American Motors Corporation

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF AMERICAN MOTORS CORPORATION, ET AL.

SET ASIDE ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Dockel C-3093. Consent Order luly 1982-Set Aside Order, Feb. , 1985 This Order reopens the proceeding and grants the petitions ofa utility vehicle manufacturer and its subsidiary to set aside the FTC Consent Order issued on July 6 1982 (100 F. C. 229 (1982)), which requires them to attach to each new Jeep CJ a sticker warning that multipurpose vehicles handle differently from ordinary passenger cars and sudden sharp turns or abrupt maneuvers may result in loss of control; and to include additional safety disclosures in Owner s Manuals and Supplements. Petitioners' request that the Order be set aside was based on changes in law and fact and on public interest considerations. The manufacturers asserted that a new regulation promulgated by the National Highway Trame Safety Administration NHTSA"), which became efiective on September 1, 1984, covers the same subject matter as :FTC's Order and makes the Order unnecessary. Further, while the regulation requires all manufacturers of utility vehicles to place a sticker on such vehicles and to disclose in their operating manuals information "to alert drivers that the particular handling and maneuvering characteristics of utility vehicles require special driving practices when those vehicles are operated on paved roads respondent is the only manufacturer of such vehicles subject to dual liability. After considering all arguments presented by petitioners, and noting that NHTSA, the federal agency with the specific st.atutory responsibility to regulate automobile traffc, has in effect a regulation, enforceable by the assessment of penalties, that adequately addresses the problem that led to issuance of the FTC Order, the Commission concluded that petitioners had adequately shown that changed conditions of law and fact and public interest considerations require that the Order be set aside. Accordingly, the Commission ordered the matter reopened and the consent order set aside.

ORDER REOPENING THE PROCEEDING AND SETTING ASIDE CEASE AND DgSIST ORDER On September 13, 1984, American Motors Corporation and its wholly'owned subsidiary, Jeep Corporation, respondents in the captioned matter, fied a petition pursuant to Rule 2.51 of the Commission Rule of Practice to reopen the proceeding and set aside the Consent Order entered therein.

The Order, which was issued on July 6, 1982, requires inter alia, that respondents affx a sticker to the instrument panel or windshield frame of each new Jeep CJ reading as follows: This multiouroose vehicle handles and maneuvers differently from an ordinary passen- _.. ., lJ:'J\lv'"1' Ul'-.L'_ 194 Set Aside Order may result in loss of control. Read driving guidelines in Owner s Manual and Supple" ment.

WEAR SEATBELTS AT ALL TIMES The Order also requires respondents to disclose in the Owner Manual for new Jeep CJ' s and in an informational Supplement to the Owner s Manual the following:

Utility vehicles have higher grol.nd clearance and narrower track to make them capable of performing in a wide variety of off road applications. Specific design characteristics give them a higher center of gravity than ordinary cars. An advantage of the higher ground clearance is a better view of the road allowing you to anticipate problems. They are not designed for cornering at the same speeds as conventional 2WD vehicles any more than low-slung sports cars are designed to perform satisfactorily under ofi:road conditions. Ifat all possible, avoid sharp turning maneuvers. As with other vehicles of this type, failure to operate this vehicle correctly may result in loss of control or an accident.

The Order further mandates that respondents include the following statement in the introduction to the Supplement: As with other vehicles ofthis type, failure to operate this vehicle correctly may result in loss of control or an accident. Be sure to read on-pavement and off-road driving guidelines which follow.

Petitioners' requests that the Order be set aside is based on changes in law and fact and on public interest considerations. The petition asserts that a new regulation ofthe National Highway Traffc Safety Administration ("NHTSA") became effective on September 1, 1984 which covers the same subject matter as the Commission s Order. 49 R. 575.105 reprinted in 49 FR 20016 (1984). NHTSA' s regulation requires all manufacturers of utility vehicles to place a sticker on such vehicles and to disclose in their Operating Manuals information to alert drivers that the particular handling and maneuvering characteristics of utility vehicles require special driving practices when those vehicles are operated on paved roads." While the sticker and the disclosures required by the NHTSA regulation were patterned after those in the Commission s Order against petitioners, the language therein differs substantively from the exact language required by the Commission s Order. Violations of both the NHTSA regulation and the Commission s Order may subject petitioners to civil penalties. Petitioners argue that the new regulation promulgated and implemented by NHTSA constitutes a change oflaw. The regulation covers the same subject matter as the Commission s Order, and NHTSA is the federal agency with specific statutory authority to regulate traffc , Set Aside Order 105 F.

safety. See 15 U. C. 1381 (1982). "In short " petitioners' assert the NHTSA regulation has made the Order unnecessary. As a changed condition of fact, petitioners argue that the new NHTSA regulation ensures that they will continue to make disclosures concerning the handling of utility vehicles. The regulation applies to all utility vehicles, and AMC is the only manufacturer of such vehicles subject to dual liability. Petitioners are, therefore, injured competitively. Furthermore, they contend that they have been placed in an untenable regulatory dilemma. Ifthey comply with the NHTSA regulation, they are in violation of the Commission s Order, and compliance with the Order constitutes non-compliance with the NHTSA regulation. Penalties are assessable for violations of both the regulation and the Order.

Finally, petitioners contend that the public interest requires that the Order be set aside because inconsistent and overlapping regulatory schemes do not serve the goal of effcient government administration.

Under Section 5(b) of the Federal Trade Commission Act and Rule 51 of t.he Commission s Rules, the Commission must reopen the proceeding and consider altering, modifying or setting aside an Order if a respondent files a request showing that changed conditions oflaw or fact. require the Order to be altered, modified or set aside, in whole or in part., or that the public interest so requires. The National Highway Traffc Safety Admninistration, the federal agency with the specific statutory responsibility to regulate automobile trafic safety, has in'effect a regulation, enforceable by the assessment of penalties, that adequately addresses the problem that led to the issuance of the Commission s Order. Therefore, the Commission has concluded that petitioners have adequately shown that changed conditions of law and fact and public interest considerations require that the Order be set aside.

Accordingly, it is ordered that the proceeding in this matter be reopened and the Order set aside.

SENTRONIC CONTROLS CORP., ET AL. 197 197 Complaint