NHTSA Issues Recommended Best Practices for Protective Orders and Settlement Agreements in Private Litigation

The National Highway Traffic Safety Administration (NHTSA) last week issued “Enforcement Guidance Bulletin 2015-01: Recommended Best Practices for Protective Orders and Settlement Agreements in Civil Litigation,” which is intended to discourage the use of confidentiality provisions that present a potential barrier to the flow of safety-related information to the agency.

The bulletin, published in the Federal Register on March 11, 2016 (81 Federal Register 13026), states:

NHTSA recommends that all parties seek to include a provision in any protective order or settlement agreement that—despite whatever other restrictions on confidentiality are imposed, and whether entered into by consent or judicial fiat—specifically allows for disclosure of relevant motor vehicle safety information to NHTSA and other applicable governmental authorities.

NHTSA cites the importance of early identification of motor vehicle risks or defects as justification for its guidance and recommendations. It points to its recent investigations involving Takata airbag inflators and GM ignition switches as examples, implying that, without restrictive confidentiality provisions, the agency would have identified these and other safety defects earlier. This guidance is consistent with similar provisions that have been included in recent consent orders. For example, the FCA US LLC consent order requires FCA to use “best efforts” to include a provision in any protective order or settlement agreement in safety-related litigation that explicitly allows FCA to provide information and documents to NHTSA. (AQ14-003, Attachment A, ¶B.12) Similar provisions were included in NHTSA’s consent orders with BMW of North America, LLC (AQ15-004, Consent Order ¶24) and Triumph Motorcycles (America) Ltd. (AQ15-001, Consent Order Attachment A, ¶B.11). The Agency stopped short of recommending specific language to be used in settlement agreements and protective orders, leaving it up to the litigants to determine appropriate language in each case depending upon the facts and circumstances.

As NHTSA noted, “[t]his Bulletin is not a final agency action and is intended as guidance only.” Indeed, as voluntary guidelines, they are subject to the limitations contained in 49 USC 30111(f)(1) (recently added by Section 24406 of the FAST Act), which provides:

No guidelines issued by the Secretary with respect to motor vehicle safety shall confer any rights on any person, State, or locality, nor shall operate to bind the Secretary or any person to the approach recommended in such guidelines. In any enforcement action with respect to motor vehicle safety, the Secretary shall allege a violation of a provision of this subtitle, a motor vehicle safety standard issued under this subtitle, or another relevant statute or regulation. The Secretary may not base an enforcement action on, or execute a consent order based on, practices that are alleged to be inconsistent with any such guidelines, unless the practices allegedly violate a provision of this subtitle, a motor vehicle safety standard issued under this subtitle, or another relevant statute or regulation.

The full bulletin, which includes a discussion of NHTSA’s legal and policy arguments in support of this guidance, can be found in the Federal Register notice, available here.