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Court Case: Motor Vehicles Manufacturers V. State Farm Insurance

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The National Highway Traffic Safety Administration (NHTSA) established a frontal impact test protocol under the Federal Motor Vehicle Safety Standard (FMVSS) No. 208 (Occupant Crash Protection) in an effort to encourage manufacturers to build safer vehicles and for consumers to purchase them. FMVSS No. 208 also mandated the phasing in one of two types of passive restraints in automobiles: airbags and passive seatbelts. Prior to the deadline for complying with the standard, and after the election of a new President (Ronald Reagan) of a different political party, the newly appointed Secretary of Transportation (Andrew Lewis) reopened the rulemaking. Within two months of reopening the rulemaking, the NHTSA ordered a one-year delay in the first application of the standard and proposed the possible rescission of the entire standard. After receiving written comments and holding public hearings, the NHTSA issued a final rule rescinding FMVSS No. 208’s passive restraint requirement.
In rescinding this requirement, the NHTSA stated that it could no longer find (as it had prior to the initial proposal of the rule) that such a requirement would produce significant safety benefits. The NHTSA’s judgment did not reflect a change of opinion regarding the effectiveness of the technology, but a change in plans by the automobile industry. At the time of the rescission, industry standards were in place to ensure automatic seatbelts were installed in approximately 99% of all new cars. The NHTSA reasoned that there was no way to reliably predict the safety standard within FMVSS No. 28 would lead to increased usage of restraints, and thus feared the general public would regard the safety measure as an ineffective regulation. State Farm Insurance led the charge of automobile insurance companies that challenged the NHTSA’s rescission of the passive system requirement from FMVSS

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