NHTSA imposes record $105 million penalty in Chrysler recall News
NHTSA imposes record $105 million penalty in Chrysler recall

The US National Highway Traffic Safety Administration (NHTSA) [official website] announced [press release] Monday that it has imposed a record $105 million penalty against Fiat Chrysler [corporate website] for its failure to provide a remedy and notices for 23 recalls related to malfunctions of their automobiles. Defective suspension systems could cause Jeep brand vehicles to lose control and other problems made them prone to catch fire. In a consent order [text, PDF], Chrysler admitted to failing to provide effective and timely recall remedies, notification to vehicle owners and dealers and notifications to NHTSA in violation of the National Traffic and Motor Vehicle Safety Act [text, PDF]. Under the agreement, Chrysler also agreed to buy back affected vehicles for above market value and provide financial incentives and notice for owners to have the issues repaired.

The agreement comes after the NHTSA held public hearings on the issue earlier this month [JURIST report]. In 2014, the US Department of Justice (DOJ) [official website] announced [JURIST report] a $1.2 billion settlement agreement with Toyota for misleading customers and US regulators. In November 2012 Toyota settled [JURIST report] a class action lawsuit for $35.5 million brought by its shareholders failing to disclose vehicle quality issues. In 2010, Toyota agreed [JURIST report] to pay $32.4 million in fines following investigations by the National Highway Traffic Safety Administration. JURIST Guest Columnist Bruce Aronson in 2011 argued [JURIST op-ed] that the recent corporate scandals in Japan, including the Toyota recalls, highlight the need for reform of that country’s corporate governance structure.