Appendix — Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co.

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82-354

Office - Supreme Court, U

7 US.

No. 82-

IN THE

Supreme Court of the United Sk

LED

AUG 80 9982

ALEXANOr

CLP.

— —

OCTOBER TERM, 1982

MOTOR VEHICLE MANUFACTUREKS ASSOCIATION OF THE

UNITED STATES, INC., et al.,

Petitioners,

STATE FARM MUTUAL AUTOMOBILE INSURANCE

COMPANY, et al.,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

APPENDICES TO

PETITION FOR WRIT OF CERTIORARI

Of Counsel:

WILLIAM H. CRABTREE

Vice President and General

Counsel

EDWARD P. Goop

Senior Attorney

Motor Vehicle Manufacturers

Association of the United

States, Inc.

Forrest A. HAINLINE, JR.

Vice President and General

Counsel

DANIEL P. Gu

Senior Attorney

American Motors Corporation

August 30, 1982

LLOYD N. CUTLER

JOHN H. PICKERING

WILLIAM R. PERLIK *

ANDREW B. WEISSMAN

WILLiaM R. RICHARDSON, JR.

JONATHAN I. Fei.

WILMER, CUTLER & PICKERING

1666 K Street, NW.

Washington, D.C. 20006

(202) 872-6000

Counsel for Petitioners

Motor Vehicle Manufacturers

Association of the United States,

Inc, American Motors

Corporation, Checker Motors

Corporation, Chrysler Motors

Corporation, Ford Motor

Company, General Motors

Corporation, and Volkswagen

of America, Inc.

* Counsel of Record

[Additional Counsel Listed on Inside Cover]

a a a a IES

RICHARD GOODYEAR

Vice President, General

Counsel and Secretary

MICHAEL W. Grice

Attorney

Chrysler Corporation

Henry R. Noute, JR.

Vice President—General

Counsel

JAMES M. MAcNEE, III

Associate General Counsel

Ford Motor Company

Oris M. Suren

Vice President and General

Counsel

CHARLES R. SHARP

Assistant General Counsel

Wulle L. Weser, JR.

J. DouGLAs HAND

General Motors Corporation

N. RICHARD SKIPPER, JR.

General Counsel

GERHARD P. RIECHEL

Associate Counsel

Volkswagen of America, Inc.

MILTON D. ANDREWS

RICHARD A. PENNA *

DONALD M. SCHWENTKER

RIVKIN SHERMAN AND LEVY

900 Seventeenth Street, N.W.

Washington, D.C. 20006

(202) 347-6007

Counsel for Petitioner

Automobile Importers of

America, Inc.

* Counsel of Record

INDEX OF APPENDICES

Appendix A—Opinion and Order of the Court of Ap-

peals (June 1, 198257 8

Appendix B—Order and Memorandum of the Court of

Appeals (August 4, 1982)

Appendix C—Order and Memorandum of the Court of

Appeals Denying Motions for Extension

of Time in Which to File Petitions for

Rehearing and/or Rehearing En Banc

ES eae

Appendix D—Order of the Court of Appeals Denying

Motions for Stay and Ordering Expe-

dited Briefing Schedule (December 7,

Appendix E— Decision of National Highway Traffic

Safety Administration (October 23,

—̃˙ .

Appendix F—Notice by National Highway Traffic

Safety Administration of Intent to Pub-

lish Attached Notice of Proposed Sup-

plemental Rulemaking (July 1, 1982)

Appendix G—Notice of Proposed Rulemaking by Na-

tional Highway Traffic Safety Adminis-

tration (April 6, 19817774

Appendix H—Judgment of the Court of Appeals (June

gE ee

Appendix I—Statutory Provisions Involved

Appendix J—Listing of Petitioners and Their Parent

Companies, Subsidiaries, and Affiliates

Page

79a

130a

147a

160a

162a

172a

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 81-2220

STATE FARM MUTUAL AUTOMOBILE INSURANCE Co.,

KENT MASON, PATRICIA WARREN and LEORLIN Boyp,

. Petitioners

DEPARTMENT OF TRANSPORTATION,

DREW LEWIS, AS SECRETARY,

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION,

and RAYMOND A. PECK, JR., AS ADMINISTRATOR,

Respondents

SUPERINTENDENT OF INSURANCE OF THE

STATE OF NEw YORK,

AUTOMOBILE IMPORTERS OF AMERICA, INC.,

MOTOR VEHICLE MANUFACTURERS ASSOCIATION, ET AL.,

CONSUMER ALERT AND PACIFIC LEGAL FOUNDATION,

Intervenors

No. 81-2221

NATIONAL ASSOCIATION OF INDEPENDENT INSURERS,

AUTOMOBILE OWNERS ACTION COUNCIL, and

EUGENE J. MEYUNG,

* Petitioners

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION,

Respondent

AUTOMOBILE IMPORTERS OF AMERICA, INC.,

CONSUMER ALERT AND PACIFIC LEGAL FOUNDATION,

MOTOR VEHICLE MANUFACTURERS ASSOCIATION, ET AL.,

SUPERINTENDENT OF INSURANCE OF THE

STATE OF NRW YORK,

Intervenors

Petitions for Review of an Order of the

National Highway Traffic Safety Administration

Argued March 1, 1982

Decided June 1, 1982

James F. Fitzpatrick, with whom Michael N. Sohn,

Merrick B. Garland, John M. Quinn and Robert E. Litan

were on the brief, for petitioners in No. 81-2220.

Raymond J. Rasenberger, with whom Lawrence C.

Merthan, Frank J. Costello and Richard M. Hall were

on the brief, for petitioners in No. 81-2221.

David W. Allen, Assistant Chief Counsel, National

Highway Traffic Safety Administration, with whom

Frank Berndt, Chief Counsel, Enid Rubenstein, Allan

J. Kam and Eileen T. Leahy, Attorneys, National High-

way Traffic Safety Administration, were on the brief, for

respondents in Nos. 81-2220 and 81-2221.

Lloyd N. Cutler, with whom John H. Pickering, Wi-

liam R. Perlik, William H. Crabtree, Michael W. Grice

and William L. Weber, Jr. were on the brief, for inter-

venors Motor Vehicle Manufacturers Association, et al.,

in Nos. 81-2220 and 81-2221.

Ronald A. Zumbrun, Raymond M. Momboisse and Sam

Kazman were on the brief for intervenors Consumer Alert

and Pacific Legal Foundation, in Nos. 81-2220 and 81-

2221.

Robert Abrams and Stanley A. Camhi were on the

brief for intervenor Superintendent of Insurance of the

State of New York, in Nos. 81-2220 and 81-2221.

Katherine I. Hall was on the brief for amicus curiae,

Center for Auto Safety, Public Citizen, Physicians for

Automotive Safety, and the American Academy of Pedi-

atrics, urging reversal of the rescission of Standard 208.

Philip R. Collins was on the brief for amicus curiae,

Automotive Occupant Protection Association, urging re-

versal of the rescission of Standard 208.

Dennis J. Barbour was on the brief for amici curiae,

American College of Preventive Medicine and American

Public Health Association, urging reversal of the rescis-

sion of Standard 208.

A. L. Zwerdling and Stephen I. Schlossberg were on

the brief for amicus curiae, International Union, United

Automobile, Aerospace & Agricultural Implement Workers

of America (AFL-CIO), urging reversal of the rescission

of Standard 208.

Debbie M. Zuckerman was on the brief for amicus

curiae, Epilepsy Foundation of America, urging reversal.

Milton D. Andrews and Lance E. Tunick entered ap-

pearances for intervenor Automobile Importers of Amer-

ica, Inc.

Before: BAZELON, Senior Circuit Judge, MIKVA and

EDWARDS, Circuit Judges.

Opinion for the court filed by Circuit Judge MIKVA.

Opinion concurring in part filed by Circuit Judge

EDWARDS.

MIKVA, Circuit Judge: Petitioners in this action seek

review of a final order by the National Highway Traffic

Safety Administration (NHTSA) rescinding the auto-

matic crash protection requirements of Federal Motor

Vehicle Safety Standard 208 ten months before the

standard’s effective date. 46 Fed. Reg. 53,419 (Oct. 29,

1981) (Notice 25). The standard would have required

that large and mid-size automobiles manufactured after

September 1, 1982, and all automobiles manufactured

after September 1, 1983, carry passive restraints such

as airbags or “passive” seatbelts. Airbags are cushions

stored under the dashboard that, when triggered by a

frontal collision, fill with stored or rapidly generated gas

to protect the rider from collision with the car’s interior.

Passive seatbelts, also called “automatic” seatbelts, move

into place automatically when a passenger enters a vehi-

cle and closes the door. Petitioners State Farm Mutual

Automobile Insurance Company (State Farm) and the

National Association of Independent Insurers (NAII)

challenge NHTSA’s rescission of the standard as arbi-

trary, capricious, an abuse of discretion, and a violation

of law as defined by section 10 of the Administrative

Procedure Act, 5 U.S.C. § 706 (1976).

We agree. This case is complicated because it has

far-reaching implications and involves a politically con-

troversial safety standard, but the determining principle

is simple. An administrative agency, possessing power

delegated by the legislative branch of government, must

comply with the legislative requirement that its decisions

be reasoned and in accordance with the purposes for

which power has been delegated. NHTSA’s rescission of

the safety standard presents a paradigm of arbitrary

and capricious agency action because NHTSA drew con-

clusions that are unsupported by evidence in the record

and then artificially narrowed the range of alternatives

available to it under its legislative mandate. NHTSA

thus failed to demonstrate the reasoned decisionmaking

that is the essence of lawful administrative action.

I. BACKGROUND

The procedural history of the case before us is ex-

tremely complex. The standard that has now been re-

scinded was the subject of approximately 60 notices of

proposed rulemaking, hearings, amendments, and the like

between 1969 and 1981. There were separate adjudica-

tions before this court and in the Sixth Circuit, and suc-

cessful as well as unsuccessful attempts in Congress to

control the evolution of the regulation. A number of

these events must be described in some detail before we

turn to the issues in this case, because they help to put

into perspective the course of the agency’s action.

A. The Story of Standard 208 and Notice 25

Congress enacted the National Traffic and Motor Ve-

hicle Safety Act of 1966 (the Safety Act), 15 U.S.C.

§§ 1381 et seg. (1976 & Supp. IV 1980), in response to

the alarming number of deaths and personal injuries

on the nation’s highways. The stated purpose of the

Safety Act was “to reduce traffic accidents and injuries

to persons resulting from traffic accidents.” 15 U.S.C.

§ 1381. The Safety Act directs the Secretary of Trans-

portation or his delegate’ to issue motor vehicle safety

standards that “shall be practicable, shall meet the need

for motor vehicle safety, and shall be stated in objective

terms.” 15 U.S.C. § 1392 (a). In issuing these standards,

the Secretary is also directed to consider “relevant avail-

able motor vehicle safety data,” whether the proposed

standard “is reasonable, practicable and appropriate for

the particular type of motor vehicle or items of motor

vehicle equipment for which it is prescribed,” and “the

extent to which such standards will contribute to carry-

ing out the purposes” of the Safety Act. 15 U.S.C.

§ 1392(f) (1), (3), (4).

1 These goals may be met by very different courses of action.

NHTSA can act to prevent accidents, or to prevent injuries in the

event of accidents—the so-called “second collision.” The Senate

Commerce Committee expressed concern that [for too many years,

the public’s proper concern over the safe driving habits and capacity

of the driver . . was permitted to overshadow the role of the car

itself. The second collision the impact of the individual within

the vehicle against the steering wheel, dashboard, windshield, etc.—

has been largely neglected.” S. Rep. No. 1301, 89th Cong., 2d Sess.

2-3 (1966), reprinted in [1966] U.S. Cope, Conc. & Ap. News

2709, 2710-11.

2 The Secretary’s general authority under the Safety Act has been

delegated to NHTSA. 49 C.F.R. § 1.51(a) (1979).

8 Although Congress intended that safety shall be the overriding

consideration in the issuance of standards,” S. Rep. No. 1301, 89th

Under these guidelines, the Department of Transporta-

tion (DOT) issued the original Standard 208 in 1967,

requiring seatbelts in all cars. 32 Fed. Reg. 2408, 2415

(Feb. 3, 1967). By July 1969, however, DOT had con-

cluded that the level of seatbelt use was too low to reduce

traffic injuries to an acceptable level. It issued a notice

of proposed rulemaking to consider “the prompt develop-

ment and installation of passive restraint systems,” 34

Fed. Reg. 11,148 (July 2, 1969), defined as protective

systems that require “no action by vehicle occupants.”

36 Fed. Reg. 8296 (May 4, 1971). The agency conducted

a lengthy rulemaking proceeding on passive restraint

systems. It revised Standard 208 in 1970 to include pas-

sive protection requirements, 35 Fed. Reg. 16,927 (Nov.

3, 1970), and after a series of modifications and petitions

for reconsideration published a final amendment to Stand-

ard 208 in 1972. 37 Fed. Reg. 3911 (Feb. 24, 1972).

The Federal Register during this period provides a

strong reminder of how frequently an agency sometimes

acts to focus or clarify a regulation before the regula-

tion is promulgated. Not all of the twenty-four notices

Cong., 2d Sess. 6 (1966), reprinted in [1966] U.S. Cope, Conc. &

Ab. NEWS 2709, 2714, it recognized that “the Secretary will neces-

sarily consider reasonableness of cost, feasibility and adequate lead

time.” Jd. The Senate committee also stated that standards “are

expected to be performance standards, specifying the required safe

performance of vehicles but not the manner in which the manu-

facturer is to achieve the specified performance.” /d. at 6, [1966]

U.S. Cope, Conc. & AD. News at 2714. At the same time, the Safety

Act is “technology forcing” in the sense that developed technology

need not be in use prior to its incorporation into a federal motor

vehicle safety standard. Pacific Legal Foundation v. Dep't of Trans-

portation, 593 F.2d 1338, 1344 (D.C. Cir.), cert. denied, 444 U.S.

830 (1979); Chrysler Corp. v. Dep't of Transportation, 472 F.2d

659, 671-72 (6th Cir. 1972). “The promotion of motor vehicle safety

through voluntary standards has largely failed. The unconditional

imposition of mandatory standards at the earliest practicable date

is the only course commensurate with the highway death and injury

toll.“ 8. Rep. No. 1301, supra, at 4, [1966] U.S. Cope, Conc. & Ap.

NEWS at 2712.

and amendments to the standard issued between 1970

and 1972 are important to the case presented to us here,

but two of these modifications are significant. When the

first notice, entitled “Inflatable Occupant Restraint Sys-

tems,” was published in 1969, the agency’s emphasis was

clearly on airbags. 34 Fed. Reg. at 11,148. In 1971, how-

ever, the agency observed that “some belt-based concepts

have been advanced that appear to be capable of meeting

the complete passive protection options,” leading it to add

a new section to the standard “to deal expressly with

passive belts.” 36 Fed. Reg. 12,858, 12,859 (July 8,

1971).

The second modification relevant here was the sub-

ject of a separate notice issued on the same day. For

the first time, perhaps because passive seatbelts had ex-

pressly been added to the propored standard, the agency

suggested that passive restraint systems contain an

“emergency release” mechanism to facilitate extrication

of passengers following a crash. The agency cautioned,

however, that the emergency release capability could not

be allowed to nullify the advantages of the passive re-

straint system:

In the case of passive belts, it would be required that

the release not cause belt separation, and that the

system be self-restoring after operation of the re-

lease. An example of such a system would be a lever

on the belt retractor that releases the locking mecha-

nism, allowing the belt to pay out freely. The self-

restoration requirement could be fulfilled, for exam-

ple, by a lever that frees the belt only while con-

tinuous pressure is exerted, or by a _ time-delay

mechanism. In the case of an air bag system, defla-

tion could constitute the “automatic” release.

36 Fed. Reg. 12,866 (July 8, 1971).

In its final form, the 1972 version of Standard 208

called for “complete passive protection” on vehicles man-

ufactured after August 15, 1975. In the interim, vehi-

cles built between August 1973 and August 1975 were

to carry either passive restraints, or lap and shoulder

belts coupled with an “ignition interlock” that would pre-

vent starting the vehicle if the belts were not connected.

Most car makers chose the second option, and the ignition

interlock was one of the factors that caused the 1972

rule to founder in both the courts and in Congress. In

Chrysler Corp. v. Dep’t of Transportation, 472 F.2d 659

(6th Cir. 1972), the Sixth Circuit held that “the Agency’s

decision to require passive restraints is supported by sub-

stantial evidence,” but that the testing procedures re-

quired of passive belts did not satisfy the Safety Act’s

requirement that standards be “objective.” Jd. at 675.

The Sixth Circuit’s decision did not affect ignition in-

terlocks, but by late 1974 the public’s irritation at being

unable to start a car without fastening seatbelts led

Congress to reject the entire standard. The Motor Ve-

hicle and Schoolbus Safety Amendments of 1974, Pub. L.

No. 93-492, § 109, 88 Stat. 1482 (codified at 15 U.S.C.

§1410b) (hereinafter cited as the 1974 Amendments),

effected two main changes. First, Congress banned any

federal motor vehicle safety standard requiring ignition

interlocks or continuous buzzers to warn that seatbelts

were not in use. Id. § 1410b(b)(1).* Second, the 1974

Amendments sharply reduced DOT’s discretion to modify

Standard 208 in the future. If a modified standard could

be satisfied by any system other than seatbelts only, the

amended safety standard would have to be submitted to

#15 U.S.C. § 1410b(b)(1) states:

No Federal motor vehicle safety standard may—

(A) have the effect of requiring, or

(B) provide that a manufacturer is permitted to comply

with such standard by means of, any continuous buzzer designed

te indicate that safety belts are not in use, or any safety belt

interlock system.

Congress where it might be vetoed by concurrent resolu-

tion of both houses. Jd. § 1410b (b) (2).°

Predictably, the actions of the Sixth Circuit and Con-

gress precipitated a new flurry of notices in the Federal

place the prohibited continuous buzzers. See, e.g., 39 Fed.

Reg. 42,692 (Dec. 6, 1974). It postponed the effective

date for passive restraint systems so as to comply with

the mandate of Congress and the testing procedures re-

quired by the Chrysler decision. See, e. g., 40 Fed. Reg.

16,217 (April 10, 1576). But most important, the agency

had to comply with the congressional ban on ignition

interlocks, and this had profound consequences for the

case before us now. The 1974 Amendments were enacted

on October 27, 1974. Nine months earlier, however, an

Reg. 3834 (Jan. 30, 1974), leading NHTSA to change

its position of 1971 that these belts should not be detach-

able. In April 1974, NHTSA had adopted the suggestion

of one automobile manufacturer that emergency release

of passive belts be accomplished by a conventional latch—

permitting belt separation—provided the restraint system

was guarded by an ignition interlock and warning buzzer

to encourage reattachment of the passive belt. 39 Fed.

515 U.S.C. § 1410b(b)(2) states

Except as otherwise provided in paragraph (3), no Federal

motor vehicle safety standard respecting occupant restraint

systems may—

(A) have the effect of requiring, or

(B) provide that a manufacturer is permitted to comply

with such standard by means of, an occupant restraint system

other than a belt system.

Section 1410b(b)(3) exempts standards otherwise prohibited by

this section if the standards are promulgated in accordance with

the legislative veto provisions of 15 U.S.C. §§1410b(c) and (d).

See pp. 34-36 infra.

10a

Reg. 14,593 (April 25, 1974). The newly enacted amend-

ments to the Safety Act obviously made this provision

untenable. Rather than return to the regulation as it

was proposed in 1971, however, the agency simply elimi-

nated the ignition interlock and buzzer requirements.

39 Fed. Reg. 38,380 (Oct. 31, 1974). Passive belts still

were required to have an emergency release mechanism

in the form of a latch mechanism that caused release at

a single point by pushbutton action.

Despite these modifications, NHTSA retained its in-

terest in a standard calling for mandatory passive re-

straints. It postponed the effective date of the require-

ment to August 31, 1976, but emphasized that this post-

ponement was only for a single year. “The NHTSA in-

tends to propose the long-term requirements for occupant

crash protection . . as soon as possible.” 40 Fed. Reg.

33,977 (Aug. 13, 1975). Shortly before that date, how-

ever, Secretary of Transportation William Coleman initi-

ated a new rulemaking on the issue. 41 Fed. Reg. 24,070

(June 14, 1976). After hearing testimony and reviewing

written comments, Coleman suspended the passive re-

straint requirement altogether. Although he found such

restraints technologically and economically feasible, the

Secretary based his decision on the expectation that there

would be widespread public resistance to the new sys-

tems. Instead of a mandatory passive restraint stand-

ard, Coleman proposed a demonstration project involving

up to 500,000 cars with passive restraints in order to

smooth the way for such a standard at some later date.

Department of Transportation, The Secretary’s Decision

Concerning Motor Vehicle Occupant Crash Protection

(December 6, 1976) (Coleman Decision), Joint Appendix

(J.A.) 2065.

Coleman’s successor as Secretary of Transportation,

Brock Adams, reopened the passive restraint rulemaking

only four months later. 42 Fed. Reg. 15,935 (March 24,

1977). Following another round of written comments

lla

and a public hearing, Adams decided that the demonstra-

tion program was unnecessary. He issued a new manda-

tory passive restraint regulation, known here as Modi-

fied Standard 208. See 42 Fed. Reg. 34,289 (July 5,

1977). This regulation, covering eleven pages of the

Code of Federal Regulations, 42 C.F.R. § 571.208 (1977),

ordered a “phasing-in” of passive restraints based on

vehicle size, beginning with large cars manufactured for

the 1982 model year and extending to all cars manufac-

tured for the 1984 model year and beyond.

Like its predecessor, the 1977 rule had to withstand

testing in Congress and the courts. In Pacific Legal

Foundation v. Dep’t of Transportation, 593 F.2d 1338

(D.C. Cir.), cert. denied, 444 U.S. 830 (1979), this court

upheld Modified Standard 208 as a rational, non-arbitrary

regulation consistent with the agency’s mandate under

the Safety Act. Modified Standard 208 also fared well in

Congress, which did not exercise its authority under the

legislative veto provision of the 1974 Amendments. No

action was taken by the full House of Representatives.

The Senate committee with jurisdiction over NHTSA af-

firmatively endorsed the standard, S. Rep. No. 481, 95th

Cong., Ist Sess. (1977), and a resolution of disapproval

was tabled by the Senate. 123 Conc. Rec. 33,332 (1977).

Congress has plainly considered Modified Standard 208

politically controversial, however. Riders were attached

to appropriation bills for 1979 and 1980 that prohibited

DOT from implementing the passive restraint standard

in those years. Pub. L. No. 95-335, § 317, 92 Stat. 435,

450 (1978); Pub. L. No. 96-131, § 317, 93 Stat. 1023,

1039 (1979). The passive restraint standard was not

scheduled to be implemented until 1981, however, and

these measures emphasized the need for experimentation

and research. See, e.g., H.R. ConF. REP. No. 1329, 95th

Cong., 2d Sess. 14 (1978) (“The conferees intend that

the language of this provision permits broad research and

development activities related to the provisions of occu-

12a

pant restraint standard No. 208”). Of far greater im-

portance were congressional efforts in 1980 to modify

rather than nullify the standard. See, e.g., H.R. Rep.

No. 1371, 96th Cong., 2d Sess. (1980). These efforts,

discussed in detail at pp. 39-47 infra, narrowly failed

to become law, and Modified Standard 208 remained in

effect.

Automobile manufacturers also reacted to Modified

Standard 208. On May 22, 1978, NHTSA issued yet

another notice of proposed rulemaking in response to a

petition from General Motors (GM) concerning emer-

gency release mechanisms on passive belts. GM sought

reconsideration of the agency’s 1974 decision to require

latch mechanisms on passive belts.

[Very little was known at the time of that decision

regarding designs of passive belt systems. Further,

automatic belt “defeat” rates were not a significant

issue at that time since no mandate existed which

would have required the use of passive restraints on

all vehicles. While this conclusion was fully

justified at that time we do not believe it has the

same degree of validity when applied to the manda-

tory incorporation of automatic restraint systems.

As we noted previously maximum usage will be a

major concern beginning with the effective dates of

the mandate established in June 1977; thus necessi-

tating additional consideration for designs which

show promise in helping to ensure that vehicle oc-

cupants avail themselves of the inherent safety bene-

fits of automatic belt restraints.

43 Fed. Reg. 21,912, 21,914 (May 22, 1978) (quoting

GM proposal). Specifically, GM sought authority to use

a “spool release” mechanism that would allow emergency

exit from vehicles without requiring separation of the

belt. NHTSA noted its “interest” in “the anticipated

rate of installation of passive belts and in any passive

belt designs that would seek to minimize the rate of dis-

13a

connection.” Id. at 21,913. It granted GM's proposal

six months later, although in a broader form so as ta

permit even greater experimentation with emergency re-

lease designs. 43 Fed. Reg. 52,493 (Nov. 13, 1978).

Automobile makers began gearing up to comply with the

safety vegulation; by October 1981, they had expended a

substantial portion of $550 million capital investment

necessary to produce the required equipment.“

In February 1981, approximately one month after tak-

ing office, Secretary of Transportation Andrew Lewis re-

opened the rulemaking yet again. 46 Fed. Reg. 12,033

(Feb. 12, 1981). He based his decision at least in part

on “the fact that economic circumstances have changed

since the standard was adopted in 1977” and the “diffi-

culties of the automobile industry,” citing high unem-

ployment, sales “at a very depressed level,” and losses

“by even the largest of the domestic manufacturers.”

Id. Two months later, the agency ordered a one-year

delay in the application of the standard to large cars,

extending the deadline to September 1982. 46 Fed. Reg.

21, 172 (April 9, 1981). This notice also observed that

the “economic situation of the industry and consumers

and the economy as a whole have drastically changed

since the standard was adopted in 1977.” Id. at 21,174.

On the same day, NHTSA proposed the possible rescis-

sion of the entire standard. 46 Fed. Reg. 21,205 (April

9, 1981). Both decisions were announced by the White

House Press Office on April 6, 1981, as a part of a larger

package of economic recovery measures. See Actions to

Help the U.S. Auto Industry at A-34 (April 6, 1981),

J.A. 1281, 1321. After receiving written comments and

holding public hearings, NHTSA issued a final rule

(Notice 25) that rescinded the passive restraint require-

„ NHTSA Final Regulatory Impact Analysis, Rescission of Auto-

matic Occupant Protection Requirements (October 1981) (herein-

after cited as RIA), at VI-41, J. A. 203 (35% of manufacturers’

budgeted capital for automatic restraints has already been spent).

14a

ment, and amended Standard 208 to eliminate this re-

quirement. 46 Fed. Reg. 53,419 (Oct. 29, 1981) (Notice

25). This court denied motions to stay the rescission in

December 1981, and these petitions for review followed.

B. NHTSA’s Analysis in Notice 25

The issues raised by Notice 25 are best introduced by

a general discussion of the safety problem and the regu-

latory task faced by the agency. The starting point for

both NHTSA and the petitioners in this action is the

fact, based on survey data and accident reports, that

American motorists overwhelmingly fail to use their seat-

belts. The usage rate of seatbelts is not only low, but

falling. In 1977, DOT estimated that usage of manual

seatbelts was around 20%. 42 Fed. Reg. at 34,290. To-

day, NHTSA estimates that nationwide usage has fallen

to 11%. 46 Fed. Reg. at 53,422.

Although individuals must decide whether to wear a

seatbelt, NHTSA and Congress have recognized that seat-

belt usage has serious social consequences. It has been

estimated that one American dies in a traffic accident

every 11 minutes. S. Rep. No. 481, 95th Cong., Ist Sess.

2-3 (1977). NHTSA predicts that there will be 61,710

motor vehicle fatalities in 1984, and that “because of the

growing number of small cars, passenger car occupant

deaths could increase by as much as 7,000 by 1990.”

NHTSA Final Regulatory Impact Analysis, Rescission of

Automatic Occupant Protection Requirements (October

1981) (hereinafter cited as RIA), at V-12 n.4, XI-3,

J.A. 160 n.4, 263. A significant number of these deaths

—and an even larger number of serious injuries—could

be prevented if motorists wore seatbelts. The resulting

7 The usage figures vary by car size, RIA at IV-20, J. A. 76 (17%

subcompact, 10% compact, 8.5% intermediate, 7.9% full-size), and

apparently by region of the country, id. at IV-31, J.A. 87 (survey

showing difference of 25 percentage points between usage in Mary-

land and North Carolina).

15a

benefits to society include reduced insurance premiums,

lower medical and rehabilitative costs, and incalculable

savings in terms of human tragedy. Estimating the value

of these benefits is necessarily inexact, but estimates can

be made. In 1977, for example, DOT predicted that pas-

sive restraints could prevent approximately 12,000 deaths

and over 100,000 serious injuries annually. 42 Fed. Reg.

at 34,298. In Notice 25, NHTSA estimated that if the

usage rate of seatbelts rose from 11% to 60%, Modified

Standard 208 would save 8,750 lives and 176,900 serious

injuries each year. RIA at IV-71, J.A. 127. The agency

estimates the long-term savings in various kinds of in-

surance premiums alone at $4.3 billion annually, if these

fatalities and deaths could be avoided. Id. at V-14, J. A.

162.°

Investment in safety also has its costs, of course. In

1977, for example, Secretary Adams estimated that pas-

sive seatbelts would exceed the cost of manual seatbelts

by $25 per car, and that installation of airbags would

cost $112 per vehicle. 42 Fed. Reg. at 34,293. These

»The RIA discussed automobile, health, and life insurance plans.

It predicted automobile insurance reductions of $960 million to

$2.9 billion annually, from the low to the high ends of the range.

RIA at V-7, J.A. 155. The range of reductions in health insurance,

government payments, and workers’ compensation was $451 million

to $1.4 billion annually. RIA at V-11, J.A. 159. Similarly, the an-

nual reductions in automobile fatalities would save $6 to $26 million

in life insurance annually. RIA at V-12, J.A. 160. These savings

can alsc oe expressed on a per-car basis, suggesting a present dis-

counted value of $79 to $240 per car (using a 10% discount rate).

RIA at V-14, J.A. 162. Such analysis is extremely sensitive to

assumptions about the appropriate discount rate, of course. See

RIA at A-5, J.A. 279 (change from 10% discount rate to 7% dis-

count rate increases social benefits by 46%). The analysis also

understates the expected savings because it deals only with reduc-

tions in insurance premiums, and makes no attempt to calculate the

full social cost of traffic fatalities and injuries in such terms as lost

earnings and reduced productivity. See RIA at A-4, J.A. 278 (esti-

mating social cost of serious injuries at $15,140 and of fatalities at

$314,100, assuming 10% discount rate).

16a

costs have risen with inflation. In 1981, NHTSA esti-

mated that the marginal cost of passive restraints would

vary between $50 and $150 per vehicle. The average

figure was $89, which includes $15 for added fuel costs

over the life of the car. 46 Fed. Reg. at 53,423; RIA at

VI-40, J.A. 202.° The cost of airbags has also risen

sharply and depends to a great extent on the volume of

production. If all vehicles manufactured annually were

equipped with airbags, the resulting economies of scale

would hold airbag costs to between $200 and $330 per

ear. At lower volumes, however, such as only 10,000

units a year, the cost of airbags could climb as high as

$1,200 per vehicle. RIA at VI-10, J.A. 172. NHTSA

*See generally RIA at VI-40 to VI-48, J.A. 202-210. Costs of

equipment in the early years of the regulation’s implementation

would be higher, but would decline in the long run as restraint

systems were incorporated in new vehicle designs as opposed to

retrofitting existing vehicle designs. RIA at VI-42, J.A. 204.

NHTSA responded in several ways to criticism that it “has not

adequately explained how the costs of automatic belts have more

than doubled in constant dollars since 1977,“ when Secretary Adams

estimated the marginal cost of passive belts to be $25. It stated

that the earlier figure was based on the Volkswagen (VW) Rabbit

system, which is not representative of larger cars. RIA at B-3, J.A.

287; see id. at VI-6, J.A. 168 (1981 retail price of VW Rabbit belts

was $50, and 1981 retail price of GM Chevette belts was $65).

Moreover, NHTSA's overall estimate of belt prices includes the

cost of features that would not be required by the standard but

that might increase comsumer acceptance of passive belts. See,

e.g., id. at VI-5, VI go, J. A. 167, 198 (estimate includes cost of

“luxurious” Toyota system, in which electric motor moves belt out

of the way when door opens, at cost in excess of $300). The cost

estimate even includes equipment that NHTSA is prohibited from

requiring. See id. at VI-37, J.A. 199 (although VW Rabbit’s inter-

lock “adds an estimated $12 to the retail cost, we believe that this

feature increases use and that its cost is properly attributable to

the standard”). As NHTSA observed, [it can be argued that

fancy consoles, easy stowage, and retractor/reel features are not

required for compliance, and therefore, should not be included as

‘legitimate’ standard-costs. Since usage is a function of consumer

acceptance, it is difficult to draw a line.” RIA at VI-40, J.A. 202.

17a

estimated the cost of Modified Standard 208 to be ap-

proximately $1 billion per year. 46 Fed. Reg. at 53,423;

RIA at VI-49, J.A. 211.

The regulatory problem facing NHTSA was therefore

simple in theory, although extremely difficult in applica-

tion. It had to predict the savings that would result

from Modified Standard 208, and compare that savings

with the cost of the standard, so as to conduct “a ‘com-

monsense’ balancing of safety benefits and economic

costs.” United States v. General Motors Corp., 518 F.2d

420, 435 (D.C. Cir. 1975); see H & H Tire Co. v.

Dep’t of Transportation, 471 F.2d 350, 353-54 (7th Cir.

1972)."° NHTSA found that the costs of the passive

restraints required by Modified Standard 208 could be

justified only if nationwide seatbelt usage rose by 13

percentage points, from 11% to 24%. RIA at A-10, J.A.

284. NHTSA concluded that no such increase would oc-

cur, and therefore rescinded the standard.

1. Modified Standard 208 as written

As discussed above, Modified Standard 208 as it stood

in 1981 could have been satisfied by airbags or by either

of two kinds of passive seatbelts. Both the “continuous”

and the “detachable” passive seatbelts provide the emer-

gency release mechanism required by the standard. On

continuous belts, this mechanism may consist of a “spooi-

out” device that expands the belt but does not detach

10 See note 3 supra. NHTSA cautioned, however, that

the conversion of safety benefits (i.e., lives saved and injuries

avoided) into dollar figures is an improper and inappropriate

method of reaching decisions on safety issues. [NHTSA should

not be] charged with placing a dollar value on human life. Such

a concept is offensive and the Agency has not been performing

such calculations. . [W]hile costs and benefits must both

be considered, safety is of overriding concern. Thus, regardless

of the outcome of a dollar-based benefit-cost analysis, it cannot

be used as the sole criterion for decisionmaking.

RIA at A1. A-2, J. A. 275, 276.

18a

it. On detachable belts, the mechanism allows separation

of the belt in the same way that manual seatbelts are

buckled and unbuckled.

In Notice 25, NHTSA first found it “reasonably cer-

tain” that if Modified Standard 208 were implemented,

“the overwhelming majority of new cars would be

equipped with automatic belts that are detachable.” 46

Fed. Reg. at 53,421. Sixteen automobile manufacturers

had participated in the rulemaking. Two stated that they

planned to use the detachable belts; three said they ex-

pected to do so, although they did not make a definite

commitment; five predicted that the automotive industry

as a whole would rely on detachable belts, without dis-

cussing their own design plans at all; and the remaining

six were silent on the question."

NHTSA then analyzed the efficacy of the detachable

passive seatbelt. Passive seatbelts—both detachable and

continuous—have been in use for some years, and the

record shows that these devices increase seatbelt use on

every model. NHTSA observed, however, that the data

11GM and Chrysler were the only two car makers that explicitly

stated an intention to use detachable passive belts. See J.A. 1220,

2549 (rulemaking comments). NAII challenges the interpretation

given by NHTSA to the comments of other manufacturers on this

point, NAII Brief at 23-24 (12 of the 16 manufacturers “gave no

indication one way or another as to their plans for detachability

features”), and State Farm suggests that “the record is not a model

of clarity on this point.” State Farm Brief at 40 n.51. Petitioners

also contend that NHTSA committed procedural error in holding

“secret meetings” with several manufacturers to obtain “a detailed

breakdown of their planned automatic belt designs” after the public

comment period closed. NAII Brief at 24 n.14; State Farm Brief at

40 n.51.

12 Between 1975 and 1980, Volkswagen (VW) sold approximately

350,000 Rabbits equipped with detachable passive seatbelts that

were guarded by an ignition interlock. General Motors (GM) sold

8,000 1978 and 1979 Chevettes with a similar system, but eliminated

the ignition interlock on the 13,000 Chevettes sold in 1980. The

1980 Chevettes offered a lap/shoulder belt whose lap portion could

19a

could be interpreted in greatly different ways.“ It also

questioned, for a number of reasons, whether the data

could be used to predict overall usage rates under Modi-

be detached from the socket on the car door. Finally, Toyota has

offered a “spool release” continuous belt on some 1980 Coronas and

on all 1981 Cressidas.

Although design features can increase the use of passenger re-

straints, no system yet conceived appears capable of bringing the

usage rate anywhere near 100%. Even the ignition interlock re-

quired on cars between 1973 and 1975—arguably the most coercive

belt system imaginable—succeeded in increasing belt usage only to

roughly 60% in 1974. Consumers deactivated many of these devices

and seatbelt use in those cars quickly fell to around 40%. See

Pacific Legal Foundation v. Dep't of Transportation, 593 F.2d at

1341 n.14.

Nevertheless, the passive belts thus far in use have shown

striking results. Based on a variety of sources, NHTSA found that

belt usage in the VW Rabbits averaged 34% for manual belts and

84% for passive belts. RIA at IV-52, J.A. 108. For the 1978-1979

Chevettes, NHTSA used figures of 34% for manual belts and 71%

for passive belts. On 1980 Chevettes, the agency found these figures

to be 31% for manual belts and 70% for passive belts. Id., J. A.

108. No statistically valid data for the Toyota models appears on

the record, although there is no suggestion that it would vary

greatly from the other models. See id. at IV-29, J.A. 85 (based on

8 observations, 17% use of manual belts and 88% use of automatic

belts).

1346 Fed. Reg. at 53,422. The problem is predicting the effect

of the automatic belts on the general population, where the average

use is 11%, from data concerning vehicles on which even manual

usage is at a much higher rate. One set of VW data, for example,

suggested usage rates of 36% for manual belts and 81% for auto-

matic belts. The difference made by passive belts could be inter-

preted either as showing an arithmetic increase of 45 percentage

points, or as showing a multiplier effect of 2.3 times. Depending

on whether the “additive” or the “multiplier” technique is used,

nationwide rates could be predicted to increase to 56% or 25%

respectively. NHTSA “used the results of these two techniques in

an attempt to construct a range of possible increases in belt usage,”

and concluded that extrapolation from the raw data suggested “a

range of 15 to 60 percent” could result. 46 Fed. Reg. at 53,422.

But see RIA at IV-29, J.A. 85 (Opinion Research Corporation sample

20a

fied Standard 208.“ Finally, NHTSA analyzed the oper-

ation of the detachable belts, and found them function-

ally equivalent to manual seatbelts already in use.

Most planned automatic belts would be like today’s

manual lap and shoulder belts in that they can be

easily detached and left that way permanently... .

Some belt designs may be detached and permanently

stowed as readily as the current manual lap and

shoulder belts. Once a detachable automatic belt is

detached, it becomes identical to a manual belt. Con-

trary to assertions of some supporters of the stand-

ard, its use thereafter requires the same type of

found 89.8% use of VW automatic belts, more than 63 percentage

points higher than use of VW manual belts, in early 1981). Al-

though NHTSA next argued that the lower end of this range was

too high, it could therefore be suggested that the upper end of this

range was too low.

The agency noted four factors that it said made it impossible

to generalize from the data on VW Rabbits and GM Chevettes to

the general vehicle fleet. (1) Car size. Both the Rabbit and Chevette

are subcompacts, and belt usage rates are typically higher in small

cars than in large ones. See note 7 supra. (2) Owner demographics.

Belt usage increases with educational level and income, RIA at IV-

27, J.A. 83, and “Rabbit owners typically have higher education

levels and earn more money” than the average car owner. Id. at

1V-33, J. A. 89. (3) Voluntarism. “Having voluntarily invested in

automatic restraints, [these users] are more likely to use those

restraints than someone who is compelled to buy them.” 46 Fed.

Reg. at 53,421. (4) Coercive use features. The Rabbits and the 1978

and 1979 Chevettes were equipped with interlocks. NHTSA also

described the belt system on 1980 Chevettes as “coercive,” even

though that model did not have an interlock, because the shoulder

portion of the lap/shoulder belt was continuows. Id., see note 12

supra. The last factor was considered the most important one.

NHTSA concluded that the Rabbit interlock “would account for

four-fifths of the [usage] increase observed in the automatic belt

vehicles,” and attributed a “significant portion of the remaining

increase” to the fact that Rabbit and Chevette owners “knowingly

and voluntarily bought the automatic belts. ... This factor would

not, of course, be present in the fleet subject to the standard.” 46

Fed. Reg. at 53,422. But see note 30 infra.

2la

affirmative action that is the stumbling block to ob-

taining high usage levels of manual belts.

46 Fed. Reg. at 53,421.

NHTSA’s final step was to predict the usage rate of

detachable passive belts that could be expected under the

standard. Although Notice 25 is somewhat unclear as

to the precise finding, NHTSA clearly believed that any

increase in usage would be minimal. The agency

cannot reliably predict even a 5 percentage point

increase as the minimum level of expected usage

increase. The adoption of a few percentage points

increase as the minimum would, in the agency’s

judgment, be more consistent with the substantial

uncertainty about the usage rate of detachable auto-

matic belts. Based on the data available to it,

NHTSA is unable to assess the probability that the

actual incremental usage would fall nearer a 0 per-

centage point increase or nearer some higher value

like a 5 or 10 percentage point increase.

46 Fed. Reg. at 53,423. NHTSA cautioned that “the

agency is not able to agree with the assertions that there

will be absolutely no increase in belt use as a result of

automatic belts,” id. at 53,425, but it repeatedly em-

phasized that any increase would be “extremely small

due to the substantial similarity of the design and

methods of using detachable automatic belts and manual

belts” and that “detachable automatic belts may con-

tribute little to achieving higher belt usage rates.” Id.

at 53,423.

Based on these three steps, NHTSA concluded that the

savings from increased seatbelt usage under Modified

Standard 208, if any, would not exceed the costs of the

regulation:

In view of the possibly minimal safety benefits and

substantial costs of implementing the automatic re-

straint requirements, the agency is unable to con-

clude that the incremental costs of the requirements

are reasonable. The requirements are, in that re-

spect, impracticable.

46 Fed. Reg. at 53,423. It therefore concluced that the

standard should either be revised or rescinded.

2. Modified Standard 208 as NHTSA considered revis-

ing it

NHTSA recognized that its analysis of detachable pas-

sive belts did not apply to other kinds of passive re-

straints. “[{T]he question then arises whether the agency

should amend the standard to require that automatic

belts have a use-inducing feature”—i.e., be continuous

rather than detachable—that “would increase belt usage.”

46 Fed. Reg. at 53,423. The agency rejected a refinement

of the standard as “impracticable,” however, for reasons

of cost, equity, public reception, and safety.

Of these factors, only the last two received emphasis in

Notice. 25."° NHTSA’s first reason for not amending

Modified Standard 208 to require “use-compelling fea-

1 The portion of NHTSA’s decision explaining why it had de-

cided against amending the standard takes up only a third of one

page in its nine-page opinion. 46 Fed. Reg. at 53,424. Earlier in the

decision, NHTSA foreshadowed the issue in recognizing that “the

question then arises whether the agency should amend the stand-

ard... Id. at 53,423. The next three columns of the Federal

(standard would cost too much because of uncertainty that “owners

of cars with detachable automatic belts would receive offsetting

discounts in insurance costs”); id. at 53,424 (negative effect on

public attitude toward safety regulation because “detachable auto-

matic belts may not be any more acceptable to the public than

manual belts”); id. (standard would be inequitable because “the

current regular user of manual belts” would be required “not only

to pay himself for a system that affords him no additional safety

protection, but in part to subsidize the current nonuser of belts

who may or may not be induced by the automatic restraints”). But

see notes 33, 43 infra.

23a

tures” on passive belts drew on the negative earlier

reaction to ignition interlocks. “The history of the Con-

gressional action which removed this authority from

NHTSA suggests that Congress would look with some

disfavor upon any similar attempt to impose a use-

compelling feature on a belt system.” Id. at 53,424. See-

ond, NHTSA concluded that revising the standard to

require only continuous belts would be “counterproduc-

tive” because of “irrational” reactions by users:

Recent attitudinal research conducted by NHTSA

confirms a widespread, latent and irrational fear in

many members of the public that they could be

trapped by the seat belt after a crash. Such appre-

hensions may well be contributing factors in decisions

by many people not to wear a seat belt at all

[I]t would be highly inappropriate to impose a

technology which by its very nature could heighten

or trigger that concern.

Id. Finally, NHTSA suggested that this concern might

not be so “irrational” after all. It suggested that “there

are compelling safety reasons” why continuous belts—

even those with emergency release features—should not

be mandated.

In the event of accident, occupants wearing belts

suffer significantly reduced risk of loss of conscious-

ness, and are commonly able to extricate themselves

with relative ease. However, the agency would be

unable to find the cause of safety served by imposing

any requirement which would further complicate the

extrication of any occupant from his or her car, as

some use-compelling features would.

Id.

Although these three reasons exhaust NHTSA’s ex-

plicit discussion of its refusal to modify the passive re-

rene

relied on a fourth concern, albeit one stated only in the

24a

context of detachable belts. Much of Notice 25 focuses

on concern about public attitudes toward government

safety regulations, suggesting that a backlash against a

passive restraint standard “might cause significant long

run harm to the safety program.” Id. at 53,424. Be-

cause detachable passive belts and manual belts may be

perceived as functionally identical, “it is not unreason-

able to conclude that the public may regard the auto-

matic restraint requirements as an expensive example of

ineffective regulation.” Id. Adverse public reaction

might lead some car owners to “cut the automatic belts

out of their cars, thus depriving subsequent owners of

the cars of the protection of any occupant restraint sys-

tem,” and could bring “a poisoning of popular sentiment

toward efforts to improve occupant restraint systems in

the future.” Id. “A public that believes it is the victim

of too much government regulation by virtue of the

standard migut well resist such parallel efforts advertis-

ing campaigrs and educational programs] to enhance

voluntary belt usage.” Id. at 53,425-26."*

II. THE Scope or REVIEW

Our review in this case proceeds under both the sub-

stantive sections of the Safety Act and the provision for

judicial review of informal rulemaking in the Adminis-

trative Procedure Act (APA), 5 U.S.C. § 553 (1976).

Section 103(b) of the Safety Act, 15 U.S.C. § 1392(b),

states that tne APA “shall apply to all orders establish-

ing, amending, or revoking a Federal motor vehicle

16 NHTSA’s final point in Notice 25 was that it planned to

“undertake a major educational effort to enhance voluntary belt

usage,” and that such an educational effort would be “at least as

effective but much less costly than the installation of millions of

detachable belts.” 46 Fed. Reg. at 53,424-25. The agency promised

to undertake this effort “entirely apart from the pending proceed-

ing,” but noted that “this effort will predominantly affect the same

population that the automatic belts would be aimed at.” Id. at

53,425.

25a

safety standard.” The 1974 Amendments further specify

that [Is leetion 553 of title 5 [the APA] shall apply”

to occupant crash protection standards promulgated

under the congressional review procedures. 15 U.S.C.

1410bic) (2). As a result, the standard of review ap-

pears easily formulated. It is well established that the

familiar “arbitrary and capricious” test applies to in-

formal rulemaking conducted pursuant to section 553

of the APA. See, ¢.g., Camp v. Pitts, 411 U.S. 138

(1973); Pacific Legal Foundation v. Dep’t of Trans-

portation, 593 F.2d at 1343.

The appropriate scope of judicial review remains the

most troublesome question in this case, however, because

we are called upon to review the rescission rather than

the promulgation of an agency rule. The scope of review

in such a situation appears to be a matter of first im-

pression, even though judicial review of orders revoking

a standard is specifically authorized by the Safety Act

and the APA. The appropriate scope of our review is

also a question of some complexity. At first view, re-

scission more resembles agency refusal to act than an

agency decision to act, and the distinction has signifi-

cance for the degree of judicial deference paid to the

agency. As we receatly noted in WWHT, Inc. v. FCC,

656 F.2d 807, 818-19 (D.C. Cir. 1981), it is only in the

rarest and most compelling circumstances that courts

overturn an agency’s “ ‘expert’ determination not to

pursue a particular program or policy at a given time.”

Although the WWHT court held that an agency’s denial

of a petition for rulemaking was subject to judicial re-

view, the opinion emphasized that “the scope of review

of such a determination must, of necessity, be very nar-

row.” Id. at 809. In Natural Resources Defense Council

v. SEC, 606 F.2d 1031 (D.C. Cir. 1979), the court

reached a similar conclusion in reviewing a situation in

which the agency terminated a rulemaking proceeding

without issuing a rule:

As is typical in informal rulemaking cases under

section 4 of the APA, 5 U.S.C. § 553, many of the

issues raised here are within the province of agency

expertise and do not readily lend themselves to judi-

cial oversight. ... [O]ur review of the Commission’s

factual, and particularly its policy, determinations

will perforce be a narrow one....

Id. at 1052-53. These cases may be distinguished, of

course, from the one before us. NHTSA has not denied

a petition for rulemaking, or failed to issue a rule after

a proceeding, but has rescinded a rule that has already

been promulgated. Even so, the parallels are obvious,

and dictate caution in formulating the appropriate scope

of review here.

In recent years, however, courts have increasingly em-

phasized that the “arbitrary and capricious” standard

zncompasses intensive as well as deferential judicial

scrutiny, depending in part on the nature of the particu-

lar problem faced by the agency.” Natural Resources

Defense Council, 606 F.2d at 1050. In Citizens to Pre-

serve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415

(1972), the Supreme Court interpreted the arbitrary and

capricious test to require a “substantial inquiry” sub-

jecting the agency’s action to “a thorough, probing, in-

depth review.“ The prior adjudications under the

* In City of Chicago v. FPC, 458 F.2d 731, 742-45 (D.C. Cir.

1971), cert. denied, 405 U.S. 1074 (1972), this court followed Over-

ton Park in explaining why judicial review of informal rulemaking

must be “searching and careful,” notwithstanding the “quasi-

legislative” nature of such rulemaking. See generally Verkuil,

Judicial Review of Informal Rulemaking, 60 Va. L. Rev. 185 (1974);

Note, Judicial Review of the Facts in Informal Rulemaking, 84

YALe L.J. 1750 (1975). For possible explanations of the increasingly

careful judicial review of informal rulemaking, see DeLong, /n-

formal Rulemaking and the Integration of Law and Policy, 65 Va.

L. Rev. 257, 278-84 (1979) (suggesting that “presumption of rea-

soned neutrality” once given to agency action has been eroded by

“the capture of regulatory agencies by special interests” and by

27a

Safety Act concerning Standard 208 also illustrate that

this review may be searching as well as deferential.

Each decision reviewed NHTSA’s issuance of the passive

restraint standard for whether it was supported by “sub-

stantial evidence“ within the meaning of 5 U.S.C.

8706 (2) (E), even though in each instance the agency

had promulgated the standard after informal rulemak-

ing. In Chrysler Corp. v. Dep't of Transportation, the

Sixth Circuit concluded that the substantial evidence test

was required by the Safety Act, which mandates that

“all of the evidence before the agency . . shall be

included in the record” submitted to the reviewing

court. 15 U.S.C. § 1894(a)‘') (referring to 28 U.S.C.

§ 2112(b)). 472 F.2d at 668. In Pacific Legal Founda-

tion v. Dep’t of Transportation, the court conducted a

“thorough, probing, in-depth review” of the record, but

declined to follow the Sixth Circuit’s invocation of the

substantial evidence test because any difference was

“largely semantic“:

congressional creation of “the single-value agency”); Gellhorn &

Robinson, Rulemaking “Due Process,” 48 U. Cui. L. Rev, 201. 202

(1981) (agency power to employ informal rulemaking procedures

was not confirmes until 1956, and format was still relatively little

used for the next fifteen years).

is In Pacific Legal Foundation v. Dep't of Transportation, 593

F.2d at 1343 n.35, this court noted that the case for this approach

was strengthened by the 1974 Amendments, which required that a

public hearing be held on any proposed passive restraint standard.

15 U.S.C. 8 1410b(c)(2). But see 120 Conc. Rec. 35,636 (1974)

(Representative Staggers) (under 1974 Amendments, DOT “would

not be required to provide an adjudicatory hearing under sections

556 and 557 of title 5, United States Code; and judicial review of a

standard promulgated under the section 125(c) procedure would not

be under the ‘substantial evidence’ rule—since the agency hearing

is not required to be ‘on the record); Automotive Parts & Acces-

sories Ass’n v. Boyd, 407 F.2d 330, 336-37 (D.C. Cir. 1968) ( reject-

ing argument that “record” meant “evidentiary record,” and refus-

ing to infer that Congress “in this unnecessarily oblique way” in-

tended to subject agency’s informal rulemaking to substantial evi-

dence test).

28a

We do not follow this reasoning because we agree

with the emerging consensus of the Courts of Ap-

peals that the distinction between the arbitrary and

capricious standard and substantial evidence review

is largely semantic, and that “in the review of rules

of general applicability made after notice and com-

ment rulemaking, the two criteria do tend to con-

verge.” Associated Industries of New York State,

Inc. v. Dep’t of Labor, 487 F.2d 342, 349-50 (2d

Cir. 1973) .... [Wle agree with Judge Lumbard

that “when an agency engages in substantive rule-

making, it abuses its discretion (or acts arbitrarily

and capriciously) if its actions are not supported by

substantial evidence.” Nat’l Nutritional Foods Ass’n

v. Weinberger, 512 F.2d 688, 705 (2d Cir. 1975)

(Lumbard, J., concurring in the result).

593 F.2d at 1343 n.35. See Recording Industry Ass’n v.

15-16 (D.C. Cir. Aug. 27, 1981); Sierra Club v. Costle,

657 F.2d 298, 323 n.67 (D.C. Cir. 1981); Paccar, Inc. v.

NHTSA, 573 F.2d 632, 636 (9th Cir.), cert. denied, 439

U.S. 862 (1978); American Public Gas Ass’n v. FPC,

567 F.2d 1016, 1029 (D.C. Cir. 1977), cert. denied, 435

U.S. 907 (1978); Bunny Bear, Inc. v. Peterson, 473

F.2d 1002, 1006 (1st Cir. 1973).

In short, although all parties in this case agree that

we should apply the arbitrary and capricious standard

of review, they differ markedly about the intensity and

rigor with which that standard should be applied. NAII

contends that there is a “heavy burden” on NHTSA to

explain that its rescission is “rational and supported by

substantial evidence.” Brief for Petitioner NAII (NAII

Brief) at 19. State Farm urges that our review be “in-

tensive and exacting,” Brief for Petitioner State Farm

(State Farm Brief) at 21. Although NHTSA “welcomes

the most intense scrutiny” and contends that Notice 25

is “supported by the evidence in the record,” Brief for

29a

Respondent NHTSA (NHTSA Brief) at 19, the agency

also urges that we exercise “a high degree of deference

to the agency’s determination.” Id. at 24 (quoting Nat-

ural Resources Defense Council, 606 F.2d at 1050).

Before we decide this question, it may be useful to

ask why the same verbal standard of review should be

given different scope in different contexts. Part of the

answer was suggested in Pacific Legal Foundation v.

Dep’t of Transportation, where the court explained that

its “probing” review was required by the fact that Sec-

retary Adams’ decision to issue the 1977 rule (Modified

Standard 208) had come on the heels of Secretary Cole-

man’s decision four months earlier that such a standard

was not required:

In addition, because the order under review here

reversea a prior policy, the agency must provide “an

opinion or analysis indicating that the standard is

being changed and not ignored, and assuring that it

is faithful and not indifferent to the rule of law.”

593 F.2d at 1343-44 (quoting Columbia Broadcasting

System, Inc. v. FCC, 454 F.2d 1018, 1026 (D.C. Cir.

1971)). As Judge Leventhal observed over a decade ago,

sharp changes of agency course constitute “danger sig-

nals” to which a reviewing court must be alert. Joseph

v. FCC, 404 F.2d 207, 212 (D.C. Cir. 1968). He elab-

orated in a later case:

Judicial vigilance to enforce the Rule of Law in

the administrative process is particularly called

upon where, as here, the area under consideration is

one wherein the Commission’s policies are in flux.

An agency’s view of what is in the public interest

may change, either with or without a change in cir-

cumstances. But an agency changing its course must

supply a reasoned analysis indicating that prior

policies and standards are being deliberately changed,

not casually ignored

30a

Greater Boston Television Corp. v. FCC, 444 F.2d 841,

852 (D.C. Cir.), cert. denied, 403 U.S. 923 (1971). See

RKO General, Inc. v. FCC, 670 F.2d 215, 223-24 (D.C.

Cir. 1981); Local 177, Democratic Union Organizing

Comm. v. NLRB, 603 F.2d 862, 882 (D.C. Cir. 1978)

(agency must announce “principled reason” for reversal

of policy).

The difficulty with these observations is that they

blend judicial review of agency adjudications and licens-

ing with review of agency rulemaking. Intuitively, at

least, it seems obvious that concern for consistency in an

agency’s decisionmaking should be greatest when the

agency departs from an adjudicative precedent or a well

established licensing rule, and less grave when the agency

reconsiders the value of a “quasi-legislative” rule of gen-

eral applicability. Precedents by definition must be the

basis for future reliance, and a sudden agency departure

suggests that parties may have been treated unfairly.

See, e.g., Boston Edison Co. v. FPC, 557 F.2d 845, 849

(D.C. Cir.), cert. denied sub nom. Towns of Norwood,

et al. v. Boston Edison Co., 434 U.S. 956 (1977) (should

agency decide to reverse its course, it must give notice

“and apply the changed standard only to those actions

taken by parties after the new standard has been pro-

claimed as in effect”). In contrast, even the eleventh-

hour decision not to promulgate a regulation has less

impact on regulated parties. This may explain why rule-

making proceedings that terminate short of agency ac-

tions, e.g., Natural Resources Defense Council v. SEC,

606 F.2d 1031, and agency decisions not to conduct rule-

making proceedings at all, e. g., WWHT, Inc. v. FCC, 656

F.2d 807, are tested under a “very narrow” reading of

the arbitrary and capricious test. The agency’s refusal

to act may reflect its desire to use scarce resources on

more pressing problems, or its judgment that a problem

is trivial or nonexistent. See Moog Industries, Inc. v.

FTC, 355 U.S. 411, 413 (1958). Agency departure from

3la

precedent raises obvious problems, but why should courts

have similar concerns about erratic agency policymaking

or reversals in the course of rulemaking?

The answer to this question lies in the fact that an

agency is not a legislature.’ Congress delegates rule-

making power in the anticipation that agencies will per-

form particular tasks. Reviewing courts are required to

strike down agency action that exceed this mandate.

See, e.g., 5 U.S.C. § 706(2)(C). Even when there is no

claim that the agency has exceeded its jurisdiction, as

there is not in this case, sudden and profound alterations

in an agency’s policy constitute “danger signals” that the

will of Congress is being ignored. The few cases in which

agency decisions not to institute rulemaking have been

overturned, for example, primarily involve plain errors

of law, suggesting that the agency has been blind to the

source of its delegated power. See, e.g., NAACP v. FPC,

520 F.2d 432 (D.C. Cir. 1975), aff'd, 425 U.S. 662

(1976) (Commission erred in concluding that it lacked

jurisdiction to promulgate regulations concerning racial

discrimination by licensees); NORML v. Ingersoll, 497

F.2d 654 (D.C. Cir. 1974) (bureau erred in rejecting

filing of petition for rulemaking for reasons going to the

merits). Cf. Los Angeles Women’s Coalition v. FCC, 584

F.2d 1089 (D.C. Cir. 1978) (per curiam) (remanding

Commission’s denial of hearing on petition to deny li-

cense for further development of factual issues). In

19 Indeed, the evolution of “arbitrary and capricious” review,

see note 17 supra, may partially be explained by increasing judicial

sensitivity to this fact. See, e.g., Superior Oil Co. v. FyC. 322 F.2d

601, 619 (9th Cir. 1963), cert. denied, 377 U.S. 922 (1964); Flying

Tiger Line, Inc. v. Boyd, 244 F.Supp. 889, 892 (D.D.C. 1965) (in-

formal rulemaking proceedings “are analogous to hearings con-

ducted by Congressional Committees”); cf. Pacific States Bor &

Basket Co. v. White, 296 U.S. 176, 186 (1935) (“the presumption

of the existence of facts justifying its specific exercise attaches alike

to statutes, to municipal ordinances, and to orders of administrative

bodies“)

32a

Geller v. FCC, 610 F.2d 973, 979 (D.C. Cir. 1979) (per

curiam), the court reversed the agency’s “plainly mis-

guided” refusal to consider the possible effect of newly

enacted copyright legislation on its earlier regulations.

As we recently described the Geller rule, “an agency may

be forced by a reviewing court to institute rulemaking

proceedings if a significant factual predicate of a prior

decision on the subject (either to promulgate or not to

promulgate specific rules) has been removed.” WWHT,

Inc. v. FCC, 656 F.2d at 819. This articulates in specific

terms the general principle that administrative agencies

derive their power from the laws of Congress and have

no authority to act inconsistently with their statutory

mandate. The same tenet may be identified in adjudica-

tions under 5 U.S.C. § 706 (1) to “compel agency action

unlawfully withheld or unreasonably delayed.”

In determining the scrutiny with which the arbitrary

and capricious standard should be applied to NHTSA’s

rescission of Modified Standard 208, then, we must first

consider the extent to which NHTSA’s action may be

inconsistent with the congressional purpose behind the

Safety Act. It may seem unusual to discuss this legisla-

tive history before a precise standard of judicial review

has been formulated, but in this case there is no better

way to undertake such a task.

A. Standard 208 in Congress

Our review of the legislative history of the 1974

Amendments to the Safety Act and the subsequent con-

gressional reaction to Modified Standard 208 suggests

that e standard has come as close as an agency-made

regulation can come to being affirmatively endorsed by

Congress, without Congress actually having done so. Al-

though Congress has always considered the standard

politically controversial, the regulation has received suffi-

cient congressional approval to raise doubts that NHTSA’s

rescission necessarily demonstrates an effort to fulfill its

33a

statutory mandate. Three separate periods of the stand-

ard’s history in Congress merit close attention. The first

is late 1974, when Congress banned the ignition interiock

and continuous buzzer but did not foreclose NHTSA’s pur-

suit of a passive restraint standard. The second period

is late 1977, when NHTSA submitted Modified Standard

208 to both houses of Congress in accordance with the

legislative veto provisions of 15 U.S.C. S 1410b, but con-

current resolutions of disapproval were not enacted. The

final period is early 1980, when Congress contemplated

new amendments to the Safety Act that would have re-

fined Modified Standard 208 but would not have abolished

it.

1. Passive restraints in 1974

In 1974, Standard 208 had not yet been modified by

Secretary Adams. It called for the mandatory installa-

tion of passive restraints by August 15, 1976, and pro-

vided that during the preceding two-year period auto-

mobiles either should have passive restraints, or should

be equipped with an ignition interlock and continuous

buzzer to encourage use of manual seatbelts. As noted

abov2, see p. 9 supra, the public reaction to the interlock

and continuous buzzer was swift and furious, and a chief

purpose of the 1974 Amendments was to ban them.

Congress could not help knowing about the pending date

for mandatory passive restraints, however, and the in-

structive aspect of the 1974 period is that Congress en-

couraged NHTSA to proceed with such a standard under

carefully constructed legislative conditions.

The 1973 Senate bill for NHTSA authorizations con-

tained no provision dealing with the passive restraint

standard. But see 119 Conc. Rec. 16,054 (1973) (Sen-

ator Magnuson) (noting that airbags “have proven to be

both reliable and life saving,” and proposing $3 million

authorization “to equip General Services Administration

vehicles with airbag systems”). In the House, however,

34a

opponents of the ignition interlock broadened their criti-

cism to include passive restraints as well. Representative

Wyman, who later described himself as “the prime spon-

sor of the interlock prohibition,” 120 Conc. Rec. 35,637

(1974), proposed a broad amendment to the Safety Act

that would have made it impossible for NHTSA ever to

promulgate a standard requiring mandatory passive re-

straints. Id. at 27,822. Representative Moss proposed to

amend this amendment so as not to affect the “pending

regulation, which already has been published, on which

comment has been received, for the passive restraint

system to become effective” as planned. /d. But

Representative Wyman insisted on his version, arguing

that passive restraints should be available only as options,

and the Wyman amendment passed overwhelmingly. /d.

at 27,822-23.

When the House and Senate bills went to conference,

however, the Wyman amendment was discarded. Instead,

the conference version proposed:

No occupant restraint system other than a belt sys-

tem could become effective until Congress was given

an opportunity to consider such standard for sixty

days of continuous session (except that DOT could

permit a manufacturer (at his option) to comply

with a standard with a nonbelt system instead of a

belt system).

H.R. Conr. Rep. No. 1452, 93d Cong., 2d Sess. 45

(1974). The Senate approved the report without a re-

corded vote, 120 Conc. Rec. 35,037 (1974), but most

relevant comments were favorable. Senator Magnuson

suggested that

exciting new technology on the immediate horizon

will save more lives than all of the other [motor

vehicle] standards heretofore promulgated put to-

gether. ... Congress has vested the Department with

all of the authority it needs to get the job done.

The burden is now with the Department to move

35a

forward with a sense of urgency. The problem is

urgent.

Id. at 35,036; see id. (statement of Senator Hartke)

(noting high benefit-cost ratios of passive restraint sys-

tems). The House also approved the conference report

without a recorded vote, id. at 35,637, with Representa-

tive Wyman also urging its adoption, id.

As the 1974 Amendments were interpreted by mem-

bers of Congress, NHTSA was required to follow four

main steps before a “nonbelt” safety standard could be

promulgated.“ Representative Staggers, chairman of the

House Committee on Interstate and Foreign Commerce

with jurisdiction over the legislation, explained that the

1974 Amendments required (1) a modification in DOT’s

notice and comment requirements in order “to permit

interested persons to present oral presentation”; (2)

specific provision for “input” by members of Congress;

(3) transmittal of any proposed standard to Congress;

and (4) application of the legislative veto provisions of

15 U.S.C. § 1410b. See 120 Conc. Rec. 35,636 (1974).

With these conditions, the way was clear for NHTSA to

try again. Congress obviously anticipated that a test of

the passive restraint standard would come when a revised

standard was sent to it on a later date. NHTSA complied

20 In presenting the Conference Report to the House, Representa-

tive Staggers emphasized that a “nonbelt” standard included stand-

ards that could be met by seatbelts if they could also be met by

nonbelts. The legislative veto provisions affect “not only a standard

which by its terms requires the system but also a performance

standard which as a practical matter can only be met by use of that

system. Thus, if an occupant restraint standard requires passive

restraints, which as a practical matter can be provided only hy an

airbag or other nonbelt system, then the standard would be regarded

as having the effect of requiring a nonbelt system.” 120 Conc. Rec.

35,635 (1974) (Representative Staggers). But see Pacific Legal

Foundation v. Dep't of Transportation, 593 F.2d at 1349 (declining

to reach contention of petitioners that Modified Standard 208 was

not covered by legislative veto provision of 1974 Amendments and

should not have been submitted to Congress at all).

with these procedural requirements, and transmitted

Modified Standard 208 to Congress on June 30, 1977.

2. Passive restraints in 1977

Concurrent resolutions to disapprove Modified Stand-

ard 208 were introduced in each house almost immedi-

ately upon congressional receipt of the standard. See, e.g.,

123 Conc. Rec. 21,760 (1977) (resolution introduced by

Senator Griffin on June 30, 1977); id. at 24,168 (seven

identical resolutions introduced in the House on July 20,

1977). These resolutions were then sent to the appro-

priate committees. In the House, the Subcommittee on

Consumer Protection and Finance of the Committee on

Interstate and Foreign Commerce concluded hearings on

September 23.“ The subcommittee voted by voice vote

to recommend to the full committee that the resolution of

disapproval not pass. The full committee voted to table

the resolution of disapproval on October 12. As a result,

the standard was not considered by the House and no

concurrent resolution of disapproval was passed.“

In the Senate, four days of hearings were held by the

Consumer Subcommittee of the Committee on Commerce,

Science, and Transportation. The subcommittee voted

unanimously, 5-0, to disapprove the resolution of disap-

proval. The full committee voted by voice vote to report

the resolution to the Senate, again with the recommenda-

tion that the resolution of disapproval not pass. S. REP.

No. 481, 95th Cong., Ist Sess. (1977). On October 12,

21 Installation of Passive Restraints in Automobiles: Hearings

before the Subcomm. on Consumer Protection and Finance of the

House Comm. on Interstate Finance, 95th Cong., Ist Sess. (1977).

22 The subcommittee and committee actions were not reported.

This legislative history is recounted in S. Rep. No. 481, 95th Cong.

Ist Sess. 2 (1977). See 123 Conc. Rec. 33,318 (1977) (Senator

Ford) (subcommittees and full committees “of both Houses of

Congress . have voted with bipartisan support to uphold Secre-

tary Brock Adams’ decision”).

37a

the full Senate voted 65-31 to table the resolution. 123

Conc. Rec. 33,332 (1977). Modified Standard 208 could

have been disapproved only by concurrent resolution of

both houses; neither house voted to disapprove the stand-

ard, and Modified Standard 208 thus went into effect.

Throughout the Senate review, Modified Standard 208

received not grudging acceptance but positive support.

The Senate report stated that the standard “would pro-

vide major increased protection for front-seat automobile

occupants” that could save “more than $3.5 billion an-

nually.“ S. Rep. No. 481, 95th Cong., Ist Sess. 2-3

(1977). On the floor, one speaker after another affirmed

the need for the standard. See, e.g., 123 Conc. Rec.

33,318 (Senator Ford) (“the hearing record contains

overwhelming support for the Department of Transporta-

tion’s rule”); id. at 33,319 (Senator Ribicoff) (noting

“well proven” efficiency of airbags) ; id. at 33,320 Sen-

ator Durkin) (“the only way to have our citizens pro-

tected by passive restraints is to mandate them”) ; id. at

33,325 (Senator Bentsen) (the rule is “in the best in-

terest of the public... . [P]assive restraint systems are

the most effective way to improve vehicle safety“); id. at

33,329 (Senator Magnuson) (“it is time to put this mat-

ter to rest“); id. at 33,330 (Senator Baker) (supporting

standard because “there is ample evidence indicating that

air bags are effective in preventing injuries, that they

would save thousands of lives and prevent many more

serious injuries annually if installed on all cars, and

23 Intervenor Motor Vehicle Manufacturers Association (MVMA)

characterizes the committee’s decision as “a 9 to 7 vote.” Brief for

Intervenor MVMA (MVMA Brief) at 49 n.55. This is by no means

clear. As the Senate Report emphasized, “[t]he only record vote

was on the motion of Senator Ford to amend the motion of Senator

Griffin,” so that Concurrent Resolution 31 be reported unfavorably

rather than without recommendation. S. Rep. No. 481, 95th Cong.

Ist Sess. 25 (1977). The decision to report the resolution to the full

Senate was made by voice vote, and only four of the sixteen mem-

bers of the committee joined in the “minority views.” Jd. at 31

(Senators Cannon, Griffin, Goldwater, and Schmitt).

38a

that they are not hazardous”). Even critics of the

standard focused more on the desirability of further test-

ing and promotion of the systems than outright opposi-

tion to the standard. See, e.g., id. at 33,322 (Senator

Goldwater) (“trying to argue against the idea of saving

lives is a lot like arguing against free beer and mother

love. It is a difficult thing to do”); id. at 33,325 (Sen-

ator Cannon) (urging DOT to reinstitute Coleman dem-

onstration project) ; id. at 33,327 (Senator Griffin) (seek-

ing more experimentation or reinstatement of Coleman

demonstration project).

3. Passive restraints in 1980

The refusal by Congress in 1977 to disapprove Modi-

fied Standard 208 did not terminate debate on the ques-

tion of passive restraints. Opponents of passive restraints

in the House criticized not only the standard, but the

fact that the 1977 resolution of disapproval had been

“bottled up” in committee, thus depriving its supporters

of opportunity for floor debate. See, e.g., 124 Conc. REC.

H 5308 (daily ed. June 12, 1978) (Representative Shus-

ter); id. at H 5313 (Representative Devine). As dis-

cussed above, see p. 12 supra, riders were attached to

NHTSA appropriations bills for 1979 and 1980 that pro-

hibited DOT from implementing the passive restraint

standard in those years. Congress recognized that the

standard was not scheduled to be implemented until

1981, however, and these measures did not interfere with

NHTSA research and testing of passive restraints. See

id. at H 5309 (Representative Conte); id. ui H 5313

(Representative Staggers). Representative Dingell, a

co-sponsor of the 1979 rider, observed that “{t]he amend-

ment does not interfere with the progression toward the

effective date, model year 1982, of the passive restraint

standard.” 125 Conc. Rec. H 8055 (daily ed. Sept. 18,

1979) .**

24 Other congressional voices during this period were favorable,

however. In reporting on the National Traffic and Motor Vehicle

The passive restraint standard was again examined in

great detail by the 96th Congress during deliberations on

the Motor Vehicle and Cost Savings Authorization Act of

1980. The Senate bill, S. 1159, made no reference to the

standard. See 125 ConG. Rec. S 9166 (daily ed. July 11,

1979). When the House bill, H.R. 2585, came to the floor,

a number of speakers praised the standard. See, e.g., id.

at H 12,282 (daily ed. Dec. 19, 1979) (Representative

Staggers) (standard will “save not one, but many thou-

sands” of lives); id. (Representative Mineta) (noting

“grave concern about any amendments that would have

the effect of delaying implementation of the automatic

restraint program,” and that el ach time the standard

has been reviewed, it has been reconfirmed”) ; id. (Rep-

resentative Maguire) (“we should go forward aggres-

sively with this program”). Other speakers found it

“disheartening” that “the Congress again appears to be

going along with [NHTSA] in its continuing tendency

toward excessive reliance on the airbag.” Id. at

H 12,283 (Representative Cleveland).

On the floor, however, Representative Stockman pro-

posed an amendment to the Safety Act that would have

denied NHTSA funds to enforce or administer an occu-

pant restraint system

unless such standard or regulation also permits the

purchaser of a passenger car to select any occupant

restraint system which, if installed in the passenger

Information and Cost Savings Authorizations Act, the House Com-

mittee on Interstate and Foreign Commerce referred to a report

two years earlier that had found

a slackening in issuance of new vehicle safety standards since

1970, partly as a result of political pressure against the issu-

ance of FMVSS 208, the passive occupant restraint stand-

ard .... Since the time of that report, the passive restraint

standard has been issued and upheld by the Congress. . The

committee believes that the agency is now making satisfactory

progress in carrying out its legislative mandate.

H.R. Rep. No. 1162, 95th Cong., 2d Sess. 9-10 (1978).

40a

car purchased by such purchaser, would comply with

the requirements of Federal Motor Vehicle Safety

Standard Number 208 (49 Code of Federal Regula-

tions 571.208), relating to the installation of active

seat belt systems, as in effect at the end of June 29,

1977.

Id. at H 12,285. Representative Stockman explained that

the amendment “preserves the right of the consumer to

choose either an active restraint system, which is the lap-

shoulder belt that we have on cars today, or a passive

restraint system, which in practice means the airbag for

large cars, and the automatic seatbelt for small cars.”

Id.

Representative Scheuer, chairman of the reporting

committee, did not oppose the Stockman amendment be-

cause it is only a symbolic amendment with no real or

direct legal impact on the Department of Transportation’s

passive restraint standard.” Id. He explained:

The standard is scheduled to go into effect beginning

in 1982. This amendment, however, is an amend-

ment to a 1-year bill authorizing the appropriations

of funds for carrying out the National Traffic and

Motor Vehicle Safety Act for fiscal year 1980 only.

Further, the amendment continues to allow for the

installation of airbags or passive seatbelts, while

providing for an additional option—active seatbelts.

This is an option which would have existed regard-

less of whether this l-year amendment was adopted.

Id. Representative Stockman responded, however, that

“this is a proposal we have not voted on previously. This

is a compromise solution that is designed to mandate the

introduction of these things into the market, mandate

the offering of passive restraints on every car that is

sold by any manufacturer in the U.S. market, but give

the consumer the choice of which system he will actually

choose to have on his car.” Jd. The Stockman amend-

4la

ment passed overwhelmingly, 320-73. It should be noted

that most of the members who had earlier praised Modi-

fied Standard 208—including Representatives Mineta,

Scheuer, and Staggers—were among those voting with

the majority. /d. at 12,287.

Like the Wyman amendment six years earlier, the

Stockman amendment was also discarded when che House

and Senate bills went to conference. The Conference Re-

port proposed several important revisions to Modified

Standard 208, however, in the form of a proposed

amendment to the Safety Act. First, the amendment

would have accelerated the date by which the standard

applied to small cars. H.R. Conr. REP. No. 1371, 96th

Cong., 2d Sess. 15 (1980). The legislative history sug-

gests two reasons for this change. “With the anticipated

increase in smaller, more fuel efficient [and more dan-

gerous] cars on the Nation’s highways, it is in the in-

terest of public safety that passive occupant restraint

protection should be required in these cars as soon as pos-

sible.” Id. Moreover, the standard as promulgated would

not have applied to small cars until two years after the

effective date for compliance on large cars, and it was

felt that this “would place domestic manufacturers at a

great disadvantage against foreign competition.” 126

Conc. Rec. S 13,499 (daily ed. Sept. 25, 1980) (Senator

Cannon).

Second, the conference substitute recognized the trend

by automobile manufacturers toward phasing out various

large car models in favor of smaller ones. It therefore

exempted “certain smaller manufacturers from having to

install automatic occupant restraint systems in mid-sized

cars that will [no longer] be produced after December 31,

1982,” although these marufacturers would still be re-

quired to comply with the applicable requirements for

models produced the following year. H.R. CoNF. REP. No.

1371, 96th Cong., 2d Sess. 15 (1980). Third, the con-

ference substitute would have required that

42a

beginning with model year 1983, each seatbelt as-

sembly installed in a passenger car must be detach-

able by the user in a manner which doc. ot impair

the subsequent reattachment and performance of the

assembly. The conferees intend that the passive belt

can be detached at any point, including one adjacent

to the inboard anchor.

Id. at 17.

The final and perhaps most significant revision pro-

posed by the conference report concerned airbags. The

five automobile manufacturers with the largest sales—

GM, Ford, Toyota, Nissan, and Volkswagen—would have

been required to “tool and offer for sale” either as an

option or as standard equipment airbags on at least one

car line in any three of the four model years between

September 1981 and September 1985. The conference re-

port provided careful definitions of “tooling up” and “car

line,” and added:

It is clearly the expectation of the conferees that

consumers have a meaningful choice in the market

between vehicles equipped with automatic safety

belts and with airbags. It is the hope of the con-

ferees that the public will be informed of such choices

and that automatic safety belts and airbags be made

available at reasonable cost.

Id. at 16.

As Representative Maguire observed during the House

consideration of the conference report, the requirement

that larger car companies offer airbags “is a major

20 To “tool for production” meant that “a manufacturer must

demonstrate that he has the capability for assembling cars with

airbags on an assembly line in the customary fashion of the manu-

facturer.“ H.R. Conr. Rep. No. 1371, 96th Cong., 2d Sess. 16

(1980) ; see id. (defining “car line”). “Further, it is the intent of

the conferees that automatic safety airbags be made generally

available and not limited to esoteric cars which are offered to a

limited market for the purpose of frustrating the legislative intent.”

Id.

43a

change in policy.” 126 Conc. Rec. H 10,196 (daily ed.

Oct. 1, 1980). Prior to this time, proponents of the pas-

sive restraint standard had always emphasized that

[t]he standard is a performance standard which does

not require that any specific technology be utilized by

automobile manufacturers .... Thus, the standard

does not mandate that air cushion restraint systems

(the air bag) be used. Passive belts may be used,

or any other technology which meets the standard.

S. REP. No. 481, 95th Cong., Ist Sess. 1 (1977); see id.

at 17-18 (explaining reasons for not requiring airbags

as a mandatory option). Now, for the first time, a com-

mittee of Congress “has gone on record to assure con-

sumers freedom of choice in the selection of restraint

systems by requiring that some airbags be made avail-

able to consumers who want to buy them.” 126 CONG.

Rec. H 10,196 (daily ed. Oct. 1, 1980) (Representative

Maguire) ; see id. at H 10,194 (Representative Scheuer).

This “major change in policy” raised certain proce-

dural problems, however, because Congress frowns on

conference reports that depart significantly from the bills

passed in the separate houses. The Senate adopted the

conference report, without a recorded vote. 126 CONG.

Rec. S 13,506 (daily ed. Sept. 25, 1980). As had been

the case in 1977, most comments on the standard were

favorable. See, e.g., id. at S 13,502-03 (Senator Warner)

(supporting “the concept for automatic occupant protec-

tion” because vehicle fatalities and injuries have reached

“epidemic proportions,’ costing society billions of dol-

lars annually). In the House, however, points of order

were raised against the conference report because of

clauses 3 and 4 of House Rule XXVII, rules of scope and

g ©uaneness designed to prevent conferees from writing

» ew legislation in conference.

In such a situation, the conference report may still be

considered in two ways. The more common is to obtain

44a

a rule from the House Committee on Rules waiving the

points of order. Alternatively, the conference report can

be considered under a suspension of the rules, although

this requires a two-thirds vote before the report is passed.

The sponsors of the 1980 conference report chose the

second course, a highly unusual move suggesting their

confidence that the report would be accepted. See 126

Conc. Rec. H 10,194 (Representative Scheuer) (“The

conferees carefully constructed a compromise which is

simultaneously supported by DOT and NHTSA] and

which GM and Ford have both said they can live with”).

The reaction in the House was mixed, however. Compare

id. at H 10,204 (Representative Mineta) (“The agree-

ment reached by the conferees is a strong endorsement of

the automatic crash protection standard 208”) with id.

at H 10,198 (Representative Frenzel) (“this is the first

time that the Congress will have ever mandated airbags

by law and, because of that, in my judgment, this con-

ference report ought to be rejected out of hand”). A

majority of the House voted in favor of the report, 209-

192, but this was less than the two-thirds vote required

under the suspension of the rules.

The sponsors of the conference report then sought and

obtained a rule that would waive points of order. H.R.

REP. No. 1500, 96th Cong., 2d Sess. (1980) (10-4 vote of

House Committee on Rules in favor of such a rule) ; see

126 Conc. Rec. H 11,912 (daily ed. Dec. 4, 1980) (Rep-

resentative Bolling). This rule was strongly opposed on

the floor, however, and was narrowly defeated, 165-168.

Id. at H 11,918; see id. at H 11,912 (Representative Quil-

len) (“If we do not draw that line now, we will be in-

viting future conferees to write completely new legisla-

tion in conference in total disregard of the wishes of the

House”). As before, however, Congress recognized that

the battle over amendments to Modified Standard 208 did

not prevent the standard from taking effect. Representa-

tive Dingell observed:

45a

Mr. Speaker, this is not a partisan question

The question is not even whether airbags or passive

restraints are going in, because under existing law

passive restraints, as opposed to airbags, which in-

clude airbags but which also include other devices

such as passive belts, are still required under regu-

lation and some passive belts and others are and

new ones will shortly be on the market.

Id. at H 11,913. Minutes later, Representative Dingell

repeated that “if we reject this proposal, Airbags and

Motor Vehicle Safety Standard 208, whicu is a perform-

ance standard, will still be in place and will not be af-

fected by the action of the House in rejecting the action

of a group of runaway conferees who have openly flaunted

and disregarded the will of the House.” Id. at H 11,916.

This latter effort to waive points of order against the

conference report was made on December 4, 1980, the day

before the end of session. On December 5, Representatives

Dingell and Broyhill urged passage of “a compromise

bill,” H.R. 8379, which Representative Dingell explained

“is again an attempt to see to it that the consumer has

an opportunity for choice in the purchase of passive

restraints without mandating air bags in passenger auto-

mobiles.” 126 Conc. Rec. H 12,119 (daily ed. Dec. 5,

1980). The compromise bill also proposed to reverse the

effective dates of Modified Standard 208, requiring that

small cars comply before large cars, but would have re-

tained the requirement that all cars have passive re-

straints by 1984. A large number of the representatives

who had voted in favor of the Conference Report now

voted against H.R. 8379, however. Representative Leland

commented :

To reverse decisions that have been made in behalf

of the people of America and their safety, in my

estimation, is a matter of madness and in the vernac-

ular of the community from whence I come, this bill

is jive.

46a

Id. at H 12,123. See id. (Representative Eckhardt) ; id.

(Representative Conyers). A majority voted in favor of

the compromise bill, 205-126. But because it too had been

considered under a suspension of the rules, H.R. 8379

also was rejected, and never even came up for considera-

tion in the Senate.

In summary, each of the three periods during which

Congress closely considered the passive restraint standard

represents a different type of legislative action. In 1974,

Congress banned the ignition interlock but did not fore-

close NHTSA’s pursuit of a passive restraint standard.

In 1977, Congress allowed the standard to take effect

when neither of the concurrent resolutions needed for dis-

approval was passed. In 1980, a majority of each house

indicated support for the concept of mandatory passive

restraints, and a majority of each house supported the

unprecedented attempt to require some installation of air-

bags. None of these acts carries the weight of positive

law, of course. The 1977 failure to disapprove the stand-

ard cannot be read as a congressional enactment—even

though it is easier to obtain a two-house veto than passage

of a bill—and the 1980 efforts failed to become law.

Reading this legislative history as a whole, however, sug-

gests a congressional commitment to the concept of auto-

matic crash protection devices for vehicle occupants that

we may not take lightly.

B. The Scope of Review in this Case

Based on the legislative reaction to the passive re-

straint standard discussed above, we conclude that rescis-

sion of the standard must be subject to “thorough, prob-

ing, in-depth review” lest the congressional will be ig-

nored. On the facts of this case, our review must be as

“searching and careful” as the judicial review in Pacific

Legal Foundation v. Dep’t of Transportation, where the

issue was the promulgation rather than the rescission of

Modified Standard 208.

47a

Mere legislative silence in the face of agency action is

a hazardous basis from which to infer congressional ap-

proval of the agency’s interpretation of the statutes in-

volved. “However, a consistent administrative interpre-

tation, shown clearly to have been brought to the atten-

tion of Congress and not changed by it, is almost con-

clusive evidence that the interpretation has congressional

approval.” Kay v. FCC, 443 F.2d 638, 646-47 (D.C. Cir.

1970) ; see Udall v. Tallman, 380 U.S. 1, 17-18 (1965).

The Safety Act directs that the Secretary shall“ issue

appropriate motor vehicle safety standards; ordinarily

this term “is the language of command.” Escoe v. Zerbst,

295 U.S. 490, 493 (1935) (Cardozo, J.). Despite the

legislative battles over whether to specify an airbag re-

quirement or when the standard should take effect, each

time Congress reviewed the passive restraint standard it

was essentially confirmed. “In the matter before us there

is not merely silence, proposals languishing without any

Congressional action, but positive action by Congress re-

jecting the limiting amendments.” National Automatic

Laundry & Cleaning Council v. Shultz, 443 F.2d 689, 706

(D.C. Cir. 1971). Although there may be situations in

which an agency may repeal a regulation on no basis at

all, such is not the case here. NHTSA is not writing on

a clean slate; it cannot suggest that the congressiona!

actions and failures to act described above have no bear-

ing on the agency’s freedom to regulate on this question.

It follows that NHTSA has the burden of explaining why

it has changed course, and of showing that rescission of

Modified Standard 208 was reasonable.“

26 NHTSA denies that there has been any “fundamental policy

change,“ NHTSA Brief at 19, and contends that placing the burden

on NHTSA to sustain the validity of its action would “transgress

the boundaries between judicial and legislative functions.” Id. at

24. NHTSA’s argument that there has been no policy change is

somewhat disingenuous, however, because the agency immediately

goes on to justify that change on the merits. See, e.g., id. at 20

(“The changed facts since the Adams decision required the Adminis-

trator to make a different decision”); id. at 19 (earlier Adams de-

48a

This does not mean that NHTSA may not revoke the

standard. If the agency clearly articulates a reasonable

basis for that action, we must defer to the policy judg-

ments and expertise of the agency. By no means may we

substitute the court’s judgment, or fail to “guard against

the danger of sliding unconsciously from the narrow con-

fines of law into the more spacious domain of policy.”

Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194 (1941).

The line between substitution of judgment and judging

whether action has been rational or arbitrary is some-

times fine, and to some critics imperceptible. We fully

recognize, however, the side of ‘hat line from which the

court derives its lawful authority. We also recognize that

the course of administrative action is frequently and

inevitably characterized by shifts and turns, as agencies

continually reassess what is in the publie interest. But

courts are “not obliged to stand aside and rubber-stamp

their affirmance of administrative decisions that they

deem inconsistent with a statutory mandate or that frus-

trate the congressional policy underlying a statute.”

NLRB v. Brown, 380 U.S. 278, 291 (1965. Judicial

scrutiny of agency action—including the rescission of a

rule—depends on the extent to which the agency has devi-

ated from congressional expectations. An agency is sel-

dom locked on course, but it must have increasingly clear

and convincing reasons the more it departs from the path

marked by Congress.

We therefore review NHTSA’s rescission of Modified

Standard 208 for whether the agency has engaged in

reasoned decisionmaking, making actual judgments con-

cerning the significance of the evidence in the record and

cision “was itself a reversal” of the Coleman decision). See gener-

ally 46 Fed. Reg. at 53,419 (purpose of rulemaking was to ensure

that standard “reflects the changes in circumstances since the

automatic restraint requirements were issued”); RIA at II-7 to

II-10, J.A. 33-36 (rising gasoline prices, economic downturn, lower

automobile sales and rising unemployment required changing the

standard).

49a

supporting its decision with ‘reasoned analysis.” City of

Charlottesville v. FERC, 661 F.2d 945, 951 n.35 (D.C.

Cir. 1981). We must ascertain the facts on which

NHTSA relied, determine whether those facts have some

basis in the record, and judge whether a reasonable de-

cisionmaker could respond to those facts as the agency

did. Recording Industry Ass’n v. Copyright Royalty

Tribunal, slip op. at 15. The court must also assure

itself that rescission is “based on consideration of the

relevant factors,” FCC v. National Citizens Comm. for

Broadcasting, 436 U.S. 775, 802-03 (1978); see Home

Box Office, Inc. v. FCC, 567 F.2d 9, 36 (D.C. Cir.), cert.

denied, 434 U.S. 829 (1977), and determine that NHTSA

made “a considered evaluation of the presently available

alternatives.” Pillai v. CAB, 485 F.2d 1018, 1029 (D.C.

Cir. 1973). With this statement of the appropriate scope

of our review, we turn to the merits of NHTSA’s action.

III. THE ARBITRARINESS OF RESCISSION

The rescission of Modified Standard 208 on the

grounds stated by NHTSA was arbitrary and illogical

for two general reasons. The agency has offered no evi-

dence that seatbelt usage wil! fail to increase as was

expected when the standard was first promulgated, and

has therefore made no showing that the standard is

unjustified as written. More important, NHTSA has

failed to consider or analyze obvious alternatives to re-

scission, and has thus artificially foreclosed attempts to

further the purpose of the Safety Act. See Pillai v. CAB,

485 F.2d 1018, 1027 (D.C. Cir. 1973). When the agency

so narrows its options that it fails to heed the goals that

Congress has asked it to meet, the agency violates its

basic legislative mandate. Simply put, NHTSA’s dis-

cussion of ways in which Modified Standard 208 could

have been amended was wholly inadequate, and rescission

was therefore arbitrary and unlawful.

A. Modified Standard 208 as Written

NHTSA made three findings in deciding that the

standard as written could not be justified, and should

either be amended or rescinded. First, most automobile

manufacturers planned to use detachable passive belts.

Second, once detached, a detachable belt “becomes iden-

tical to a manual belt.” Finally, NHTSA “cannot reli-

ably predict even a 5 percentage point increase as the

minimum level of expected usage increase.” See 46 Fed.

Reg. 53,421-23.

Although the petitioners challenge each step of this

reasoning, we conclude that NHTSA’s first finding was

not unreasonable. The prediction of how industries plan

to comply with an agency regulation is exactly the sort

of factual question on which the agency’s expert “admin-

istrative feel” deserves the greatest deference. It was

not unreasonable for NHTSA to conclude, from the com-

ments that appear in the record, that most manufac-

turers did indeed plan to install detachable passive seat-

belts in order to comply with the passive restraint

standard.

NHTSA’s second finding is also reasonable, although it

is important to note the limitations of this finding. The

observation that a detachable belt, once detached, is func-

tionally equivalent to a manual belt, does not dictate any

conclusion about the usage rate of detachable belts. Any

suggestion that this finding alone leads to a prediction

that usage rates under the two systems would be iden-

tical is inconsistent with NHTSA’s third finding, which

* See note 11 supra; MVMA Brief at 28 n.30. We recognize, of

course, that although deference must be given to this agency finding,

it may nevertheless be erroneous. See NAII Brief at 25 (“logic

would suggest that given a choice between two passive restraint sys-

tems of equal cost and consumer acceptance, manufacturers would

choose the one that is the safest”). Indeed, the primary empirical

problem in this case arises precisely because automobile makers have

not used detachable belts thus far in voluntarily providing passive

restraints. See note 30 infra.

5la

acknowledged that even detachable passive belts would

make some difference in seatbelt usage.** The rationality

of NHTSA’s conclusion about the standard as written

depends entirely on how well its third step—predicting

usage rates with detachable belts—holds up.

In taking this third step, NHTSA turned the question

on its head and thus totally misdirected its analysis.

There may well be “substantial uncertainty” about the

seatbelt usage rates that can be predicted if detachable

belts are widely used. But the question is not whether

evidence shows that usage rates will increase by the

necessary amount, but — there is evidence showing

they will not. NHTSA has some burden, in other words,

to show that a regulation once considered to prevent

deaths and injuries efficiently can no longer be expected

to do so. This evidence may take the form of statistical

data or logical argument, but it must exist in some form.

To state this point in the reverse, it would be unrea-

sonable for an agency to promulgate a regulation simply

because of “substantial uncertainty” that the status quo

was any better. There must be some reason to support

any reasoned decision.

There is not one iota of evidence to support NHTSA’s

conclusion that Modified Standard 208 as written will

fail to increase nationwide seatbelt use by 13 percentage

points or more. No logical reason has been suggested

why even detachable belts—except under a certain con-

dition whose frequency is not known—cannot lead to

safety benefits that exceed their relatively small mar-

28 46 Fed. Reg. at 53,425. This conclusion is certainly supported

by logic, because whereas a detached belt may be “identical to a

manual belt,” a connected belt is identical to a passive restraint. If

users at some point detach these belts, they may indeed leave the

belts unattached for a series of their subsequent trips. When those

users remember to reattach the belts, however, inertia is again on

the side of belt usage. See note 33 infra.

ginal costs.“ Statistics concerning usage rates of the

passive seatbelts now in service suggest exactly the op-

posite, and NHTSA’s conjectural efforts to distinguish

these systems miss the point.“ If, as NHTSA contends,

29 See note 9 supra (marginal cost of VW passive belts is $50).

As NHTSA observes, “[wJith car prices increasin, annually by

more than $1,000, the added price of automatic restraints, although

not insignificant, is still a small portion of total increases and may

go undetected by consumers.” RIA at IX-4, J. A. 219.

% See note 12 supra (passive restraints now in use increase usage

rates on particular models to between 70 and 90%). Although

NHTSA refused to extrapolate from these statistics for the reasons

discussed in note 14 supra, this merely left the agency with no

data “which can be used to predict automatic belt usage.” RIA at

IV-55, J.A. 111. See NHTSA Brief at 36-37 (agency had a “total

absence of empirical and attitudinal information on the readily

detachable belt”).

We note that NHTSA’s reasons for refusing to extrapolate from

the available data are extremely weak. Three of the four factors

discussed in note 14 supra were undercut by the agency's own

analysis. See RIA at IV-54, J.A. 110 (“generally it is not true”

that voluntarism biases existing data, because a number of current

users “did not know they were getting automatic belts and others

accepted the automatic belt equipped car because it was the only car

available with the other options they wanted”); id. (demographic

argument “is somewhat, although not totally, negated” by adjust-

ing data to acount for higher usage of manual belts; moreover,

although VW owners may be atypical of the fleet, GM Chevette

owners are not). NHTSA’s final concern was that interlocks on

some of these vehicles “would account for four-fifths of the [usage]

increase observed.” There are three major difficulties with this

undocumented conclusion. First, although GM eliminated the inter-

lock on the 1980 Chevette, the usage rate of passive belts on those

models actually increased over the interlocks-guarded belts on 1978

and 1979 Chevettes. See RIA at IV-33, B-8, J.A. 89, 292 (38%

incremental use on 1979 model, 39% incremental use on 1980 model)

Second, NHTSA’s surveys suggested that the high usage rates on

current models should be attributed to factors other than the

coercive effect of the interlock. See id. at IV-36, J.A. 92 (67% of

VW owners in Opinion Research Corporation survey said they

would use the passive belts even if there were no interlock); id.

(same survey finding more favorable later impressions than i.rst

53a

the passive belts now in use cannot be the basis for pre-

dicting usage rates under Modified Standard 208, then

only a well justified refusal to seek more evidence could

render rescission non- arbitrary. National Ass’n of Dem-

olition Contractors v. Costle, 565 F.2d 748, 751-52 (D.C.

Cir. 1977). NHTSA could have conducted surveys or ex-

perimented with detachable belt prototypes, or it could

have explained logically why usage rates with detachable

belts would increase less than 13 percentage points. The

agency did not do so; it rested its decision only on “sub-

impressions of passive belts); id. at IV-40, J.A. 96 (focus group

studies identifying common reaction to passive belts of “relief”

that automatic belts could resolve conflict between what passengers

feel they should do and what they actually do). See generally note

33 infra. Finally, the record suggests that the effect of interlocks

may actually be relatively insignificant in promoting seatbelt use.

See RIA at IV-39, J.A. 95 (NHTSA rental car survey showing

13% use of shoulder belts without interlock and 15% use with inter-

locks). See generally note 12 supra ‘(interlocks in 1975 only suc-

ceeded in raising manual belt use from 20% to 40%).

In their briefs, NHTSA and MVMA suggest yet another reason

not to extrapolate from current data. The alleged consumer re-

sistance to the 1980 Chevette, see NHTSA Brief at 13 n.7, MVMA

Brief at 57 n.66, is said to show that negative consumer reaction

would have “an increasingly adverse effect on overall seat belt

usage rates.” NHTSA Brief at 58. Aside from the fact that post-

hoc rationalizations of counsel carry no weight in our review of

agency decisionmaking, Buriington Truck Lines, Inc. v. United

States, 371 U.S. 156, 168-69 (1962), it is difficult to see exactly

how speculation about abstract consumer preferences detracts from

concrete data concerning current usage rates. As NHTSA observes,

“GM’s comparison of voluntary purchase of automatic belts in

Chevettes to potential consumer reaction to mandated automatic

belts may be fallacious.” RIA at IX-4, J.A. 219. Consumers may

voluntarily purchase passive restraints with low frequency for the

same reason that vehicle occupants wear manual belts with low

frequency, i.e. “people obviously have little information on either

the safety risks inherent in motor vehicle travel or the relative

benefit of belts, be they manual or automatic.” Id. at IX-5, JA.

220. See id. at IV-41, J.A. 97 (Americans view collision survival

“in very unsophisticated terms,” with “virtually no apparent aware-

ness of ‘secondary collision’”). See generally note 33 infra.

54a

stantial uncertainty” about these rates. Its decision to

rescind the standard thus was arbitrary because the

decision was supported by no record evidence whatsoever.

We do not mean this portion of our opinion to seem

simplistic. Implicitly, the perpetuation of a regulation

also involves a decision that its continuation is worth-

while, and reasonable decisionmaking requires that this

too be supported by reasons. If NHTSA was uncertain

that Modified Standard 208 would lead to the required

usage increase, it could reasonably have decided to sus-

pend or amend the regulation rather than plunge ahead

in the blind faith that the standard would succeed. In-

deed, this was originally how the agency framed the

questions that led to the most recent rulemaking pro-

ceedings.“ But it is one thing to decide that evidence

fails to show the wisdom of continuing with a regulatory

program, and quite another to decide that evidence shows

the regulatory program should be abandoned altogether.

There is no evidence at all that detachable passive belts

will fail to increase seatbelt usage by 13 or even 50 per-

centage points, and NHTSA thus went one step further

than reason can support.

B. Other Forms of Modified Standard 208

NHTSA explicitly considered a series of alternative

amendments to Modified Standard 208 before deciding to

rescind the standard. Its notice of proposed rulemaking

proposes a wide range of possible changes to the

automatic restraint requirements. The Depart-

ment desires to ensure that it is taking the most

effective and reasonable approach to addressing the

serious safety problem posed by the low rate of

31 See text at note 32 infra. DOT noted its concern that several

automobile manufacturers “plan automatic belts [sic] designs which

have a release buckle identical to the buckle on current manual

belt systems,” with the result that “[u]Jsage could thus in fact turn

out to be low.” 46 Fed. Reg. at 21,176 (April 9, 1981).

55a

safety belt use in all cars and by the steadily de-

creasing average size of new cars sold in this country.

46 Fed. Reg. at 21,205-06. The agency considered

whether to reverse the sequence of compliance so that

small cars would be required to comply before large cars,

and whether to amend the standard so as to require

simultaneous implementation on all car sizes. NHTSA

also considered amending the standard in order to exempt

the front center seating position, while retaining the re-

quirements for the driver and front right passenger

seats. In reviewing these possibilities, NHTSA’s Regula-

tory Impact Analysis (RIA) was impressively thorough

and careful.”

In striking contrast, neither NHTSA’s decision nor its

RIA devoted even a modicum of reasoned analysis to

several far more obvious possible amendments to Modified

Standard 208. The decision briefly discussed—and sum-

marily rejected—amending the standard so as to elimi-

nate compliance by detachable belts. The RIA, which

was otherwise replete with economic and safety estimates

and other data, did not once attempt to analyze the con-

sequences of such an amendment. Even more striking

is the agency’s failure to consider amending the passive

32 See, e. g., RIA at IV-63 to IV-71, J. A. 119-27. NHTSA’s discus-

sion of whether to delete the requirement of passive protection

for front center seating positions was a model of careful analysis.

See id. at IV-73, J.A. 129 (analyzing deaths by seating position) ;

id. at IV-79, J.A. 135 (adjusting fatality figures for front right

position to reflect the fact that bucket seats would prevent passen-

gers from sitting in center seat); id. at IV-S6, J. A. 142 (analyzing

net impact on fatalities and injuries). In short, NHTSA devoted

15 pages of its RIA to a discussion that “has no relevance if the

standard is rescinded,” id., but declined to analyze airbags or con-

tinuous belts because this “would be engagin, in a mythical paper

exercise” given the intentions of automobile manufacturers to com-

ply primarily with detachable belts. Jd. at IV-56, J. A. 112.

56a

restraint standard so as to allow compliance with airbags

only. In both the decision and the RIA, airbags are men-

tioned only in passing and only in the context of pre-

dicting that automobile manufacturers would not install

them on a widespread basis. Absolutely no effort was

made to compare the costs of airbags against their poten-

tial benefits, an omission that is particularly notable be-

cause none of the problems that NHTSA identified with

passive belts appears to apply to airbags.

In proceeding as it did, NHTSA allowed itself to be-

come captive to the ways in which it predicted automobile

manufacturers would comply with Modified Standard

208. Lip service aside, there is no indication of the

agency’s awareness that it could act positively to develop

a passive restraint standard that would advance the pur-

poses of the Safety Act. Courts frequently observe that

regulatory agencies do not function “as an impire

blandly calling balls and strikes for adversaries ppear-

ing before” them. Scenic Hudson Preservation Confer-

ence v. FPC, 354 F.2d 608, 620 (2d Cir. 1965), cert.

denied, 384 U.S. 941 (1966). If NHTSA did not be-

lieve the standard as written would fulfill the standard’s

goals, its foremost obligation was to consider whether

an amended standard could. The agency’s reasons for not

prohibiting compliance with detachable belts are hollow,

and its analysis of requiring exclusive compliance with

airbags is nonexistent. NHTSA was not required to fol-

low either avenue, of course, but it may not reject these

possibilities without reasoned discussion. In stating that

“the central issue in this proceeding has become whether

[detachable] automatic belts would induce higher belt

usage rates than are occurring with manual belts,” 46

Fed. Reg. at 53,425, NHTSA lost sight of its statutory

obligation to devise the best passenger safety regulation

it could. By artificially narrowing the options avail-

able—or ignoring those options completely—the agency

acted in a totally arbitrary fashion.

57a

1. Continuous belts

As in its assessment of Modified Standard 208 as writ-

ten, NHTSA’s discussion of whether to require only con-

tinuous passive belts starts by asking the wrong ques-

tion. The issue is not whether exclusive reliance on con-

tinuous belts would be superior to detachable belts, but

whether detachable belts comply with the passive re-

straint standard at all. NHTSA boldly declared that

Holnee a detachable automatic belt is detached, it be-

comes identical to a manual belt. . [I]ts use thereafter

requires the same type of affirmative action that is the

stumbling block to obtaining high usage levels of manual

belts.” 46 Fed. Reg. at 53,421. If so, the obvious ques-

tion is whether detachable belts conform to the require-

ments of the passive restraint standard, which requires

compliance “by means that require no action by vehicle

occupants.” 49 C. F. R. § 571.208, S4. 1. 1. 1. Whether a

detachable belt is in fact a passive restraint may depend

on the usage rates of these belts—a matter that NHTSA

has not yet established. But if detachable belts do not

comply with the passive restraint regulation, NHTSA

should have concentrated its analysis on safety devices

that do.

Time after time, members of Congress as well as

NHTSA have emphasized that a safety restraint requir-

ing affirmative action is not a passive restraint. For the

last decade, the agency has explained that a passive re-

straint requires “no action other than would be required

if the protective system were not present in the vehi-

cle.” 36 Fed. Reg. at 8296 (May 4, 1971). “The essence

of a passive restraint is that it provides at least the

minimum level of protection without relying on occupant

action to deploy the restraint.” 39 Fed. Reg. at 14,594

(April 25, 1974). “Automatic restraints are systems

that require no action, such as buckling a seat belt, by

vehicle occupants to be effective.” 46 Fed. Reg. at 12,033

(Feb. 12, 1981). See 123 Conc. Rec. 33,321 (1977)

(Senator Griffin) (a passive restraint “is something that

58a

does not require any activity on the part of the occupant

of the car“); S. REP. No. 481, 95th Cong., Ist Sess. 1

(1977) (“Passive restraints are defined in the rule to

mean any front seat occupant restraint which protects

the occupant . . without the occupant having to activ-

ate it”). It is difficult to imagine an agency decision that

could be more irrational than rescinding a regulation be-

cause of problems identified in industry actions that do

not comply with that regulation. If detachable belts

function as poorly as NHTSA says they would, then

NHTSA’s discussion of these belts is worse than irrele-

vant because detachable belts are not passive restraints

at all.

Modified Standard 208 is a performance standard,

which means that compliance may be in the form of any

technology “which meets the standard.” S. Rep. No. 481,

supra, at 1; see 123 Conc. REC. 33,318 (1977) (Senator

Ford) (“any technology which meets the standard can

be utilized”). It is almost embarrassingly obvious that

technology that does not meet the performance standard

may not be used. NHTSA’s discussion of detachable belts

versus continuous belts ignores this elementary point. Its

decision not to amend the standard so as to allow only

continuous passive belts is therefore fundamentally flawed

by NHTSA’s failure to consider that the standard

might only permit use of such belts in the first place.

Essentially, the agency seems to conclude that because

some technology will not meet the passive restraint stand-

ard, it need not mandate compliance by technology that

will. The absurdity of this Orwellian reasoning is

obvious.

The explicit reasons stated by NHTSA for refusing

to mandate compliance only with continuous passive belts

also seem capricious. The first reason stated was the

congressional prohibition on interlocks, and the fear that

“Congress would look with some disfavor upon any simi-

lar attempt to impose a use-compelling feature on a belt

59a

system.” 46 Fed. Reg. at 53,424. NHTSA’s discussion

of the interlock is absolutely irrelevant, of course, be-

cause the 1974 Amendments prevent it from mandating

such devices. Of more serious concern is NHTSA’s ap-

parent belief that interlocks and other “use-compelling

features” are equivalent. There is absolutely no evi-

dence to support such a conclusion; indeed, every indica-

tion in the record points the other way.“ The distinc-

* See, e.g., 42 Fed. Reg. at 34,290 (Secretary Adams distin-

guished interlocks from passive restraints because interlock re-

quires affirmative action whereas passive restraints, by definition,

do not); 36 Fed. Reg. at 8296 (May 4, 1971) (interlocks require

“forced action” and thus do not qualify as passive restraints) :

Pacific Legal Foundation v. Dep't of Transportation, 593 2d at

1346 (approving this reasoning); RIA at II-4, J. A. 30 (noting

same distinction).

The importance of this distinction deserves emphasis. NHTSA

devoted much of its analysis to the question of why current seat-

belt use is low. See RIA at IV-25, J.A. 81 (1978 survey by Tekne-

kron, Inc., finding following reasons for not using belts: “bother-

some, inconvenient, forgot,” 68% ; “uncomfortable,” 14%; all other

responses, less than 8%); 1981 National Safety Belt Study, J.A.

1108 (hereinafter cited as Study) (“too much time/hassle,” 25% ;

“not in habit/don’t think about it/lazy,” 22%; “uncomfortable/too

confining,” 20%; all other responses, less than 7%); RIA at

IV-27, J.A. 83 (GM-funded survey finding that riders “who get in

the habit of attaching belts, as part of a check-off system to start

the car, habitually wear them”). See generally Arnould & Grabow-

ski, Auto Safet Regulation: An Analysis of Market Failure, 12

BELL J. ECONOMICS 27, 29-35 (Spring 1981) (decision whether to

wear seatbelt involves “a very low probability (on the order of

10~ or 10) of very adverse outcomes (i.e., serious injury or loss

of life),” suggesting that low seatbelt use reflects the “limited

capability of individuals to attend to rare events’). These are

exactly the factors that automatic restraints are intended to

address. See id. at 36 (“striking difference” between usage rates of

VW manual and automatic belts “suggests that discomfort costs

are not the key reason for the observed nonutilization of manual

belt systems. In particular, VW was able to shift the habitual

behavior of car occupants from nonusers to users simply by

eliminating the time and discomfort costs of bucklisg up, while

at the same time imposing small bu“ real costs on those who might

be inclined toward nonuse.”).

60a

tion lies in the use that is “compelled”: interlocks re-

quire affirmative action, but continuous passive belts do

not. The very concept of a passive restraint standard

presupposes “use-inducing” safety equipment. NHTSA’s

argument about congressional disfavor toward continu-

ous belts, based only on the fact that such belts would

work better than detachable belts, is thus belied by the

legislative history discussed above.

Had Congress desired to repeal the passive restraint

standard in 1974, it was free to do so. Instead, Con-

gress legislated with great specificity concerning the

aspects of the standard that it wanted to change—re-

quiring, for example, that a warning buzzer not exceed

eight seconds in duration—and retained the explicit

right to review other aspects of the standard at a later

date. The possibility of a later legislative veto is far

different from a legislative prohibition, however, and

NHTSA assumes too much when it tries to read into

this congressional action a hostility to an effective pas-

sive restraint standard. NHTSA errs when it presumes

that it knows how to speak more clearly than Congress.

The 1974 Amendments do not provide the slightest sup-

port for NHTSA’s refusal to consider a passive restraint

standard that could be satisfied with continuous but not

detachable belts.

The last two explicit reasons given by NHTSA for

refusing to mandate compliance only with continuous

belts are somewhat inconsistent: the public’s wide-

spread, latent and irrational fear” about being trapped

by seatbelts, and the concern that a “use-compelling fea-

ture” could not be required consistent with “the cause

of safety.” Jd. Considerable doubt exists about the

strength of the first finding.“ More important, NHTSA’s

This finding was based on the Study, supra note 33, in which

fear of beigg trapped was given by 7% of the respondents as a

reason for not wearing seatbelts. This factor thus seems to have

little relevance to why vehicle occupants fail to use seatbelts, see

6la

second finding—clearly more fundamental to any agency

charged with mandating safety standards—is squarely

contradicted by the explicit requirement of an “emer-

gency release mechanism” in the passive restraint stand-

ard. See 42 C. F. R. § 571.208, $4.5.3.3(a). NHTSA has

not suggested, nor is there any evidence for such a prop-

osition, that the emergency release mechanisms on con-

tinuous belts are any more susceptible to jamming or

locking in the event of a collision than the latch mecha-

nisms on detachable or manual belts. Indeed, for all that

appears on this record, the emergency release on a con-

tinuous belt may be more dependable than that on a

detachable belt. In any event, NHTSA also notes that

if an accident occurs, “occupants wearing belts suffer

significantly reduced risk of loss of consciousness, and

are commonly able to extricate themselves with relative

ease.” 46 Fed. Reg. at 53,424 (emphasis added). There

is no evidence to support the suggestion that “further

note 33 supra. More important, this factor appears to be over-

emphasized in NHTSA's analysis: “Nearly all previous studies

have shown a ‘hard core’ population (20-40 percent) of car occu-

pants who will not wear a belt under any circumstances.” RIA at

IX-5, J. A. 220. See generally note 12 supra (interlock increased

usage to 40%, and even passive belts have not increased usage more

than 90%). Because a passive restraint standard would be eco-

nomically justified if usage increased 13 percentage points, see text

at note 10 supra, the existence of this “hard core” of nonusers

seems irrelevant.

The petitioners also attack NHTSA’s relianc> on this limited

finding from the Study on procedural grounds, noting that the

Study was entered into the rulemaking docket only two days prior

to the date that Notice 25 was announced and thus without giving

the parties an opportunity to evaluate and comment on its findings.

See Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375, 393 (D.C.

Cir. 1973), cert. denied, 417 U.S. 921 (1974). NHTSA responds

that “the study was not critical to the outcome of the rulemaking”

because it duplicated other evidence in the record, and thus “the

procedural error, if any, was harmless.” NHTSA Brief at 56 n.22.

Because of our disposition of this petition for review, we do not

reach this question.

complicating] the extrication” of occupants after colli-

sions, if that occurs at all, will not be more than offset

by the advantages of increased belt use.

Instead, there is every indication here that continuous

belts—which would not require or be guarded by inter-

locks—would increase belt usage more than enough to

meet the agency’s justifiable concerns about the stand-

ard’s cost.“ Such belts could never “become identical to

a manual belt,“ id. at 53,421, and clearly “would increase

belt usage.” Id. at 53,423. NHTSA has not analyzed the

magnitude of this increase, or whether a standard per-

mitting continuous belts only would make Modified

Standard 208 the cost-effective regulation that Congress

expected it to be. If continuous passive belts worked

effectively, of course, this would dispatch NHTSA’s im-

plicit concern about public backlash against “an expen-

sive example of ineffective regulation.” Jd. at 53,424

(emphasis added). Until NHTSA at least analyzes the

consequences of a continuous-belt-only standard, there is

no way to know whether this form of the passive re-

straint standard is justified. At the same time, until

NHTSA considers this obvious alternative, its rescission

of the entire standard must be considered arbitrary.

2. Airbags

If NHTSA’s consideration of continuous belts was

minimal, its analysis of airbags was nonexistent. Time

and again, the agency failed or flatly refused to evaluate

the cost-effectiveness of these devices. The only mention

of airbags in the decision focused on Modified Standard

208 as written:

Instead of installing air bags in approximately 60

percent of new cars [as had been anticipated in

1977], the manufacturers apparently planned to in-

%5 See notes, 9, 12, 33 supra. Usage rates on GM's 1980 Chevette

justified. We emphasize, of course, that the agency has not yet

performed this analysis.

63a

stall them in less than 1 percent of new cars. Thus,

automatic belts would have been the predominant

means of compliance, and installed in approximately

99% of new cars. Thus, the assumed life-saving

potential of air bags would not have been realized.

46 Fed. Reg. at 53,421. It is obvious that airbags would

be installed in 100% of new cars if NHTSA were to de-

cide that no passive belts advanced the purpose of the

safety standard and that airbags were the only way of

complying with Modified Standard 208. NHTSA appar-

ently did not consider this possibility. See RIA at IV-10,

J.A. 66 (because airbags will be installed on a small

seale, “the fatality reduction potential of air bags will

not be considered in the main body of the analysis”) ;

id. at IV-56, J.A. 112 (“Although benefits would be

greater if [large cars were equipped with airbags], it

does not now appear that this will happen”); id. at

VI-19, J. A. 181 (“the Air cushion costs are not dealt with

in this analysis as the domestic manufacturers have de-

cided to use automatic safety belts rather than air bags

to comply with the standard”); id. at XI-5, J.A. 265

(“The issue of air bags, constant and controversial as

it is, is not in fact squarely before the Agency at this

time”).

NHTSA’s failure to consider this obvious alternative

is particularly striking in view of the history of the

passive restraint standard. “To some, FMVSS 208 was

always intended to be an air bag standard.” RIA at

XI-5, J.A. 265. The first notice of proposed rulemaking

leading to the 1972 version of Standard 208 referred to

“inflatable occupant restraint systems,” 34 Fed. Reg. at

11,148 (1969), and passive belts were added thereafter.

See pp. 7-8 supra. In Chrysler Corp. v. Dep’t of Trans-

portation, 472 F.2d at 664, the court suggested that the

standard might be called “more descriptively, the Airbag

Standard.” Congress too has tended to consider airbags

the central aspect of the passive restraint standard. See,

64a

e. g., 120 Conc. Rec. 35,637 (1974) (Representative Din-

gell) (observing “the desire of the Congress to review

and, if appropriate, disapprove a standard imposing air

bags on our constituents”); 124 Conc. Rec. H 5309

(daily ed. June 12, 1978) (Representative Conte) (“The

airbag does not go into effect unti] 1982”); H.R. Rep.

No. 145, 96th Cong., Ist Sess. 13-15 (1979) (supple-

mental views) (discussing only airbags). In 1977, when

Senator Griffin added Senator Helms as a sponsor of

S. Res. 31 to disapprove Modified Standard 208, the

resolution was described as a measure to ban “the use

of air bags in automobiles.” 123 Conc. Rec. 24,879

(1977). It is true that airbags also have been the most

controversial aspect of the passive restraint standard.

See pp. 43-47 supra (Senate but not House approved con-

ference report that would have required automobile man-

ufacturers to offer airbags on at least one car line).

But this is all the more reason why NHTSA should at

least have considered and evaluated the benefits and costs

of a standard relying only on airbags before it could

rationally rescind Moditied Standard 208.

This is virtually self-evident. First, as NHTSA ac-

knowledged in the RIA, the agency

has no basis at this time for changing its earlier

conclusions in 1976 and 1977 that basic air bag tech-

nology is sound and has been sufficiently demon-

strated to be effective in those vehicles in current

use, such that it could be considered an acceptable

method of compliance with the mandates of the Act.

Id. at XI-4, J. A. 264. More important, airbags seem to

less likely to be disconnected because of “irrational fears”

about being trapped. See id. at IX-18, J.A. 233. They

cannot be analogized to manual seatbelts, and thus their

rate of “use” is likely to be higher than that of passive

belts. See id. at IV-9, 89-90, J. A. 65, 145-46. Moreover,

65a

even when used, neither seatbelts nor airbags are com-

pletely effective in preventing deaths and injuries under

all circumstances, but the “effectiveness” of airbags may

be relatively higher. See id. at IV-9, J.A. 65.“ Finally,

whereas NHTSA emphasized its uncertainty that dis-

counts in insurance premiums would “materialize on a

general basis” under a passive belt regime, see 46 Fed.

Reg. at 53,423, it observed that a number of insurance

companies already offer a 30 percent discount on policies

for vehicles equipped with airbags. RIA at V-1, J.A.

149." Each of these points suggests that the benefits of

an airbags-only standard would be significantly greater

than the minimal benefits now predicted from Modified

Standard 208 as written. Yet NHTSA made no attempt

whatsoever to evaluate or even mention such a standard.

The agency did, of course, review the cost of airbags.

As it observed, the unit cost of these devices is remark-

ably sensitive to economies of scale, ranging from as high

„ NHTSA found that manual and passive seatbelts, when used,

had an effectiveness of roughly 50% for fatalities and 65% for

serious injuries. RIA at IV-8, J.A. 64. When airbags are used

in tandem with lap belts, their effectiveness is apparently slightly

higher. As a result, NHTSA concluded that even if airbags were

installed on only 5% of the 1984 model year fleet, this “results

in a change in fatality reduction of 70 lives saved” over che pre-

dictions for 100% automatic belt installation. RIA at IV-88, IV-90,

J. A. 144, 146.

* NHTSA supported its rescission of the standard by noting the

reluctance of insurance companies to reduce insurance premiums

on cars equipped with automatic belts until those belts had shown

their effectiveness. 46 Fed. Reg. at 53,423 (“premium reductions

generally are available only to owners of cars equipped with air

bags, not automatic belts”). We fail to see how the fact that insur-

ance companies set rates on the basis of experience can be used

by NHTSA to evaluate the future effectiveness of a motor safety

standard. Moreover, at least one intervenor intends to require the

lowering of bodily injury premium levels based only on the introduc-

tion of passive restraints. Brief for Intervenor Superintendent of

Insurance of the State of New York at 5-6.

as $1,200 when only 10,000 units are produced to as low

as $200 when airbags are installed on a fleet-wide basis.

Id. at VI-10, J.A. 172. Were the agency to analyze an

airbags-only standard, the lower cost figures would ob-

viously be the appropriate basis of its analysis.“ We

may therefore not decide on this record that NHTSA’s

failure to consider airbags alone was irrelevant; indeed,

airbags may be significantly cost-effective.” That ques-

tion is for NHTSA to decide, but it has not yet done so.

The only reason that can even be inferred for NHTSA’s

silence on this point is that such a standard risks con-

gressional disfavor under the legislative veto provisions

of 15 U.S.C. S 1410b. The fact that Congress might veto

an airbags-only standard is not a reason for ignoring

such a standard; an agency cannot refuse to proceed with

reasoned decisionmaking simply because Congress has

explicitly stated an intention to review its conclusions at

a later time.

3. Other alternatives

Other than promising to undertake a campaign to en-

courage voluntary seatbelt use, the kind of effort that

has had dubious effectiveness in the past,“ NHTSA con-

Such an analysis might also cause NHTSA to study the cost

of airbags more closely. See RIA at VI-7, J.A. 169 (Talley Indus-

tries, Inc., price estimate of $212 per airbag, including $70 profit

for dealer and manufacturer).

% See text at notes 7-10 supra. As late as 1981, NHTSA antici-

pated that airbags would be placed in “more than 60 percent of new

cars.” 46 Fed. Reg. at 53,420.

% See, e.g., Arnould & Grabowski, supra note 33, at 45 (“past

efforts along these lines have been extremely unsuccessful”) ; Com-

ments of Insurance Institute for Highway Safety, May 26, 1981,

J.A. 454-56) (poor results of past major promotional campaigns).

Moreover, Administrator Peck promised that this campaign “will be

undertaken regardless of he outcome of this proceeding” and “is

not in any sense viewed as even related much less a substitute for

the rulemaking process which is at work here.” Transcript of

NHTSA hearing, August 5-6, 1981, J.A. 1218-19, 1247A.

67a

sidered no alternatives to the passive restraint standard.“

Such alternatives abound, from speed controls that might

prevent vehicles from obtaining freeway speeds unless

seatbelts were fastened to continuous or flashing lights

on dashboards. See Fed. Reg. 38,380 (Oct. 31, 1974)

(recognizing that 1974 Amendment “leaves considerable

regulatory discretion concerning warning systems” to re-

place continuous buzzers) .

Although the agency clearly did not have an obligation

to consider every such alternative in the course of re-

scinding Modified Standard 208, the omission of one

scheme stands out in particular. As discussed above,

see pp. 10-11 supra, Secretary Coleman also decided that

the passive restraint standard should be suspended, but

he proposed a demonstration project involving up to

500,000 cars with passive restraints in order to “in-

crease significantly the chances that passive restraints

will ultimately prove acceptable [because] I am con-

The one possible exception is suggested by the comment that

retention of Modified Standard 208 might lead to an adverse public

reaction that could impair “the ability of States to pass mandatory

seat belt use laws.” RIA at ii, XI-12, J. A. 22, 272. This observation

is ironic, to say the least, because the option of such laws “has con-

sistently ranked last in several public opinion polls.” Arnould &

Grabowski, supra note 33, at 46; see Pacific Legal Foundation v.

Dep't of Transportation, 593 F.2d at 1342 n.22 both Adams and

Coleman considered feasibility of mandatury seat belt laws and

“concluded that such statutes could not be enacted in this country”).

The explanation for the disfavor with which the American public

regards such laws may have been given in note 33 supra (interlock

requires affirmative action; passive restraints do not).

#2 See, e.g., Independent Bankers Ass'n v. Heimann, 613 F.2d

1164, 1171 (D.C. Cir. 1979) (agency head “was not required to

meet each separate comment head on when issuing his determination

following the comment period.” where he did identify the “vital

material questions raised during the proceedings and indicate the

agency’s response to these concerns“); Automotive Parts & Acces-

sories Ass'n v. Boyd, 407 F.2d 330, 338 (D.C. Cir. 1968) (“We do

not expect the agency to discuss every item of fact or opinion in-

cluded in the submissions made to it in informal rulemaking”).

68a

vinced that their potential safety benefits warrant this

action.” Coleman Decision, J.A. 2074. When Secretary

Adams countermanded this decision and issued the man-

datory standard in 1977, the debate in Congress focused

on the distinction between these two approaches. See,

e.g., 123 Conc. REC. 33,325 (1977) (Senator Cannon);

id. at 33,327 (Senator Griffin); S. Rep. No. 481 (95th

Cong., Ist Sess. 31 (1977) (Minority Views) (“the pre-

cise issue” is “not whether or not the development and

use of air bags should be encouraged. (They should, and

they would have been—much sooner, in fact—under for-

mer Secretary Coleman’s voluntary program; H.R.

Rep. No. 145, 96th Cong., Ist Sess. 14 (1979) (Supple-

mental Views) (“We must agree that the wiser and

more sensible approach would be to reinstate the Cole-

man decision”). It is difficult to understand why NHTSA

did not reinstate the Coleman decision because that ap-

proach is also not discussed in Notice 25. Here too, the

agency’s rescission of the safety standard without dis-

cussing or perhaps even considering obvious alternatives

was arbitrary and capricious.

IV. THE NEED FOR A REMAND TO NHTSA

The foregoing analysis illustrates several ways in

which NHTSA artificially narrowed its analysis of Modi-

fied Standard 208. Although that regulation is a per-

formance standard, the agency offered no evidence that

certain technology would fail to perform. More impor-

tant, it then rescinded the standard without analyzing

it in terms of technology that clearly would comply.

By any measure of reasoned decisionmaking, NHTSA’s

action was arbitrary and capricious. Despite carefully

issuing notice on an array of possible changes to Medi-

fied Standard 208, NHTSA proceeded as though the only

were whether to impiement or rescind the safety

standard exactly as that standard was first written five

years ago. “It is easy enough for an administrator to

69a

ban everything.” United States v. Nova Scotia Food

Products Corp., 568 F.2d 240, 253 (2d Cir. 1977) (FDA

regulation concerning smoked whitefish overturned be-

cause agency failed to consider formulating rule “with

specific parameters that applied to all species of fish”).

But “an artificial narrowing of the scope of the regula-

tory problem is itself arbitrary and capricious and is

ground for reversal.” Home Bow Office, Inc. v. FCC, 567

F.2d 9, 36 (D.C. Cir.), cert. denied, 434 U.S. 829 (1977)

(overturning regulation of cable television because record

evidence failed to suggest existence of problem at which

regulation was aimed). See, e.g., Sabin v. Butz, 515 F.2d

1061, 1069 (10th Cir. 1975) (summary judgment in

favor of government on whether regulation was arbi-

trary was precluded by allegation that agency had failed

to consider anticompetitive factors); Pillai v. CAB, 485

F.2d at 1027-30 (vacating order extending multilateral

air carrier rates because agency considered only alterna-

tive to be open rates, and thus ignored bilateral negotia-

tions and agency’s suspension powers). These cases set

aside regulations promulgated without consideration of

obvious alternatives, but we see no reason why a differ-

ent analysis should be applied here to the rescission of

a regulation already promulgated. Either form of agency

action may at times be irrational.

On balance, it is difficult to find anything positive to

say about NHTSA’s decisionmaking in this case. After

conducting an elaborate quantitative analysis in a 280-

page Regulatory Impact Analysis, NHTSA essentially

rejected much of this analysis as “hypothetical”:

For purposes of this analysis only, the Agency has

again adopted this approach in order to place hypo-

thetical quantitative bounds on benefits and costs.

The Agency, for reasons spelled out in detail in the

Final Rule, does not accept these hypothetical

bounds, and believes that it is not possible to predict

with any accuracy what the usage rates of auto-

matic belts would be.

70a

RIA at XI-13, J. A. 273. See id. at IV-51, J.A. 107 (em-

phasizing that extrapolation from existing data “must

be understood to be hypothetical”). In other words, the

analysis to support Notice 25 has not yet been under-

taken. Moreover, several of the explanations stated in

Notice 25 fly directly in the face of the agency’s own

analysis. In stating that the standard would raise equity

problems, for example, because current users of manual

belts would “subsidize” the nonusers who “will generate

all of the benefits that result directly and solely from

this regulation,” 46 Fed. Reg. at 53,425, NHTSA ignored

the fact that high insurance savings could be realized

even by regular users of manual belts. See RIA at V-1,

J. A. 149.“ It is difficult to avoid the conclusion that

NHTSA’s analysis in Notice 25 has been distorted by

solicitude for the economically depressed automobile in-

dustry—which is not the agency’s mandate—at the ex-

pense of consideration of traffic safety, which is.“

43 Because insurance companies are unable to tell which car owners

consistently use their manual seatbelts, premium discounts are

generally given only for vehicles equipped with airbags. See note

37 supra. But see transcript of NHTSA hearing, August 5-6, 1981,

J.A. 1246 (Nationwide Mutual Insurance Companies has for 10

years offered increased insurance coverage at no additional cost to

car owners who state that they use manual belts). Even current

users of manual belts could benefit significantly from the lower in-

surance premiums that could follow implementation of the passive

restraint standard. See RIA at V-9, J.A. 157 (at 60% usage rates,

annual insurance discounts could be $30 per vehicle). Such dis-

counts would cover the marginal cost of automatic belts after

three years.

NHTSA also makes the dubious observation that although the

Safety Act is “technology-forcing,” see note 3 supra, “[i)t is diffi-

cult to conclude that the Vehicle Safety Act is, or in light of past

experience could become, a ‘people-forcing’ statute.” 46 Fed. Reg.

at 43,426. The very concept of a passive restraint standard is that,

unlike interlocks and mandatory seatbelt-use laws, it does not

“force” safety action. See notes 33, 41 supra.

44 See text at notes 6-7 supra (notice of rulemaking to rescind

standard was based at least in part on economic problems of the

71a

We do not hold, of course, that an agency charged with

promulgating safety standards may never rescind those

regulations once promulgated. But rescission must be

supported by rational explanations, after a reasoned and

good-faith effort to consider alternative means of ad-

vaneing the agency’s purpose. If Congress chooses, it

has the authority to override Modified Standard 208 or

any other regulation. See, e.g., 15 U.S.C. § 1410 (exemp-

tion from motor vehicle safety standards for manufac-

turers of 10,000 cars or less for reasons of “substantial

economic hardship”). But NHTSA may not confuse its

role with that of Congress. Based on the record and the

statements in Notice 25, we must conclude that NHTSA

has acted capriciously, wearing blinders that prevented it

from reasoned evaluation of methods to fulfill the pur-

poses of the Safety Act.

Nature of the Remand

There are obvious problems associated with reversing

NHTSA’s action, however. Within hours of the issu-

ance of Notice 25—and well before the notice’s effective

date—the automobile manufacturers began to dismantle

their passive restraint programs, and now contend that it

would require a minimum of twelve months “following the

beginning of the first model year following announcement

of the requirement” to restore these programs. MVMA

Brief at 70 n. 85.“ Moreover, because of NHTSA’s muddy

automobile industry, and was announced by White House in Actions

to Help the U.S. Auto Industry); RIA at II-9, J. A. 35 (applying

standard to large cars first could have resulted in net income loss of

$300 million and employment loss of 13,000 jobs). This observation

may not apply to NHTSA’s staff, however. See State Farm Brief at

19 n.27 (NHTSA Administrator Peck stated at October 23, 1981,

press conference that “in some way or another, they all argued to

retain the standard”).

40 Although Notice 25 was not effective until December 8, 1981,

the automobile manufacturers acted on October 23 and 24. See

State Farm Brief at 43 n.56 (citing affidavits attached to MVMA

Opposition to Stay in November, 1981); NAII Brief at 63 (same).

72a

reasoning in Notice 25, manufacturers would justifiably

feel uncertain about the technology that satisfies the

performance requirements of Modified Standard 208. See

id. at 69 n.84. NHTSA has yet to make the case that

detachable belts would not comply, although it could

make that finding or even require compliance by airbags

only. We must therefore decline the suggestions of pe-

titioners that the standard take full effect by September

1983, State Farm Brief at 21, or by September 1982,

NAII Brief at 64.

At the same time, we should not simply remand this

petition to the agency so that recalcitrance might suc-

ceed where rational decisionmaking might not. The im-

plementation of a passive restraint standard has already

been delayed without acceptable reasons, perhaps uncon-

scionably so. Our decision does not foreclose rescission,

but requires simply that the agency analyze obvious tech-

nological alternatives for compliance before doing so. We

therefore remand to NHTSA to recommend to us 30 days

from today a feasible schedule for completing analysis of

these questions. If technological means are found that

conform to the performance requirements of the standard

such that its safety benefits are economically justified,

NHTSA is further instructed to prepare a practical

schedule for the implementation of a passive restraint

standard.“ Our order does not, of course, foreclose a

reasoned decision by NHTSA that the standard should

be suspended or delayed for appropriate reasons, or im-

pede any action that Congress might take to resolve

these issues.

46 See MCI Telecommunications Corp. v. FCC, 627 F.2d 322, 346

(D.C. Cir. 1980) (ordering same procedure). As in that case, any

party to the proceedings before NHTSA or now before the court

shall file with the court any comments on NHTSA’s proposed sched-

ule within fifteen days after that schedule is filed with the court by

NHTSA. Within fifteen additional days, NHTSA may reply to any

of the comments. The court will then either approve, reject, or ap-

propriately modify the schedule, or make such further orders as

necessary.

73a

NHTSA is correct in expressing concern about nega-

tive public reaction to “an expensive example of inef-

fective regulation.” 46 Fed. Reg. at 53,424. There is no

basis on the record before us, however, for concluding

that Modified Standard 208 is such a regulation. More

important, it is erroneous to believe that “ineffective

regulation” occurs only when government acts affirma-

tively. By rescinding the passive restraint standard with-

out legal justification, NHTSA’s arbitrary action pre-

sents a paradigm of ireffective regulation. Notice 25

has wasted administrative and judicial resources, and

has possibly delayed without justification a safety stand-

ard that may be, “from an economic point of view, as

important as any environmental, health, or safety rule

now on the books.“ “ At present rates, 1 in every 60

children born today is expected to die in an automobile

accident, and 2 out of every 3 will suffer injuries in a

crash. See 126 ConG Rec. 8 13,503 (daily ed. Sept. 25,

1980) (Senator Warner). These figures may be low, for

NHTSA concedes that the problem at which the passive

restraint standard was aimed has become more urgent in

recent years. See p. 15 supra. But the agency concludes

Notice 25 by observing:

After 12 years of rulemaking, NHTSA has not yet

succeeded in its original intent, the widespread offer-

ing of automatic crash protection that will produce

substantial benefits.

46 Fed. Reg. at 53,426. NHTSA may yet conduct the

reasoned decisionmaking that can support the rescission

of the passive restraint standard, but it may not reject

twelve years of preparation for such a standard until it

does so. The agency’s action here thus represents “an

expensive example of ineffective reguiation” of the worst

kind.

47 Comment of William D. Nordhaus, John Musser Professor of

Economics at Yale University, May 26, 1981, J.A. 511, 514.

74a

CONCLUSION

NHTSA began this rulemaking because a number cf

factors had changed since Modified Standard 208 was

approved by Congress in 1977. These changed factors—

higher gasoline prices, smaller cars, an ailing automobile

industry, and the methods of compliance being pursued

by that industry—may fully justify reassessing, modify-

ing, and even deferring the effective date of the regula-

tion, decisions that are not before us here. There has

been no showing, however, that these changes justify

rescinding the standard outright. The explanations put

forward in Notice 25 are arbitrary in their failure to

address obviously relevant considerations. The rescission

of Modified Standard 208 is reversed.

We recognize that sensitive issues are raised in this

case. An administrative agency may well require less

basis for its decision not to pursue a particular policy

at a particular time than when it decides to act affirma-

tively. But agencies may not ignore the mandate they

have received from Congress, and reverse course without

a reasoned or rational foundation for doing so. In this

regard, we emphasize that courts, administrative agen-

cies, and Congress are partners, not adversaries. Courts

do not substitute judgment for that of the agency, but

ensure that agencies exercise their judgment only in ac-

cordance with the will of Congress.

NHTSA’s rescission of Modified Standard 208 cannot

be supported on this record. The agency has 30 days in

which to submit a schedule for resolving the questions

raised in this opinion, leading either to the rescission or

suspension of the standard or to a judicially approved

schedule for the effective implementation of that stand-

ard or an amended standard. If NHTSA finds non-

arbitrary reasons for rescinding the standard, of course,

its action will be affirmed. Absent such reasons, or inter-

vening action by Congress, NHTSA may not arbitrarily

veer from the course that Congress has set.

It is so ordered.

75a

EDWARDS, Circuit Judge, concurring: Although I agree

with the conclusion in part III of the majority opinion,

that “(t]he rescission of Modified Standard 208 on the

grounds stated by NHTSA was arbitrary and illogical,”

maj. op. at 50, I rely principally on the reasons indicated

in part III-A. Certain of the observations made in part

III-B of the majority opinion appear to be irrefutable,

but I do not accept them as a basis for decision in this

case. With this one exception, I fully concur in the

excellent opinion of Judge Mikva.

By way of emphasis, I think it important to highlight

a theme that is implicit throughout the majority opinion.

This case involves highly controversial issues that are

seen to be critically important to various and competing

interest groups. The role of the court is not to write or

rewrite Federal Motor Vehicle Safety Standards, or to

support a particular interest group, or to weigh alter-

native solutions to economic problems, or to respond to

the political climate of the day. The role of the court—

plain and simple—is to enforce the mandate of Congress

as expressed in the National Traffic and Motor Vehicle

Safety Act and, thus, to determine whether the action of

NHTSA reflects “reasoned decisionmaking that is the

essence of lawful administrative action.” Maj. op. at 5.

This judicial role does not change when the court, as

here, is confronted with a hotly contested and highly con-

troversial case. The court, thus, does not become a

rubberstamp for lawless agency action merely because

the questions posed are difficult or sensitive.

As Judge Mikva has so ably indicated in his exhaus-

tive majority opinion, the decision of NHTSA is long

on words and short on reasoned decisionmaking. Indeed,

the agency decision appears to be nothing more than a

determined effort to achieve a particular result without

76a

regard to the facts at hand. Plainly, this is not reasoned

decisionmaking, and it cannot be sanctioned by this court.

We express no judgment on the proper outcome of this

case and, therefore, we do not seek to substitute our

judgment for that of the agency. Rather, as is our re-

sponsibility, we reverse here to require the agency to act

in accordance with the will of Congress and pursuant to

reasoned decisionmaking.

77a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

September Term, 1981

No. 81-2220

STATE FARM MUTUAL AUTOMOBILE INSURANCE Co.,

KENT MASON, PATRICIA WARREN and LEORLIN Boo,

. Petitioners

DEPARTMENT OF TRANSPORTATION,

Drew LEWIS, as SECRETARY,

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION,

and RAYMOND A. PECK, JR., as ADMINISTRATOR,

Respondents

SUPERINTENDENT OF INSURANCE OF THE

STATE OF NEW YORK,

AUTOMOBILE IMPORTERS OF AMERICA, INC.,

Morox VEHICLE MANUFACTURERS ASSOCIATION, ET AL.,

CONSUMER ALERT AND PACIFIC LEGAL FOUNDATION,

Intervenors

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