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Section 111

As Enacted

Noncompliance. I

Sec. 111. (a) If any motor vehicle or item of motor vehicle equip. ment is determined not to conform to applicable Federal motor vehicle safety standards, or contains a defect which relates to motor vehicle safety, after the sale of such vehicle or item of equipment by a manufacturer or a distributor to a distributor or a dealer and prior to the sale of such vehicle or item of equipment by such distributor or dealer:

(1) The manufacturer or distributor, as the case may be, shall immediately repurchase such vehicle or item of motor vehicle equipment from such distributor or dealer at the price paid by such distributor or dealer, plus all transportation charges involved and a reasonable reimbursement of not less than 1 per centum per month of such price paid prorated from the date of notice of such nonconformance to the date of repurchase by the manufacturer or distributor; or

(2) In the case of motor vehicles, the manufacturer or distributor, as the case may be, at his own expense, shall immediately furnish the purchasing distributor or dealer the required conforming part or parts or equipment for installation by the distributor or dealer on or in such vehicle and for the installation involved the manufacturer shall reimburse such distributor or dealer for the reasonable value of such installation plus a reasonable reimbursement of not less than 1 per centum per month of the manufacturer's or distributor's selling price prorated from the date of notice of such nonconformance to the date such vehicle is brought into conformance with applicable Federal standards: Provided, however, That the distributor or dealer proceeds with reasonable diligence with the installation after the required part, parts or equipment are received. (b) In the event any manufacturer or distributor shall refuse to comply with the requirements of paragraphs (1) and (2) of subsection (a), then the distributor or dealer, as the case may be, to whom such nonconforming vehicle or equipment has been sold may bring suit against such manufacturer or distributor in any district court of the United States in the district in which said manufacturer or distributor lesides, or is found, or has an agent, without respect to the amount in controversy, and shall recover the damage by him sustained, as well as all court costs plus reasonable attorneys' fees. Any action brought pursuant to this section shall be forever barred unless commenced within three years after the cause of action shall have accrued.

(c) The value of such installations and such reasonable reimbursements as specified in subsection (a) of this section shall be fixed by mutual agreement of the parties, or failing such agreement, by the court pursuant to the provisions of subsection (b) of this section.

Conference Report Contains nothing helpful.

House Passed Act

Same as enacted Act.

House Debate

Congressional Record-House
August 17, 1966, 19647
Mr. RYAN.

Mr. Chairman, it is regrettable that in the hands of consumers. The bill, as the bill does not include a provision for reported, requires recall from the dealers & corrective callback, as suggested by only. As far as the purchaser is conCongressman MACKAY'S amendment of- cerned, it only provides for notification fered before the Committee on Interstate of defects. I am afraid this will leave and Foreign Commerce. This would the consumer still a victim of the tragic have required manufacturers to recall apathy which characterized our past atfor the repair of defects motor vehicles, titude toward motor vehicle safety.

House Committee Report House Report 1776, Page 26

REIMBURSEMENT TO DISTRIBUTORS OR DEALERS Section 111(a) requires that if any motor vehicle or item of equipment is determined not to conform to Federal safety standards, or contains a defect which relates to vehicle safety, after the sale of such vehicle or item of equipment by a manufacturer to a distributor or dealer and prior to resale, the manufacturer or distributor shall repurchase such vehicle or item of equipment at the price paid by the affected distributor or dealer plus transportation charges and a reasonable reimbursement of not less than 1 percent per month of the price paid, prorated from the date of notice of nonconformance to the date of repurchase by the manufacturer or distributor, or in the case of motor vehicles, the manufacturer or distributor at his expense shall furnish the purchasing distributor or dealer the required conforming part or parts of equipment for installation and the manufacturer shall reimburse the distributor or dealer for the reasonable value of the installation plus reimbursement of not less than 1 percent per month of the manufacturer's or distributor's selling price prorated from the date of notice of nonconformance to the date such vehicle is brought into conformance with applicable safety standards. However, the distributor or dealer affected is required to proceed with reasonable diligence with the installation of the required part, parts, or equipment.

Section 111(b) provides that in the event the manufacturer or distributor refuses to comply with the requirements of subsection (a) of this section, then the distributor or dealer to whom such nonconforming vehicle or equipment has been sold may sue the manufacturer or distributor in any district court of the United States in which said manufacturer or distributor resides, is found, or has an agent, without regard to the amount in controversy and he shall recover the damage sustained as well as court costs and reasonable attorneys' fees. Any action brought pursuant to this section shall be barred unless commenced within 3 years after the cause of action accrues.

Subsection 111(c) provides that the value of installations and such reasonable reimbursements as specified in subsection (a) of this section shall be fixed by agreement of the parties or, failing such agreement, by the court pursuant to subsection (b) of this section.

Section 111 of the reported bill was included by the committee to place the financial responsibility for noncompliance upon the person or persons who failed to achieve conformance with Federal safety standards rather than upon a distributor or dealer who purchases a vehicle or item of equipment under a presumption and certification that conformance had been achieved.

Senate Passed Act
Congressional Record-Senate
June 24, 1966, 14259

Obligation for noncomplying motor vehicles

and motor vehicle equipment Soc. 119. (a) It any motor vehicle or item of motor vehicle equipment is determined not to conform to applicable Federal motor vehicle safety standards, or contains a delect which relates to motor vehicle safety, after the sale of such vehicle or item of equipment by a manufacturer or a distributor to a distributor or a dealer and prior to the sale of such vehicle or item of equipment by such distributor or dealer:

(1) The manufacturer or distributor, as the case may be, sball immediately repurchase such vehicle or item of motor vehicle equipment from such distributor or dealer at the price paid by such distributor or dealer, plus all transportation charges involved and a reasonable reimbursement of not less than 1 per contum per month of such price paid proratod from the date of notice of such nonconformance to the date of repurchase by the manufacturer or distributor; or

(2) In the case of motor vehicles, the manufacturer or distributor, as the caso may be, at his own expense, shall immediately furnish the purchasing distributor or dealer the required conforming part or parts or oquipment for installation by the distribu. tor or dealer on or in such vehicle and for the installation involved the manufacturer shall reimburse such distributor or dealer for the reasonable value of such installation plus a reasonable reimbursement of not less than 1 per centum per month of the manu

Lecturer's or distributor's selling price prorated from the date of notico of such nonconformance to the date such vehicle 18 brought into conformance with applicable Federal standards: Provided, however, That the distributor or dealer proceeds with reasonable diligence with the installation after the required part, parts or equipment are received.

(b) In the event any manufacturer or distributor shall refuse to comply with the requirements of paragraphs (1) and (2) of subsection (a), then the distributor or dealer, as the case may be, to whom such nonconforming vehicle or equipment has been sold may bring suit against such manufacturer or distributor in any district court of the United States in the district in which said manufacturer or distributor resides, or is found, or has an agent, without respect to the amount in controversy, and shall recover the damage by him sustained, as well as all court costs plus reasonable attorneys' fees. Any action brought pursuant to this section shall be forever barred unless commenced within three years after the cause of action shall have accrued.

(c) The value of such installations and such reasonable reimbursements as specified in subsection (a) of this section shall be fixed by mutual agreement of the parties, or falling such agreement, by the court pursuant to the provisions of subsection (b) of this section.

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