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Foreign Manufacturers Legal Accountability Act of 2010

July 13th, 2010 · 3 Comments · Politics of Riding, Vintage

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BadCongress.com logoWatch out. Congress is at it again and this time they may wipe out half the vintage dirt bike industry.

A couple of years ago the motorcycle industry was caught by surprise when Congress enacted, and then deployed, the Consumer Product Safety Improvement Act (CPSIA) — almost immediately wiping out a $1 billion youth motorcycle and atv industry. Over the ensuing two years the CPSIA proved to be a massive screw job for all sorts of small businesses.

On Wednesday, June 30, 2010 the House Energy and Commerce Committee passed (by voice vote) another piece of legislation that could be equally devastating to the vintage dirt bike scene — the Foreign Manufacturers Legal Accountability Act of 2010, H.R. 4678. The bill now moves to the larger Ways and Means Committee or perhaps to the floor for a vote.

This act is aimed at forcing foreign manufacturers into the US tort system for liability law suits. Like most laws, that sounds great in a sound byte on the news – force all those big Chinese and Taiwanese companies to be accessible to our thousands of personal injury lawyers.

The truth is that if you’re a vintage dirt bike fan and you buy or use any part that’s made in the UK, China, Taiwan, Australia, or Europe by a small manufacturer you may well find that part is no longer available to you. Those cool CZ parts Bertus brings in from Czechoslovakia? Not gonna happen if this bill passes. Nifty trials parts for your Ty250 or TL125 from Great Britain? Kiss them goodbye. Replica frames from GMC in Australia? Adios, amigo.

To get a little more insight into this bill I called Paul Vitrano, General Counsel for the Motorcycle Industry Council (MIC) and the Motorcycle Safety Foundation (MSF), to discuss it.

According to Paul, the MIC currently has no official position on the bill and has not been involved at the draft stage. However, he did offer some comments based on his reading of the bill text and previous experience with the CPSIA.

My first question to Paul was whether this bill was actually as ominous as it seemed, and whether people like me — vintage bike hobbyists — should be concerned. His answer? A definite Yes, with a couple of caveats.

As currently written the bill does not encompass products that are otherwise covered by the Department of Transportation (DOT). What this means is that manufacturers of parts, pieces, and materials that are DOT-approved for street use should not be subject to the new regulations. Essentially the street bike crowd should be relatively safe. But if you’re into performance (non-DOT) parts for vintage road racing you’re vulnerable.

As for us dirt bike guys, almost none of our stuff is DOT-approved. There may be some parts for early dual-purpose bikes, but I’m not aware of anything. Typically, everything that comes in from overseas for dirt bikes is stamped “For Competition Use Only” specifically as a way of avoiding liability. None of this stuff will be allowed through customs unless the manufacturer has  complied with the onerous registration, agency, and disclosure requirements of the bill.

Paul’s second caveat was that the bill does allow for rule-making after passage. He sees this as a good thing, as the main problem with the CPSIA was that limits were set in the law itself, allowing for little or no flexibility on the part of the bureaucrats responsible for implementation.

Specifically, the bill provides for the administrative bureaucrats to determine the minimum size of the manufacturers to be regulated, based on dollar volume, unit volume, and number of incoming shipments. This means there is the potential for certain small businesses to be exempt, but I fail to see any incentive for the bureaucrats to exempt them. Small, cottage businesses in foreign countries don’t have any political representation in this country, and can’t pay lobbyists to fight on their behalf.

I am not any more comfortable with idiot bureaucrats making laws than I am idiot Congressmen but, to Paul’s point, at least that allows for some input by the affected parties — however difficult and expensive that input may be. With CPSIA there was no input mechanism at all and the result was a legal quagmire of historic proportions.

Paul’s closing comment was that there are some benefits to the bill, in terms of making large foreign manufacturers more accountable, but it definitely bears watching and could  pose serious problems to the vintage hobby.

I first became aware of the bill here, at the Learning Resources, Inc. blog. Editor Rick Woldenberg has posted additional commentary on the bill, specifically on the rule-making and minimum size aspects, here.

If you’re interested I have posted a Government Printing Office PDF of the bill, or you can track it at Thomas.gov using HR4678 for your search. (Note: If you open the PDF it may appear to hang for a minute as it goes out to the GPO site to validate authenticity of the document.)

In summary, I think this is going to be another bad piece of legislation and, unless we are very careful and proactive, the vintage dirt bike hobby could take a real beating on this deal. Few, if any, of the vintage parts guys are members of the MIC (as far as I know) and cannot expect to be represented by them. As to whether the AMA or AHRMA will take a position on this, I do not know.  I will keep you updated here as I learn more.

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3 Comments so far ↓

  • ray friedlund

    SCARED,were being screwed from every direction,gonna be hard to ride let alone drive if they shut down the oil in the states.Ray

  • Tim Lile

    I would like the DOT should care more about this then the off road racing riders. Why should this action go after the off road riders? Why not exclude all off road bikes and parts used off road?

    • Terry Frazier

      Hi Tim. I don’t understand your point. Are you saying the DOT should oppose this bill rather than dirt bike riders? The DOT is irrelevant, except that manufacturers who are registered with the DOT don’t have to re-register under the FMLAA.

      This bill isn’t about going after dirt bike riders, it’s about forcing foreign companies into the US tort system so they can easily be sued. I’d be shocked if anyone involved in the drafting, sponsoring, and approval processes for this bill even knows what a dirt bike is, much less cares about going after them. This is just another “big idea”, proposed by big lawyers (Congressmen), aimed at big companies and foreign trading partners.

      But like every other big idea to come out of Congress there will be devastating consequences to small businesses and the people who rely on them. VMX is a cottage industry. Complying with the FMLAA could be hideously expensive for little businesses in Europe or Australia. Worse, it forces them to defend themselves in lawsuits over here.

      While we like to think we wouldn’t do it, we all know some asshole who is likely to go out and injure himself doing something stupid and then want to sue everybody even remotely connected to the products he was using, the clothes he was wearing, and the property he was on at the time. Just have a look at the $41 MILLION settlement against Parts Unlimited because a jacked-up YZ caught fire and burned a kid.

      This law means that all those little vintage suppliers have to have an agent here that can be served, they have to agree to be sued under US law, and they have to agree to come over here and defend themselves if there is a suit. They have to do all this regardless of whether there has ever been an incident with their products, and regardless of whether or not there is likely to be.

      If you’re selling $25k or $50k or $100k per year in vintage parts and gear to the US market are you going to open yourself to the kind of abuse that Parts Unlimited got? I wouldn’t. I’d just walk away from the market. Which is what I suspect most of the foreign vintage vendors will do. They could easily spend an entire year’s revenue on even a single, small lawsuit.

      Everyone knows the US tort system is broken. If you are stupid in this country you have an inalienable right to find someone else, someone with money, responsible.

      This bill wasn’t aimed at dirt bike riders, but it will snare us in the massive net that is government bureaucracy if we don’t stand up now — early in the process — and make ourselves heard.

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