[Federal Register Volume 68, Number 144 (Monday, July 28, 2003)]
[Rules and Regulations]
[Pages 44209-44232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19069]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 512

[Docket No. NHTSA-02-12150; Notice 2]
RIN 2127-AI13


Confidential Business Information

AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT

ACTION: Final rule

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SUMMARY: This document amends the regulation on Confidential Business 
Information to simplify and update the regulation to reflect 
developments in the law and to address the application of the 
regulation to the early warning reporting regulation issued pursuant to 
the Transportation Recall Enhancement, Accountability, and 
Documentation (TREAD) Act.

DATES: This rule is effective on September 11, 2003. If you wish to 
submit a petition for reconsideration of this rule, your petition must 
be received by September 11, 2003.

ADDRESSES: Petitions for reconsideration should refer to the docket 
number and be submitted to: Administrator, Room 5220, National Highway 
Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC 
20590.

FOR FURTHER INFORMATION CONTACT: For questions relating to procedures 
under Part 512, contact Lloyd Guerci or Otto Matheke. For questions 
relating to the treatment of material under the early warning reporting 
regulations, contact Lloyd Guerci or Michael Kido. For questions 
relating to the early warning regulation itself, contact Lloyd Guerci 
or Andrew DiMarsico. All can be reached in the Office of the Chief 
Counsel at the National Highway Traffic Safety Administration, 400 7th 
Street SW., Room 5219, Washington, DC 20590. They can be reached by 
telephone at (202) 366-5263.
    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
http://dms.dot.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Comments Received
III. Overview of the Comments
IV. Overview of the Final Rule
V. Specific Provisions of Part 512
    A. Subpart A--General Provisions
    B. Subpart B--Submission Requirements
    1. Copies of Submissions
    2. Personal Information
    3. Stamp Each Page
    C. Subpart C--Additional Requirements
    1. Duty to Amend
    2. Third Parties
    D. Subpart D--Agency Determination
    1. Time to Request Reconsideration or to Respond When a FOIA 
Request is Pending
    2. Whether Voluntarily Submitted Materials Should Be Returned 
Following a Denial of a Confidentiality Request
    3. Class Determinations
    E. Subpart E--Agency Treatment of Information
VI. Early Warning Reporting Information
    A. Summary of the Early Warning Reporting Requirements
    B. Application of the FOIA to the Early Warning Reporting 
Program
    1. The TREAD Act and the FOIA Exemptions
    2. The Early Warning Reporting Information and FOIA Exemption

[[Page 44210]]

    C. Specific Types of Information to be Provided Under the Early 
Warning Regulation
    1. Production Numbers
    2. Claims and Notices Involving Death, Personal Injury and 
Property Damage
    3. Information Regarding Warranty Claims
    4. Field Reports
    5. Consumer Complaints
VII. Appendix A: FOIA Exemption 3 and the TREAD Act Disclosure 
Provision
VIII. Appendix B: Confidential Business Information Case Law 
Analysis
IX. Regulatory Analyses and Notices
    A. Executive Order 12866 and DOT Regulatory Policies and 
Procedures
    B. Regulatory Flexibility Act
    C. National Environmental Policy Act
    D. Executive Order 13132 (Federalism)
    E. Unfunded Mandate Reform Act
    F. Executive Order 12778 (Civil Justice Reform)
    G. Paperwork Reduction Act
    H. Executive Order 13045
    I. National Technology Transfer and Advancement Act
    J. Data Quality Act
    K. Regulation Identifier Number (RIN)

I. Background

    On April 30, 2002, NHTSA published a Notice of Proposed Rulemaking 
(NPRM) to amend 49 CFR part 512, Confidential Business Information 
(part 512). The proposal was intended to make the regulation clearer 
and easier to follow, particularly for organizations or individuals who 
do not submit materials to the agency on a regular or frequent basis, 
and to update specific sections of the regulation to reflect 
developments in the law. The agency proposed to reorganize the 
provisions of part 512 and to use a question and answer format, 
designed to guide the reader through the procedural steps of making a 
claim for confidential treatment of business information. The NPRM also 
addressed a variety of procedural matters relating to such claims.
    The agency sought comment on whether it should create a series of 
class determinations of information presumed not to cause substantial 
competitive harm, in addition to those classes already contained in 
Appendix B to Part 512 applicable to information the disclosure of 
which has been determined to cause substantial competitive harm. 
Although the final rule establishing the early warning reporting 
obligations had not yet been issued, the agency sought comment on 
whether to establish class determinations relating to the early warning 
reporting information.

II. Comments Received

    The comment period closed on July 1, 2002. The agency received 
timely comments from various sectors of the automotive industry, 
including vehicle manufacturers, tire manufacturers, supplier and 
equipment manufacturers, and other interested parties. Comments were 
received from the following trade associations: the Alliance of 
Automobile Manufacturers (Alliance), the Association of International 
Automobile Manufacturers (AIAM), the Rubber Manufacturers Association 
(RMA), the Tire Industry Association (TIA), the Motor and Equipment 
Manufacturers Association and the Original Equipment Suppliers 
Association (MEMA/OESA), the Automotive Occupant Restraints Council 
(AORC), the Juvenile Products Manufacturers Association (JPMA), the 
Truck Manufacturers Association (TMA) and the Motorcycle Industry 
Council (MIC). Comments were received also from individual 
manufacturers: General Motors North America (GM), Cooper Tire (Cooper), 
Utilimaster, Blue Bird Body Company (Blue Bird), Bendix, Harley-
Davidson Motorcycle Company (Harley-Davidson), WABCO North America 
(WABCO), Meritor-WABCO, and Workhorse Custom Chassis (Workhorse). 
Enterprise Rent-A-Car Company (Enterprise) and the Washington Legal 
Foundation (WLF) also filed comments.
    On October 17, 2002, representatives of Public Citizen met with the 
agency and requested the opportunity to file comments three months 
after the closing of the comment period. As was noted in a memo to the 
docket, the agency informed Public Citizen that, consistent with its 
longstanding practice, the agency would consider late filed comments to 
the extent possible.\1\ Public Citizen filed its comments on November 
27, 2002.
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    \1\ The agency's analysis is scheduled to begin promptly after 
the comment period closes and, in general, we expect all comments to 
be filed within the specified period. We analyze the comments and 
all other available data to make decisions on how to shape our final 
rules. Allowing commenters to file late provides an unfair 
opportunity to critique the comments of those who submitted their 
comments in a timely manner. In some rulemakings it is possible to 
consider late comments without delaying the agency's decision 
making. In general, however, we only consider late comments to the 
extent they are filed before the agency has made significant 
progress towards the next step in the regulatory process and to the 
extent that they critique the agency's proposal.
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III. Overview of the Comments

    Most of the comments supported the NPRM's approach to make Part 512 
easier to read and to update the substantive description of what 
constitutes confidential business information to conform to 
developments in the law. Many commenters expressed concern over the 
number of copies the agency was considering requiring to be filed, the 
agency's request that certain submitters redact personal identifiers, 
and various other aspects of the proposal. Objections were also raised 
to the concept of establishing categories of information presumed not 
to cause substantial competitive harm if disclosed.
    The majority of the comments responded to the agency's request that 
commenters address the early warning reporting requirements, which were 
proposed on December 21, 2001. See 66 FR 66190. Most of the business 
interests argued that the TREAD Act's disclosure provision in 49 U.S.C. 
30166(m)(4)(C) created a categorical, statutory exemption for 
information submitted pursuant to the early warning reporting 
regulations, unless the Administrator makes certain findings specified 
in 49 U.S.C. 30167(b). This position was presented with the most detail 
in the comments filed by the RMA.
    Many of the comments also expressed substantive concerns that the 
early warning data, given that it is ``raw'' and comprehensive in 
scope, could be misleading, available for misuse, and create public 
confusion. Many business interests presented arguments as to why the 
disclosure of specific elements of the early warning data would be 
competitively harmful within their particular sections of the motor 
vehicle or equipment industry. In addition, many commenters expressed 
concern that the public disclosure of the early warning information 
would be unfair to those companies that proactively seek out and 
collect customer feedback and field data.
    The Alliance and Public Citizen did not adopt the view that the 
TREAD Act created a statutory exemption from disclosure. Public Citizen 
and the Alliance agreed with much of the analysis set forth in an 
internal departmental memo, dated October 27, 2000, and placed into the 
public docket on March 6, 2001. That memo expressed the view of NHTSA's 
Chief Counsel that the TREAD Act's disclosure provision did not create 
a statutory categorical exemption because of the manner in which it 
referenced 49 U.S.C. 30167(b). The memo concluded that the provision 
instead indicated a Congressional intent that NHTSA determine the 
confidentiality of the early warning reporting data in the same manner 
as it treated other data submitted to the agency; i.e., under Exemption 
4 of the Freedom of Information Act (FOIA), 5 U.S.C. 502(b)(4).
    The Alliance suggested that, in accordance with the October 27, 
2000 memo, the agency could apply either Exemption 4 (confidential 
business

[[Page 44211]]

information) or Exemption 7 (investigative records), and further argued 
that either exemption allows the agency to retain the data as 
confidential. The Alliance asserted that Congress considered the early 
warning data to be pre-investigative screening information of the type 
NHTSA traditionally considers part of its internal deliberative 
process, and intended that the information be confidential until such 
time as a defect investigation is opened. The Alliance contended that 
the effect of Section 30166(m)(4)(C) was to modify a presumption in 
Section 30167(b) generally favoring disclosure.
    Public Citizen argued that the TREAD Act did not create a 
categorical, statutory exemption from disclosure, and that a class 
determination that information does not presumptively create 
competitive harm should apply to information about consumer complaints, 
warranty data and property damage claims. Public Citizen further 
contended that it is reasonable to disclose each of the other 
categories of information because it is summary data by make and model 
and therefore, in Public Citizen's view, not competitively harmful. 
Public Citizen also asserted that reports of death and injuries and 
field reports are materials prepared as part of a defect investigation 
and therefore should be disclosed.

IV. Overview of the Final Rule

    In the NPRM, we proposed changes to part 512 that were designed 
primarily to simplify and improve the clarity of the regulation and to 
update specific sections of the regulation to reflect current case law 
and legislation. The proposal was intended to ensure the efficient 
processing of requests for confidential treatment and the proper 
protection for sensitive business information received by NHTSA.
    In a newly captioned Subpart A, the final rule includes the general 
provisions that establish the purpose, scope, and applicability of the 
regulation governing claims for confidential treatment, and that define 
the terms used in the regulation. Additionally, the final rule revises 
the definition of confidential business information to reflect 
developments in the law.
    The final rule addresses the number of copies to be submitted to 
the agency when information is claimed to be confidential. The 
following must accompany any claim for confidential treatment: (1) A 
complete copy of the submission, (2) a copy of a public version of the 
submission and (3) either a second complete copy of the submission or, 
alternatively, only those portions of the submission containing the 
material relating to the request for confidential treatment, with any 
appropriate sections within the pages marked in accordance with this 
rule. Those filing comments to rulemakings must additionally submit a 
copy of the public version to the docket. The submissions must also be 
marked in accordance with this final rule.
    The final rule has eliminated the requirement that submitters 
redact personal identifying information from their submissions. The 
final rule specifies in Subpart B the manner in which information 
submitted to NHTSA and claimed to be confidential must be marked and 
identifies the supporting documentation that must accompany each 
submission. Each page containing information claimed to be confidential 
must be marked. If an entire page is claimed to be confidential, the 
markings must indicate this clearly. If portions of a page are claimed 
to be confidential, they must be marked by enclosing them within 
brackets ``[ ].''
    The final rule clarifies issues relating to the duty to amend 
claims for confidential treatment. It also provides that, when 
confidentiality is claimed for information obtained by the submitter 
from a third party, such as a supplier, the submitter is responsible 
for obtaining from the third party the information that is necessary to 
comply with the submission requirements of Part 512, including the 
requirement to submit a certificate and supporting information.
    We have decided against the creation of categories of information 
presumed not to cause substantial competitive harm for a variety of 
reasons, including the fact that such a presumption is duplicative of 
existing law. Class determinations are intended to reduce or eliminate 
the need for individual consideration of information that, by its 
nature, has been determined to cause substantial competitive harm if 
released. Class determinations alleviate the unnecessary burden of 
filing individual claims for confidential treatment. Information not 
subject to one of the class determinations is already presumed to be 
publicly available. Submitters must make individual claims relating to 
the information and carry the burden of showing that disclosure would 
either likely cause substantial competitive harm or, if the information 
is voluntarily submitted, that it is not ordinarily released to the 
public.
    We nonetheless remain concerned that submitters may routinely seek 
confidential treatment for information the agency has consistently 
determined would not cause competitive harm if released. We will take 
appropriate action to discourage those who repeatedly file claims for 
confidential treatment despite our consistent rejection of similar 
requests.
    Consistent with the analysis contained in the October 27, 2000 
memo, we have determined that Section 30166(m)(4)(C) of the TREAD Act 
did not create a categorical statutory exemption pursuant to Exemption 
3 of the FOIA applicable to all early warning reporting information. We 
have decided to consider the confidentiality of early warning reporting 
information pursuant to Exemption 4 of the FOIA, which exempts 
confidential business information from disclosure. We have created a 
series of class determinations covering those portions of the early 
warning reporting information we have determined are entitled to 
confidential treatment. We are permitting the information in these 
classes to be submitted and given confidential treatment without the 
filing of a part 512 justification and the accompanying certificate.

V. Specific Provisions of Part 512

A. Subpart A--General Provisions

    The agency proposed to include in Subpart A the general provisions 
that establish the purpose, scope, and applicability of the regulation 
governing claims for confidential treatment, and that define the terms 
used in the regulation. In addition, we proposed to revise the 
definition of confidential business information to reflect developments 
in the law.
    The agency did not receive any comments objecting to these portions 
of the regulation, and is adopting the proposed changes to this subpart 
without modification.

B. Subpart B--Submission Requirements

    The agency proposed to delineate in Subpart B the specific 
requirements that submitters must follow when they request confidential 
treatment for materials submitted to NHTSA. The NPRM described the 
information required to be submitted with a confidentiality request, 
how documents were to be marked, how many copies would be required, 
where materials were to be submitted and what supporting documentation 
would be needed. The comments raised no concerns regarding most 
provisions contained in proposed Subpart B, but several commenters 
objected to certain of its features.

[[Page 44212]]

1. Copies of Submissions
    Part 512 previously provided that submitters send to the Chief 
Counsel two copies of documents containing information claimed to be 
confidential and one copy of a public version of the documents, from 
which portions claimed to be confidential were redacted. Submitters 
were also to send a second copy of the public version of the document 
to the appropriate program office within NHTSA (typically those engaged 
in the development of motor vehicle safety--Enforcement, Rulemaking or 
Applied Research). Thus, the submitter sent the agency two confidential 
sets of documents and two public sets of documents.
    We proposed changing the regulation to require the submitters to 
send to the Office of the Chief Counsel one confidential and one public 
set of submitted documents. The submitter could also send, along with 
the confidential set, any non-confidential information the submitter 
wanted NHTSA to consider along with its request. We also proposed that 
submitters send a confidential and a public set of the documents to the 
appropriate program office.
    A number of comments characterized this proposal as requiring the 
creation of a ``third version'' of the submitted materials, and argued 
that it would significantly increase the time, expense, and difficulty 
associated with the exercise of the statutory right to protection of 
confidential commercial and financial information. JPMA and others 
suggested instead that the agency require submitters to furnish two 
copies of the complete submission and one or two redacted versions.
    The agency did not intend to require the creation of any ``third 
version'' of submitted documents. The agency believes that some 
companies may find it easier to send the Chief Counsel only those 
material for which confidential treatment is sought, especially when 
the amount of material claimed to be confidential is small in 
comparison to the whole submission or when it is limited to documents 
that are easily severable from the whole. We have accordingly modified 
this provision to provide this option when submitting confidentiality 
claims.
    Each claim for confidential treatment must be accompanied with the 
following: (1) A complete copy of the submission, (2) a copy of a 
public version of the submission and (3) either a second complete copy 
of the submission or, alternatively, only those portions of the 
submission containing the material relating to the request for 
confidential treatment, with any appropriate sections within the pages 
marked in accordance with this rule. Those individuals who are filing 
comments to rulemakings must additionally file an electronic or hard 
copy of the public version to the docket. All submissions must be 
appropriately marked in accordance with this final rule. Information 
for which the submitter requests confidential treatment may be 
submitted electronically or in an electronic format. Submitters should 
also provide any special software necessary to review the submitted 
materials.
    The Chief Counsel will distribute the complete copy and the public 
version of the material to the program office for its use, and will use 
the additional marked copy or set of material to evaluate the claim for 
confidential treatment. This will provide the program office 
expeditiously with the information necessary for program activity and 
ensure that the program office is aware of which material is claimed to 
be confidential and which is not. This process will also provide the 
Chief Counsel with the information needed to consider the claim for 
confidential treatment. Generally, this will simply be the material for 
which confidential treatment is sought. The submitter may also include 
any additional information it wishes the Chief Counsel to evaluate in 
considering the claim.
2. Personal Information
    The agency proposed to include in Part 512 a request that 
submitters remove personal information, such as names, addresses and 
telephone numbers of consumers, from the redacted version of submitted 
materials, to protect the privacy of individuals. The agency's policy 
has been to redact personal identifiers from all owner complaints 
(whether filed directly with the agency or from documents obtained from 
manufacturers in the course of a defect investigation) before placing 
them on the public record. The policy was designed to encourage the 
submission of information by protecting personal privacy concerns. The 
agency believes that consumers may be less willing to make complaints 
if their personal contact and other information are made publicly 
available.
    In Center for Auto Safety v. National Highway Traffic Safety 
Administration, 809 F. Supp. 148 (D.D.C. 1993), the Center for Auto 
Safety sought release of the names and addresses of consumers who filed 
complaints directly with the agency. The court analyzed the possible 
effects of disclosure, balancing the interests of the individuals 
filing complaints with the asserted public interest in obtaining not 
only the substance of the complaint, which was publicly available, but 
also the identities of those filing them. The Court ruled that the 
privacy of the complainants will be recognized and protected because 
``there is no ascertainable public interest of sufficient significance 
or certainty to outweigh [a complainant's privacy] right'' that would 
justify the release of this personal contact information provided by 
consumers. Id. at 150. Thus, the court upheld the agency's decision not 
to release the names of, and other personal information about, those 
voluntarily providing information to the agency.\2\
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    \2\ Public Citizen expressed opposition to the agency's practice 
of providing a release option on its Vehicle Owner Questionnaires to 
allow the agency to share consumer names with manufacturers but not 
a similar release option with respect to advocacy groups. 
Manufacturers have a legal obligation to investigate vehicle 
problems and make timely defect determinations. The release of 
information to them, with the owner's permission, assists in their 
performance of their legal responsibilities by enabling them to 
investigate reports of vehicle problems. Advocacy groups and other 
members of the public have no such statutory obligation.
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    The same policy concerns apply to personal identifiers on copies of 
information submitted by manufacturers. The judicially recognized 
privacy interest in protecting the personal identifiers and contact 
information when a consumer complains to the agency is at least as 
strong when applied to a consumer who complains directly to the 
company, and is in all likelihood unaware that the company may be 
required to send that communication to the government, which, in turn, 
will place it into a publicly accessible file.
    Many comments, including those from TMA and the Alliance, objected 
to the proposed requirement that submitters remove personal 
information, pointing out that the legal burden of reviewing and 
redacting personal identifiers lay with the agency, not with the 
private submitters of the information. TMA also argued that relying on 
submitters to redact the information might lead to inconsistent 
approaches and cause confusion over what personal identifiers are or 
are not redacted.
    In light of the comments, we have revised the proposed regulation 
to eliminate this requirement. The agency nonetheless would appreciate 
submissions, in addition to the complete copy, of redacted versions 
deleting any personal identifiers from any companies willing to provide 
them.

[[Page 44213]]

3. Stamp Each Page
    The proposal specified the manner in which information submitted to 
NHTSA and claimed to be confidential must be marked, and identified the 
supporting documentation that must accompany each submission. The NPRM 
intended to continue the requirement that each page containing 
information claimed to be confidential be marked as such. The markings 
would indicate if an entire page was claimed to be confidential or 
would identify with brackets any particular portions of a page claimed 
to be confidential.
    This proposal was intended to avoid misunderstanding by 
establishing a system through which companies could provide the agency 
with clear direction as to which portions of the pages or documents 
were claimed to be confidential. To allow the pages with confidential 
information to be identified easily, the proposal provided also that 
each page claimed to contain confidential information must be numbered.
    The RMA claimed that the combination of this feature with other 
parts of the proposed regulation would create an unreasonable burden 
and violate the Paperwork Reduction Act. The RMA was concerned with the 
combined effect of presumably requiring three versions of the same 
information, stamping each appropriate page with the word 
``confidential,'' potentially redacting personal information, and the 
potential application of all the requirements to each quarterly 
submission of the early warning reporting information.
    As noted above, we have made various modifications to address many 
of these concerns. We have clarified that we did not intend to require 
a so-called third version of each submission, have eliminated the 
proposal to require the redaction of personal identifiers, and have 
addressed the early warning reporting information through a series of 
class determinations covering those portions we have determined are 
entitled to confidential treatment under Exemption 4 of the FOIA.
    In sum, we believe that this final rule simplifies the process for 
submitting confidentiality claims, allows for the more efficient 
handling of those claims within the agency and imposes no additional 
burden on those submitting the information. The final early warning 
reporting regulation likewise clarified those reporting obligations 
and, we believe, assuages many of the concerns raised by the RMA.
    Those providing submissions electronically must either separate the 
material that is confidential from that which is not, or find an 
alternative method of marking those pages that are confidential. We 
note that companies increasingly are supplying information required as 
part of a defect or noncompliance investigation in electronic formats.

C. Subpart C--Additional Requirements

    In Subpart C, the agency proposed to retain additional requirements 
from the existing regulation that submitters must follow when certain 
circumstances apply. The NPRM stated that we did not intend to change 
these requirements substantively, only to clarify the requirements and 
assemble them in a single subpart.
    The requirements contained in this portion of the proposed rule 
covered such issues as the submitter's continuing obligation to amend 
information provided in support of a claim for confidential treatment, 
the manner in which confidential treatment is to be claimed for 
multiple items of information or for information submitted by a third 
party, the steps submitters must take if they need an extension of time 
to claim confidential treatment, and the consequences for noncompliance 
with part 512.
    The final rule includes the requirement that submitters specify 
with their claim the length of time for which confidential treatment is 
sought. The information supporting the confidentiality request must 
include adequate justification for the time period specified in the 
claim.
    The agency did not receive comments objecting to the proposed 
reorganization of these provisions into Subpart C, or to most of the 
specific requirements contained in this portion of the proposal. 
Objections were raised, however, regarding two provisions of the 
proposal:
1. Duty To Amend
    The existing regulation provides that submitters of information 
``shall promptly amend supporting information'' justifying a claim for 
confidential treatment ``if the submitter obtains information upon the 
basis of which the submitter knows that the supporting information was 
incorrect when provided, or that the supporting information, though 
correct when provided, is no longer correct and the circumstances are 
such that a failure to amend the supporting information is in substance 
a knowing concealment.'' 49 CFR 512.4(i). The NPRM proposed to revise 
this language to provide that submitters ``shall promptly amend any 
information under Sec.  512.4 of this part whenever the submitter knows 
or becomes aware that the information was incorrect at the time it was 
provided to NHTSA, or that the information, although correct when 
provided to NHTSA, is no longer correct.''
    Several comments, including those submitted by TMA and AIAM, 
objected to this proposed change on the grounds that it would impose an 
unreasonable burden on submitters to monitor submissions constantly in 
order to avoid civil penalties. Workhorse expressed concern that, by 
removing the ``knowing concealment'' standard, the rule would subject 
submitters to civil penalties based on ``constructive knowledge.'' 
Business interests urged the agency not to adopt the proposed changes. 
Public Citizen, on the other hand, considers the ``knowing 
concealment'' standard ``too weak'' and believes it allows situations 
in which materials that are no longer confidential receive continued 
protection ``long after the conditions justifying its confidentiality 
have been removed.''
    We note that the agency requires the submitter to identify the 
length of time for which confidential treatment is sought. The agency 
will evaluate these requests when determining whether to grant 
confidential treatment and will release information once the time 
period for which confidential treatment is granted has lapsed. If the 
time period between the grant and the possible disclosure is long, the 
agency may seek reconfirmation, with appropriate support, that the 
information remains confidential.
    The comments show that the proposed language could impose 
substantial and unnecessary burdens on submitters to monitor 
information previously submitted to the agency without providing 
additional benefit, since the agency is able to monitor the time for 
which confidential treatment is granted and is able to reassess a 
confidentiality grant should the information be requested. Accordingly, 
we have revised the final rule to clarify that the duty to amend 
relates to the supporting information submitted to justify the claim 
for confidential treatment, not to the substance of the reported 
information itself. In addition, we have revised the rule further so 
that, as before, the duty to amend is triggered only when circumstances 
are such that a failure to amend the supporting information would 
constitute a knowing concealment.
2. Third Parties
    In the NPRM, the agency proposed that, when confidentiality is 
claimed for information obtained by the submitter

[[Page 44214]]

from a third party, such as a supplier, the submitter is responsible 
for obtaining from the third party the information that is necessary to 
comply with the requirements of this regulation, including the 
requirement to submit a certificate of confidentiality.
    The agency received several comments, all from suppliers, raising 
questions concerning this aspect of the agency's proposal. MEMA/OESA, 
AORC, Bendix, and WABCO, among others, argued that they should have the 
opportunity to request confidentiality directly with respect to 
information that they submit to their customers, and should be able to 
deal directly with the agency regarding information that is not 
available to the original submitter.
    The agency believes these comments reflect a misunderstanding of 
the proposed regulation. The proposed regulation would not prevent 
suppliers from submitting information to the agency or seeking 
confidential treatment directly. This provision of the NPRM merely 
provided that if a person submits information that was obtained from a 
third party (such as an automobile manufacturer submitting information 
obtained from a supplier, a supplier submitting information obtained 
from a vehicle manufacturer, a contractor submitting information 
obtained from a subcontractor, or a similar situation involving wholly 
different parties), and if the submitter seeks confidential treatment 
for the information, it must obtain adequate supporting documentation 
to justify the claim. For example, it may be appropriate, or even 
necessary, to obtain and submit a Certificate in Support of the Request 
for Confidentiality that was prepared by the entity from which the 
information was obtained. In the absence of adequate supporting 
information, the agency will have no choice but to make the information 
public. Accordingly, this provision of the proposed rule is adopted 
without change.

D. Subpart D--Agency Determination

    NHTSA proposed in the NPRM to delineate the confidentiality 
standards and procedures used by the agency to render a confidentiality 
determination. We also proposed to state that the agency may render 
determinations involving classes of information and that submitters may 
request reconsideration if they disagree with an agency decision. We 
indicated that we were proposing to clarify these provisions and 
assemble them into a single subpart. We indicated also that we were 
proposing some substantive changes to these portions of the regulation.
    The majority of the comments related to the submission and 
protection of early warning reporting information, but a few additional 
issues were also addressed:
1.Time To Request Reconsideration or To Respond When a FOIA Request Is 
Pending
    Part 512 previously provided that, if a request for confidential 
treatment is denied in whole or in part, the agency would inform the 
submitter of its right to petition for reconsideration of the denial 
within ten working days after receiving notice of the agency's 
decision. The NPRM proposed no changes to this aspect of the rule. A 
number of comments, primarily from smaller businesses, requested that 
this period of time be extended.
    Blue Bird, for example, asserted that small-to medium-sized 
companies should have ``the opportunity to undertake the type of 
expanded review which the Company would need in cases where it must 
fully consider and present all possible arguments and justifications to 
protect what [it considers to be] proprietary, competitively sensitive 
information.'' In addition, MEMA/OESA asserted that ``requests for 
reconsideration where sensitive company documents are otherwise at risk 
will often require the input of many company employees * * * [and that] 
the ten-day period under the current and proposed rules * * * provides 
insufficient time.'' These comments recommended that the period of time 
should be extended from 10 working days to 20 working days or 30 
calendar days.
    Upon consideration of the difficulties faced by small companies 
(Blue Bird) and the potential need to coordinate responses with widely 
dispersed employees (MEMA/OESA), the agency has decided to adopt the 
commenters' request to extend the period of time to request 
reconsideration of denials of confidential treatment rendered by the 
agency, from ten working days to twenty working days.
    In related comments, citing sections 512.22 and 512.23 of the 
regulation, which appear in Subpart E and relate to modifications of 
confidentiality decisions and the public release of confidential 
information under certain limited circumstances, the WLF recommended 
that ``the agency should [n]ever give less than ten (10) day advance 
notice to [a] company before releasing business documents.'' Although 
not specifically raised in any other comments, the agency notes that 
several portions of part 512 provide submitters of information with ten 
working days within which to seek review of agency decisions.
    For example, if a petition for reconsideration is denied in whole 
or in part under Section 512.19 (also in subpart D), or if the agency 
determines that an earlier determination of confidentiality should be 
modified under section 512.22 or that information previously determined 
or claimed to be confidential will be disclosed under section 512.23 
(in subpart E), the submitter is advised that the information will be 
made available to the public not less than ten working days after the 
date on which notification of the agency's action is received.
    The reasons that support an extension from ten working days to 
twenty working days for requesting reconsideration also justify the 
extension of these other time periods. Nonetheless, while we are 
revising the regulations to provide a period of twenty working days, 
rather than ten, in each of the sections referenced above, we are 
reserving the right to shorten these periods when the agency finds it 
to be in the public interest.
    WLF asserted that the NPRM would provide ``an inadequate amount of 
time to businesses to review and respond to FOIA requests submitted to 
the [agency] by third parties,'' and recommended that the agency 
``provide the third-party FOIA request to the affected business within 
three (3) business days after receiving it * * * [and] copies of all 
correspondence between the agency and the FOIA requester.''
    The agency notes that while the WLF's comments asserted that they 
concern notice to businesses upon the agency's receipt of a FOIA 
request for the information, the sections of the NPRM that WLF cites do 
not relate to these circumstances. Moreover, the agency does not 
believe that additional notice to submitters is needed at the time a 
FOIA request is received. Unlike many other Federal agencies, NHTSA 
does not wait until it has received a FOIA request before asking a 
submitter to justify the withholding of information. Instead, NHTSA's 
regulation provides that submitters must support their claims for 
confidential treatment at the time of submission. See 49 CFR 512.4. The 
agency would not expect, nor would we welcome, any additional materials 
from a submitter simply because a FOIA request has been filed. If a 
submitter disagrees with the agency's confidentiality determination 
(whether or not it is made in the context of a FOIA request), it can 
then request reconsideration. Therefore, there is no need to notify 
submitters if a FOIA

[[Page 44215]]

request is received by the agency for submitted information.
2. Whether Voluntarily Submitted Materials Should Be Returned Following 
a Denial of a Confidentiality Request
    Bendix suggested that Section 512.18 should be amended to 
``clarify'' that information voluntarily provided to the agency subject 
to a claim for confidential treatment should be returned to the 
submitter if the agency denies the request for confidential treatment. 
Such information may be submitted as part of a rulemaking, research 
activity or a request for interpretation of our statutes and 
regulations.
    We note that the Federal Records Act imposes limitations on the 
agency's ability to return information voluntarily submitted to the 
agency. That Act mandates the maintenance and preservation of federal 
records.\3\ It does not contemplate the return of records to individual 
submitters. Those providing technical or market information as part of 
a rulemaking or in connection with the agency's research activity do so 
voluntarily and with knowledge of the standards applicable to the 
treatment of the data. Further, we believe we can respond to 
interpretation requests while maintaining the confidentiality of any 
information. Accordingly, we are not adopting this suggestion.
---------------------------------------------------------------------------

    \3\ The Act defines a ``federal record'' as consisting of ``all 
books, papers, maps, photographs, machine readable materials, or 
other documentary materials, regardless of physical form or 
characteristics, made or received by an agency of the United States 
Government under Federal law or in connection with the transaction 
of public business and preserved or appropriate for preservation by 
that agency or its legitimate successor as evidence of the 
organization, functions, policies, decisions, procedures, 
operations, or other activities of the Government or because of the 
informational value of data in them.'' 44 U.S.C. 3301. The disposal 
of these records is governed by 44 U.S.C. 3314 and related 
provisions of the Act. See 44 U.S.C. 3302, et seq.
---------------------------------------------------------------------------

3. Class Determinations
    The NPRM proposed no specific changes to the already established 
class determinations applicable to information found to cause 
substantial competitive harm if released. Appendix B to part 512 
currently contains three such determinations. These classes are 
blueprints and engineering drawings (under certain circumstances), 
future specific model plans, and anticipated vehicle or equipment 
production or sales figures (in some cases, for limited periods of 
time).
    The NPRM sought comment with regard to whether the agency should 
also consider the establishment of class determinations applicable to 
categories of information that presumptively would not cause 
substantial competitive harm if released. The proposal suggested that 
such class determinations, if established, would be applicable only to 
compelled information. The agency did not intend that any such class 
determinations would be applicable to information voluntarily submitted 
to the agency. Such information is subject to disclosure under a 
different legal standard and only upon a showing that the company 
customarily discloses the information to the public.
    We have decided against the creation of class determinations trying 
to address categories of information the release of which would be 
presumed not to cause substantial competitive harm. Such class 
determinations are unnecessary because all data the agency requires to 
be submitted is already presumptively subject to disclosure under FOIA 
unless shown to be subject to a FOIA exemption or covered by a class 
determination. Class determinations merely set forth those categories 
in which it is unnecessary to make individual submissions regarding the 
release of data that by its very nature would cause substantial 
competitive harm or impair the Government's ability to obtain the 
information in the future. In addition, we have concluded that some of 
the areas we posed as candidates for such treatment, such as testing 
conducted pursuant to ``known'' procedures, would require specific 
evaluation, thus rendering the class determination futile.
    We nonetheless remain concerned that submitters may routinely seek 
confidential treatment for information the agency has consistently 
determined would not cause competitive harm if released. We will take 
appropriate action to discourage those who repeatedly file claims for 
confidential treatment despite our consistent rejection of similar 
requests.

E. Subpart E--Agency Treatment of Information

    In Subpart E, the proposal described the manner in which 
information claimed to be confidential would be treated by the agency. 
The proposal intended to continue the practice of providing that any 
information identified and claimed to be confidential would be 
protected from disclosure by the agency pending an agency decision, and 
would continue to be treated confidentially as if the submitter's 
request for confidential treatment were granted, except under certain 
limited circumstances.
    The Alliance suggested that the final rule should explicitly state 
that information claimed to be confidential would remain confidential 
pending the agency's administrative determination that the information 
is not entitled to confidential treatment. The NPRM expressly proposed 
such protection during the administrative reconsideration process: 
``Upon receipt of a timely petition for reconsideration * * * the 
submitted information will remain confidential, pending a determination 
regarding the petition.'' The Alliance also suggested an express 
regulatory provision maintaining the confidentiality of material 
pending any judicial review of the agency's final administrative action 
regarding confidential treatment.
    The agency will continue to treat as confidential any information 
that remains subject to an administrative review. This includes both 
the initial determination and the agency's response to any petition for 
reconsideration. The agency declines, however, to adopt the Alliance's 
suggestion that we continue automatically to treat such information as 
confidential pending judicial review. The agency will make the 
information publicly available, consistent with its administrative 
decision, unless ordered otherwise by a court of competent 
jurisdiction. We recognize that if we were to make information 
available immediately following the denial of a petition for 
reconsideration, it would obviate the submitters' right to judicial 
review. Accordingly, the regulation will provide that the agency will 
allow the submitter twenty working days within which to obtain a court 
order (e.g., through a temporary restraining order) requiring the 
agency to maintain the confidentiality of information pending judicial 
review. We have chosen twenty working days to be consistent with the 
other time periods incorporated into this final rule. We also recognize 
that, while the basis and arguments for the confidentiality claim 
should have been fully developed by the time a submitter seeks judicial 
review of our determination, additional work may be necessary before a 
lawsuit is filed. In the absence of a judicial order to the contrary, 
information we have determined is not entitled to confidential 
treatment will be placed into the public record twenty working days 
after receipt of the agency's decision on reconsideration. As in other 
contexts, we reserve the right to shorten this period if we find that 
it is in the public interest to do so.
    The proposal also provided that a grant of confidentiality may be 
modified

[[Page 44216]]

under certain circumstances, including newly discovered or changed 
facts, a change in applicable law, a change in a class determination, 
or a finding that the prior determination was erroneous.
    The proposal further incorporated certain statutory provisions 
under which information that has been claimed or determined to be 
entitled to confidential treatment may nonetheless be publicly released 
in some situations, including releases made to Congress, pursuant to a 
court order, to the Secretary of Transportation or to other Executive 
agencies in accordance with applicable law, with the consent of the 
submitter, and to contractors (subject to certain conditions).
    The agency's existing regulation also listed three additional 
situations under which information determined to be confidential may 
nonetheless be disclosed to the public. The proposed rule explained 
that the Cost Savings Act and the Vehicle Safety Act have been repealed 
and their pertinent provisions have been codified under title 49 of the 
United States Code. Accordingly, the NPRM proposed to modify part 512 
in a manner consistent with these statutory changes. We are adopting 
these revisions.

VI. Early Warning Reporting Information

    The NPRM sought public comment on how the agency should handle the 
data to be submitted under the new early warning reporting regulation. 
Although the final rule prescribing the early warning reporting 
requirements had not yet been issued, the agency received numerous 
comments with regard to that data.
    Some business interests argued that the TREAD Act itself prohibits 
the disclosure of any early warning reporting information under 
Exemption 3 of the Freedom of Information Act (FOIA). Others argued 
that Exemption 4 of the FOIA, applicable to confidential business 
information, governs whether the information should be disclosed. All 
business interests contended that release of the early warning data is 
likely to cause substantial competitive harm and many pointed out that 
disclosure is likely to impair the agency's ability to obtain the 
material in the future. Public Citizen, while agreeing that Exemption 4 
is applicable, argued that all the data should be released because it 
is summary in nature, is important to the identification of potential 
defects and is often released in the course of individual defect 
determinations.
    As the Court of Appeal for the District of Columbia Circuit 
recently noted, the Freedom of Information Act is premised on public 
access to information within enumerated bounds ensuring that the 
government's proper functions are not impeded:

    ``Public access to government documents'' is the ``fundamental 
principle'' that animates FOIA. John Doe Agency v. John Doe Corp., 
493 U.S. 146, 151 (1989). ``Congress recognized, however, that 
public disclosure is not always in the public interest.'' CIA v. 
Sims, 471 U.S. 159, 166-67 (1985). Accordingly, FOIA represents a 
balance struck by Congress between the public's right to know and 
the government's legitimate interest in keeping certain information 
confidential. John Doe Agency, 493 U.S. at 152. To that end, FOIA 
mandates disclosure of government records unless the requested 
information falls within one of nine enumerated exemptions, see 5 
U.S.C. 552(b). While these exemptions are to be ``narrowly 
construed,'' FBI v. Abramson, 456 U.S. 615, 630 (1982), courts must 
not fail to give them a ``meaningful reach and application,'' John 
Doe Agency, 493 U.S. at 152. The government bears the burden of 
proving that the withheld information falls within the exemptions it 
invokes. 5 U.S.C. 552(a)(4)(b).

See Center for National Security Studies, et. al. v. U.S. Department of 
Justice, 331 F.3d 918 (D.C. Cir. 2003).
    We have determined that the confidentiality of the early warning 
submissions should be reviewed under Exemption 4 of FOIA relating to 
confidential business information. Below we briefly set forth the early 
warning reporting requirements and the arguments made in favor and 
against disclosure. We then apply the principles set forth in National 
Parks & Conservation Ass'n v. Morton (National Parks), 498 F.2d 765 
(D.C. Cir. 1974), and its progeny to each element of the early warning 
reporting information.

A. Summary of the Early Warning Reporting Requirements

    The bulk of the early warning reporting requirements apply to 
larger manufacturers of motor vehicles, and all manufacturers of child 
restraint systems and tires (see 49 CFR part 579). In general, vehicle 
manufacturers must submit quarterly reports with regard to the 
following categories of vehicles, if they produce 500 or more vehicles 
of a category annually: light vehicles, medium-heavy vehicles and all 
buses, trailers, and motorcycles. The reporting information required of 
these manufacturers is summarized below:

    [sbull] Deaths. These manufacturers must report certain 
specified information about each incident involving a death that 
occurred in the United States that is identified in a claim (as 
defined) against and received by the manufacturer. They must also 
report information about incidents involving a death in the United 
States that is identified in a notice received by the manufacturer 
alleging or proving that the death was caused by a possible defect 
in the manufacturer's product. Finally, they must report on each 
death occurring in foreign countries that is identified in a claim 
against the manufacturer involving the manufacturer's product, or 
one that is identical or substantially similar to a product that the 
manufacturer has offered for sale in the United States.
    [sbull] Injuries. These manufacturers must report certain 
specified information about each incident involving an injury that 
occurred in the United States that is identified in a claim against 
and received by the manufacturer, or that is identified in a notice 
received by the manufacturer which notice alleges or proves that the 
injury was caused by a possible defect in the manufacturer's 
product.
    [sbull] Property damage. These manufacturers (other than child 
restraint system manufacturers) must report the numbers of claims 
for property damage that occurred in the United States that are 
related to alleged problems with certain specified components and 
systems, regardless of the amount of such claims.
    [sbull] Consumer complaints. These manufacturers (other than 
tire manufacturers) must report the numbers of consumer complaints 
they receive that are related to problems with certain specified 
components and systems that occurred in the United States. 
Manufacturers of child restraint systems must report the combined 
number of such consumer complaints and warranty claims, as discussed 
below.
    [sbull] Warranty claims information. These manufacturers must 
report the number of warranty claims (adjustments for tire 
manufacturers), including extended warranty and good will, they 
receive that are related to problems with certain specified 
components and systems that occurred in the United States. As noted 
above, manufacturers of child restraint systems must combine these 
with the number of reportable consumer complaints.
    [sbull] Field reports. These manufacturers (other than tire 
manufacturers) must report the total number of field reports they 
receive from the manufacturer's employees, representatives, and 
dealers, and from fleets, that are related to problems with certain 
specified components and systems that occurred in the United States. 
In addition, manufacturers must provide copies of certain field 
reports received from their employees, representatives, and fleets, 
but are not required to provide copies of reports received from 
dealers.
    [sbull] Production. These manufacturers must report the number 
of vehicles, child restraint systems, and tires, by make, model, and 
model year, during the reporting period and the prior nine model 
years (prior four years for child restraint systems and tires).

    In addition, these manufacturers must submit to the agency, on a 
one-time basis, historical data relating to the number of warranty 
claims/adjustments and field reports for each calendar quarter during 
the three-year period

[[Page 44217]]

from July 1, 2000 through June 30, 2003.\4\
---------------------------------------------------------------------------

    \4\ The early warning regulation contains definitions and 
explanations that provide further context to these requirements and 
that are not repeated here.
---------------------------------------------------------------------------

    Smaller manufacturers (as defined in the early warning rule), and 
manufacturers of original motor vehicle equipment or replacement 
equipment other than child restraint systems and tires, are required to 
submit reports containing information about claims and notices of 
deaths allegedly caused by their products, but are not required to 
submit other information.

B. Application of the FOIA to the Early Warning Reporting Program

    The TREAD Act's disclosure provision applies to information 
provided under 49 U.S.C. 30166(m), which was added to the Vehicle 
Safety Act in the aftermath of hearings held in connection with NHTSA's 
investigation of Firestone ATX and Wilderness AT tires. That statutory 
section mandates that the agency initiate a rulemaking ``to establish 
early warning reporting requirements for manufacturers of motor 
vehicles and motor vehicle equipment to enhance the Secretary's ability 
to carry out the provisions of this chapter.'' 49 U.S.C. 30166(m)(1).
    Section 30166(m)(3) sets forth the type of information Congress 
expected the rulemaking to include. Congress specifically directed the 
agency to require the submission of information relating to repair and/
or replacement campaigns. The Act provides for the submission of data 
on claims submitted to the manufacturer for serious injuries (including 
death) and aggregate statistical data on property damage from alleged 
defects in a motor vehicle or in motor vehicle equipment that may 
assist in the identification of defects. 49 U.S.C. 30166(m)(3)(A). 
Congress also specifically provided for manufacturers to submit 
information relating to claims of death or serious injury alleged to be 
caused by a defect where the manufacturer receives actual notice. 49 
U.S.C. 30166(m)(3)(C).
    Congress recognized that additional types of information may be 
useful to the agency in carrying out its mission to identify safety 
related defects. In Section 30166(m)(3)(B), Congress gave the agency 
the authority to mandate the submission of ``other data'' in addition 
to the information described above ``to the extent that such 
information may assist in the identification of defects related to 
motor vehicle safety in motor vehicles and motor vehicle equipment in 
the United States.'' Pursuant to that authority, NHTSA's early warning 
reporting rule requires the submission of information relating, among 
others, to warranty claims, field reports and consumer complaints.
    Congress also considered the extent to which the data submitted as 
part of the early warning reporting regulation should be subject to 
public disclosure or, alternatively, the extent to which it should be 
held confidential to enhance the agency's ability to identify potential 
safety defects. The TREAD Act's disclosure provision, Section 
30166(m)(4)(C), reads:

    None of the information collected pursuant to the final rule 
promulgated under paragraph (1) shall be disclosed pursuant to 
section 30167(b) unless the Secretary determines the disclosure of 
such information will assist in carrying out sections 30117(b) and 
30118 through 30121.\5\
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    \5\ Section 30167(B) provides: ``Subject to subsection (a) of 
this section, the Secretary shall disclose information obtained 
under this chapter related to a defect or noncompliance that the 
Secretary decides will assist in carrying out sections 30117(b) and 
30118-30121 of this title or that is required to be disclosed under 
section 30118(a) of this title. A requirement to disclosure 
information under this subsection is in addition to the requirements 
of section 552 of title 5.''
---------------------------------------------------------------------------

1. The TREAD Act and the FOIA Exemptions
    In a letter to Secretary Slater dated October 20, 2000, days after 
passage of the TREAD Act, but before President Clinton signed the Act 
into law, Public Citizen objected to the disclosure provision.\6\ 
Public Citizen was concerned that the provision would be construed to 
prohibit the disclosure of any early warning reporting data:
---------------------------------------------------------------------------

    \6\ Public Citizen's letter appears in the docket as an 
attachment to the comments submitted by the RMA.

    The secrecy provision in sec. 3(b)(4)(c) is imposed upon all 
safety defect information collected as part of the bill's ``early 
warning reporting requirements'' rulemaking. We believe that the 
secrecy provision thwarts the clear purpose of the legislation--to 
protect the public from defect cover-ups--and may drastically reduce 
public access to safety defect information. Under that section, the 
Secretary shall not disclose defect and early warning information 
about lawsuits, consumer complaints, deaths, injuries, component 
failures or consumer satisfaction campaigns unless you determine 
that disclosure will assist in carrying out the law. This inverts 
existing law, as the current presumption of 49 U.S.C. sec. 30167(b) 
is to favor the disclosure over and above the disclosure 
requirements of the Freedom of Information Act (FOIA). Indeed, the 
function of this reversal in presumptions is to create a categorical 
exemption under FOIA's exemption three, and thus to keep information 
submitted under the new rule totally secret, probably indefinitely. 
---------------------------------------------------------------------------
(Emphasis in original)\7\

    \7\ Exemption 3 applies to material ``specifically exempted from 
disclosure by statute (other than section 552b of this title), 
provided that such statute (A) requires that the matters be withheld 
from the public in such a manner as to leave no discretion on the 
issue, or (B) establishes particular criteria for withholding or 
refers to particular types of matters to be withheld.'' 5 U.S.C. 
552(b)(3).
---------------------------------------------------------------------------

    NHTSA's Chief Counsel considered and rejected this view of the 
TREAD Act's disclosure provision in an internal departmental memo, 
which was subsequently placed in the public record. That memo stated in 
part:

    Ms. Claybrook's letter seems to suggest that the variation in 
language could be interpreted to prevent the disclosure of any early 
warning information submitted to the agency in the absence of a 
decision by the Secretary that disclosure of the information ``will 
assist in carrying out'' the purposes of the Act. However, the 
legislation clearly requires that such a decision be made prior to 
disclosure only when the disclosure is being made under section 
30167(b), which by its terms is invoked only when the disclosure 
involves information that has been determined to be entitled to 
confidential treatment.
    Moreover, section 30167(b) provides specifically that ``A 
requirement to disclose information under this subsection is in 
addition to the requirements of [the FOIA].'' Accordingly, neither 
section 30167(b) nor paragraph (4)(C) would affect the agency's 
initial decision regarding whether information submitted to the 
agency is entitled to confidential treatment. Such decisions will 
continue to be made in accordance with Exemption 4 of [the FOIA], 
the Trade Secrets Act and the agency's regulations concerning the 
treatment of confidential business information, 49 CFR part 512.\8\

    \8\ Memo from Frank Seales, Chief Counsel, NHTSA, to Rosalind 
Knapp, Acting General Counsel of the Department of Transportation, 
at 2 (Oct. 27, 2000) (emphasis in original).
---------------------------------------------------------------------------

    In its comments to this rulemaking, Public Citizen agreed that 
Section 30166(m)(4)(C) permits the agency to consider the early warning 
information under Exemption 4 of the FOIA. Public Citizen claimed that 
the effect of the provision is to alter a preexisting presumption in 
Section 30167(b) from one of disclosure to nondisclosure in the absence 
of the specified findings of the Secretary. Public Citizen also 
clarified that its ``statements about the possible meaning of the bill 
were concerned with its potential for legal manipulation by the 
industry, i.e., what in the worst case it could mean, rather than any 
suggestion of what it should or actually does mean in agency 
practice.''
    The RMA argued that the TREAD Act provision falls within Exemption 
3(b) of the FOIA, which negates disclosure when Congress has 
established particular criteria for withholding

[[Page 44218]]

information or has referred to particular types of matters to be 
withheld. The RMA asserted that the reference in the disclosure 
provision to the rulemaking required by Section 30166(m)(1) is 
sufficient to bring the statute within the purview of Exemption 3. 
According to the RMA, the analysis prepared by the agency in the 
October 27, 2000 memorandum would render the statutory provision 
meaningless and violate a central tenet of statutory construction.
    The RMA, as well as individual tire makers and many other 
manufacturers, further argued that the information required by the 
early warning reporting regulation would lead to substantial 
competitive harm if disclosed. In addition, they suggest that 
disclosure would lead to less candor from field personnel, resulting in 
less reliable information, and would discourage marketing efforts that 
lead to more complete and useful data.
    The Alliance suggested that the provision assumes the 
confidentiality of the early warning reporting data because information 
cannot be disclosed under section 30167(b) unless it is otherwise 
confidential. The Alliance asserted that the information may be found 
to be confidential under either Exemption 4 or Exemption 7 of the FOIA. 
The Alliance submitted affidavit evidence to support its claim that 
disclosure of the early warning reporting information would lead to 
substantial competitive harm within the automotive industry. General 
Motors also submitted comments explaining how, in its view, substantial 
competitive harm is likely to result if the data were disclosed.
    The TREAD Act mandated that NHTSA collect and maintain information 
in a manner not previously followed by the agency. Historically, the 
agency has received information relating specifically to a particular 
alleged defect or noncompliance, including engineering drawings, 
warranty claim information, customer complaints, field reports and 
lawsuit information. Manufacturers submitting information in response 
to the agency's information requests frequently seek confidential 
treatment for portions of the information submitted. The agency reviews 
those requests in accordance with Exemption 4 of the FOIA.
    The early warning reporting regulation requires regular periodic 
submissions of data that relate not simply to alleged problems, but to 
all of a manufacturer's products. These submissions are not necessarily 
indicative of any problem needing investigation. We do not believe that 
the language of Section 30166(m)(4)(C), and the colloquy accompanying 
its enactment (See Appendix A), expresses a Congressional mandate to 
treat all early warning reporting information confidentially. Instead, 
we believe that Congress expected the agency to review the 
confidentiality of early warning reporting information under Exemption 
4 of the FOIA, but to apply Section 30167(b) in a more restrictive 
manner to that data than to other information received by the 
agency.\9\
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    \9\ We must give meaning to all words and phrases of a statute, 
and therefore we must give meaning to the reference in Section 
30166(m)(4)(C) to the preexisting Section 30167(b). See, e.g., TRW 
Inc. v. Andrews, 534 U.S. 19, 31 (2001) (``It is `a cardinal 
principle of statutory construction that a statute ought, upon the 
whole, to be construed that, if it can be prevented, no clause, 
sentence, or word shall be superfluous, void, or insignificant' '') 
and United States v. Menasche, 348 U.S. 528, 538-539 (1955)(``It is 
our duty ``to give effect, if possible, to every clause and word of 
a statute.' '' We must also ensure that our construction of the 
statute does not render the TREAD Act provision meaningless or 
duplicative of existing law. See, e.g., Dunn v. Commodity Futures 
Trading Commission, 519 U.S. 465, 472 (1997) (``Our reading of the 
exemption is therefore also consonant with the doctrine that 
legislative enactments should not be construed to render their 
provisions mere surplusage'').
---------------------------------------------------------------------------

    As many of the commenters pointed out, Section 30167(b) applies 
only after we have determined that information is entitled to 
confidential treatment. The provision permits the disclosure of 
confidential information whenever the Secretary, in his discretion, 
believes that the information can be useful in carrying out the 
agency's defect identification and remediation function. In contrast, 
the TREAD Act's disclosure provision does not permit the disclosure of 
confidential early warning reporting information unless the Secretary 
specifically finds that disclosure is necessary to carry out the 
agency's responsibility to identify potential safety-related defects. 
Thus, the basis for justifying disclosure of the early warning 
reporting information is significantly more stringent than that for all 
other material submitted to the agency and found entitled to 
confidential treatment under the FOIA.
    Both Public Citizen and the Alliance construed the TREAD Act 
provision in a manner consistent with our analysis. Public Citizen 
stated that the provision ``inverts existing law, as the current 
presumption of 49 U.S.C. Sec.  30167(b) is to favor disclosure over and 
above the disclosure requirements of the Freedom of Information Act 
(FOIA).''\10\ The Alliance similarly argued that Congress enacted the 
TREAD Act aware that the Vehicle Safety Act contained a provision 
generally favoring disclosure of information, even if it is otherwise 
confidential, when deemed necessary to assist in carrying out the 
agency's defect remediation function. According to the Alliance, 
Congress intended to neutralize that presumption and to disfavor 
disclosure of the early warning information:

    [U]nder longstanding NHTSA practice, nonconfidential information 
related to potential defects or noncompliances under investigation 
by the agency is routinely available in the agency's public 
reference reading room, without need for a Secretarial 
``determination'' under Sec.  30167(b), even though NHTSA could 
lawfully invoke FOIA Exemption Seven (relating to law enforcement 
investigations) to protect this information. Thus, as a practical 
matter, information in NHTSA's possession is not even considered for 
release under Sec.  30167(b) of the Safety Act, unless and until 
that information is already entitled to confidential treatment under 
one of the Freedom of Information Act exemptions. (Emphases in 
original.)

    \10\ In its comments, Public Citizen expressed its view that the 
provision is not an Exemption 3 statute, stating that ``while the 
TREAD Act provision may reverse a presumption available for certain 
information under Section 30167(b), the language of the statute 
falls far short of creating a withholding statute or exemption from 
FOIA.'' (Emphasis in original.)
---------------------------------------------------------------------------

    As set forth in the October 27, 2000 memo, the agency disagrees 
with the assertion presented by the RMA and other business interests 
that the TREAD Act provision categorically prohibits the disclosure of 
any early warning reporting information pursuant to Exemption 3 of the 
FOIA. Our analysis of the arguments in favor of the application of FOIA 
Exemption 3, and our reasons for rejecting those arguments are 
amplified in Appendix A to this Final Rule. In sum, we believe the 
TREAD Act provision intended the Secretary initially to determine which 
information is entitled to confidential treatment as confidential 
business information, and, if so and only then, to consider whether 
disclosure is nonetheless necessary for the agency to fulfill its 
responsibilities to detect and enforce the laws governing the recall of 
vehicles and equipment containing safety related defects.
2. The Early Warning Reporting Information and FOIA Exemption 4
    Consistent with the October 27, 2000 memo, we have determined that 
the confidentiality of the early warning reporting information should 
be construed under Exemption 4 of the FOIA. Exemption 4 protects 
information from disclosure that are ``trade secrets and commercial or 
financial information obtained from a person and privileged or 
confidential.'' 5 U.S.C. 552(b)(4). Information is confidential if its 
disclosure is likely ``(1) to impair the Government's ability to obtain 
necessary

[[Page 44219]]

information in the future; or (2) to cause substantial harm to the 
competitive position of the person from whom the information was 
obtained.'' National Parks, 498 F.2d at 770. See also Center for Auto 
Safety v. National Highway Traffic Safety Administration (CAS v. 
NHTSA), 244 F.3d 144, 147-48 (D.C. Cir. 2001) (discussing application 
of Exemption 4 to mandatory submissions).\11\
---------------------------------------------------------------------------

    \11\ A different standard applies to information that is 
submitted voluntarily to a government agency. See Critical Mass 
Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C. 
Cir. 1992) (en banc). Since all the information provided under the 
early warning reporting regulation is ``required,'' Critical Mass 
does not apply.
---------------------------------------------------------------------------

    Business interests contended that the early warning reporting 
information is entitled to protection under both prongs. They argued 
that early warning submissions would provide insight into the field 
experience and performance of a submitter's entire product line. 
Business enterprises were concerned that this information could then be 
analyzed by competitors to assess various factors, such as a 
submitter's experience with a particular supplier, production cycles, 
and the reliability of that submitter's products. Many of the 
commenters also pointed out that the disclosure of information may 
deter candor and discourage efforts to obtain reliable information from 
the field.
    The RMA asserted that disclosure of early warning reporting 
information would harm individual competitors. The Alliance echoed 
these concerns and emphasized that the information would be valuable to 
competitors, particularly within the context of competition among its 
member companies, aftermarket parts manufacturers, potential new 
entrants, and franchised dealers. Many commenters pointed out that the 
early warning reporting information constitutes a unique and 
comprehensive compilation of information not otherwise available, and, 
while subject to misinterpretation by the public, is especially 
valuable to competitors.
    The Alliance submitted affidavit evidence with its comments from an 
automotive marketing consultant to support its claim that the early 
warning reporting information relates to issues of importance to new 
car buyers, and therefore that the material is likely to be used (and 
potentially misused) in the competitive marketplace. The Alliance 
pointed out that the most significant factors cited by automobile 
consumers when choosing a vehicle relate to reliability, quality and 
dependability--all factors upon which the early warning reporting 
information is likely to shed some light.
    The Alliance and others expressed concern over the potential misuse 
of the early warning reporting information, either by competing 
companies or others who may draw conclusions from the data that, 
according to the Alliance and others, may be unwarranted. The Alliance 
stated that in addition to ``[t]he unfairness of subjecting the 
submitting manufacturers to the competitive harm that would flow from 
the disclosure of [early warning information],'' any comparison of this 
information by the public would not be valid because of the differences 
in warranty periods among manufacturers.
    GM reiterated this concern. Workhorse similarly wrote that 
disclosure of early warning information would create ``a serious risk 
that the public will be misled by disclosing such raw, unverified 
data'' and lead to ``consumer confusion and manufacturer harm.'' The 
RMA, while arguing that the potential misuse should support a blanket 
prohibition from disclosure, also asserted that the early warning 
reporting information is commercially valuable, and that its value is 
directly related to the extent of its confidentiality.
    The Alliance recognized and did not take issue with NHTSA's current 
practice of releasing similar types of information submitted during 
specific defect investigations, but argued that this ``does not justify 
the release of the comprehensive compilations of information'' 
collected under the early warning reporting rule. The Alliance 
explained that ``[a] limited release of information that is relevant 
to, and specific to, an individual defect investigation is much 
different from a competitive standpoint than the automatic release of 
the continually collected, full compendium of quality and customer 
satisfaction information that is represented by the complete `early 
warning' submission each quarter.''
    Because of the comprehensive nature of the early warning 
information, the Alliance argued that these submissions ``should * * * 
be protected by a class determination presuming their confidentiality 
and * * * should not have to be accompanied by a traditional part 512 
justification with each quarterly submission.'' The Alliance added that 
NHTSA's ``long-standing practice of releasing information limited in 
terms of scope and timeframe related to consumer complaints, warranty 
claims, property damage claims, field reports, etc., when this 
information has been submitted in connection with an individual, 
specific defect investigation does not defeat the presumptive 
confidentiality of the comprehensive collection of such information.''
    AIAM asserted a similar argument in favor of protecting early 
warning information, claiming that its main point of contention ``lies 
with a comprehensive disclosure of all, unscreened early warning 
information.'' The AIAM added that ``we recognize that, in appropriate 
instances, portions of the early warning information could still be 
disclosed to the public.'' AIAM explained that such releases could 
occur ``after NHTSA has processed and evaluated early warning 
information and decided to pursue an investigation about a particular 
vehicle/component.''
    GM also distinguished between the disclosures that NHTSA currently 
makes during defect investigations and the disclosures that would occur 
if the class determinations the agency proposed for warranty 
information were made. The company explained that its responses to 
agency information requests ``often include warranty data for a limited 
number of makes, models, and years.''
    Public Citizen argued that most of the information to be submitted 
under the early warning reporting rule is summary in nature and not 
specific enough to qualify for confidential treatment. Public Citizen 
also contended that because information to be submitted is similar or 
identical to the type of information submitted as part of a defect 
investigation, it should be treated as it currently is in a defect 
investigation. Public Citizen noted that the agency had speculated 
early in the development of the early warning reporting regulation that 
it thought manufacturers may not seek confidential treatment of the 
early warning reporting information.
    We believe that the information submitted in the course of a defect 
investigation is qualitatively and quantitatively different from the 
comprehensive compendium of pre-investigation information to be 
submitted under the early warning reporting rule, and further that the 
competitive harm caused by the disclosure of some of the early warning 
reporting data is substantial. While the early warning reporting 
information will generally not be as specific as the data submitted 
during a defect investigation into a defined and particular problem, 
each company must provide data with regard to each product it 
manufacturers. The information relating to certain elements of 
reporting provides specific information that competitors are likely to 
find valuable and, at the same time,

[[Page 44220]]

provides comparative data across each manufacturer's entire product 
line.
    The U.S. Court of Appeals for the D.C. Circuit has also recognized 
that a collection of information may be found likely to cause 
substantial competitive harm even if some of the individual pieces of 
data are not independently entitled to confidential treatment. See 
Trans-Pacific Policing Agreement v. United States Customs Service, 177 
F.3d 1022 (D.C. Cir. 1999).\12\ See also Center for National Security 
Studies, et. al. v. U.S. Dept. of Justice, 331 F.3d 918 (D.C. Cir. 
2003) (finding that Exemption 7 protects a comprehensive list of names 
and other personal information even though individual pieces of 
information have been otherwise revealed). We further note that the 
D.C. Circuit has acknowledged that potential consumer misuse, with 
competitive consequences, is a legitimate factor to consider when 
determining the confidentiality of the information required to be 
submitted to the agency. See Worthington Compressors v. Costle, 662 
F.2d 45, 52 n.43 (D.C. Cir. 1981)(trial court should consider ``whether 
competitors or consumers may misuse the information to the detriment'' 
of the submitters' competitive positions).\13\
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    \12\ We do not agree with Public Citizen's assertion that the 
analysis in Trans-Pacific is limited to its facts and has no 
applicability to other, similar situations. Trans-Pacific neither 
compels the protection of the information here, nor does it compel 
its disclosure. The case supports consideration of any substantial 
competitive harm arising from the disclosure of a comprehensive 
compendium of information, even if the disclosure of individual 
pieces of that compendium are not competitively harmful.
    \13\ NHTSA has long maintained that public embarrassment per se 
(that is, in the absence of substantial competitive harm or a 
deleterious effect on a government program) is not a basis for 
confidential treatment. The record here, however, provides support 
that public disclosure of some of the early warning reporting 
information may lead to mischaracterizations causing substantial 
competitive harm and may lead to less, rather than more, reporting.
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    NHTSA has consistently recognized the importance of providing 
accurate (and complete) information to the public about motor vehicle 
safety. The agency issues Consumer Advisories to help instruct 
consumers on the proper use of automotive products and encourages the 
public to refer to its New Car Assessment Program (NCAP) when choosing 
a vehicle to purchase. In developing the NCAP program, the agency 
expressed its belief that ``if consumers have valid comparative 
information on important motor vehicle characteristics, they will use 
that information in their vehicle purchase decisions.'' See 52 FR 31691 
(Aug. 21, 1987). The agency has even rescinded certain aspects of its 
Consumer Information programs after concluding that the data may 
mislead consumers and, therefore, will not provide valuable safety 
information. See 60 FR 32918 (June 26, 1985).
    Some of the commenters also raised the possibility that NHTSA's 
release of early warning information would impair both the agency's 
ability to obtain this information in the future and the quality of the 
information that the agency receives. For example, AIAM noted that 
``[d]espite the manufacturer's intent to the contrary, individuals who 
prepare field reports may be less thorough or candid if they know that 
their reports will be available to the general public and not just to 
experienced, sophisticated analysts employed by the manufacturer and 
the government.'' Similarly, TIA asserted that, under the proposed 
presumptive categories, submitters ``will produce the bare minimum 
required.'' TIA added that if the information were protected, 
submitters ``will be more likely to provide robust amounts of data.''
    The purpose of the TREAD Act's mandate to develop a regulation 
requiring the submission of the early warning data to the agency is 
made clear in the language of the law itself. The purpose of the early 
warning reporting regulation is ``to enhance the Secretary's ability to 
carry out the provisions of this chapter,'' 49 U.S.C. 30166(m)(1), 
which includes reducing both the number of traffic accidents and the 
fatalities and injuries arising from them. (Emphasis added). The 
Secretary has delegated those responsibilities to NHTSA. See 49 CFR 
501.2. The agency's ability promptly to identify safety related defects 
would not be ``enhanced'' if disclosure of all or part of the data 
diminishes the volume and/or reliability of the information, nor would 
the public interest in motor vehicle safety be served if disclosure has 
the result of discouraging manufacturers from being responsive to 
consumer concerns that may relate to motor vehicle safety or imposing 
greater costs on consumers who need to address such concerns.\14\ 
Therefore, we must consider whether the disclosure of each reporting 
element has the potential to impair our early detection of possible 
safety related defects.
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    \14\ Section 30166(m)(4)(B) provides that ``the regulations 
promulgated by the Secretary under paragraph (1) may not require a 
manufacturer of a motor vehicle or motor vehicle equipment to 
maintain or submit records respecting information not in the 
possession of the manufacturer.''
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    The Alliance argued that all early warning data are entitled to 
confidential treatment under Exemption 4, although both it and General 
Motors placed particular emphasis on the confidential nature of 
warranty information. Conversely, Public Citizen argued that all of the 
early warning data should be categorically considered public in order 
to achieve what it perceives to be the purpose of the TREAD Act--that 
is, to give the public complete access to the data required pursuant to 
the TREAD Act so that the public can make its own decisions relating to 
products. Public Citizen contended that some Members of Congress voted 
for the TREAD Act only because they believed the information required 
by it would be publicly available, citing unreported conversations 
between NHTSA's and Congressional staff. \15\ Public Citizen also 
argued that business interests failed to establish that early warning 
reporting submissions qualify for blanket confidential treatment under 
Exemption 4.
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    \15\ Public Citizen neither provided evidence to support this 
claim, nor identified those Members who might have voted 
differently. Further, the analysis in the memo was prepared in 
response to the October 20, 2000 letter and post-dated the 
Congressional votes. The TREAD Act passed in the House of 
Representatives on October 10, 2000 and in the Senate on October 11, 
2000. The letter to Secretary Slater was dated October 20, 2000, and 
the memo was dated October 27, 2000. The TREAD Act was signed into 
law on November 1, 2000. The memo was placed in the public docket in 
March 2001. There is no reference to the memo in the Congressional 
record. Nor are we aware of any public dissemination of the memo, or 
its analysis, prior to its placement in the docket approximately 
five months after the TREAD Act was passed.
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    We do not believe that Exemption 4 should be applied to the early 
warning reporting information on a wholesale basis, whether in favor or 
against disclosure. Instead, we will consider the application of 
Exemption 4 to each ``reporting element'' to be submitted under the 
early warning reporting regulation. In doing so, we consider whether 
the disclosure of each element of information is either likely to cause 
substantial competitive harm or likely to impair the agency's ability 
to obtain necessary information in the future (and thereby impair an 
important government function). An analysis of the case law applying 
National Parks and its progeny, and discussing the impairment prong in 
particular, is included as Appendix B.

C. Specific Types of Information To Be Provided Under the Early Warning 
Regulation

    Congress provided for the agency to collect from manufacturers 
reports of safety related recalls and campaigns conducted outside the 
United States, and reports relating to claims for deaths

[[Page 44221]]

and serious injuries.\16\ These mandates grew directly from information 
arising from the Ford/Firestone tire problem--reports of foreign safety 
related service actions and a plethora of lawsuits, neither of which 
had been reported to the agency. Congress also directed the agency to 
collect aggregate statistical information on property damage claims and 
authorized it to collect any other data that would assist the agency in 
its efforts to identify safety related defects in the field.
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    \16\ The provision requiring the reporting of safety related 
recalls and other safety campaigns conducted in foreign countries on 
vehicles that are identical or substantially similar to those 
offered for sale in the United States is section 30166(l). The 
disclosure provision in Section 30166(m)(4)(C) does not apply to 
this category of information. We mention it, however, because it is 
a critical element of the information Congress thought important for 
the agency to obtain. As in the case of information delineating 
safety recalls in the United States and other widely distributed 
technical information, we do not consider this category of 
information confidential and will not protect it from public 
disclosure.
---------------------------------------------------------------------------

    The purpose of the early warning reporting rule is to ensure that 
the agency has information from which it can detect potential safety 
problems and investigate them in a timely manner. We are concerned that 
our decisions on whether information will be disclosed could discourage 
manufacturers from collecting the information in the first instance, 
thereby reducing the information available to the agency to serve this 
critical function. We are also worried that the public interest in 
motor vehicle safety will be adversely affected if disclosure has the 
result of causing manufacturers to be less responsive to consumer 
safety concerns or to impose greater costs on consumers who need to 
address problems with their vehicles and equipment, thereby reducing 
the likelihood of repairing potential safety issues.
    The case law construing Exemption 4 makes clear that, while the 
functioning of our early warning defect detection program is an 
appropriate consideration when construing the confidentiality of the 
data, assertions that the data may be useful in a broader public 
context is not. (See Appendix B) We must consider whether each element 
required to be submitted pursuant to the early warning reporting 
regulation is entitled to confidential treatment either because its 
disclosure will likely cause substantial competitive harm or because 
its disclosure will likely impair our ability to obtain in the future 
information important to our early warning defect detection program.
1. Production Numbers
    The early warning reporting rule requires certain manufacturers to 
submit the number of vehicles, tires and child restraint systems, by 
make, model, and model (or production) year, produced during the model 
year of the reporting period and the prior nine model years (prior four 
years for child restraint systems and tires). The agency previously 
noted in the early warning reporting NPRM that it has generally granted 
confidential treatment to production data on child restraints and tires 
submitted to NHTSA, but that light vehicle production numbers are 
generally available to the public through the automotive press and have 
generally not been granted confidential status.
    Many business interests discussed their efforts to maintain the 
confidentiality of their production figures. Harley Davidson and MIC 
stated that production numbers by model have never been generally 
available in the motorcycle industry. Cooper Tire submitted an 
affidavit, further confirmed through RMA's comments, with regard to the 
competitive harm that disclosure of otherwise confidential production 
numbers would have in the tire industry. JPMA argued that disclosure of 
these data would provide new entrants and competitors in the child 
restraint industry with information about production capacities, sales 
and market performance not otherwise available in the absence of 
considerable investment in market research. Bluebird (buses, school 
buses and motor homes), Utilimaster (final stage walk-in vans and 
freight bodies for commercial use) and the AORC (occupant restraint 
systems and other components) also each stated that production numbers 
in their segment of the industry are confidential and likely to lead to 
substantial competitive harm if released.
    The comments substantiate that production numbers in many sectors 
of the automotive and equipment industries are competitively protected 
information, revealing otherwise unobtainable data relating to business 
practices and marketing strategies. Production numbers for 
manufacturers other than light vehicle manufacturers have been treated 
confidentially in the past and their disclosure is likely to cause 
substantial competitive harm to the businesses engaged in these 
industries. Accordingly, we are establishing a class determination 
applicable to such information.
2. Claims and Notices Involving Death, Personal Injury and Property 
Damage
    The early warning reporting rule requires all vehicle and equipment 
manufacturers, including those producing less than 500 vehicles 
annually, to report certain information about each incident involving a 
death that occurred in the United States that is identified in a claim 
against and received by the manufacturer. They must also report 
information about incidents involving a death in the United States that 
is identified in a notice received by the manufacturer alleging or 
proving that the death was caused by a possible defect in the 
manufacturer's product. Finally, they must report on each death 
occurring in a foreign country that is identified in a claim against 
and received by the manufacturer involving the manufacturer's product, 
if it is identical or substantially similar to a product that the 
manufacturer has offered for sale in the United States.
    Certain manufacturers are also required to report specified 
information about each incident involving an injury that occurred in 
the United States that is identified in a claim against and received by 
the manufacturer, or that is identified in a notice received by the 
manufacturer alleging or proving that the injury was caused by a 
possible defect in the manufacturer's product.
    In general, the information that must be reported includes, for 
each claim or notice: the make, model, model year and Vehicle 
Identification Number of the vehicle involved, the date of the 
incident, the number of deaths and/or injuries involved, the state or 
foreign country in which the incident occurred, and each system or 
component that is referred to in the claim or notice. In addition, the 
larger vehicle manufacturers and tire manufacturers must report the 
numbers of claims for property damage that occurred in the United 
States that involve certain specified components and systems, 
regardless of the amount of such claims.
    Industry commenters, such as TMA and MEMA/OESA, alleged that 
release of death and injury data will result in substantial competitive 
harm. Public Citizen claimed that such reports do not reveal detailed 
competitive information, but rather reveal only summary information 
about the incidents reported.
    The submissions relating to claims and notices of death, personal 
injury or property damage involve a collection of information, many of 
the pieces of which are publicly available. While the data are not 
generally available to the

[[Page 44222]]

public in this type of compilation, the disclosure of this collected 
information is not likely to reveal business strategies or other data 
that can be used competitively. These kinds of claims tend to be more 
historical than other types of information required by the early 
warning reporting regulation, with any apparent trends arising over 
longer periods of time. Given the nature of the data, we consider it 
unlikely that information about claims of death, personal injury or 
property damage will lend itself to cross-company comparison. We 
further note that the claims about a particular issue against a 
particular manufacturer, and in particular a developing set of claims, 
often receive media attention and are already in the public domain.
    Nor are we concerned that disclosure will detract from the future 
availability or reliability of this information. Manufacturers receive 
claims based on incidents occurring in the field, not as the result of 
proactive efforts to obtain data or customer feedback. They are 
required under 49 CFR part 576 to retain this information and do not 
have the option to refuse to amass it. Further, the required 
information relating to these claims does not involve subjective 
determinations or require companies to make any admissions relating to 
facts or legal conclusions in dispute. The reports simply reflect the 
existence of allegations made with regard to events that occurred in 
the field.
    For these reasons, we have decided not to create a class 
determination to cover the early warning reporting information relating 
to claims and notices of death or personal injury, or property damage 
claims. We have determined that release of that data generally will 
neither lead to substantial competitive harm nor impair our ability to 
obtain such information in the future.
3. Information Regarding Warranty Claims
    Manufacturers of more than 500 vehicles per year and tire 
manufacturers must report quarterly the number of warranty claims 
(adjustments for tire manufacturers), including extended warranty and 
good will, they paid that involved certain specified components and 
systems and that arose in the United States. Manufacturers of child 
restraint systems must combine these with the number of reportable 
consumer complaints. In addition, these manufacturers must provide 
similar historical information relating to warranty claims paid during 
each calendar quarter from July 1, 2000 to June 30, 2003. The 
information is provided on a make/model basis and categorized with 
reference to the twenty-two categories defined as part of 
implementation of the early warning regulation.
    Public Citizen argued that the information is summary in nature and 
typical of that generally provided as part of particularized defect 
investigations. Conversely, almost all the corporate commenters decried 
the potential disclosure of warranty data claims as the revelation of 
vital competitive information. Comments from the Alliance and Cooper 
Tire included affidavits providing evidence relating to the competitive 
harm that would be associated with the disclosure of warranty data 
within the light vehicle and tire industry, respectively.
    As suggested by the affidavit from AutoPacific, Inc., submitted by 
the Alliance, knowledge of the warranty experience of one of the 
specified components or systems on a make/model level can provide other 
manufacturers with information about the reliability of a component or 
system not otherwise available to them, except perhaps through 
extensive investment in market research. GM offered the following 
example:

    If supplier A offers a newly-designed system to OEMs, any OEM 
can tear it down and test it, but no practical test duplicates the 
experience that is gained from having the system in hundreds of 
thousands of vehicles. If OEM1 makes the investment to put the 
system in some of its vehicles, it would gain that field experience 
and could use it to make better decisions about the future use of 
the system. With early warning warranty data disclosure, other OEMs 
would have access to some of the same information and would be able 
to make their decisions with less extensive testing and analysis. 
Through the loss of its confidential information, OEM1 is forced to 
subsidize the other OEMs, reducing their costs at OEM1's expense.

    General Motors also makes the further point that warranty cost 
information is critical in the competitive automotive marketplace. 
While particular warranty information (such as that submitted as part 
of a particular defect investigation) does not reveal a company's cost 
structure, when aggregated by make, model and model year and applied 
across systems, a cost index is created. As GM notes, cost structure 
information has consistently been considered data likely to cause 
substantial competitive harm if released.
    Cooper Tire raised concerns that competitors could mischaracterize 
the data and use it to their competitive advantage. In an affidavit 
submitted to the docket, Cooper Tire's expert explained that the 
release of ``a few statistics, such as the warranty adjustment rate, 
without the complete background behind those statistics could lead to a 
very misleading picture of tire performance.'' The company indicated 
that the differences between warranties among otherwise identical tire 
lines sold to different types of users ``could lead to erroneous 
inferences about tire safety which, in turn could lead to erroneous and 
justified competitive harm.'' Many other commenters echoed this same 
concern, asserting that because warranty practices differ and because 
the raw data do not reflect any technical evaluation, the data can be 
used and abused competitively.
    In addition to the comments filed in the docket, additional public 
information illustrates the extent to which the industry as a whole 
relies on and uses sensitive warranty information. For example, GM uses 
its warranty data to help it pinpoint problem areas and to help it 
reduce its warranty costs. See, e.g., Gregory L. White, ``GM Takes Tips 
from CDC to Debug its Fleet of Cars,'' Wall St. J., April 8, 1999, at 
B1 (noting GM's adaptation of the epidemiological system used by the 
Centers for Disease Control and Prevention to warranty issues) and ``A 
Message to Dealers Regarding the Ford Recall of Firestone Wilderness AT 
Tires and General Motors Continued Use of Firestone Tires on its 
Vehicles'' (May 25, 2001)(stating that GM and Firestone tire engineers 
``are on site at GM's tire and wheel laboratory two days a week'' to 
``monitor tire warranty data''), published on GM's Web site at http://www.gmfleet.com.
    The comments and affidavits submitted support a conclusion that the 
warranty information required by the early warning reporting rule--that 
is, the number of claims associated with specific components and 
systems broken down by make, model and model year (with slightly 
different breakouts for tires and child restraint systems)--is likely 
to provide competing manufacturers with sufficient information about 
the field experience of those components and systems to provide 
commercial value to competitors who may be deciding whether to purchase 
similar components, the price at which to purchase those components and 
which suppliers to choose.
    While manufacturers are likely to explore the practices and 
policies of their competitors when reviewing any publicly available 
warranty claims information, the public is more likely simply to rely 
on generic cross-company comparisons. The warranty claims information 
may be used as part of

[[Page 44223]]

vehicle comparisons, even though the warranty terms and conditions and 
corporate warranty practices may differ. As a result, the potential for 
the warranty claims information to give rise to misleading comparisons 
and cause substantial competitive harm is also strong.
    For the reasons set forth above, we have determined that the early 
warning reporting of warranty information, both as regards the 
quarterly reports and the one-time seeding of the system, is entitled 
to confidential treatment because its disclosure is likely to cause 
substantial competitive harm.\17\
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    \17\ In its comments, the Alliance pointed out the competitive 
value of warranty information by identifying publications available 
through sale, including one called the Automotive Industry Status 
Report. Public Citizen, in turn, points out that the Alliance both 
claims that warranty claim data are competitively protected and that 
they are generally available for sale. Having reviewed the website 
on which that publication is sold, we believe that the report 
provides certain summary information relating to aftermarket 
equipment, but that it is not comparable to the compendium of more 
specific data required to be submitted under the early warning 
reporting regulation.
---------------------------------------------------------------------------

    The warranty data required by the early warning reporting 
regulation are also entitled to confidential treatment because their 
disclosure is likely to impair the agency's ability in the future to 
obtain and use reliable warranty information as part of its program to 
identify potential safety related defects. Warranty claims data--which 
begin to accumulate as soon as vehicles are sold and continue for the 
length of any given warranty policy--will be a significant indicant of 
potential defects. The quarterly warranty claims reports, combined 
initially with the historical seeding material, will help the agency to 
identify trends involving particular equipment and systems or 
components in a particular make, model and model year of a given 
product.
    The more warranty information available to the agency, the more 
useful the warranty data will be in assisting the agency in identifying 
areas for further investigation. Warranty information is particularly 
important since it is generated early in the life of the vehicle, thus 
assisting in the prompt identification of potential defects. The record 
is replete with comments explaining why disclosure is likely to impair 
corporate willingness to provide expansive warranty coverage or to 
apply warranty policy in a more generous and less restrictive way. 
Longer warranties, and more liberal applications of warranty policy, 
will increase the number of claims paid by manufacturers and, 
therefore, the amount of data available to the agency. Moreover, 
changes in warranty policy caused by a reaction to disclosure of 
warranty data would likely reduce the ability of the agency to compare 
current data with historical data and to explore apparent changes in 
the data.
    We are aware that, for marketing purposes, manufacturers may choose 
to make available to their customers warranties of longer duration and 
broader mileage (e.g., a company may offer a 5 year/50,000 mile 
warranty or a 3 year/36,000 mile warranty), making more warranty claims 
information available to the agency. DaimlerChrysler, for example, 
lengthened its engine warranty period to gain in the competitive 
market. See, e.g., Jeff Green, ``DC Emphasizes Warranty,'' Bloomberg, 
Sept. 6, 2002, available at http://www.theautochannel.com. Not only do 
warranties differ by manufacturer, they also differ based on the 
targeted market (e.g. luxury v. non-luxury) and on system components. 
See, 2003 Manufacturers' Warranties, available at http://www.enterprise.com.
    Similarly, companies can choose strictly to adhere to their 
warranty limitations or, alternatively, they may adopt policies of 
avoiding customer dissatisfaction by covering repairs arguably no 
longer covered under warranty, either because they may not fall within 
the terms of the warranty or because they fall outside their time or 
mileage parameters. As pointed out in the comments, the disclosure of 
early warning warranty data may deter ``good will,'' customer 
satisfaction, and early dispute resolution efforts since such efforts 
will increase the number of warranty claims.\18\ If these data were 
made public, it could lead consumers to assume that the product was of 
poorer quality than a similar competing product made by a manufacturer 
with a stricter approach to allowing warranty or ``good will'' claims.
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    \18\ We recognize that this is not a matter of corporate 
generosity. Some companies may choose as a matter of marketing or 
customer relations to apply their warranty policies liberally, thus 
generating additional numbers of warranty claims. Other companies 
may make decisions aimed primarily at avoiding potential warranty 
liability in the context of real or potential disputes. In either 
event, disclosing early warning warranty claims data may discourage 
customer satisfaction and early dispute resolution efforts.
---------------------------------------------------------------------------

    The disclosure of early warning warranty information could lead to 
contraction of current warranty policies, and discourage their 
expansion, resulting in substantially less information available to 
NHTSA to screen for signs of early field problems. Thus, the disclosure 
of the comprehensive compendium of warranty data will likely impair the 
agency's defect detection program. Because disclosure of the early 
warning reporting warranty information is likely to cause substantial 
competitive harm and will likely impair the ability of the agency to 
obtain comprehensive warranty information in the future, we have 
decided to create a class determination covering this information.
4. Field Reports
    Larger vehicle manufacturers and manufacturers of child restraint 
systems must report on a quarterly basis the total number of field 
reports they receive from the manufacturer's employees, 
representatives, and dealers, and from fleets, that are related to 
problems with certain specified components and systems, with respect to 
vehicles and restraints offered for sale, sold or leased in the United 
States. In addition, these manufacturers must provide copies of certain 
field reports received from their employees, representatives, and 
fleets, but are not required to provide copies of reports received from 
dealers. Like information relating to warranty claims, the agency is 
requiring the submission of historical field report information from 
these manufacturers to provide it with a seeding of data it can use 
immediately to detect any trends within the manufacturers' product 
lines.
    The nature, quality and quantity of field reports vary 
significantly from company to company. Some companies actively pursue 
field feedback, whether directly from customers or through dealers and 
manufacturer representatives. Our experience in conducting defect 
investigations, in which we routinely receive field reports about the 
specific problem under investigation, shows that companies obtain 
information from the field in differing ways and with differing degrees 
of specificity and technical evaluation. Some manufacturers collect 
field reports that are little more than customer complaints, collected 
through dealers and field personnel. For others, a field report is more 
akin to technical investigation into a problem detected through 
warranty, consumer complaint or other data available to the company.
    Field reports reflect the in-use experience of a manufacturer's 
product, collected by the company at its expense and with the intent of 
identifying problems associated with its products in the field. Such 
information would be of substantial value to competitors, who could--if 
this information were to be made public--avert similar issues or 
improve their products without the need to invest in market research, 
engineering development or actual

[[Page 44224]]

market experience. Competitors (and others) may also use the field 
report information competitively, just as with warranty data, to 
suggest comparisons that may merely result from differing policies and 
practices.
    Public Citizen maintains that, because field reports are often 
disclosed as part of individual defect investigations, field reports 
and/or field report information should also be disclosed in a wholesale 
fashion when submitted as part of early warning data. On the other 
hand, manufacturers such as Utilimaster and Enterprise Fleet Services 
described the harmful competitive effects of disclosing the 
confidential field reports relating to the performance of their 
products. As stated by Utilimaster, ``public and private parcel 
delivery operations do not under any circumstances want their 
competitors (or competitors of their respective customers) to be aware 
of and exploit delivery vehicle fleet performance, maintenance or 
durability issues which might impact on the operational capability of 
the delivery company in a particular region/trading area, or on the 
operations of particular customer accounts.''
    The same is true for other manufacturers, who collect equally 
proprietary information about their products that allows them to 
conform future design and production to field experience. Because they 
would have access to comprehensive data covering all products, 
competitors would obtain data revealing which product features, 
components and systems have met with consumer acceptance (and which 
have not), as well as what problems may be associated with particular 
components and systems. The information may also reveal which aspects 
of a vehicle's performance (whether potentially safety related or not) 
a manufacturer deems important in its commercial efforts. As a result, 
and as commenters have illustrated, the disclosure both of the hard 
copies of field reports and information about the number of reports 
associated with the components and systems specified is likely to cause 
substantial competitive harm. This is true both for the quarterly 
reports and with regard to the historical seeding field report 
information.
    The field report data are also entitled to protection because their 
disclosure is likely to lead to fewer and less reliable field reports 
available to the agency in its efforts to identify potential safety 
defects promptly. The agency has required the submission of hard copies 
of certain field reports, as well as the numbers of all field reports, 
because the agency believes that this information will be especially 
helpful in identifying the existence of possible safety-related 
problems. We recognize that we cannot compel the preparation of field 
reports, but rather only require that manufacturers submit to the 
agency information about, and copies of, those field reports that 
companies choose to prepare and/or obtain. See 49 U.S.C. 
30166(m)(4)(B). Therefore, we do not want to do anything to discourage 
manufacturers from preparing accurate and comprehensive field reports 
about problems with their products. Nor do we want to detract from the 
candor and specificity with which field reports are written.
    As made clear throughout the comments, disclosure of field reports 
is likely to discourage candor on the part of field personnel and could 
adversely affect corporate policies and practices with respect to their 
preparation. The available evidence shows that the disclosure of the 
field reports and the field report data would likely inhibit a 
significant feature of the agency's program to encourage the collection 
and reporting of information and to identify the potential existence of 
safety defects as soon as they begin to manifest themselves in the 
field. It would also reduce the amount of valuable information 
available to the agency during our defect investigations.
    Because disclosure of the field report information required by the 
early warning reporting rule is likely to cause substantial competitive 
harm and will likely impair the ability of the agency to obtain 
comprehensive field report information in the future, we have decided 
to create a class determination applicable to these data.
5. Consumer Complaints
    The early warning reporting regulation also requires larger vehicle 
manufacturers and child restraint manufacturers to submit complaints 
received each quarter relating to specified components and systems.\19\ 
Consumer complaints are defined by the regulation as:
---------------------------------------------------------------------------

    \19\ Child restraint system manufacturers will report consumer 
complaints and warranty data together. As to those manufacturers, 
the data are considered warranty data for purposes of this rule.

    [A] communication of any kind made by a consumer (or other 
person) to or with a manufacturer addressed to the company, an 
officer thereof or an entity thereof that handles consumer matters, 
a manufacturer website that receives consumer complaints, a 
manufacturer electronic mail system that receives such information 
at the corporate level, or that are otherwise received by a unit 
within the manufacturer that receives consumer inquiries or 
complaints, including telephonic complaints, expressing 
dissatisfaction with a product, or relating the unsatisfactory 
performance of a product, or any actual or potential defect in a 
product, or any event that allegedly was caused by any actual or 
potential defect in a product, but not including a claim of any kind 
or a notice involving a fatality or injury.\20\
---------------------------------------------------------------------------

    \20\ 49 CFR 579.4(c).

    The definition recognizes that companies may receive customer input 
in a variety of ways and may establish differing practices for the 
receipt of customer complaints. Companies may enhance their ability to 
receive consumer complaints, for example, by increasing the staff at 
their toll free telephone numbers or by creating web-based systems 
through which consumers can make complaints instantly by email. The 
more consumer inputs a company receives, the more reliable the 
information available to it, and the agency, to assess its products' 
performance in the hands of consumers.
    We are concerned that release of the consumer complaint information 
will discourage companies from actively pursuing or will restrict their 
ability to receive consumer feedback.\21\ Consumer complaint 
information is a critical aspect of the data the agency intends to use 
to identify potential vehicle problems. Like warranty data and field 
reports, the aggregate information is likely to be a useful pointer to 
areas that, after appropriate inquiry, may lead to defect 
investigations and ultimately to the remedy of safety defects.
---------------------------------------------------------------------------

    \21\ Harley-Davidson noted its proactive efforts to pursue 
consumer feedback that might not otherwise be brought to the 
company's attention. Efforts such as those of Harley-Davidson show 
that consumer complaint data may be developed by manufacturers at 
their own expense and for their own proprietary purposes. The 
record, however, does not indicate that efforts like those described 
by Harley-Davidson are prevalent among all manufacturers.
---------------------------------------------------------------------------

    Our experience in defect investigations has been that companies 
generally receive considerably more consumer inputs than does the 
agency on any given vehicle problem. Indeed, the importance of this 
material increases as warranties expire and the availability of 
warranty claims information correspondingly diminishes. The early 
warning reporting regulation will make available to the agency 
information about the volume of complaints received by manufacturers as 
to each of the specified components or systems, thus considerably 
enhancing the agency's ability to review field experience as it arises. 
The disclosure of this information is likely to discourage 
manufacturers' proactive efforts to obtain the data or to expend sums 
to establish systems to receive more information or to use it more 
effectively.

[[Page 44225]]

Consequently, such disclosure could impair the effective and efficient 
implementation of the agency's early warning process.
    Manufacturers argued that release of consumer complaint information 
is likely to cause substantial competitive harm because it will be used 
by competing manufacturers and potentially others in the public to make 
cross-company comparisons. If misinterpreted, the information may 
result in unwarranted product disparagement, leading to substantial 
competitive harm. As many of the comments pointed out, consumer 
complaints reveal the raw, unverified perceptions of vehicle owners. 
They neither reflect a repair that was conducted (which is revealed by 
warranty claims) nor an evaluation of an event by a manufacturer's 
employee or dealer (which is often the source of field reports). 
Furthermore, the consumer complaint information is not subject to any 
controls or analytic rigor that we believe are imbedded into the 
development of public acceptance surveys.
    Competitors with access to complaint data would obtain, to a 
certain extent, information revealing which product features, 
components and systems have met with consumer acceptance (and which 
have not) and what perceived problems may be associated with particular 
components and systems. The information may also reveal which aspects 
of a vehicle's performance (whether potentially safety related or not) 
a manufacturer deems important in its commercial efforts. Thus, the 
public disclosure of complaint data is likely to cause substantial 
competitive harm.
    Because we have determined that the disclosure of the consumer 
complaint data required by the early warning reporting rule will likely 
impair the ability of the agency to obtain comprehensive consumer 
complaint information in the future and is likely to cause substantial 
competitive harm, we have decided to create a class determination 
covering these data.

VII. Appendix A--FOIA Exemption 3 and the TREAD Act Disclosure 
Provision

    Exemption 3 of the Freedom of Information Act prevents the 
disclosure of information provided to the government when Congress 
evidences a clear intent through a statutory scheme that prohibits 
disclosure. The RMA argued that Congress referred specifically to all 
of the information submitted under the regulations issued to implement 
Section 30166(m)(1), and therefore all such information must be 
withheld from disclosure under Exemption 3.
    Exemption 3 is designed to incorporate into the FOIA exemptions 
other statutes that, on their face, clearly exempt information from 
FOIA's disclosure requirements. See, e.g., Reporters Comm'n for Freedom 
of the Press v. Department of Justice, 816 F.2d 730, 735 (D.C. Cir.), 
modified on other grounds, 831 F.2d 1124 (D.C. Cir. 1987), rev'd on 
other grounds, 489 U.S. 749 (1989) (providing that ``a statute that is 
claimed to qualify as an Exemption 3 withholding statute must, on its 
face, exempt matters from disclosure''), and Irons & Sears v. Dann, 606 
F.2d 1215, 1220 (D.C. Cir. 1979) (stating that ``[o]nly explicit 
nondisclosure statutes that evidence a congressional determination that 
certain materials ought to be kept in confidence will be sufficient to 
qualify under the exemption.''). An Exemption 3 statute must either 
make clear that the agency has no discretion on whether to disclose the 
information or must clearly circumscribe the determination by setting 
forth particular criteria or specifically identifying the information 
to be withheld from disclosure. The RMA claims that the TREAD Act's 
disclosure provision does the latter.
    We disagree. Had Section 30166(m)(4)(C) stated only that ``none of 
the information collected pursuant to the final rule promulgated under 
paragraph (1) shall be disclosed,'' then the provision would have 
provided unambiguous direction to the agency and clearly identified the 
information to be withheld. But that is not what the disclosure 
provision states. Instead, the provision makes reference to Section 
30167(b) and states that ``[n]one of the information collected pursuant 
to the final rule promulgated under paragraph (1) shall be disclosed 
pursuant to section 30167(b) unless the Secretary determines the 
disclosure of such information will assist in carrying out sections 
30117(b) and 30118 through 30121.'' By making reference to preexisting 
Section 30167(b), the provision suggests that Congress intended the 
Secretary to determine initially which of the early warning reporting 
information is entitled to confidential treatment as confidential 
business information, and, if so and only then, would consider whether 
disclosure was nonetheless necessary for the agency to fulfill its 
responsibilities.
    The colloquy between Congressmen Markey and Tauzin during the TREAD 
Act hearings suggests that Congress intended the agency to consider the 
confidentiality of the early warning reporting information by applying 
the same legal standards otherwise applicable to information the agency 
requires to be submitted:

    Mr. MARKEY: First, under the section entitled ``early warning 
requirements,'' we provide for the reporting of new information to 
NHTSA generally at an earlier stage than the stage when an actual 
recall takes place based on the finding of a defect. To protect the 
confidentiality of this new early stage information, the bill 
provides in Section 2(b) in the subsection titled ``disclosure'' 
that such information shall be treated as confidential unless the 
Secretary makes a finding that its disclosure would assist in 
ensuring public safety, but with respect to information that NHTSA 
currently requires be disclosed to the public it is my understanding 
of the committee's intention that we not provide manufacturers with 
the ability to hide from public disclosure information which under 
current law must be disclosed. Would the gentleman from Louisiana 
(Mr. Tauzin) agree that this special disclosure provision for new 
early stage information is not intended to protect from disclosure 
[information] that is currently disclosed under existing law such as 
information about actual defects or recalls?
* * * * *
    Mr. TAUZIN: Mr. Speaker, the gentleman is correct.\22\
---------------------------------------------------------------------------

    \22\ 146 Cong. Rec. H9629 (daily ed. Oct. 10, 2000) (emphasis 
added).

    The RMA and other commenters, however, pointed to other statutory 
schemes in which Congress' intent to ensure the confidentiality of 
submitted information was made clear. The AIAM, citing the practices of 
several State and Federal agencies, noted that these ``regulatory 
agencies receive product quality-related information from regulated 
parties for compliance evaluation purposes'' and have ``consistently 
follow[ed] policies of withholding such information from public 
disclosure.'' AIAM admitted, however, that the statutory provisions for 
these agencies ``differ from those affecting NHTSA'' and ``do not * * * 
provide controlling legal authority for NHTSA's handling of the early 
warning report information.''
    For example, the Supreme Court has held that the statute governing 
the activities of the Consumer Product Safety Commission (CPSC) 
contains a provision constituting an Exemption 3 statute. CPSC v. GTE 
Sylvania, 447 U.S. 102 (1980). The Court noted that Section 6(b) of the 
Consumer Product Safety Act, 15 U.S.C. 2055, sets forth specific 
procedures that CPSC must follow prior to the release of information to 
the public. Id. at 105. Under that provision, the CPSC must ensure the 
accuracy of the information it plans to release, notify the 
manufacturer and provide it

[[Page 44226]]

with a summary of the information that the CPSC intends to release if 
the summary would enable one to readily ascertain the identity of that 
manufacturer. Id. The manufacturer is also afforded an opportunity to 
comment on the CPSC's summary. Id.
    Similarly, some of the statutory provisions regarding the 
disclosure of information the Federal Aviation Administration (FAA) 
receives involve very specific instances or types of information. For 
example, in Public Citizen v. FAA, 988 F.2d 186 (D.C. Cir. 1993), the 
court determined that information concerning air transportation 
security could be withheld under the agency's Air Security Improvement 
Act of 1990. Under the provisions of that Act, the court determined 
that ``Congress's intent was to broaden the FAA's power to withhold 
sensitive information'' held by the agency. Id. at 195 (emphasis in 
original).
    Indeed, the extent of protection afforded to submitters of 
information under federal programs varies.\23\ For example, while the 
Food and Drug Administration (FDA) must adhere to a statutory scheme 
that governs the public disclosure of information (21 U.S.C. 360j), the 
D.C. Circuit noted that a lower court's reading of the FDA statute as 
an Exemption 3 provision was ``contradicted by the language of Section 
360j(h), its legislative history, and its interrelation with other 
provisions of the Medical Device Amendments.'' Public Citizen Health 
Research Group v. FDA, 704 F.2d 1280, 1284 (D.C. Cir. 1983). Under the 
FDA's statutory provisions, the agency must release a summary of 
information relating to the safety of medical devices. The court noted 
that the statutory provision's ``legislative history repudiates the 
proposition that Section 360j(h) specifically prohibits the disclosure 
of health and safety data that do not qualify for protection under 
Exemption 4 to the FOIA or [Trade Secrets Act].'' Id. at 1285.
---------------------------------------------------------------------------

    \23\ We note that the U.S. District Court for the District of 
Columbia has rejected the notion that the Vehicle Safety Act 
generally provides Exemption 3 protection for information the agency 
requires be submitted. Ditlow v. Volpe, 362 F. Supp. 1321, 1324 
(D.D.C. 1973) (specifically rejecting application of Exemption 3 to 
the Motor Vehicle Safety Act), rev'd on other grounds, Ditlow v. 
Brinegar, 494 F.2d 1073 (D.C. Cir. 1974).
---------------------------------------------------------------------------

    The Tenth Circuit Court of Appeals considered whether another 
provision of the FDA statute, 21 U.S.C. 331(j), qualifies as an 
Exemption 3 statute. See Anderson v. HHS, 907 F.2d 936, 950 (D.C. Cir. 
1990). Section 331(j) provides that any information acquired under the 
FDA's various information-collection statutes must not be disclosed if 
the information ``concern[s] any method or process which as a trade 
secret is entitled to protection.'' Id. While the court indicated that 
Section 331(j) qualified as an Exemption 3 statute, it held that the 
scope of the statute is not broader than Exemption 4 and ``cannot 
provide any independent justification for nondisclosure.'' Id.
    The colloquy between Congressmen Markey and Tauzin suggests no 
intent to create a statutory scheme like that governing the disclosure 
of information from the CPSC or other provisions prohibiting 
disclosure. Rather, the limited legislative history of Section 
30166(m)(4)(C), and the reference to Section 30167(b) in that 
provision, shows that Congress intended the agency to determine the 
confidentiality of the early warning reporting information in 
accordance with its long standing practice of considering whether the 
data constitutes confidential business information. Congress is 
presumed to be aware of agency practice when promulgating statutes and, 
therefore, is presumed to have been aware of NHTSA's practice of 
analyzing confidentiality claims pursuant to Exemption 4 of the FOIA. 
See e.g., U.S. v. Wilson, 290 F.3d 347, 356 (D.C. Cir. 2002) 
(``Congress is presumed to preserve, not abrogate, the background 
understandings against which it legislates'').\24\
---------------------------------------------------------------------------

    \24\ The Alliance suggests that Exemption 7 may also be 
applicable. Exemption 7 protects records from disclosure relating to 
law enforcement purposes when disclosure could reasonably be 
expected to interfere with the enforcement proceedings. NHTSA has 
historically not invoked Exemption 7 to withhold information 
received from manufacturers during the course of defect 
investigations. See CNA v. Donovan, 830 F.2d 1132, 1139 (D.C. Cir. 
1987).
---------------------------------------------------------------------------

VIII. Appendix B--Confidential Business Information Case Law Analysis

    In assessing whether Exemption 4 applies to required submissions 
the Government must examine whether the disclosure is likely to impair 
the Government's ability to obtain necessary information in the future 
or is likely to cause substantial competitive harm to the submitter. 
Substantial competitive harm can arise when the information has 
significant commercial value to competitors, such as: from revealing 
fundamental data (such as price, cost or other proprietary business 
structure); from revealing information that would otherwise require 
investment, through reverse engineering or other means, to obtain; or 
from revealing business strategies by making information that otherwise 
would be unobtainable available to competitors.
    The National Parks test also recognizes that the Government 
requires the submission of certain information because it is needed to 
serve an important government function. In describing this aspect of 
Exemption 4, the court in National Parks noted that:

    The ``financial information'' exemption recognizes the need of 
government policymakers to have access to commercial and financial 
data. Unless persons having necessary information can be assured 
that it will remain confidential, they may decline to cooperate with 
officials and the ability of the Government to make intelligent, 
well-informed decisions will be impaired. Id. at 767.

    The DC Circuit nonetheless decided that the information at issue--
financial information of concessionaires in national parks--did not 
qualify as confidential under the impairment prong because it was 
required by government regulation and therefore the government's 
ability to obtain it in the future would not be impaired by its 
disclosure. The court remanded the case to the district court for a 
determination of whether the data would cause competitive harm if 
released.
    That the National Parks test was intended in part to ensure the 
proper functioning of government business was further made clear in 
Washington Post Co. v. HHS, 865 F.2d 320 (D.C. Cir. 1989). In remanding 
the case for the development of a more complete record, the court 
emphasized that it had no intention of undermining the impairment prong 
of National Parks. Instead, the Washington Post court prognosticated 
that the impairment prong would tend to focus on protecting the 
reliability of data, rather than the availability of data. Id. at 328. 
Thus, the court reiterated the fundamental concept that the receipt of 
valid information on which the government can rely in performing its 
programmatic functions is a critical component of considering Exemption 
4 claims.
    The DC Circuit once again considered its policy of encouraging the 
submission of information to the government in Critical Mass Energy 
Project v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C. Cir. 1992) 
(en banc). In Critical Mass, the court distinguished between 
information the government compels and that which is voluntarily 
submitted to help further governmental functions, such as rulemakings. 
The court held that information voluntarily submitted to the government 
should be treated as confidential under Exemption 4 as long as the 
submitter can show that it is not customarily released to the public. 
Id. at

[[Page 44227]]

880. In contrast, information compelled by the government would 
continue to be considered under the two prongs enunciated in National 
Parks.
    The Exemption 4 jurisprudence in the aftermath of Critical Mass 
makes clear that the determination of whether information should be 
protected under Exemption 4 may include additional considerations, but 
only to the extent that those considerations relate to the government 
functions for which the information is sought. Underpinning the 
jurisprudence surrounding Exemption 4 has been the acknowledgement that 
``it is intended to protect the interests of both the Government and 
the individual,'' including advancing the efficiency of government 
operations. National Parks, 498 F.2d at 767. The concern that 
disclosure policy should not impair government programs remains strong 
whether the information is compelled (and its disclosure governed by 
the two prongs of National Parks) or voluntarily submitted (and its 
disclosure governed by the Critical Mass test). See CAS v. NHTSA, 244 
F.3d at 148 (D.C. Cir. 2001) (explaining that ``[w]hen the Government 
obtains the information as part of a mandatory submission, the 
Government's access to the information normally is not seriously 
threatened by disclosure; the private interest is the principal factor 
tending against disclosure, and the harm to the private interest must 
be significant to prevent public access to information'') (emphasis 
added).
    For example, the government may withhold information that, if 
disclosed, would diminish the effectiveness of a licensing program even 
when the basis for disclosure would arguably advance an underlying 
public interest. See Public Citizen Health Research Group v. National 
Institutes of Health (PCHRG v. NIH), 209 F. Supp. 2d 37, 46 (D.D.C. 
2002) (finding certain royalty information confidential under Exemption 
4 because ``disclosure of the royalty information would impair the 
efficient and effective performance of [the government's] licensing 
program'').
    It is not sufficient, therefore, to argue that some public need 
unrelated to the government's function warrants the disclosure of 
information under Exemption 4. Public Citizen Health Research Group v. 
Food & Drug Administration (PCHRG v. FDA), 185 F.3d 898 (D.C. Cir. 
1999) (rejecting the argument that a company's clinical studies, which 
were required to be submitted to the FDA, should be disclosed because 
disclosure would allow the public to learn from the company's 
experience). As the D.C. Circuit stated in PCHRG v. FDA:

    It is not open to Public Citizen, however, to bolster the case 
for disclosure by claiming an additional public benefit in that, if 
the information is disclosed, then other drug companies will not 
conduct risky clinical trials of the drugs that Schering has 
abandoned. That is not related to ``what the [ ] government is up 
to'' and the Court has clearly stated ``whether disclosure of a * * 
* document * * * is warranted must turn on the nature of the 
requested document and its relationship to the basic purpose of the 
Freedom of Information Act to open agency action to the light of 
public scrutiny * * * rather than on the particular purpose for 
which the document is being requested. In other words, the public 
interest side of the balance is not a function of the identity of 
the requester * * * or of any potential negative consequences 
disclosure may have for the public * * * nor likewise of any 
collateral benefits of disclosure. Id. at 904 (citations omitted).

    In most of the cases discussing the National Parks test, the courts 
were considering the kind of commercial information that would be 
created independent of any government mandate, and thus the courts have 
generally considered the inquiry under the impairment prong to focus on 
the reliability, rather than the availability, of the data. Yet, the 
courts have carefully maintained the vitality of the impairment prong 
as applied to compelled submissions and, in doing so, have maintained 
an analytic framework within which to ensure that the disclosure of 
information does not unduly impair the government's functions by 
reducing both qualitatively and quantitatively the data available to 
the government. Thus, as in CAS v. NHTSA, the Court was careful to 
state that ``when the Government obtains the information as part of a 
mandatory submission, the Government's access to information normally 
is not seriously threatened by disclosure,'' and in PCHRG v. NIH, the 
impairment of the government's program served as an independent basis 
for the court's refusal to require disclosure.

IX. Regulatory Analyses and Notices

A. Executive Order 12866 and DOT Regulatory Policies and Procedures

    NHTSA has considered the impact of this rulemaking action under 
Executive Order 12866 and the Department of Transportation's regulatory 
policies and procedures. This rulemaking document is not economically 
significant. It was, however, reviewed by the Office of Management and 
Budget under E.O. 12866, ``Regulatory Planning and Review.'' The 
rulemaking action has been determined to be significant under the 
Department's regulatory policies and procedures, given the degree of 
public interest in the treatment of the early warning reporting 
information.
    This final rule simplifies and clarifies the agency's regulation on 
confidential information and updates specific sections of the 
regulation to reflect legal developments. In addition, this final rule 
creates a series of class determinations applicable to those portions 
of the data to be submitted pursuant to the early warning reporting 
regulation that are determined to be entitled to confidential treatment 
under the procedures set forth in this final rule.
    The procedural aspects of this final rule impose no new, 
significant burdens on submitters of information. The treatment of the 
early warning reporting information addresses the manner in which the 
agency will handle the data, and also imposes no new, significant 
burdens on submitters of information. Because no additional burdens are 
imposed, there are no costs requiring the development of a full cost/
benefit evaluation.

B. Regulatory Flexibility Act

    We have considered the effects of this rulemaking action under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) This rule does not 
have a significant economic impact on a substantial number of small 
entities. Therefore, a regulatory flexibility analysis is not required 
for this action. This final rule imposes no additional obligations on 
the submitters of information to NHTSA beyond those otherwise required 
by the Vehicle Safety Act and the early warning reporting regulation. 
This final rule addresses the agency's treatment of early warning 
reporting data and simplifies procedures for all submitters, including 
small entities, when submitting information to the agency. The rule 
protects from disclosure early warning reporting information found 
likely to cause competitive harm. It permits the disclosure of that 
early warning information determined neither to cause competitive harm 
if released nor to impair the ability of the government to obtain the 
information in the future.

C. National Environmental Policy Act

    NHTSA has analyzed this rule for the purposes of the National 
Environmental Policy Act and determined that it does not have any 
significant impact on the quality of the human environment.

D. Executive Order 13132 (Federalism)

    The agency has analyzed this rulemaking action in accordance with 
the principles and criteria set forth in Executive Order 13132 and has

[[Page 44228]]

determined that it does not have sufficient federalism implications to 
warrant consultation with State and local officials or the preparation 
of a federalism summary impact statement. The rule has no substantial 
effects on the States, or on the current Federalism-State relationship, 
or on the current distribution of power and responsibilities among the 
various local officials.

E. Unfunded Mandate Reform Act

    The Unfunded Mandate Reform Act of 1995 requires agencies to 
prepare a written assessment of the costs, benefits and other effects 
of proposed or final rules that include a Federal mandate likely to 
result in the expenditure by State, local or tribal governments, in the 
aggregate, or by the private sector, of more than $100 million annually 
(adjusted for inflation with base year of 1995). This rule will not 
result in the expenditure by State, local or tribal governments, in the 
aggregate, or by the private sector, of more than $100 million 
annually.

F. Executive Order 12778 (Civil Justice Reform)

    This rule will not have any preemptive or retroactive effect. This 
action meets applicable standards in sections 3(a) and 3(b)(2) of 
Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden. The rule does not require 
submission of a petition for reconsideration or other administrative 
proceedings before parties may file suit in court.

G. Paperwork Reduction Act

    The existing requirements of part 512 are considered to be 
information collection requirements as that term is defined by the 
Office of Budget and Management (OMB) in 5 CFR part 1320. Accordingly, 
the existing part 512 regulation was submitted to and approved by OMB 
pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). These 
requirements were approved in February, 2002 through February 28, 2005. 
This final rule does not revise the existing currently approved 
information collection under Part 512.
    Commenters to the Notice of Proposed Rulemaking objected to the 
submission of a ``third version'' of information for review, a request 
for submitters to redact personal identifiers and certain other 
features of the form with which the agency had proposed the submission 
of information claimed to be confidential. This agency has considered 
and addressed these concerns, including the number of copies to be 
submitted. These proposals, whether intended or otherwise interpreted, 
were not adopted.

H. Executive Order 13045

    Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any 
rule that: (1) Is determined to be ``economically significant'' as 
defined under E.O. 12866, and (2) concerns an environmental, health or 
safety risk that NHTSA has reason to believe may have a 
disproportionate effect on children. This regulatory action does not 
meet either of these criteria.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act (NTTAA) requires NHTSA to evaluate and use existing voluntary 
consensus standards \25\ in its regulatory activities unless doing so 
would be inconsistent with applicable law (e.g., the statutory 
provisions regarding NHTSA's vehicle safety authority) or otherwise 
impractical. This requirement is not relevant to this rulemaking 
action.
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    \25\ Voluntary consensus standards are technical standards 
developed or adopted by voluntary consensus standards bodies. 
Technical standards are defined by the NTTAA as ``performance-based 
or design-specific technical specifications and related management 
systems practices.'' They pertain to ``products and processes, such 
as size strength, or technical performance of a product, process or 
material.''
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J. Data Quality Act

    Section 515 of the Treasury and General Government Appropriations 
Act for Fiscal Year 2001 (the ``Data Quality Act'') requires agencies 
to take certain affirmative steps to maximize the utility, objectivity, 
and integrity of data agencies disseminate to the public. This final 
rule establishes a series of class determinations applicable to those 
portions of the early warning reporting information determined likely, 
if released, to cause substantial competitive harm and to impair the 
government's ability to obtain data necessary to the operation of the 
agency's defect detection and remediation program. Such submissions are 
entitled to confidential treatment under Exemption 4 of the Freedom of 
Information Act.
    The early warning reporting information determined not to be 
entitled to confidential treatment--reports of claims and notices of 
deaths, personal injury and property damage and some production 
numbers--involves factual matter and does not constitute data relied on 
or developed as part of a determination by the agency. The remainder of 
the early warning information is similarly factual, but will not be 
disclosed to the public. This rule does not implicate Data Quality Act 
concerns.

K. Regulation Identifier Number (RIN)

    The Department of Transportation assigns a regulation identifier 
number (RIN) to each regulatory action listed in the Unified Agenda of 
Federal Regulations. The Regulatory Information Service Center 
publishes the Unified Agenda in April and October of each year. You may 
use the RIN contained in the heading at the beginning of this document 
to find this action in the Unified Agenda.

List of Subjects in 49 CFR Part 512

    Administrative procedure and practice, Confidential Business 
Information, Freedom of Information, Motor Vehicle Safety, Reporting 
and Record Keeping Requirements.

0
In consideration of the foregoing, the National Highway Traffic Safety 
Administration amends title 49, Code of Federal Regulations, by 
revising Part 512 as set forth below.
Subpart A--General Provisions
Sec.
512.1 Purpose and scope.
512.2 Applicability.
512.3 Definitions.
Subpart B--Submission Requirements
512.4 When requesting confidentiality, what should I submit?
512.5 How many copies should I submit?
512.6 How should I prepare documents when submitting a claim for 
confidentiality?
512.7 Where should I send the information for which I am requesting 
confidentiality?
512.8 What supporting information should I submit with my request?
Subpart C--Additional Requirements
512.9 What are the requirements if the information comes from a 
third party?
512.10 Duty to amend.
512.11 What if I need an extension of time?
512.12 What if I am submitting multiple items of information?
512.13 What are the consequences for noncompliance with this part?
Subpart D--Agency Determination
512.14 Who makes the confidentiality determination?
512.15 How will confidentiality determinations be made?
512.16 Class determinations.
512.17 How long should it take to determine whether information is 
entitled to confidential treatment?
512.18 How will I be notified of the confidentiality determination?
512.19 What can I do if I disagree with the determination?

[[Page 44229]]

Subpart E--Agency Treatment of Information Claimed To Be Confidential
512.20 How does the agency treat information submitted pursuant to 
this part before a confidentiality determination is made?
512.21 How is information submitted pursuant to this part treated 
once a confidentiality determination is made?
512.22 Under what circumstances may NHTSA modify a grant of 
confidentiality?
512.23 Under what circumstances may NHTSA publicly release 
confidential information?
Appendix A--Certificate in Support of Request for Confidentiality
Appendix B--General Class Determinations
Appendix C--Early Warning Reporting Class Determinations
Appendix D--OMB Clearance

    Authority: 49 U.S.C. 322; 5 U.S.C. 552; 49 U.S.C. 30166; 49 
U.S.C. 30167; 49 U.S.C. 32307; 49 U.S.C. 32505; 49 U.S.C. 32708; 49 
U.S.C. 32910; 49 U.S.C. 33116; delegation of authority at 49 CFR 
1.50.

Subpart A--General Provisions


Sec.  512.1  Purpose and scope.

    The purpose of this part is to establish the procedures and 
standards by which NHTSA will consider claims that information 
submitted to the agency is entitled to confidential treatment under 5 
U.S.C. 552(b), most often because it constitutes confidential business 
information as described in 5 U.S.C. 552(b)(4), and to address the 
treatment of information determined to be entitled to confidential 
treatment.


Sec.  512.2  Applicability.

    (a) This part applies to all information submitted to NHTSA, except 
as provided in paragraph (b) of this section, for which a determination 
is sought that the material is entitled to confidential treatment under 
5 U.S.C. 552(b), most often because it constitutes confidential 
business information as described in 5 U.S.C. 552(b)(4), and should be 
withheld from public disclosure.
    (b) Information received as part of the procurement process is 
subject to the Federal Acquisition Regulation, 48 CFR Chapter 1, as 
well as this part. In any case of conflict between the Federal 
Acquisition Regulation and this part, the provisions of the Federal 
Acquisition Regulation prevail.


Sec.  512.3  Definitions.

    Whenever used in this part:
    (a) Administrator means the Administrator of the National Highway 
Traffic Safety Administration.
    (b) Chief Counsel means the Chief Counsel of the National Highway 
Traffic Safety Administration.
    (c) Confidential business information means trade secrets or 
commercial or financial information that is privileged or confidential, 
as described in 5 U.S.C. 552(b)(4).
    (1) A trade secret is a secret, commercially valuable plan, 
formula, process, or device that is used for the making, preparing, 
compounding, or processing of trade commodities and that can be said to 
be the end product of either innovation or substantial effort.
    (2) Commercial or financial information is considered confidential 
if it has not been publicly disclosed and:
    (i) If the information was required to be submitted and its release 
is likely to impair the Government's ability to obtain necessary 
information in the future, or is likely to cause substantial harm to 
the competitive position of the person from whom the information was 
obtained; or
    (ii) if the information was voluntarily submitted and is the kind 
of information that is customarily not released to the public by the 
person from whom it was obtained.
    (d) NHTSA means the National Highway Traffic Safety Administration.
    (e) ``Substantial competitive harm'' includes ``significant 
competitive damage'' under Chapter 329 of Title 49 of the United States 
Code, Automobile Fuel Economy, 49 U.S.C. 32910(c).

Subpart B--Submission Requirements


Sec.  512.4  When requesting confidentiality, what should I submit?

    Any person submitting information to NHTSA, other than information 
in a class identified in Appendix C of this Part, and requesting that 
the information be withheld from public disclosure pursuant to 5 U.S.C. 
552(b) shall submit the following:
    (a) The materials for which confidentiality is being requested, in 
conformance with Sec. Sec.  512.5, 512.6, and 512.7 of this part;
    (b) The Certificate, in the form set out in Appendix A to this 
part;
    (c) Supporting information, in conformance with Sec.  512.8; and
    (d) Any request for an extension of time, made in accordance with 
Sec.  512.11.


Sec.  512.5  How many copies should I submit?

    (a) Except as provided for in subsection (c), a person must send 
the following in hard copy or electronic format to the Chief Counsel 
when making a claim for confidential treatment covering submitted 
material:
    (1) A complete copy of the submission, and
    (2) A copy of the submission containing only the portions for which 
no claim of confidential treatment is made and from which those 
portions for which confidential treatment is claimed has been redacted, 
and
    (3) Either a second complete copy of the submission or, 
alternatively, those portions of the submission containing the material 
for which confidential treatment is claimed and any additional 
information the submitter deems important to the Chief Counsel's 
consideration of the claim.
    (4) If submitted in electronic format, a copy of any special 
software required to review materials for which confidential treatment 
is requested and user instructions must also be provided.
    (b) A person filing comments to a rulemaking action must 
additionally submit to the rulemaking docket a copy of the submission 
containing only the portions for which no claim of confidential 
treatment is made and from which those portions for which confidential 
treatment is claimed has been redacted.
    (c) Any person submitting blueprints or engineering drawings need 
only provide an original version with their submission.


Sec.  512.6  How should I prepare documents when submitting a claim for 
confidentiality?

    (a) Information claimed to be confidential must be clearly 
identified to enable the agency to distinguish between those portions 
of the submission claimed to constitute confidential business 
information and those portions for which no such claim is made.
    (b) The word ``CONFIDENTIAL'' must appear on the top of each page 
containing information claimed to be confidential.
    (1) If an entire page is claimed to be confidential, the submitter 
must indicate clearly that the entire page is claimed to be 
confidential.
    (2) If the information for which confidentiality is being requested 
is contained within a page, the submitter shall enclose each item of 
information that is claimed to be confidential within brackets: ``[ 
].''
    (3) If submitted in electronic format, a comparable method to of 
identifying the information claimed to be confidential may be used. If 
submitted on CD-ROM or other format, the item containing the 
information shall be labeled as containing confidential information.


Sec.  512.7  Where should I send the information for which I am 
requesting confidentiality?

    A claim for confidential treatment must be submitted in accordance 
with

[[Page 44230]]

the provisions of this regulation to the Chief Counsel of the National 
Highway Traffic Safety Administration, Room 5219, 400 Seventh Street, 
SW., Washington, DC 20590.


Sec.  512.8  What supporting information should I submit with my 
request?

    When requesting confidentiality, the submitter shall:
    (a) Describe the information for which confidentiality is being 
requested;
    (b) Identify the confidentiality standard(s) under which the 
confidentiality request should be evaluated, in accordance with Sec.  
512.15;
    (c) Justify the basis for the claim of confidentiality under the 
confidentiality standard(s) identified pursuant to paragraph (b) of 
this section by describing:
    (1) Why the information qualifies as a trade secret, if the basis 
for confidentiality is that the information is a trade secret;
    (2) What the harmful effects of disclosure would be and why the 
effects should be viewed as substantial, if the claim for 
confidentiality is based upon substantial competitive harm;
    (3) What significant NHTSA interests will be impaired by disclosure 
of the information and why disclosure is likely to impair such 
interests, if the claim for confidentiality is based upon impairment to 
government interests;
    (4) What measures have been taken by the submitter to ensure that 
the information is not customarily disclosed or otherwise made 
available to the public, if the basis for confidentiality is that the 
information is voluntarily submitted; and
    (5) The information is otherwise entitled to protection, pursuant 
to 5 U.S.C. 552(b).
    (d) Indicate if any items of information fall within any of the 
class determinations included in Appendix B to this Part;
    (e) Indicate the time period during which confidential treatment is 
sought; and
    (f) State the name, address, and telephone number of the person to 
whom NHTSA's response and any inquiries should be directed.

Subpart C--Additional Requirements


Sec.  512.9  What are the requirements if the information comes from a 
third party?

    Where confidentiality is claimed for information obtained by the 
submitter from a third party, such as a supplier, the submitter is 
responsible for obtaining from the third party the information that is 
necessary to comply with Sec.  512.4 of this part, including a 
certificate in the form set out in Appendix A to this Part.


Sec.  512.10  Duty to amend.

    The submitter shall promptly amend any supporting information 
provided under Sec.  512.4 if the submitter obtains information upon 
the basis of which the submitter knows that the supporting information 
was incorrect when provided, or that the supporting information, though 
correct when provided to the agency, is no longer correct and the 
circumstances are such that a failure to amend the supporting 
information is in substance a knowing concealment.


Sec.  512.11  What if I need an extension of time?

    If a person is unable to submit the necessary information required 
under Sec.  512.4 at the time the claimed confidential information is 
submitted to NHTSA, then that person may request an extension of time. 
Any request for an extension shall explain the reason for the extension 
of time and the length of time requested.


Sec.  512.12  What if I am submitting multiple items of information?

    Any certificate provided under Sec.  512.4(b) of this part, and any 
supporting information provided under Sec.  512.4(c) of this part, may 
be used to support a claim for confidential treatment of more than one 
item of information. However, general or nonspecific assertions or 
analysis may be insufficient to form an adequate basis for the agency 
to find that the information is entitled to confidential treatment, and 
may result in the denial of the claim.


Sec.  512.13  What are the consequences for noncompliance with this 
part?

    (a) If the submitter fails to comply with Sec.  512.4 of this part 
at the time the information is submitted to NHTSA or does not request 
an extension of time under Sec.  512.11, the claim for confidentiality 
may be waived, unless the agency is notified or otherwise becomes aware 
of the claim before the information is disclosed to the public. If the 
information is placed in a public docket or file, such placement is 
disclosure to the public within the meaning of this part and may 
preclude any claim for confidential treatment. The Chief Counsel may 
notify a submitter of information or, if applicable, a third party from 
whom the information was obtained, of inadequacies regarding a claim 
for confidential treatment and may allow the submitter or third party 
additional time to supplement the submission, but has no obligation to 
provide either notice or additional time.
    (b) If the submitter does not provide the certificate required 
under Sec.  512.4(b) of this part or any supporting information 
required under Sec.  512.4(c) of this part, or if the information is 
insufficient to establish that the information should be afforded 
confidential treatment under the confidentiality standards set out in 
Sec.  512.15 of this part, a request that such information be treated 
confidentially may be denied. The Chief Counsel may notify a submitter 
of information of inadequacies in the supporting information and may 
allow the submitter additional time to supplement the showing, but has 
no obligation to provide either notice or additional time.

Subpart D--Agency Determination


Sec.  512.14  Who makes the confidentiality determination?

    The Chief Counsel will determine whether an item of information 
will be afforded confidential treatment under this part.


Sec.  512.15  How will confidentiality determinations be made?

    Information may be afforded confidential treatment if the Chief 
Counsel determines that:
    (a) The information is a trade secret;
    (b) Public disclosure of the information would be likely to cause 
substantial harm to the competitive position of the submitter;
    (c) Public disclosure of the information would be likely to impair 
NHTSA's ability to obtain necessary information in the future;
    (d) The information was provided to NHTSA voluntarily and was not 
customarily released to the public by the person from whom it was 
obtained; or
    (e) The information is otherwise entitled to protection, pursuant 
to 5 U.S.C. 552(b).


Sec.  512.16  Class determinations.

    (a) The Chief Counsel may issue class determinations of categories 
of information to be entitled to confidential treatment if the Chief 
Counsel determines that one or more characteristics common to each item 
of information in that class, will, in most cases, result in identical 
treatment, and further that it is appropriate to treat all such items 
as a class for one or more purposes under this part. Once a class 
determination is made, the Chief Counsel will publish the new class 
determination in the Federal Register.
    (b) The Chief Counsel may amend, modify, or terminate any class

[[Page 44231]]

determination established under this section. These changes will be 
published in the Federal Register.
    (c) Class determinations made by the Chief Counsel are listed in 
Appendices B and C to this Part.
    (d) A class determination may state that all of the information in 
the class:
    (1) Is or is not governed by a particular section of this part or 
by a particular set of substantive criteria of this part;
    (2) Satisfies one or more of the applicable substantive criteria; 
or
    (3) Satisfies one or more of the substantive criteria, but only for 
a certain period of time.


Sec.  512.17  How long should it take to determine whether information 
is entitled to confidential treatment?

    (a) When information claimed to be confidential is requested under 
the Freedom of Information Act, the determination will be made within 
twenty (20) working days after NHTSA receives such a request or within 
thirty (30) working days in unusual circumstances as provided under 5 
U.S.C. 552(a)(6)(A). However, these time periods may be extended by the 
Chief Counsel for good cause shown or on request from any person. An 
extension will be made in accordance with 5 U.S.C. 552(a)(6)(A), and 
will be accompanied by a written statement setting out the reasons for 
the extension.
    (b) When information claimed to be confidential is not requested 
under the Freedom of Information Act, the determination of 
confidentiality will be made within a reasonable period of time, at the 
discretion of the Chief Counsel.


Sec.  512.18  How will I be notified of the confidentiality 
determination?

    (a) If a request for confidential treatment is granted, the 
submitter of the information will be notified in writing of the 
determination and of any appropriate limitations.
    (b) If a request for confidential treatment is denied in whole or 
in part, the submitter of the information will be notified in writing 
of the determination, and the reasons for the denial, by certified 
mail, return receipt requested. The information may be made available 
to the public twenty (20) working days after the submitter of the 
information has received notice of the denial, unless a request for 
reconsideration is filed. The information may be released publicly on 
an earlier date, if the Chief Counsel determines in writing that the 
public interest requires that the information be made available to the 
public on such date.


Sec.  512.19  What can I do if I disagree with the determination?

    (a) A submitter of information whose request for confidential 
treatment is denied in whole or in part, may petition for 
reconsideration of that decision. Petitions for reconsideration shall 
be addressed to and received by the Chief Counsel prior to the date on 
which the information would otherwise be made available to the public. 
The determination by the Chief Counsel upon such petition for 
reconsideration shall be administratively final.
    (b) If a person is unable to submit a petition for reconsideration 
within twenty (20) working days of receiving notice that a claim for 
confidential treatment was denied, that person may submit a request for 
an extension of time. The Chief Counsel must receive any request for an 
extension of time before the date on which the information would be 
made available to the public, and the request must be accompanied by an 
explanation describing the reason for the request and the length of 
time requested. The Chief Counsel will determine whether to grant or 
deny the extension and the length of the extension.
    (c) If a petition for reconsideration is granted, the petitioner 
will be notified in writing of the determination and of any appropriate 
limitations.
    (d) If a petition for reconsideration is denied in whole or in 
part, or if a request for an extension is denied, the petitioner will 
be notified in writing of the denial, and the reasons for the denial, 
and will be informed that the information will be made available to the 
public not less than twenty (20) working days after the petitioner has 
received notice of the denial. The information may be released publicly 
on an earlier date, if the Administrator determines in writing that the 
public interest requires that the information be made available to the 
public on such date.

Subpart E--Agency Treatment of Information Claimed To Be 
Confidential


Sec.  512.20  How does the agency treat information submitted pursuant 
to this part before a confidentiality determination is made?

    (a) Information received by NHTSA, for which a properly filed 
confidentiality request is submitted, will be kept confidential until 
the Chief Counsel makes a determination regarding its confidentiality. 
Such information will not be disclosed publicly, except in accordance 
with this part.
    (b) Redacted copies of documents submitted to NHTSA under this part 
will be disclosed to the public.


Sec.  512.21  How is information submitted pursuant to this part 
treated once a confidentiality determination is made?

    (a) Once the Chief Counsel makes a determination regarding the 
confidentiality of the submitted information, all materials determined 
not to be entitled to confidential protection will be disclosed to the 
public in accordance with the determination, unless a timely petition 
for reconsideration is received by the agency.
    (b) Upon receipt of a timely petition for reconsideration under 
Sec.  512.19 of this part, the submitted information will remain 
confidential, pending a determination regarding the petition.
    (c) Should the Chief Counsel, after considering a petition for 
reconsideration, decide that information is not entitled to 
confidential treatment, the information may make the information 
available after twenty (20) working days after the submitter has 
received notice of that decision from the Chief Counsel unless the 
agency receives direction from a court not to release the information.


Sec.  512.22  Under what circumstances may NHTSA modify a grant of 
confidentiality?

    (a) The Chief Counsel may modify a grant of confidentiality based 
upon:
    (1) Newly discovered or changed facts;
    (2) A change in the applicable law;
    (3) A change in class determination, pursuant to Sec.  512.16;
    (4) The passage of time; or
    (5) A finding that the prior determination is erroneous.
    (b) If the Chief Counsel believes that an earlier determination of 
confidentiality should be modified based on one or more of the factors 
listed in paragraph (a) of this section, the submitter of the 
information will be notified in writing that the Chief Counsel has 
modified its earlier determination and of the reasons for the 
modification, and will be informed that the information will be made 
available to the public in not less than twenty (20) working days from 
the date of receipt of the notice of modification. The information may 
be released publicly on an earlier date, if the Administrator 
determines in writing that the public interest requires that the 
information be made available to the public on such date. The submitter 
may seek reconsideration of the modification, pursuant to Sec.  512.19.

[[Page 44232]]

Sec.  512.23  Under what circumstances may NHTSA publicly release 
confidential information?

    (a) Information that has been claimed or determined to be 
confidential under this part may be disclosed to the public by the 
Administrator notwithstanding such claim or determination, if 
disclosure would be in the public interest as follows:
    (1) Information obtained under chapter 325, 327, 329 or 331 of 
title 49 of the United States Code (formerly under the Motor Vehicle 
Information and Cost Savings Act) may be disclosed when that 
information is relevant to a proceeding under the chapter under which 
the information was obtained.
    (2) Information obtained under chapter 301 of title 49 of the 
United States Code (49 U.S.C. Sec.  30101 et seq.), relating to the 
establishment, amendment, or modification of Federal motor vehicle 
safety standards, may be disclosed when relevant to a proceeding under 
the chapter.
    (3) Except as specified in the next sentence, information obtained 
under Chapter 301 of title 49 of the United States Code (49 U.S.C. 
30101 et seq.), related to a possible defect or noncompliance, shall be 
disclosed when the Administrator decides the information will assist in 
carrying out sections 30117(b) and 30118 through 30121 of title 49 or 
is required to be disclosed under 30118(a) of title 49, except as 
provided in paragraph (a)(4) of this section.
    (4) No information will be disclosed under paragraph (a) of this 
section unless the submitter of the information is given written notice 
of the Administrator's intention to disclose information under this 
section. Written notice will be given at least twenty (20) working days 
before the day of release, unless the Administrator finds that shorter 
notice is in the public interest. The notice under this paragraph will 
include a statement of the Administrator's reasons for deciding to 
disclose the information, and will afford the submitter of the 
information an opportunity to comment on the contemplated release of 
the information. The Administrator may also give notice of the 
contemplated release of information to other persons and may allow 
these persons the opportunity to comment. In making the determination 
to release information pursuant to this section, the Administrator will 
consider ways to release the information that will cause the least 
possible adverse effects to the submitter.
    (b) Notwithstanding any other provision of this part, information 
that has been determined or claimed to be confidential may be released:
    (1) To a committee of Congress;
    (2) Pursuant to an order of a court of competent jurisdiction;
    (3) To the Office of the Secretary, U.S. Department of 
Transportation and other Executive branch offices or other Federal 
agencies in accordance with applicable laws;
    (4) With the consent of the submitter of the information; and
    (5) To contractors, if necessary for the performance of a contract 
with the agency or any Federal agency, with specific prohibitions on 
further release of the information.

Appendix A--Certificate in Support of Request for Confidentiality

Certificate in Support of Request for Confidentiality

    I ----------, pursuant to the provisions of 49 CFR part 512, 
state as follows:
    (1) I am (official's name, title) and I am authorized by 
(company) to execute this certificate on its behalf;
    (2) I certify that the information contained in (pertinent 
document(s)) is confidential and proprietary data and is being 
submitted with the claim that it is entitled to confidential 
treatment under 5 U.S.C. 552(b)(4) (as incorporated by reference in 
and modified by the statute under which the information is being 
submitted);
    (3) I hereby request that the information contained in 
(pertinent document(s)) be protected for (requested period of time);
    (4) This certification is based on the information provided by 
the responsible (company) personnel who have authority in the normal 
course of business to release the information for which a claim of 
confidentiality has been made to ascertain whether such information 
has ever been released outside (company);
    (5) Based upon that information, to the best of my knowledge, 
information and belief, the information for which (company) has 
claimed confidential treatment has never been released or become 
available outside (company); (except as hereinafter specified);
    (6) I make no representations beyond those contained in this 
certificate and, in particular, I make no representations as to 
whether this information may become available outside (company) 
because of unauthorized or inadvertent disclosure (except as stated 
in paragraph 5); and
    (7) I certify under penalty of perjury that the foregoing is 
true and correct. Executed on this the ------ day of ------, ------. 
(If executed outside of the United States of America: I certify 
under penalty of perjury under the laws of the United States of 
America that the foregoing is true and correct). (signature of 
official)

Appendix B--General Class Determinations

    The Chief Counsel has determined that the following classes of 
information will cause substantial competitive harm if released:
    (1) Blueprints and engineering drawings containing process and 
production data where the subject could not be manufactured without 
the blueprints or engineering drawings except after significant 
reverse engineering;
    (2) Future specific model plans (to be protected only until the 
date on which the specific model to which the plan pertains is first 
offered for sale); and
    (3) Future vehicle production or sales figures for specific 
models (to be protected only until the termination of the production 
period for the model year vehicle to which the information 
pertains).

Appendix C--Early Warning Reporting Class Determinations

    (a) The Chief Counsel has determined that the following 
information required to be submitted to the agency under 49 CFR 579, 
subpart C, will cause substantial competitive harm and will impair 
the government's ability to obtain this information in the future if 
released:
    (1) Reports and data relating to warranty claim information;
    (2) Reports and data relating to field reports, including dealer 
reports and hard copy reports; and
    (3) Reports and data relating to consumer complaints.
    (b) In addition, the Chief Counsel has determined that the 
following information required to be submitted to the agency under 
49 CFR 579, subpart C, will cause substantial competitive harm if 
released: Reports of production numbers for child restraint systems, 
tires, and vehicles other than light vehicles, as defined in 49 CFR 
579.4(c).

Appendix D--OMB Clearance

    The OMB clearance number for this regulation is 2127-0025.

    Issued on: July 21, 2003.
Jeffrey W. Runge,
Administrator.
[FR Doc. 03-19069 Filed 7-24-03; 11:00 am]
BILLING CODE 4910-59-P