The agency charged with keeping motor vehicles safe and reliable has been allowing automakers to restrict vehicle defect recalls to selected states rather than conduct recalls nationwide. Now a federal court has declined to bar such regionally restricted recalls. Regional Recalls The National Highway Traffic Safety Administration (NHTSA) regulates motor vehicle defect recalls to serve the goals of the National Traffic and Motor Vehicle Safety Act. Under the Safety Act, NHTSA has broad investigative powers that allow the agency to identify defects, to declare the need for defect recalls, and to supervise any recalls whether initiated by the agency or voluntarily by automakers. See 49 U.S.C. §§ 30166, 30118-20. The identification of a safety defect triggers two important responsibilities: notice and remedy.

• NHTSA must require the manufacturer to notify all dealers and registered owners of the defective vehicles to inform them of the defect and encourage them to have the vehicles repaired as quickly as possible. See 49 C.F.R. §§ 577.2 & 577.5.
• For vehicles subject to safety defect recalls, automakers must promptly repair or replace the defective part or refund the owner's purchase price. See 49 U.S.C. § 30120.

Since the mid 1980s, NHTSA has been permitting a type of recall not contemplated by the Safety Act: a non-nationwide, regionally restricted recall. In such recalls, NHTSA allows automakers to restrict both notice of defects and the repair/refund remedies to a few states rather than the entire nation. Auto safety groups have compiled several examples:

• Automakers conducted several safety recalls between 1992 and 1998 to repair vehicle parts that corroded when exposed to salt. NHTSA permitted the automakers in these cases to conduct the recalls in selected states rather than the entire country. Even though the corrosion occurred for all the affected cars when exposed to salt, NHTSA permitted the automakers to limit their recalls to the states that, in the automakers' judgment, used the most salt on their roads (and in which, therefore, the unsafe corrosion would occur most quickly). The various regional recalls for salt corrosion were inconsistent in identifying the states privileged to benefit from the recalls: some corrosion recalls included Missouri and Minnesota, for example, whereas other corrosion recalls simply ignored the same states. Moreover, even though California uses more salt in its mountain areas than many of the states that were included in these corrosion recalls, none of the corrosion recalls included any part of California.
• Ford Escorts were recalled to fix cracked fuel tanks that could leak, causing deadly fires. NHTSA actually permitted Ford to limit its recall to 12 states, in one of which --California -- Ford was allowed to limit the recall to ten counties. Although Ford apparently claimed to have selected for the recall only those parts of the country that experienced more than 2,500 "cooling degree days" (a measurement used to anticipate energy demand) in a given year, NHTSA did not force Ford to justify choosing the "cooling degree day" measurement, the 2,500 days cutoff, or the exclusion of some areas that met or exceeded the criterion (such as Death Valley, the hottest location in the country, that logs more than 5,000 cooling degree days on average every year).
• A later recall also involved the risk of fuel tank fires. The Ford Windstar was recalled in 1999 because a fuel tank defect created a risk of stress fractures, which in turn created a serious risk of deadly fuel tank fires. Because the fuel tank's propensity to crack seemed partially related to hot temperatures, Ford restricted the Windstar recall to 11 states along with ten southern California counties and Nevada's Clark County. NHTSA permitted Ford to limit the recall to these areas even though they excluded New Mexico, North Carolina, Tennessee, Virginia, and the California county that includes Death Valley -- all of which have high monthly average temperatures equal or greater than the states included in the recall.

NHTSA codified the practice of regional recalls in an August 1998 letter to automakers that specified criteria for permitting regional recalls. NHTSA first distinguished two kinds of weather-related defects: (1) those that manifest after a single or short-term exposure to certain weather conditions, and (2) those that manifest only after longer periods of exposure. NHTSA declared that regional recalls would henceforth be inappropriate for the former category, but the agency permitted regionally restricted recalls for the latter whenever the manufacturer could demonstrate that "the relevant environmental factor … is significantly more likely to exist in the area proposed for inclusion than in the rest of the United States." Additionally, NHTSA stated in the letter that notice requirements in the case of regional recalls would apply to vehicles originally sold in covered states and vehicles currently registered in recall states at the time of the recall. The letter suggested that automakers would also need to conduct follow-up notifications two to three years later in order to reach owners who moved into covered states after the original recall notice. The letter did not, however, extend notice requirements to owners of vehicles that were purchased in the recall states but moved to a non-covered state before the recall. Further, the letter did not contemplate vehicles purchased and registered in non-covered states that nonetheless regularly enter the covered states (as, for example, in the case of vehicles purchased and registered by someone whose domicile is a non-covered state but whose occupation requires travel to a covered state). Moreover, the August 1998 letter was styled as a set of "policy guidelines" rather than regulatory requirements. As such, the letter was never published in the Federal Register with an opportunity for public comments, and its actual policy content was apparently not applied rigorously across the board. For example, auto safety groups that challenged regional recalls in court could not identify any regional recalls in which NHTSA actually required the automaker to conduct the follow-up notice described in the August 1998 letter. About the Court Challenge Two auto safety groups, the Center for Auto Safety and Public Citizen, challenged the practice of regional recalls in federal court. They argued that the practice of regional recalls denies owners of defective cars in excluded states the notice and remedy they need and thus violates the Safety Act. They also charged that NHTSA's policy and practice of permitting regional recalls constitute rulemaking without notice and comment and are arbitrary and capricious, thus violating the Administrative Procedure Act (APA). The court's decision, entered Sept. 30, denied the APA claims, finding that the August 1998 letter was merely informal guidance rather than a prospectively binding rule. More surprisingly, the court upheld the regional recall policy. The pivot of the court's rationale is the meaning of the key terms "defect" and "motor vehicle safety." On one level, the court decision differs from the plaintiffs' position because of a straightforward application of legal canons of statutory interpretation, albeit one which shifts the focus from notice and remedy to the defect itself. On another level, however, is a more complicated policy dispute about safety, risk, and equity. The text of the court decision manages the latter dispute by burying it in the former, resolving it without addressing it by recasting a philosophical disagreement as a semiotic one. The major divergence between the plaintiffs and the court on the matter of statutory interpretation is which section of the statute needs to be interpreted. For the plaintiffs, the most relevant parts of the Safety Act at stake in the case were the notice and remedy sections. For the court, the case turned on the parts of the Safety Act that define which defects are subject to recall. The plaintiffs stressed that the notice and remedy provisions of the Safety Act do not contemplate regional recalls but instead insist that notice and remedies will be provided to "each person registered under State law as the owner" of an affected vehicle. 49 U.S.C. § 30119(d)(1)(A). In fact, the Safety Act also explicitly provides for exemptions from the general notice and remedy requirements, but it limits those exemptions to a number of criteria, chief among which is whether the exemption would serve the public interest. See id. §§ 30118(d) (notice) & 30120(h) (remedy). NHTSA further cannot allow any such exemptions without first publishing a notice in the Federal Register and allowing the public to comment on possible exemptions. See id. These specifications of NHTSA's authority to grant any exemptions from notice and remedy requirements notably do not include exemptions of defective vehicles or vehicle parts located in areas in which the defect presents a comparatively lower risk of manifesting. For the court, the Safety Act provisions that matter most are those that define the defects subject to notice and remedy provisions. The Safety Act defines two key terms as follows: "[D]efect" includes any defect in performance, construction, a component, or material of a motor vehicle or motor vehicle equipment. "[M]otor vehicle safety" means the performance of a motor vehicle or motor vehicle equipment in a way that protects the public against unreasonable risk of accidents occurring because of the design, construction, or performance of a motor vehicle, and against unreasonable risk of death or injury in an accident, and includes non-operational safety of a motor vehicle. Id. § 30102(a)(2), (8). According to the court, that "performance" is embedded in each definition "clearly implies that consideration must be given to the manner in which the vehicle is used." Center for Auto Safety v. NHTSA, No. 04-392 (ESH) (D.D.C. Sept. 30, 2004), at 20. For the court, the possibility that "defect" can mean a "defect in performance" compels this conclusion: With this in mind, it becomes readily apparent that the statute does not outlaw regional recalls; rather, it envisions that the agency will exercise its discretion to determine whether a safety-related defect exists in a given scenario. To this end, it is logical to include a vehicle's locale of operation when considering its "use" and "normal operation." In other words, a motor vehicle may contain a safety-related defect when used in some states but not in others, and so if a vehicle experiences a significant number of failures in a specific climate, it is fair to conclude that the vehicle has a safety-related defect related to performance. Id. at 21. In other words, the court concluded that vehicles with climate-induced defects are not inherently defective but, instead, are only defective in locales with the given climate conditions. Accordingly, the court concluded that defect recalls need only apply to vehicles with the climate-related or condition-specific defects, which in the court's interpretation are vehicles in states with the given climates or conditions. By shifting terrain and focusing on the interpretation of the terms that define defects subject to recall, the court construed the meaning of "defect" so broadly that it effectively allows NHTSA to designate a given defect with so many conditions and caveats that limitations on the scope of notice and remedy get built into the very definition of a defect. The court essentially allowed "defect" to permit geographically limited conditions so that it need not spend any time interpreting the seemingly universal language of the notice and recall provisions of the Safety Act. In so doing, the court ignored one of the central canons of statutory construction: that the interpretation of any one clause of a statute must be read in light of its related terms, so as to recognize the larger coherence of any body of statutory law. Among other things, the Supreme Court has repeatedly held that "[w]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Bates v. United States, 522 U.S. 23, 29-30 (1997) (quoting Russello v. United States, 464 U.S. 16, 23 (1983)). The Safety Act does not permit any geographic exclusions from its notice and remedy obligations except insofar as any contemplated exclusions (whether geographically limited or total nationwide exclusions -- the statute does not distinguish between them) meet specified criteria and are subject to formal public notice and comment procedures. Further, the Safety Act grants NHTSA largely unreviewable discretion in the determination of the existence of a defect, although it does not grant the same degree of discretion in the mandatory notice and recall provisions. The court's decision ignores this aspect of the Safety Act's structure as well, and it grants the agency far more discretion over the scope of notice and recall than the Safety Act itself intended. By interpreting the terms defining defects as permitting the designation of geographically exclusive or otherwise condition-specific criteria, the court eviscerates these exclusion clauses. The court decision effectively permits two tiers of notice and remedy exclusions: total exclusions, still subject to the Safety Act, and partial exclusions, which could dodge the Safety Act's exclusion clauses by being embedded in the designation of the defect itself. The court did not consider the frightening prospect of NHTSA being so captured by industry influence that it designates a defect so specifically that an automaker would not need to provide notice or comment to a single person. Consequences Buried in the opinion's seeming logic and (as the court put it) "common sense" is any recognition of the consequences of these regionally limited recalls. Consider the court's easy elision of climate conditions with political jurisdictions as when, discussing climate-specific defects, the court observed, "In other words, a motor vehicle may contain a safety-related defect when used in some states but not in others." Climate conditions do not respect strict boundaries of county or state lines; a record heat wave, or a sudden winter storm requiring larger-than-normal use of salt to de-ice roads, could hasten the manifestation of a latent defect in a state excluded from a regional recall. Moreover, people do not live their lives confined by state lines. Some metropolitan areas -- for example, Chattanooga, Kansas City, and New York City -- are sited right along their respective state lines, and people who live in Georgia, Kansas, and New Jersey often cross their state lines every day to work or shop in those cities. Those people could well be experiencing the same climate-hastened defects as citizens of the states they visit, but the arbitrariness of regional recalls could mean that these out-of-state citizens are excluded from notification or the free recall remedy of their defects. In fact, the climate aspect of some of these defects does not necessarily mean, as the court would have it, that the defect does not manifest itself at all in other climes. In the cases of salt corrosion, for example, the climates of northern or mountainous states did not themselves induce corrosion; rather, the climate required heavy and regular use of roadway salts that caused the corrosion. The same car is vulnerable to salt-induced corrosion whether it is registered in Minnesota or Tennessee; the relative climate differences may mean only that the Minnesota car will corrode more quickly than the Tennessee car. Regional recalls create the inequitable result that the Minnesota driver could obtain the free remedy whereas the Tennessee driver would be forced to pay for replacement parts out-of-pocket. The court decision creates the absurd consequence that the Minnesota car has a "defect" whereas the Tennessee car, experiencing the same corrosion for the same reason, does not. The court decision does not mean the NHTSA must pursue a practice of regionally limited recalls; it only permits NHTSA to continue along the course it set back in the mid-1980s. Whatever the possibilities for further court challenges of the practice, the ultimate problem is that NHTSA believes these arbitrary and nonsensical regional recalls are sound policy. They are only the latest example of NHTSA's unfortunate tendency in recent years to shortchange the public interest in favor of corporate special interests.