By Jenna Greene, From The National Law Journal

American Honda Motor Co. Inc. will pay two fines totaling a record $70 million to the National Highway Traffic Safety Administration for failing to report deaths, injuries and certain warranty claims to the federal government.

The automaker was hit with a $35 million fine because it did not notify NHTSA about 1,729 incidents between 2003 and 2014 in which one of its vehicles caused an injury or death. The second $35 million penalty stems from Honda’s failure to report relevant warranty and customer satisfaction claims.

The penalties are the maximum NHTSA can collect under a congressionally mandated cap.

“Today’s announcement sends a very clear message to the entire industry that manufacturers have responsibility for the complete and timely reporting of this critical safety information,” NHTSA Administrator Mark Rosekind said in a news release.

NHTSA relies on quarterly reports from automakers to investigate whether safety defects or defect trends exist and warrant further action, including possible recalls.

Represented by Mayer Brown partner Erika Jones, Honda also agreed to increased NHTSA oversight and third party audits to ensure that all required reporting is completed.

“We have resolved this matter and will move forward to build on the important actions Honda has already taken to address our past shortcomings in early warning reporting,” Rick Schostek, Honda North America Inc.’s executive vice president, said in a written statement. “We continue to fully cooperate with NHTSA to achieve greater transparency and to further enhance our reporting practices.”

After an internal audit, Honda discovered the under-reporting and disclosed it to NHTSA in November. The automaker blamed “errors related to data entry, computer coding, regulatory interpretation, and other errors in warranty and property damage claims reporting.”

For NHTSA, the fines follow a banner 2014, when the auto safety regulator collected a record $126 million in penalties. Among them: $35 million against General Motors Co. for failing to issue a recall in a timely manner and $17 million against Hyundai Motor America also for failing to issue a timely recall.

Photo: Wednell Franks/iStockphoto.com

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