Interpretation ID: BakerDaniels.ajd
Melissa M. Hinds, Esquire
Baker Daniels
300 North Meridian Street, Suite 2700
Indianapolis, IA 46204-1782
Re: Request for Interpretation
Dear Ms. Hinds:
This is in reply to your letter dated November 19, 2003 seeking an interpretation of 49 CFR Part 579, Reporting of Information and Communications About Potential Defects. In particular, you seek an interpretation of several terms in 49 CFR 579.4 and the reporting requirements under 49 CFR 579.5.
You note that the regulatory term "manufacturer" in section 579.4 includes "any parent corporation, any subsidiary or affiliate, and any subsidiary or affiliate of a parent corporation of such a person."You ask whether a manufacturers obligation to report an external communication under section 579.5 is triggered when communications are made to multiple recipients who are in a corporate family. In particular, you provided the following scenario with two questions.
"Big A" manufacturers motor vehicles. In addition to its own plants, Big A also has first and second tier subsidiaries, "Subsidiary B" and "Subsidiary C," both of which manufacturer motor vehicles sold under Big As brand and trademark. Enter "Supplier D," which manufacturers motor vehicle equipment for Big A, Subsidiary B, and Subsidiary C.
1) Supplier D identifies a defect in its motor vehicle equipment. It sends a letter identifying the defect to Subsidiary B and Subsidiary C.
2) Supplier D identifies a defect in its motor vehicle equipment. It sends a letter identifying the defects to Subsidiary B and Big A.
You ask if these communications are "external communications" for the purposes of section 579.5.
You also note that the answer to this question may depend upon the construction of the word "affiliate," which you state is not defined in the regulations.
All manufacturers of motor vehicle equipment, including equipment manufacturers that manufacture parts that enter into use only through a vehicle manufacturer and its subsidiaries, have an obligation, independent of the vehicle manufacturer, to provide certain communications to NHTSA pursuant to Sections 579.5(a) and (b). This obligation arises when the equipment manufacturer issues a notice, bulletin, customer satisfaction campaign, consumer advisory or any other communication within the scope of Section 579.5(a) or (b) and sends it to more than one manufacturer, distributor, dealer, lessor, lessee, owner or purchaser in the United States. Vehicle manufacturers have the same obligations for notices that they issue.
As you point out, the definition of manufacturer includes "any parent corporation, any subsidiary or affiliate, and any subsidiary or affiliate of a parent corporation of such a person." In applying this definition to the two hypothetical situations you presented, Big A, Subsidiary B and Subsidiary C would all be considered the same manufacturer for the purposes of 49 CFR Part 579. Thus, in each instance, Supplier Ds notice is not an external communication that needs to be submitted pursuant to 49 CFR 579.5 because it is not sent to more than one manufacturer, distributor, dealer, lessor, lessee, owner or purchaser. Therefore, Supplier Ds notices do not have to be submitted to NHTSA.
Lastly, while the term "affiliate" is not dispositive to the outcome here, we note that "affiliate" is defined in 49 CFR 579.4. For the purposes of Part 579, affiliate means:
In the context of an affiliate of or person affiliated with a specified person, a person that directly, or indirectly through one or more intermediates, controls or is controlled by, or is under common control with, the person specified. The term person usually is a corporation.
If you have any questions, you may phone Andrew DiMarsico of my staff at (202) 366-5263.
Sincerely,
Jacqueline Glassman
Chief Counsel
ref:579
d.2/2/04