BILL ANALYSIS Ó
AB 2387
Page 1
Date of Hearing: April 5, 2016
Consultant: Matt Dean
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Reginald Byron Jones-Sawyer, Sr., Chair
AB
2387 (Mullin) - As Introduced February 18, 2016
As Proposed to be Amended in Committee
SUMMARY: Punishes the knowing distribution, selling or
installation of any counterfeit or nonfunctional air bag, as
defined, and the manufacture or importation of any counterfeit,
nonfunctional or unsafe air bag, as defined, as a misdemeanor.
Specifically, this bill:
1)Adds to the list of prohibited air bags any counterfeit air
bag or nonfunctional air bag, as defined.
2)Defines "counterfeit air bag" as an air bag that does any of
the following:
a) displays a mark identical or similar to the genuine mark
of a motor vehicle manufacturer without authorization from
that manufacturer;
b) any air bag falsely represented to be an airbag of any
true dealer, manufacturer or producer of the air bag; or
c) a counterfeit or repaired airbag cover, installed in a
motor vehicle to mislead the owner or operator of the motor
vehicle into believing that a functional airbag has been
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installed.
3)Defines "nonfunctional air bag" as any of the following:
a) An air bag that is no longer in proper working order,
b) An airbag that was previously deployed or damaged,
c) An airbag that has an electric fault that is detected by
the vehicle airbag diagnostic system after the installation
procedure is completed,
d) An airbag that includes a part or object, including,
but not limited to, a counterfeit or repaired airbag cover,
installed in a motor vehicle to mislead the owner or
operator of the motor vehicle into believing that a
functional airbag has been installed, or
e) An airbag that was subject to factory recall.
4)States that any person who manufactures, imports, installs,
reinstalls, sells, or offers for sale any device with the
intent that the device place an airbag in any motor vehicle if
the person knows or reasonably should know that the device is
a counterfeit air bag or a nonfunctional air bag, or does not
meet federal safety requirements as provided in Section
571.208 of Title 49 of the Code of Federal Regulations is
guilty of a misdemeanor punishable by a fine of up to five
thousand dollars ($5,000) or by imprisonment in a county jail
for up to one year, or by both the fine and imprisonment.
5)Grants safe harbor to any installer who installs a
nonfunctional air bag, who after discovering the nonfunctional
air bag has been installed, either replaces the nonfunctional
air bag with a functional air bag or notifies the purchaser or
other recipient of the vehicle that the air bag is not
functional.
EXISTING LAW:
1)Prohibits installation, reinstallation, rewiring, tampering
with, altering or modifying for compensation a vehicle's
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computer or supplemental restraint system, or the system's
performance indicators, so that it falsely indicates the
supplemental restraint system is in proper working order.
(Veh. Code, § 27317.)
2)Prohibits knowingly distributing or selling a previously
deployed air bag or previously deployed air bag component that
will no longer meet the original equipment manufacturing form
or function for proper operation. (Veh. Code, § 27317.)
3)States that improper installation or installation of
previously deployed air bag components which no longer meet
the original equipment manufacturing form or function for
proper operation is a misdemeanor. (Veh. Code, § 27317.)
4)Punishes anyone who knowingly sells or knowingly holds for
sale any counterfeit trademark registered with the Secretary
of State or the Principal Register of the United States Patent
and Trademark Office, as provided, according to the total
value of the goods or products. (Pen. Code, § 350.)
5)Prohibits anyone from willfully and falsely representing their
goods or products as being the products of a true dealer,
manufacturer or producer of those goods or products. (Pen.
Code, § 351a.)
FISCAL EFFECT: Unknown
COMMENTS:
1)Author's Statement: According to the author, "AB 2387 is a
consumer protection measure. It strengthens existing laws
aimed at deterring the fraudulent distribution and
installation of counterfeit airbags by more clearly defining
key terms and increasing the penalty for knowingly exposing
the public to this potentially deadly hazard."
2)Background: AB 1854 (Brownley), Chapter 97, Statutes of 2012,
states in the analysis "Federal law requires car makers in the
United States to install both driver- and front passenger-side
airbags because they have been shown to help prevent injuries
during a crash. In some areas of the state, however, law
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enforcement discovered that some repair shops were installing
or reinstalling previously deployed airbag systems in their
entirety, an act that frequently resulted in fatal or near
fatal injuries when the airbags failed to function properly in
a crash. To address this problem, the Legislature passed AB
1471 (Havice), [Chapter 449, Statutes of] 1999, which made it
a crime to knowingly install or reinstall, for compensation,
any previously deployed airbag that is part of an inflatable
restraint system.
"Proponents of this bill report that in order to get around this
existing law, some unscrupulous salvage vehicle rebuilders are
now no longer installing an entire previously deployed airbag
system. Instead they are using individual components from
previously deployed airbag systems and rewiring the onboard
computer so that it appears as though the vehicle's airbag
system is functioning properly when it in fact it is not. The
author notes that judges have rebuffed the efforts of
prosecutors to take legal action against such fraudulent
activity because of the lack of a legal prohibition against
such actions."
In sum, AB 1854 (Brownley) prohibits knowingly installing any
air bag or air bag component that will no longer meet the
original equipment manufacturing form or function for proper
operation. This bill added the knowing installation or sale
of any nonfunctional air bag or counterfeit air bag to the
list of air bags which are prohibited to be installed or sold.
3)Counterfeit Air Bags: The National Highway Traffic Safety
Administration (NHTSA) has warned that counterfeit air bag
systems may pose public safety issues. As of yet there have
been no injuries or deaths reported from counterfeit air bags,
but testing by the NHTSA has demonstrated that counterfeit air
bags frequently malfunction or fail altogether. <
http://www.nhtsa.gov/About+NHTSA/Press+Releases/2012/Safety+Adv
isory:+NHTSA+Alerting+Consumers+to+Dangers+of+Counterfeit+Air+B
ags >. Currently, selling counterfeit goods bearing a
registered mark is already prohibited by Penal Code Sections
350. The punishment for selling such counterfeit goods
includes imprisonment in county jail ranging from not more
than a year to three years, fines ranging from $10,000 to
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$500,000, or both. Selling a single counterfeit air bag
would be punishable by a fine of not more than ten thousand
dollars ($10,000), or by imprisonment in a county jail for not
more than one year, or by both that fine and imprisonment.
Goods that do not bear a registered mark, which are falsely
represented as genuine manufacturer or dealer goods, are
prohibited under Penal Code Section 351a. A defendant who
violates this section is guilty of a misdemeanor and
punishable by a fine of not less than one hundred dollars
($100) or more than six hundred dollars ($600), or by
imprisonment in the county jail for not less than 20 or more
than 90 days, or both. Under either of these Code Sections,
counterfeit air bags are already prohibited. This bill
increases the potential penalties for selling or installing
counterfeit air bags.
4)Replacement Parts: Honda's current supplemental restraint
system repair manual directs repairmen and repairwomen to only
replace the air bag and applicable sensors on the side where
the air bag deployed -not the entire air bag system for the
vehicle. However, the language of this bill is unclear if
Honda or other auto manufacturers or dealers will change their
standards for replacing air bags and their components when a
vehicle has been in a collision, whether those standards would
compel further air bag and air bag component replacement in
order for installers to avoid criminal liability under this
Section.
5)Criminal Penalty Increases: Over the last few years, Governor
Brown has vetoed bills that create new crimes or particularize
otherwise prohibited conduct. This bill would do both -by
expanding the definition of a crime and by particularizing the
counterfeiting of air bags specifically. Governor Brown said,
in a blanket veto message sent October 3, 2015 which returned
nine bills, "Each of these bills creates a new crime - usually
by finding a novel way to characterize and criminalize conduct
that is already proscribed. This multiplication and
particularization of criminal behavior creates increasing
complexity without commensurate benefit.
"Over the last several decades, California's criminal code has
grown to more than 5,000 separate provisions, covering almost
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every conceivable form of human misbehavior. During the same
period, our jail and prison populations have exploded.
"Before we keep going down this road, I think we should pause
and reflect on how our system of criminal justice could be
made more human, more just and more cost-effective."
6)Description of Amendments: The amendments to this bill reduce
the penalties for violations of this section from felonies to
misdemeanors, keeping the penalties for violation of this
section the same as they are under existing law, while adding
counterfeit and nonfunctional air bags to the list of
prohibited air bags into the Code Section as it currently
exists. The bill also prohibits the manufacture and
importation of nonfunctional, counterfeit or otherwise unsafe
air bags, as defined in the Federal Regulations on airbags, to
the list of offenses in this Section.
7)Argument in Support: According to Honda North America, Inc.,
"Airbags are an essential component of modern vehicle safety
systems, with several installed throughout each vehicle cabin
as required by federal law. In the milliseconds after a
collision, vehicle sensors measure critical information such
as the size and position of the passenger, as well as the
point and force of the impact. The vehicle then deploys each
airbag in a specific order and with a precise amount of force
to best protect the occupants. This level of precision
requires each component to work as it was designed for the
specific make, model and year of the vehicle for which it was
designed. We encourage you to visit our website to see video
evidence of just how deadly the difference in one airbag
inflating seven one-hundredths of a second early or late can
be.
"In 2010, federal authorities made Honda aware of a growing
problem with cheap and ineffective counterfeit airbags
entering the U.S. stream of commerce from China. While those
airbags looked authentic from the outside, testing by the
federal authorities, Honda and independent third parties
confirmed that the counterfeiters were unable to replicate the
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technology required to protect consumers in the event of a
collision. Because of the cost and precision involved in
replicating our technology, many counterfeiters did not even
bother to try. Instead they chose to fill airbags with
sawdust, newspaper, paper towels, styrofoam or other items
that were never intended to provide vehicle occupants with
protection during a crash. These counterfeit airbags are then
advertised as new and sold over the internet in an attempt to
make a profit by defrauding consumers at the expense of public
safety.
"This problem is so widespread that on October 10, 2012 the
National Highway Traffic Safety Administration (NHTSA) issued
a consumer advisory alerting vehicle owners and repair
professionals about the danger. This advisory shows that this
is a problem that impacts not just Honda vehicles, but nearly
every make and model vehicle on the road and is putting
thousands of motorists at risk for serious injury or even
death.
"Since discovering this problem, and because of the inherent
danger these products pose to our customers, Honda has made
combating these products a priority. We have launched a
website www.airbagaware.com filled with news articles and
videos in order to raise public awareness about this problem
among consumers, repair professionals and policy makers. We
have also worked closely with federal authorities in Homeland
Security, Customs and Border Protection and the FBI to
identify counterfeit airbags and prosecute those responsible
when possible. Over the past few years, several thousand
counterfeit airbags have been confiscated in raids across the
country. To date, Honda has worked with federal authorities to
secure the conviction of 16 people for trafficking counterfeit
airbags including one California resident. Unfortunately this
is just the tip of the iceberg.
"Despite their best efforts, federal agents have limited
authority to combat this problem. Federal authorities are only
able to prosecute counterfeiters when they violate federal
trademark law. This occurs when a registered trademark or a
mark substantially similar to a registered trademark is used
on a fake airbag without approval. Unfortunately the majority
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of legitimate airbags, including passenger and side-curtain
airbags do not contain trademarks and therefore fakes cannot
be prosecuted under trademark law. Even when these fake
airbags are discovered by authorities they must eventually be
released and can eventually find their way into the
marketplace. Additionally, counterfeiters are becoming
increasingly aware of this loophole and are shipping
driver-side airbags without the trademark in order to avoid
confiscation and prosecution. Once in the country, the
manufacturer's insignia is attached and the counterfeit
product is sold.
"Because of these shortcomings in federal law, Honda has
worked with a coalition of stakeholders to push for
legislation in states across the country that address these
inadequacies. Over time this coalition has included
automakers, auto dealers, insurers, automotive recyclers and
several local safety groups. The airbag definition in Assembly
Bill 2387 is broad enough to include all airbags not designed
in accordance with federal motor vehicle safety standards. The
bill also addresses those who knowingly manufacture, sell and
install these products into the vehicles of unknowing
consumers. We believe that this bill will provide a real
disincentive to someone who would consider engaging in this
heinous act, and allow the state to pursue such actors. Over
the past three years our coalition has enacted similar laws in
ten states ( AL , CT , FL , IA , LA , NJ , NM , NY , OH & TX) by a
combined vote of 1386-1. This bill was also adopted as model
legislation by the Council of State Governments in their 2015
"Suggested State Legislation" docket. Existing California laws
relating to airbag fraud do not address this specific and
growing problem, but are consistent with the legislature's
original intent of protecting consumers and we respectfully
ask for your support in enacting this important consumer
safety legislation."
8)Argument in Opposition: According to the State of California
Auto Dismantlers Association (SCADA), "SCADA is opposed to AB
2387 because it guts the hard work of then Assemblywomen
Brownley. In 2012, Assemblywoman Brownley worked with
district attorneys, law enforcement, auto dismantlers and
other to make it a crime to fraudulently repair deployed
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airbags and to sell or make repairs using deployed airbags or
deployed airbag components. Current law and industry repair
standards are clear that auto dismantlers, repair shops and
the public cannot sell or install a deployed airbag or
deployed air bag component.
"An additional concern we have is that under the definitions of
'airbag' and 'nonfunctional airbag,' the bill creates a new
crime for a person who repairs a vehicle that has a deployed
airbag or a deployed air bag component even when the repairs
are being done under approved, required and established
industry repair standards.
"Other than the issue of counterfeit airbags that is trying to
be addressed in AB 2387, the Brownley law addresses all of the
issues of concern outlined by the sponsor of the bill. It is
for these reasons that SCADA must respectfully oppose AB 2387.
However, we are supportive of efforts to address the issue of
counterfeit airbags and would be happy to continue to work
with you and the sponsor on the issue within the framework of
the existing statute."
9)Prior Legislation: AB 1854 (Brownley), Chapter 97, Statutes
of 2012, punishes as a misdemeanor any person who installs or
tampers with a vehicle's computer system or supplemental
restraint system, including, but not limited to, the
supplemental restraint system's on-board system performance
indicators, so that it falsely indicates the supplemental
restraint system is in proper working order, and for a person
to knowingly distribute or sell a previously deployed air bag
or component that will no longer meet the original equipment
manufacturing form or function for proper operation.
REGISTERED SUPPORT / OPPOSITION:
Support
Alliance of Automobile Manufacturers
Automobile Club of Southern California
California Professional Firefighters
Coalition Against Insurance Fraud
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Ford Motor Company
Global Automakers, Inc.
Honda North America, Inc.
Opposition
Auto Dismantlers Association of Southern California
California Auto Dismantlers & Recyclers Alliance, Inc.
California Public Defenders Association
Inland Auto Dismantlers Association
LKQ Corporation
State of California Auto Dismantlers Association
Valley Auto Dismantlers Association
Analysis Prepared
by: Matt Dean / PUB. S. / (916) 319-3744