At least fifteen people have died since 2005 due to defective ignition switches in General Motors cars.
Congress can’t fix these tragedies, but this sure hasn’t stopped them from trying to legislate a response.
General Motors CEO Mary Barra purportedly discovered a defect in some of their cars in January 2014 and issued recalls. After investigations, several senators, unsatisfied with her response, convinced themselves that General Motors officers knew about the defects as early as 2004.
Automotive News reports that Sen. Richard Blumenthal, D-Conn., thought “existing criminal law covered GM’s activity,” but wanted to send corporate officers “a stronger message.”
So he drafted the Hide No Harm Act of 2014.
It would fine and jail for up to five years any corporate officer who “knowingly conceals” any “corporate action or product” that poses any danger of serious harm to any consumer or worker.
The bill defines “corporate officers” to capture virtually any employee. In case employees are worried, Congress hasn’t passed the bill, but its authors haven’t given up.
Blumenthal recently tried to sneak the bill into a National Highway Safety Administration (NHTSA) reauthorization during a Committee mark-up.
The committee did not adopt the bill, but eight of the eleven committee Democrats supported it.
This bill channels a growing public concern for product safety—an issue that Congress will not abandon.
The Justice Department recently showed how costly a car defect case can be in a recent deferred prosecution agreement with Toyota, which had been charged with wire fraud for “downplaying [an acceleration defect] to safety regulators.”
Prosecutors agreed to defer the prosecution for three years and potentially seek to dismiss it if Toyota accepted an independent monitor to oversee its reporting obligations and safety-related public statements, and a $1.2 billion civil penalty.
Car manufacturers are not the only ones who need to watch NHTSA reauthorization bills.
All businesses should be alarmed by the risk that Congress could hide new criminal laws in seemingly innocuous legislation.
The Hide No Harm Act would apply to any “business entity” “carrying out business operations relating to any product or service” that “enters interstate commerce.”
Translation: If you’re not selling lemonade in front of your home, you’re covered.
Worse, this new law would be superfluous.
Federal prosecutors proved that when they mounted criminal fraud charges against GM for “misleading statements about [the] flawed ignition switch.”
No new federal criminal law is necessary.
Existing law, as well as state criminal liability, strict products liability, and negligence liability, to name but a few avenues of recourse, already provides an adequate deterrent.
Moreover, GM’s internal investigation reveals that the defect went undiscovered because lower-level engineers, not GM’s top brass, missed a connection between the air bag and ignition switch operations. Sadly, it took at least 61 crashes to discover it.
How will cumulative criminal sanctions on “corporate officers” prevent engineers from missing the next defect?
Legislators should act with the understanding that they cannot prevent all human tragedy, or else overcriminalization will only increase.
When legislators leap to hastily-passed, overly-broad, strict liability criminal laws—like the Hide No Harm Act—they forego smarter, smaller measures that better address targeted conduct.
This leaves the real lawmaking—saying exactly what and whose conduct is prohibited, when, and why—to the judges who will be tasked with sorting out this mess by applying those statutes to those who are accused of violating them.
It is fundamentally unfair, and a classic example of overcriminalization, for Congress to respond in knee-jerk fashion to a tragic, sensationalistic headline by passing a new, arguably superfluous, criminal statute that creates a fog as to what conduct is actually criminal.