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From Products Liability Law Daily, July 10, 2015

NHTSA issues fines totaling $44 million against Forest River and Spartan Motors

By John Dumoulin

The National Highway Traffic Safety Administration (NHTSA) has entered into consent orders with Forest River, Inc., and Spartan Motors, Inc., for failing to launch timely safety defect recalls as required by the Motor Vehicle Safety Act and to report critical data, such as technical service bulletins and early warning report data. Pursuant to the agreements, Forest River has agreed to pay a $35 million civil penalty, and Spartan Motors agreed to a $9 million civil penalty (NHTSA Press Release, NHTSA 36-15, July 9, 2015).

Forest River, Inc., an Indiana-based maker of recreational vehicles, acknowledged in its consent order with NHTSA that it failed to report early warning data and failed to launch two safety recalls in a timely fashion. The $35 million penalty issued against the company includes a $5 million cash penalty and a $30 million deferred amount. Under the agreement, Forest River is required to retain an independent monitor to conduct periodic audits of the company’s safety practices. If the company fails to resolve any issues discovered in those audits, it will be liable for paying the deferred portions of the civil penalty—$3 million for a first violation, $7 million for a second violation, and $20 million for a third violation. Forest River also is required to hire an in-house consultant to help the company meet requirements of the consent order.

Spartan Motors, Inc., a Michigan-based maker of specialty heavy-duty vehicle chassis, emergency-response vehicles, and other products, acknowledged in its consent order with NHTSA that it failed to report service bulletins to NHTSA as required by law and that the company did not launch three previously initiated safety recalls in a timely manner. The $9 million penalty issued against Spartan Motors includes a $1 million cash penalty, $3 million that the company has agreed to spend on compliance with the requirements of the consent order, and $5 million that will come due immediately if the company fails to comply with the consent order. Under the consent order, Spartan Motors is required to launch recalls to remedy three additional safety defects that NHTSA identified in previously undisclosed service bulletins, according to the agency’s press release. In addition, Spartan Motors is required to undergo a third-party audit of its reporting practices, develop new written reporting procedures, and engage in an education and outreach campaign designed to increase awareness of reporting requirements in the medium and heavy-duty vehicle industry.

In its announcement, NHTSA also said that the Department of Transportation is seeking enhanced safety enforcement authority as part of the GROW AMERICA Act. One provision of this act would increase the statutory cap on NHTSA civil penalties from $35 million to $300 million. Another would add imminent hazard authority to address safety risks more quickly, according to the agency.

Companies: Forest River, Inc.; Spartan Motors, Inc.

MainStory: TopStory MotorVehiclesNews

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