CFA Consumer Federation of America April 20, 1988 The Honorable James J. Florio Chairman, Subcommittee on Commerce, Consumer Protection and Competitiveness Dear Congressman Florio: We are writing to request that the enclosed brief be included in the record for the March 16, 1988 hearing on H.R.3991. This brief was submitted to the Court by Consumer Federation of America (CFA), the American Academy of Pediatrics, Public Citizen, the American Public Health Association, U.S. Public Interest Research Group and Frederic Booth, as amici, in opposition to the final approval of the Consent Decree in the case of United States v. America Honda Motor Co., et al. The brief sets forth the objections of CFA, et al. to the terms of the decree and its failure in particular, to protect children who are at an especially high risk of death or injury from all-terrain vehicles. We ask that this brief and the accompanying exhibits (L-Z) be included in the hearing record as further clarification of our concerns about the terms of the decree and the need for legislative action to fully address the hazards associated with ATVS. (Please note that exhibits A-K were submitted by amici with previous pleadings in this case.) NOTE: The brief and accompanying exhibits are retained in the subcommittee files. 1424 16th Street, N.W., Suite 604 Washington, D.C. 20036 (202) 387-6121 In accordance with conversations with your staff, we are pleased to provide herewith a memorandum for inclusion in the printed official record of the March 16, 1988 hearing on H. R. 3991 before the Subcommittee on Commerce, Consumer Protection, and Competitiveness. This memorandum was prepared by Professor Paul Bator, a constitutional law scholar, former Deputy Solicitor General of the United States, and of counsel with Mayer, Brown & Platt in Chicago. - - Professor Bator was requested by the four major distributors of all-terrain vehicles American Honda Motor Co., Inc., Yamaha Motor Corp., U.S.A., U.S. Suzuki Motor Corp., and Kawasaki Motors Corp., U.S.A. to evaluate the constitutionality of H.R. 3991. It is hoped that his evaluation, as an important supplement to other expressed legal views, will be of benefit to the subcommittee in considering the proposed legislation. Enclosure Yours very truly, Сол Mark L. Gerchick of PAUL, HASTINGS, JANOFSKY & WALKER MAYER, BROWN & PLATT April 15, 1988 MEMORANDUM ON THE CONSTITUTIONALITY OF H.R. 3991, We have reviewed House of Representatives Bill 3991, the ATV User Safety and Equity Act. This bill, if enacted, would represent a major intrusion into the judicial process. It seeks to impose a congressional judgment with respect to the liability of five ATV distributors under the law; that judgment would effectively revise and reverse the judgment of the district court as set forth in the consent decree in United States v. American Honda Motor Co. The bill would encroach upon the proper roles of the judicial and executive branches, and would deprive the manufacturers of all-terrain-vehicles of their rights guaranteed by the Due Process Clause of the Fifth Amendment. This memorandum examines the substantial constitutional concerns raised by the bill. INTRODUCTION H.R. 3991 represents an attempt to have Congress, rather than a court or an administrative agency, apply an existing statute to the past conduct of a small, determinate group of persons engaged in business. It constitutes a legislative verdict after trial by legislature. The bill disregards the procedures Congress wisely (and necessarily, in light of the Due Process Clause) mandated under the Consumer Product Safety Act (the "Act"), and overturns the result reached in a lawsuit brought by the Government under the Act. If enacted, the bill would be an unprecedented encroachment upon the judicial and the executive branches, and a complete denial of the procedural protections required by the Constitution. Under the Act, all manufacturers and distributors of consumer products are entitled to a trial-type hearing and to judicial review before it is definitively determined that they have violated the Act and must suffer sanctions. It is pursuant to these provisions of the Act that the Government instituted proceedings against the five ATV distributors; it is those proceedings that eventuated in the consent decree entered by the district court. H.R. 3991 seeks to undo these proceedings by singling out the 5 ATV distributors and imposing on them a MAYER, BROWN & PLATT legislative finding of guilt and a legislative order requiring the distributors in effect to pay millions of dollars of damages, all without any evidentiary hearing and any judicial review whatever. The The bill begins by declaring that all 3-wheel all terrain vehicles ("ATVs"), including those previously manufactured and sold, are "banned hazardous products" under §8 of the Act.1/ statute ordinarily allows such a declaration only after a rulemaking proceeding by the Consumer Product Safety Commission; the bill eliminates the need for any such proceedings by simply declaring, contrary to fact, that the Commission has issued a rule: Sec. 2(a). Ban. - For purposes of the Consumer Product Safety Act, 3-wheel all terrain vehicles shall be considered banned hazardous products for which a rule was promulgated under section 8 of such Act . . The bill then dictates the remedy that is to follow from that declaration (a remedy that is not provided under §8 2/): Sec. 2(b). Refund. The manufacturers of 3-wheel all terrain vehicles shall provide to persons who (1) before the date of the enactment of this Act, (2) return the vehicles to the manufacturer in 1/ Section 8 of the Act is codified at 15 U.S.C. §2057. 2/ The Act provides that rules promulgated under §8 shall be in accordance with §9, 15 U.S.C. §2058. The latter section provides, in part, that rules promulgated thereunder "shall be applicable only to consumer products after the effective date [of the rule]." 15 U.S.C. §2058 (d) (1). Therefore, it appears that a declaration under §8 that a product is a "banned hazardous product" would only have prospective effect, and would not support any remedy as to previouslymanufactured products. MAYER, BROWN & PLATT Safety Commission under paragraph (3), a refund in an amount determined under such regulations. The refund remedy that is thus required by the bill can ordinarily be imposed by the Commission under the Act only following either the trial of an action brought by the Commission against the manufacturers in district court or a full adjudicatory hearing before the Commission. The bill--with regard to this one product--would take over the roles of the courts and the Commission, and would completely deny the affected manufacturers the fair procedures mandated by the Act and the Due Process Clause. In addition to usurping the roles of the courts and the Commission and depriving the manufacturers of the fair procedures provided by the Act, the bill would further encroach upon the judiciary by reversing the judgment agreed upon in United States v. American Honda Motor Co. 3/ The consent decree in that case forbids the future sales of 3-wheel ATVs; requires manufacturers to provide training and safety information; and permits the Commission to administratively to seek additional relief if new and substantial evidence indicates such relief is warranted. does not require manufacturers to offer refunds at this time. The bill seeks to have Congress act as an appellate court, overturning the district court judgment and imposing a remedy not found necessary by the parties or the court. It By assuming the roles of the courts and the Commission, by overturning the judgment of the district court, and by denying the manufacturers the procedural protections provided by the Act, H.R. 3991 contravenes the constitutional separation of powers and denies the manufacturers the due process of law guaranteed by the Fifth Amendment. 3/ United States v. American Honda Motor Co., Civil Action No. 87-3525 (D.D.C.). The parties agreed to and filed a preliminary consent decree that was approved and entered by the district court on December 30, 1987. The parties have since agreed upon and filed a final consent decree, and are awaiting final court approval. |