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Calif. Bill Targets Rental Cars Subject To Recalls

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(Getty Images)

(Getty Images)

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SACRAMENTO (AP) — California lawmakers are taking a step toward enacting what would be the nation’s first law forcing rental car companies to pull recalled vehicles off the road, encouraged by a mother who testified that such a rule could have saved the lives of her two daughters.

A state Assembly committee voted 6-2 in favor of a bill named for Carol Houck’s daughters, who died in 2004 while driving a rented car that was the subject of a safety recall.

“Consumers need to know that when they rent these cars, that these cars are safe,” said Assemblyman Bill Monning, D-Monterey, who presented the bill to the committee.

Auto dealers are not allowed to sell or lease cars that have been recalled, Monning said. His bill would close a loophole that allows rental car companies to continue doing so.

Representatives of several rental car companies said they repair 90 percent of vehicles within 30 days of receiving a recall notice and that their safety policies make the bill unnecessary. They also said adopting such a law in California could prompt other states to do the same, creating a patchwork of laws that would be difficult for them to follow.

They said the bill targets their industry unfairly and ignores other vehicle fleets, such as those operated by taxi, limousine and shuttle bus services, private companies and governments.

“If something needs to be done — and there are different opinions about that — we think it needs to be done at the federal level,” said Thomas Laffey, general counsel for Enterprise Holdings, after the hearing.

Enterprise is the largest U.S. car rental company, with $12 billion in annual revenue and 1.1 million vehicles in its fleet. It includes the Alamo, Enterprise and National brands.

Houck’s daughters — Raechel, 24, and Jacqueline, 20 – were killed in 2004 when the steering failed on a Chrysler PT Cruiser they had rented from Enterprise in central California. The car crashed into a truck and caught fire.

The company had received a recall notice for the vehicle about a month earlier.

“The PT Cruiser my daughters were killed in was rented out three times after they received the notice,” said Carol Houck, of Ojai.

Investigators hired by the Houck family said the power steering fluid line that was the subject of the recall leaked and caused the steering to fail. Enterprise fought a wrongful death case brought by the family for five years before admitting negligence. Last year, a jury awarded the parents $15 million.

Laffey testified that Enterprise and other major U.S. car rental companies have provided cars for the equivalent of 3 billion days since the Houck accident without a single similar incident. The
industry also argued that some recalls do not pose a threat to drivers and it could leave some travelers stranded to require that cars be pulled from service for all recalls.

Assembly Republicans on the Judiciary Committee voted against the bill, AB753, and peppered Monning with questions about it.

Several of the questions focused on whether state law was the appropriate way to regulate the industry, which sends cars and drivers across state lines every day.

Don Wagner, R-Irvine, the committee vice chair, questioned whether the issue is best left to the federal government. The industry is responding to questions from federal regulators, he said, and U.S. Sen. Charles Schumer, D-N.Y., has proposed that Congress address the matter.
“I fully support a federal solution to this problem,” Monning replied, “but I don’t think we can wait for another Houck family” tragedy. Monning said he was willing to consider amendments that
would broaden the bill to include other vehicle operators such as taxi companies.

The National Highway Traffic Safety Administration recently asked rental companies to answer detailed questions about how they handle recalls, following up on an inquiry to auto manufacturers.

The agency “believes that rental car companies have a responsibility to provide safe vehicles to their customers,” NHTSA said in a statement distributed to lawmakers by the bill’s author, Sacramento-based group Consumers for Auto Reliability and Safety.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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