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H & H Tire Co. v. United States Department of Transportation

decided: December 5, 1972.

H & H TIRE COMPANY, PETITIONER,
v.
UNITED STATES DEPARTMENT OF TRANSPORTATION ET AL., RESPONDENTS



Pell, Stevens, and Sprecher, Circuit Judges. Stevens, Circuit Judge (concurring).

Author: Pell

PELL, Circuit Judge.

Petitioner H & H Tire Company, an independent tire retreader, seeks judicial review of Federal Motor Vehicle Safety Standard No. 117 (Standard 117)*fn1 issued by the Department of Transportation pursuant to the National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C. § 1381 et seq. Standard 117 establishes specified processing and performance requirements for retreaded pneumatic passenger tires.*fn2 On petitioner's motion, this court, pending its review, stayed the enforcement of the standard, scheduled to have become effective January 1, 1972.

The purpose of the 1966 Safety Act is "to reduce traffic accidents and deaths and injuries to persons resulting from traffic accidents," 15 U.S.C. § 1381. Toward that end, Congress conferred upon the Secretary of the Department of Transportation the power to establish federal motor vehicle safety standards,*fn3 which are defined as "minimum standard[s] for motor vehicle performance, or motor vehicle equipment performance . . .," 15 U.S.C. § 1391(2). The Secretary in turn delegated this authority to respondent National Highway Traffic Safety Administration (Safety Administration). The Act requires compliance with the Administrative Procedure Act (the A.P.A.), 5 U.S.C. § 501 et seq.

When it was engaged in informal rulemaking procedures, 5 U.S.C. § 553, that resulted in the issuance of Standard 117, the Safety Administration received comments reflecting a difference of opinion about the kind of rule the Administration should adopt. Some interested parties preferred a performance standard which would test the performance of completed retreaded tires regardless of their method of manufacture. Others advocated a processing standard setting forth approved methods and processes by which tires should be retreaded. Those favoring performance standards maintained that retreaded tires could and should be expected to meet the same performance standards established for new tires. Standard 117 in its final form reflects this point of view and incorporates five laboratory performance tests that are part of the safety standard for new tires, Standard 109.*fn4

In December 1971, after the Safety Administration failed to amend Standard 117 so as to obviate their objections to the inclusion of two of Standard 109's performance tests, H & H Tire Company, several other independent retreaders, and the American Retreaders' Association, Inc. instituted suit in the District Court for the Northern District of Illinois to have Standard 117 declared invalid and its enforcement enjoined. A week later, the plaintiffs voluntarily dismissed the action, and H & H Tire Company filed the present petition for review.*fn5

Petitioner here urges that Standard 117 must be set aside because it allegedly is in excess of statutory authority and was fashioned without observance of the procedures required by law. Petitioner's attack on the substantive validity of the standard centers on its incorporation of Standard 109's "high speed" and "endurance" tests, which were developed originally for new tires.*fn6 The issuance of Standard 117 was allegedly procedurally improper because the Safety Administration failed to provide the "concise general statement of [the standard's] basis and purpose" required by Section 4 of the A.P.A., 5 U.S.C. § 553.

I

The scope of our review is prescribed by Section 10 of the A.P.A., now 5 U.S.C. §§ 701-706.

"When the issue on appeal is whether a rule made in informal proceedings [under A.P.A. § 4, 5 U.S.C. § 553] meets the criteria of Section 10, the court must necessarily go about the application of that standard in a manner unlike its review of findings of fact and conclusions of law compiled in a formal proceeding [A.P.A. §§ 7, 8, 5 U.S.C. §§ 556, 557].

"This exercise need be no less searching and strict in its weighing of whether the agency has performed in accordance with the Congressional purposes. . . . The paramount objective is to see whether the agency, given an essentially legislative task to perform, has carried it out in a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of rules for general application in the future." Automotive Parts & Accessories Ass'n, Inc. v. Boyd, 132 U.S.App.D.C. 200, 407 F.2d 330, 338 (1968).

If the requirements of Section 10 have not been satisfied, we must "hold unlawful and set aside [the] agency action. . . ." A.P.A. § 10(e), 5 U.S.C. § 706.*fn7

The Safety Act provides that a proposed standard is to be "practicable," to "meet the need for motor vehicle safety,"*fn8 to be based upon the consideration of relevant, available motor vehicle safety data,*fn9 and to be "reasonable, practicable and appropriate" for the particular item of motor vehicle equipment regulated, 15 U.S.C. §§ 1392, 1395. Petitioner H & H Tire contends that Standard 117 satisfies none of these mandatory criteria for a proposed motor vehicle safety regulation.

The House debate on its proposed safety bill suggests that by "practicable" the legislators meant that all relevant factors be considered by the agency, "including technological ability to achieve the goal of a particular standard as well as consideration of economic factors." 112 Cong.Rec. 19648 (Aug. 17, 1966). The Report of the Senate Commerce Committee recommending passage of the Senate's version of the safety act, which was the basis for the version ultimately enacted, stated: "The committee recognizes . . . that the Secretary will necessarily consider [in the ...


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