USA: class action for disappointed Shelby Mustang owners

Consumer law firm Hagens Berman is putting together a class action for disappointed customers for Ford's Shelby GT350 Mustang (2016 model), which far from being the exciting track car that Ford advertised is said to suffer from overheating problems. Sustained high-speed driving (which is what a track car is supposed to be for) is more than the transmission and diff can cope with, and the car goes into "limp mode" to prevent damage. Limping is, I guess, the antithesis of what you buy a track car for.

The problem can also arise when the cars are driven on the road. It stems, the law firm contends, from the absence of coolers for those parts of the drive train. Base and Tech models are affected.

Hagens Berman's page about the claim is here.

USA: Legal settlement about recalled used cars challenged

A legal settlement reached on 8 December last year between the Federal Trade Commission and GM and two used-car dealers is being challenged by consumer rights activists in court in Washington DC. The settlement is alleged to allow cars to be sold as 'safe' or 'certified' even if it has defective air bags, faulty ignition switches or other potentially lethal problems, provided the used car dealer discloses that the vehicle may be subject to a pending safety recall.

The papers filed at the Federal Court by Consumers for Auto Reliability and Safety, Center for Auto Safety and U.S. Public Interest Research Group, Inc., are available from here. See also the article on the fairwarning.com website, here.

The Road Traffic Act 1988 (Motor Racing) (England) Regulations 2017 (SI no 390)

These regulations deal (as the title suggests) with motor racing events. For a race, or a trial of speed, between vehicles lawfully to take place on a public way, it needs a permit from a motor sport governing body and a motor race order from the relevant highway authority. Section 12 of the Road Traffic Act 1988 makes it an offence to promote or take part in an unauthorised event, but sections 12A to 12I (inserted by the Deregulation Act 2015 - deregulation clearly does not mean reducing the sheer volume of legislation) provide a mechanism for getting the necessary authorisation. The present regulations specify the Motor Sports Association and the Auto-Cycle Union as the governing bodies which may issue permits.

USA: VW plead guilty to emissions offences

Law 360 reports that VW has pleaded guilty in a federal court in Michigan to three criminal charges arising from Dieselgate, and agreed to pay $4.3 billion in criminal and civil penalties. The charges were counts of conspiracy to defraud the United States, wire fraud and violations of the Clean Air Act.

Further coverage of the story is here, here, and here.

Hybrid patent wars

In the US, Ford is under investigation by the International Trade Commission following a patent infringement complaint by Paice LLC (the name an acronym for Power-Assisted Internal Combustion Engines), a hydrid technology company based in Maryland which owns what are rated as four of the most influential hybrid technology patents, and the Abell Foundation, a charity that supports progressive start-up businesses and which co-owns the patents. They allege that the vehicle manyfacturer is importing hybrid electric vehicles and components that infringe their patents. Section 337 of the Tariff Act 1930 prohibits the import of infringing products, and is often used by patentees as an alternative to litigation - although Paice have been down that road too a couple of years ago, and their claims were thrown out.
The investigation could result in Ford being prevented from shipping Mexico-made cars into the USA. As if making cars in Mexico was not already controversial enough!
Paice worked with Ford between 1999 and 2004, providing (according to Automotive News) "detailed modeling and component design" - which seems to fall rather a long way short of creating anything for which a patent might be granted. Perhaps the argument is that Paice's work had its own patented technology embedded in it: in any event, Ford eventually decided not to take a licence to use Paice's technology - and instead struck a deal with Toyota to use its technology. Paice has also been embroiled in litigation with Toyota, which it claims received its technology from Ford, and in 2010 Ford reached a settlement with Paice over that technology. Hyundai and Kia are also accused of infringements by Paice. Ford has also filed 25 legal challenges to Paice patents in the US Patent and Trademark Office.
Hybrid vehicle technology is going the same way as mobile phones - soon the companies involved will be spending more time suing each other for patent infringements than making cars.
Griffith Hack report http://db8fgso3tb3n4.cloudfront.net/wp-content/uploads/2013/09/Griffith-Hack-Dec-2010-Report.pdf
Automotive News http://www.autonews.com/article/20170308/OEM/170309777/ford-faces-another-legal-challenge-over-hybrid-technology-patent
Paice press statement http://www.businesswire.com/news/home/20170308006138/en/Paice-Ford-Hybrids-Mexico-Banned-U.S

Air con cartel fined a cool €155 million

Six car air conditioning and engine cooling suppliers have been fined €155 million by the European Commission for taking part in one or more of four cartels in the European Economic Area. 

Commissioner Margrethe Vestager, in charge of competition policy said:“Even though air conditioning and cooling components are not something you see as products, they are very much something you feel. In this case you might also have felt it in your wallet even though temperatures would still be regulated in your car. Today's decision underlines that we do not accept cartels that affect the European market, wherever and however they may be organised."

The six car component suppliers addressed in this decision coordinated prices or markets, and exchanged sensitive information, for the supply of climate control components and engine cooling components to certain car manufacturers in the EEA. These suppliers are Behr (Germany), Calsonic (Japan), Denso (Japan), Panasonic (Japan), Sanden (Japan) and Valeo (France). The coordination took place at meetings, notably through trilateral meetings in Europe in one of the cartels, and through other collusive contacts in Europe and Japan through bilateral meetings, by email or phone. The Commission's investigation revealed the existence of four separate infringements. All six suppliers acknowledged their involvement in the cartels and agreed to settle the case. Denso was not fined for three of the cartels as it revealed their existence to the Commission. Panasonic was not fined for one of the cartels as it revealed its existence to the Commission.

The fines were set on the basis of the Commission's 2006 Guidelines on fines (see also MEMO).

In setting the level of fines, the Commission took into account, in particular, the sales value in the EEA achieved by the cartel participants for the products in question, the serious nature of the infringement, its geographic scope and its duration.

Under the Commission's 2006 Leniency Notice:

• Denso received full immunity for revealing three of the cartels (thereby avoiding an aggregate fine of ca. € 287 million).
• Panasonic received full immunity for revealing one of the cartels (thereby avoiding an aggregate fine of ca. € 200 000).
• Behr, Calsonic, Denso, Sanden and Valeo benefited from reductions of their fines for their cooperation with the Commission investigation. The reductions reflect the timing of their cooperation and the extent to which the evidence they provided helped the Commission to prove the existence of the cartels in which they were involved.

In addition, under the Commission's 2008 Settlement Notice, the Commission applied a reduction of 10% to the fines imposed on the companies in view of their acknowledgment of the participation in the cartel and of the liability in this respect.

Details are set out in the Commission Press Release.

Garel Rhys

I am very sorry to learn of the death, on 21 February, of Garel Rhys, who among other distinctions held the SMMT chair in motor industry economics at Cardiff University. He was superbly well-informed on all matters to do with the industry, and had a gift of being able to present his knowledge in a highly entertaining fashion - no danger of his audiences ever becoming bored. He spoke at least once for Motor Law, at our seminar on the block exemption back in oh, about 1995, when these things were worth talking about. He was worth every penny, and he will be missed by a lot of people in the industry.

Change to advisory fuel rate

HMRC published new rates for the next quarter in the week of 20th February, then made a further change on 27th February. The new rates come into force on 1st March and initially gave the rate for petrol engine vehicles above 2000cc at 20p per mile (down one penny).  The rate for LPG vehicles above 2000cc has increased by a penny a mile from 13p to 14p. Now, the figures show that the petrol rate has increased by one penny per mile rather than fallen as originally announced. The new rate will be 22 per mile.

Takata agree to settle PL claims

Takata, the Japanese airbag supplier facing big public liability claims in the US, has agreed a settlement said to be worth 1 billion dollars. The judge preferred to strike the deal rather than risk putting the company into bankruptcy.