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Appeals Court Rules for Chrysler on Safety Issue

2 November 1998

Appeals Court Rules for Chrysler on Safety Issue
    AUBURN HILLS, Mich., Oct. 30 -- The federal government cannot
change the rules in the middle of the game -- that's the message a federal
appellate court sent the National Highway Traffic Safety Administration today
overturning a lower court decision ordering the recall of 91,000 1995 Dodge
Stratus and Chrysler Cirrus vehicles.
    Chrysler will move to overturn the $800,000 fine levied by the lower
court, which Chrysler believes is academic, in light of the court's ruling.
    In a decision released this morning, the United States Court of Appeals
for the District of Columbia ruled that the government cannot apply new
testing requirements to vehicles after they have already been manufactured.
    "Chrysler said right from the beginning that this was not a safety issue,
but a legal issue.  Safety standards and test procedures must be objective.
Automakers cannot be forced to guess what the rules require and then be
sanctioned for not guessing correctly," said Lew Goldfarb, Chrysler Associate
General Counsel.
    The court agreed.  In its ruling the court stated: "Chrysler might have
satisfied NHTSA with the exercise of extraordinary intuition or with the aid
of a psychic, but these possibilities are more than the law requires."
    This case involved the testing of the seat belt anchor in Stratus and
Cirrus sedans.  Not a single anchor has failed in the field and obviously no
one has been injured.  Indeed, the lower court found that the anchor -- which
secures the rear seat belt to the vehicle's structure -- fully complied with
federal safety standards when Chrysler manufactured the vehicles.
Nonetheless, the lower court ordered Chrysler to recall the vehicles, finding
that NHTSA could change test procedures without advance notice.  The court of
appeals disagreed, and reversed the lower court's recall decision.
    In fact, in the appellate court ruling, Chief Judge Edwards noted: "There
is no claim here that the vehicles in question suffer from safety defects."
    The government changed the test procedures and tried to apply these new
procedures retroactively by ordering a recall of the vehicles based on the
tests. While proceeding with the recall, Chrysler challenged the manner in
which safety standards were arbitrarily altered -- a challenge that was joined
by other automakers when the entire industry filed briefs on Chrysler's
behalf.
    "This ruling represents a significant step forward for auto safety because
it will bring clarity and certainty to federal safety standards, and will
allow automakers to be confident they won't be punished for following the
rules," said Chrysler's Goldfarb.  "We are gratified by the Court's decision
to reaffirm the important principle that safety standards must be consistent
in their meaning and fair in their application."