Federal Aftermarket Priority Issues
Anti-Counterfeiting Asbestos Litigation Reform Association Health Plans Class Action Defect Notification On-Board Diagnostics (OBDII) Right to Repair Act
Federal Legislative Chart Federal Regulatory Chart
Anti-Counterfeiting
The Issue: Counterfeiting is a pervasive and dangerous practice that harms the automotive aftermarket industry, as well as consumers. The U.S. Customs Service and Border Protection estimate that counterfeiting costs U.S. businesses $200 billion annually. The annual global trade in illegitimate goods is estimated to be nearly $600 billion and it continues to grow.
For the aftermarket, there has been influx in dangerous counterfeit products – such as batteries and brake pads. Counterfeit goods universally rely on inferior materials and insufficient testing for quality assurance. Unsafe and unreliable automotive aftermarket products represent a serious danger to the consumer.
Background: In January 2005, Representative Joe Knollenberg (R-Mich), introduced the Stop Counterfeiting in Manufactured Goods Act (H.R. 32), which would close existing loopholes in the U.S. Trademark Counterfeiting Act and provide law enforcement with better tools for shutting down counterfeiters.
The bill contains three key provisions: the mandatory destruction of equipment used for making and packaging counterfeit goods; clarifies that the current federal law prohibits trafficking in counterfeit labels, patches and packaging that are not attached to actual products; and closes a loophole currently exploited by counterfeiters who place "famous" trademarks on products in a different class of goods than those for which the trademark owner has registered its mark.
Existing U.S. law does not require the destruction of the equipment and materials used to make the fakes, thus permitting a convicted pirate to quickly resume trafficking. With these changes, the law would become a greater deterrent to trademark theft by making the potential costs of getting caught much higher than the potential profits of piracy.
Status: The House Judiciary Committee passed H.R. 32 by voice vote on April 13, 2005. AAIA actively supports H.R. 32. During the March Aftermarket Legislative Summit over 200 aftermarket participants urged lawmakers to support and pass the strong anti-counterfeiting provisions contained in H.R. 32. The bill currently has 59 House cosponsors. A companion bill has not yet been introduced in the Senate.
In addition to H.R. 32, AAIA supports new efforts by the Bush Administration to exert diplomatic and economic pressure on China and other nations to fully comply with their Intellectual Property Rights (IPR) obligations under the World Trade Organization (WTO). AAIA also supports the Administration’s efforts to assist American manufacturers through its new Strategy Targeting Organized Piracy (STOP), an initiative advanced to eliminate the criminal networks that traffic in counterfeits and fakes.
Action Required: Write a letter to your lawmakers urging them to support H.R. 32 using AAIA's Legislative Action Center. Click here to send a letter to Congress.
Should you become a victim of counterfeiting, be sure to alert AAIA Government Affairs Department (301/654-664) so that we may document the case and provide assistance.
Resources
Asbestos Litigation Reform Legislation
The Issue: Asbestos claims are inundating the United States courts at an alarming rate. To date, the number of asbestos liability claims filed in the U.S. is over 700,000. The growing number of asbestos lawsuits have cost American businesses billions of dollars and sent more than 60 companies into bankruptcy. If left unchecked, experts predict one to three million claims could be filed and $200 billion in awards paid, before the litigation ends. Studies also show that the asbestos crisis has cost the U.S. economy 60,000 jobs and workers as much as $3 billion in lost wages and in pension savings that are often held in company stock.
Background: In 2003, Senate Judiciary Committee Chairman Orrin Hatch, (R-UT) introduced landmark asbestos litigation reform, S. 1125, The Fairness in Asbestos Injury Resolution Act (FAIR) Act. The bill would eliminate the hundreds of thousands mostly frivolous asbestos claims now clogging court dockets. Replacing the uncertainty of asbestos litigation with a no-fault compensation system, using medical criteria to determine eligibility for established payments based on various levels of injury. Defendant companies and insurers would contribute to the fund, providing resources to meet all future needs. While labor supports the trust-fund approach, they have harshly criticized reform legislation as inadequate, and the trial lawyers are mobilized against the bill. In the summer of 2003, the Senate Judiciary Committee held hearings and passed an asbestos litigation reform bill, S. 1125, largely along party lines.
Status: In April 2004, revised asbestos litigation reform legislation (S. 2290) was introduced in the Senate. The new measure is the result of hundreds of hours of multi-party negotiations that settled many administrative issues. However, a Senate vote on S. 2290 failed to garner the support of any Democrats and the 60 votes necessary to formally take up the modified bill. While negotiations continue, Senate leaders thus far have failed to obtain an agreement regarding the size of the trust fund or how much each group would be required to contribute. No action is expected in the House until the Senate completes action. While AAIA supports asbestos litigation reform, the association does not support the legislation in its current form.
Association Health Plan Legislation
The Issue: Health insurance costs continue to escalate, placing extensive burdens on small businesses and causing many individuals to go without health insurance. A major factor in health insurance costs for small businesses is the fact that since they normally operate in one state, the state laws and mandates that regulate their plans increase their cost of coverage. Corporations and unions that operate across state lines have their health plans governed by the federal Employee Retirement Income Security Act of 1974 (ERISA) statute. ERISA lacks many of the onerous state provisions, making federally regulated plans much less expensive. Small businesses in most states are stuck with disproportionately high costs because they also have to choose from just a few providers.
Background: Earlier this year, legislation was introduced in both the House and Senate which would allow small businesses to join together to purchase quality health care at lower costs through federally certified Association Health Plans (AHPs). The measure, the Small Business Health Fairness Act of 2005 (H.R. 525/S. 406), was sponsored by Rep. Sam Johnson (R-Texas) in the House and Sen. Olympia Snowe (R-Maine) in the Senate. Specifically, the bills would allow small businesses would be able to band together on a national level through trade associations and either purchase their health insurance from a provider or self-insure in the same way that large employers and unions currently do.
Patient advocacy groups and insurers, like Blue Cross and Blue Shield Association, oppose the legislation. These groups claim that the legislation would permit AHPs to cherry pick which individuals they would cover, leaving the high risk individuals to purchase more expensive state regulated plans. AHP opponents maintain that the federal government is not capable of adequately regulating health insurance plans, a job that should be better left to the states. While the legislation provides sufficient safeguards to prevent abuses, the opposition’s strong political ties in Congress threaten to hold up passage.
AAIA endorses the legislation and participates in a broad coalition known as the Coalition Supporting Access & Choice.
Status: The House of Representatives overwhelmingly passed its version of AHP legislation on July 26, 2005 by a vote of 263-165. The vote marked the eighth time that the House has passed AHP legislation, though the measure has yet to gain Senate approval. A similar bill is pending in the Senate and has 14 cosponsors.
Action Required: AAIA encourages its members to contact their Senators urging them to cosponsor and pass S. 406, the Small Business Health Fairness Act, in order to improve health-care access and lower costs. Click here to send a letter to Congress.
Class Action Fairness Act
The Issue: Among the many challenges facing the automotive aftermarket is the ongoing threat of frivolous class action lawsuits. Massive class action lawsuits have become a major burden on large and small businesses. Currently, trial lawyers are often able to seek state courts that historically favor class action plaintiffs. In fact, they have used these courts to impose legal precedent on the entire nation. In addition, these lawsuits crowd the court's dockets, cost businesses millions of dollars in attorney fees, and often leave plaintiffs with little other than worthless coupons as their only compensation.
Background: AAIA endorses the Class Action Fairness Act [H.R. 1115, S. 2062] introduced in the House and Senate that would amend the procedures that apply to consideration of interstate class actions and allow large, multi-state class action suits to be moved to federal court to ease overburdened state courts and to ensure that uniform standards are applied. Passage of these bills would reduce the burden and unfairness of massive class action lawsuits on both businesses and plaintiffs. Specifically, the legislation would transfer to federal court any class action where the value of the suit is greater than $5 million and where less than 1/3 of the plaintiffs reside in a state different from the defendant. This provision would help reduce venue shopping by trial lawyers. The bill also establishes a consumer class action bill of rights, including provisions for: (1) judicial review and approval of non-cash (e.g. coupons) settlements; (2) protection against loss by class members because of payments to class counsel; (3) a prohibition against settlements that provide for greater payments to class members simply because they are located in closer geographic proximity to the court; (4) a prohibition against settlements that allow for a greater share of the award to go to lawyers serving on behalf of the class; (5) standardized - and simplified - settlement notification information; and (6) specific requirements regarding proposed settlement notifications to Federal and State officials.
Status: A deal was struck in the Senate earlier this year to place limits on class-action lawsuits. Unfortunately, in July, the Senate failed to reach an agreement on unrelated amendments (climate change, minimum wage and drug reimportation) that would have permitted the class action reform legislation, S. 2062, to be considered in the Senate. The motion to shut off debate and vote on the measure failed by a vote of 44-43 or 16 votes short of the 60-vote requirement. On June 12, 2003, the House of Representatives passed the companion bill H.R. 1115 by a vote of 253-170. Time is running out to bring up the bill again, as the Congress is expected to adjourn in October. AAIA members should continue to contact their Senators urging support of this critical legislation and utilize the Legislative Action Center. Click here to send a letter to Congress.
Defect Notification
The Issue: The Firestone recall situation has generated growing interest in federal legislation/regulation that seeks to protect the public from defective products.
The Impact: Regulations are being implemented that attempt to provide the government with an early warning of potentially harmful product defects. There is danger that these regulations could pose a substantial record-keeping burden and/or subject manufacturers to unwarranted litigation. The possible result: an environment where more, not fewer defective products are brought to market.
AAIA Position: We support legislation and regulations that expose dangerous automotive defects and fairly compensate injured parties. At the same time, AAIA continues to oppose any government actions that would overly burden members, curtail the development of safer products or unfairly punish companies that in good faith attempt to correct defective products.
The Motor Vehicle Owners Right to Repair Act
The Issue: Modern cars and light trucks contain advanced technology that monitors or controls virtually every function of the vehicle including: brakes, steering, air bags, fuel delivery, ignition, lubrication, theft prevention, emission controls and in some cases, tire pressure. Car owners and independent shops must have full access to the information and tools necessary to accurately diagnose, repair, or re-program these systems. This information and equipment is necessary to ensure vehicle safety, performance, and environmental compliance. Vehicle manufacturers are making access to such vital information increasingly difficult and costly to obtain for the independent aftermarket and its customers.
Impact on Consumers and the Aftermarket: Without access to critical information and tools, motorists are forced to patronize new car dealerships, which may not be convenient, accessible or otherwise desirable to the car owner. Moreover, the lack of competition and consumer choice will inevitably lead to higher repair prices. Failure to perform necessary maintenance for any reason will result in unsafe and high-polluting vehicles populating the nation's highways.
Action Needed: The Motor Vehicle Owners Right to Repair Act prevents vehicle manufacturers and others from unfairly restricting access to the information and tools necessary to accurately diagnose, repair, re-program or install automotive replacement parts. The Act would require the Federal Trade Commission to promulgate and enforce regulations that ensure competition in the vehicle repair business. In addition, the bill would permit the FTC, car owners and independent repair facilities to take legal action to ensure all information and tools are available and affordable. The Right to Repair Act does not affect the dealer’s right to perform any services, including warranty work and does not unconstitutionally take the manufacturer’s intellectual property or require them to disclose trade secrets. Click here to send a letter to Congress.
For more information: Visit AAIA's Right to Repair page.
Click here to see a list of OEM Service Information Web sites.
Click here to see a list of organizations that support the Right to Repair Act.
On-Board Diagnostics (OBDII)
The issue: On-board diagnostics systems (OBDII) are key to the proper performance and maintenance of various automotive emissions and safety-related components. The ability of the aftermarket to utilize and service OBDII systems is essential if consumers are to retain their freedom of choice in selecting service facilities. Further, aftermarket manufacturers must have information necessary to ensure that their components will operate properly with the vehicles’ sophisticated on-board computers. Vehicle manufacturers and their allies have attempted to eliminate or restrict the aftermarket’s access to critical OBDII service tools and information.
The Impact: Should vehicle manufacturers succeed in controlling access to certain OBDII codes and scan tools, consumers would be forced to patronize dealerships and aftermarket service facilities and parts suppliers would be deprived of a huge repair and maintenance market.
AAIA Position: AAIA has aggressively fought to deny vehicle manufactures the ability to restrict access to key OBDII systems. AAIA played a key role in the passage of landmark legislation in California that guarantees aftermarket access to OBDII service information, tools and operating parameters in that bellwether state.
Links for additional information:
Automotive Aftermarket Industry Association (AAIA)7101 Wisconsin Ave, Suite 1300 | Bethesda, MD 20814 | Phone: 301-654-6664 | Fax: 301-654-3299 | E-mail: aaia@aftermarket.orgClick here to read our legal and privacy statement.