to
experienced, sophisticated analysts employed by the manufacturer and
the government.'' Similarly, TIA asserted that, under the proposed
presumptive categories, submitters ``will produce the bare minimum
required.'' TIA added that if the information were protected,
submitters ``will be more likely to provide robust amounts of data.''
The purpose of the TREAD Act's mandate to develop a regulation
requiring the submission of the early warning data to the agency is
made clear in the language of the law itself. The purpose of the early
warning reporting regulation is ``to enhance the Secretary's ability to
carry out the provisions of this chapter,'' 49 U.S.C. 30166(m)(1),
which includes reducing both the number of traffic accidents and the
fatalities and injuries arising from them. (Emphasis added). The
Secretary has delegated those responsibilities to NHTSA. See 49 CFR
501.2. The agency's ability promptly to identify safety related defects
would not be ``enhanced'' if disclosure of all or part of the data
diminishes the volume and/or reliability of the information, nor would
the public interest in motor vehicle safety be served if disclosure has
the result of discouraging manufacturers from being responsive to
consumer concerns that may relate to motor vehicle safety or imposing
greater costs on consumers who need to address such concerns.\14\
Therefore, we must consider whether the disclosure of each reporting
element has the potential to impair our early detection of possible
safety related defects.
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\14\ Section 30166(m)(4)(B) provides that ``the regulations
promulgated by the Secretary under paragraph (1) may not require a
manufacturer of a motor vehicle or motor vehicle equipment to
maintain or submit records respecting information not in the
possession of the manufacturer.''
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The Alliance argued that all early warning data are entitled to
confidential treatment under Exemption 4, although both it and General
Motors placed particular emphasis on the confidential nature of
warranty information. Conversely, Public Citizen argued that all of the
early warning data should be categorically considered public in order
to achieve what it perceives to be the purpose of the TREAD Act--that
is, to give the public complete access to the data required pursuant to
the TREAD Act so that the public can make its own decisions relating to
products. Public Citizen contended that some Members of Congress voted
for the TREAD Act only because they believed the information required
by it would be publicly available, citing unreported conversations
between NHTSA's and Congressional staff. \15\ Public Citizen also
argued that business interests failed to establish that early warning
reporting submissions qualify for blanket confidential treatment under
Exemption 4.
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\15\ Public Citizen neither provided evidence to support this
claim, nor identified those Members who might have voted
differently. Further, the analysis in the memo was prepared in
response to the October 20, 2000 letter and post-dated the
Congressional votes. The TREAD Act passed in the House of
Representatives on October 10, 2000 and in the Senate on October 11,
2000. The letter to Secretary Slater was dated October 20, 2000, and
the memo was dated October 27, 2000. The TREAD Act was signed into
law on November 1, 2000. The memo was placed in the public docket in
March 2001. There is no reference to the memo in the Congressional
record. Nor are we aware of any public dissemination of the memo, or
its analysis, prior to its placement in the docket approximately
five months after the TREAD Act was passed.
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We do not believe that Exemption 4 should be applied to the early
warning reporting information on a wholesale basis, whether in favor or
against disclosure. Instead, we will consider the application of
Exemption 4 to each ``reporting element'' to be submitted under the
early warning reporting regulation. In doing so, we consider whether
the disclosure of each element of information is either likely to cause
substantial competitive harm or likely to impair the agency's ability
to obtain necessary information in the future (and thereby impair an
important government function). An analysis of the case law applying
National Parks and its progeny, and discussing the impairment prong in
particular, is included as Appendix B.
C. Specific Types of Information To Be Provided Under the Early Warning
Regulation
Congress provided for the agency to collect from manufacturers
reports of safety related recalls and campaigns conducted outside the
United States, and reports relating to claims for deaths
[[Page 44221]]
and serious injuries.\16\ These mandates grew directly from information
arising from the Ford/Firestone tire problem--reports of foreign safety
related service actions and a plethora of lawsuits, neither of which
had been reported to the agency. Congress also directed the agency to
collect aggregate statistical information on property damage claims and
authorized it to collect any other data that would assist the agency in
its efforts to identify safety related defects in the field.
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\16\ The provision requiring the reporting of safety related
recalls and other safety campaigns conducted in foreign countries on
vehicles that are identical or substantially similar to those
offered for sale in the United States is section 30166(l). The
disclosure provision in Section 30166(m)(4)(C) does not apply to
this category of information. We mention it, however, because it is
a critical element of the information Congress thought important for
the agency to obtain. As in the case of information delineating
safety recalls in the United States and other widely distributed
technical information, we do not consider this category of
information confidential and will not protect it from public
disclosure.
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The purpose of the early warning reporting rule is to ensure that
the agency has information from which it can detect potential safety
problems and investigate them in a timely manner. We are concerned that
our decisions on whether information will be disclosed could discourage
manufacturers from collecting the information in the first instance,
thereby reducing the information available to the agency to serve this
critical function. We are also worried that the public interest in
motor vehicle safety will be adversely affected if disclosure has the
result of causing manufacturers to be less responsive to consumer
safety concerns or to impose greater costs on consumers who need to
address problems with their vehicles and equipment, thereby reducing
the likelihood of repairing potential safety issues.
The case law construing Exemption 4 makes clear that, while the
functioning of our early warning defect detection program is an
appropriate consideration when construing the confidentiality of the
data, assertions that the data may be useful in a broader public
context is not. (See Appendix B) We must consider whether each element
required to be submitted pursuant to the early warning reporting
regulation is entitled to confidential treatment either because its
disclosure will likely cause substantial competitive harm or because
its disclosure will likely impair our ability to obtain in the future
information important to our early warning defect detection program.
1. Production Numbers
The early warning reporting rule requires certain manufacturers to
submit the number of vehicles, tires and child restraint systems, by
make, model, and model (or production) year, produced during the model
year of the reporting period and the prior nine model years (prior four
years for child restraint systems and tires). The agency previously
noted in the early warning reporting NPRM that it has generally granted
confidential treatment to production data on child restraints and tires
submitted to NHTSA, but that light vehicle production numbers are
generally available to the public through the automotive press and have
generally not been granted confidential status.
Many business interests discussed their efforts to maintain the
confidentiality of their production figures. Harley Davidson and MIC
stated that production numbers by model have never been generally
available in the motorcycle industry. Cooper Tire submitted an
affidavit, further confirmed through RMA's comments, with regard to the
competitive harm that disclosure of otherwise confidential production
numbers would have in the tire industry. JPMA argued that disclosure of
these data would provide new entrants and competitors in the child
restraint industry with information about production capacities, sales
and market performance not otherwise available in the absence of
considerable investment in market research. Bluebird (buses, school
buses and motor homes), Utilimaster (final stage walk-in vans and
freight bodies for commercial use) and the AORC (occupant restraint
systems and other components) also each stated that production numbers
in their segment of the industry are confidential and likely to lead to
substantial competitive harm if released.
The comments substantiate that production numbers in many sectors
of the automotive and equipment industries are competitively protected
information, revealing otherwise unobtainable data relating to business
practices and marketing strategies. Production numbers for
manufacturers other than light vehicle manufacturers have been treated
confidentially in the past and their disclosure is likely to cause
substantial competitive harm to the businesses engaged in these
industries. Accordingly, we are establishing a class determination
applicable to such information.
2. Claims and Notices Involving Death, Personal Injury and Property
Damage
The early warning reporting rule requires all vehicle and equipment
manufacturers, including those producing less than 500 vehicles
annually, to report certain information about each incident involving a
death that occurred in the United States that is identified in a claim
against and received by the manufacturer. They must also report
information about incidents involving a death in the United States that
is identified in a notice received by the manufacturer alleging or
proving that the death was caused by a possible defect in the
manufacturer's product. Finally, they must report on each death
occurring in a foreign country that is identified in a claim against
and received by the manufacturer involving the manufacturer's product,
if it is identical or substantially similar to a product that the
manufacturer has offered for sale in the United States.
Certain manufacturers are also required to report specified
information about each incident involving an injury that occurred in
the United States that is identified in a claim against and received by
the manufacturer, or that is identified in a notice received by the
manufacturer alleging or proving that the injury was caused by a
possible defect in the manufacturer's product.
In general, the information that must be reported includes, for
each claim or notice: the make, model, model year and Vehicle
Identification Number of the vehicle involved, the date of the
incident, the number of deaths and/or injuries involved, the state or
foreign country in which the incident occurred, and each system or
component that is referred to in the claim or notice. In addition, the
larger vehicle manufacturers and tire manufacturers must report the
numbers of claims for property damage that occurred in the United
States that involve certain specified components and systems,
regardless of the amount of such claims.
Industry commenters, such as TMA and MEMA/OESA, alleged that
release of death and injury data will result in substantial competitive
harm. Public Citizen claimed that such reports do not reveal detailed
competitive information, but rather reveal only summary information
about the incidents reported.
The submissions relating to claims and notices of death, personal
injury or property damage involve a collection of information, many of
the pieces of which are publicly available. While the data are not
generally available to the
[[Page 44222]]
public in this type of compilation, the disclosure of this collected
information is not likely to reveal business strategies or other data
that can be used competitively. These kinds of claims tend to be more
historical than other types of information required by the early
warning reporting regulation, with any apparent trends arising over
longer periods of time. Given the nature of the data, we consider it
unlikely that information about claims of death, personal injury or
property damage will lend itself to cross-company comparison. We
further note that the claims about a particular issue against a
particular manufacturer, and in particular a developing set of claims,
often receive media attention and are already in the public domain.
Nor are we concerned that disclosure will detract from the future
availability or reliability of this information. Manufacturers receive
claims based on incidents occurring in the field, not as the result of
proactive efforts to obtain data or customer feedback. They are
required under 49 CFR part 576 to retain this information and do not
have the option to refuse to amass it. Further, the required
information relating to these claims does not involve subjective
determinations or require companies to make any admissions relating to
facts or legal conclusions in dispute. The reports simply reflect the
existence of allegations made with regard to events that occurred in
the field.
For these reasons, we have decided not to create a class
determination to cover the early warning reporting information relating
to claims and notices of death or personal injury, or property damage
claims. We have determined that release of that data generally will
neither lead to substantial competitive harm nor impair our ability to
obtain such information in the future.
3. Information Regarding Warranty Claims
Manufacturers of more than 500 vehicles per year and tire
manufacturers must report quarterly the number of warranty claims
(adjustments for tire manufacturers), including extended warranty and
good will, they paid that involved certain specified components and
systems and that arose in the United States. Manufacturers of child
restraint systems must combine these with the number of reportable
consumer complaints. In addition, these manufacturers must provide
similar historical information relating to warranty claims paid during
each calendar quarter from July 1, 2000 to June 30, 2003. The
information is provided on a make/model basis and categorized with
reference to the twenty-two categories defined as part of
implementation of the early warning regulation.
Public Citizen argued that the information is summary in nature and
typical of that generally provided as part of particularized defect
investigations. Conversely, almost all the corporate commenters decried
the potential disclosure of warranty data claims as the revelation of
vital competitive information. Comments from the Alliance and Cooper
Tire included affidavits providing evidence relating to the competitive
harm that would be associated with the disclosure of warranty data
within the light vehicle and tire industry, respectively.
As suggested by the affidavit from AutoPacific, Inc., submitted by
the Alliance, knowledge of the warranty experience of one of the
specified components or systems on a make/model level can provide other
manufacturers with information about the reliability of a component or
system not otherwise available to them, except perhaps through
extensive investment in market research. GM offered the following
example:
If supplier A offers a newly-designed system to OEMs, any OEM
can tear it down and test it, but no practical test duplicates the
experience that is gained from having the system in hundreds of
thousands of vehicles. If OEM1 makes the investment to put the
system in some of its vehicles, it would gain that field experience
and could use it to make better decisions about the future use of
the system. With early warning warranty data disclosure, other OEMs
would have access to some of the same information and would be able
to make their decisions with less extensive testing and analysis.
Through the loss of its confidential information, OEM1 is forced to
subsidize the other OEMs, reducing their costs at OEM1's expense.
General Motors also makes the further point that warranty cost
information is critical in the competitive automotive marketplace.
While particular warranty information (such as that submitted as part
of a particular defect investigation) does not reveal a company's cost
structure, when aggregated by make, model and model year and applied
across systems, a cost index is created. As GM notes, cost structure
information has consistently been considered data likely to cause
substantial competitive harm if released.
Cooper Tire raised concerns that competitors could mischaracterize
the data and use it to their competitive advantage. In an affidavit
submitted to the docket, Cooper Tire's expert explained that the
release of ``a few statistics, such as the warranty adjustment rate,
without the complete background behind those statistics could lead to a
very misleading picture of tire performance.'' The company indicated
that the differences between warranties among otherwise identical tire
lines sold to different types of users ``could lead to erroneous
inferences about tire safety which, in turn could lead to erroneous and
justified competitive harm.'' Many other commenters echoed this same
concern, asserting that because warranty practices differ and because
the raw data do not reflect any technical evaluation, the data can be
used and abused competitively.
In addition to the comments filed in the docket, additional public
information illustrates the extent to which the industry as a whole
relies on and uses sensitive warranty information. For example, GM uses
its warranty data to help it pinpoint problem areas and to help it
reduce its warranty costs. See, e.g., Gregory L. White, ``GM Takes Tips
from CDC to Debug its Fleet of Cars,'' Wall St. J., April 8, 1999, at
B1 (noting GM's adaptation of the epidemiological system used by the
Centers for Disease Control and Prevention to warranty issues) and ``A
Message to Dealers Regarding the Ford Recall of Firestone Wilderness AT
Tires and General Motors Continued Use of Firestone Tires on its
Vehicles'' (May 25, 2001)(stating that GM and Firestone tire engineers
``are on site at GM's tire and wheel laboratory two days a week'' to
``monitor tire warranty data''), published on GM's Web site at http://www.gmfleet.com
.
The comments and affidavits submitted support a conclusion that the
warranty information required by the early warning reporting rule--that
is, the number of claims associated with specific components and
systems broken down by make, model and model year (with slightly
different breakouts for tires and child restraint systems)--is likely
to provide competing manufacturers with sufficient information about
the field experience of those components and systems to provide
commercial value to competitors who may be deciding whether to purchase
similar components, the price at which to purchase those components and
which suppliers to choose.
While manufacturers are likely to explore the practices and
policies of their competitors when reviewing any publicly available
warranty claims information, the public is more likely simply to rely
on generic cross-company comparisons. The warranty claims information
may be used as part of
[[Page 44223]]
vehicle comparisons, even though the warranty terms and conditions and
corporate warranty practices may differ. As a result, the potential for
the warranty claims information to give rise to misleading comparisons
and cause substantial competitive harm is also strong.
For the reasons set forth above, we have determined that the early
warning reporting of warranty information, both as regards the
quarterly reports and the one-time seeding of the system, is entitled
to confidential treatment because its disclosure is likely to cause
substantial competitive harm.\17\
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\17\ In its comments, the Alliance pointed out the competitive
value of warranty information by identifying publications available
through sale, including one called the Automotive Industry Status
Report. Public Citizen, in turn, points out that the Alliance both
claims that warranty claim data are competitively protected and that
they are generally available for sale. Having reviewed the website
on which that publication is sold, we believe that the report
provides certain summary information relating to aftermarket
equipment, but that it is not comparable to the compendium of more
specific data required to be submitted under the early warning
reporting regulation.
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The warranty data required by the early warning reporting
regulation are also entitled to confidential treatment because their
disclosure is likely to impair the agency's ability in the future to
obtain and use reliable warranty information as part of its program to
identify potential safety related defects. Warranty claims data--which
begin to accumulate as soon as vehicles are sold and continue for the
length of any given warranty policy--will be a significant indicant of
potential defects. The quarterly warranty claims reports, combined
initially with the historical seeding material, will help the agency to
identify trends involving particular equipment and systems or
components in a particular make, model and model year of a given
product.
The more warranty information available to the agency, the more
useful the warranty data will be in assisting the agency in identifying
areas for further investigation. Warranty information is particularly
important since it is generated early in the life of the vehicle, thus
assisting in the prompt identification of potential defects. The record
is replete with comments explaining why disclosure is likely to impair
corporate willingness to provide expansive warranty coverage or to
apply warranty policy in a more generous and less restrictive way.
Longer warranties, and more liberal applications of warranty policy,
will increase the number of claims paid by manufacturers and,
therefore, the amount of data available to the agency. Moreover,
changes in warranty policy caused by a reaction to disclosure of
warranty data would likely reduce the ability of the agency to compare
current data with historical data and to explore apparent changes in
the data.
We are aware that, for marketing purposes, manufacturers may choose
to make available to their customers warranties of longer duration and
broader mileage (e.g., a company may offer a 5 year/50,000 mile
warranty or a 3 year/36,000 mile warranty), making more warranty claims
information available to the agency. DaimlerChrysler, for example,
lengthened its engine warranty period to gain in the competitive
market. See, e.g., Jeff Green, ``DC Emphasizes Warranty,'' Bloomberg,
Sept. 6, 2002, available at http://www.theautochannel.com. Not only do
warranties differ by manufacturer, they also differ based on the
targeted market (e.g. luxury v. non-luxury) and on system components.
See, 2003 Manufacturers' Warranties, available at http://www.enterprise.com
.
Similarly, companies can choose strictly to adhere to their
warranty limitations or, alternatively, they may adopt policies of
avoiding customer dissatisfaction by covering repairs arguably no
longer covered under warranty, either because they may not fall within
the terms of the warranty or because they fall outside their time or
mileage parameters. As pointed out in the comments, the disclosure of
early warning warranty data may deter ``good will,'' customer
satisfaction, and early dispute resolution efforts since such efforts
will increase the number of warranty claims.\18\ If these data were
made public, it could lead consumers to assume that the product was of
poorer quality than a similar competing product made by a manufacturer
with a stricter approach to allowing warranty or ``good will'' claims.
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\18\ We recognize that this is not a matter of corporate
generosity. Some companies may choose as a matter of marketing or
customer relations to apply their warranty policies liberally, thus
generating additional numbers of warranty claims. Other companies
may make decisions aimed primarily at avoiding potential warranty
liability in the context of real or potential disputes. In either
event, disclosing early warning warranty claims data may discourage
customer satisfaction and early dispute resolution efforts.
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The disclosure of early warning warranty information could lead to
contraction of current warranty policies, and discourage their
expansion, resulting in substantially less information available to
NHTSA to screen for signs of early field problems. Thus, the disclosure
of the comprehensive compendium of warranty data will likely impair the
agency's defect detection program. Because disclosure of the early
warning reporting warranty information is likely to cause substantial
competitive harm and will likely impair the ability of the agency to
obtain comprehensive warranty information in the future, we have
decided to create a class determination covering this information.
4. Field Reports
Larger vehicle manufacturers and manufacturers of child restraint
systems must report on a quarterly basis the total number of field
reports they receive from the manufacturer's employees,
representatives, and dealers, and from fleets, that are related to
problems with certain specified components and systems, with respect to
vehicles and restraints offered for sale, sold or leased in the United
States. In addition, these manufacturers must provide copies of certain
field reports received from their employees, representatives, and
fleets, but are not required to provide copies of reports received from
dealers. Like information relating to warranty claims, the agency is
requiring the submission of historical field report information from
these manufacturers to provide it with a seeding of data it can use
immediately to detect any trends within the manufacturers' product
lines.
The nature, quality and quantity of field reports vary
significantly from company to company. Some companies actively pursue
field feedback, whether directly from customers or through dealers and
manufacturer representatives. Our experience in conducting defect
investigations, in which we routinely receive field reports about the
specific problem under investigation, shows that companies obtain
information from the field in differing ways and with differing degrees
of specificity and technical evaluation. Some manufacturers collect
field reports that are little more than customer complaints, collected
through dealers and field personnel. For others, a field report is more
akin to technical investigation into a problem detected through
warranty, consumer complaint or other data available to the company.
Field reports reflect the in-use experience of a manufacturer's
product, collected by the company at its expense and with the intent of
identifying problems associated with its products in the field. Such
information would be of substantial value to competitors, who could--if
this information were to be made public--avert similar issues or
improve their products without the need to invest in market research,
engineering development or actual
[[Page 44224]]
market experience. Competitors (and others) may also use the field
report information competitively, just as with warranty data, to
suggest comparisons that may merely result from differing policies and
practices.
Public Citizen maintains that, because field reports are often
disclosed as part of individual defect investigations, field reports
and/or field report information should also be disclosed in a wholesale
fashion when submitted as part of early warning data. On the other
hand, manufacturers such as Utilimaster and Enterprise Fleet Services
described the harmful competitive effects of disclosing the
confidential field reports relating to the performance of their
products. As stated by Utilimaster, ``public and private parcel
delivery operations do not under any circumstances want their
competitors (or competitors of their respective customers) to be aware
of and exploit delivery vehicle fleet performance, maintenance or
durability issues which might impact on the operational capability of
the delivery company in a particular region/trading area, or on the
operations of particular customer accounts.''
The same is true for other manufacturers, who collect equally
proprietary information about their products that allows them to
conform future design and production to field experience. Because they
would have access to comprehensive data covering all products,
competitors would obtain data revealing which product features,
components and systems have met with consumer acceptance (and which
have not), as well as what problems may be associated with particular
components and systems. The information may also reveal which aspects
of a vehicle's performance (whether potentially safety related or not)
a manufacturer deems important in its commercial efforts. As a result,
and as commenters have illustrated, the disclosure both of the hard
copies of field reports and information about the number of reports
associated with the components and systems specified is likely to cause
substantial competitive harm. This is true both for the quarterly
reports and with regard to the historical seeding field report
information.
The field report data are also entitled to protection because their
disclosure is likely to lead to fewer and less reliable field reports
available to the agency in its efforts to identify potential safety
defects promptly. The agency has required the submission of hard copies
of certain field reports, as well as the numbers of all field reports,
because the agency believes that this information will be especially
helpful in identifying the existence of possible safety-related
problems. We recognize that we cannot compel the preparation of field
reports, but rather only require that manufacturers submit to the
agency information about, and copies of, those field reports that
companies choose to prepare and/or obtain. See 49 U.S.C.
30166(m)(4)(B). Therefore, we do not want to do anything to discourage
manufacturers from preparing accurate and comprehensive field reports
about problems with their products. Nor do we want to detract from the
candor and specificity with which field reports are written.
As made clear throughout the comments, disclosure of field reports
is likely to discourage candor on the part of field personnel and could
adversely affect corporate policies and practices with respect to their
preparation. The available evidence shows that the disclosure of the
field reports and the field report data would likely inhibit a
significant feature of the agency's program to encourage the collection
and reporting of information and to identify the potential existence of
safety defects as soon as they begin to manifest themselves in the
field. It would also reduce the amount of valuable information
available to the agency during our defect investigations.
Because disclosure of the field report information required by the
early warning reporting rule is likely to cause substantial competitive
harm and will likely impair the ability of the agency to obtain
comprehensive field report information in the future, we have decided
to create a class determination applicable to these data.
5. Consumer Complaints
The early warning reporting regulation also requires larger vehicle
manufacturers and child restraint manufacturers to submit complaints
received each quarter relating to specified components and systems.\19\
Consumer complaints are defined by the regulation as:
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\19\ Child restraint system manufacturers will report consumer
complaints and warranty data together. As to those manufacturers,
the data are considered warranty data for purposes of this rule.
[A] communication of any kind made by a consumer (or other
person) to or with a manufacturer addressed to the company, an
officer thereof or an entity thereof that handles consumer matters,
a manufacturer website that receives consumer complaints, a
manufacturer electronic mail system that receives such information
at the corporate level, or that are otherwise received by a unit
within the manufacturer that receives consumer inquiries or
complaints, including telephonic complaints, expressing
dissatisfaction with a product, or relating the unsatisfactory
performance of a product, or any actual or potential defect in a
product, or any event that allegedly was caused by any actual or
potential defect in a product, but not including a claim of any kind
or a notice involving a fatality or injury.\20\
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\20\ 49 CFR 579.4(c).
The definition recognizes that companies may receive customer input
in a variety of ways and may establish differing practices for the
receipt of customer complaints. Companies may enhance their ability to
receive consumer complaints, for example, by increasing the staff at
their toll free telephone numbers or by creating web-based systems
through which consumers can make complaints instantly by email. The
more consumer inputs a company receives, the more reliable the
information available to it, and the agency, to assess its products'
performance in the hands of consumers.
We are concerned that release of the consumer complaint information
will discourage companies from actively pursuing or will restrict their
ability to receive consumer feedback.\21\ Consumer complaint
information is a critical aspect of the data the agency intends to use
to identify potential vehicle problems. Like warranty data and field
reports, the aggregate information is likely to be a useful pointer to
areas that, after appropriate inquiry, may lead to defect
investigations and ultimately to the remedy of safety defects.
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\21\ Harley-Davidson noted its proactive efforts to pursue
consumer feedback that might not otherwise be brought to the
company's attention. Efforts such as those of Harley-Davidson show
that consumer complaint data may be developed by manufacturers at
their own expense and for their own proprietary purposes. The
record, however, does not indicate that efforts like those described
by Harley-Davidson are prevalent among all manufacturers.
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Our experience in defect investigations has been that companies
generally receive considerably more consumer inputs than does the
agency on any given vehicle problem. Indeed, the importance of this
material increases as warranties expire and the availability of
warranty claims information correspondingly diminishes. The early
warning reporting regulation will make available to the agency
information about the volume of complaints received by manufacturers as
to each of the specified components or systems, thus considerably
enhancing the agency's ability to review field experience as it arises.
The disclosure of this information is likely to discourage
manufacturers' proactive efforts to obtain the data or to expend sums
to establish systems to receive more information or to use it more
effectively.
[[Page 44225]]
Consequently, such disclosure could impair the effective and efficient
implementation of the agency's early warning process.
Manufacturers argued that release of consumer complaint information
is likely to cause substantial competitive harm because it will be used
by competing manufacturers and potentially others in the public to make
cross-company comparisons. If misinterpreted, the information may
result in unwarranted product disparagement, leading to substantial
competitive harm. As many of the comments pointed out, consumer
complaints reveal the raw, unverified perceptions of vehicle owners.
They neither reflect a repair that was conducted (which is revealed by
warranty claims) nor an evaluation of an event by a manufacturer's
employee or dealer (which is often the source of field reports).
Furthermore, the consumer complaint information is not subject to any
controls or analytic rigor that we believe are imbedded into the
development of public acceptance surveys.
Competitors with access to complaint data would obtain, to a
certain extent, information revealing which product features,
components and systems have met with consumer acceptance (and which
have not) and what perceived problems may be associated with particular
components and systems. The information may also reveal which aspects
of a vehicle's performance (whether potentially safety related or not)
a manufacturer deems important in its commercial efforts. Thus, the
public disclosure of complaint data is likely to cause substantial
competitive harm.
Because we have determined that the disclosure of the consumer
complaint data required by the early warning reporting rule will likely
impair the ability of the agency to obtain comprehensive consumer
complaint information in the future and is likely to cause substantial
competitive harm, we have decided to create a class determination
covering these data.
VII. Appendix A--FOIA Exemption 3 and the TREAD Act Disclosure
Provision
Exemption 3 of the Freedom of Information Act prevents the
disclosure of information provided to the government when Congress
evidences a clear intent through a statutory scheme that prohibits
disclosure. The RMA argued that Congress referred specifically to all
of the information submitted under the regulations issued to implement
Section 30166(m)(1), and therefore all such information must be
withheld from disclosure under Exemption 3.
Exemption 3 is designed to incorporate into the FOIA exemptions
other statutes that, on their face, clearly exempt information from
FOIA's disclosure requirements. See, e.g., Reporters Comm'n for Freedom
of the Press v. Department of Justice, 816 F.2d 730, 735 (D.C. Cir.),
modified on other grounds, 831 F.2d 1124 (D.C. Cir. 1987), rev'd on
other grounds, 489 U.S. 749 (1989) (providing that ``a statute that is
claimed to qualify as an Exemption 3 withholding statute must, on its
face, exempt matters from disclosure''), and Irons & Sears v. Dann, 606
F.2d 1215, 1220 (D.C. Cir. 1979) (stating that ``[o]nly explicit
nondisclosure statutes that evidence a congressional determination that
certain materials ought to be kept in confidence will be sufficient to
qualify under the exemption.''). An Exemption 3 statute must either
make clear that the agency has no discretion on whether to disclose the
information or must clearly circumscribe the determination by setting
forth particular criteria or specifically identifying the information
to be withheld from disclosure. The RMA claims that the TREAD Act's
disclosure provision does the latter.
We disagree. Had Section 30166(m)(4)(C) stated only that ``none of
the information collected pursuant to the final rule promulgated under
paragraph (1) shall be disclosed,'' then the provision would have
provided unambiguous direction to the agency and clearly identified the
information to be withheld. But that is not what the disclosure
provision states. Instead, the provision makes reference to Section
30167(b) and states that ``[n]one of the information collected pursuant
to the final rule promulgated under paragraph (1) shall be disclosed
pursuant to section 30167(b) unless the Secretary determines the
disclosure of such information will assist in carrying out sections
30117(b) and 30118 through 30121.'' By making reference to preexisting
Section 30167(b), the provision suggests that Congress intended the
Secretary to determine initially which of the early warning reporting
information is entitled to confidential treatment as confidential
business information, and, if so and only then, would consider whether
disclosure was nonetheless necessary for the agency to fulfill its
responsibilities.
The colloquy between Congressmen Markey and Tauzin during the TREAD
Act hearings suggests that Congress intended the agency to consider the
confidentiality of the early warning reporting information by applying
the same legal standards otherwise applicable to information the agency
requires to be submitted:
Mr. MARKEY: First, under the section entitled ``early warning
requirements,'' we provide for the reporting of new information to
NHTSA generally at an earlier stage than the stage when an actual
recall takes place based on the finding of a defect. To protect the
confidentiality of this new early stage information, the bill
provides in Section 2(b) in the subsection titled ``disclosure''
that such information shall be treated as confidential unless the
Secretary makes a finding that its disclosure would assist in
ensuring public safety, but with respect to information that NHTSA
currently requires be disclosed to the public it is my understanding
of the committee's intention that we not provide manufacturers with
the ability to hide from public disclosure information which under
current law must be disclosed. Would the gentleman from Louisiana
(Mr. Tauzin) agree that this special disclosure provision for new
early stage information is not intended to protect from disclosure
[information] that is currently disclosed under existing law such as
information about actual defects or recalls?
* * * * *
Mr. TAUZIN: Mr. Speaker, the gentleman is correct.\22\
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\22\ 146 Cong. Rec. H9629 (daily ed. Oct. 10, 2000) (emphasis
added).
The RMA and other commenters, however, pointed to other statutory
schemes in which Congress' intent to ensure the confidentiality of
submitted information was made clear. The AIAM, citing the practices of
several State and Federal agencies, noted that these ``regulatory
agencies receive product quality-related information from regulated
parties for compliance evaluation purposes'' and have ``consistently
follow[ed] policies of withholding such information from public
disclosure.'' AIAM admitted, however, that the statutory provisions for
these agencies ``differ from those affecting NHTSA'' and ``do not * * *
provide controlling legal authority for NHTSA's handling of the early
warning report information.''
For example, the Supreme Court has held that the statute governing
the activities of the Consumer Product Safety Commission (CPSC)
contains a provision constituting an Exemption 3 statute. CPSC v. GTE
Sylvania, 447 U.S. 102 (1980). The Court noted that Section 6(b) of the
Consumer Product Safety Act, 15 U.S.C. 2055, sets forth specific
procedures that CPSC must follow prior to the release of information to
the public. Id. at 105. Under that provision, the CPSC must ensure the
accuracy of the information it plans to release, notify the
manufacturer and provide it
[[Page 44226]]
with a summary of the information that the CPSC intends to release if
the summary would enable one to readily ascertain the identity of that
manufacturer. Id. The manufacturer is also afforded an opportunity to
comment on the CPSC's summary. Id.
Similarly, some of the statutory provisions regarding the
disclosure of information the Federal Aviation Administration (FAA)
receives involve very specific instances or types of information. For
example, in Public Citizen v. FAA, 988 F.2d 186 (D.C. Cir. 1993), the
court determined that information concerning air transportation
security could be withheld under the agency's Air Security Improvement
Act of 1990. Under the provisions of that Act, the court determined
that ``Congress's intent was to broaden the FAA's power to withhold
sensitive information'' held by the agency. Id. at 195 (emphasis in
original).
Indeed, the extent of protection afforded to submitters of
information under federal programs varies.\23\ For example, while the
Food and Drug Administration (FDA) must adhere to a statutory scheme
that governs the public disclosure of information (21 U.S.C. 360j), the
D.C. Circuit noted that a lower court's reading of the FDA statute as
an Exemption 3 provision was ``contradicted by the language of Section
360j(h), its legislative history, and its interrelation with other
provisions of the Medical Device Amendments.'' Public Citizen Health
Research Group v. FDA, 704 F.2d 1280, 1284 (D.C. Cir. 1983). Under the
FDA's statutory provisions, the agency must release a summary of
information relating to the safety of medical devices. The court noted
that the statutory provision's ``legislative history repudiates the
proposition that Section 360j(h) specifically prohibits the disclosure
of health and safety data that do not qualify for protection under
Exemption 4 to the FOIA or [Trade Secrets Act].'' Id. at 1285.
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\23\ We note that the U.S. District Court for the District of
Columbia has rejected the notion that the Vehicle Safety Act
generally provides Exemption 3 protection for information the agency
requires be submitted. Ditlow v. Volpe, 362 F. Supp. 1321, 1324
(D.D.C. 1973) (specifically rejecting application of Exemption 3 to
the Motor Vehicle Safety Act), rev'd on other grounds, Ditlow v.
Brinegar, 494 F.2d 1073 (D.C. Cir. 1974).
---------------------------------------------------------------------------
The Tenth Circuit Court of Appeals considered whether another
provision of the FDA statute, 21 U.S.C. 331(j), qualifies as an
Exemption 3 statute. See Anderson v. HHS, 907 F.2d 936, 950 (D.C. Cir.
1990). Section 331(j) provides that any information acquired under the
FDA's various information-collection statutes must not be disclosed if
the information ``concern[s] any method or process which as a trade
secret is entitled to protection.'' Id. While the court indicated that
Section 331(j) qualified as an Exemption 3 statute, it held that the
scope of the statute is not broader than Exemption 4 and ``cannot
provide any independent justification for nondisclosure.'' Id.
The colloquy between Congressmen Markey and Tauzin suggests no
intent to create a statutory scheme like that governing the disclosure
of information from the CPSC or other provisions prohibiting
disclosure. Rather, the limited legislative history of Section
30166(m)(4)(C), and the reference to Section 30167(b) in that
provision, shows that Congress intended the agency to determine the
confidentiality of the early warning reporting information in
accordance with its long standing practice of considering whether the
data constitutes confidential business information. Congress is
presumed to be aware of agency practice when promulgating statutes and,
therefore, is presumed to have been aware of NHTSA's practice of
analyzing confidentiality claims pursuant to Exemption 4 of the FOIA.
See e.g., U.S. v. Wilson, 290 F.3d 347, 356 (D.C. Cir. 2002)
(``Congress is presumed to preserve, not abrogate, the background
understandings against which it legislates'').\24\
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\24\ The Alliance suggests that Exemption 7 may also be
applicable. Exemption 7 protects records from disclosure relating to
law enforcement purposes when disclosure could reasonably be
expected to interfere with the enforcement proceedings. NHTSA has
historically not invoked Exemption 7 to withhold information
received from manufacturers during the course of defect
investigations. See CNA v. Donovan, 830 F.2d 1132, 1139 (D.C. Cir.
1987).
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VIII. Appendix B--Confidential Business Information Case Law Analysis
In assessing whether Exemption 4 applies to required submissions
the Government must examine whether the disclosure is likely to impair
the Government's ability to obtain necessary information in the future
or is likely to cause substantial competitive harm to the submitter.
Substantial competitive harm can arise when the information has
significant commercial value to competitors, such as: from revealing
fundamental data (such as price, cost or other proprietary business
structure); from revealing information that would otherwise require
investment, through reverse engineering or other means, to obtain; or
from revealing business strategies by making information that otherwise
would be unobtainable available to competitors.
The National Parks test also recognizes that the Government
requires the submission of certain information because it is needed to
serve an important government function. In describing this aspect of
Exemption 4, the court in National Parks noted that:
The ``financial information'' exemption recognizes the need of
government policymakers to have access to commercial and financial
data. Unless persons having necessary information can be assured
that it will remain confidential, they may decline to cooperate with
officials and the ability of the Government to make intelligent,
well-informed decisions will be impaired. Id. at 767.
The DC Circuit nonetheless decided that the information at issue--
financial information of concessionaires in national parks--did not
qualify as confidential under the impairment prong because it was
required by government regulation and therefore the government's
ability to obtain it in the future would not be impaired by its
disclosure. The court remanded the case to the district court for a
determination of whether the data would cause competitive harm if
released.
That the National Parks test was intended in part to ensure the
proper functioning of government business was further made clear in
Washington Post Co. v. HHS, 865 F.2d 320 (D.C. Cir. 1989). In remanding
the case for the development of a more complete record, the court
emphasized that it had no intention of undermining the impairment prong
of National Parks. Instead, the Washington Post court prognosticated
that the impairment prong would tend to focus on protecting the
reliability of data, rather than the availability of data. Id. at 328.
Thus, the court reiterated the fundamental concept that the receipt of
valid information on which the government can rely in performing its
programmatic functions is a critical component of considering Exemption
4 claims.
The DC Circuit once again considered its policy of encouraging the
submission of information to the government in Critical Mass Energy
Project v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C. Cir. 1992)
(en banc). In Critical Mass, the court distinguished between
information the government compels and that which is voluntarily
submitted to help further governmental functions, such as rulemakings.
The court held that information voluntarily submitted to the government
should be treated as confidential under Exemption 4 as long as the
submitter can show that it is not customarily released to the public.
Id. at
[[Page 44227]]
880. In contrast, information compelled by the government would
continue to be considered under the two prongs enunciated in National
Parks.
The Exemption 4 jurisprudence in the aftermath of Critical Mass
makes clear that the determination of whether information should be
protected under Exemption 4 may include additional considerations, but
only to the extent that those considerations relate to the government
functions for which the information is sought. Underpinning the
jurisprudence surrounding Exemption 4 has been the acknowledgement that
``it is intended to protect the interests of both the Government and
the individual,'' including advancing the efficiency of government
operations. National Parks, 498 F.2d at 767. The concern that
disclosure policy should not impair government programs remains strong
whether the information is compelled (and its disclosure governed by
the two prongs of National Parks) or voluntarily submitted (and its
disclosure governed by the Critical Mass test). See CAS v. NHTSA, 244
F.3d at 148 (D.C. Cir. 2001) (explaining that ``[w]hen the Government
obtains the information as part of a mandatory submission, the
Government's access to the information normally is not seriously
threatened by disclosure; the private interest is the principal factor
tending against disclosure, and the harm to the private interest must
be significant to prevent public access to information'') (emphasis
added).
For example, the government may withhold information that, if
disclosed, would diminish the effectiveness of a licensing program even
when the basis for disclosure would arguably advance an underlying
public interest. See Public Citizen Health Research Group v. National
Institutes of Health (PCHRG v. NIH), 209 F. Supp. 2d 37, 46 (D.D.C.
2002) (finding certain royalty information confidential under Exemption
4 because ``disclosure of the royalty information would impair the
efficient and effective performance of [the government's] licensing
program'').
It is not sufficient, therefore, to argue that some public need
unrelated to the government's function warrants the disclosure of
information under Exemption 4. Public Citizen Health Research Group v.
Food & Drug Administration (PCHRG v. FDA), 185 F.3d 898 (D.C. Cir.
1999) (rejecting the argument that a company's clinical studies, which
were required to be submitted to the FDA, should be disclosed because
disclosure would allow the public to learn from the company's
experience). As the D.C. Circuit stated in PCHRG v. FDA:
It is not open to Public Citizen, however, to bolster the case
for disclosure by claiming an additional public benefit in that, if
the information is disclosed, then other drug companies will not
conduct risky clinical trials of the drugs that Schering has
abandoned. That is not related to ``what the [ ] government is up
to'' and the Court has clearly stated ``whether disclosure of a * *
* document * * * is warranted must turn on the nature of the
requested document and its relationship to the basic purpose of the
Freedom of Information Act to open agency action to the light of
public scrutiny * * * rather than on the particular purpose for
which the document is being requested. In other words, the public
interest side of the balance is not a function of the identity of
the requester * * * or of any potential negative consequences
disclosure may have for the public * * * nor likewise of any
collateral benefits of disclosure. Id. at 904 (citations omitted).
In most of the cases discussing the National Parks test, the courts
were considering the kind of commercial information that would be
created independent of any government mandate, and thus the courts have
generally considered the inquiry under the impairment prong to focus on
the reliability, rather than the availability, of the data. Yet, the
courts have carefully maintained the vitality of the impairment prong
as applied to compelled submissions and, in doing so, have maintained
an analytic framework within which to ensure that the disclosure of
information does not unduly impair the government's functions by
reducing both qualitatively and quantitatively the data available to
the government. Thus, as in CAS v. NHTSA, the Court was careful to
state that ``when the Government obtains the information as part of a
mandatory submission, the Government's access to information normally
is not seriously threatened by disclosure,'' and in PCHRG v. NIH, the
impairment of the government's program served as an independent basis
for the court's refusal to require disclosure.
IX. Regulatory Analyses and Notices
A. Executive Order 12866 and DOT Regulatory Policies and Procedures
NHTSA has considered the impact of this rulemaking action under
Executive Order 12866 and the Department of Transportation's regulatory
policies and procedures. This rulemaking document is not economically
significant. It was, however, reviewed by the Office of Management and
Budget under E.O. 12866, ``Regulatory Planning and Review.'' The
rulemaking action has been determined to be significant under the
Department's regulatory policies and procedures, given the degree of
public interest in the treatment of the early warning reporting
information.
This final rule simplifies and clarifies the agency's regulation on
confidential information and updates specific sections of the
regulation to reflect legal developments. In addition, this final rule
creates a series of class determinations applicable to those portions
of the data to be submitted pursuant to the early warning reporting
regulation that are determined to be entitled to confidential treatment
under the procedures set forth in this final rule.
The procedural aspects of this final rule impose no new,
significant burdens on submitters of information. The treatment of the
early warning reporting information addresses the manner in which the
agency will handle the data, and also imposes no new, significant
burdens on submitters of information. Because no additional burdens are
imposed, there are no costs requiring the development of a full cost/
benefit evaluation.
B. Regulatory Flexibility Act
We have considered the effects of this rulemaking action under the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) This rule does not
have a significant economic impact on a substantial number of small
entities. Therefore, a regulatory flexibility analysis is not required
for this action. This final rule imposes no additional obligations on
the submitters of information to NHTSA beyond those otherwise required
by the Vehicle Safety Act and the early warning reporting regulation.
This final rule addresses the agency's treatment of early warning
reporting data and simplifies procedures for all submitters, including
small entities, when submitting information to the agency. The rule
protects from disclosure early warning reporting information found
likely to cause competitive harm. It permits the disclosure of that
early warning information determined neither to cause competitive harm
if released nor to impair the ability of the government to obtain the
information in the future.
C. National Environmental Policy Act
NHTSA has analyzed this rule for the purposes of the National
Environmental Policy Act and determined that it does not have any
significant impact on the quality of the human environment.
D. Executive Order 13132 (Federalism)
The agency has analyzed this rulemaking action in accordance with
the principles and criteria set forth in Executive Order 13132 and has
[[Page 44228]]
determined that it does not have sufficient federalism implications to
warrant consultation with State and local officials or the preparation
of a federalism summary impact statement. The rule has no substantial
effects on the States, or on the current Federalism-State relationship,
or on the current distribution of power and responsibilities among the
various local officials.
E. Unfunded Mandate Reform Act
The Unfunded Mandate Reform Act of 1995 requires agencies to
prepare a written assessment of the costs, benefits and other effects
of proposed or final rules that include a Federal mandate likely to
result in the expenditure by State, local or tribal governments, in the
aggregate, or by the private sector, of more than $100 million annually
(adjusted for inflation with base year of 1995). This rule will not
result in the expenditure by State, local or tribal governments, in the
aggregate, or by the private sector, of more than $100 million
annually.
F. Executive Order 12778 (Civil Justice Reform)
This rule will not have any preemptive or retroactive effect. This
action meets applicable standards in sections 3(a) and 3(b)(2) of
Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden. The rule does not require
submission of a petition for reconsideration or other administrative
proceedings before parties may file suit in court.
G. Paperwork Reduction Act
The existing requirements of part 512 are considered to be
information collection requirements as that term is defined by the
Office of Budget and Management (OMB) in 5 CFR part 1320. Accordingly,
the existing part 512 regulation was submitted to and approved by OMB
pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). These
requirements were approved in February, 2002 through February 28, 2005.
This final rule does not revise the existing currently approved
information collection under Part 512.
Commenters to the Notice of Proposed Rulemaking objected to the
submission of a ``third version'' of information for review, a request
for submitters to redact personal identifiers and certain other
features of the form with which the agency had proposed the submission
of information claimed to be confidential. This agency has considered
and addressed these concerns, including the number of copies to be
submitted. These proposals, whether intended or otherwise interpreted,
were not adopted.
H. Executive Order 13045
Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any
rule that: (1) Is determined to be ``economically significant'' as
defined under E.O. 12866, and (2) concerns an environmental, health or
safety risk that NHTSA has reason to believe may have a
disproportionate effect on children. This regulatory action does not
meet either of these criteria.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) requires NHTSA to evaluate and use existing voluntary
consensus standards \25\ in its regulatory activities unless doing so
would be inconsistent with applicable law (e.g., the statutory
provisions regarding NHTSA's vehicle safety authority) or otherwise
impractical. This requirement is not relevant to this rulemaking
action.
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\25\ Voluntary consensus standards are technical standards
developed or adopted by voluntary consensus standards bodies.
Technical standards are defined by the NTTAA as ``performance-based
or design-specific technical specifications and related management
systems practices.'' They pertain to ``products and processes, such
as size strength, or technical performance of a product, process or
material.''
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J. Data Quality Act
Section 515 of the Treasury and General Government Appropriations
Act for Fiscal Year 2001 (the ``Data Quality Act'') requires agencies
to take certain affirmative steps to maximize the utility, objectivity,
and integrity of data agencies disseminate to the public. This final
rule establishes a series of class determinations applicable to those
portions of the early warning reporting information determined likely,
if released, to cause substantial competitive harm and to impair the
government's ability to obtain data necessary to the operation of the
agency's defect detection and remediation program. Such submissions are
entitled to confidential treatment under Exemption 4 of the Freedom of
Information Act.
The early warning reporting information determined not to be
entitled to confidential treatment--reports of claims and notices of
deaths, personal injury and property damage and some production
numbers--involves factual matter and does not constitute data relied on
or developed as part of a determination by the agency. The remainder of
the early warning information is similarly factual, but will not be
disclosed to the public. This rule does not implicate Data Quality Act
concerns.
K. Regulation Identifier Number (RIN)
The Department of Transportation assigns a regulation identifier
number (RIN) to each regulatory action listed in the Unified Agenda of
Federal Regulations. The Regulatory Information Service Center
publishes the Unified Agenda in April and October of each year. You may
use the RIN contained in the heading at the beginning of this document
to find this action in the Unified Agenda.
List of Subjects in 49 CFR Part 512
Administrative procedure and practice, Confidential Business
Information, Freedom of Information, Motor Vehicle Safety, Reporting
and Record Keeping Requirements.
0
In consideration of the foregoing, the National Highway Traffic Safety
Administration amends title 49, Code of Federal Regulations, by
revising Part 512 as set forth below.
Subpart A--General Provisions
Sec.
512.1 Purpose and scope.
512.2 Applicability.
512.3 Definitions.
Subpart B--Submission Requirements
512.4 When requesting confidentiality, what should I submit?
512.5 How many copies should I submit?
512.6 How should I prepare documents when submitting a claim for
confidentiality?
512.7 Where should I send the information for which I am requesting
confidentiality?
512.8 What supporting information should I submit with my request?
Subpart C--Additional Requirements
512.9 What are the requirements if the information comes from a
third party?
512.10 Duty to amend.
512.11 What if I need an extension of time?
512.12 What if I am submitting multiple items of information?
512.13 What are the consequences for noncompliance with this part?
Subpart D--Agency Determination
512.14 Who makes the confidentiality determination?
512.15 How will confidentiality determinations be made?
512.16 Class determinations.
512.17 How long should it take to determine whether information is
entitled to confidential treatment?
512.18 How will I be notified of the confidentiality determination?
512.19 What can I do if I disagree with the determination?
[[Page 44229]]
Subpart E--Agency Treatment of Information Claimed To Be Confidential
512.20 How does the agency treat information submitted pursuant to
this part before a confidentiality determination is made?
512.21 How is information submitted pursuant to this part treated
once a confidentiality determination is made?
512.22 Under what circumstances may NHTSA modify a grant of
confidentiality?
512.23 Under what circumstances may NHTSA publicly release
confidential information?
Appendix A--Certificate in Support of Request for Confidentiality
Appendix B--General Class Determinations
Appendix C--Early Warning Reporting Class Determinations
Appendix D--OMB Clearance
Authority: 49 U.S.C. 322; 5 U.S.C. 552; 49 U.S.C. 30166; 49
U.S.C. 30167; 49 U.S.C. 32307; 49 U.S.C. 32505; 49 U.S.C. 32708; 49
U.S.C. 32910; 49 U.S.C. 33116; delegation of authority at 49 CFR
1.50.
Subpart A--General Provisions
Sec. 512.1 Purpose and scope.
The purpose of this part is to establish the procedures and
standards by which NHTSA will consider claims that information
submitted to the agency is entitled to confidential treatment under 5
U.S.C. 552(b), most often because it constitutes confidential business
information as described in 5 U.S.C. 552(b)(4), and to address the
treatment of information determined to be entitled to confidential
treatment.
Sec. 512.2 Applicability.
(a) This part applies to all information submitted to NHTSA, except
as provided in paragraph (b) of this section, for which a determination
is sought that the material is entitled to confidential treatment under
5 U.S.C. 552(b), most often because it constitutes confidential
business information as described in 5 U.S.C. 552(b)(4), and should be
withheld from public disclosure.
(b) Information received as part of the procurement process is
subject to the Federal Acquisition Regulation, 48 CFR Chapter 1, as
well as this part. In any case of conflict between the Federal
Acquisition Regulation and this part, the provisions of the Federal
Acquisition Regulation prevail.
Sec. 512.3 Definitions.
Whenever used in this part:
(a) Administrator means the Administrator of the National Highway
Traffic Safety Administration.
(b) Chief Counsel means the Chief Counsel of the National Highway
Traffic Safety Administration.
(c) Confidential business information means trade secrets or
commercial or financial information that is privileged or confidential,
as described in 5 U.S.C. 552(b)(4).
(1) A trade secret is a secret, commercially valuable plan,
formula, process, or device that is used for the making, preparing,
compounding, or processing of trade commodities and that can be said to
be the end product of either innovation or substantial effort.
(2) Commercial or financial information is considered confidential
if it has not been publicly disclosed and:
(i) If the information was required to be submitted and its release
is likely to impair the Government's ability to obtain necessary
information in the future, or is likely to cause substantial harm to
the competitive position of the person from whom the information was
obtained; or
(ii) if the information was voluntarily submitted and is the kind
of information that is customarily not released to the public by the
person from whom it was obtained.
(d) NHTSA means the National Highway Traffic Safety Administration.
(e) ``Substantial competitive harm'' includes ``significant
competitive damage'' under Chapter 329 of Title 49 of the United States
Code, Automobile Fuel Economy, 49 U.S.C. 32910(c).
Subpart B--Submission Requirements
Sec. 512.4 When requesting confidentiality, what should I submit?
Any person submitting information to NHTSA, other than information
in a class identified in Appendix C of this Part, and requesting that
the information be withheld from public disclosure pursuant to 5 U.S.C.
552(b) shall submit the following:
(a) The materials for which confidentiality is being requested, in
conformance with Sec. Sec. 512.5, 512.6, and 512.7 of this part;
(b) The Certificate, in the form set out in Appendix A to this
part;
(c) Supporting information, in conformance with Sec. 512.8; and
(d) Any request for an extension of time, made in accordance with
Sec. 512.11.
Sec. 512.5 How many copies should I submit?
(a) Except as provided for in subsection (c), a person must send
the following in hard copy or electronic format to the Chief Counsel
when making a claim for confidential treatment covering submitted
material:
(1) A complete copy of the submission, and
(2) A copy of the submission containing only the portions for which
no claim of confidential treatment is made and from which those
portions for which confidential treatment is claimed has been redacted,
and
(3) Either a second complete copy of the submission or,
alternatively, those portions of the submission containing the material
for which confidential treatment is claimed and any additional
information the submitter deems important to the Chief Counsel's
consideration of the claim.
(4) If submitted in electronic format, a copy of any special
software required to review materials for which confidential treatment
is requested and user instructions must also be provided.
(b) A person filing comments to a rulemaking action must
additionally submit to the rulemaking docket a copy of the submission
containing only the portions for which no claim of confidential
treatment is made and from which those portions for which confidential
treatment is claimed has been redacted.
(c) Any person submitting blueprints or engineering drawings need
only provide an original version with their submission.
Sec. 512.6 How should I prepare documents when submitting a claim for
confidentiality?
(a) Information claimed to be confidential must be clearly
identified to enable the agency to distinguish between those portions
of the submission claimed to constitute confidential business
information and those portions for which no such claim is made.
(b) The word ``CONFIDENTIAL'' must appear on the top of each page
containing information claimed to be confidential.
(1) If an entire page is claimed to be confidential, the submitter
must indicate clearly that the entire page is claimed to be
confidential.
(2) If the information for which confidentiality is being requested
is contained within a page, the submitter shall enclose each item of
information that is claimed to be confidential within brackets: ``[
].''
(3) If submitted in electronic format, a comparable method to of
identifying the information claimed to be confidential may be used. If
submitted on CD-ROM or other format, the item containing the
information shall be labeled as containing confidential information.
Sec. 512.7 Where should I send the information for which I am
requesting confidentiality?
A claim for confidential treatment must be submitted in accordance
with
[[Page 44230]]
the provisions of this regulation to the Chief Counsel of the National
Highway Traffic Safety Administration, Room 5219, 400 Seventh Street,
SW., Washington, DC 20590.
Sec. 512.8 What supporting information should I submit with my
request?
When requesting confidentiality, the submitter shall:
(a) Describe the information for which confidentiality is being
requested;
(b) Identify the confidentiality standard(s) under which the
confidentiality request should be evaluated, in accordance with Sec.
512.15;
(c) Justify the basis for the claim of confidentiality under the
confidentiality standard(s) identified pursuant to paragraph (b) of
this section by describing:
(1) Why the information qualifies as a trade secret, if the basis
for confidentiality is that the information is a trade secret;
(2) What the harmful effects of disclosure would be and why the
effects should be viewed as substantial, if the claim for
confidentiality is based upon substantial competitive harm;
(3) What significant NHTSA interests will be impaired by disclosure
of the information and why disclosure is likely to impair such
interests, if the claim for confidentiality is based upon impairment to
government interests;
(4) What measures have been taken by the submitter to ensure that
the information is not customarily disclosed or otherwise made
available to the public, if the basis for confidentiality is that the
information is voluntarily submitted; and
(5) The information is otherwise entitled to protection, pursuant
to 5 U.S.C. 552(b).
(d) Indicate if any items of information fall within any of the
class determinations included in Appendix B to this Part;
(e) Indicate the time period during which confidential treatment is
sought; and
(f) State the name, address, and telephone number of the person to
whom NHTSA's response and any inquiries should be directed.
Subpart C--Additional Requirements
Sec. 512.9 What are the requirements if the information comes from a
third party?
Where confidentiality is claimed for information obtained by the
submitter from a third party, such as a supplier, the submitter is
responsible for obtaining from the third party the information that is
necessary to comply with Sec. 512.4 of this part, including a
certificate in the form set out in Appendix A to this Part.
Sec. 512.10 Duty to amend.
The submitter shall promptly amend any supporting information
provided under Sec. 512.4 if the submitter obtains information upon
the basis of which the submitter knows that the supporting information
was incorrect when provided, or that the supporting information, though
correct when provided to the agency, is no longer correct and the
circumstances are such that a failure to amend the supporting
information is in substance a knowing concealment.
Sec. 512.11 What if I need an extension of time?
If a person is unable to submit the necessary information required
under Sec. 512.4 at the time the claimed confidential information is
submitted to NHTSA, then that person may request an extension of time.
Any request for an extension shall explain the reason for the extension
of time and the length of time requested.
Sec. 512.12 What if I am submitting multiple items of information?
Any certificate provided under Sec. 512.4(b) of this part, and any
supporting information provided under Sec. 512.4(c) of this part, may
be used to support a claim for confidential treatment of more than one
item of information. However, general or nonspecific assertions or
analysis may be insufficient to form an adequate basis for the agency
to find that the information is entitled to confidential treatment, and
may result in the denial of the claim.
Sec. 512.13 What are the consequences for noncompliance with this
part?
(a) If the submitter fails to comply with Sec. 512.4 of this part
at the time the information is submitted to NHTSA or does not request
an extension of time under Sec. 512.11, the claim for confidentiality
may be waived, unless the agency is notified or otherwise becomes aware
of the claim before the information is disclosed to the public. If the
information is placed in a public docket or file, such placement is
disclosure to the public within the meaning of this part and may
preclude any claim for confidential treatment. The Chief Counsel may
notify a submitter of information or, if applicable, a third party from
whom the information was obtained, of inadequacies regarding a claim
for confidential treatment and may allow the submitter or third party
additional time to supplement the submission, but has no obligation to
provide either notice or additional time.
(b) If the submitter does not provide the certificate required
under Sec. 512.4(b) of this part or any supporting information
required under Sec. 512.4(c) of this part, or if the information is
insufficient to establish that the information should be afforded
confidential treatment under the confidentiality standards set out in
Sec. 512.15 of this part, a request that such information be treated
confidentially may be denied. The Chief Counsel may notify a submitter
of information of inadequacies in the supporting information and may
allow the submitter additional time to supplement the showing, but has
no obligation to provide either notice or additional time.
Subpart D--Agency Determination
Sec. 512.14 Who makes the confidentiality determination?
The Chief Counsel will determine whether an item of information
will be afforded confidential treatment under this part.
Sec. 512.15 How will confidentiality determinations be made?
Information may be afforded confidential treatment if the Chief
Counsel determines that:
(a) The information is a trade secret;
(b) Public disclosure of the information would be likely to cause
substantial harm to the competitive position of the submitter;
(c) Public disclosure of the information would be likely to impair
NHTSA's ability to obtain necessary information in the future;
(d) The information was provided to NHTSA voluntarily and was not
customarily released to the public by the person from whom it was
obtained; or
(e) The information is otherwise entitled to protection, pursuant
to 5 U.S.C. 552(b).
Sec. 512.16 Class determinations.
(a) The Chief Counsel may issue class determinations of categories
of information to be entitled to confidential treatment if the Chief
Counsel determines that one or more characteristics common to each item
of information in that class, will, in most cases, result in identical
treatment, and further that it is appropriate to treat all such items
as a class for one or more purposes under this part. Once a class
determination is made, the Chief Counsel will publish the new class
determination in the Federal Register.
(b) The Chief Counsel may amend, modify, or terminate any class
[[Page 44231]]
determination established under this section. These changes will be
published in the Federal Register.
(c) Class determinations made by the Chief Counsel are listed in
Appendices B and C to this Part.
(d) A class determination may state that all of the information in
the class:
(1) Is or is not governed by a particular section of this part or
by a particular set of substantive criteria of this part;
(2) Satisfies one or more of the applicable substantive criteria;
or
(3) Satisfies one or more of the substantive criteria, but only for
a certain period of time.
Sec. 512.17 How long should it take to determine whether information
is entitled to confidential treatment?
(a) When information claimed to be confidential is requested under
the Freedom of Information Act, the determination will be made within
twenty (20) working days after NHTSA receives such a request or within
thirty (30) working days in unusual circumstances as provided under 5
U.S.C. 552(a)(6)(A). However, these time periods may be extended by the
Chief Counsel for good cause shown or on request from any person. An
extension will be made in accordance with 5 U.S.C. 552(a)(6)(A), and
will be accompanied by a written statement setting out the reasons for
the extension.
(b) When information claimed to be confidential is not requested
under the Freedom of Information Act, the determination of
confidentiality will be made within a reasonable period of time, at the
discretion of the Chief Counsel.
Sec. 512.18 How will I be notified of the confidentiality
determination?
(a) If a request for confidential treatment is granted, the
submitter of the information will be notified in writing of the
determination and of any appropriate limitations.
(b) If a request for confidential treatment is denied in whole or
in part, the submitter of the information will be notified in writing
of the determination, and the reasons for the denial, by certified
mail, return receipt requested. The information may be made available
to the public twenty (20) working days after the submitter of the
information has received notice of the denial, unless a request for
reconsideration is filed. The information may be released publicly on
an earlier date, if the Chief Counsel determines in writing that the
public interest requires that the information be made available to the
public on such date.
Sec. 512.19 What can I do if I disagree with the determination?
(a) A submitter of information whose request for confidential
treatment is denied in whole or in part, may petition for
reconsideration of that decision. Petitions for reconsideration shall
be addressed to and received by the Chief Counsel prior to the date on
which the information would otherwise be made available to the public.
The determination by the Chief Counsel upon such petition for
reconsideration shall be administratively final.
(b) If a person is unable to submit a petition for reconsideration
within twenty (20) working days of receiving notice that a claim for
confidential treatment was denied, that person may submit a request for
an extension of time. The Chief Counsel must receive any request for an
extension of time before the date on which the information would be
made available to the public, and the request must be accompanied by an
explanation describing the reason for the request and the length of
time requested. The Chief Counsel will determine whether to grant or
deny the extension and the length of the extension.
(c) If a petition for reconsideration is granted, the petitioner
will be notified in writing of the determination and of any appropriate
limitations.
(d) If a petition for reconsideration is denied in whole or in
part, or if a request for an extension is denied, the petitioner will
be notified in writing of the denial, and the reasons for the denial,
and will be informed that the information will be made available to the
public not less than twenty (20) working days after the petitioner has
received notice of the denial. The information may be released publicly
on an earlier date, if the Administrator determines in writing that the
public interest requires that the information be made available to the
public on such date.
Subpart E--Agency Treatment of Information Claimed To Be
Confidential
Sec. 512.20 How does the agency treat information submitted pursuant
to this part before a confidentiality determination is made?
(a) Information received by NHTSA, for which a properly filed
confidentiality request is submitted, will be kept confidential until
the Chief Counsel makes a determination regarding its confidentiality.
Such information will not be disclosed publicly, except in accordance
with this part.
(b) Redacted copies of documents submitted to NHTSA under this part
will be disclosed to the public.
Sec. 512.21 How is information submitted pursuant to this part
treated once a confidentiality determination is made?
(a) Once the Chief Counsel makes a determination regarding the
confidentiality of the submitted information, all materials determined
not to be entitled to confidential protection will be disclosed to the
public in accordance with the determination, unless a timely petition
for reconsideration is received by the agency.
(b) Upon receipt of a timely petition for reconsideration under
Sec. 512.19 of this part, the submitted information will remain
confidential, pending a determination regarding the petition.
(c) Should the Chief Counsel, after considering a petition for
reconsideration, decide that information is not entitled to
confidential treatment, the information may make the information
available after twenty (20) working days after the submitter has
received notice of that decision from the Chief Counsel unless the
agency receives direction from a court not to release the information.
Sec. 512.22 Under what circumstances may NHTSA modify a grant of
confidentiality?
(a) The Chief Counsel may modify a grant of confidentiality based
upon:
(1) Newly discovered or changed facts;
(2) A change in the applicable law;
(3) A change in class determination, pursuant to Sec. 512.16;
(4) The passage of time; or
(5) A finding that the prior determination is erroneous.
(b) If the Chief Counsel believes that an earlier determination of
confidentiality should be modified based on one or more of the factors
listed in paragraph (a) of this section, the submitter of the
information will be notified in writing that the Chief Counsel has
modified its earlier determination and of the reasons for the
modification, and will be informed that the information will be made
available to the public in not less than twenty (20) working days from
the date of receipt of the notice of modification. The information may
be released publicly on an earlier date, if the Administrator
determines in writing that the public interest requires that the
information be made available to the public on such date. The submitter
may seek reconsideration of the modification, pursuant to Sec. 512.19.
[[Page 44232]]
Sec. 512.23 Under what circumstances may NHTSA publicly release
confidential information?
(a) Information that has been claimed or determined to be
confidential under this part may be disclosed to the public by the
Administrator notwithstanding such claim or determination, if
disclosure would be in the public interest as follows:
(1) Information obtained under chapter 325, 327, 329 or 331 of
title 49 of the United States Code (formerly under the Motor Vehicle
Information and Cost Savings Act) may be disclosed when that
information is relevant to a proceeding under the chapter under which
the information was obtained.
(2) Information obtained under chapter 301 of title 49 of the
United States Code (49 U.S.C. Sec. 30101 et seq.), relating to the
establishment, amendment, or modification of Federal motor vehicle
safety standards, may be disclosed when relevant to a proceeding under
the chapter.
(3) Except as specified in the next sentence, information obtained
under Chapter 301 of title 49 of the United States Code (49 U.S.C.
30101 et seq.), related to a possible defect or noncompliance, shall be
disclosed when the Administrator decides the information will assist in
carrying out sections 30117(b) and 30118 through 30121 of title 49 or
is required to be disclosed under 30118(a) of title 49, except as
provided in paragraph (a)(4) of this section.
(4) No information will be disclosed under paragraph (a) of this
section unless the submitter of the information is given written notice
of the Administrator's intention to disclose information under this
section. Written notice will be given at least twenty (20) working days
before the day of release, unless the Administrator finds that shorter
notice is in the public interest. The notice under this paragraph will
include a statement of the Administrator's reasons for deciding to
disclose the information, and will afford the submitter of the
information an opportunity to comment on the contemplated release of
the information. The Administrator may also give notice of the
contemplated release of information to other persons and may allow
these persons the opportunity to comment. In making the determination
to release information pursuant to this section, the Administrator will
consider ways to release the information that will cause the least
possible adverse effects to the submitter.
(b) Notwithstanding any other provision of this part, information
that has been determined or claimed to be confidential may be released:
(1) To a committee of Congress;
(2) Pursuant to an order of a court of competent jurisdiction;
(3) To the Office of the Secretary, U.S. Department of
Transportation and other Executive branch offices or other Federal
agencies in accordance with applicable laws;
(4) With the consent of the submitter of the information; and
(5) To contractors, if necessary for the performance of a contract
with the agency or any Federal agency, with specific prohibitions on
further release of the information.
Appendix A--Certificate in Support of Request for Confidentiality
Certificate in Support of Request for Confidentiality
I ----------, pursuant to the provisions of 49 CFR part 512,
state as follows:
(1) I am (official's name, title) and I am authorized by
(company) to execute this certificate on its behalf;
(2) I certify that the information contained in (pertinent
document(s)) is confidential and proprietary data and is being
submitted with the claim that it is entitled to confidential
treatment under 5 U.S.C. 552(b)(4) (as incorporated by reference in
and modified by the statute under which the information is being
submitted);
(3) I hereby request that the information contained in
(pertinent document(s)) be protected for (requested period of time);
(4) This certification is based on the information provided by
the responsible (company) personnel who have authority in the normal
course of business to release the information for which a claim of
confidentiality has been made to ascertain whether such information
has ever been released outside (company);
(5) Based upon that information, to the best of my knowledge,
information and belief, the information for which (company) has
claimed confidential treatment has never been released or become
available outside (company); (except as hereinafter specified);
(6) I make no representations beyond those contained in this
certificate and, in particular, I make no representations as to
whether this information may become available outside (company)
because of unauthorized or inadvertent disclosure (except as stated
in paragraph 5); and
(7) I certify under penalty of perjury that the foregoing is
true and correct. Executed on this the ------ day of ------, ------.
(If executed outside of the United States of America: I certify
under penalty of perjury under the laws of the United States of
America that the foregoing is true and correct). (signature of
official)
Appendix B--General Class Determinations
The Chief Counsel has determined that the following classes of
information will cause substantial competitive harm if released:
(1) Blueprints and engineering drawings containing process and
production data where the subject could not be manufactured without
the blueprints or engineering drawings except after significant
reverse engineering;
(2) Future specific model plans (to be protected only until the
date on which the specific model to which the plan pertains is first
offered for sale); and
(3) Future vehicle production or sales figures for specific
models (to be protected only until the termination of the production
period for the model year vehicle to which the information
pertains).
Appendix C--Early Warning Reporting Class Determinations
(a) The Chief Counsel has determined that the following
information required to be submitted to the agency under 49 CFR 579,
subpart C, will cause substantial competitive harm and will impair
the government's ability to obtain this information in the future if
released:
(1) Reports and data relating to warranty claim information;
(2) Reports and data relating to field reports, including dealer
reports and hard copy reports; and
(3) Reports and data relating to consumer complaints.
(b) In addition, the Chief Counsel has determined that the
following information required to be submitted to the agency under
49 CFR 579, subpart C, will cause substantial competitive harm if
released: Reports of production numbers for child restraint systems,
tires, and vehicles other than light vehicles, as defined in 49 CFR
579.4(c).
Appendix D--OMB Clearance
The OMB clearance number for this regulation is 2127-0025.
Issued on: July 21, 2003.
Jeffrey W. Runge,
Administrator.
[FR Doc. 03-19069 Filed 7-24-03; 11:00 am]
BILLING CODE 4910-59-P