V. Specific Provisions of Part 512

    A. Subpart A -- General Provisions

    The agency proposed to include in Subpart A the general provisions that establish the purpose, scope, and applicability of the regulation governing claims for confidential treatment, and that define the terms used in the regulation. In addition, we proposed to revise the definition of confidential business information to reflect developments in the law.

    The agency did not receive any comments objecting to these portions of the regulation, and is adopting the proposed changes to this subpart without modification.

    B. Subpart B -- Submission Requirements

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

    1. Copies of Submissions

    Part 512 previously provided that submitters send to the Chief Counsel two copies of documents containing information claimed to be confidential and one copy of a public version of the documents, from which portions claimed to be confidential were redacted. Submitters were also to send a second copy of the public version of the document to the appropriate program office within NHTSA (typically those engaged in the development of motor vehicle safety – Enforcement, Rulemaking or Applied Research). Thus, the submitter sent the agency two confidential sets of documents and two public sets of documents.

    We proposed changing the regulation to require the submitters to send to the Office of the Chief Counsel one confidential and one public set of submitted documents. The submitter could also send, along with the confidential set, any non-confidential information the submitter wanted NHTSA to consider along with its request. We also proposed that submitters send a confidential and a public set of the documents to the appropriate program office.

    A number of comments characterized this proposal as requiring the creation of a "third version" of the submitted materials, and argued that it would significantly increase the time, expense, and difficulty associated with the exercise of the statutory right to protection of confidential commercial and financial information. JPMA and others suggested instead that the agency require submitters to furnish two copies of the complete submission and one or two redacted versions.

    The agency did not intend to require the creation of any "third version" of submitted documents. The agency believes that some companies may find it easier to send the Chief Counsel only those material for which confidential treatment is sought, especially when the amount of material claimed to be confidential is small in comparison to the whole submission or when it is limited to documents that are easily severable from the whole. We have accordingly modified this provision to provide this option when submitting confidentiality claims.   

    Each claim for confidential treatment must be accompanied with the following: (1) a complete copy of the submission, (2) a copy of a public version of the submission and (3) either a second complete copy of the submission or, alternatively, only those portions of the submission containing the material relating to the request for confidential treatment, with any appropriate sections within the pages marked in accordance with this rule. Those individuals who are filing comments to rulemakings must additionally file an electronic or hard copy of the public version to the docket. All submissions must be appropriately marked in accordance with this final rule. Information for which the submitter requests confidential treatment may be submitted electronically or in an electronic format. Submitters should also provide any special software necessary to review the submitted materials.

    The Chief Counsel will distribute the complete copy and the public version of the material to the program office for its use, and will use the additional marked copy or set of material to evaluate the claim for confidential treatment. This will provide the program office expeditiously with the information necessary for program activity and ensure that the program office is aware of which material is claimed to be confidential and which is not. This process will also provide the Chief Counsel with the information needed to consider the claim for confidential treatment.  Generally, this will simply be the material for which confidential treatment is sought. The submitter may also include any additional information it wishes the Chief Counsel to evaluate in considering the claim.       

    2. Personal Information

    The agency proposed to include in Part 512 a request that submitters remove personal information, such as names, addresses and telephone numbers of consumers, from the redacted version of submitted materials, to protect the privacy of individuals. The agency's policy has been to redact personal identifiers from all owner complaints (whether filed directly with the agency or from documents obtained from manufacturers in the course of a defect investigation) before placing them on the public record. The policy was designed to encourage the submission of information by protecting personal privacy concerns. The agency believes that consumers may be less willing to make complaints if their personal contact and other information are made publicly available.

    In Center for Auto Safety v. National Highway Traffic Safety Administration, 809 F. Supp. 148 (D.D.C. 1993), the Center for Auto Safety sought release of the names and addresses of consumers who filed complaints directly with the agency. The court analyzed the possible effects of disclosure, balancing the interests of the individuals filing complaints with the asserted public interest in obtaining not only the substance of the complaint, which was publicly available, but also the identities of those filing them. The Court ruled that the privacy of the complainants will be recognized and protected because "there is no ascertainable public interest of sufficient significance or certainty to outweigh [a complainant's privacy] right" that would justify the release of this personal contact information provided by consumers. Id. at 150. Thus, the court upheld the agency's decision not to release the names of, and other personal information about, those voluntarily providing information to the agency. [2]

    The same policy concerns apply to personal identifiers on copies of information submitted by manufacturers. The judicially recognized privacy interest in protecting the personal identifiers and contact information when a consumer complains to the agency is at least as strong when applied to a consumer who complains directly to the company, and is in all likelihood unaware that the company may be required to send that communication to the government, which, in turn, will place it into a publicly accessible file.

    Many comments, including those from TMA and the Alliance, objected to the proposed requirement that submitters remove personal information, pointing out that the legal burden of reviewing and redacting personal identifiers lay with the agency, not with the private submitters of the information. TMA also argued that relying on submitters to redact the information might lead to inconsistent approaches and cause confusion over what personal identifiers are or are not redacted.

    In light of the comments, we have revised the proposed regulation to eliminate this requirement. The agency nonetheless would appreciate submissions, in addition to the complete copy, of redacted versions deleting any personal identifiers from any companies willing to provide them.

    3. Stamp Each Page

    The proposal specified the manner in which information submitted to NHTSA and claimed to be confidential must be marked, and identified the supporting documentation that must accompany each submission. The NPRM intended to continue the requirement that each page containing information claimed to be confidential be marked as such. The markings would indicate if an entire page was claimed to be confidential or would identify with brackets any particular portions of a page claimed to be confidential.  

    This proposal was intended to avoid misunderstanding by establishing a system through which companies could provide the agency with clear direction as to which portions of the pages or documents were claimed to be confidential. To allow the pages with confidential information to be identified easily, the proposal provided also that each page claimed to contain confidential information must be numbered.

    The RMA claimed that the combination of this feature with other parts of the proposed regulation would create an unreasonable burden and violate the Paperwork Reduction Act. The RMA was concerned with the combined effect of presumably requiring three versions of the same information, stamping each appropriate page with the word "confidential," potentially redacting personal information, and the potential application of all the requirements to each quarterly submission of the early warning reporting information.

    As noted in above, we have made various modifications to address many of these concerns. We have clarified that we did not intend to require a so-called third version of each submission, have eliminated the proposal to require the redaction of personal identifiers, and have addressed the early warning reporting information through a series of class determinations covering those portions we have determined are entitled to confidential treatment under Exemption 4 of the FOIA.

    In sum, we believe that this final rule simplifies the process for submitting confidentiality claims, allows for the more efficient handling of those claims within the agency and imposes no additional burden on those submitting the information. The final early warning reporting regulation likewise clarified those reporting obligations and, we believe, assuages many of the concerns raised by the RMA.

    Those providing submissions electronically must either separate the material that is confidential from that which is not, or find an alternative method of marking those pages that are confidential. We note that companies increasingly are supplying information required as part of a defect or noncompliance investigation in electronic formats.

    C. Subpart C -- Additional Requirements

    In Subpart C, the agency proposed to retain additional requirements from the existing regulation that submitters must follow when certain circumstances apply. The NPRM stated that we did not intend to change these requirements substantively, only to clarify the requirements and assemble them in a single subpart.

    The requirements contained in this portion of the proposed rule covered such issues as the submitter's continuing obligation to amend information provided in support of a claim for confidential treatment, the manner in which confidential treatment is to be claimed for multiple items of information or for information submitted by a third party, the steps submitters must take if they need an extension of time to claim confidential treatment, and the consequences for noncompliance with Part 512.

    The final rule includes the requirement that submitters specify with their claim the length of time for which confidential treatment is sought. The information supporting the confidentiality request must include adequate justification for the time period specified in the claim.

    The agency did not receive comments objecting to the proposed reorganization of these provisions into Subpart C, or to most of the specific requirements contained in this portion of the proposal. Objections were raised, however, regarding two provisions of the proposal:

    1. Duty to Amend

    The existing regulation provides that submitters of information "shall promptly amend supporting information" justifying a claim for confidential treatment "if the submitter obtains information upon the basis of which the submitter knows that the supporting information was incorrect when provided, or that the supporting information, though correct when provided, is no longer correct and the circumstances are such that a failure to amend the supporting information is in substance a knowing concealment."  49 CFR 512.4(i). The NPRM proposed to revise this language to provide that submitters "shall promptly amend any information under § 512.4 of this part whenever the submitter knows or becomes aware that the information was incorrect at the time it was provided to NHTSA, or that the information, although correct when provided to NHTSA, is no longer correct."

    Several comments, including those submitted by TMA and AIAM, objected to this proposed change on the grounds that it would impose an unreasonable burden on submitters to monitor submissions constantly in order to avoid civil penalties. Workhorse expressed concern that, by removing the "knowing concealment" standard, the rule would subject submitters to civil penalties based on "constructive knowledge."  Business interests urged the agency not to adopt the proposed changes. Public Citizen, on the other hand, considers the "knowing concealment" standard "too weak" and believes it allows situations in which materials that are no longer confidential receive continued protection "long after the conditions justifying its confidentiality have been removed." 

    We note that the agency requires the submitter to identify the length of time for which confidential treatment is sought. The agency will evaluate these requests when determining whether to grant confidential treatment and will release information once the time period for which confidential treatment is granted has lapsed. If the time period between the grant and the possible disclosure is long, the agency may seek reconfirmation, with appropriate support, that the information remains confidential.

    The comments show that the proposed language could impose substantial and unnecessary burdens on submitters to monitor information previously submitted to the agency without providing additional benefit, since the agency is able to monitor the time for which confidential treatment is granted and is able to reassess a confidentiality grant should the information be requested. Accordingly, we have revised the final rule to clarify that the duty to amend relates to the supporting information submitted to justify the claim for confidential treatment, not to the substance of the reported information itself. In addition, we have revised the rule further so that, as before, the duty to amend is triggered only when circumstances are such that a failure to amend the supporting information would constitute a knowing concealment.

    2. Third Parties

    In the NPRM, the agency proposed that, when confidentiality is claimed for information obtained by the submitter from a third party, such as a supplier, the submitter is responsible for obtaining from the third party the information that is necessary to comply with the requirements of this regulation, including the requirement to submit a certificate of confidentiality.

    The agency received several comments, all from suppliers, raising questions concerning this aspect of the agency's proposal. MEMA/OESA, AORC, Bendix, and WABCO, among others, argued that they should have the opportunity to request confidentiality directly with respect to information that they submit to their customers, and should be able to deal directly with the agency regarding information that is not available to the original submitter.

    The agency believes these comments reflect a misunderstanding of the proposed regulation. The proposed regulation would not prevent suppliers from submitting information to the agency or seeking confidential treatment directly. This provision of the NPRM merely provided that if a person submits information that was obtained from a third party (such as an automobile manufacturer submitting information obtained from a supplier, a supplier submitting information obtained from a vehicle manufacturer, a contractor submitting information obtained from a subcontractor, or a similar situation involving wholly different parties), and if the submitter seeks confidential treatment for the information, it must obtain adequate supporting documentation to justify the claim. For example, it may be appropriate, or even necessary, to obtain and submit a Certificate in Support of the Request for Confidentiality that was prepared by the entity from which the information was obtained. In the absence of adequate supporting information, the agency will have no choice but to make the information public. Accordingly, this provision of the proposed rule is adopted without change.

    D. Subpart D -- Agency Determination

    NHTSA proposed in the NPRM to delineate the confidentiality standards and procedures used by the agency to render a confidentiality determination. We also proposed to state that the agency may render determinations involving classes of information and that submitters may request reconsideration if they disagree with an agency decision. We indicated that we were proposing to clarify these provisions and assemble them into a single subpart. We indicated also that we were proposing some substantive changes to these portions of the regulation.

    The majority of the comments related to the submission and protection of early warning reporting information, but a few additional issues were also addressed:

    1. Time to Request Reconsideration or to Respond When a FOIA Request is Pending

    Part 512 previously provided that, if a request for confidential treatment is denied in whole or in part, the agency would inform the submitter of its right to petition for reconsideration of the denial within ten working days after receiving notice of the agency's decision. The NPRM proposed no changes to this aspect of the rule. A number of comments, primarily from smaller businesses, requested that this period of time be extended.

    Blue Bird, for example, asserted that small to medium-sized companies should have "the opportunity to undertake the type of expanded review which the Company would need in cases where it must fully consider and present all possible arguments and justifications to protect what [it considers to be] proprietary, competitively sensitive information." In addition, MEMA/OESA asserted that "requests for reconsideration where sensitive company documents are otherwise at risk will often require the input of many company employees . . . [and that] the ten-day period under the current and proposed rules . . . provides insufficient time."  These comments recommended that the period of time should be extended from 10 working days to 20 working days or 30 calendar days.

    Upon consideration of the difficulties faced by small companies (Blue Bird) and the potential need to coordinate responses with widely dispersed employees (MEMA/OESA), the agency has decided to adopt the commenters' request to extend the period of time to request reconsideration of denials of confidential treatment rendered by the agency, from ten working days to twenty working days.

    In related comments, citing Sections 512.22 and 512.23 of the regulation, which appear in Subpart E and relate to modifications of confidentiality decisions and the public release of confidential information under certain limited circumstances, the WLF recommended that "the agency should [n]ever give less than ten (10) day advance notice to [a] company before releasing business documents."  Although not specifically raised in any other comments, the agency notes that several portions of Part 512 provide submitters of information with ten working days within which to seek review of agency decisions.

    For example, if a petition for reconsideration is denied in whole or in part under Section 512.19 (also in subpart D), or if the agency determines that an earlier determination of confidentiality should be modified under Section 512.22 or that information previously determined or claimed to be confidential will be disclosed under Section 512.23 (in subpart E), the submitter is advised that the information will be made available to the public not less than ten working days after the date on which notification of the agency's action is received.

    The reasons that support an extension from ten working days to twenty working days for requesting reconsideration also justify the extension of these other time periods. Nonetheless, while we are revising the regulations to provide a period of twenty working days, rather than ten, in each of the sections referenced above, we are reserving the right to shorten these periods when the agency finds it to be in the public interest.

    WLF asserted that the NPRM would provide "an inadequate amount of time to businesses to review and respond to FOIA requests submitted to the [agency] by third parties," and recommended that the agency "provide the third-party FOIA request to the affected business within three (3) business days after receiving it . . . [and] copies of all correspondence between the agency and the FOIA requester." 

    The agency notes that while the WLF's comments asserted that they concern notice to businesses upon the agency's receipt of a FOIA request for the information, the sections of the NPRM that WLF cites do not relate to these circumstances. Moreover, the agency does not believe that additional notice to submitters is needed at the time a FOIA request is received. Unlike many other Federal agencies, NHTSA does not wait until it has received a FOIA request before asking a submitter to justify the withholding of information. Instead, NHTSA's regulation provides that submitters must support their claims for confidential treatment at the time of submission. See 49 CFR § 512.4. The agency would not expect, nor would we welcome, any additional materials from a submitter simply because a FOIA request has been filed. If a submitter disagrees with the agency's confidentiality determination (whether or not it is made in the context of a FOIA request), it can then request reconsideration. Therefore, there is no need to notify submitters if a FOIA request is received by the agency for submitted information.

    2. Whether Voluntarily Submitted Materials Should Be Returned Following a Denial of a Confidentiality Request

    Bendix suggested that Section 512.18 should be amended to "clarify" that information voluntarily provided to the agency subject to a claim for confidential treatment should be returned to the submitter if the agency denies the request for confidential treatment. Such information may be submitted as part of a rulemaking, research activity or a request for interpretation of our statutes and regulations.

    We note that the Federal Records Act imposes limitations on the agency's ability to return information voluntarily submitted to the agency. That Act mandates the maintenance and preservation of federal records. [3]  It does not contemplate the return of records to individual submitters. Those providing technical or market information as part of a rulemaking or in connection with the agency's research activity do so voluntarily and with knowledge of the standards applicable to the treatment of the data. Further, we believe we can respond to interpretation requests while maintaining the confidentiality of any information. Accordingly, we are not adopting this suggestion.

    3. Class Determinations

    The NPRM proposed no specific changes to the already established class determinations applicable to information found to cause substantial competitive harm if released. Appendix B to Part 512 currently contains three such determinations. These classes are blueprints and engineering drawings (under certain circumstances), future specific model plans, and anticipated vehicle or equipment production or sales figures (in some cases, for limited periods of time).

    The NPRM sought comment with regard to whether the agency should also consider the establishment of class determinations applicable to categories of information that presumptively would not cause substantial competitive harm if released. The proposal suggested that such class determinations, if established, would be applicable only to compelled information. The agency did not intend that any such class determinations would be applicable to information voluntarily submitted to the agency. Such information is subject to disclosure under a different legal standard and only upon a showing that the company customarily discloses the information to the public.

    We have decided against the creation of class determinations trying to address categories of information the release of which would be presumed not to cause substantial competitive harm. Such class determinations are unnecessary because all data the agency requires to be submitted is already presumptively subject to disclosure under FOIA unless shown to be subject to a FOIA exemption or covered by a class determination. Class determinations merely set forth those categories in which it is unnecessary to make individual submissions regarding the release of data that by its very nature would cause substantial competitive harm or impair the Government's ability to obtain the information in the future. In addition, we have concluded that some of the areas we posed as candidates for such treatment, such as testing conducted pursuant to "known" procedures, would require specific evaluation, thus rendering the class determination futile.

    We nonetheless remain concerned that submitters may routinely seek confidential treatment for information the agency has consistently determined would not cause competitive harm if released. We will take appropriate action to discourage those who repeatedly file claims for confidential treatment despite our consistent rejection of similar requests.

    E. Subpart E -- Agency Treatment of Information

    In Subpart E, the proposal described the manner in which information claimed to be confidential would be treated by the agency. The proposal intended to continue the practice of providing that any information identified and claimed to be confidential would be protected from disclosure by the agency pending an agency decision, and would continue to be treated confidentially as if the submitter's request for confidential treatment were granted, except under certain limited circumstances.

    The Alliance suggested that the final rule should explicitly state that information claimed to be confidential would remain confidential pending the agency's administrative determination that the information is not entitled to confidential treatment. The NPRM expressly proposed such protection during the administrative reconsideration process:  "Upon receipt of a timely petition for reconsideration . . . the submitted information will remain confidential, pending a determination regarding the petition."  The Alliance also suggested an express regulatory provision maintaining the confidentiality of material pending any judicial review of the agency's final administrative action regarding confidential treatment.

    The agency will continue to treat as confidential any information that remains subject to an administrative review. This includes both the initial determination and the agency's response to any petition for reconsideration. The agency declines, however, to adopt the Alliance's suggestion that we continue automatically to treat such information as confidential pending judicial review. The agency will make the information publicly available, consistent with its administrative decision, unless ordered otherwise by a court of competent jurisdiction. We recognize that if we were to make information available immediately following the denial of a petition for reconsideration, it would obviate the submitters' right to judicial review.   Accordingly, the regulation will provide that the agency will allow the submitter twenty working days within which to obtain a court order (e.g., through a temporary restraining order) requiring the agency to maintain the confidentiality of information pending judicial review. We have chosen twenty working days to be consistent with the other time periods incorporated into this final rule. We also recognize that, while the basis and arguments for the confidentiality claim should have been fully developed by the time a submitter seeks judicial review of our determination, additional work may be necessary before a lawsuit is filed. In the absence of a judicial order to the contrary, information we have determined is not entitled to confidential treatment will be placed into the public record twenty working days after receipt of the agency's decision on reconsideration. As in other contexts, we reserve the right to shorten this period if we find that it is in the public interest to do so.

    The proposal also provided that a grant of confidentiality may be modified under certain circumstances, including newly discovered or changed facts, a change in applicable law, a change in a class determination, or a finding that the prior determination was erroneous.

    The proposal further incorporated certain statutory provisions under which information that has been claimed or determined to be entitled to confidential treatment may nonetheless be publicly released in some situations, including releases made to Congress, pursuant to a court order, to the Secretary of Transportation or to other Executive agencies in accordance with applicable law, with the consent of the submitter, and to contractors (subject to certain conditions).

    The agency's existing regulation also listed three additional situations under which information determined to be confidential may nonetheless be disclosed to the public. The proposed rule explained that the Cost Savings Act and the Vehicle Safety Act have been repealed and their pertinent provisions have been codified under title 49 of the United States Code. Accordingly, the NPRM proposed to modify Part 512 in a manner consistent with these statutory changes. We are adopting these revisions.

    [2]   Public Citizen expressed opposition to the agency's practice of providing a release option on its Vehicle Owner Questionnaires to allow the agency to share consumer names with manufacturers but not a similar release option with respect to advocacy groups. Manufacturers have a legal obligation to investigate vehicle problems and make timely defect determinations. The release of information to them, with the owner's permission, assists in their performance of their legal responsibilities by enabling them to investigate reports of vehicle problems. Advocacy groups and other members of the public have no such statutory obligation.

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