Toyota Problems Reflect Limits of Governmental Power

The Toyota recall related to sudden acceleration problems is further evidence of the limits of the power of government to regulate big business. According to a recent New York Times story, the National Highway Transportation Safety Administration conducted six different investigations into complaints of sudden and unexpected acceleration and closed them all with no action. It accepted Toyota’s superficial explanation for the problems, and refused requests to pursue a further investigation.

NHTSA is the U.S. government agency charged with regulating automobile safety. Complaints may be filed with the agency by injury victims, their lawyers and others. Frequently, the complaints are dismissed or rejected by NHTSA after a limited investigation. As in all government action, politics can play a role in the appointment of high officials, and political outlook can trickle down within the agency. One common excuse given for refusal to further investigate is lack of resources within the agency. Both of these problems can result in poor investigations and poor outcomes.

While it is true that every government agency has limited resources, that fact is forgotten at some critical points in the legal process. For example, when Congress creates rulemaking authority in an agency such as NHTSA, it can convey the power to pre-empt civil lawsuits over safety issues. If NHTSA goes on to issue rules about auto safety, and its decisions are flawed by politics and limited resources, they nonetheless become the law of the land and the public is left to buy unsafe products.

Judges also sometimes use their own power to declare that NHTSA rules and decisions pre-empt citizen lawsuits. In their decisions, these judges dismiss pending cases on the ground that if a manufacturer follows a NHTSA standard, its car must be safe. This happens even though NHTSA standards mostly date back to the 1970s — long before modern technology was available to make cars as safe as they can be made today.

The important lesson to be learned here is that history is full of stories about the failure of government regulators to stop big business from glossing over truth and fairness. Neither Congress nor the courts should close the courtroom door to citizens who want to contest the decisions and safety standards adopted by government and business. Such decisions are best made by jurors informed in the courtroom by the litigation process.

Toyota claims to have “voluntarily” recalled millions of cars and trucks, and to have “voluntarily” stopped making and selling new cars until the problem is fixed. NHTSA is now claiming credit for having forced Toyota’s hand, and for having a leading role in protecting the public from dangerous and defective products. We should all look carefully at such claims. Neither Toyota nor NHTSA deserves much credit for the present state of affairs. Millions of people are now feeling at risk, and feeling helpless to do anything about it.

The next time government wants to limit the opportunity of injured people to take their case to court, and the next time the auto industry and its insurers want to blame the trial lawyers for hurting the public interest, we should all remember Toyota, the Ford Pinto, the cigarette companies, the asbestos industry and the many government agencies that failed in their regulatory duties.

The Toyota recall related to sudden acceleration problems is further evidence of the limits of the power of government to regulate big business. According to a recent New York Times story, the National Highway Transportation Safety Administration conducted six different investigations into complaints of sudden and unexpected acceleration and closed them all with no action. It accepted Toyota’s superficial explanation for the problems, and refused requests to pursue a further investigation.

NHTSA is the U.S. government agency charged with regulating automobile safety. Complaints may be filed with the agency by injury victims, their lawyers and others. Frequently, the complaints are dismissed or rejected by NHTSA after a limited investigation. As in all government action, politics can play a role in the appointment of high officials, and political outlook can trickle down within the agency. One common excuse given for refusal to further investigate is lack of resources within the agency. Both of these problems can result in poor investigations and poor outcomes.

While it is true that every government agency has limited resources, that fact is forgotten at some critical points in the legal process. For example, when Congress creates rulemaking authority in an agency such as NHTSA, it can convey the power to pre-empt civil lawsuits over safety issues. If NHTSA goes on to issue rules about auto safety, and its decisions are flawed by politics and limited resources, they nonetheless become the law of the land and the public is left to buy unsafe products.

Judges also sometimes use their own power to declare that NHTSA rules and decisions pre-empt citizen lawsuits. In their decisions, these judges dismiss pending cases on the ground that if a manufacturer follows a NHTSA standard, its car must be safe. This happens even though NHTSA standards mostly date back to the 1970s — long before modern technology was available to make cars as safe as they can be made today.

The important lesson to be learned here is that history is full of stories about the failure of government regulators to stop big business from glossing over truth and fairness. Neither Congress nor the courts should close the courtroom door to citizens who want to contest the decisions and safety standards adopted by government and business. Such decisions are best made by jurors informed in the courtroom by the litigation process.

Toyota claims to have “voluntarily” recalled millions of cars and trucks, and to have “voluntarily” stopped making and selling new cars until the problem is fixed. NHTSA is now claiming credit for having forced Toyota’s hand, and for having a leading role in protecting the public from dangerous and defective products. We should all look carefully at such claims. Neither Toyota nor NHTSA deserves much credit for the present state of affairs. Millions of people are now feeling at risk, and feeling helpless to do anything about it.

The next time government wants to limit the opportunity of injured people to take their case to court, and the next time the auto industry and its insurers want to blame the trial lawyers for hurting the public interest, we should all remember Toyota, the Ford Pinto, the cigarette companies, the asbestos industry and the many government agencies that failed in their regulatory duties.