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Code · REGISTER · 2007-10-19 · Social Security Administration · Rules and Regulations

Rules and Regulations. Final rule

81,416 words·~370 min read·/register/2007/10/19/07-5222

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BILLING CODE 4210-67-P 72 202 Friday, October 19, 2007 Rules and Regulations Part III Social Security Administration 20 CFR Parts 404 and 416 Revised Medical Criteria for Evaluating Digestive Disorders; Final Rule SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404 and 416 [Docket No. SSA 2006-0094] RIN 0960-AF28 Revised Medical Criteria for Evaluating Digestive Disorders AGENCY: Social Security Administration. ACTION: Final rule. SUMMARY: We are revising the criteria in the Listing of Impairments (the listings) that we use to evaluate claims involving digestive disorders.
We apply these criteria when you claim benefits based on disability under title II and title XVI of the Social Security Act (the Act). The revisions reflect advances in medical knowledge, methods of evaluating digestive disorders, treatment, and our program experience. We are also removing listings that are redundant because they only refer to other listings, and we are making other conforming changes. DATES: These rules are effective December 18, 2007. FOR FURTHER INFORMATION CONTACT:
James Julian, Director, Office of Medical Policy, Social Security Administration, 4470 Annex Building, 6401 Security Boulevard, Baltimore, Maryland 21235-6401, 410-965-4015. For information on eligibility or filing for benefits, call our national toll-free number 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet Web site, Social Security Online, at *http://www.socialsecurity.gov.* SUPPLEMENTARY INFORMATION: Electronic Version The electronic file of this document is available on the date of publication in the **Federal Register** at *http://www.gpoaccess.gov/fr/index.html.* Background We are revising and making final the rules we proposed in the Notice of Proposed Rulemaking
(NPRM)published in the **Federal Register** on November 14, 2001 (66 FR 57009). We provide a summary of the provisions of the final rules below, with an explanation of the changes we have made from the text in the NPRM. We also provide summaries of the public comments and our reasons for adopting or not adopting the recommendations in these comments in the section, “Public Comments.” The final rule language follows the public comments. After we published the NPRM, we also: • Published final rules on April 24, 2002, entitled Technical Revisions to Medical Criteria for Determinations of Disability (67 FR 20018). In those final rules, we added listings 5.09 and 105.09 for liver transplantation. We also made minor technical changes to our listings to include references to modern imaging techniques. These final rules do not make substantive changes to the rules we published on April 24, 2002, although we are making minor editorial changes. • Published a notice on November 8, 2004, providing a 60-day extension of the comment period on the NPRM for the limited purpose of accepting comments about the proposals regarding chronic liver disease (69 FR 64702). We explain this extension in more detail in the public comments section of this preamble. • Held an outreach meeting in Cambridge, Massachusetts on November 17, 2004, regarding our listings for chronic liver disease. We describe this meeting in more detail in the public comments section of this preamble. Why are we revising the listings for digestive disorders? We reviewed the prior digestive disorder listings and determined that they should be revised in light of our program experience and advances in medical knowledge, methods of evaluating digestive disorders, and treatment. We last published final rules comprehensively revising the digestive disorder listings in the **Federal Register** on December 6, 1985 (50 FR 50068). In the introductory text to those rules, we stated our intention to periodically review and update these listings due to medical advances in treatment and our program experience. What do we mean by “final rules” and “prior rules”? Even though these rules will not go into effect until 60 days after publication of this notice, for clarity we refer to the changes we are making here as the “final rules” and to the rules that will be changed by these final rules as the “prior rules.” When will we start to use these final rules? We will start to use these final rules on their effective date. We will continue to use our prior rules until the effective date of these final rules. When these final rules become effective, we will apply them to new applications filed on or after the effective date of these rules and to claims pending before us, as we describe below. As is our usual practice when we make changes to our regulations, we will apply these final rules on or after their effective date when we make a determination or decision, including those claims in which we make a determination or decision after a remand to us from a Federal court. With respect to claims in which we have made a final decision and that are pending judicial review in Federal court, we expect that the court would review the Commissioner's final decision in accordance with the rules in effect at the time the final decision of the Commissioner was issued. If a court reverses the Commissioner's final decision and remands the case for further administrative proceedings after the effective date of these final rules, we will apply the provisions of these final rules to the entire period at issue in the claim in our new decision issued pursuant to the court's remand. How long will these rules be in effect? These rules will be in effect for 5 years after the date they become effective, unless we extend them or revise and issue them again. What general changes are we making that affect both the adult and childhood listings for digestive disorders? We are clarifying the listing criteria and making them easier to use by: • Removing reference listings and, when appropriate, providing guidance in the introductory text of the listings. Reference listings are listings that are met by satisfying the criteria of another listing. For example, an impairment could meet prior listing 5.03, Stricture, stenosis, or obstruction of the esophagus, with weight loss “as described under listing 5.08.” Prior listing 5.08 required weight loss of a specific amount due to “any persisting gastrointestinal disorder.” Therefore, prior listing 5.03 was redundant because we could also evaluate weight loss from stricture, stenosis, or obstruction of the esophagus under listing 5.08 alone. • Removing or updating outdated listings. • Adding criteria to the listing for chronic liver diseases and expanding the guidance in the introductory text on how we evaluate these diseases, including specific guidance on chronic viral hepatitis infections. • Revising and adding criteria to the listing for inflammatory bowel diseases and expanding the introductory text to include guidance on how we evaluate these digestive disorders. • Adding a listing for short bowel syndrome and providing guidance in the introductory text for this disorder. • Expanding the introductory text to include guidance on how we consider the effects of treatment. • Providing general guidance in the introductory text explaining how we evaluate digestive disorders that do not meet these listings. • Making nonsubstantive editorial changes to update the medical terminology in the listings and to be consistent with plain language guidelines. We discuss other changes in the listings below, in our detailed explanation of the revised listings. How are we changing the introductory text to the listings for evaluating digestive disorders in adults? 5.00 Digestive System We are revising the introductory text for this body system to provide additional guidance for evaluating digestive disorders and to update its medical terminology. We are also removing references to digestive disorders and complications of digestive disorders, such as peptic ulcer disease, fistulae, and abscesses, that generally are not of listing-level severity. (However, as we explain below, we are including fistulae and abscesses as criteria in final listing 5.06 for inflammatory bowel disease.) We are including relevant material from prior 5.00A in final 5.00A and final 5.00C. We are updating and moving relevant material from prior 5.00B to final 5.00G. We are moving relevant material from prior 5.00C to final 5.00E. We are removing the portion of prior 5.00C that dealt with peptic ulcer disease because advances in diagnosis, evaluation, and treatment of this impairment make the surgical interventions discussed in the prior section (including gastrectomy, vagotomy, and pyloroplasty) much less common. Following is a detailed, section-by-section explanation of the final introductory text material. 5.00A—What kinds of disorders do we consider in the digestive system? This section revises prior 5.00A. We list the major types of digestive disorders included in these listings and provide an example of a complication that may result from them. In the NPRM, we proposed to include information in this section from prior 5.00C about colostomy and ileostomy. However, we moved this information to final 5.00E as part of the general reorganization of the introductory text. We also proposed to explain that gastrointestinal impairments frequently respond to treatment; therefore, their severity should be evaluated in the context of prescribed treatment. We moved this information to 5.00C, “How do we consider the effects of treatment?” where it more logically fits. 5.00B—What documentation do we need? In this new section, we include examples of the types of clinical and laboratory findings that should be part of the longitudinal evidence. This section also includes two sentences describing appropriate medically acceptable imaging that were not in the NPRM, but that we added in the aforementioned final rules making technical, but not policy, changes to our listings. We revised the sentence describing medically acceptable imaging so that it more appropriately reflects imaging techniques used for digestive disorders. We also moved to this section a revised version of the first sentence of proposed 5.00C2, which explains that the specific findings required by these listings must occur within the period we are considering in connection with an individual's application or continuing disability review. In response to public comments we describe later in this preamble, we removed the sentence in proposed 5.00B1 explaining that we usually need longitudinal evidence covering a period of at least 6 months of observations and treatment unless we can make a fully favorable determination or decision without it. Instead, we are providing timeframes for the evidence requirements in each listing. We moved proposed 5.00B2, which explained how we evaluate claims when an individual has not received ongoing treatment or does not have an ongoing relationship with the medical community despite the existence of a severe impairment, to final 5.00C where it fits more logically with our discussion of treatment issues. 5.00C—How do we consider the effects of treatment? In the NPRM, proposed 5.00C was titled, “How do we evaluate digestive disorders that require recurring or persistent findings?” Proposed 5.00C1 defined “recurring” and “persisting” as used in listings 5.02, 5.05, 5.06, and 5.08, and proposed 5.00C2 explained when the “events” required to satisfy the listings must occur. In these final rules, we removed the references to recurring or persistent findings from the digestive listings. We also moved the first sentence of 5.00C2 to final 5.00B. We no longer need the second sentence of proposed 5.00C2 because of changes we made to the listings. Therefore, we removed all of proposed 5.00C. We explain the reasons for the changes to the listings later in this preamble. We explain how we consider the effects of treatment in final 5.00C. This section is an expansion of proposed 5.00D. It includes six paragraphs that address treatment issues, rather than the three paragraphs we proposed. As we have already noted, we moved the additional paragraphs from other sections to present the information more logically. General Information About Final 5.00D Through 5.00G In the NPRM, proposed 5.00F was titled “What are our guidelines for evaluating specific digestive impairments?” Proposed 5.00F1 addressed malnutrition and weight loss, and proposed 5.00F2 addressed chronic liver disease. In these final rules, we are greatly expanding the introductory text from the NPRM in response to public comments and adding more discussion about digestive disorders, especially chronic liver disease and inflammatory bowel disease. Since we are including significantly more information in these final rules, we are addressing each kind of digestive disorder in its own separate section. Also, the guidance about specific disorders under proposed 5.00F was not in the order of the proposed listings. In the final rules, we are providing guidance that generally follows the structure of the final listings. Thus: • Final 5.00D addresses chronic liver disease (final listing 5.05); • Final 5.00E addresses inflammatory bowel disease (final listing 5.06); • Final 5.00F addresses short bowel syndrome (final listing 5.07); and • Final 5.00G addresses weight loss due to any digestive disorder (final listing 5.08). 5.00D—How do we evaluate chronic liver disease? In final 5.00D (proposed 5.00F2), we define chronic liver disease, provide examples of it, and describe its manifestations. In response to hundreds of public comments regarding hepatitis C, we are greatly expanding this section to explain how we evaluate chronic viral hepatitis, including chronic hepatitis B and C infections, and we describe extrahepatic manifestations of these infections. In addition, we include guidance for considering the effects of specific treatment modalities for hepatitis B and C infections. We also present information on conditions that we include in the chronic liver disease listing (that is, gastrointestinal hemorrhage, ascites or hydrothorax, spontaneous bacterial peritonitis, hepatorenal syndrome, hepatopulmonary syndrome, hepatic encephalopathy, end stage liver disease, and liver transplantation). Final 5.00D contains 12 sections: • Final 5.00D1, D2, and D3 are a reorganization of the information presented in proposed 5.00F2(a), F2(b), and F2(d). • In final 5.00D1, we define chronic liver disease and name the manifestations of chronic liver disease that we consider under these listings. We removed the phrase in proposed 5.00F2 indicating that chronic liver disease must be “expected to continue for 12 months” because it is unnecessary. Under our general rules for evaluating disability, an impairment must meet the duration requirement. • We also removed the phrase in proposed 5.00F2d explaining that we would “assess impairment due to hepatic encephalopathy under the criteria for the appropriate mental disorder or neurological listing(s).” In response to public comments, we are adding a listing for hepatic encephalopathy (final listing 5.05F). • Final 5.00D2 presents an expanded list of examples of chronic liver disease, including some diseases, such as Wilson's disease and chronic hepatitis, which we included in the heading of prior listing 5.05 but not in the heading of final listing 5.05. • Final 5.00D3 is an expansion of proposed 5.00F2d. It has three paragraphs that describe the symptoms (5.00D3a), signs (5.00D3b), and laboratory findings (5.00D3c) associated with the manifestations of chronic liver disease. In response to a comment, we are including guidance in final 5.00D3a to explain that symptoms may correlate poorly with the severity of chronic liver disease. In final 5.00D3c, we are clarifying our intent in proposed 5.00F2d, where we explained that abnormal liver function test findings may correlate poorly with the clinical severity of liver disease. Although that guidance is applicable to liver function tests such as serum total bilirubin or liver enzyme levels, it is not applicable to all tests indicative of liver function. In final 5.00D3c, we now explain that abnormally low serum albumin or elevated International Normalized Ratio
(INR)levels are exceptions because they are indicators of significant liver disease. As we note below, we include criteria for abnormally low serum albumin and elevated INR in final listings 5.05B and 5.05F. We are also not including the statement from proposed 5.00F2d that liver function tests “must not be relied upon in isolation” because it is unnecessary. In final 5.00D3c, we are also expanding the rules from what we had proposed to include information on documenting chronic liver disease with a liver biopsy or imaging studies. • Final 5.00D4 is new; there was no corresponding section in the NPRM. We added it in response to hundreds of comments concerning the growing incidence of hepatitis. In final 5.00D4a, we provide general information about chronic viral hepatitis infections. In final 5.00D4b, we provide information about chronic hepatitis B infection. In final 5.00D4c, we provide detailed information about chronic hepatitis C infection, including a paragraph explaining adverse effects of treatment that may contribute to a finding of disability. In final 5.00D4d, we provide information about the extrahepatic manifestations of hepatitis B and C infections that may result in, or contribute to, a finding of disability. • Final 5.00D5 corresponds to proposed 5.00F2c. In it, we provide guidance for evaluating gastrointestinal hemorrhages under final listings 5.02 and 5.05A. As we explain in more detail below, we have revised proposed listings 5.02 and 5.05A in these final rules, and final 5.00D reflects the changes to the listings. For example, in response to comments, we expanded the scope of listing 5.05A to include hemorrhages from gastric or ectopic varices and portal hypertensive gastropathy in addition to hemorrhages from esophageal varices. Also in response to comments, we removed the proposed criterion for “massive” hemorrhage requiring transfusion of at least 5 units of blood in 48 hours. Instead, final listing 5.05A requires hemorrhaging which results in “hemodynamic instability,” which we describe in final 5.00D5. • In final 5.00D6, we provide guidance for evaluating ascites or hydrothorax under final listing 5.05B. In response to comments, we have revised proposed listing 5.05B; therefore, final 5.00D6 reflects the changes we made to that listing. We explain those changes later in this preamble. We also removed the statement in proposed 5.00F2d that current imaging techniques are capable of identifying even minimal amounts of ascites before they can be detected on physical examination. We made this change because final listing 5.05B is met based on laboratory findings coupled with documentation of the ascites or hydrothorax. If these laboratory findings are at the level specified in the listing, it is not necessary to quantify the ascites. • Final 5.00D7, D8, and D9 are also new in these final rules. In response to comments, we are including listing criteria in final listing 5.05 for three serious complications of chronic liver disease: Spontaneous bacterial peritonitis (final listing 5.05C); hepatorenal syndrome (final listing 5.05D); and hepatopulmonary syndrome (final listing 5.05E). Each new section explains how the condition is diagnosed and the documentation requirements for the new listings. • In final 5.00D10, we provide guidance for evaluating hepatic encephalopathy under final listing 5.05F. As noted earlier, we added this listing in response to comments. In 5.00D10a, we explain how hepatic encephalopathy is diagnosed and identify the documentation requirements for the new listing. In final 5.00D10b, we explain that we will not evaluate acute encephalopathy under listing 5.05F if it results from conditions other than chronic liver disease. • Final 5.00D11 is also new in these final rules. In response to public comments, we added listing 5.05G, for end stage liver disease
(ESLD)with SSA Chronic Liver Disease (SSA CLD) scores of 22 or greater. The SSA CLD calculation is a calculation we developed based on the Model for End Stage Liver Disease
(MELD)calculation. The MELD is a numerical scale developed for the United Network for Organ Sharing
(UNOS)that is used for liver allocation within the Organ Procurement and Transplantation Network. The MELD score is based on objective and verifiable medical data, and estimates an individual's risk of dying while waiting for a liver transplant. In final 5.00D11a, we explain that we will use the SSA CLD score to evaluate your end stage liver disease under final listing 5.05G. In final 5.00D11b-g, we explain how we calculate the SSA CLD score; for example, what laboratory values we use, when they must be obtained, and the formula we use to do the calculation. • Final 5.00D12 corresponds to 5.00F2e and F2g in the NPRM. It explains how we evaluate liver transplantation 1 year after the date of the transplantation. The final rule is similar to the proposed rule; we edited it for clarity and expanded it slightly to provide more information about when liver transplantations are performed. 5.00E—How do we evaluate inflammatory bowel disease (IBD)? In response to public comments, we are greatly expanding the listing criteria for inflammatory bowel disease, final listing 5.06, and adding a new section, final 5.00E, to the introductory text to provide guidance for evaluating IBD under these expanded criteria. Final 5.00E contains four paragraphs: • In final 5.00E1, we explain the general characteristics of IBD; • In final 5.00E2, we list common symptoms, signs, and laboratory findings associated with IBD; • In final 5.00E3, we describe some of the more common extraintestinal manifestations of IBD affecting different body systems; and • In final 5.00E4, we explain how we consider surgical procedures such as ileostomy and colostomy. Final 5.00E4 corresponds to the first sentence of prior 5.00C and proposed 5.00A3. 5.00F—How do we evaluate short bowel syndrome (SBS)? In response to public comments, we are adding a new listing for short bowel syndrome, final listing 5.07, and a new section in the introductory text, final 5.00F, to provide guidance for evaluating SBS under this listing. 5.00G—How do we evaluate weight loss due to any digestive disorder? Final 5.00G corresponds to prior 5.00B and proposed 5.00F1 and reflects changes we made to proposed listing 5.08, discussed below. We are simplifying the guidance from prior 5.00B about evaluating malnutrition and weight loss. Under the final rules, it is sufficient for our purposes that the weight loss result from any medically determinable digestive disorder. We are also revising the heading of final 5.00G to refer only to weight loss, instead of the proposed reference to malnutrition and weight loss, to better reflect the content of the section. We revised proposed listing 5.08 to use Body Mass Index
(BMI)to evaluate weight loss instead of using height and weight measurements by gender. BMI is the measurement recommended by the Centers for Disease Control and Prevention
(CDC)to determine appropriate weight for height. In final 5.00G1, we explain that we use BMI to evaluate weight loss due to any digestive disorder under listing 5.08 and to evaluate lesser weight loss from IBD under listing 5.06B. The latter is one of the new criteria that we added to the IBD listing in response to public comments. In final 5.00G2, we explain how we calculate BMI. The change from height and weight measurements to BMI removed the need to provide rules for rounding of height and weight measurements; therefore, we do not include in these final rules the rules for rounding that were in proposed 5.00F1a-F1c. 5.00H—What do we mean by the phrase “consider under a disability for 1 year”? Final 5.00H corresponds to proposed 5.00F2f; however, we revised it to make clear that the phrase refers to the date on which we must determine whether an impairment continues to meet a listing or is otherwise disabling, not the date on which disability began. We explain that we do not restrict our finding about the onset date of disability to the date of a specific qualifying event in a listing, such as a liver transplant. For example, many individuals who need liver transplants (final listing 5.09) have impairments that meet one of the criteria for chronic liver disease (final listing 5.05) before they have their liver transplants. In the proposed rules, we had inadvertently included the explanation of the phrase “consider under a disability for 1 year” under the heading for chronic liver disease; however, we also use the phrase in final listing 5.02 for gastrointestinal hemorrhaging from any cause. Therefore, in the final rules, we explain the phrase in a section that is independent of the discussion of chronic liver disease, and we identify the three listings to which it applies. In proposed 5.00F2f, we had also stated that the phrase was a “statement about the expected duration of disability.” In reviewing that language, we realized that it could have been misunderstood to mean that we presume that an individual will no longer be disabled after 1 year. That was not our intent. Rather, we intended to indicate only that after 1 year the impairment would no longer meet the requirements of the particular listing that includes the criterion. The impairment may still be disabling at the end of the period because it may meet or medically equal another listing or result in a residual functional capacity that is consistent with a finding of disability. Also, when we consider whether an impairment continues to be disabling, we apply the medical improvement review standard in §§ 404.1594 and 416.994. For these reasons, we are not including the statement in these final rules. 5.00I—How do we evaluate impairments that do not meet one of the digestive disorder listings? Final 5.00I is generally the same as proposed 5.00E, except that we include hepatitis B or C that results in depression as an example of a digestive impairment we would evaluate in another body system, instead of the hepatic encephalopathy example we included in proposed 5.00E1. This example was no longer appropriate because we have a listing for hepatic encephalopathy (5.05F) in the final rules. How are we changing the listings for evaluating digestive disorders in adults? 5.01 Category of Impairments, Digestive System Removal of Redundant or Reference Listings We are removing four prior listings because they were reference listings and, therefore, were redundant. These four listings were met by referring to the requirements of prior listing 5.08: • 5.03—Stricture, stenosis, or obstruction of the esophagus with weight loss; • 5.04D—Peptic ulcer disease with weight loss; • 5.06E—Chronic ulcerative or granulomatous colitis with weight loss; and • 5.07D—Regional enteritis with weight loss. All of these impairments are still covered by final listing 5.08. Chronic ulcerative or granulomatous colitis and regional enteritis are also covered by final listing 5.06. We no longer mention them explicitly in these final rules because they have been replaced by the more encompassing term “inflammatory bowel disease.” Prior listing 5.05E, hepatic encephalopathy, was also a reference listing, referring to listing 12.02. In the NPRM, we proposed to remove the listing and to add language in proposed sections 5.00E1 and 5.00F2b that reminded adjudicators to evaluate the impairment under the criteria for the appropriate mental disorder or neurological listing. However, in response to many public comments, we decided to remove the proposed guidance and to provide a new listing specifically for hepatic encephalopathy in the digestive listings, final listing 5.05F. Therefore, while we are still removing prior reference listing 5.05E, we are including a different listing for hepatic encephalopathy in these final rules. We are also removing the following prior listings because medical knowledge, methods of evaluating digestive disorders, advances in treatment, and our program experience indicate that they are no longer appropriate indicators of listing-level severity. There has been significant progress in the treatment of these digestive disorders. Many of these disorders can be controlled or resolved and thus are less likely to be of listing-level severity. Even if listing-level severity is initially present, the 12-month statutory duration requirement will often not be met. • 5.04—Peptic ulcer disease (demonstrated by endoscopy or other appropriate medically acceptable imaging). Advances in medical and surgical management have made less common many complications from peptic ulcer disease, such as recurrent ulceration (prior listing 5.04A), fistula formation (prior listing 5.04B), and recurrent obstruction (prior listing 5.04C). Treatment often results in significant improvement, therefore the prior listing criteria for these impairments are no longer appropriate indicators of listing-level severity. • 5.05B—Chronic liver disease with performance of a shunt operation for esophageal varices. When we first published this listing, only surgical shunts involving extensive abdominal surgery were available. These surgeries were not usually performed until the chronic liver disease became serious enough to justify the risks associated with prolonged surgery and anesthesia. More recently, transjugular intrahepatic portosystemic shunts (TIPS), which are performed with minimal anesthesia and with fewer complications, have largely replaced abdominal surgical shunts in treating the complications of portal hypertension, such as bleeding gastroesophageal varices or refractory ascites. However, in the final listing for hepatic encephalopathy, final listing 5.05F, we are adding a criterion for a history of TIPS in combination with other findings that describe an impairment that is of listing-level severity. • 5.05C—Chronic liver disease with specific levels of serum total bilirubin. Prior listing 5.05C required only a persistently elevated serum total bilirubin level. We are removing this listing because this laboratory finding alone does not correlate sufficiently with the ability to function. • 5.05F—Chronic liver disease with liver biopsy. This listing required confirmation of chronic liver disease by a liver biopsy, with another specified clinical or laboratory finding. We are removing this listing because a liver biopsy, while confirming the presence of liver disease, does not correlate with any specific level of impairment severity or decrease in ability to function. We assess the clinical findings described in prior listings 5.05F1 and F3 in other final listings, and we are removing the requirement for elevated serum total bilirubin level in prior listing 5.05F2 because it does not sufficiently demonstrate impairment severity or correlate with the ability to function. • 5.06A—Chronic ulcerative or granulomatous colitis with recurrent bloody stools documented on repeated examinations and anemia manifested by hematocrit of 30 percent or less. These criteria alone were not appropriate indicators of listing-level severity. However, we have incorporated a criterion for anemia in final listing 5.06, the new listing for IBD that we added in response to public comments. • 5.06B and 5.07—Persistent or recurrent systemic manifestations, such as arthritis, iritis, fever, or liver dysfunction due to chronic ulcerative or granulomatous colitis or regional enteritis. These listings required only the presence of a systemic manifestation in another body system or organ, without regard to degree of severity or impact on functioning. Therefore, they were not appropriate indicators of listing-level severity. However, in response to public comments described below, we are including examples of significant extraintestinal manifestations in final 5.00E3 with instructions to our adjudicators to consider these manifestations when determining whether the individual has an impairment(s) that meets or medically equals another listing and when assessing residual functional capacity. The examples include arthritis, iritis, and other effects. • 5.06C and 5.07C—Intermittent obstruction due to intractable abscess, fistula formation, or stenosis as a result of chronic ulcerative or granulomatous colitis or regional enteritis. Advances in surgical treatment have improved the management of these disorders, thus these listings are no longer appropriate indicators of listing-level severity. However, in final listing 5.06B, we include intestinal obstruction, abscess, fistula, and stenosis as criteria that can satisfy the requirements of the listing. • 5.06D—Recurrence of findings in listing 5.06A, B, or C after total colectomy. We are removing this listing consistent with our removal of listings 5.06A, B, and C. • 5.08B—Weight loss due to any persisting digestive disorder, with weight equal to or less than the values specified in Table III or IV and one of the listed abnormal laboratory findings present on repeated examinations. This listing allowed a lesser level of weight loss than that required to meet listing 5.08A when accompanied by one of the additional listed findings. Those findings, however, did not correlate with any specific level of impairment severity or decrease of ability to function that would be an accurate indicator of listing-level severity. However, in response to public comments, we are including a 10 percent weight loss from baseline as one of the criteria that can be used to meet final listing 5.06 for individuals who have IBD. The following is a detailed explanation of the final listings. Listing 5.02—Gastrointestinal Hemorrhaging From Any Cause, Requiring Blood Transfusion We are expanding this listing to include “gastrointestinal hemorrhage from any cause” instead of the prior listing's “upper gastrointestinal hemorrhage from undetermined cause.” We are also revising the severity criterion in this listing from anemia with a persistent hematocrit level of 30 percent or less, to a requirement for gastrointestinal hemorrhages that require blood transfusions of at least 2 units of blood per transfusion, occurring at least three times, at least 30 days apart, during a consecutive 6-month period. A hematocrit level by itself is generally not an appropriate indicator of the severity of gastrointestinal hemorrhage, and as we have already noted, does not necessarily correlate with inability to function. In these final rules, we are clarifying the proposed rule to explain that an individual does not have to be hospitalized for transfusions under this listing. We did not indicate whether hospitalization was required in the proposed rule. Therefore, this is only an editorial change for clarity. The proposed listing indicated in a parenthetical statement that “[a]ll incidents [hemorrhages] within a consecutive 14-day period constitute one episode.” In the final listing, we are revising this statement by removing references to “incidents” and “episodes” and instead simply using the word “transfusions,” since transfusions are the indicators of severity. Also, in response to a public comment, we are increasing the length of time between blood transfusions (described as “episodes” in the proposed rule) from 14 days to 30 days. Since improvements in medical treatment may resolve the frequency of hemorrhages and thus the overall severity of the impairment, we indicate that we will consider an individual to be under a disability for 1 year following the last documented transfusion. After that, we will evaluate the residual impairment(s). Listing 5.05—Chronic Liver Disease We are replacing prior listing 5.05 with criteria that more accurately reflect listing-level severity. • We are removing the parenthetical examples of chronic liver diseases from the heading of prior listing 5.05 because these references could have been misinterpreted to mean that we included only those specific conditions under the listing. However, in response to comments, we continue to use Wilson's disease and chronic hepatitis as examples of chronic liver diseases that are covered by final listing 5.05 in final 5.00D2 of the introductory text. In a change from the NPRM, and in response to many comments, we are revising the heading of the listing to refer to “chronic liver disease” only. We removed “and cirrhosis of any kind” from the heading because cirrhosis is a form of chronic liver disease. • In final listing 5.05A, we are expanding the scope of prior and proposed listing 5.05A in response to comments to include hemorrhaging from esophageal, gastric, or ectopic varices, or from portal hypertensive gastropathy. The proposed listing required “massive” hemorrhage requiring “5 units of blood in 48 hours.” In response to comments, we changed the requirement for “massive” hemorrhage to hemorrhaging that results in hemodynamic instability, and we changed the transfusion requirements from the proposed “5 units of blood in 48 hours” to “at least 2 units of blood.” We chose 2 units of blood because this is the minimum amount of blood that is usually transfused. We define “hemodynamic instability” in 5.00D5. Newer techniques in primary prevention and treatment of bleeding gastroesophageal varices, for example, TIPS, banding, sclerotherapy, and laser therapy, have significantly improved the management of bleeding varices. Based on these advances, it is no longer appropriate to presume disability for 3 years as under prior listing 5.05A. Therefore, the final listing (like the proposed listing) provides that we will consider an individual disabled for 1 year following the last documented transfusion. After that, we will evaluate the residual impairment(s). Final listing 5.05B corresponds to prior listing 5.05D, ascites due to chronic liver disease. In response to comments, we are also including hydrothorax in the listing because ascitic fluid can collect in the chest cavity and result in a very serious impairment. Therefore, we are including thoracentesis in the documentation requirements in final listing 5.05B1 because it provides a definitive diagnosis of hydrothorax, just as paracentesis provides a definitive diagnosis of ascites. As in the NPRM, we are revising the required time period in which the evaluations showing ascites or hydrothorax must occur from 5 months to 6 months because, in our experience, a 6-month period enables us to make a more reliable prediction of duration of an impairment of listing-level severity. We also are requiring that evaluations be done at least 60 days apart within the 6-month period to substantiate the chronic nature of the impairment. In response to public comments, final listing 5.05B2 now requires documentation of ascites or hydrothorax by physical examination or by appropriate medically acceptable imaging, but not both, as we proposed in the NPRM. However, if the ascites or hydrothorax is documented by physical examination or imaging rather than paracentesis or thoracentesis, we require additional laboratory findings that confirm very serious chronic liver disease. As in proposed listing 5.05B2a, we require serum albumin of 3.0 g/dL or less. In response to public comments, we changed the proposed criterion for a measure of prothrombin time to a criterion for an elevated International Normalized Ratio
(INR)of at least 1.5 in final listing 5.05B2b. The public comments correctly indicated that INR is a more widely used study. • In response to public comments, we are also adding three new listings for serious complications of chronic liver disease: Final listing 5.05C for spontaneous bacterial peritonitis; final listing 5.05D for hepatorenal syndrome; and final listing 5.05E for hepatopulmonary syndrome. These complications are so severe that we require only one occurrence of any one of them, shown by the requisite findings, to satisfy the listing. • As already noted, we are also adding a new listing 5.05F for hepatic encephalopathy. The new listing requires hepatic encephalopathy documented by abnormal behavior, cognitive dysfunction, changes in mental status, or altered state of consciousness, present on at least two evaluations at least 60 days apart within a consecutive 6-month period, with associated physical signs or laboratory findings, occurring with the same frequency and during the same time period; or a history of a TIPS or any surgical portosystemic shunt procedure. • In response to comments that individuals on liver transplant lists should qualify, we are adding another new listing, final listing 5.05G, for evaluating individuals with ESLD. We are using an SSA CLD score criterion as an objective means to measure listing-level severity. As discussed above, we based the SSA CLD calculation on the MELD calculation used by UNOS to prioritize individuals ages 12 and over on a national liver transplantation list according to the severity of their liver disease. (There is also a Pediatric End Stage Liver Disease scoring system, called PELD, for children under age 12. We have developed an SSA Chronic Liver Disease—Pediatric (SSA CLD-P) calculation based on that system that we have included in the part B listings, as we explain below.) The SSA CLD score determination relies only on objective criteria, with standardized laboratory determinations that are readily available and reproducible. We did not agree that all individuals on transplant lists should qualify under our listings because the threshold criteria for placement on a transplant list vary widely throughout the country and some individuals are placed on transplantation lists well before they have listing-level impairments. In the final rule, we provide that a SSA CLD score of 22 or greater meets the listing. We chose this score based on the clinical severity represented by the laboratory values contained in the SSA CLD score. For final listing 5.05G, we require two calculations of SSA CLD scores, at least 60 days apart, and that the scores must be calculated within a consecutive 6-month period, consistent with other provisions in these final rules. Listing 5.06—Inflammatory Bowel Disease We are combining portions of prior listings 5.06 and 5.07 into final listing 5.06. Ulcerative colitis, Crohn's disease, granulomatous colitis, and regional enteritis are now commonly referred to as “inflammatory bowel disease” (IBD). In the NPRM, proposed listing 5.06 required documentation of IBD with persistent or recurrent intestinal obstruction. The proposed listing repeated the criteria from prior listing 5.07A, clarified that the intestinal obstruction must be documented by appropriate medically acceptable imaging or operative findings, and included the requirement for documentation of two episodes of obstruction over a consecutive 6-month period despite prescribed treatment, to ensure that there is a chronic impairment. In response to public comments, we are significantly revising and expanding final listing 5.06. As in the proposed listing, the introductory paragraph of final listing 5.06 requires documentation of IBD by endoscopy, biopsy, appropriate medically acceptable imaging, or operative findings. As in the NPRM, final listing 5.06A requires obstruction of stenotic areas in the small intestine or colon with proximal dilatation. We are clarifying in the final rule that adhesions do not satisfy the requirement for obstruction. This is not a substantive change but a clearer statement of our intent that there must be obstruction that results from IBD. We are also clarifying that, in these cases, the stenotic areas may be shown by surgery or by medically acceptable imaging. In addition, we are clarifying the language we had proposed by requiring hospitalization for treatment of the obstruction (intestinal decompression or surgery). This is not a substantive change from the NPRM because listing-level obstruction of a stenotic area would require hospitalization for one of these types of treatment. Therefore, the requirement in the final listing will only help to confirm the existence of listing-level obstruction caused by IBD. We are deleting the proposed requirement for persistent or recurrent obstruction over a consecutive 6-month period despite prescribed treatment in response to a public comment. Instead, we are requiring that the findings occur on at least two distinct occasions at least 60 days apart within a consecutive 6-month period. Final listing 5.06B includes six other manifestations of IBD that were suggested by commenters. Consistent with most of the other criteria in the final rules for impairments that have episodic manifestations, final listing 5.06B requires that two of the six criteria be present on at least two evaluations, occurring at least 60 days apart within the same consecutive 6-month period, except for listing 5.06B6, which requires supplemental daily enteral nutrition via a gastrostomy or daily parenteral nutrition via a central venous catheter. Listing 5.07—Short Bowel Syndrome As we explained earlier, we are removing prior listing 5.07, for regional enteritis. Instead, we evaluate this condition under final listing 5.06, for IBD. However, in response to comments regarding individuals who need parenteral nutrition, we are adding a new listing, final listing 5.07, for short bowel syndrome to address situations in which post-operative nutritional needs cannot be met orally or with supplemental enteral nutrition. This final listing requires a diagnosis of short bowel syndrome due to surgical resection of more than one-half of the small intestine with resulting dependence on daily parenteral nutrition via a central venous catheter. Listing 5.08—Weight Loss Due to Any Digestive Disorder In this final rule, we changed the heading of prior and proposed listing 5.08, “Weight loss due to any persisting gastrointestinal disorder” to “Weight loss due to any digestive disorder.” We deleted the word “persisting” for reasons we explain in the public comments section of this preamble. In final listing 5.08, we are establishing the severity of the weight loss based on the CDC's BMI formula, rather than the Metropolitan Life Insurance Company's weight charts we used in the proposed rules and which were last updated in 1983. When we published the NPRM in 2001, we indicated that neither the CDC nor any other recognized authority known to us had determined a BMI for adults that would be consistent with listing-level severity weight loss. However, since that time, we determined that we could establish a BMI comparable to the severity standard in the weight charts. We established this BMI level in the final listing by calculating the BMI for each value on proposed weight tables I and II and averaging them. We are changing to the more widely used BMI for several other reasons. For example, this change eliminates the need for gender tables, as BMI is not gender-specific in adults. Also, we were not able to apply the prior and proposed weight tables to individuals whose height was outside the table values, and instead had to review the evidence and determine whether the impairment medically equaled the listing. Now we can apply the BMI formula to all cases regardless of the individual's height. Also, our use of BMI in this body system is consistent with our use of BMI in Social Security Ruling 02-1p, Title II and XVI: Evaluation of Obesity (67 FR 57859). Listing 5.09—Liver Transplantation In the NPRM, we proposed to add listing 5.09 for liver transplantation. However, we published final rules adding this listing on April 24, 2002 (67 FR 20018) based on another NPRM in which we had also proposed to add this listing. (See 65 FR 6934.) Therefore, in these final rules, we are retaining the listing we published in April 2002, revising it to include the phrase “1 year following the date of transplantation,” and changing the punctuation to make it easier to read. The only public comments we received about this listing agreed that we should add it. How are we changing the introductory text to the listings for evaluating digestive disorders in children? 105.00 Digestive System As in the adult rules, we are revising the introductory text to the digestive system in part B, final 105.00, to provide additional guidance for adjudicating digestive disorders. Where necessary, we are adding information specific to children; however, we are repeating much of the introductory text of final 5.00 in final 105.00. This is because, for the most part, the same basic rules for establishing and evaluating the existence and severity of digestive disorders in adults also apply to children. We are making a number of changes from the NPRM in the final rules to make part B even more consistent with part A than we originally proposed. As we note below, we are also adding: • Listing 105.02 for gastrointestinal hemorrhaging from any cause requiring blood transfusion; • Listing 105.05A for hemorrhaging from esophageal, gastric, or ectopic varices, or from portal hypertensive gastropathy; • Listings 105.05C, D, and E for complications of chronic liver disease; • Listing 105.05F for hepatic encephalopathy; • Listing 105.05G for end stage liver disease with SSA CLD and SSA CLD-P score criteria; • Listing 105.05H for extrahepatic biliary atresia; • Listing 105.06 for inflammatory bowel disease; • Listing 105.07 for short bowel syndrome; and • Listing 105.10 for the need for supplemental daily enteral feeding via a gastrostomy. The following discussions describe only the significant provisions that are unique to the childhood rules or that require further explanation. We do not note differences like the fact that we use references to childhood listings instead of adult listings or that we use references to “children” instead of adults. 105.00A—What kinds of disorders do we consider in the digestive system? Final 105.00A corresponds to final 5.00A, except that we are adding information to explain that under the childhood listings we also consider congenital abnormalities involving the organs of the gastrointestinal system. 105.00B—What documentation do we need? The only substantive difference between final 105.00B and final 5.00B is a statement noting that we may also need assessments of a child's growth and development. 105.00D—How do we evaluate chronic liver disease? The new guidance on chronic liver disease in final 105.00D generally corresponds to the information in final 5.00D in the adult rules, except for information specific to the complications of chronic liver disease in children and two sections (final 105.00D11b and 105.00D12) that are not in part A because they provide guidance for listing criteria that are only in the final childhood rules. In final 105.00D11b, we provide information about the SSA Chronic Liver Disease—Pediatric (SSA CLD-P) calculation, which we use under final listing 105.05G2 for children who have not attained age 12. We explain in final 105.00D11b(iv) that we will not purchase the INR value required to calculate the SSA CLD-P score because obtaining the necessary amount of blood to perform this test in small children often requires an invasive procedure. We further explain that if we do not have an INR value for a child under 12 within the applicable time period, we will use an INR value of 1.1 for the SSA CLD-P calculation. (In final 105.00D11a, we provide the same guidelines about the SSA CLD calculation as we do in part A because the SSA CLD calculation is applicable to children age 12 to the attainment of age 18.) In final 105.00D12, we provide guidance for applying final listing 105.05H for extrahepatic biliary atresia, a congenital disorder of the liver. 105.00E—How do we evaluate inflammatory bowel disease (IBD)? Final 105.00E corresponds to final 5.00E. In the NPRM, we proposed a short section (proposed 105.00F4) on IBD that provided guidance for evaluating IBD under proposed listing 105.06. As in final listing 5.06 in part A, we have greatly expanded proposed listing 105.06 in these final rules, so we are also including the more detailed guidance for evaluating the expanded listing criteria of final listing 105.06 that we provide in part A for final listing 5.06. 105.00G—How do we evaluate malnutrition in children? Final 105.00G (proposed 105.00F1) reflects changes we made to final listing 105.08, Malnutrition due to any digestive disorder. In final 105.00G1, we explain that digestive disorders may result in malnutrition and growth retardation. We also explain that we document the presence of a digestive disorder with associated chronic nutritional deficiency despite prescribed treatment using the malnutrition criteria in final listing 105.08A. The malnutrition criteria in final listing 105.08A generally correspond to the laboratory findings we presented as examples in the introductory text, proposed 105.00F1(a)(1), F1(a)(2), and F1(a)(4). We are including them as listing criteria in final listing 105.08A in response to a public comment. Final listing 105.08A1 corresponds to proposed 105.00F1(a)(1). However, we changed the criterion for anemia to a hemoglobin of less than 10.0 g/dL, rather than less than 8 g/dL, to be consistent with the anemia criteria elsewhere in these final listings. Final listing 105.08A2 requires low serum albumin levels and corresponds to proposed 105.00F1(a)(2). Final listing 105.08A3 corresponds to proposed 105.00F1(a)(4), except that we added the phrase “fat soluble” to clarify the type of vitamin deficiency we intended. We also removed the concluding phrase “despite aggressive medical and nutritional therapy” because the introductory paragraph of the listing requires findings “despite continuing treatment as prescribed.” We did not include as a listing criterion the example of intractable steatorrhea (malabsorption of dietary fats) quantified by fecal fat excretion that we had included in proposed 105.00F1(a)(3); most pediatric laboratories no longer do this type of testing, and steatorrhea will usually result in the vitamin deficiency we describe in final listing 105.08A3. In 105.00F1b of the proposed rules, we included a paragraph discussing Body Mass Index
(BMI)measurements. We explained in the preamble of the NPRM that we proposed to add this discussion because proposed listing 105.08 included criteria based on BMI measurements. (See 66 FR at 57015 and 57020.) We are not including this paragraph in the final rules because, when we reviewed it, we realized that it did not provide guidance that would have been useful to the application of final listing 105.08 and that it could have been confusing for the following reasons: • As in the NPRM, final listing 105.08 includes two criteria for documenting growth retardation, one for children under age 2 (final listing 105.08B1) and one for children age 2 and older (final listing 105.08B2). Only final listing 105.08B2 includes a criterion for BMI, and it refers to the CDC's latest BMI-for-age growth charts or data files. The language we included in proposed 105.00F1b did not explain this clearly. • Furthermore, much of the language repeated what the listing already said, and we believe that the language that was not redundant of the listing was unnecessary. The first sentence defined in basic terms how to calculate a BMI; however, it was oversimplified for children. • The proposed paragraph also referred to the fact that the CDC has determined that a BMI-for-age less than the fifth percentile meets its criteria for underweight. However, since the CDC does not calculate a figure or indicate a cutoff that it judges to be indicative of malnutrition, this guidance in the proposed rule would not have been useful for applying final listing 105.08. In final 105.00G2, which replaces proposed 105.00F1b, we are providing information that is more relevant to the application of final listing 105.08B. We explain that we use the most recent growth charts published by the CDC. In final 105.00G2a, we explain that we use the CDC's age- and gender-specific weight-for-length charts for children who have not attained age 2. In final 105.00G2b, we explain that we use the CDC's gender-specific BMI-for-age charts for children age 2 or older. In final 105.00G2c, we explain how we calculate BMI, and in final 105.00G2d we provide the corresponding BMI formulas. Final 105.00G2c and 105.00G2d are the same as final 5.00G2a and 5.00G2b. 105.00H—How do we evaluate the need for supplemental daily enteral feedings via a gastrostomy? Final 105.00H is a new section that provides guidance for evaluating the need for feeding gastrostomies for children under age 3 under final listing 105.10. We had previously provided for a finding of functional equivalence for children under age 3 who require a gastrostomy for feeding in § 416.926a(m)(10). We are now making that example of functional equivalence a listing and removing the example from § 416.926a(m). 105.00I—How do we evaluate esophageal stricture or stenosis? Final 105.00I corresponds to proposed 105.00F3 and includes minor editorial changes for clarity. In this section, we provide guidance for evaluating esophageal stricture or stenosis, which we had listed in prior listing 105.03, a listing we are removing because it is a reference listing. In the final rule, we explain that these conditions may be evaluated under listing 105.08 or 105.10. We also provide guidance for adjudicating these conditions when they do not meet a listing but the child still has problems maintaining nutritional status. 105.00K—How do we evaluate impairments that do not meet one of the digestive disorder listings? Final 105.00K corresponds to final 5.00I, except that we include two additional examples of digestive impairments relevant to children that we would evaluate in other body systems. These are the same additional examples we included in proposed 105.00E1; however, we made minor editorial changes to these examples for clarity. How are we changing the listings for evaluating digestive disorders in children? 105.01 Category of Impairments, Digestive System Removal of Redundant or Reference Listings As in the adult listings, we are removing the following reference listings and other listings that are no longer appropriate: • 105.03—Esophageal obstruction, caused by atresia, stricture or stenosis, which referred to listing 105.08; • 105.05F—Chronic liver disease with chronic active inflammation or necrosis documented by SGOT persistently more than 100 units or serum total bilirubin of 2.5 mg percent or greater; • 105.07B—Chronic inflammatory bowel disease with malnutrition, which referred to listing 105.08; and • 105.07C—Chronic inflammatory bowel disease, with growth impairment as described under the criteria in 100.03. However, we are adding material to the introductory text in final 105.00G2 to address the assessment of growth retardation that is secondary to any digestive disorder. Prior listing 105.05E, for hepatic encephalopathy, was a reference listing, referring to listing 112.02 for organic mental disorders. For the reasons we cited in our discussion of prior listing 5.05E (final listing 5.05F) above, we are including criteria for evaluating hepatic encephalopathy in the digestive listings, final listing 105.05F, instead of evaluating this impairment under the criteria for organic mental disorders. We will also evaluate the impairment in prior listing 105.05D, hepatic coma, under final listing 105.05F. The following is a detailed explanation of the changed listing criteria where they differ from the part A listings. Listing 105.02—Gastrointestinal Hemorrhaging From Any Cause, Requiring Blood Transfusion Final listing 105.02, which corresponds to final listing 5.02, was not in the NPRM. We are adding it in response to a public comment described later in this preamble. The final listing is the same as final listing 5.02, except for the amount of blood transfused. In final listing 105.02, we provide a ratio of volume of blood to the child's weight, which is a more medically appropriate standard for children. Listing 105.05—Chronic Liver Disease Final listing 105.05A replaces prior listing 105.05C, chronic liver disease with esophageal varices. The final listing is the same as final listing 5.05A, except for the amount of blood transfused. As in final listing 105.02, we provide a ratio of volume of blood to the child's weight, which is a more medically appropriate standard for children. Final listings 105.05C, D, E, F, and G correspond to final listings 5.05C, D, E, F, and G in part A, with appropriate changes to reflect findings and laboratory values for children. Also, final listing 105.05G includes both an SSA CLD score criterion for children age 12 and older (final listing 105.05G1) and an SSA CLD-P score criterion for children who have not attained age 12 (final listing 105.05G2). We provide that an SSA CLD-P score of 11 or greater meets the listing. We chose this score based on the clinical severity represented by the values contained in the SSA CLD-P score, which we believe represents the degree of severity consistent with listing level severity. For final listing 105.05G2, we require two calculations of SSA CLD-P scores, at least 60 days apart, and the scores must be calculated within a consecutive 6-month period, consistent with other provisions in these final rules. Final listing 105.05H replaces prior listing 105.05A, inoperable biliary atresia. The new listing requires extrahepatic biliary atresia, as diagnosed on liver biopsy or intraoperative cholangiogram. We will consider children who meet this requirement to be disabled for 1 year following the diagnosis, and we will evaluate residual liver function after that period. Listing 105.06—Inflammatory Bowel Disease
(IBD)We are redesignating prior listing 105.07, chronic inflammatory bowel disease, as final listing 105.06 for consistency with the corresponding adult listing. Final listing 105.06 is the same as final listing 5.06, except that it does not include a criterion for weight loss from baseline. This criterion is inappropriate for children because they are continually growing, and therefore do not have a “baseline weight.” (We can evaluate weight loss, inadequate growth, and malnutrition secondary to IBD under final listing 105.08.) Proposed listing 105.06B required IBD with perineal or intra-abdominal complications, such as abscess, fistulae, or fecal incontinence. These complications must have been intractable despite medical or surgical treatment, and clinically documented over a 6-month period. Final listing 105.06 includes a criterion for perineal disease with draining abscess or fistula. However, we did not include fecal incontinence because final listing 105.06 includes a much wider array of complications resulting from IBD and children with listing-level impairments who have fecal incontinence would be evaluated under criteria in final listing 105.06. Listing 105.07—Short Bowel Syndrome
(SBS)This new listing is the same as final listing 5.07 except that it applies to children. It eliminates the need for a finding of functional equivalence for children of any age who have a frequent need for a central venous alimentation catheter, as we described in the example of functional equivalence in prior § 416.926a(m)(3). Listing 105.08—Malnutrition Due to Any Digestive Disorder Final listing 105.08 corresponds to proposed listing 105.08; however, as we have already noted, we are including as listing criteria three of the examples of laboratory findings that would confirm chronic nutritional deficiency we had included in proposed 105.00F1a. We also removed the statement from proposed listings 105.08A and B that the required findings are “expected to persist for at least 12 months,” because it is unnecessary. Under our general rules for evaluating disability, an impairment must meet the duration requirement. Final listing 105.08 is consistent with the weight-for-length and BMI-for-age charts and data file tables from the CDC. According to the CDC, these are the recommended measurements to determine if an individual's weight is appropriate for his or her height. On May 30, 2000, the CDC updated its 1977 weight-for-length growth charts, and introduced BMI-for-age charts and tables. 1 The CDC explained that: 1 Centers for Disease Control and Prevention, National Center for Health Statistics. CDC growth charts: United States. May 30, 2000. These BMI-for-age charts were created for use in place of the 1977 weight-for-stature charts. BMI * * * is used to judge whether an individual's weight is appropriate for their height. * * * The new BMI growth charts can be used clinically beginning at 2 years of age, when an accurate stature can be obtained. As we have already noted, the CDC also defines “underweight” in children as a BMI-for-age less than the fifth percentile, but neither the CDC nor any other recognized expert authority has published guidelines for the classification of malnutrition based on BMI. Therefore, we will continue to monitor this area, and in the meantime, continue to use our criterion of persistence of weight below the third percentile to show listing-level severity based on malnutrition for children under 2 years of age. The third percentile is generally accepted as the lower limit of the normal range for most biologic measurements, and persistence below this level would warrant evaluation and intervention. Likewise, since the current BMI-for-age charts provide percentiles, we will continue to use measurements below the third percentile as the listing-level criterion for children age 2 and older. In response to a comment, we revised proposed listing 105.08B to indicate that we use the latest editions of the CDC's charts, which will ensure that the listing remains current if the CDC revises its charts in the future. Listing 105.10—Need for Supplemental Daily Enteral Feeding via a Gastrostomy In response to a public comment, we are adding final listing 105.10 for the need for a feeding gastrostomy. Because of this new listing, we no longer need the functional equivalence example in prior § 416.926a(m)(10) for a gastrostomy in a child who has not attained age 3. We are also clarifying that the gastrostomy must be used for supplemental enteral feeds on a daily basis. Conforming Changes Listing 6.02—Impairment of Renal Function For the reasons discussed in the explanation of changes for listing 5.08, Weight loss due to any digestive disorder, we are also revising listing 6.02C4 to use BMI. We are also removing the criterion for “recent” weight loss and replacing it with the same criterion we use in the final digestive disorder listings, a requirement for two measurements at least 60 days apart within a 6-month period. Section 416.924b—Age as a Factor of Evaluation in the Sequential Evaluation Process for Children We are correcting the reference in the last sentence of § 416.924b(b)(3), which should refer to the functional equivalence examples in § 416.926a(m)(7) or
(8)but incorrectly designates this functional equivalence rule as § 416.924a rather than § 416.926a. Also, because we are removing two of the examples of functional equivalence, §§ 416.926a(m)(3) and (10), and redesignating the remaining examples as explained below, we are revising the reference to refer to final § 416.926a(m)(6) or (7). Section 416.926a—Functional Equivalence for Children We are removing paragraph (m)(3), the example of functional equivalence based on a frequent need for a life-sustaining device at home or elsewhere, because we are including the need for a central venous alimentation catheter as final listing 105.07 and because we now no longer need this functional equivalence example. We are also removing paragraph (m)(10), the functional equivalence example of gastrostomy in a child who has not attained age 3, as it is now final listing 105.10. Other Changes We made many editorial changes from the NPRM for clarity in these final rules. For example, we: • Revised many sentences to put them into active voice, to simplify them, and to use more consistent style throughout the final rules; • Reorganized some paragraphs into a more logical order; • Clarified several headings; • Eliminated some redundancy from the proposed provisions; and • Revised language for greater consistency between part A and part B. Also, many of the paragraph designations in the NPRM were different from the way we designate paragraphs in our other body system listings. We changed those designations so they are in the same format as our other listings sections. None of these changes are substantive. Public Comments In the NPRM we published in the **Federal Register** on November 14, 2001 (66 FR at 57009), we provided the public with a 60-day comment period. The comment period ended on January 14, 2002. In response to that NPRM, we received letters, telefaxes, and e-mails from 11 commenters containing comments pertaining to the changes we proposed. The commenters included physicians, advocates for individuals who have disabilities, individuals who have digestive disorders, and State agencies that make disability determinations for us. On November 8, 2004, we published a limited reopening of the comment period of the NPRM in the **Federal Register** (69 FR 64702) to request additional comments about our proposals to revise and remove chronic liver disease listings. We published this limited reopening of the comment period because we believed those proposals were significant. The comment period also lasted 60 days and ended on January 7, 2005. In response to this reopening, we received letters, telefaxes, and e-mails from 539 commenters pertaining to the changes we proposed regarding chronic liver disease. The commenters included physicians, advocates for individuals who have chronic liver disease, individuals who have chronic liver disease, and State agencies that make disability determinations for us. In addition, on November 17, 2004, during the reopened comment period, we held an outreach meeting in Cambridge, Massachusetts. At the outreach meeting, physicians, advocates for individuals with liver disorders, and individuals who have liver disorders provided additional comments about chronic liver disease which we included in the rulemaking record for these final rules. We carefully considered all of the written comments in response to the two **Federal Register** documents and the comments we received at the outreach meeting. Because some of them were long and many comments were similar, we have condensed, summarized, and paraphrased them below. We have tried to present all views adequately and to respond to all of the issues raised by the commenters that were within the scope of these rules. We provide our reasons for adopting or not adopting the recommendations in the summaries of the comments and our responses below. Proposed 5.00A and 105.00A—What kinds of disorders do we consider in the digestive system? *Comment:* A commenter who has a colostomy asked us to include colostomies in our listings. He described the problems he had been having with his colostomy. *Response:* We did not adopt the comment. Although we agree with the commenter that some people who have colostomies are unable to work, we did not add a listing for this because the vast majority of people who have colostomies do not experience long-term complications that would meet the 12-month duration requirement and they are able to work. However, we did include a statement in final 5.00E4 indicating that if an individual is not able to maintain nutrition due to surgical diversions of the intestinal tract, including ileostomy and colostomy, we will evaluate the impairment under listing 5.08. Proposed 5.00B and 105.00B—What documentation do we need? *Comment:* Several commenters expressed concerns about our statement in the first sentence of proposed 5.00B1 and 105.00B1 that we usually need longitudinal evidence covering a period of at least 6 months of observations and treatment, unless we can make a fully favorable decision without it. One commenter was concerned that the proposed requirement was overly burdensome, especially for low-income claimants and the homeless who are unable to access health care. This commenter noted that proposed 5.00B2 (incorrectly designated as 5.00B3 in the NPRM) provided guidance for considering medical equivalence when an impairment did not meet a listing, but was concerned that adjudicators might overlook that guidance because it was in a separate paragraph. The commenter was also concerned that administrative law judges would need more testimony from medical experts to consider the issue of medical equivalence. The commenter asked us to provide more alternatives for claimants who, through no fault of their own, are unable to access continuous health care treatment. Some commenters stated that adjudicators may consider the 6-month requirement for observation and treatment absolute and not read the introductory text in proposed sections 5.00B3 and 105.00B2. The commenters believed that the proposed provision would require our adjudicators to defer the adjudication of significant numbers of cases with documented impairments of the digestive system until there was 6 months of evidence, even when it was obvious that those disorders were not of listing-level severity. These commenters believed that many digestive disorder cases could be fairly evaluated after 3 months of treatment and that we could give adjudicators more room for judgment. One commenter also suggested that we combine a requirement for 3 months of treatment with the establishment of a “medical improvement expected” diary in appropriate cases, in order to reflect advances in medical treatment and the fact that some individuals will respond to treatment. Many commenters noted that there are some conditions that are irreversible or progressive and would not require a 6-month observation period since the likelihood of substantial improvement with these conditions is negligible. *Response:* In response to these comments, we reorganized proposed 5.00B1 and 105.00B1 and removed the sentence stating that we usually need evidence covering a 6-month period of observations and treatment. We did not mean to imply that we would require evidence of 6 months of observation and treatment for all cases involving digestive disorders. We agree with the commenters that some digestive disorders are irreversible and progressive and could be fairly evaluated after 3 months of treatment, or even less. For example, final listing 5.02 does not require 6 months of evidence if the 3 required hemorrhages and transfusions occur in less than a 6-month period, as long as the transfusions are at least 30 days apart; and listing 5.05A requires only one episode of bleeding varices that require blood transfusion. In response to comments, we also added three new listings for chronic liver disease (final listings 5.05C, D, and E) that can be satisfied with documentation of the required findings on only one occasion. We recognize that some individuals may not have access to ongoing treatment and that, because of this, they may not be able to demonstrate that their impairments meet the criteria of listings in this body system. As we explain in final 5.00C6 and 105.00C6, it may be necessary to determine whether an individual's impairment or impairments medically equal a listing or are disabling based on consideration of residual functional capacity. We do not believe that adjudicators will overlook this guidance in the introductory text because it reflects general adjudicative policy that applies to all the body system listings. Also, our adjudicators are well aware that they are required to consult the information in the introductory text when they apply the listings. We will also provide training for our adjudicators on these rules. It may be possible that administrative law judges
(ALJs)will need to consult with medical experts somewhat more frequently than they did under the prior listings, but we do not believe that there will be a large increase in this need. We expect that most cases that would have met prior digestive disorder listings and that will not meet any of the final listings will require an individualized residual functional capacity assessment and will not require such expert medical input to determine whether the individual's impairment medically equals a listing. *Comment:* Another commenter noted that, while many homeless individuals infected with hepatitis C virus
(HCV)do not have medical records that reflect a complete longitudinal history of medical treatment, they may have some medical evidence. The commenter said that we should contact the treating physicians instead of purchasing consultative examinations. The commenter expressed the view that a consultative examiner may not be familiar with treating people with HCV, especially those who are homeless. The commenter indicated that SSA could save financial resources and secure better evidence for use in evaluations if all community medical sources were contacted. *Response:* We make every reasonable effort to secure evidence from individuals' treating physicians and other medical sources. Sections 404.1512 and 416.912 of our regulations require us to make every reasonable effort to obtain a complete medical history from an individual's medical sources. However, the regulations also explain that we will order a consultative examination if the information we need is not readily available from the records of the individual's medical sources or if we are unable to obtain clarification from the medical sources. Proposed 5.00C and 105.00C—How do we evaluate digestive disorders under listings that require persistent or recurrent findings? *Comment:* One commenter stated that our requirement that a “recurrent” or “persistent” finding must have lasted or be expected to last for 12 months is medically inappropriate for decompensated cirrhosis because continued deterioration is expected. The commenter also indicated that three events within a 6-month period with 1 month between events is medically inconsistent with the natural history of chronic liver disease because the disease is chronic and, therefore, progressive. The commenter acknowledged that some individuals with chronic liver disease experience episodes of symptoms and signs, but said that we should not have episodic requirements alone for the evaluation of the condition. *Response:* We agree with the commenter that we do not need episodic requirements or evidence of persistence for all cases involving chronic liver disease. Based on this and other comments, we removed proposed 5.00C and 105.00C and added final listings 5.05C through 5.05G. By making these changes, we provide additional criteria that are appropriate for evaluating the impairments of individuals who have progressive, chronic liver disease. Final listings 5.05A, 5.05C, 5.05D, and 5.05E provide for a determination of disability based on findings on a single occasion. On the other hand, final listings 5.05B, 5.05F, 5.05G, and 5.08 include conditions that may be acute or chronic and that may respond to treatment. They contain requirements for episodes of symptoms and signs. Proposed 5.00D and 105.00D (final 5.00C and 105.00C)—How do we consider the effects of treatment? *Comment:* One commenter suggested that we discuss how the side effects of medication can affect a child's growth and social development. Another commenter noted that treatment side effects can be debilitating and can cause functional limitations that validate disability. The commenter recommended that we expand our system of disability evaluation to acknowledge and articulate how treatment can affect a child's physical, emotional, and social development, including specifying how these factors (including school performance) should be evaluated. This commenter said that we should integrate all aspects of functional development into the evaluation criteria. *Response:* We did not adopt these comments because we believe that these final rules and our other rules sufficiently address issues of developmental delay and other potentially adverse effects of treatment. These final rules include general guidance to our adjudicators in final 105.00C about assessing any adverse effects of treatment. Final 105.00D4 includes a detailed discussion of the effects of treatment for chronic viral hepatitis infections, including hepatitis B and C virus. We explain that treatment for chronic viral hepatitis infections will vary considerably due to a child's age, medication tolerance, treatment response, and duration of the treatment. While we do not include the specific example of effects on “development” recommended by the first commenter, we do include a number of other examples of more common adverse effects of treatment in children. In addition, we have other rules for evaluating disability in children, and these rules address the kinds of issues raised by both commenters. In § 416.924a(b)(9) of our regulations, we include a detailed explanation of how we consider the effects of treatment in children. This section explains that we consider, among other things, any functional limitations that are caused by the side effects of treatment and the frequency of the need for treatment; in the latter case, we explain that frequent therapy may interfere with a child's participation in typical daily activities, which implicitly can also affect development. Likewise, in § 416.926a we include additional guidance explaining that we consider limitations that result from treatment when we make determinations about functional equivalence (see § 416.926a(a)). In the sixth domain of functioning, “health and physical well-being,” we consider the cumulative physical effects of physical or mental impairments and their associated treatments or therapies on a child's functioning (see § 416.926a(1). We also explain that medications and other treatments a child receives may have physical effects that also limit his or her performance of activities (see § 416.926a(a)(3)). *Comment:* One commenter disagreed with the proposed guidance on parenteral and specialized enteral nutrition. The commenter stated that individuals who have intravenous or gastrostomy tubes require special equipment and frequently require multiple feedings a day that may entail a significant amount of time. In the commenter's opinion, this is so intrusive that individuals who require parenteral or specialized enteral nutrition to avoid debilitating complications of a disease should be considered not able to work, and disability should be established if the 12-month duration requirement has been, or is expected to be, met. *Response:* We partially adopted the comment. There is a wide range in the nature and severity of underlying diseases that require parenteral or supplemental enteral nutrition, the type of delivery and scheduling of administration of such nutrition, and potential related complications. Many individuals who receive home parenteral or supplemental enteral nutrition have a reasonably normal lifestyle, including regular employment. Therefore, we do not think it appropriate to presume disability in all individuals who need such treatment; we must evaluate most situations on a case-by-case basis. However, we did agree that in certain instances the need for parenteral nutrition can be disabling. Therefore, we added final listings 5.07 and 105.07 for short bowel syndrome when post-operative nutritional needs cannot be met orally and an individual requires daily parenteral nutrition via a central venous catheter. We also added a criterion based on the need for daily enteral nutrition via a gastrostomy or daily parenteral nutrition via a central venous catheter in final listings 5.06 and 105.06 for IBD. As a consequence of the changes we made in response to this comment, we are also removing two of the examples of functional equivalence in § 416.926a(m). Section 416.926a(m)(3) provided for a finding of functional equivalence for children of any age who have a frequent need for a life-sustaining device, “e.g., central venous alimentation catheter.” Section 416.926a(m)(10) provided for a finding of functional equivalence for children who have not attained age 3 and who have a gastrostomy. Therefore, in these final rules, we are removing functional equivalence examples (m)(3) and (m)(10) because we no longer need them, as we explained earlier in this preamble. If we determine that the impairment does not meet or medically equal one of these listings, we will consider the need for parenteral or supplemental enteral nutrition via a gastrostomy in our residual functional capacity assessment or functional equivalence determination, especially in the kinds of situations described by the commenter. For example, the functional equivalence domain for children called “health and physical well-being” requires us to consider the cumulative physical effects of physical or mental impairments and their associated treatments or therapies on the child's functioning (see § 416.926a(l)). Proposed 5.00F and 105.00F—What are our guidelines for evaluating specific digestive disorders? (Final 5.00D and 105.00D—How do we evaluate chronic liver disease?) *Comment:* Several organizations made suggestions for specific language changes to the introductory text of the listings (proposed 5.00 and 105.00). Many commenters asked us to expand our discussion of the signs, symptoms, and complications of chronic liver disease. They asked us to list symptoms, such as chronic fatigue, chronic indigestion, diarrhea, constipation, and sleep disturbances. Commenters also proposed that we add specific laboratory findings to the introductory text, such as decreased platelets and acid-base imbalances. They suggested that we should take into account the frequency of extrahepatic manifestations resulting from chronic liver disease and factor them into the medical evaluation. *Response:* We partially adopted these comments by expanding the introductory text to provide additional adjudicative guidance on symptoms and signs of chronic liver disease. We are providing general information on symptoms and signs in final 5.00D3 and 105.00D3, and, where appropriate, specific information about symptoms and signs of particular chronic liver diseases. For example, in final 5.00D4c(ii) and 105.00D4c(ii), we provide examples of symptoms associated with the adverse effects of treatment for chronic hepatitis C virus infection, and in final 5.00D4d and 105.00D4d, we also provide examples of extrahepatic manifestations of chronic viral hepatitis by body system. We did not adopt all the specific language commenters requested because certain symptoms, such as indigestion, diarrhea, and constipation, are generally not features of chronic liver disease. However, we did include in final 5.00D3c and 105.00D3c decreased platelet count in the list of laboratory findings associated with chronic liver disease, and we indirectly referenced acid-base imbalances by adding increased ammonia levels as another laboratory finding. *Comment:* One commenter suggested that we add the phrase “or the remainder of an individual's natural life” to the first sentence of proposed 5.00F2 (final 5.00D1). This sentence described chronic liver disease and explained that it persists for more than 6 months and is expected to continue for at least 12 months. *Response:* We did not adopt the comment. The issue in our initial disability determinations and decisions under the listings is whether the individual has an impairment that prevents him or her from engaging in any gainful activity (or in a child, that causes “marked and severe functional limitations”) and that has lasted or can be expected to last for a continuous period of 12 months or that is expected to result in death. We are required by law to reevaluate the disability status of all individuals who qualify for disability benefits and this applies even to people who have permanent impairments. Therefore, there would be no practical reason for us to add the phrase requested by the commenter. *Comment:* One commenter recommended that we delete the word “function” in proposed 5.00F2d and 105.00F2e when referring to liver tests because liver enzymes are not liver function tests. *Response:* We adopted the comment in final 5.00D3c and 105.00D3c. *Comment:* One commenter suggested we delete the word “minimal” when referring to ascites in proposed 5.00F2(d) and 105.00F2(e) (final 5.00D6 and 105.00D6) and that we change it to “small volume.” The commenter also suggested that we delete “and not on physical examination” in this same section to more clearly indicate that we are referring to incidental and clinically insignificant findings of ascites found on imaging studies alone. Another commenter indicated that ascites should be evident on physical examination and not identified solely by an imaging procedure that might show clinically insignificant findings of ascites. This commenter also suggested listing criteria based on intractable ascites, documented on physical examination as moderate to severe, or hydrothorax, poorly controlled by or unresponsive to diuretic treatment, or requiring paracenteses for control. *Response:* We agree with the commenters that current imaging techniques are capable of detecting even minimal amounts of ascites before detection may be possible on physical examination. However, the criteria of proposed listings 5.05B2 and 105.05B2 did not base severity solely on the presence of ascites detected by physical examination or by imaging studies; nor do these final listings. To meet the severity requirement, the laboratory findings in final 5.05B2 and 105.05B2 must also be present. If the laboratory findings are at the level specified in the listing, it is not necessary to quantify the ascites because there will be sufficient information to show that the individual is disabled. Therefore, we did not adopt the comment to change the quantifier from “minimal” to “small volume” ascites; instead, we removed it. We adopted the second commenter's suggestion to include criteria in final listing 5.05B and 105.05B for hydrothorax because ascitic fluid can collect in the chest cavity and result in a very serious impairment. We did not adopt the other recommendation that we characterize listing-level ascites as “moderate to severe,” because these terms are subject to varying interpretations and their use would not promote consistent adjudication. *Comment:* One commenter suggested that we provide detailed information about a number of extrahepatic manifestations and complications of chronic liver disease and suggested additional language for proposed 5.00F (final 5.00D). *Response:* Based on this and other comments, we added language in final 5.00D7 through D11 and the corresponding paragraphs in 105.00. These sections provide guidance relevant to the application of the new listings we are adding for complications of chronic liver disease; that is, final listings 5.05C through G and 105.05C through H. We also provide information on extrahepatic manifestations of hepatitis B and C in final 5.05D4d and 105.05D4d. The additional information we provide is relevant only to application of the listings, and therefore, does not include the amount of detail this commenter suggested. *Comment:* Several commenters requested that we provide a listing for individuals placed on a liver transplant list. They submitted proposals for the introductory text to explain this suggested listing. *Response:* We did not adopt the suggestion of placement on a liver transplant list alone as a listing because the threshold criteria for placement on a transplant list vary widely throughout the country and because individuals may be placed on a list well before they have listing-level impairments. However, based on this and other comments we added final listings 5.05G and 105.05G for end stage liver disease documented by particular scores determined using the SSA Chronic Liver Disease (SSA CLD) calculation and SSA Chronic Liver Disease-Pediatric (SSA CLD-P) calculation. We based these calculations on the Model for End Stage Liver Disease and the Pediatric End Stage Liver Disease (MELD and PELD) scales that were developed by the United Network of Organ Sharing for prioritizing patients waiting for liver transplants based on statistical formulas for predicting mortality from liver disease. *Comment:* One commenter noted that liver patients regularly have laboratory studies to track their liver function. Any decline in function is evident almost immediately and these laboratory studies are often done bi-weekly, or weekly in some cases. The commenter said that we should be able to use the laboratory findings rather than wait until a patient's condition declines to the point that he or she needs a liver transplant. *Response:* We partially adopted the comment. Although we have indicated that laboratory studies may not be a good indicator of disability, since there may be a poor correlation between the studies and the severity of liver disease, we believe that some laboratory findings can be indicative of listing-level severity for certain disorders, such as spontaneous bacterial peritonitis (final listings 5.05C and 105.05C), hepatorenal syndrome (final listings 5.05D and 105.05D), hepatopulmonary syndrome (final listings 5.05E and 105.05E), and end stage liver disease (final listings 5.05G and 105.05G). Final Listing 5.02—Gastrointestinal Hemorrhage From Any Cause, Requiring Blood Transfusion *Comment:* Proposed listing 5.02 specified that at least 2 units of blood must be transfused per episode. One commenter expressed concern that different physicians and different religious preferences can dictate when and how much blood is transfused. The commenter said that it appeared more reasonable to use hematocrit levels, which are standardized, instead of a more subjective and less standardized method based on the number of units transfused. *Response:* We did not adopt the comment to use a hematocrit level in this listing because it takes time for the hematocrit to equilibrate following rapid blood loss. We also did not adopt the comment to remove the 2-unit requirement for the amount of blood transfused per episode in final listing 5.02. As we explained earlier, we chose 2 units of blood because this is the minimum amount of blood that is usually transfused. We recognize that there are individuals who may object to transfusions. In such cases, their impairments cannot meet the requirements of any listing that includes a criterion for a transfusion. However, it is certainly possible for a person who refuses transfusions to be found disabled under our other rules for determining disability. *Comment:* One commenter noted that in proposed listing 5.02 we stated that all incidents within a consecutive 14-day period constitute one episode, but in proposed 5.00C2 we also stated that there must be at least 1 month between events (incidents). The commenter asked us to clarify these requirements because it seemed that all events within a 30-day period should constitute one episode. *Response:* We clarified the requirements by deleting the sentence in proposed listing 5.02 that referred to episodes within a 14-day period because it could have been confusing and was not necessary for correctly applying the listing. Although our intent was to explain that several bleeds may occur during a single episode, listing-level severity is based on hemorrhages that require transfusions and not the actual number of bleeds per episode. We require 30 days between hemorrhages that require transfusion in order to establish that there are separate events and that the condition is chronic. Final Listings 5.05 and 105.05—Chronic Liver Disease *Comment:* One commenter recommended that we place the study “endoscopy” before “x-ray” in listing 5.05A because 95 percent of diagnoses for varices are made by endoscopy. *Response:* We adopted the comment. *Comment:* We received many comments asking us to change the headings of listings 5.05 and 105.05. Commenters suggested eliminating the words “and cirrhosis of any kind,” stating that “cirrhosis” is chronic liver disease. Commenters also pointed out that individuals may have chronic liver disease but not necessarily cirrhosis. *Response:* We adopted the comments and removed the reference to “cirrhosis” from the headings of the two listings. *Comment:* One commenter stated that the definition of cirrhosis can be subjective. The commenter said that one doctor who reads a tissue sample may diagnose fibrosis and another doctor may diagnosis cirrhosis. This commenter stated he had had debilitating symptoms before he officially had cirrhosis. *Response:* We do not agree that the definition of cirrhosis is subjective. Cirrhosis is a disorder defined by pathology. Fibrosis is an early form of scarring. Cirrhosis is late-stage disease and readily distinguishable by pathologists from fibrosis. We do agree, however, that individuals can have debilitating problems from chronic liver disease before they develop cirrhosis. As we have noted in a number of places throughout this preamble, we have expanded and clarified the final rules to ensure that we identify people without cirrhosis who should qualify under these final listings. *Comment:* Many commenters noted that the proposed changes for chronic liver disease contained fewer criteria (physical examination, laboratory, or imaging tests) to establish disability than did the prior listings. They expressed concern about “compressing” prior listings 5.05 B, C, D, E, and F into proposed listing 5.05B, which contained only two sets of severity criteria. Some commenters said that the proposed listings were vague and too narrow in scope. Commenters believed that this would make our determinations more restrictive and perhaps erroneous. They urged us to expand the medical evaluation criteria to more accurately reflect the pathophysiology of chronic liver disease. The commenters believed that the listings should be more specific and inclusive with regard to signs, symptoms, complications, treatment, and metabolic and functional factors to make the evaluation of chronic liver disease more on par with HIV criteria because hepatitis C is a systemic illness that encompasses a broad spectrum of diseases similar to HIV infection. *Response:* We adopted many of these comments. We significantly expanded the listing criteria for chronic liver disease. For example, we expanded proposed listings 5.05A and 105.05A to include hemorrhaging from gastric or ectopic varices and portal hypertensive gastropathy. We also expanded proposed listings 5.05B and 105.05B to include hydrothorax as well as ascites. We added four listings in parts A and B based on suggestions from commenters: Final listings 5.05C, D, E, and G, and 105.05C, D, E, and G. We also replaced the prior reference listing for hepatic encephalopathy with a stand-alone listing for this complication of chronic liver disease (final listings 5.05F and 105.05F). Analogous to the detailed guidance we provide about HIV infection in 14.00D and 114.00D of our listings, we have greatly expanded the introductory text to include detailed information on chronic viral hepatitis infections in final 5.00D4 and 105.00D4. We provide information about the symptoms, signs, and complications of chronic hepatitis B and C virus, and include information about the types of treatment for these infections and the common adverse effects of this treatment. We have also added information on extrahepatic manifestations of hepatitis B and C virus by body systems. We did not add all of the suggested complications or extrahepatic manifestations of chronic liver disease because most respond to prescribed treatment and they are generally very rare. Also, some of the suggested extrahepatic syndromes are multi-causal, may be unrelated to the liver disease, and poorly correlate with the degree of liver destruction. Very serious extrahepatic manifestations that we did not list in these final rules can be evaluated under the affected body system. Lesser manifestations are evaluated in the residual functional capacity assessments or functional equivalence evaluations later in the appropriate sequential evaluation process for adults or children. (We describe the sequential evaluation process later in this preamble.) *Comment:* Several commenters suggested we include a classification system, such as the Child-Turcotte-Pugh score, which has a refined scoring system and has been validated for years as predictive of mortality. This score indicates cirrhosis as “compensated” and “decompensated.” Another commenter suggested that we should not use the Child-Turcotte-Pugh score because it does not pick up some disabilities, but we should use the MELD and PELD scoring systems which have replaced it. *Response:* We partially adopted the suggestion to use a classification system by including an SSA CLD score criterion in final listing 5.05G, and SSA CLD and SSCLD-P score criteria in final listings 105.05G1 and G2. The SSA CLD and SSA CLD-P calculations are based on the calculations for the MELD and PELD scores, but we made minor changes to these calculations to make them more appropriate for determining disability. We did not base the SSA CLD-P calculation on the Child-Turcotte-Pugh score because it has been superseded by the PELD in clinical practice. *Comment:* Several commenters were concerned about our proposal to remove prior listing 5.05B, for performance of a shunt operation for esophageal varices. One commenter noted there are still problems that can occur with the TIPS shunting procedure, such as occlusion, infection, or failure. The commenter noted that TIPS shunting does not have any bearing on the severity of the condition that required the shunt. The commenter also indicated that, although the shunt will help relieve the pressure causing the hemorrhage, it does not bring about a recovery or improvement of the liver disease itself. The same commenter stated that, after a TIPS procedure, the blood is not being filtered by the liver, but is bypassing liver function, and that blood toxicity is an issue. The commenter noted that TIPS prevents or postpones the next big bleed, but does not cure the underlying disease, usually cirrhosis. The debilitating symptoms are not eliminated and the patient is unable to perform work or normal lifestyle functions. *Response:* We did not adopt the comments asking us to keep prior listing 5.05B. As we indicated in the preamble to the NPRM, more modern types of procedures, such as TIPS, are less risky and can be performed before the condition becomes serious enough to meet the level of severity required by our listings. Therefore, we cannot presume that everyone who has had a TIPS procedure is disabled. However, we will evaluate the severity of the underlying chronic liver disease under final listing 5.05, and if it does not satisfy the requirements of the listing, we will evaluate the effects of any debilitating symptoms when we assess residual functional capacity at later steps in the sequential evaluation process. We do agree that complications of TIPS may occur. However, if there are complications, immediate medical attention would be required, and the complications would not last or be expected to last for 12 months. We do not agree with the comment that blood is not being filtered by the liver after a TIPS procedure. Portal pressure is reduced by the TIPS procedure, which connects the portal vein to the hepatic vein using a stent (shunt); however, there is still some blood that filters through the liver. *Comment:* Many commenters disagreed with our proposal to remove prior listings 5.05E and 105.05E for hepatic encephalopathy. They noted that this condition is directly related to end stage liver disease and affects an individual's ability to work due to manifestations such as confusion, poor memory, and lack of concentration. Many commenters also recommended that we include criteria for evaluating hepatic encephalopathy in the digestive disorders listings rather than evaluating the condition in the mental or neurological body systems. Another commenter noted that TIPS can cause encephalopathy, and said that doing away with listings for shunts and hepatic encephalopathy was not a good idea. *Response:* We adopted the comments. Although we are still removing prior listings 5.05E and 105.05E because they were reference listings that only referred to the mental disorders listings, we are adding new listings for hepatic encephalopathy that contain specific evaluation criteria, final listings 5.05F and 105.05F. These final listings include criteria for the behavioral or cognitive manifestations of hepatic encephalopathy in combination with TIPS or any surgical portosystemic shunt or in combination with a specific clinical or laboratory finding. We are also providing guidance in final 5.00D10 and 105.00D10 of the introductory text for using the new listings. *Comment:* We received many comments regarding the use of liver biopsies in the evaluation of chronic liver disease. Commenters stated that individuals with chronic liver disease may suffer from a multitude of symptoms and have little evidence of injury to their liver, while others may have few symptoms, even with extensive cell damage on liver biopsy. Therefore, histological findings may not correlate with functional capacity. Others noted that extrahepatic manifestations of chronic liver disease cannot be found on liver biopsy, yet these manifestations are symptomatic and limiting. Also, in an apparent reference to our proposal to remove the requirement for confirmation of chronic liver disease by liver biopsy in prior listing 5.05F, commenters agreed that a biopsy should not be mandatory. However, they indicated that the results of a biopsy could help to assess whether an individual has cirrhosis, particularly early cirrhosis, since symptoms may not be substantiated by blood tests or physical examination. *Response:* We agree with the commenters that a liver biopsy is useful in diagnosing cirrhosis, and in final 5.00D3c and 105.00D3c, we explain that biopsy may demonstrate the degree of liver cell necrosis, inflammation, fibrosis, and cirrhosis. We also agree with the commenters that a liver biopsy is not a good predictor of the severity of symptoms of chronic liver disease or their effect on functioning. Therefore, as we explained earlier, we have removed prior listing 5.05F, which was based in part on confirmation of chronic liver disease by liver biopsy. We will continue to consider liver biopsy reports when they are part of the existing medical records in combination with all the other evidence in the case record. *Comment:* Several commenters stated that many of the medications and procedures used to treat the symptoms of liver disease, such as higher dose diuretics, repeated large-volume paracenteses, and placement of TIPS for bleeding esophageal varices, have side effects that we should consider. The commenters noted that treatment can lead to major electrolyte or renal problems. *Response:* We agree that the effects of treatment must be considered in assessing digestive impairments. In final 5.00C and 105.00C, we provide general guidance for how we consider the effects of treatment for all impairments in this body system. In final 5.00D4 and 105.00D4, we provide specific guidance about how we consider the effects of treatment for chronic viral hepatitis infections. Also, if an impairment does not meet or medically equal a listing, we continue to consider the effects of treatment on the individual's ability to function when we assess residual functional capacity, or for children, when we assess functional equivalence. *Comment:* Several commenters suggested that we add documented portal hypertension to listing 5.05A and 105.05A. *Response:* We adopted the comment. *Comment:* One commenter suggested that proposed listing 105.05A was more restrictive than proposed listing 5.02 for adults, with no corresponding childhood listing 105.02 for children. The commenter suggested that we include a comparable listing for children based on three gastrointestinal bleeds requiring transfusion in a 6-month period due to any disease process, not just esophageal varices. *Response:* We adopted the comment and added a corresponding childhood listing 105.02 with essentially the same provisions as in final listing 5.02. *Comment:* Many commenters recommended that we delete the word “massive” from proposed listings 5.05A and 105.05A. They also suggested including other sites of bleeding besides the esophagus under listing 5.05A, specifically bleeding from gastric and ectopic varices, and portal hypertensive gastropathy. *Response:* We adopted the comments and made corresponding changes to final 5.00D5 and 105.00D5 of the introductory text which provide guidance for applying listings 5.05A and 105.05A. We also changed the proposed criteria of these listings, as we explain in our response to the next comment. *Comment:* Many commenters opposed the requirement in proposed listing 5.05A that an individual receive 5 units of blood in order for his or her impairment to meet the requirement for a massive hemorrhage. One commenter stated that it would be more reasonable to simply require a “significant hemorrhage.” This commenter noted that any transfusion is significant. Another commenter said that specifying the number of units transfused could not be supported because the size of the individual, the protocol of the hospital, the timeliness of the intervention, and other factors could influence the amount of blood transfused. This commenter doubted that the prognosis for an individual with bleeding varices who receives 4 units is significantly better than for an individual who receives 5 units. The commenter thought that, since physicians and hospitals are reluctant to transfuse blood, any blood transfusion should suffice or the matter should at least be left to medical judgment. Another commenter said that a transfusion of “multiple” units of blood in conjunction with other interventions in an attempt to restore hemodynamic stability should suffice and that there should be some latitude for medical judgment in this listing. Another commenter stated that we should include other criteria to define a hemodynamically significant bleed, such as at least a 2-unit bleed, or a drop in blood pressure and increase in pulse rate. This commenter also suggested changing the wording from “hemodynamic instability” to “hemodynamically significant bleed” in the listing and the introductory text. *Response:* We partially adopted the comments. We agree that the proposed rule was too severe. Therefore, we revised the listing so that the primary criterion for listing-level severity is hemorrhaging that results in hemodynamic instability and requires hospitalization for transfusion. Since the minimum amount of blood a physician will usually transfuse in adults is 2 units, we used this amount in the listing. In final 5.00D5, we also adopted some of the language suggested by commenters to describe hemodynamic instability, including pallor, diaphoresis, rapid pulse, low blood pressure, postural hypotension, and syncope. (We also provide brief definitions of the more technical medical terms on this list.) We do not indicate, as we did in the NPRM, that hemodynamic instability may require multiple transfusions because final listing 5.05A requires only one transfusion. We made similar changes in the part B section for children, but provided a rule for documenting appropriate transfusion volumes based on body weight. *Comment:* One commenter noted that some people could not meet listing 5.05A because they may have many large varices clipped. These individuals would be in serious danger and disabled without ever bleeding. *Response:* We agree that an individual who has had prophylactic banding of varices without a bleed would not meet the requirements of final listing 5.05A. However, one of the major complications of cirrhosis with portal hypertension is bleeding varices; therefore, a criterion for hemorrhaging is appropriate in these listings. An impairment that does not meet the requirements of 5.05A because varices have been clipped may still meet the requirements of final listing 5.05B through 5.05G or be disabling on another basis. *Comment:* One commenter stated that the mortality rate associated with variceal bleeding has decreased over the last several years with advances in therapy. If an individual goes more than a year without recurrent bleeding, he or she is back at baseline and has only a 25 percent risk for bleeding. The commenter recommended that we determine disability at that point by the state of decompensation of the liver rather than the risk of bleeding. *Response:* All of the criteria in final listings 5.05 and 105.05 are based on the state of decompensation of the liver rather than the risk of bleeding. The requirement under 5.05A for hemorrhaging that results in hospitalization and transfusion reflects one of the major complications of chronic liver disease. When we determine whether an impairment that met 5.05A continues to be disabling following the 1-year period of disability, we evaluate any residual impairment(s), including bleeding and other complications of chronic liver disease. *Comment:* One commenter stated that the proposed language for the length of disability under listings 5.05A and 105.05A (that is, “for 1 year following the last documented massive hemorrhage”) did not work. The commenter suggested that the correct standard has to be the state of decompensation of the liver, not a fixed period of time. *Response:* We did not adopt the comment. As we explained in the NPRM, we changed the period for which we would presume the impairment is disabling from 3 years to 1 year because of newer techniques in the treatment of esophageal varices. (See 66 FR at 57013.) The same logic would hold for other bleeds as well. Also, it is important to remember that the 1-year rule does not mean that disability automatically ends 1 year following the last documented transfusion (we removed the description “massive hemorrhage” as we explained earlier). Our rule is only that after 1 year we must consider whether the impairment is still disabling. Also, our existing rules allow our adjudicators to decide that we will not review a case until a date later than 1 year after the qualifying event (in this case, the last documented transfusion), if the medical evidence supports a conclusion that the disability will continue for longer than 1 year. *Comment:* One commenter objected to the criterion in proposed listing 5.05B2a for a cutoff level for serum albumin depletion, stating that the actual serum albumin level is dependent upon many factors, such as hydration and the degree of portal hypertension. The commenter suggested that we change the listing criterion to “an associated decrease in serum albumin.” *Response:* We did not adopt the comment. A serum albumin level of 3.5 g/dL is normal. Even though a level between 3.0 g/dL and 3.5 g/dL may indicate an abnormality, it is does not reflect listing-level severity. A level of 3.0 g/dL or less is recognized by hepatologists as indicative of loss of liver biosynthesis. We set the laboratory values in these listings, such as the serum albumin level in 5.05B2a, at a level that reflects very serious impairment because we use the listings only to deem individuals disabled without considering any other factors that may contribute to their inability to work; that is, their residual functional capacity, age, education, and work experience. However, the establishment of these levels does not mean that individuals whose impairments do not satisfy the criteria of the listing are not disabled; it only means that we do not presume that they are disabled under the listing. We may still find that the impairment is disabling based on an individualized assessment of its effects on the individual's functioning. *Comment:* One commenter suggested that we include a criterion for malabsorption with involuntary weight loss of 10 percent or more from baseline in the absence of a comorbid condition that could explain the findings. *Response:* We did not adopt the comment because malabsorption is not a common feature of chronic liver disease. However, individuals with chronic liver disease and the appropriate degree of weight loss can meet the requirements of final listings 5.08 or 105.08. *Comment:* Several commenters suggested that we change the measure of coagulation studies from prothrombin time to International Normalized Ratio
(INR)as many laboratories do not report the prothrombin time in terms of seconds, but do report the INR. *Response:* We adopted the comment. *Comment:* Several commenters suggested that we include hepatic malignancy as a criterion in listings 5.05 and 105.05, noting that many liver diseases result in hepatocellular carcinoma. *Response:* We did not adopt the comment because we already have listings for malignant tumors of the liver, listing 13.19 for adults and listing 113.03 for children. However, in response to this comment, we added a cross-reference to listing 13.19 in final section 5.00D1 and to listing 113.03 in final section 105.00D1. *Comment:* Several commenters stated that some hepatic conditions, such as Budd-Chiari syndrome, may not include cirrhosis or ascites, but are disabling and should be included as conditions for determining eligibility for disability benefits. *Response:* We did not add all the specific conditions mentioned by the commenters to the listings. However, as already explained, we did add several criteria to final listing 5.05 and 105.05 to expand the scope of those listings and to address additional manifestations of chronic liver disease. We also expanded the introductory text in 5.00D2 and 105.00D2 to provide examples of chronic liver disease that should be considered under the listings when they result in the complications specified in the listings. We added guidance regarding the effects of the extrahepatic manifestations of chronic liver disease that should be considered under the requirements of other body systems or at later steps in the sequential evaluation process when the impairment does not meet or medically equal a listing in the digestive disorders body system. *Comment:* One commenter noted that we proposed to remove the laboratory values from prior listings 5.05C and 5.05F and asked why we did not propose to delete the laboratory values in proposed listing 5.05B. The commenter recommended that we delete the values from listing 5.05B as well. *Response:* We did not adopt the comment. As we explained in the NPRM (66 FR at 57013) and have explained earlier in this preamble, we did not propose to delete the laboratory values in proposed listing 5.05B because they are specific indicators of the severity of the deterioration of liver function in that listing. Serum albumin level is a good indicator of liver biosynthesis and it correlates with the severity of ascites. In addition, blood coagulation disorders resulting from chronic liver disease are indicative of the severity of the liver dysfunction. However, as we explained earlier in this preamble, we are providing a criterion for an elevated INR as a measure of the body's ability to regulate coagulation, rather than a prolongation of prothrombin time as in the prior and proposed listing, because INR is a more widely used study than prothrombin time. *Comment:* Another commenter believed that our proposal to eliminate prior listing 5.05C, which required chronic liver disease with elevated serum total bilirubin, would be a “great disservice” to individuals with primary biliary cirrhosis (PBC), primary sclerosing cholangitis (PSC), and autoimmune hepatitis (AIH). The commenter noted that elevated serum total bilirubin levels and pruritis associated with these conditions are very real problems. Also, a commenter noted that most primary care doctors are not going to run studies other than the serum total bilirubin. *Response:* Even though serum total bilirubin studies may be readily available in the medical records from primary care physicians, we are removing prior listing 5.05C because, as we explained earlier, this laboratory finding alone is not a good indicator of impairment severity or an individual's ability to function. However, serum total bilirubin is one of the three laboratory values we use to calculate the SSA CLD score for final listing 5.05G. In response to this comment, we are providing a list of examples of chronic liver disease in final 5.00D2. The list includes PBC, PSC, and AIH, and will remind adjudicators that these conditions can be evaluated under final listing 5.05. *Comment:* One commenter stated that doctors are finding that low platelet counts are an indicator of portal hypertension and that they should be added to the criteria for listings 5.05 and 105.05. The commenter noted that patients are concerned about the amount of physical activities they can perform with low platelet counts and abnormal coagulation. *Response:* We do not include low platelet counts as stand-alone criteria for listing-level severity because there is a wide statistical variation in platelet counts, and there is no specific level at which individuals will subsequently bleed. We consider any functional consequences, such as limitations in an individual's ability to perform physical activity, when we assess residual functional capacity in adults and functional equivalence in children. However, in response to this comment, we added a reference to abnormal coagulation studies, including an increased INR level and decreased platelet counts, in our list of laboratory studies associated with chronic liver disease in final 5.00D3c and 105.00D3c. We explain that elevated INR level does indicate loss of synthetic liver function, as well as increased likelihood of cirrhosis and associated complications. We also include an elevated INR level in the criteria of listings 5.05B and 105.05B. *Comment:* Proposed listings 5.05B and 5.06 contained criteria that required specific findings to occur during a consecutive 6-month period. Commenters believed that our proposal to change the requirement that ascites persist for 5 months in prior listing 5.05D to a requirement for 6 months in proposed listing 5.05B seemed arbitrary and unfair because not all impairments fit neatly into 6-month blocks. (There was no 6-month requirement in prior listing 5.06.) The commenters believed that we changed the listing simply to coincide with an arbitrary timeframe without regard for long-held understanding of medical severity. One commenter believed that the period was excessive because clinically significant ascites for 3 months despite treatment represents serious liver disease. Another commenter questioned how we would handle cases in which the appropriate findings persist consecutively over a 2- to 5-month period, improve for a few months, and then recur for a few months. The commenter asked if a case involving multiple recurring periods, none of which individually lasts up to 6 consecutive months, could equal either of these listings. *Response:* As we explained in the NPRM, “[i]n our experience, requiring 6 months of persistent findings enables us to make a more reliable prediction of listing-level severity.” (See 66 FR at 57013.) Requiring findings from at least two evaluations, at least 60 days apart, within a consecutive 6-month period allows us to document the recurrent or persistent nature of many of these impairments and is a more reliable indicator that the impairment will be disabling for 12 consecutive months. When these listing requirements are satisfied, we can generally conclude that the impairment will be disabling for 12 consecutive months. In the two examples provided by the commenters (that is, clinically significant ascites for 3 months despite treatment, or findings persisting for 2 to 5 months that improved for a few months and then recurred), the impairments would meet the listing if there was evidence showing the required findings on two evaluations spaced at least 60 days apart. These examples show that we do not necessarily need 6 months of evidence to find that an impairment meets the listing. Also, as we have already noted, if the impairment does not meet the criteria of any of these final listings, it may meet the criteria of a listing in another body system, medically equal a listing, or meet the definition of disability later in the sequential evaluation process. *Comment:* One commenter believed that we should not require documentation of ascites by both physical examination and appropriate medically acceptable imaging under proposed listings 5.05B2 and 105.05B2. The commenter stated that imaging studies are not always available and that, if ascites is observable on examination and the serum albumin or coagulation studies criterion in the listing is fulfilled, it seems unnecessary to also require documentation by imaging. Another commenter noted that it is difficult to demonstrate ascites in obese people by physical examination, and requiring both types of documentation could reduce the chance that an individual who is obese would benefit from this listing. Another commenter stated that our proposed listing 5.05B criteria did not quantify the amount of ascites and that we should be evaluating significant ascites. *Response:* We adopted the first two comments by providing in final listing 5.05B2 that ascites or hydrothorax can be demonstrated by appropriate medically acceptable imaging “or” by physical examination. Since the required laboratory findings in final listings 5.05B2 establish the severity of the impairment under the listings, we agree that there is no need to require documentation of ascites both on physical examination and on imaging. Because of this change in the final rules, individuals with obesity will be able to meet this listing with ascites demonstrated on imaging techniques alone, provided they meet the other criteria of the listing. Because of this comment, we also reviewed the same criterion in proposed listing 105.05. For consistency, and because it is medically appropriate, we included the same requirements for children in final listing 105.05B as we do for adults in final listing 5.05B. We also restored the criterion from prior listing 105.05B for an associated serum albumin of 3.0 g/dL or less and added a criterion for an INR of 1.5 consistent with final listing 5.05B. This will ensure that the ascites is a sign of chronic liver disease. Because we are requiring the associated laboratory studies with the ascites to demonstrate listing-level severity, we will not need to quantify the amount of ascites. *Comment:* One commenter recommended that we not delete listing 105.05A, inoperable biliary atresia, and require children to prove disability in other ways. *Response:* We adopted the comment. In final listing 105.05H, we have clarified that the listing applies only to extrahepatic biliary atresia, thus excluding other types, such as intrahepatic biliary atresia. We are no longer using “inoperable” to describe the condition, because by definition, extrahepatic biliary atresia cannot be remedied with surgery except by liver transplantation; the portoenterostomy procedure usually performed in the first 3 months of life is only palliative. *Comment:* One commenter believed that our requirement for prolongation of the prothrombin time of at least 2 seconds in proposed listing 5.05B2(b) was medically unreasonable and might be excessive. The commenter suggested that any reading above the normal value for the reporting laboratory should qualify. *Response:* We disagree with the comment; however, we have removed the proposed criterion for measurement of prothrombin time and instead provided a criterion for INR in final listing 5.05B2 because INR is a more widely used study than prothrombin time. As we explained earlier, because we use the listings to deem individuals disabled, we must set laboratory values in the listings at levels that reflect very serious impairment. *Comment:* One commenter suggested that we include in listing 105.05 consideration of poor school performance, difficulties in play, and growth and developmental delays. The commenter gave examples of developmental delays due to ascites, such as inability to roll over. *Response:* We did not include this information in the listing, but in response to this comment we did note in final 105.00D3 in the introductory text that the manifestations of chronic liver disease may include developmental delays or poor school performance. The issues raised by this comment are more appropriately addressed when we make functional equivalence determinations under § 416.926a, where we provide detailed, age-specific guidelines for evaluating limitations in school, play, and various other developmental issues. *Comment:* Many commenters stated that we should include a separate listing for chronic hepatitis B and C. Some suggested that we do not recognize the hepatitis C virus as a disability and they believed that it is “unacceptable” to evaluate individuals with chronic hepatitis C virus under the chronic liver disease listings. Some commenters thought that our proposals would restrict individuals with hepatitis C from receiving benefits. One commenter said that our proposed changes did not take into account knowledge gained in the last 20 years regarding the hepatitis C virus. Some commenters thought we were removing hepatitis C and all liver diseases from the listings, while others suggested that we wrote the chronic liver disease listings only for alcoholic and drug-induced liver failure. *Response:* We are not removing chronic liver disease from the listings, and we do recognize and include hepatitis C, which is a chronic liver disease, under final listings 5.05 and 105.05. We believe that the many changes and improvements we are making in the final listings and the introductory text in response to these and other comments will make clear that final listings 5.05 and 105.05 apply to all forms of chronic liver disease, including disease caused by the hepatitis B and C viruses. As we have already explained, final listings 5.05 and 105.05 are now broader in scope and more inclusive than the proposed listings were. We did not add a separate listing for chronic hepatitis B or C because individuals with listing-level effects of hepatitis will have the same kinds of findings as those associated with other chronic liver diseases. In response to these and other comments about chronic viral hepatitis, we are also adding extensive sections to the introductory text to address many of the concerns expressed in the comment letters and at the outreach conference. Final 5.00D4 and 105.00D4, which explain how we evaluate chronic viral hepatitis, are the longest sections in the introductory text. We have provided subsections explaining: • The nature and course of hepatitis B and C infections; • Treatment, including the adverse effects of treatment; and • Extrahepatic manifestations of hepatitis B and C. With these changes, we believe it will now be very clear that we do consider hepatitis B and C to be medically determinable impairments that could be the basis for a finding of disability. We explain how these impairments can meet the requirements of final listings 5.05 and 105.05, and how they can be disabling in other ways, either by meeting other listings, medically equaling listings, or based on the functional consequences of the impairments as a result of symptoms and the effects of treatment. It should also be clear that we do not intend to restrict the entitlement to disability benefits of individuals who have hepatitis B or C; rather, we intend to include everyone who should qualify under our rules. The new information in final 5.00D4 and 105.00D4 will also ensure that our adjudicators have up-to-date information about hepatitis B and C. *Comment:* Some commenters indicated that the debilitating symptoms of hepatitis C virus often begin decades before end-stage liver failure occurs. Some commenters recommended that we include criteria for hepatitis like the criteria in listings 14.08N and 114.08O, for human immunodeficiency virus (HIV). Those listings provide for a finding of disability based on significant documented symptoms or signs with specified functional limitations. The commenters indicated that the symptoms and signs of hepatitis, such as decreased cognitive function, decreased memory acuity, fatigue, weakness, fever, malaise, lethargy, weight loss, abdominal pain, appetite disturbance, mood disturbance, and insomnia, are in many respects the same as the symptoms and signs we include in listings 14.08N and 114.08O. The commenters noted that both HIV and chronic hepatitis B and C are systemic illnesses that encompass a broad spectrum of diseases and potential impairments with many constitutional and systemic signs and symptoms. One commenter stated that including a listing based on functional limitations would be important for individuals who are homeless and whose functional disabilities may be very profound. The commenter noted that it would be easier to document the functional limitations than the medical conditions because expert medical care may not be available to this group. A group of physicians who spoke at the outreach meeting commented that they “struggled with the dilemma of” how we should evaluate fatigue because they believe it is subjective and difficult to assess and validate. They recommended that the assessment of the validity and impact of fatigue should rest on the judgment of the treating source. *Response:* We did not adopt the comments. While we agree that some individuals with hepatitis B and C may be debilitated by symptoms of fatigue and the other symptoms mentioned by the commenters, we believe it would be more appropriate to consider these symptoms on a case-by-case basis at later steps of the sequential evaluation process, based on information obtained from the treating source(s) as well as other medical and non-medical sources concerning the particular effects of the impairments on residual functional capacity or, for children, age-appropriate functioning. Also, we do not believe we should add a functional listing to the final rules without first proposing it and asking for public comment on the criteria it might contain. Therefore, even though we are not adding such a listing now, we plan to issue an Advance Notice of Proposed Rulemaking inviting public comments on whether we should add a functional listing to the digestive disorders body system and, if so, what functional criteria would be appropriate. With regard to the comment that we should add a listing based on functional limitations for individuals who are homeless, we do not believe we should add a listing at this time for the reasons stated above; however, we do evaluate functional limitations that result from the symptoms and signs of an impairment when we assess residual functional capacity. We agree with the physicians who spoke at the outreach meeting that the fatigue associated with hepatitis B and C is often substantial but also difficult to assess and validate. We also agree that treating physicians can provide important information about the validity and impact of fatigue on functioning. In fact, our regulations at §§ 404.1527 and 416.927 require us to consider medical source opinions about the nature and severity of impairments, including opinions about symptoms and their effects on functioning. However, these same rules do not allow us to rely solely on the judgment of the treating physician, as the commenters may have been suggesting. The rules identify factors we must consider in determining whether to accept a treating source's medical opinion, including an opinion about an individual's symptoms. We must also evaluate the symptom of fatigue under §§ 404.1529 and 416.929 of our regulations, which provide a variety of factors that we must consider. *Comment:* One commenter suggested that hepatitis C should be included in the hematological body system (7.00 and 107.00) since it is a blood-borne virus. *Response:* We did not adopt the comment because hepatitis is primarily a liver disorder and should be evaluated in the digestive disorders body system. *Comment:* One commenter stated that only those individuals who suffer from hepatitis C know the extent of their symptoms and only they should make judgments about the appropriate disability criteria for this disease. Another commenter recommended that we employ doctors who deal with a large number of patients with hepatitis. The commenter further recommended that we consult with the American Association for the Study of Liver Disease (AASLD) for a list of experts in the field. Another commenter indicated that some doctors who do not deal regularly with an indigent population or those that have retired from active practice may not have expertise in assessing hepatitis B and C. The commenter recommended that community health centers or other public entities should be used as a source of medical expertise. *Response:* As we note at the beginning of the comment and response section of this preamble, we reopened the comment period on the NPRM so that we could receive additional input on our rules for evaluating chronic liver disease. In addition to the outreach meeting we conducted in Cambridge, Massachusetts in November of 2004, at which a number of experts presented, we also asked other people with expertise to send us written comments. As a result of these efforts, we received many comments from medical specialists, advocates who specialize in chronic liver disease (including hepatitis B and C), and patients. We adopted many of the comments from these individuals. We generally agree with the commenters who indicated that it would be better if we used doctors in our program who have expertise in evaluating and treating individuals with hepatitis, or any chronic liver diseases, and we do use such experts whenever possible. We also asked the Institute of Medicine of the National Academies to study the issue of medical expertise in our disability evaluations and to recommend ways in which we can make better use of medical expertise in our case adjudications. They issued their report, *Improving the Social Security Disability Decision Process,* on February 13, 2007. 2 We are now considering their findings and recommendations for future improvements. 2 Institute of Medicine of the National Academies, Committee on Improving the Disability Decision Process. *Improving the Social Security Disability Decision Process.* Washington, DC: The National Academies Press, 2007. The report is available at *http://www.nap.edu/catalog.php?record_id=11859* . *Comment:* One commenter said that a Veterans Administration
(VA)disability rating of 100 percent due to hepatitis C should trigger automatic payment of Social Security disability benefits, as it does for disabled railroad employees. The commenter stated that this would save tax dollars and eliminate inequity between the two Federal programs. *Response:* We did not adopt the comment. Under sections 205(b)(1) and 1631(c)(1)(A) of the Act and §§ 404.1504 and 416.904 of our regulations, we are required to make a determination of disability independent of other agencies, such as the VA. Also, the disability standard the VA uses is not the same as our disability standard. However, our regulations do provide that we must consider determinations made by other agencies, including the VA, when we make our determinations and decisions (see §§ 404.1504, 404.1512(b)(5), 416.904, and 416.912(b)(5)). The reason that a decision awarding disability benefits for the Railroad Retirement Board sometimes applies to Social Security disability benefits is that there is a law that permits this presumption. Also, the determinations of disability that we accept use the same standard that we use for determining disability under our programs; in some cases, we make the determination of disability that the Railroad Retirement Board uses. *Comment:* One commenter suggested that hepatitis C should be a category for SSA disability at the point of diagnosis, stating that genotyping and treatment costs are prohibitive. This commenter stated that there was no help for those in the interim between contracting the disease and being near death under the current standards, and those individuals must go without any assistance for years until they meet the criteria in the chronic liver disease listings. Another commenter noted that the symptoms of hepatitis C virus infection make learning a new, less strenuous trade an unrealistic option if an individual does not become symptomatic until later in life. *Response:* While we understand the concern of the first commenter, we do not have the authority to do what the commenter asked. To qualify for Social Security Disability Insurance or Supplemental Security Income benefits, individuals must show that they are disabled under the definition of disability in the Act. Likewise, with regard to the second comment, we cannot pay disability benefits under the Act to individuals who are not currently disabled but who may become disabled in the future. However, at the fifth step of our sequential evaluation process (described near the end of this preamble) we do consider an individual's age, education, and work experience. At this step, the older an individual becomes, the more likely it is that we will find the individual unable to make an adjustment to other work; that is, the more likely we will find that the individual is disabled. *Comment:* One commenter recommended that we include a reference to hepatitis B under recurrent and persistent syndromes because chronic fatigue syndrome
(CFS)and depression are common symptoms and these functional limitations are debilitating and prevalent enough that they merit inclusion. *Response:* We did not adopt this comment but we did provide guidance on hepatitis B in final 5.00D4b and 105.00D4b. We did not include a reference to CFS in this final rule partly because it is a diagnosis of exclusion; that is, the diagnosis is not made if another physical or mental impairment, such as hepatitis, is present that can account for the symptoms. We explain our policy for evaluating CFS in Social Security Ruling 99-2p, “Titles II and XVI: Evaluating Cases Involving Chronic Fatigue Syndrome (CFS),” 83 FR 23380 (April 30, 1999). 3 3 The ruling is also available at *http://www.socialsecurity.gov/OP_Home/rulings/di/01/SSR99=02=di=01.html* . *Comment:* Many commenters stated that individuals undergoing interferon/ribavirin treatment for hepatitis C cannot work as the treatment seriously interferes with physical and mental stamina. One commenter observed that it was unfair to patients and employers to expect those who are undergoing treatment for hepatitis C to work due to the side effects of the treatment. They asked us to use compassion when we make decisions regarding changes in the chronic liver disease criteria. Another commenter stated that disability benefits would be helpful for patients when going through treatment or transplant as the symptoms attack on all fronts. *Response:* Partly in response to these comments, we included guidance in final 5.00D4 and 105.00D4 about the types of treatment for hepatitis C, including interferon/ribavirin treatment for adults and children, and the common adverse effects of treatment. However, we cannot automatically grant disability benefits if an individual is undergoing treatment for hepatitis B or C. Everyone reacts differently to the treatment and we must evaluate the disease progression, side effects of treatment, and response to treatment on an individual basis, unless in the future we can identify a diagnostic technique that would allow us to use a conclusive presumption that a case of hepatitis is so severe the individual cannot, as a practical matter, engage in any gainful activity. *Comment:* Some commenters suggested that we should include neuropsychological testing in the evaluation of any person seeking Social Security disability benefits for chronic liver disease, regardless of liver histology, because 50 percent of individuals with chronic hepatitis C experience cognitive impairment and chronic fatigue, even in individuals with mild liver disease. *Response:* We did not adopt the comment. Neuropsychological testing is highly specialized, and we generally try to exhaust all other or more direct avenues before we purchase such testing. Also, the testing examines fine areas of brain functioning and not the global functioning that we are generally most interested in for our disability evaluations. *Comment:* Several commenters suggested that the medical criteria be kept in line with the National Institutes of Health
(NIH)*Consensus Statement on the Management of Hepatitis C* (the Consensus Statement). 4 4 *http://consensus.nih.gov/2002/2002HepatitisC2002116PDF.pdf.* *Response:* With the additional material we added as described above, we believe that these final rules are consistent with the Consensus Statement to the extent appropriate for our disability evaluation criteria under the listings. There is a considerable amount of information in the Consensus Statement that is not specifically relevant to our disability adjudications (for example, discussion of treatment options and recommendations for more education and research) or that goes beyond what is appropriate to include in our listings. Listings 5.06 and 105.06 Inflammatory Bowel Disease *Comment:* We received many comments about IBD. Some commenters were concerned that the listings focused on recurrent intestinal obstruction or fistulae as practically the only criteria for disability due to IBD. The commenters agreed that most individuals with IBD respond to medical or surgical treatment and lead fairly normal lives, but they indicated that there is a subset of individuals who have recurring and persisting disease that is refractory to treatment and makes them unable to work. The commenters suggested that many of these individuals would not be covered by the proposed listings and would face difficulty with their claims. The commenters indicated that individuals with IBD can be incapacitated by persistent abdominal pain that may be unassociated with either obstruction or fistulae. They also said that profound fatigue due to the underlying inflammatory disease or the resulting and often complex nutritional deficiencies that accompany these disorders may be incapacitating. The commenters mentioned several symptoms and signs that could be refractory to medical and surgical treatment; for example, recurrent obstruction, anemia, fistulae, abscess, or other perineal or intra-abdominal complications. They also noted that recurrent and persisting severe diarrhea, with or without incontinence, makes it impossible for many individuals with IBD to sustain any activity for even modest periods of time. One of the commenters stated that many of the most challenging symptoms of IBD cannot be directly quantified by the usual objective studies, including imaging or laboratory tests, resulting in our excluding relief to many who need and deserve it. Another commenter stated that we did not sufficiently address recurrent diarrhea and bowel incontinence that do not lead to weight loss or malnutrition. This commenter noted that these conditions may require proximity to a restroom or may interfere with the ability to work in public. The commenter acknowledged that they are “probably not” listings issues, but said that there did not appear to be sufficient guidance for disability adjudicators on how to consider these issues. Two individuals who have IBD and who had filed claims for disability benefits described how profound the disease was for them and expressed concern about any changes we might make that would make it more difficult to qualify. One of these commenters, who has Crohn's disease, described the embarrassment of the disease and the other kinds of illnesses she has had that are associated with the disease and its treatment. The other commenter said that he was against any change in our present regulations that would make it more difficult for a person with IBD to qualify for disability benefits. He said that the proposed changes would cause an added hardship for individuals with IBD. *Response:* We adopted most of the comments and completely revised proposed listings 5.06 and 105.06 and the introductory text for IBD. In response to these comments, we added final 5.00E in the introductory text in part A and revised and expanded proposed 105.00F4 (final 105.00E) in part B to provide more detailed guidance for documenting and evaluating IBD in adults and children. We also added criteria in final listings 5.06 and 105.06 to include some of the other manifestations of IBD mentioned by the commenters. The new sections in the introductory text include most of the examples of symptoms and signs of IBD that the commenters mentioned, as well as others that the commenters did not specifically mention, including a longer list of potential manifestations in other body systems than we included under the prior listings. In addition, we revised proposed listings 5.06 and 105.06 by adding a list of six manifestations in paragraph B of final listing 5.06 and a list of five manifestations in paragraph B of final listing 105.06. We did not include criteria for manifestations like severe diarrhea or fecal incontinence. We believe that the effect of severe diarrhea is best identified at the listing level by the criteria in 5.06B1 and 105.06B1 (anemia with a hemoglobin of less than 10 g/dL) and 5.06B2 and 105.06B2 (serum albumin of 3.0g/dL or less). We agree that there are other consequences of severe diarrhea or fecal incontinence, such as the necessity to be near a restroom or the difficulty of sustaining activities for even modest amounts of time, that may significantly affect an individual's ability to work or a child's ability to function in an age-appropriate manner. However, we believe these consequences of IBD are more appropriately addressed on an individual case basis when we assess residual functional capacity or functional equivalence. In considering these comments, we also noted that there were unintentional differences between proposed listings 5.06B and 105.06B, and that we included proposed 105.00F4 (final 105.00E) specifically for children but no corresponding guidance in proposed part A for adults. In making the revisions in the final rules, we determined that, with minor exceptions, there was no need for the information in part A to be different from the information in part B. Therefore, we added final 5.00E to correspond to final 105.00E, and we made a number of editorial changes to 105.00E for consistency between the two sections. Final 5.00E and 105.00E and final listings 5.06 and 105.06 are the same, except for the minor differences necessary to address childhood disability that we have already noted in the explanations of the final rules at the beginning of this preamble. With regard to the last comments expressing concern that our changes may make it more difficult for individuals with IBD to qualify for disability benefits, we believe that the changes we are making in these final rules are an improvement over the proposed rules that address many of the commenters' concerns. Also, the final rules are consistent with advances in medical science and technology, our adjudicative experience, and our goal of appropriately finding all individuals who are unable to perform any gainful activity disabled under the listings. *Comment:* One commenter stated that he was “perplexed” by the statement in the preamble to the NPRM that “anemia, when caused by inflammatory bowel disease, is not an appropriate indicator of listing-level severity.” (See 66 FR at 57013.) The commenter noted that we have long held that chronic anemia with persistent hematocrit below 30 percent is of listing-level severity. The commenter asserted that people with chronic anemia are tired, fatigued, and have poor stamina, and that there are other factors that affect their ability to function. Another commenter stated that our proposed reasons for changes to the listing were inaccurate. The commenter questioned our statement that “a gradual reduction in hemoglobin, even to very low levels, is often well tolerated and does not correlate with ability to function.” (See 66 FR at 57013.) The commenter stated that studies show that quality of life and functional status correlate with hemoglobin levels. *Response:* It is true that we have long had listings that are met with anemia demonstrated by hematocrits of 30 percent or less. We also agree that anemia may cause the kinds of symptoms listed. However, listing criteria must represent a level of severity that prevents “any gainful activity.” We cannot presume, based only on low hematocrit (or hemoglobin) levels, that the symptoms referred to will be present or sufficiently severe in all cases to determine that an individual is disabled. The body adapts to a gradual lowering of hematocrit (or hemoglobin) levels, therefore there is not a strong correlation between hematocrit levels and the ability to function. We removed a similar criterion from the genitourinary system listings for the same reason. See 70 FR 38582, 38586 (2005). However, we have included a criterion for anemia with hemoglobin of less than 10 g/dL as one of the criteria of final listings 5.06B and 105.06B. We believe that it is an appropriate criterion when it occurs in conjunction with at least one of the other manifestations of IBD listed in the final rules. We are using hemoglobin (measured in units of g/dL) rather than hematocrit (percent) in assessing the degree of anemia as the former laboratory measurement is more accurate. Listing 5.08 Weight Loss Due to Any Digestive Disorder *Comment:* A commenter suggested that we include guidance that height be measured without shoes in the introductory text to the listings. Another commenter noted that, although we explained in the NPRM how to round inches and centimeters, we did not explain how to round pounds and kilograms. *Response:* We adopted the first comment. Because the final listings are based on BMI, we now explain in final 5.00G2a that measurements of both weight and height must be made without shoes. We did not need to adopt the second comment because we changed the weight loss criteria to BMI measurements and as a consequence removed the proposed rule for rounding. Because of this change, we also did not include the height and weight tables from proposed listing 5.08. *Comment:* Two commenters believed that the height and weight tables in the regulations did not reflect the chronicity and severity of disease in individuals with IBD who are routinely treated with corticosteroids. The commenters indicated that corticosteroids lead to substantial salt and water retention and increased fatty tissue accumulation, so that nutritionally depleted patients may have artificially sustained weight. They also noted that it is not uncommon for patients with crippling symptoms, hypoalbuminemia, and nutritional deficiencies to have “normal” or increased weight due to the corticosteroids. *Response:* We agree with the commenters that individuals with IBD may have “normal” weight; however, final listing 5.08 is specifically for individuals with weight loss as a consequence of a digestive disorder. Individuals whose impairments do not meet listing 5.08 may still meet the criteria of another listing. As we explained earlier, we have significantly expanded final listings 5.06 and 105.06 to include criteria for many of the symptoms and signs of IBD. For example, we have included criteria in final 5.06B1 and B8 under which individuals with IBD who are nutritionally depleted but have sustained weight may qualify. Also in response to these comments, we have provided examples in final 5.00E2 and 105.00E2 of signs and laboratory findings that may demonstrate malnutrition in the absence of weight loss, such as edema, anemia, hypoalbuminemia, hypokalemia, hypocalcemia, and hypomagnesemia. If the impairment does not meet or medically equal a listing, we will continue our evaluation through the sequential evaluation process. Listing 105.08 Malnutrition *Comment:* Two commenters suggested that we move the guidelines for what is needed to document malnutrition from proposed 105.00F of the introductory text into listing 105.08 because they were so specific. *Response:* We adopted the comments and included three of the proposed examples as criteria in final listing 105.08A. We did not include the example of steatorrhea for reasons we have already explained. Also, as explained earlier, we changed the criteria in final 105.08A1 for anemia to a hemoglobin of less than 10.0 g/dL. *Comment:* One commenter suggested that we specify that we use the most current edition when we refer to the CDC chart in listing 105.08 and in the introductory text. This would ensure that the listing criteria continue to reflect the latest guidance. *Response:* We adopted the comment. The change appears in final 105.00G2 and in final listings 105.08B1 and B2. Listings 5.09 and 105.09 *Comment:* One commenter suggested that as long as an individual is required to take anti-rejection drugs after a transplanted organ, at the very least, medical benefits should continue. *Response:* We did not adopt this comment because we do not have the authority to do what the commenter asked. We can only pay benefits to individuals who are under a disability as defined in the Act and our regulations, and Medicare and Medicaid benefits generally depend on continuing entitlement to disability benefits. *Comment:* One commenter stated that disability benefits should last for 18 months after a liver transplant because transplants do not remedy the underlying cause of the disease, such as viral hepatitis. *Response:* We did not adopt this comment because in our experience 12 months is a sufficient period after which we need to reevaluate each individual's status to see if he or she is still disabled. This is the period we provide for most other transplants. See, for example, listings 3.11 (lung), 4.09 (heart), 6.02 (kidney), 7.17 (aplastic anemia with bone marrow or stem cell transplantation), and 13.05 (lymphoma with bone marrow or stem cell transplantation). Also, we published the liver transplant listing in 2002 in another notice; these final rules do not make any substantive changes to that rule, only editorial revisions. And as we have already noted, the 1-year rule does not mean that an individual's disability automatically ends 1 year after the transplant. Our rule is only that after 1 year we generally will consider whether the individual is still disabled. Our existing rules also allow our adjudicators to set a later diary date for review of continuing disability if the facts of the case warrant it. Other Comments *Comment:* One commenter did not support our proposal to remove reference listings. The commenter believed that it is easier for our adjudicators to recognize the need to document and evaluate an impairment if it is also included in the listing itself. The commenter also noted that reference listings assure the public and their physicians that a specific impairment has been considered. *Response:* We did not adopt the comment. With one exception, all of the reference listings in the part A digestive disorder listings were to listing 5.08, the listing for weight loss. We believe that our adjudicators, the public, and their physicians will easily see that final listing 5.08 is applicable to weight loss due to any digestive disorder. The only exception in part A was for hepatic encephalopathy, which cross-referred to listing 12.02; however, we have now added a listing specifically for hepatic encephalopathy (final listing 5.05F) in the digestive disorders listings. Part B was essentially the same, with most reference listings cross-referring to listing 105.08, and a reference listing for hepatic encephalopathy, which we now list in final listing 105.05F. Prior listing 105.07C also referred to growth impairment listing 100.03. We are removing that reference listing without replacement; however, as we have already noted, we have added references to growth impairment in the introductory text to these listings and we believe that this is sufficient. We do not agree that the prior reference listings were especially helpful to adjudicators. All individuals who would qualify under any of the provisions of our prior reference listings will continue to qualify under other listings or the rules for medical or functional equivalence for children. Also, because reference listings are redundant, we are removing them from all the body systems as we revise them; therefore, we would be inconsistent if we retained reference listings only in this body system. Our adjudicators are aware that the listings do not include all possible disabling impairments, so they review all of the evidence, including the claimant's allegations and the medical evidence from treating and other medical sources, to identify the impairments they must evaluate. *Comment:* One commenter suggested that we include some discussion in the introductory text of how to evaluate digestive impairments for which there is no specific listing, such as peptic ulcer disease and chronic pancreatitis. *Response:* We did not add specific information in the introductory text about peptic ulcer disease or chronic pancreatitis because we prefer to include information that is relevant to the application of these listings. However, we do make it clear that we may evaluate digestive disorders that are not specifically named in the introductory text under this body system. *Comment:* One commenter asked that we consider the unique health risks and cultural issues that affect Asian Americans and immigrant communities. *Response:* We did not adopt the comment. We are not aware of any current medical distinction that supports the suggestion. Additional Information What programs do these final rules affect? These final rules affect disability determinations and decisions that we make under title II and title XVI of the Act. In addition, to the extent that Medicare entitlement and Medicaid eligibility are based on whether you qualify for disability benefits under title II or title XVI, these final rules also affect the Medicare and Medicaid programs. Who can get disability benefits? Under title II of the Act, we provide for the payment of disability benefits if you are disabled and belong to one of the following three groups: • Workers insured under the Act; • Children of insured workers; and • Widows, widowers, and surviving divorced spouses (see § 404.336) of insured individuals. Under title XVI of the Act, we provide for Supplemental Security Income
(SSI)payments on the basis of disability if you are disabled and have limited income and resources. How do we define disability? Under both the title II and title XVI programs, disability must be the result of any medically determinable physical or mental impairment or combination of impairments that is expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months. Our definitions of disability are shown in the following table: If you file a claim under . . . And you are . . . Disability means you have a medically determinable impairment(s) as described above that results in . . . title II an adult or a child the inability to do any substantial gainful activity (SGA). title XVI an individual age 18 or older the inability to do any SGA. title XVI an individual under age 18 marked and severe functional limitations. How do we decide whether you are disabled? To decide whether you are disabled under the Act, we use a five-step “sequential evaluation process,” which we describe in our regulations at §§ 404.1520 and 416.920. We follow the five steps in order and stop as soon as we can make a determination or decision. The steps are: 1. Are you working, and is the work you are doing substantial gainful activity? If you are working and the work you are doing is substantial gainful activity, we will find that you are not disabled, regardless of your medical condition or your age, education, and work experience. If you are not, we will go on to step 2. 2. Do you have a “severe” impairment? If you do not have an impairment or combination of impairments that significantly limits your physical or mental ability to do basic work activities, we will find that you are not disabled. If you do, we will go on to step 3. 3. Do you have an impairment(s) that meets or medically equals the severity of an impairment in the listings? If you do, and the impairment(s) meets the duration requirement, we will find that you are disabled. If you do not, we will go on to step 4. 4. Do you have the residual functional capacity to do your past relevant work? If you do, we will find that you are not disabled. If you do not, we will go on to step 5. 5. Does your impairment(s) prevent you from doing any other work that exists in significant numbers in the national economy, considering your residual functional capacity, age, education, and work experience? If it does, and it meets the duration requirement, we will find that you are disabled. If it does not, we will find that you are not disabled. We use a different sequential evaluation process for children who apply for payments based on disability under SSI. If you are already receiving benefits, we also use a different sequential evaluation process when we decide whether your disability continues. See §§ 404.1594, 416.924, 416.994, and 416.994a of our regulations. However, all of these processes also include steps at which we consider whether your impairment meets or medically equals one of our listings. What are the listings? The listings are examples of impairments that we consider severe enough to prevent you as an adult from doing any gainful activity. If you are a child seeking SSI payments based on disability, the listings describe impairments that we consider severe enough to result in marked and severe functional limitations. Although the listings are contained only in appendix 1 to subpart P of part 404 of our regulations, we incorporate them by reference in the SSI program in § 416.925 of our regulations, and apply them to claims under both title II and title XVI of the Act. How do we use the listings? The listings are in two parts. There are listings for adults (part A) and for children (part B). If you are an individual age 18 or over, we apply the listings in part A when we assess your claim, and we never use the listings in part B. If you are an individual under age 18, we first use the criteria in part B of the listings. Part B contains criteria that apply only to individuals who are under age 18. If your impairment does not meet the criteria in part B, we may then use the criteria in part A when those criteria give appropriate consideration to the effects of the impairment(s) in children. (See §§ 404.1525 and 416.925.) If your impairment(s) does not meet any listing, we will also consider whether it medically equals any listing; that is, whether it is as medically severe as an impairment in the listings. (See §§ 404.1526 and 416.926.) What if you do not have an impairment(s) that meets or medically equals a listing? We use the listings only to decide that you are disabled or that you are still disabled. We will not deny your claim or decide that you no longer qualify for benefits because your impairment(s) does not meet or medically equal a listing. If you are not working and you have a severe impairment(s) that does not meet or medically equal any listing, we may still find you disabled based on other rules in the sequential evaluation process that we use to evaluate all disability claims. Likewise, we will not decide that your disability has ended only because your impairment(s) does not meet or medically equal a listing. Also, when we conduct reviews to determine whether your disability continues, we will not find that your disability has ended because we have changed a listing. Our regulations explain that, when we change our listings, we continue to use our prior listings when we review your case, if you qualified for disability benefits or SSI payments based on our determination or decision that your impairment(s) met or medically equaled a listing. In these cases, we determine whether you have experienced medical improvement, and if so, whether the medical improvement is related to the ability to work. If your condition(s) has medically improved so that you no longer meet or medically equal the prior listing, we evaluate your case further to determine whether you are currently disabled. We may find that you are currently disabled, depending on the full circumstances of your case. See §§ 404.1594(c)(3)(i) and 416.994(b)(2)(iv)(A). If you are a child who is eligible for SSI payments, we follow a similar rule after we decide that you have experienced medical improvement in your condition(s). See § 416.994a(b)(2). What is our authority to make rules and set procedures for determining whether a person is disabled under the statutory definition? Section 205(a) of the Act and, by reference to section 205(a), section 1631(d)(1) provide that: The Commissioner of Social Security shall have full power and authority to make rules and regulations and to establish procedures, not inconsistent with the provisions of this title, which are necessary or appropriate to carry out such provisions, and shall adopt reasonable and proper rules and regulations to regulate and provide for the nature and extent of the proofs and evidence and the method of taking and furnishing the same in order to establish the right to benefits hereunder. Regulatory Procedures Executive Order 12866 We have consulted with the Office of Management and Budget
(OMB)and determined that these final rules meet the criteria for a significant regulatory action under Executive Order 12866, as amended. Thus, they were subject to OMB review. Our proposed rules met the criteria for an economically significant regulatory action under Executive Order 12866. They were also “major” rules under 5 U.S.C. 801ff. For the reasons stated earlier in this preamble, these final rules reflect changes we have made from the proposed rules. Based on these changes, we estimate that these final rules will result in program savings but will not constitute an economically significant regulatory action or “major” rules. We are projecting savings in program expenditures as described below. Program Savings 1. Title II We estimate that these final rules would result in reduced program outlays resulting in the following savings (in millions of dollars) to the title II program ($132 million total in a 5-year period beginning in FY 2008). FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Total −$10 −$19 −$27 −$35 −$42 −$132 5 5 5-year total may not be equal to the sum of the annual totals due to rounding. 2. Title XVI We estimate that these final rules will result in reduced program outlays resulting in the following savings (in millions of dollars) to the SSI program ($25 million in a 5-year period beginning in FY 2008). FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Total −$1 −$3 −$5 −$8 −$8 −$25 6 6 Federal SSI payments due on October 1st in fiscal year 2012 are included with payments for the prior fiscal year. Regulatory Flexibility Act We certify that these final rules will not have a significant economic impact on a substantial number of small entities because they affect only individuals. Thus, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required. Paperwork Reduction Act The Paperwork Reduction Act
(PRA)of 1995 says that no persons are required to respond to a collection of information unless it displays a valid OMB control number. In accordance with the PRA, SSA is providing notice that OMB has approved the information collection requirements contained in Part A, 5.00 and Part B, 105.00 of these final rules. The OMB Control Number for this collection is 0960-0642 expiring March 31, 2008. (Catalog of Federal Domestic Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; and 96.006, Supplemental Security Income) List of Subjects 20 CFR Part 404 Administrative practice and procedure, Death benefits, Blind, Disability benefits, Old-age, survivors, and disability insurance, Reporting and recordkeeping requirements, Social Security. 20 CFR Part 416 Administrative practice and procedure, Aged, Blind, Disability benefits, Public assistance programs, Reporting and recordkeeping requirements, Supplemental Security Income (SSI). Dated: June 25, 2007. Michael J. Astrue, Commissioner of Social Security. For the reasons set forth in the preamble, subpart P of part 404 and subpart I of part 416 of chapter III of title 20 of the Code of Federal Regulations are amended as set forth below: PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-) 1. The authority citation for subpart P of part 404 continues to read as follows: Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a) and (i), 222(c), 223, 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a) and (i), 422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 Stat. 2105, 2189; sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note). Appendix 1 to Subpart P of Part 404—Listing of Impairments [Amended] 2. Revise item 6 of the introductory text before part A of appendix 1 to subpart P of part 404 to read as follows: Appendix 1 to Subpart P of Part 404—Listing of Impairments 6. Digestive System (5.00 and 105.00): October 19, 2012. 3. Revise section 5.00 in part A of appendix 1 to subpart P of part 404 to read as follows: Appendix 1 to Subpart P of Part 404—Listing of Impairments Part A 5.00 DIGESTIVE SYSTEM A. *What kinds of disorders do we consider in the digestive system?* Disorders of the digestive system include gastrointestinal hemorrhage, hepatic (liver) dysfunction, inflammatory bowel disease, short bowel syndrome, and malnutrition. They may also lead to complications, such as obstruction, or be accompanied by manifestations in other body systems. B. *What documentation do we need?* We need a record of your medical evidence, including clinical and laboratory findings. The documentation should include appropriate medically acceptable imaging studies and reports of endoscopy, operations, and pathology, as appropriate to each listing, to document the severity and duration of your digestive disorder. Medically acceptable imaging includes, but is not limited to, x-ray imaging, sonography, computerized axial tomography (CAT scan), magnetic resonance imaging (MRI), and radionuclide scans. *Appropriate* means that the technique used is the proper one to support the evaluation and diagnosis of the disorder. The findings required by these listings must occur within the period we are considering in connection with your application or continuing disability review. C. *How do we consider the effects of treatment?* 1. Digestive disorders frequently respond to medical or surgical treatment; therefore, we generally consider the severity and duration of these disorders within the context of prescribed treatment. 2. We assess the effects of treatment, including medication, therapy, surgery, or any other form of treatment you receive, by determining if there are improvements in the symptoms, signs, and laboratory findings of your digestive disorder. We also assess any side effects of your treatment that may further limit your functioning. 3. To assess the effects of your treatment, we may need information about: a. The treatment you have been prescribed (for example, the type of medication or therapy, or your use of parenteral (intravenous) nutrition or supplemental enteral nutrition via a gastrostomy); b. The dosage, method, and frequency of administration; c. Your response to the treatment; d. Any adverse effects of such treatment; and e. The expected duration of the treatment. 4. Because the effects of treatment may be temporary or long-term, in most cases we need information about the impact of your treatment, including its expected duration and side effects, over a sufficient period of time to help us assess its outcome. When adverse effects of treatment contribute to the severity of your impairment(s), we will consider the duration or expected duration of the treatment when we assess the duration of your impairment(s). 5. If you need parenteral (intravenous) nutrition or supplemental enteral nutrition via a gastrostomy to avoid debilitating complications of a digestive disorder, this treatment will not, in itself, indicate that you are unable to do any gainful activity, except under 5.07, short bowel syndrome (see 5.00F). 6. If you have not received ongoing treatment or have not had an ongoing relationship with the medical community despite the existence of a severe impairment(s), we will evaluate the severity and duration of your digestive impairment on the basis of the current medical and other evidence in your case record. If you have not received treatment, you may not be able to show an impairment that meets the criteria of one of the digestive system listings, but your digestive impairment may medically equal a listing or be disabling based on consideration of your residual functional capacity, age, education, and work experience. D. *How do we evaluate chronic liver disease?* 1. *General. Chronic liver disease* is characterized by liver cell necrosis, inflammation, or scarring (fibrosis or cirrhosis), due to any cause, that persists for more than 6 months. Chronic liver disease may result in portal hypertension, cholestasis (suppression of bile flow), extrahepatic manifestations, or liver cancer. (We evaluate liver cancer under 13.19.) Significant loss of liver function may be manifested by hemorrhage from varices or portal hypertensive gastropathy, ascites (accumulation of fluid in the abdominal cavity), hydrothorax (ascitic fluid in the chest cavity), or encephalopathy. There can also be progressive deterioration of laboratory findings that are indicative of liver dysfunction. Liver transplantation is the only definitive cure for end stage liver disease (ESLD). 2. *Examples of chronic liver disease* include, but are not limited to, chronic hepatitis, alcoholic liver disease, non-alcoholic steatohepatitis (NASH), primary biliary cirrhosis (PBC), primary sclerosing cholangitis (PSC), autoimmune hepatitis, hemochromatosis, drug-induced liver disease, Wilson's disease, and serum alpha-1 antitrypsin deficiency. Acute hepatic injury is frequently reversible, as in viral, drug-induced, toxin-induced, alcoholic, and ischemic hepatitis. In the absence of evidence of a chronic impairment, episodes of acute liver disease do not meet 5.05. 3. *Manifestations of chronic liver disease.* a. *Symptoms* may include, but are not limited to, pruritis (itching), fatigue, nausea, loss of appetite, or sleep disturbances. Symptoms of chronic liver disease may have a poor correlation with the severity of liver disease and functional ability. b. *Signs* may include, but are not limited to, jaundice, enlargement of the liver and spleen, ascites, peripheral edema, and altered mental status. c. *Laboratory findings* may include, but are not limited to, increased liver enzymes, increased serum total bilirubin, increased ammonia levels, decreased serum albumin, and abnormal coagulation studies, such as increased International Normalized Ratio
(INR)or decreased platelet counts. Abnormally low serum albumin or elevated INR levels indicate loss of synthetic liver function, with increased likelihood of cirrhosis and associated complications. However, other abnormal lab tests, such as liver enzymes, serum total bilirubin, or ammonia levels, may have a poor correlation with the severity of liver disease and functional ability. A liver biopsy may demonstrate the degree of liver cell necrosis, inflammation, fibrosis, and cirrhosis. If you have had a liver biopsy, we will make every reasonable effort to obtain the results; however, we will not purchase a liver biopsy. Imaging studies (CAT scan, ultrasound, MRI) may show the size and consistency (fatty liver, scarring) of the liver and document ascites (see 5.00D6). 4. *Chronic viral hepatitis infections* . a. *General* .
(i)*Chronic viral hepatitis* infections are commonly caused by hepatitis C virus (HCV), and to a lesser extent, hepatitis B virus (HBV). Usually, these are slowly progressive disorders that persist over many years during which the symptoms and signs are typically nonspecific, intermittent, and mild (for example, fatigue, difficulty with concentration, or right upper quadrant pain). Laboratory findings (liver enzymes, imaging studies, liver biopsy pathology) and complications are generally similar in HCV and HBV. The spectrum of these chronic viral hepatitis infections ranges widely and includes an asymptomatic state; insidious disease with mild to moderate symptoms associated with fluctuating liver tests; extrahepatic manifestations; cirrhosis, both compensated and decompensated; ESLD with the need for liver transplantation; and liver cancer. Treatment for chronic viral hepatitis infections varies considerably based on medication tolerance, treatment response, adverse effects of treatment, and duration of the treatment. Comorbid disorders, such as HIV infection, may affect the clinical course of viral hepatitis infection(s) or may alter the response to medical treatment.
(ii)We evaluate all types of chronic viral hepatitis infections under 5.05 or any listing in an affected body system(s). If your impairment(s) does not meet or medically equal a listing, we will consider the effects of your hepatitis when we assess your residual functional capacity. b. *Chronic hepatitis B virus
(HBV)infection.*
(i)*Chronic HBV* infection is diagnosed by the detection of hepatitis B surface antigen (HBsAg) in the blood for at least 6 months. In addition, detection of the hepatitis B envelope antigen (HBeAg) suggests an increased likelihood of progression to cirrhosis and ESLD.
(ii)The therapeutic goal of treatment is to suppress HBV replication and thereby prevent progression to cirrhosis and ESLD. Treatment usually includes a combination of interferon injections and oral antiviral agents. Common adverse effects of treatment are the same as noted in 5.00D4c(ii) for HCV, and generally end within a few days after treatment is discontinued. c. *Chronic hepatitis C virus
(HCV)infection.*
(i)*Chronic HCV infection* is diagnosed by the detection of hepatitis C viral RNA in the blood for at least 6 months. Documentation of the therapeutic response to treatment is also monitored by the quantitative assay of serum HCV RNA (“HCV viral load”). Treatment usually includes a combination of interferon injections and oral ribavirin; whether a therapeutic response has occurred is usually assessed after 12 weeks of treatment by checking the HCV viral load. If there has been a substantial reduction in HCV viral load (also known as early viral response, or EVR), this reduction is predictive of a sustained viral response with completion of treatment. Combined therapy is commonly discontinued after 12 weeks when there is no early viral response, since in that circumstance there is little chance of obtaining a sustained viral response (SVR). Otherwise, treatment is usually continued for a total of 48 weeks.
(ii)Combined interferon and ribavirin treatment may have significant adverse effects that may require dosing reduction, planned interruption of treatment, or discontinuation of treatment. Adverse effects may include: Anemia (ribavirin-induced hemolysis), neutropenia, thrombocytopenia, fever, cough, fatigue, myalgia, arthralgia, nausea, loss of appetite, pruritis, and insomnia. Behavioral side effects may also occur. Influenza-like symptoms are generally worse in the first 4 to 6 hours after each interferon injection and during the first weeks of treatment. Adverse effects generally end within a few days after treatment is discontinued. d. *Extrahepatic manifestations of HBV and HCV.* In addition to their hepatic manifestations, both HBV and HCV may have significant extrahepatic manifestations in a variety of body systems. These include, but are not limited to: Keratoconjunctivitis (sicca syndrome), glomerulonephritis, skin disorders (for example, lichen planus, porphyria cutanea tarda), neuropathy, and immune dysfunction (for example, cryoglobulinemia, Sjögren's syndrome, and vasculitis). The extrahepatic manifestations of HBV and HCV may not correlate with the severity of your hepatic impairment. If your impairment(s) does not meet or medically equal a listing in an affected body system(s), we will consider the effects of your extrahepatic manifestations when we assess your residual functional capacity. 5. *Gastrointestinal hemorrhage* (5.02 and 5.05A). Gastrointestinal hemorrhaging can result in hematemesis (vomiting of blood), melena (tarry stools), or hematochezia (bloody stools). Under 5.02, the required transfusions of at least 2 units of blood must be at least 30 days apart and occur at least three times during a consecutive 6-month period. Under 5.05A, *hemodynamic instability* is diagnosed with signs such as pallor (pale skin), diaphoresis (profuse perspiration), rapid pulse, low blood pressure, postural hypotension (pronounced fall in blood pressure when arising to an upright position from lying down) or syncope (fainting). Hemorrhaging that results in hemodynamic instability is potentially life-threatening and therefore requires hospitalization for transfusion and supportive care. Under 5.05A, we require only one hospitalization for transfusion of at least 2 units of blood. 6. *Ascites or hydrothorax* (5.05B) indicates significant loss of liver function due to chronic liver disease. We evaluate ascites or hydrothorax that is not attributable to other causes under 5.05B. The required findings must be present on at least two evaluations at least 60 days apart within a consecutive 6-month period and despite continuing treatment as prescribed. 7. *Spontaneous bacterial peritonitis* (5.05C) is an infectious complication of chronic liver disease. It is diagnosed by ascitic peritoneal fluid that is documented to contain an absolute neutrophil count of at least 250 cells/mm 3 . The required finding in 5.05C is satisfied with one evaluation documenting peritoneal fluid infection. We do not evaluate other causes of peritonitis that are unrelated to chronic liver disease, such as tuberculosis, malignancy, and perforated bowel, under this listing. We evaluate these other causes of peritonitis under the appropriate body system listings. 8. *Hepatorenal syndrome* (5.05D) is defined as functional renal failure associated with chronic liver disease in the absence of underlying kidney pathology. Hepatorenal syndrome is documented by elevation of serum creatinine, marked sodium retention, and oliguria (reduced urine output). The requirements of 5.05D are satisfied with documentation of any one of the three laboratory findings on one evaluation. We do not evaluate known causes of renal dysfunction, such as glomerulonephritis, tubular necrosis, drug-induced renal disease, and renal infections, under this listing. We evaluate these other renal impairments under 6.00ff. 9. *Hepatopulmonary syndrome* (5.05E) is defined as arterial deoxygenation (hypoxemia) that is associated with chronic liver disease due to intrapulmonary arteriovenous shunting and vasodilatation in the absence of other causes of arterial deoxygenation. Clinical manifestations usually include dyspnea, orthodeoxia (increasing hypoxemia with erect position), platypnea (improvement of dyspnea with flat position), cyanosis, and clubbing. The requirements of 5.05E are satisfied with documentation of any one of the findings on one evaluation. In 5.05E1, we require documentation of the altitude of the testing facility because altitude affects the measurement of arterial oxygenation. We will not purchase the specialized studies described in 5.05E2; however, if you have had these studies at a time relevant to your claim, we will make every reasonable effort to obtain the reports for the purpose of establishing whether your impairment meets 5.05E2. 10. *Hepatic encephalopathy* (5.05F). a. *General.* Hepatic encephalopathy usually indicates severe loss of hepatocellular function. We define hepatic encephalopathy under 5.05F as a recurrent or chronic neuropsychiatric disorder, characterized by abnormal behavior, cognitive dysfunction, altered state of consciousness, and ultimately coma and death. The diagnosis is established by changes in mental status associated with fleeting neurological signs, including “flapping tremor” (asterixis), characteristic electroencephalographic
(EEG)abnormalities, or abnormal laboratory values that indicate loss of synthetic liver function. We will not purchase the EEG testing described in 5.05F3b; however, if you have had this test at a time relevant to your claim, we will make every reasonable effort to obtain the report for the purpose of establishing whether your impairment meets 5.05F. b. *Acute encephalopathy.* We will not evaluate your acute encephalopathy under 5.05F if it results from conditions other than chronic liver disease, such as vascular events and neoplastic diseases. We will evaluate these other causes of acute encephalopathy under the appropriate body system listings. 11. *End stage liver disease
(ESLD)documented by scores from the SSA Chronic Liver Disease (SSA CLD) calculation* (5.05G). a. We will use the SSA CLD score to evaluate your ESLD under 5.05G. We explain how we calculate the SSA CLD score in b. through g. of this section. b. To calculate the SSA CLD score, we use a formula that includes three laboratory values: Serum total bilirubin (mg/dL), serum creatinine (mg/dL), and International Normalized Ratio (INR). The formula for the SSA CLD score calculation is: 9.57 × [Log e (serum creatinine mg/dL)] +3.78 × [Log e (serum total bilirubin mg/dL)] +11.2 × [Log e (INR)] +6.43 c. When we indicate “Log e ” in the formula for the SSA CLD score calculation, we mean the “base *e* logarithm” or “natural logarithm”
(ln)of a numerical laboratory value, not the “base 10 logarithm” or “common logarithm”
(log)of the laboratory value, and not the actual laboratory value. For example, if an individual has laboratory values of serum creatinine 1.2 mg/dL, serum total bilirubin 2.2 mg/dL, and INR 1.0, we would compute the SSA CLD score as follows: 9.57 × [Log e (serum creatinine 1.2 mg/dL) = 0.182] +3.78 × [Log e (serum total bilirubin 2.2 mg/dL) = 0.788] +11.2 × [Log e (INR 1.0) = 0] * +6.43* ___ = 1.74 + 2.98 + 0 + 6.43 = 11.15, which is then rounded to an SSA CLD score of 11. d. For any SSA CLD score calculation, all of the required laboratory values must have been obtained within 30 days of each other. If there are multiple laboratory values within the 30-day interval for any given laboratory test (serum total bilirubin, serum creatinine, or INR), we will use the highest value for the SSA CLD score calculation. We will round all laboratory values less than 1.0 up to 1.0. e. Listing 5.05G requires two SSA CLD scores. The laboratory values for the second SSA CLD score calculation must have been obtained at least 60 days after the latest laboratory value for the first SSA CLD score and within the required 6-month period. We will consider the date of each SSA CLD score to be the date of the first laboratory value used for its calculation. f. If you are in renal failure or on dialysis within a week of any serum creatinine test in the period used for the SSA CLD calculation, we will use a serum creatinine of 4, which is the maximum serum creatinine level allowed in the calculation, to calculate your SSA CLD score. g. If you have the two SSA CLD scores required by 5.05G, we will find that your impairment meets the criteria of the listing from at least the date of the first SSA CLD score. 12. *Liver transplantation* (5.09) may be performed for metabolic liver disease, progressive liver failure, life-threatening complications of liver disease, hepatic malignancy, and acute fulminant hepatitis (viral, drug-induced, or toxin-induced). We will consider you to be disabled for 1 year from the date of the transplantation. Thereafter, we will evaluate your residual impairment(s) by considering the adequacy of post-transplant liver function, the requirement for post-transplant antiviral therapy, the frequency and severity of rejection episodes, comorbid complications, and all adverse treatment effects. E. *How do we evaluate inflammatory bowel disease (IBD)?* 1. *Inflammatory bowel disease* (5.06) includes, but is not limited to, Crohn's disease and ulcerative colitis. These disorders, while distinct entities, share many clinical, laboratory, and imaging findings, as well as similar treatment regimens. Remissions and exacerbations of variable duration are the hallmark of IBD. Crohn's disease may involve the entire alimentary tract from the mouth to the anus in a segmental, asymmetric fashion. Obstruction, stenosis, fistulization, perineal involvement, and extraintestinal manifestations are common. Crohn's disease is rarely curable and recurrence may be a lifelong problem, even after surgical resection. In contrast, ulcerative colitis only affects the colon. The inflammatory process may be limited to the rectum, extend proximally to include any contiguous segment, or involve the entire colon. Ulcerative colitis may be cured by total colectomy. 2. Symptoms and signs of IBD include diarrhea, fecal incontinence, rectal bleeding, abdominal pain, fatigue, fever, nausea, vomiting, arthralgia, abdominal tenderness, palpable abdominal mass (usually inflamed loops of bowel) and perineal disease. You may also have signs or laboratory findings indicating malnutrition, such as weight loss, edema, anemia, hypoalbuminemia, hypokalemia, hypocalcemia, or hypomagnesemia. 3. IBD may be associated with significant extraintestinal manifestations in a variety of body systems. These include, but are not limited to, involvement of the eye (for example, uveitis, episcleritis, iritis); hepatobiliary disease (for example, gallstones, primary sclerosing cholangitis); urologic disease (for example, kidney stones, obstructive hydronephrosis); skin involvement (for example, erythema nodosum, pyoderma gangrenosum); or non-destructive inflammatory arthritis. You may also have associated thromboembolic disorders or vascular disease. These manifestations may not correlate with the severity of your IBD. If your impairment does not meet any of the criteria of 5.06, we will consider the effects of your extraintestinal manifestations in determining whether you have an impairment(s) that meets or medically equals another listing, and we will also consider the effects of your extraintestinal manifestations when we assess your residual functional capacity. 4. Surgical diversion of the intestinal tract, including ileostomy and colostomy, does not preclude any gainful activity if you are able to maintain adequate nutrition and function of the stoma. However, if you are not able to maintain adequate nutrition, we will evaluate your impairment under 5.08. F. *How do we evaluate short bowel syndrome (SBS)?* 1. *Short bowel syndrome* (5.07) is a disorder that occurs when ischemic vascular insults (for example, volvulus), trauma, or IBD complications require surgical resection of more than one-half of the small intestine, resulting in the loss of intestinal absorptive surface and a state of chronic malnutrition. The management of SBS requires long-term parenteral nutrition via an indwelling central venous catheter (central line); the process is often referred to as *hyperalimentation* or *total parenteral nutrition* (TPN). Individuals with SBS can also feed orally, with variable amounts of nutrients being absorbed through their remaining intestine. Over time, some of these individuals can develop additional intestinal absorptive surface, and may ultimately be able to be weaned off their parenteral nutrition. 2. Your impairment will continue to meet 5.07 as long as you remain dependent on daily parenteral nutrition via a central venous catheter for most of your nutritional requirements. Long-term complications of SBS and parenteral nutrition include central line infections (with or without septicemia), thrombosis, hepatotoxicity, gallstones, and loss of venous access sites. Intestinal transplantation is the only definitive treatment for individuals with SBS who remain chronically dependent on parenteral nutrition. 3. To document SBS, we need a copy of the operative report of intestinal resection, the summary of the hospitalization(s) including: Details of the surgical findings, medically appropriate postoperative imaging studies that reflect the amount of your residual small intestine, or if we cannot get one of these reports, other medical reports that include details of the surgical findings. We also need medical documentation that you are dependent on daily parenteral nutrition to provide most of your nutritional requirements. G. *How do we evaluate weight loss due to any digestive disorder?* 1. In addition to the impairments specifically mentioned in these listings, other digestive disorders, such as esophageal stricture, pancreatic insufficiency, and malabsorption, may result in significant weight loss. We evaluate weight loss due to any digestive disorder under 5.08 by using the Body Mass Index (BMI). We also provide a criterion in 5.06B for lesser weight loss resulting from IBD. 2. BMI is the ratio of your weight to the square of your height. Calculation and interpretation of the BMI are independent of gender in adults. a. We calculate BMI using inches and pounds, meters and kilograms, or centimeters and kilograms. We must have measurements of your weight and height without shoes for these calculations. b. We calculate BMI using one of the following formulas: ER19OC07.003 ER19OC07.004 ER19OC07.005 H. *What do we mean by the phrase “consider under a disability for 1 year”?* We use the phrase “consider under a disability for 1 year” following a specific event in 5.02, 5.05A, and 5.09 to explain how long your impairment can meet the requirements of those particular listings. This phrase does not refer to the date on which your disability began, only to the date on which we must reevaluate whether your impairment continues to meet a listing or is otherwise disabling. For example, if you have received a liver transplant, you may have become disabled before the transplant because of chronic liver disease. Therefore, we do not restrict our determination of the onset of disability to the date of the specified event. We will establish an onset date earlier than the date of the specified event if the evidence in your case record supports such a finding. I. *How do we evaluate impairments that do not meet one of the digestive disorder listings?* 1. These listings are only examples of common digestive disorders that we consider severe enough to prevent you from doing any gainful activity. If your impairment(s) does not meet the criteria of any of these listings, we must also consider whether you have an impairment(s) that satisfies the criteria of a listing in another body system. For example, if you have hepatitis B or C and you are depressed, we will evaluate your impairment under 12.04. 2. If you have a severe medically determinable impairment(s) that does not meet a listing, we will determine whether your impairment(s) medically equals a listing. (See §§ 404.1526 and 416.926.) If your impairment(s) does not meet or medically equal a listing, you may or may not have the residual functional capacity to engage in substantial gainful activity. In this situation, we will proceed to the fourth, and if necessary, the fifth steps of the sequential evaluation process in §§ 404.1520 and 416.920. When we decide whether you continue to be disabled, we use the rules in §§ 404.1594, 416.994, and 416.994a as appropriate. 5.01 *Category of Impairments, Digestive System* 5.02 *Gastrointestinal hemorrhaging from any cause, requiring blood transfusion* (with or without hospitalization) of at least 2 units of blood per transfusion, and occurring at least three times during a consecutive 6-month period. The transfusions must be at least 30 days apart within the 6-month period. Consider under a disability for 1 year following the last documented transfusion; thereafter, evaluate the residual impairment(s). 5.03 [Reserved] 5.04 [Reserved] 5.05 *Chronic liver disease,* with: A. Hemorrhaging from esophageal, gastric, or ectopic varices or from portal hypertensive gastropathy, demonstrated by endoscopy, x-ray, or other appropriate medically acceptable imaging, resulting in hemodynamic instability as defined in 5.00D5, and requiring hospitalization for transfusion of at least 2 units of blood. Consider under a disability for 1 year following the last documented transfusion; thereafter, evaluate the residual impairment(s). OR B. Ascites or hydrothorax not attributable to other causes, despite continuing treatment as prescribed, present on at least two evaluations at least 60 days apart within a consecutive 6-month period. Each evaluation must be documented by: 1. Paracentesis or thoracentesis; or 2. Appropriate medically acceptable imaging or physical examination and one of the following: a. Serum albumin of 3.0 g/dL or less; or b. International Normalized Ratio
(INR)of at least 1.5. OR C. Spontaneous bacterial peritonitis with peritoneal fluid containing an absolute neutrophil count of at least 250 cells/mm 3 . OR D. Hepatorenal syndrome as described in 5.00D8, with one of the following: 1. Serum creatinine elevation of at least 2 mg/dL; or 2. Oliguria with 24-hour urine output less than 500 mL; or 3. Sodium retention with urine sodium less than 10 mEq per liter. OR E. Hepatopulmonary syndrome as described in 5.00D9, with: 1. Arterial oxygenation (P <sup>a</sup> O <sup>2</sup> ) on room air of: a. 60 mm Hg or less, at test sites less than 3000 feet above sea level, or b. 55 mm Hg or less, at test sites from 3000 to 6000 feet, or c. 50 mm Hg or less, at test sites above 6000 feet; or 2. Documentation of intrapulmonary arteriovenous shunting by contrast-enhanced echocardiography or macroaggregated albumin lung perfusion scan. OR F. Hepatic encephalopathy as described in 5.00D10, with 1 and either 2 or 3: 1. Documentation of abnormal behavior, cognitive dysfunction, changes in mental status, or altered state of consciousness (for example, confusion, delirium, stupor, or coma), present on at least two evaluations at least 60 days apart within a consecutive 6-month period; and 2. History of transjugular intrahepatic portosystemic shunt
(TIPS)or any surgical portosystemic shunt: or 3. One of the following occurring on at least two evaluations at least 60 days apart within the same consecutive 6-month period as in F1: a. Asterixis or other fluctuating physical neurological abnormalities; or b. Electroencephalogram
(EEG)demonstrating triphasic slow wave activity; or c. Serum albumin of 3.0 g/dL or less; or d. International Normalized Ratio
(INR)of 1.5 or greater. OR G. End stage liver disease with SSA CLD scores of 22 or greater calculated as described in 5.00D11. Consider under a disability from at least the date of the first score. 5.06 *Inflammatory bowel disease (IBD)* documented by endoscopy, biopsy, appropriate medically acceptable imaging, or operative findings with: A. Obstruction of stenotic areas (not adhesions) in the small intestine or colon with proximal dilatation, confirmed by appropriate medically acceptable imaging or in surgery, requiring hospitalization for intestinal decompression or for surgery, and occurring on at least two occasions at least 60 days apart within a consecutive 6-month period; OR B. Two of the following despite continuing treatment as prescribed and occurring within the same consecutive 6-month period: 1. Anemia with hemoglobin of less than 10.0 g/dL, present on at least two evaluations at least 60 days apart; or 2. Serum albumin of 3.0 g/dL or less, present on at least two evaluations at least 60 days apart; or 3. Clinically documented tender abdominal mass palpable on physical examination with abdominal pain or cramping that is not completely controlled by prescribed narcotic medication, present on at least two evaluations at least 60 days apart; or 4. Perineal disease with a draining abscess or fistula, with pain that is not completely controlled by prescribed narcotic medication, present on at least two evaluations at least 60 days apart; or 5. Involuntary weight loss of at least 10 percent from baseline, as computed in pounds, kilograms, or BMI, present on at least two evaluations at least 60 days apart; or 6. Need for supplemental daily enteral nutrition via a gastrostomy or daily parenteral nutrition via a central venous catheter. 5.07 *Short bowel syndrome (SBS),* due to surgical resection of more than one-half of the small intestine, with dependence on daily parenteral nutrition via a central venous catheter (see 5.00F). 5.08 *Weight loss due to any digestive disorder* despite continuing treatment as prescribed, with BMI of less than 17.50 calculated on at least two evaluations at least 60 days apart within a consecutive 6-month period. 5.09 *Liver transplantation.* Consider under a disability for 1 year following the date of transplantation; thereafter, evaluate the residual impairment(s) (see 5.00D12 and 5.00H). 4. Revise listing 6.02C4 in part A of appendix 1 to subpart P of part 404 to read as follows: Appendix 1 to Subpart P of Part 404—Listing of Impairments Part A 6.02 * * * C. * * * 4. Persistent anorexia with weight loss determined by body mass index
(BMI)of less than 18.0, calculated on at least two evaluations at least 30 days apart within a consecutive 6-month period (see 5.00G2). 5. Revise listing 12.09G in part A of appendix 1 to subpart P of part 404 to read as follows: Appendix 1 to Subpart P of Part 404—Listing of Impairments Part A 12.09 * * * G. Gastritis. Evaluate under 5.00. 6. Revise section 105.00 in part B of appendix 1 to subpart P of part 404 to read as follows: Appendix 1 to Subpart P of Part 404—Listing of Impairments Part B 105.00 DIGESTIVE SYSTEM A. *What kinds of disorders do we consider in the digestive system?* Disorders of the digestive system include gastrointestinal hemorrhage, hepatic (liver) dysfunction, inflammatory bowel disease, short bowel syndrome, and malnutrition. They may also lead to complications, such as obstruction, or be accompanied by manifestations in other body systems. Congenital abnormalities involving the organs of the gastrointestinal system may interfere with the ability to maintain adequate nutrition, growth, and development. B. *What documentation do we need?* We need a record of your medical evidence, including clinical and laboratory findings. The documentation should include appropriate medically acceptable imaging studies and reports of endoscopy, operations, and pathology, as appropriate to each listing, to document the severity and duration of your digestive disorder. We may also need assessments of your growth and development. Medically acceptable imaging includes, but is not limited to, x-ray imaging, sonography, computerized axial tomography (CAT scan), magnetic resonance imaging (MRI), and radionuclide scans. *Appropriate* means that the technique used is the proper one to support the evaluation and diagnosis of the disorder. The findings required by these listings must occur within the period we are considering in connection with your application or continuing disability review. C. *How do we consider the effects of treatment?* 1. Digestive disorders frequently respond to medical or surgical treatment; therefore, we generally consider the severity and duration of these disorders within the context of the prescribed treatment. 2. We assess the effects of treatment, including medication, therapy, surgery, or any other form of treatment you receive, by determining if there are improvements in the symptoms, signs, and laboratory findings of your digestive disorder. We also assess any side effects of your treatment that may further limit your functioning. 3. To assess the effects of your treatment, we may need information about: a. The treatment you have been prescribed (for example, the type of medication or therapy, or your use of parenteral (intravenous) nutrition or supplemental enteral nutrition via a gastrostomy); b. The dosage, method, and frequency of administration; c. Your response to the treatment; d. Any adverse effects of such treatment; and e. The expected duration of the treatment. 4. Because the effects of treatment may be temporary or long-term, in most cases we need information about the impact of your treatment, including its expected duration and side effects, over a sufficient period of time to help us assess its outcome. When adverse effects of treatment contribute to the severity of your impairment(s), we will consider the duration or expected duration of the treatment when we assess the duration of your impairment(s). 5. If you need parenteral (intravenous) nutrition or supplemental enteral nutrition via a gastrostomy to avoid debilitating complications of a digestive disorder, this treatment will not, in itself, indicate that you have marked and severe functional limitations. The exceptions are 105.07, short bowel syndrome, and 105.10, for children who have not attained age 3 and who require supplemental daily enteral feedings via a gastrostomy (see 105.00F and 105.00H). 6. If you have not received ongoing treatment or have not had an ongoing relationship with the medical community despite the existence of a severe impairment(s), we will evaluate the severity and duration of your digestive impairment on the basis of current medical and other evidence in your case record. If you have not received treatment, you may not be able to show an impairment that meets the criteria of one of the digestive system listings, but your digestive impairment may medically equal a listing or functionally equal the listings. D. *How do we evaluate chronic liver disease?* 1. *General. Chronic liver disease* is characterized by liver cell necrosis, inflammation, or scarring (fibrosis or cirrhosis), due to any cause, that persists for more than 6 months. Chronic liver disease may result in portal hypertension, cholestasis (suppression of bile flow), extrahepatic manifestations, or liver cancer. (We evaluate liver cancer under 113.03.) Significant loss of liver function may be manifested by hemorrhage from varices or portal hypertensive gastropathy, ascites (accumulation of fluid in the abdominal cavity), hydrothorax (ascitic fluid in the chest cavity), or encephalopathy. There can also be progressive deterioration of laboratory findings that are indicative of liver dysfunction. Liver transplantation is the only definitive cure for end stage liver disease (ESLD). 2. *Examples of chronic liver disease* include, but are not limited to, biliary atresia, chronic hepatitis, non-alcoholic steatohepatitis (NASH), primary biliary cirrhosis (PBC), primary sclerosing cholangitis (PSC), autoimmune hepatitis, hemochromatosis, drug-induced liver disease, Wilson's disease, and serum alpha-1 antitrypsin deficiency. Children can also have congenital abnormalities of abdominal organs or inborn metabolic disorders that result in chronic liver disease. Acute hepatic injury is frequently reversible as in viral, drug-induced, toxin-induced, and ischemic hepatitis. In the absence of evidence of a chronic impairment, episodes of acute liver disease do not meet 105.05. 3. *Manifestations of chronic liver disease.* a. *Symptoms* may include, but are not limited to, pruritis (itching), fatigue, nausea, loss of appetite, or sleep disturbances. Children can also have associated developmental delays or poor school performance. Symptoms of chronic liver disease may have a poor correlation with the severity of liver disease and functional ability. b. *Signs* may include, but are not limited to, jaundice, enlargement of the liver and spleen, ascites, peripheral edema, and altered mental status. c. *Laboratory findings* may include, but are not limited to, increased liver enzymes, increased serum total bilirubin, increased ammonia levels, decreased serum albumin, and abnormal coagulation studies, such as increased International Normalized Ratio
(INR)or decreased platelet counts. Abnormally low serum albumin or elevated INR levels indicate loss of synthetic liver function, with increased likelihood of cirrhosis and associated complications. However, other abnormal lab tests, such as liver enzymes, serum total bilirubin, or ammonia levels, may have a poor correlation with the severity of liver disease and functional ability. A liver biopsy may demonstrate the degree of liver cell necrosis, inflammation, fibrosis, and cirrhosis. If you have had a liver biopsy, we will make every reasonable effort to obtain the results; however, we will not purchase a liver biopsy. Imaging studies (CAT scan, ultrasound, MRI) may show the size and consistency (fatty liver, scarring) of the liver and document ascites (see 105.00D6). 4. *Chronic viral hepatitis infections.* a. *General.*
(i)*Chronic viral hepatitis* infections are commonly caused by hepatitis C virus (HCV), and to a lesser extent, hepatitis B virus (HBV). Usually, these are slowly progressive disorders that persist over many years during which the symptoms and signs are typically nonspecific, intermittent, and mild (for example, fatigue, difficulty with concentration, or right upper quadrant pain). Laboratory findings (liver enzymes, imaging studies, liver biopsy pathology) and complications are generally similar in HCV and HBV. The spectrum of these chronic viral hepatitis infections ranges widely and includes an asymptomatic state; insidious disease with mild to moderate symptoms associated with fluctuating liver tests; extrahepatic manifestations; cirrhosis, both compensated and decompensated; ESLD with the need for liver transplantation; and liver cancer. Treatment for chronic viral hepatitis infections varies considerably based on age, medication tolerance, treatment response, adverse effects of treatment, and duration of the treatment. Comorbid disorders, such as HIV infection, may affect the clinical course of viral hepatitis infection(s) or may alter the response to medical treatment.
(ii)We evaluate all types of chronic viral hepatitis infections under 105.05 or any listing in an affected body system(s). If your impairment(s) does not meet or medically equal a listing, we will consider the effects of your hepatitis when we assess whether your impairment(s) functionally equals the listings. b. *Chronic hepatitis B virus
(HBV)infection* .
(i)*Chronic HBV* infection is diagnosed by the detection of hepatitis B surface antigen (HBsAg) in the blood for at least 6 months. In addition, detection of the hepatitis B envelope antigen (HBeAg) suggests an increased likelihood of progression to cirrhosis and ESLD.
(ii)The therapeutic goal of treatment is to suppress HBV replication and thereby prevent progression to cirrhosis and ESLD. Treatment usually includes a combination of interferon injections and oral antiviral agents. Common adverse effects of treatment are the same as noted in 105.00D4c(ii) for HCV, and generally end within a few days after treatment is discontinued. c. *Chronic hepatitis C virus
(HCV)infection.*
(i)*Chronic HCV infection* is diagnosed by the detection of hepatitis C viral RNA in the blood for at least 6 months. Documentation of the therapeutic response to treatment is also monitored by the quantitative assay of serum HCV RNA (“HCV viral load”). Treatment usually includes a combination of interferon injections and oral ribavirin; whether a therapeutic response has occurred is usually assessed after 12 weeks of treatment by checking the HCV viral load. If there has been a substantial reduction in HCV viral load (also known as early viral response, or EVR), this reduction is predictive of a sustained viral response with completion of treatment. Combined therapy is commonly discontinued after 12 weeks when there is no early viral response, since in that circumstance there is little chance of obtaining a sustained viral response (SVR). Otherwise, treatment is usually continued for a total of 48 weeks.
(ii)Combined interferon and ribavirin treatment may have significant adverse effects that may require dosing reduction, planned interruption of treatment, or discontinuation of treatment. Adverse effects may include: Anemia (ribavirin-induced hemolysis), neutropenia, thrombocytopenia, fever, cough, fatigue, myalgia, arthralgia, nausea, loss of appetite, pruritis, and insomnia. Behavioral side effects may also occur. Influenza-like symptoms are generally worse in the first 4 to 6 hours after each interferon injection and during the first weeks of treatment. Adverse effects generally end within a few days after treatment is discontinued. d. *Extrahepatic manifestations of HBV and HCV.* In addition to their hepatic manifestations, both HBV and HCV may have significant extrahepatic manifestations in a variety of body systems. These include, but are not limited to: Keratoconjunctivitis (sicca syndrome), glomerulonephritis, skin disorders (for example, lichen planus, porphyria cutanea tarda), neuropathy, and immune dysfunction (for example, cryoglobulinemia, Sjögren's syndrome, and vasculitis). The extrahepatic manifestations of HBV and HCV may not correlate with the severity of your hepatic impairment. If your impairment(s) does not meet or medically equal a listing in an affected body system(s), we will consider the effects of your extrahepatic manifestations when we determine whether your impairment(s) functionally equals the listings. 5. *Gastrointestinal hemorrhage* (105.02 and 105.05A). Gastrointestinal hemorrhaging can result in hematemesis (vomiting of blood), melena (tarry stools), or hematochezia (bloody stools). Under 105.02, the required transfusions of at least 10 cc of blood/kg of body weight must be at least 30 days apart and occur at least three times during a consecutive 6-month period. Under 105.05A, *hemodynamic instability* is diagnosed with signs such as pallor (pale skin), diaphoresis (profuse perspiration), rapid pulse, low blood pressure, postural hypotension (pronounced fall in blood pressure when arising to an upright position from lying down) or syncope (fainting). Hemorrhaging that results in hemodynamic instability is potentially life-threatening and therefore requires hospitalization for transfusion and supportive care. Under 105.05A, we require only one hospitalization for transfusion of at least 10 cc of blood/kg of body weight. 6. *Ascites or hydrothorax* (105.05B) indicates significant loss of liver function due to chronic liver disease. We evaluate ascites or hydrothorax that is not attributable to other causes under 105.05B. The required findings must be present on at least two evaluations at least 60 days apart within a consecutive 6-month period and despite continuing treatment as prescribed. 7. *Spontaneous bacterial peritonitis* (105.05C) is an infectious complication of chronic liver disease. It is diagnosed by ascitic peritoneal fluid that is documented to contain an absolute neutrophil count of at least 250 cells/mm 3 . The required finding in 105.05C is satisfied with one evaluation documenting peritoneal fluid infection. We do not evaluate other causes of peritonitis that are unrelated to chronic liver disease, such as tuberculosis, malignancy, and perforated bowel, under this listing. We evaluate these other causes of peritonitis under the appropriate body system listings. 8. *Hepatorenal syndrome* (105.05D) is defined as functional renal failure associated with chronic liver disease in the absence of underlying kidney pathology. Hepatorenal syndrome is documented by elevation of serum creatinine, marked sodium retention, and oliguria (reduced urine output). The requirements of 105.05D are satisfied with documentation of any one of the three laboratory findings on one evaluation. We do not evaluate known causes of renal dysfunction, such as glomerulonephritis, tubular necrosis, drug-induced renal disease, and renal infections, under this listing. We evaluate these other renal impairments under 106.00ff. 9. *Hepatopulmonary syndrome* (105.05E) is defined as arterial deoxygenation (hypoxemia) that is associated with chronic liver disease due to intrapulmonary arteriovenous shunting and vasodilatation, in the absence of other causes of arterial deoxygenation. Clinical manifestations usually include dyspnea, orthodeoxia (increasing hypoxemia with erect position), platypnea (improvement of dyspnea with flat position), cyanosis, and clubbing. The requirements of 105.05E are satisfied with documentation of any one of the findings on one evaluation. In 105.05E1, we require documentation of the altitude of the testing facility because altitude affects the measurement of arterial oxygenation. We will not purchase the specialized studies described in 105.05E2; however, if you have had these studies at a time relevant to your claim, we will make every reasonable effort to obtain the reports for the purpose of establishing whether your impairment meets 105.05E2. 10. *Hepatic encephalopathy* (105.05F). a. *General.* Hepatic encephalopathy usually indicates severe loss of hepatocellular function. We define hepatic encephalopathy under 105.05F as a recurrent or chronic neuropsychiatric disorder, characterized by abnormal behavior, cognitive dysfunction, altered state of consciousness, and ultimately coma and death. The diagnosis is established by changes in mental status associated with fleeting neurological signs, including “flapping tremor” (asterixis), characteristic electroencephalographic
(EEG)abnormalities, or abnormal laboratory values that indicate loss of synthetic liver function. We will not purchase the EEG testing described in 105.05F3b. However, if you have had this test at a time relevant to your claim, we will make every reasonable effort to obtain the report for the purpose of establishing whether your impairment meets 105.05F. b. *Acute encephalopathy.* We will not evaluate your acute encephalopathy under 105.05F if it results from conditions other than chronic liver disease, such as vascular events and neoplastic diseases. We will evaluate these other causes of acute encephalopathy under the appropriate body system listings. 11. *End stage liver disease
(ESLD)documented by scores from the SSA Chronic Liver Disease (SSA CLD) calculation (105.05G1) and SSA Chronic Liver Disease-Pediatric (SSA CLD-P) calculation (105.05G2).* a. *SSA CLD score.*
(i)If you are age 12 or older, we will use the SSA CLD score to evaluate your ESLD under 105.05G1. We explain how we calculate the SSA CLD score in a(ii) through a(vii) of this section.
(ii)To calculate the SSA CLD score, we use a formula that includes three laboratory values: Serum total bilirubin (mg/dL), serum creatinine (mg/dL), and International Normalized Ratio (INR). The formula for the SSA CLD score calculation is: 9.57 × [Log e (serum creatinine mg/dL)] +3.78 × [Log e (serum total bilirubin mg/dL)] +11.2 × [Log e (INR)] +6.43
(iii)When we indicate “Log e ” in the formula for the SSA CLD score calculation, we mean the “base *e* logarithm” or “natural logarithm”
(ln)of a numerical laboratory value, not the “base 10 logarithm” or “common logarithm”
(log)of the laboratory value, and not the actual laboratory value. For an example of SSA CLD calculation, see 5.00D11c.
(iv)For any SSA CLD score calculation, all of the required laboratory values must have been obtained within 30 days of each other. If there are multiple laboratory values within the 30-day interval for any given laboratory test (serum total bilirubin, serum creatinine, or INR), we will use the highest value for the SSA CLD score calculation. We will round all laboratory values less than 1.0 up to 1.0.
(v)Listing 105.05G requires two SSA CLD scores. The laboratory values for the second SSA CLD score calculation must have been obtained at least 60 days after the latest laboratory value for the first SSA CLD score and within the required 6-month period. We will consider the date of each SSA CLD score to be the date of the first laboratory value used for its calculation.
(vi)If you are in renal failure or on dialysis within a week of any serum creatinine test in the period used for the SSA CLD calculation, we will use a serum creatinine of 4, which is the maximum serum creatinine level allowed in the calculation, to calculate your SSA CLD score.
(vii)If you have the two SSA CLD scores required by 105.05G1, we will find that your impairment meets the criteria of the listing from at least the date of the first SSA CLD score. b. *SSA CLD-P score.*
(i)If you have not attained age 12, we will use the SSA CLD-P score to evaluate your ESLD under 105.05G2. We explain how we calculate the SSA CLD-P score in b(ii) through b(vii) of this section.
(ii)To calculate the SSA CLD-P score, we use a formula that includes four parameters: Serum total bilirubin (mg/dL), International Normalized Ratio (INR), serum albumin (g/dL), and whether growth failure is occurring. The formula for the SSA CLD-P score calculation is: 4.80 × [Log e (serum total bilirubin mg/dL)] +18.57 × [Log e (INR)] −6.87 × [Log e (serum albumin g/dL)] +6.67 if the child has growth failure (<−2 standard deviations for weight or height)
(iii)When we indicate “Log e ” in the formula for the SSA CLD-P score calculation, we mean the “base *e* logarithm” or “natural logarithm”
(ln)of a numerical laboratory value, not the “base 10 logarithm” or “common logarithm”
(log)of the laboratory value, and not the actual laboratory value. For example, if a female child is 4.0 years old, has a current weight of 13.5 kg (10th percentile for age) and height of 92 cm (less than the third percentile for age), and has laboratory values of serum total bilirubin 2.2 mg/dL, INR 1.0, and serum albumin 3.5 g/dL, we will compute the SSA CLD-P score as follows: 4.80 × [Log e +(serum total bilirubin 2.2 mg/dL) = 0.788] +18.57 × [Log e (INR 1.0) = 0] −6.87 × [Log e +(serum albumin 3.5 g/dL) = 1.253] +6.67 ___ = 3.78 + 0 −8.61 + 6.67 = 1.84, which is then rounded to an SSA CLD-P score of 2
(iv)For any SSA CLD-P score calculation, all of the required laboratory values (serum total bilirubin, INR, or serum albumin) must have been obtained within 30 days of each other. We will not purchase INR values for children who have not attained age 12. If there is no INR value for a child under 12 within the applicable time period, we will use an INR value of 1.1 to calculate the SSA CLD-P score. If there are multiple laboratory values within the 30-day interval for any given laboratory test, we will use the highest serum total bilirubin and INR values and the lowest serum albumin value for the SSA CLD-P score calculation. We will round all laboratory values less than 1.0 up to 1.0.
(v)The weight and length/height measurements used for the calculation must be obtained from one evaluation within the same 30-day period as in D11b(iv).
(vi)Listing 105.05G2 requires two SSA CLD-P scores. The laboratory values for the second SSA CLD-P score calculation must have been obtained at least 60 days after the latest laboratory value for the first SSA CLD-P score and within the required 6-month period. We will consider the date of each SSA CLD-P score to be the date of the first laboratory value used for its calculation.
(vii)If you have the two SSA CLD-P scores required by listing 105.05G2, we will find that your impairment meets the criteria of the listing from at least the date of the first SSA CLD-P score. 12. *Extrahepatic biliary atresia (EBA)* (105.05H) usually presents in the first 2 months of life with persistent jaundice. The impairment meets 105.05H if the diagnosis of EBA is confirmed by liver biopsy or intraoperative cholangiogram that shows obliteration of the extrahepatic biliary tree. EBA is usually surgically treated by portoenterostomy (for example, Kasai procedure). If this surgery is not performed in the first months of life or is not completely successful, liver transplantation is indicated. If you have had a liver transplant, we will evaluate your impairment under 105.09. 13. *Liver transplantation* (105.09) may be performed for metabolic liver disease, progressive liver failure, life-threatening complications of liver disease, hepatic malignancy, and acute fulminant hepatitis (viral, drug-induced, or toxin-induced). We will consider you to be disabled for 1 year from the date of the transplantation. Thereafter, we will evaluate your residual impairment(s) by considering the adequacy of post-transplant liver function, the requirement for post-transplant antiviral therapy, the frequency and severity of rejection episodes, comorbid complications, and all adverse treatment effects. E. *How do we evaluate inflammatory bowel disease (IBD)?* 1. *Inflammatory bowel disease* (105.06) includes, but is not limited to, Crohn's disease and ulcerative colitis. These disorders, while distinct entities, share many clinical, laboratory, and imaging findings, as well as similar treatment regimens. Remissions and exacerbations of variable duration are the hallmark of IBD. Crohn's disease may involve the entire alimentary tract from the mouth to the anus in a segmental, asymmetric fashion. Obstruction, stenosis, fistulization, perineal involvement, and extraintestinal manifestations are common. Crohn's disease is rarely curable and recurrence may be a lifelong problem, even after surgical resection. In contrast, ulcerative colitis only affects the colon. The inflammatory process may be limited to the rectum, extend proximally to include any contiguous segment, or involve the entire colon. Ulcerative colitis may be cured by total colectomy. 2. Symptoms and signs of IBD include diarrhea, fecal incontinence, rectal bleeding, abdominal pain, fatigue, fever, nausea, vomiting, arthralgia, abdominal tenderness, palpable abdominal mass (usually inflamed loops of bowel) and perineal disease. You may also have signs or laboratory findings indicating malnutrition, such as weight loss, edema, anemia, hypoalbuminemia, hypokalemia, hypocalcemia, or hypomagnesemia. 3. IBD may be associated with significant extraintestinal manifestations in a variety of body systems. These include, but are not limited to, involvement of the eye (for example, uveitis, episcleritis, iritis); hepatobiliary disease (for example, gallstones, primary sclerosing cholangitis); urologic disease (for example, kidney stones, obstructive hydronephrosis); skin involvement (for example, erythema nodosum, pyoderma gangrenosum); or non-destructive inflammatory arthritis. You may also have associated thromboembolic disorders or vascular disease. These manifestations may not correlate with the severity of your IBD. If your impairment does not meet any of the criteria of 105.06, we will consider the effects of your extraintestinal manifestations in determining whether you have an impairment(s) that meets or medically equals another listing, and we will also consider the effects of your extraintestinal manifestations when we determine whether your impairment(s) functionally equals the listings. 4. Surgical diversion of the intestinal tract, including ileostomy and colostomy, does not very seriously interfere with age-appropriate functioning if you are able to maintain adequate nutrition and function of the stoma. However, if you are not able to maintain adequate nutrition, we will evaluate your impairment under 105.08. F. *How do we evaluate short bowel syndrome (SBS)?* 1. *Short bowel syndrome* (105.07) is a disorder that occurs when congenital intestinal abnormalities, ischemic vascular insults (for example, necrotizing enterocolitis, volvulus), trauma, or IBD complications require surgical resection of more than one-half of the small intestine, resulting in the loss of intestinal absorptive surface and a state of chronic malnutrition. The management of SBS requires long-term parenteral nutrition via an indwelling central venous catheter (central line); the process is often referred to as *hyperalimentation* or *total parenteral nutrition* (TPN). Children with SBS can also feed orally, with variable amounts of nutrients being absorbed through their remaining intestine. Over time, some of these children can develop additional intestinal absorptive surface, and may ultimately be able to be weaned off their parenteral nutrition. 2. Your impairment will continue to meet 105.07 as long as you remain dependent on daily parenteral nutrition via a central venous catheter for most of your nutritional requirements. Long-term complications of SBS and parenteral nutrition include abnormal growth rates, central line infections (with or without septicemia), thrombosis, hepatotoxicity, gallstones, and loss of venous access sites. Intestinal transplantation is the only definitive treatment for children with SBS who remain chronically dependent on parenteral nutrition. 3. To document SBS, we need a copy of the operative report of intestinal resection, the summary of the hospitalization(s) including: Details of the surgical findings, medically appropriate postoperative imaging studies that reflect the amount of your residual small intestine, or if we cannot get one of these reports, other medical reports that include details of the surgical findings. We also need medical documentation that you are dependent on daily parenteral nutrition to provide most of your nutritional requirements. G. *How do we evaluate malnutrition in children?* 1. Many types of digestive disorders can result in malnutrition and growth retardation. To meet the malnutrition criteria in 105.08A, we need documentation of a digestive disorder with associated chronic nutritional deficiency despite prescribed treatment. 2. We evaluate the growth retardation criteria in 105.08B by using the most recent growth charts by the Centers for Disease Control and Prevention (CDC). a. If you have not attained age 2, we use weight-for-length measurements to assess whether your impairment meets the requirement of 105.08B1. CDC weight-for-length charts are age- and gender-specific. b. If you are a child age 2 or older, we use BMI-for-age measurements to assess whether your impairment meets the requirement of 105.08B2. BMI is the ratio of your weight to the square of your height. BMI-for-age is plotted on the CDC's gender-specific growth charts. c. We calculate BMI using inches and pounds, meters and kilograms, or centimeters and kilograms. We must have measurements of your weight and height without shoes for these calculations. d. We calculate BMI using one of the following formulas: ER19OC07.003 ER19OC07.004 ER19OC07.005 H. *How do we evaluate the need for supplemental daily enteral feeding via a gastrostomy?* 1. *General.* Infants and young children may have anatomical, neurological, or developmental disorders that interfere with their ability to feed by mouth, resulting in inadequate caloric intake to meet their growth needs. These disorders frequently result in the medical necessity to supplement caloric intake and to bypass the anatomical feeding route of mouth-throat-esophagus into the stomach. 2. Children who have not attained age 3 and who require supplemental daily enteral nutrition via a feeding gastrostomy meet 105.10 regardless of the medical reason for the gastrostomy. Thereafter, we evaluate growth impairment under 100.02, malnutrition under 105.08, or other medical or developmental disorder(s) (including the disorder(s) that necessitated gastrostomy placement) under the appropriate listing(s). I. *How do we evaluate esophageal stricture or stenosis?* Esophageal stricture or stenosis (narrowing) from congenital atresia (absence or abnormal closure of a tubular body organ) or destructive esophagitis may result in malnutrition or the need for gastrostomy placement, which we evaluate under 105.08 or 105.10. Esophageal stricture or stenosis may also result in complications such as pneumonias due to frequent aspiration, or difficulty in maintaining nutritional status short of listing-level severity. While none of these complications may be of such severity that they would meet the criteria of another listing, the combination of impairments may medically equal the severity of a listing or functionally equal the listings. J. *What do we mean by the phrase “consider under a disability for 1 year”?* We use the phrase “consider under a disability for 1 year” following a specific event in 105.02, 105.05A, and 105.09 to explain how long your impairment can meet the requirements of those particular listings. This phrase does not refer to the date on which your disability began, only to the date on which we must reevaluate whether your impairment continues to meet a listing or is otherwise disabling. For example, if you have received a liver transplant, you may have become disabled before the transplant because of chronic liver disease. Therefore, we do not restrict our determination of the onset of disability to the date of the specified event. We will establish an onset date earlier than the date of the specified event if the evidence in your case record supports such a finding. K. *How do we evaluate impairments that do not meet one of the digestive disorder listings?* 1. These listings are only examples of common digestive disorders that we consider severe enough to result in marked and severe functional limitations. If your impairment(s) does not meet the criteria of any of these listings, we must also consider whether you have an impairment(s) that satisfies the criteria of a listing in another body system. For example: a. If you have hepatitis B or C and you are depressed, we will evaluate your impairment under 112.04. b. If you have multiple congenital abnormalities, we will evaluate your impairment(s) under the criteria in the listings for impairments that affect multiple body systems (110.00) or the criteria of listings in other affected body systems. c. If you have digestive disorders that interfere with intake, digestion, or absorption of nutrition, and result in a reduction in your rate of growth, and your impairment does not satisfy the criteria in the malnutrition listing (105.08), we will evaluate your impairment under the growth impairment listings (100.00). 2. If you have a severe medically determinable impairment(s) that does not meet a listing, we will determine whether your impairment(s) medically equals a listing. (See § 416.926.) If your impairment(s) does not meet or medically equal a listing, you may or may not have an impairment(s) that functionally equals the listings. (See § 416.926a.) When we decide whether you continue to be disabled, we use the rules in § 416.994a. 105.01 *Category of Impairments, Digestive System* 105.02 *Gastrointestinal hemorrhaging from any cause, requiring blood transfusion* (with or without hospitalization) of at least 10 cc of blood/kg of body weight, and occurring at least three times during a consecutive 6-month period. The transfusions must be at least 30 days apart within the 6-month period. Consider under a disability for 1 year following the last documented transfusion; thereafter, evaluate the residual impairment(s). 105.03 [Reserved] 105.04 [Reserved] 105.05 *Chronic liver disease,* with: A. Hemorrhaging from esophageal, gastric, or ectopic varices or from portal hypertensive gastropathy, demonstrated by endoscopy, x-ray, or other appropriate medically acceptable imaging, resulting in hemodynamic instability as defined in 105.00D5, and requiring hospitalization for transfusion of at least 10 cc of blood/kg of body weight. Consider under a disability for 1 year following the last documented transfusion; thereafter, evaluate the residual impairment(s). OR B. Ascites or hydrothorax not attributable to other causes, despite continuing treatment as prescribed, present on at least two evaluations at least 60 days apart within a consecutive 6-month period. Each evaluation must be documented by: 1. Paracentesis or thoracentesis; or 2. Appropriate medically acceptable imaging or physical examination and one of the following: a. Serum albumin of 3.0 g/dL or less; or b. International Normalized Ratio
(INR)of at least 1.5. OR C. Spontaneous bacterial peritonitis with peritoneal fluid containing an absolute neutrophil count of at least 250 cells/mm 3 . OR D. Hepatorenal syndrome as described in 105.00D8, with one of the following: 1. Serum creatinine elevation of at least 2 mg/dL; or 2. Oliguria with 24-hour urine output less than 1 mL/kg/hr; or 3. Sodium retention with urine sodium less than 10 mEq per liter. OR E. Hepatopulmonary syndrome as described in 105.00D9, with: 1. Arterial oxygenation (P <sup>a</sup> O <sup>2</sup> ,) on room air of: a. 60 mm Hg or less, at test sites less than 3000 feet above sea level, or b. 55 mm Hg or less, at test sites from 3000 to 6000 feet, or c. 50 mm Hg or less, at test sites above 6000 feet; or 2. Documentation of intrapulmonary arteriovenous shunting by contrast-enhanced echocardiography or macroaggregated albumin lung perfusion scan. OR F. Hepatic encephalopathy as described in 105.00D10, with 1 and either 2 or 3: 1. Documentation of abnormal behavior, cognitive dysfunction, changes in mental status, or altered state of consciousness (for example, confusion, delirium, stupor, or coma), present on at least two evaluations at least 60 days apart within a consecutive 6-month period; and 2. History of transjugular intrahepatic portosystemic shunt
(TIPS)or any surgical portosystemic shunt; or 3. One of the following occurring on at least two evaluations at least 60 days apart within the same consecutive 6-month period as in F1: a. Asterixis or other fluctuating physical neurological abnormalities; or b. Electroencephalogram
(EEG)demonstrating triphasic slow wave activity; or c. Serum albumin of 3.0 g/dL or less; or d. International Normalized Ratio
(INR)of 1.5 or greater. OR G. End Stage Liver Disease, with: 1. For children 12 years of age or older, SSA CLD scores of 22 or greater calculated as described in 105.00D11a. Consider under a disability from at least the date of the first score. 2. For children who have not attained age 12, SSA CLD-P scores of 11 or greater calculated as described in 105.00D11b. Consider under a disability from at least the date of the first score. OR H. Extrahepatic biliary atresia as diagnosed on liver biopsy or intraoperative cholangiogram. Consider under a disability for 1 year following the diagnosis; thereafter, evaluate the residual liver function. 105.06 *Inflammatory bowel disease (IBD)* documented by endoscopy, biopsy, appropriate medically acceptable imaging, or operative findings with: A. Obstruction of stenotic areas (not adhesions) in the small intestine or colon with proximal dilatation, confirmed by appropriate medically acceptable imaging or in surgery, requiring hospitalization for intestinal decompression or for surgery, and occurring on at least two occasions at least 60 days apart within a consecutive 6-month period; OR B. Two of the following despite continuing treatment as prescribed and occurring within the same consecutive 6-month period: 1. Anemia with hemoglobin less than 10.0 g/dL, present on at least two evaluations at least 60 days apart; or 2. Serum albumin of 3.0 g/dL or less, present on at least two evaluations at least 60 days apart; or 3. Clinically documented tender abdominal mass palpable on physical examination with abdominal pain or cramping that is not completely controlled by prescribed narcotic medication, present on at least two evaluations at least 60 days apart; or 4. Perineal disease with a draining abscess or fistula, with pain that is not completely controlled by prescribed narcotic medication, present on at least two evaluations at least 60 days apart; or 5. Need for supplemental daily enteral nutrition via a gastrostomy or daily parenteral nutrition via a central venous catheter. (See 105.10 for children who have not attained age 3.) 105.07 *Short bowel syndrome (SBS),* due to surgical resection of more than one-half of the small intestine, with dependence on daily parenteral nutrition via a central venous catheter (see 105.00F). 105.08 *Malnutrition* due to any digestive disorder with: A. Chronic nutritional deficiency despite continuing treatment as prescribed, present on at least two evaluations at least 60 days apart within a consecutive 6-month period, and documented by one of the following: 1. Anemia with hemoglobin less than 10.0 g/dL; or 2. Serum albumin of 3.0 g/dL or less; or 3. Fat-soluble vitamin, mineral, or trace mineral deficiency; AND B. Growth retardation documented by one of the following: 1. For children who have not attained age 2, multiple weight-for-length measurements that are less than the third percentile on the CDC's most recent weight-for-length growth charts, documented at least three times within a consecutive 6-month period; or 2. For children age 2 and older, multiple Body Mass Index (BMI)-for-age measurements that are less than the third percentile on the CDC's most recent BMI-for-age growth charts, documented at least three times within a consecutive 6-month period. 105.09 *Liver transplantation.* Consider under a disability for 1 year following the date of transplantation; thereafter, evaluate the residual impairment(s) (see 105.00D13 and 105.00J). 105.10 *Need for supplemental daily enteral feeding via a gastrostomy* due to any cause, for children who have not attained age 3; thereafter, evaluate the residual impairment(s) (see 105.00H). PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED Subpart I—[Amended] 7. Revise the authority citation for subpart I of part 416 to read as follows: Authority: Secs. 221(m), 702(a)(5), 1611, 1614, 1619, 1631(a), (c), (d)(1), and
(p)and 1633 of the Social Security Act (42 U.S.C. 421(m), 902(a)(5), 1382, 1382c, 1382h, 1383(a), (c), (d)(1), and (p), and 1383b); secs. 4(c) and 5, 6(c)-(e), 14(a), and 15, Pub. L. 98-460, 98 Stat. 1794, 1801, 1802, and 1808 (42 U.S.C. 421 note, 423 note, and 1382h note). § 416.924b [Amended] 8. In § 416.924b(b)(3), remove the reference “§ 416.924a(m)(7) or (8)” and insert the reference “§ 416.926a(m)(6) or (7)” in its place. § 416.926a [Amended] 9. In § 416.926a, remove paragraphs (m)(3) and (m)(10) and redesignate paragraphs (m)(4), (m)(5), (m)(6), (m)(7), (m)(8), and (m)(9) as paragraphs (m)(3), (m)(4), (m)(5), (m)(6), (m)(7), and (m)(8). [FR Doc. E7-20235 Filed 10-18-07; 8:45 am] BILLING CODE 4191-02-P 72 202 Friday, October 19, 2007 Rules and Regulations Part IV Department of Transportation National Highway Traffic Safety Administration 49 CFR Part 512 Confidential Business Information; Final Rule DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration 49 CFR Part 512 [Docket No. NHTSA-06-26140; Notice 2] RIN 2127-AJ95 Confidential Business Information AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT. ACTION: Final rule. SUMMARY: This final rule addresses the confidentiality of certain information that manufacturers of motor vehicles and motor vehicle equipment submit to NHTSA pursuant to the early warning reporting
(EWR)rule. The agency is establishing class determinations that certain categories of EWR information are confidential, based on Exemption 4 of the Freedom of Information Act (FOIA). These categories of EWR data are production numbers (other than for light vehicles), the numbers of consumer complaints, the numbers of warranty claims (warranty adjustments in the tire industry), the numbers of field reports, copies of field reports and common green tire identifier information. In addition, based on the privacy interests protected by FOIA Exemption 6, the rule includes a class determination encompassing the last six
(6)characters of the vehicle identification numbers
(VINs)which are reported in certain EWR submissions involving deaths and injuries. This final rule also clarifies the agency's general requirements regarding confidentiality markings in submissions in electronic media. DATES: This final rule is effective on November 19, 2007. If you wish to submit a petition for reconsideration of this rule, your petition must be received by December 3, 2007. ADDRESSES: Petitions for reconsideration should refer to the docket number and be submitted to: Administrator, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., West Building Fourth Floor, Washington, DC 20590, with a copy to the DOT docket. Copies to the docket may be submitted electronically through the Federal E-Rulemaking Portal at *http://www.regulations.gov.* Follow the online instructions for submitting comments. You may call Docket Management at 202-366-9324. The Docket room (ground floor Room W12-140, 1200 New Jersey Avenue, SE.) hours are from 9 a.m. to 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Michael Kido, Office of Chief Counsel, NHTSA, telephone
(202)366-5263, 1200 New Jersey Avenue, SE., Washington, DC 20590. SUPPLEMENTARY INFORMATION: Table of Contents I. Background A. National Traffic and Motor Vehicle Safety Act B. TREAD Act—Early Warning Reporting C. Confidentiality of EWR Data D. Litigation Challenging the 2003-2004 CBI Rule II. 2006 Notice of Proposed Rulemaking III. The Final Rule A. Determinations of the Confidentiality of EWR Data Are Based on FOIA Exemptions 4 and 6 B. Approach—Class Determinations v. Individual Assessments C. Class Determinations Based on FOIA Exemption 4 1. Production Numbers 2. Consumer Complaints 3. Warranty Claims 4. Field Reports 5. Common Green Tire Identifiers D. Class Determination Based on FOIA Exemption 6 IV. Exemption 3 V. Other EWR Data VI. Identification of Confidential Business Information Located in Electronic Files VII. Updated Agency Contact Information VIII. Data Quality Act Issues IX. Privacy Act Statement X. Regulatory Analyses and Notices A. Executive Order 12866 and DOT Regulatory Policies and Procedures B. Regulatory Flexibility Act C. Executive Order 13132 (Federalism) D. Unfunded Mandate Reform Act E. Executive Order 12988 (Civil Justice Reform) F. Paperwork Reduction Act G. Executive Order 13045 H. Regulation Identifier Number
(RIN)I. Background On October 31, 2006, NHTSA published a notice of proposed rulemaking
(NPRM)regarding the confidentiality of certain early warning reporting
(EWR)data submitted to the agency by manufacturers of motor vehicles and motor vehicle equipment. 71 FR 63738. In that notice, the agency proposed to create class determinations that specified EWR data would be confidential based on the criteria applicable to required submissions under Exemption 4 of the Freedom of Information Act (FOIA). In addition, some of the data in VINs would be confidential based on FOIA Exemption 6. The October 2006 NPRM also proposed to clarify requirements applicable to persons seeking confidential treatment for information contained on electronic media. In this final rule, the agency adopts the proposed class determinations and amends the submission process for requesting confidential treatment for information on electronic media. The background and genesis of this rulemaking is summarized below. A. National Traffic and Motor Vehicle Safety Act In 1966, Congress enacted the National Traffic and Motor Vehicle Safety Act (Safety Act) with the purpose of reducing traffic accidents and deaths and injuries to persons resulting from traffic accidents. 49 U.S.C. 30101. 1 Since it was amended in 1974, the Safety Act has contained a series of provisions that address motor vehicles and motor vehicle equipment that contain a potential or actual defect that is related to motor vehicle safety. 2 1 Pub. L. 89-563, 80 Stat. 718. This preamble will use the current citations to the United States Code. In 1994, the Safety Act, as amended, was repealed, reenacted, and recodified without material change as part of the recodification of Title 49 of the United States Code. *See* Pub. L. 103-272, 108 Stat. 745, 1379, 1385
(1994)(repealing); *id.* at 745, 941-73
(1994)(reenacting and recodifying without substantive changes). 2 Pub. L. 93-492, 88 Stat. 1470 (1974). The Safety Act requires a manufacturer to notify NHTSA and the vehicle or equipment owners if it learns of a defect and decides in good faith that the defect is related to motor vehicle safety. 49 U.S.C. 30118(c). This duty is independent of any action by NHTSA. 3 Ordinarily, a manufacturer's notice is followed by the manufacturer's provision of a free remedy to owners of defective vehicles and equipment. *See* 49 U.S.C. 30120. Collectively, the manufacturer's notice and remedy are known as a recall. 3 *United States* v. *General Motors Corp.,* 574 F. Supp. 1047, 1049 (D.D.C. 1983). Congress also provided NHTSA with considerable investigative and enforcement authority. The Safety Act authorizes NHTSA to conduct investigations and to require manufacturers to submit reports to enable the agency to determine whether the manufacturer has complied with or is complying with the statute, including its duty to conduct recalls when warranted. 49 U.S.C. 30166(b), (e). An investigation may culminate in an order to the manufacturer to provide notification of a safety-related defect or a noncompliance to owners of the vehicle or equipment. 49 U.S.C. 30118(a), (b). B. TREAD Act—Early Warning Reporting For several decades preceding the enactment of the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act of 2000, 4 the Safety Act provided for limited submissions of information by a manufacturer to NHTSA prior to the manufacturer's submission of a notice of a safety-related defect. *See* 49 U.S.C. 30118(c); 49 CFR part 573. Manufacturers were required to submit copies of technical service bulletins and other communications to the agency. *See* 49 U.S.C. 30166(f); 573.8 (1999); 66 FR 6532, 6533 (Jan. 22, 2001). NHTSA also received consumer complaints. At times, this information provided a basis for opening an investigation and at times it did not. This practical limitation on NHTSA's investigations manifested itself in 2000 when it was revealed that under the limited level of reporting then required, the agency had not been provided sufficient information to identify defects in Firestone tires mounted on Ford Explorers. 66 FR at 6534. There were numerous fatalities before NHTSA opened an investigation and Firestone conducted recalls of its tires. 4 Pub. L. 106-414, 114 Stat. 1800. In response to these and other shortcomings in the Safety Act, on November 1, 2000, Congress enacted the TREAD Act. The TREAD Act added provisions to the Safety Act that expanded the scope of the information manufacturers must submit to NHTSA prior to a manufacturer-initiated recall. In relevant part, the TREAD Act required the Secretary of Transportation to publish a rule setting out the early warning reporting requirements to enhance the agency's ability to carry out the Act. 49 U.S.C. 30166(m). In general, the TREAD Act authorized the agency to require manufacturers to submit information that may assist in the early identification of defects related to motor vehicle safety. In July 2002, pursuant to the TREAD Act, NHTSA promulgated the Early Warning Reporting
(EWR)rule. 67 FR 45822 (July 10, 2002). 5 Generally, the EWR rule required manufacturers of automobiles and other light vehicles, medium-heavy trucks and buses, motorcycles, and trailers that produce or sell 500 or more vehicles per year in any of these industry sectors and manufacturers of child restraints and tires (except as to relatively low production tire lines) to submit data regarding production numbers (cumulative total vehicles or equipment manufactured annually), incidents involving death or injury based on claims and notices, property damage claims, consumer complaints, warranty claims paid, and field reports on a quarterly basis. *See* 49 CFR 579.21-579.26. Collectively this information is referred to as EWR data. In this notice, we refer to the vehicle and tire manufacturers that report under 49 CFR 579.21-579.24 and 579.26 as larger manufacturers. 6 The information is submitted electronically to the agency in a standardized format. *See* 49 CFR 579.29. 5 Thereafter, NHTSA published amendments to the EWR rule. As used herein, the references to the EWR rule are to the rule as amended. The reader should note that the discussion of the EWR rule in this notice is a summary. The full text of the rule and associated **Federal Register** notices should be consulted for a complete description. 6 Manufacturers other than larger vehicle and tire manufacturers and child restraint manufacturers have limited EWR obligations. *See* 49 CFR 579.27. More specifically, the categories of information on which these manufacturers of light vehicles, medium-heavy vehicles and buses, motorcycles, trailers, tires and child restraints generally report under the EWR rule are: • *Production.* These manufacturers must report the number of vehicles, child restraint systems, and tires, by make, model, and model (or production) year, during the reporting period and the prior nine model years (prior four years for child restraint systems and tires). • *Deaths.* These manufacturers must report certain specified information about each incident involving a death that occurred in the United States that is identified in a claim (as defined) against and received by the manufacturer. They must also report information about incidents involving a death in the United States that is identified in a notice received by the manufacturer alleging or proving that the death was caused by a possible defect in the manufacturer's product. Finally, they must report on each death occurring in a foreign country that is identified in a claim against the manufacturer involving the manufacturer's product, or one that is identical or substantially similar to a product that the manufacturer has offered for sale in the United States. • *Injuries.* These manufacturers must report certain specified information about each incident involving an injury that is identified in a claim against and received by the manufacturer, or that is identified in a notice received by the manufacturer which notice alleges or proves that the injury was caused by a possible defect in the manufacturer's product. • *Property damage claims.* These manufacturers (other than child restraint system manufacturers) must report the numbers of claims for property damage that are related to alleged problems with certain specified components and systems, regardless of the amount of such claims. • *Consumer complaints.* These manufacturers (other than tire manufacturers) must report the numbers of consumer complaints they receive that are related to problems with certain specified components and systems. Manufacturers of child restraint systems must report the combined number of such consumer complaints and warranty claims. • *Warranty claims.* These manufacturers must report the number of warranty claims (adjustments for tire manufacturers), including extended warranty and good will, they pay that are related to problems with certain specified components and systems. As noted above, manufacturers of child restraint systems must combine these with the number of reportable consumer complaints. • *Field reports.* These manufacturers (other than tire manufacturers) must report the total number of field reports they receive from the manufacturer's employees, representatives, and dealers, and from fleets, that are related to problems with certain specified components and systems. In addition, manufacturers must provide copies of field reports received from their employees, representatives, and fleets, but are not required to provide copies of reports received from dealers and product evaluation reports. Tire manufacturers must also provide information on their common green tire lines: • *Common green tires.* Tire manufacturers must identify tires that are produced to the same internal specifications but that have, or may have, different external characteristics and may be sold under different tire line names. C. Confidentiality of EWR Data The EWR rule did not address the confidentiality of EWR data. It noted, however, that this issue would be considered as part of the proposed amendments to NHTSA's confidential business information rule. *See* 67 FR at 45866, n.6. In July of 2003, NHTSA addressed the confidentiality of EWR data in its general rule on Confidential Business Information (CBI). 49 CFR Part 512, 68 FR 44209 (July 28, 2003). The 2003 CBI rule addressed the confidentiality of EWR information in a new Appendix C, which set forth class determinations treating certain EWR information as confidential based on FOIA Exemption 4. In particular, the rule determined that EWR data on production numbers (except light vehicles), consumer complaints, warranty claims, and field reports including copies of field reports, were confidential. 49 CFR Part 512 Appendix C (2003). The agency based these class determinations on the substantial competitive harm and impairment standards of FOIA Exemption 4. *See* 5 U.S.C. 552(b)(4); 49 CFR Part 512 App. C (2003). The 2003 CBI rule did not resolve the confidentiality of EWR data on deaths and injuries, or on property damage claims. In April 2004, NHTSA amended the CBI rule in its response to administrative petitions for reconsideration of the July 2003 rule. 69 FR 21409 (April 21, 2004). Specifically, the agency added two class determinations to Appendix C. One class determination, based on FOIA Exemption 4, covered common green tire identifiers submitted by tire manufacturers under the EWR rule, 49 CFR 579.26(d). A second class determination, based on FOIA Exemption 6, covered the last six
(6)characters of vehicle identification numbers
(VINs)contained in EWR death and injury reports. *See,* e.g. 49 CFR 579.21(b)(2). D. Litigation Challenging the 2003-2004 CBI Rule Public Citizen filed a lawsuit challenging NHTSA's class determinations in Appendix C to 49 CFR Part 512. The Rubber Manufacturers Association
(RMA)intervened and asserted, among other things, that in light of a disclosure provision in the TREAD Act, 7 NHTSA was precluded from disclosing all EWR data, subject to a limited exclusion. In a March 31, 2006 decision, the United States District Court for the District of Columbia addressed some of Public Citizen's claims. The Court upheld the agency's authority to promulgate the regulation making categorical confidentiality determinations for classes of EWR data. *Public Citizen, Inc.* v. *Mineta* , 427 F. Supp. 2d 7, 12-14 (D.D.C. 2006). The Court concluded, however, that NHTSA had not provided adequate notice and an opportunity to comment on those determinations in the proposed rule. *Id* . at 14-17. The Court remanded the matter to NHTSA but did not address the parties' other claims. *Id* . Thereafter, in a supplemental opinion, the Court addressed RMA's claim that the disclosure of EWR data was precluded by the disclosure provision in the TREAD Act and FOIA Exemption 3, 5 U.S.C. 552(b)(3), which provides for the withholding of information when disclosure of that information is prohibited by another statute. 8 *Public Citizen, Inc.* v. *Mineta* , 444 F. Supp. 2d 12 (D.D.C. 2006). The District Court held that the TREAD Act's disclosure provision was not an Exemption 3 statute. RMA appealed the District Court's judgment to the U.S. Court of Appeals for the District of Columbia Circuit (No. 06-5304) and that case is currently pending. 7 49 U.S.C. 30166(m)(4)(C). In reference to information provided by manufacturers pursuant to the EWR rule, this provision states: “ *Disclosure.* None of the information collected pursuant to the final rule promulgated under paragraph
(1)[the EWR rule] shall be disclosed pursuant to section 30167(b) unless the Secretary determines the disclosure of such information will assist in carrying out sections 30117(b) and 30118 through 30121.” 8 Exemption 3 applies when information is “specifically exempted from disclosure by statute (other than section 552b of this title) provided that such statute
(A)requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or
(B)establishes particular criteria for withholding or refers to particular types of matters to be withheld”. 5 U.S.C. 552(b)(3). II. 2006 Notice of Proposed Rulemaking In light of the District Court's decisions, on October 31, 2006, NHTSA published an NPRM addressing the confidentiality of certain EWR information. In short, the agency proposed class determinations that production numbers for reporting sectors other than light vehicles, consumer complaints, warranty claims (warranty adjustments in the tire industry), field reports (including copies of field reports) and common green tire identifier information would be confidential. This proposal was based on the criteria in FOIA Exemption 4. 71 FR at 63741-42. Under Exemption 4, where the submission of information to the government is mandatory, as is reporting required by the EWR rule, the information is confidential if its disclosure is likely to cause substantial harm to the competitive position of the person from whom the information was obtained or to impair the Government's ability to obtain necessary information in the future. This proposal was consistent with the 2003 and 2004 rules, and was based on the docket for that rulemaking. *See* NHTSA Docket No. 2002-12150 ( *available at http://dms.dot.gov* which is being transferred to *http://www.regulations.gov)* . More particularly, in formulating the proposal, NHTSA considered comments from a diverse cross-section of the automotive industry and a non-governmental organization. Commenters included the Automotive Occupant Restraints Council (AORC), Bendix Commercial Vehicle Systems (Bendix), Blue Bird Body Company (Blue Bird), Enterprise Fleet Services (Enterprise), Harley-Davidson Motor Company (Harley-Davidson), the Juvenile Products Manufacturers Association (JPMA), the Motor and Equipment Manufacturers Association and the Original Equipment Suppliers Association (MEMA/OESA), Hella North America (Hella) (which primarily referred to the comments from MEMA/OESA), the Motorcycle Industry Council, the Tire Industry Association (TIA), Utilimaster Corporation (Utilimaster), WABCO North America (WABCO), and Workhorse Custom Chassis (Workhorse). NHTSA also considered comments by Public Citizen and its litigation group. As in the previously remanded rule, the agency's October 2006 NPRM also proposed creating a class determination for the last six
(6)characters of VINs of vehicles allegedly involved in deaths and injuries reported in the EWR data. *See* 71 FR at 63745 and 69 FR at 21416. This was based on Exemption 6 of the FOIA, which provides for withholding information that, if disclosed, would constitute a clearly unwarranted invasion of personal privacy. We noted our ability to obtain personal information regarding individual owners and past owners using a VIN and expressed our concern over the disclosure of full VINs of vehicles reportedly involved in an event resulting in an injury or fatality. Notwithstanding this limited redaction, we noted that the public would be able to identify the make, model, and model year of the vehicle involved in an injury- or fatality-producing incident reported through EWR data. The NPRM published in October of 2006 explained that we were not proposing class determinations of confidentiality of other categories of EWR information, namely, information on incidents involving deaths and injuries, and on property damage claims. *See id.* at 63745-46. Further, the agency noted that the issue of whether the TREAD Act disclosure provision qualifies as a FOIA Exemption 3 statute was pending in the Court of Appeals and indicated that the agency would act in a manner consistent with that ruling once issued. Apart from the confidentiality of EWR data, the NPRM proposed clarifications to the submission procedures to address recurring problems encountered by the agency with requests for confidential treatment contained on electronic media such as CDs or DVDs. In response to the October 2006 NPRM, a number of trade associations representing a variety of automotive sectors, companies, consumer groups and individuals submitted comments. The industry commenters included the Alliance of Automobile Manufacturers (the Alliance), Association of International Automobile Manufacturers (AIAM), General Motors North America (GM), National Marine Manufacturers Association (National Marine), Nissan North America (Nissan), Rubber Manufacturers Association (RMA), Truck Manufacturers Association (TMA), and Utility Trailer Manufacturing (Utility)—all of which generally supported the proposed class determinations based on FOIA Exemptions 4 and 6. Non-industry commenters included numerous individual consumers and groups (Public Citizen, American Association for Justice (AAJ), and Quality Control Systems (Quality Control)). 9 These commenters generally criticized the proposed class determinations and asked that the agency withdraw its proposal. Many individual commenters also appear to have mistakenly believed that the proposal would affect information ( *e.g.* , consumer complaints and information produced during defect investigations) that is already made available to the public through the agency's Web site. 9 The vast majority of individuals who commented appeared to believe that the agency, in light of the class determinations, would cease making public information pertaining to defect investigations and recalls. The class determinations adopted today address only EWR data and do not pertain to other information that the agency currently discloses to the public. The agency will continue to make this information publicly available. III. The Final Rule The rule that NHTSA is publishing today creates class determinations that EWR data on production numbers (other than for light vehicles), the numbers of consumer complaints, warranty claims and field reports, copies of field report documents, and common green tire identifier information are confidential. These class determinations, which are included in a new Appendix C to 49 CFR Part 512, are based on FOIA Exemption 4. Second, the rule creates a class determination based on FOIA Exemption 6 that covers the last six
(6)characters of VINs contained in EWR reports pertaining to incidents involving death or injury. These 6 characters would be redacted from injury or fatality information contained in EWR submissions. Thus, absent an individual manufacturer's request for confidentiality for particular EWR death and injury reports, these reports would be released to the public, except for the last 6 characters of a VIN. This class determination is in a new Appendix D to 49 CFR Part 512. The agency also is modifying the procedural provisions of 49 CFR 512.6 with respect to the submission of information contained on electronic media for confidential treatment. The rule adopts a slightly modified version of the changes proposed in our NPRM by permitting some flexibility in the identification of confidential information and pagination requirements. Details of the new procedures are discussed under Section VI. *Identifying Confidential Business Information Located in Electronic Files.* Finally, this rule updates the agency's contact information to reflect the Department of Transportation's new address. This change is incorporated into 49 CFR 512.7. Our rationale for the final rule follows. A. Determinations of the Confidentiality of EWR Data Are Based on FOIA Exemptions 4 and 6 The confidentiality of most EWR data is based on FOIA Exemption 4, 5 U.S.C. 552(b)(4). FOIA Exemption 4 provides for the withholding of “trade secrets and commercial or financial information obtained from a person and privileged or confidential”. Under Exemption 4, the standard for assessing the confidentiality of information that parties are required to submit to the government is whether “disclosure of the information is likely to have either of the following effects:
(1)To impair the Government's ability to obtain necessary information in the future; or
(2)to cause substantial competitive harm to the competitive position of the person from whom the information was obtained.” 10 *National Parks & Conservation Ass'n* v. *Morton,* 498 F.2d 765, 770 (D.C. Cir. 1974). These two alternative tests are referred to as the impairment prong and the competitive harm prong. 10 The term “trade secrets” has been narrowly defined by the Court of Appeals for the District of Columbia Circuit for the purpose of FOIA Exemption 4 as encompassing “a secret, commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort.” *Public Citizen Health Research Group* v. *FDA,* 704 F.2d 1280, 1288 (D.C. Cir. 1983). Under the competitive harm prong of the *National Parks* test, there must be “actual competition and a likelihood of substantial competitive injury” from disclosure of the information. *CNA Financial Corp.* v. *Donovan,* 830 F.2d 1132, 1152 (D.C. Cir. 1987). This standard requires only that disclosure of information would “likely” cause competitive harm, for whatever reasons. *McDonnell Douglas Corp.* v. *U.S. Dept. of the Air Force,* 375 F.3d 1182, 1187 (D.C. Cir. 2004); *see also Occidental Petroleum Corp.* v. *SEC,* 873 F.2d 325, 341 (D.C. Cir. 1989). Under this prong, the agency assesses the likelihood of substantial injury; it does not make that assessment and then further balance it against other matters such as the public's interest in the information. In fact, the D.C. Circuit has firmly rejected the contention that under Exemption 4 a court should gauge whether the competitive harm to an entity submitting confidential information from the public disclosure of the information is outweighed by the strong public interest in the information. As discussed below, in *Public Citizen Health Research Group* v. *FDA,* 185 F.3d 898, 904-05 (D.C. Cir. 1999), the court held that the appropriate balancing is reflected in the test of confidentiality set forth in *National Parks.* There is no further balancing of the public's interest in the information. B. Approach—Class Determinations v. Individual Assessments As explained in the NPRM, the District Court in *Public Citizen, Inc.* v. *Mineta,* 427 F.Supp. 2d 7, 12-14 (D.D.C. 2006), ruled that NHTSA had the authority to promulgate the 2003 CBI rule making categorical confidentiality determinations for classes of EWR data. *See* 71 FR at 63740. Consistent with the District Court's opinion, the agency proposed a rule to address the confidentiality of EWR information through specific class determinations based on FOIA Exemptions 4 and 6. *Id.* We pointed out that this proposal was largely similar to our prior determinations. 71 FR at 63740 and 63741. Both industry and non-industry commenters provided views on the proposed adoption of class determinations. Industry comments (e.g., AIAM, the Alliance, and Nissan) were predicated in part on the recurring nature of early warning reporting under 49 CFR Part 579. In connection with each quarterly submission of EWR data, manufacturers would request confidential treatment for the EWR data and would provide the same justifications in each quarterly request. This result, the manufacturers maintained, would create significant administrative burdens for both the submitting entities and the agency. Nissan added that such a burden was not anticipated by the EWR rule and would be inconsistent with the TREAD Act's premise against creating undue burdens in implementing the EWR program. *See also* H.R. Rep. No. 106-954, at 14 (Oct. 10, 2000) (pointing out that the agency's EWR rule “may not impose requirements that are unduly burdensome to a manufacturer, taking into account the manufacturer's cost of complying with such requirements”). Non-industry commenters criticized the agency's proposed class determination approach. For example, Quality Control suggested that the agency apply a presumption of non-confidentiality (i.e., of disclosure) to whatever class determinations that the agency adopts. Public Citizen asserted that the District Court's holding regarding the agency's authority to promulgate class determinations based on FOIA exemptions was in error. Thus, Public Citizen disputed the legality of creating class determinations. It also pointed out that the agency had previously proposed the creation of presumptively nonconfidential categories that in Public Citizen's view would cover complaints, property damage and paid warranty claims. In comments to the agency's prior rulemaking, Public Citizen expressed support for class determinations that applied a presumption in favor of broad disclosure of EWR information. As noted in the summary of this rule, NHTSA has decided to promulgate class determinations on the confidentiality of some but not all categories of EWR data. In adopting this approach, we have considered a number of matters. First, we have considered whether class determinations may lawfully be adopted. As explained by the District Court, NHTSA may adopt categorical rules to manage the tasks assigned to it by Congress under the TREAD Act. *Public Citizen,* 427 F. Supp. 2d at 13. Second, we have identified and assessed the alternatives. One alternative is to require manufacturers to submit individual requests for confidentiality for each quarterly submission of EWR data. A second alternative is to adopt binding class determinations. Class determinations could be adopted on a category-by-category of EWR data basis, where warranted, as was proposed in the October 2006 NPRM and had been adopted in the rule that was remanded by the District Court. A variation on this approach, which was not proposed, would be class determinations that cover all EWR data. A third alternative is presumptive categorical determinations of confidentiality. In considering the alternatives, two significant concerns are the provision of direction to the regulated entities and predictability. About 500 manufacturers regularly report EWR data. One general concern is providing direction to them regarding the confidentiality of EWR data. A related and more specific concern is that the agency convey its views, not only on procedures, but on the substance of what they must show in seeking confidentiality and/or on whether some or all of the information is confidential. Another concern is consistency. As detailed in the EWR rule, there are common data elements in the EWR submissions. NHTSA is concerned that it provides consistent determinations of the confidentiality of data reported on the common data elements. The common data elements in EWR submissions exist both across and within EWR categories of vehicle and equipment manufacturers. For example, most categories of larger manufacturers regulated under the EWR rule submit consumer complaint data. *See* 49 CFR 579.21(c) (light vehicles), 579.22(c) (medium heavy vehicles and buses), 579.23(c) (motorcycles), 579.24(c) (trailers). 11 And most reporting sectors submit warranty claims data. *See* 49 CFR 579.21(c) (light vehicles), 579.22(c) (medium heavy vehicles and buses), 579.23(c) (motorcycles), 579.24(c) (trailers), 579.26(c) (warranty adjustments in the tire industry). 12 All the categories of vehicle manufacturers submit field reports, as do child restraint manufacturers. *See* 49 CFR 579.21(c) (light vehicles), 579.22(c) (medium heavy vehicles and buses), 579.23(c) (motorcycles), 579.24(c) (trailers); 579.25(c) (child restraints). 11 *See also* 49 CFR 579.21(c) (child restraint manufacturers report combined consumer complaints and warranty claims). 12 *See* previous footnote. Within the categories of manufacturers that submit EWR data, there are common data elements. For example, all light vehicle manufacturers report on the same 18 different systems and components. These include, for example, steering systems, air bags, seat belts and wheels. *See* 49 CFR 579.21(b)(2), (c). Child restraint manufacturers report on the same elements such as buckles and harnesses, and handles. 49 CFR 579.25(b)(2), (c). And tire manufacturers report on the same items, such as the tread and sidewall. 49 CFR 579.26(b)(2), (c). In addition, most of the vehicle categories include some of the same and similar reporting elements, including brakes, electrical, exterior lighting, tires, and wheels. *See* 49 CFR 579.21(c) (light vehicles), 579.22(c) (medium heavy vehicles and buses), 579.23(c) (motorcycles), 579.24(c) (trailers). The data elements are largely the same. Third, the agency is concerned about the burden on the manufacturers in submitting individual requests for confidentiality, and the burden on the agency of processing individual requests and ruling on them. Also, if NHTSA staff denies a request, the party may petition for administrative reconsideration by NHTSA's Chief Counsel, who issues the final agency action on the request. 49 CFR 512.19. This creates additional burdens on persons seeking confidentiality and on the agency. NHTSA is also concerned about other aspects of the administration of its programs. For example, the agency considers the burdens on small businesses. If NHTSA were simply to require individual requests for confidential treatment with the submission of EWR data on a quarterly basis under 49 CFR Part 512 without the Appendices on the confidentiality of EWR data (Appendices C and D in today's rule), a large number of manufacturers would submit requests for confidentiality, without meaningful direction from the agency. In the absence of the direction that would be provided by a class determination, manufacturers likely would submit a wide variety of requests. They would be written in different ways (as requests under 49 CFR 512.8 now are), with a broad range of statements of fact and opinion, and rationales. NHTSA would make ad hoc determinations of the confidentiality of the EWR data for which confidentiality was requested. Some requests would meet the standards for confidential treatment under Exemption 4 of the FOIA, and some would not. Agency denials of requests likely would be followed by requests for reconsideration. The process would be anything but orderly. Moreover, there would be a large number of submissions. Based on the assumption that almost all of the 500 larger manufacturers that regularly submit EWR data would request confidentiality on a quarterly basis, there would be about 2000 requests for confidential treatment of EWR data per year. The EWR submissions include separate data entries for numerous makes/models/model years and systems and components, and the amount of information is substantial. Since the inception of the EWR rule, NHTSA has received a large volume of data and documents from reporting manufacturers. For the period from 2004 through the end of 2006, the agency received millions of items of aggregate data from the approximately 500 entities that regularly report EWR data to the agency. 13 From the approximately 60 light vehicle manufacturers who regularly submit EWR data, the agency has received information pertaining to nearly 163 million warranty claims, nearly 9.5 million consumer complaints, over 5.8 million field reports, and over half a million distinct field report documents. Manufacturers in other EWR reporting sectors, in addition to reporting detailed quarterly production data, likewise submitted large amounts of data. Medium-heavy bus and truck manufacturers submitted information regarding over 8.6 million warranty claims, nearly 277,000 complaints, over 301,000 field reports, and nearly 20,000 distinct field report documents; trailer manufacturers submitted information covering over 1.3 million warranty claims, nearly 77,000 complaints, over 20,000 field reports, and over 400 distinct field report documents; and motorcycle manufacturers provided nearly 889,000 warranty claims, nearly 41,000 complaints, over 26,000 field reports, and nearly 26,000 distinct field report documents. Motor vehicle equipment manufacturers submitted large volumes of EWR data as well. Child restraint manufacturers submitted information on over 50,000 complaints and warranty claims, over 8,500 field reports, and provided over 4,500 distinct field report documents. Tire manufacturers provided data on over 1.3 million warranty adjustment claims. 13 The term “aggregate data” refers to the quarterly submissions of the numbers of paid warranty claims, consumer complaints, field reports, and property damage claims received by the agency. If the agency were to review requests for confidentiality from individual manufacturers, inevitably there would be inconsistent resolutions on the confidentiality of data submitted in the numerous data elements in EWR reports. These different outcomes would stem from the different approaches in manufacturers' requests and different assertions in them, different agency staff reviewing different requests, and pressure to resolve requests in order to minimize the inevitable backlog, discussed below. Thus, a third problem would be consistency. In addition, a requirement that manufacturers submit individual requests for confidentiality would pose a substantial burden on the manufacturers and the agency. As noted above, there likely would be about 2000 requests for confidentiality of EWR data per year. Most would cover the range of EWR data, including production data, consumer complaints, warranty claims and field reports. Some, such as would be expected from Goodyear based on its historic practices, 14 would cover EWR information on deaths and injuries and property damage claims, which are not covered by today's rule. The preparation of these requests would impose a substantial burden on the manufacturers. The burden would fall disproportionately on the manufacturers that are not comparable in size to companies such as Toyota and General Motors, and have limited to no experience in requesting confidentiality from NHTSA. The preparation of the initial requests would be particularly burdensome. Ultimately, NHTSA would deny some of these requests and manufacturers would file petitions for reconsideration. Over time, we expect that most manufacturers, perhaps with outside assistance, would likely be able to submit a request for confidentiality that NHTSA would grant. In the long run, the process would become routinized. At this stage, a manufacturer would largely repeat what it had said in a previous request for confidentiality of EWR data that the agency had granted, making that and subsequent quarterly individual assessments duplicative. As a result, requiring EWR data submitters to provide a detailed written justification for each quarterly submission would be difficult to justify, as it would impose burdens on manufacturers that are unnecessary given the availability of class determinations under the District Court's decision in *Public Citizen.* 14 Goodyear submits quarterly requests for confidentiality of EWR data notwithstanding a stay pending a decision by the court on the RMA claim that the TREAD Act is a FOIA Exemption 3 statute. These requests provide insight into the nature of requests for the confidentiality of certain EWR data. In contrast to these projected 2000 requests, the agency normally receives approximately 450 requests for confidential treatment annually. 15 A portion of these are addressed with limited effort because they involve information submitted voluntarily, which is subject to an objective standard that ordinarily is met based on a limited review. 16 Adding the 2000 requests for confidential treatment that would likely accompany EWR submissions, on an annual basis, would significantly add to the burden faced by the agency. 15 This number was derived from the number of requests for confidential treatment that the agency has received over the past three calendar years and the expectation that we will receive requests for confidentiality of EWR information that would not be resolved by this rulemaking. 16 *Critical Mass Energy Project* v. *NRC* , 975 F.2d 871 (D.C. Cir. 1992). The agency's experience in processing and responding to confidentiality requests, such as those submitted during the course of enforcement investigations, provides a foundation for an assessment of the burden and its implications. A comparison of the expected number of EWR submissions to the number of confidentiality requests that manufacturers now submit, which do not involve EWR data, while taking content to account, indicates that if the agency were to attempt to process individualized requests for confidentiality of EWR data from each or most manufacturers that regularly report EWR data, the agency would be overwhelmed. There would be considerable additional work from logging in, to assigning and controlling assignments, to analyzing the requests, to preparing draft letters, to review, to preparation and execution of final letters to logging them out. There would also be an overall management burden. There are no available resources to do this work. A backlog would develop and delays in responding to requests for confidentiality of EWR data and other requests for confidentiality would ensue. Requests for confidentiality that likely would have merit and those that likely would not be favorably received by the agency would be caught in the backlog. Consistent with our customary practices, the information would be withheld until the agency decides whether it is confidential. Disclosure to the public of information, including both EWR and non-EWR information, that is the subject of a request for confidentiality but that ultimately is determined not to be entitled to be withheld under Exemption 4 would be hindered and delayed. This likely would include at least some EWR data on deaths and injuries. Based on historical actions, it likely would include some information submitted by manufacturers in defect investigations. Ultimately, the public interest would be impacted. Another effect would be the likely diversion of some resources from other agency safety efforts, including pursuing other enforcement activities, in order to mitigate the delay. 17 17 Public Citizen, within the context of disclosing EWR data, noted that “[t]he categorical disclosure of documents and data obtained under the early warning system is essential for the proper functioning of the early warning rule”. In view of the foregoing, requiring and processing individual requests for confidential treatment for all EWR data is not a viable alternative. A second alternative is to proceed by binding rule. If NHTSA were to proceed by issuance of class determinations, the agency would take advantage of the benefits of rulemaking. Interested parties would know NHTSA's assessment of the confidentiality of most of the EWR data. 18 The Supreme Court has long recognized the general preference for rulemaking over ad hoc adjudications. In *SEC* v. *Chenery Corp.* 332 U.S. 194, 202 (1947), the Court observed that since an agency, unlike a court, does have the ability to make new law prospectively through the exercise of its rulemaking powers, it has less reason to rely upon ad hoc adjudication to formulate new standards of conduct. The Court recognized that the function of implementing the act should be performed, as much as possible, through this quasi-legislative promulgation of rules to be applied in the future. 18 The confidentiality of EWR data on deaths, injuries and property damage claims is not resolved by today's rule. Most manufacturers have not reported claims for deaths. Of those that have, NHTSA expects that most manufacturers, except tire companies, will not submit individualized requests for confidentiality. Binding determinations for EWR data are appropriate mechanisms to address the confidentiality of the EWR data report submissions. The submissions are standardized. The EWR reports contain identical informational elements for each regulated manufacturer category under the EWR rule. *See* 49 CFR Part 579, Subpart C. EWR reports are submitted pursuant to standardized electronic reporting templates that are used repeatedly from reporting period to reporting period. Each manufacturer in a regulatory category reports on the same systems and components. Each quarterly report provides a snapshot of that manufacturer's experience for each of the standard informational elements, making these submissions identical with respect to the nature of their content between reporting periods. Binding determinations eliminate the problems with ad hoc determinations. They provide direction to the regulated community. They assure consistency. They avoid resource burdens, particularly for small businesses. They eliminate the substantial workload that the agency would face in processing and addressing requests for confidentiality. They also avoid a substantial backlog on processing of requests for confidentiality that impacts not only EWR data but other information submitted to NHTSA as well. This would result in quicker disclosure to the public of information that is not confidential. This is in the public interest. The District Court recognized the suitability of adopting class determinations when it ruled that limited categorical rules that address the confidentiality of EWR data are necessary “to allow the agency to administer the EWR program effectively,” *Public Citizen,* 427 F. Supp. 2d at 13, and that the agency was “justified in making categorical rules to manage the tasks assigned to it by Congress under the TREAD Act.” *Id.* Consistent with this approach, the agency is adopting an appropriate method to help it manage the EWR program while satisfying its obligations under the FOIA. By adopting class determinations, the agency ensures that it applies a consistent and reliable approach when addressing the treatment of EWR data. Commenters on both sides of this issue also recognize the value of class determinations but each favors class determinations that result in opposite results—disclosure or withholding. A third alternative is presumptive class determinations. In the October 2006 NPRM, we explained the practical differences between adopting “binding” as opposed to “presumptive” determinations. Binding determinations would alleviate the need for submitters to provide a formal written request for confidentiality and supporting justification, whereas presumptive determinations would still require submitters to provide a written request and supporting justification pursuant to 49 CFR Part 512. 71 FR at 63745 n. 19. The agency currently uses presumptive determinations for certain classes of information detailed in Appendix B of 49 CFR Part 512. Presumptive determinations are a middle ground between ad hoc determinations and class determinations. In our view, presumptive determinations of the confidentiality of EWR data are inappropriate. While a presumptive determination would provide direction to the regulated community and the public and should avoid inconsistent rulings on the confidentiality of the EWR data submitted in satisfaction of EWR information requirements, it would not eliminate the requirement for individualized requests for confidentiality of EWR data. Since the elements and the basis for withholding them would be the same, individualized requests for confidentiality of EWR data would, as a practical matter, be unnecessary. Thus, they would impose an unnecessary burden on manufacturers. Also, the agency would face a substantial burden in processing requests for confidentiality under the presumptive determination alternative. 19 19 Public Citizen had suggested presumptions in favor of disclosure. In view of the general thrust of disclosure under FOIA in the absence of an exemption, this is not meaningful. The EWR data differ from the presumptive classes in 49 CFR Part 512 Appendix B in important respects. The presumptive class determinations in Appendix B cover information that has limiting factors such as a finite period of time for which confidentiality is sought or after which it ends (e.g., new product plan information for the upcoming model year expires once that product arrives or becomes public knowledge). Additionally, when reviewing requests for confidential treatment covering new product information (e.g., introduction of a new model) the agency not infrequently discovers that a manufacturer's media center has already publicly released that information, which makes it necessary for the agency to check the accuracy of a given confidentiality request. As a result, the nature of the information covered by Appendix B requires individualized agency review to ensure that non-confidential information is readily disclosed to the public. The EWR information (other than death, injury and property damage claims data, which are not covered) does not raise these concerns. C. Class Determinations Based on FOIA Exemption 4 Exemption 4 of the FOIA covers information in federal agency records that is commercial or financial information obtained from a person that is privileged or confidential. EWR information. 5 U.S.C. 552(b)(4). The terms “commercial” or “financial” information are given their ordinary meanings. *Public Citizen Health Research Group* v. *FDA,* 704 F.2d 1280, 1290 (D.C. Cir. 1983). Records are commercial so long as a submitter has a commercial interest in them. *Id.* EWR data meet this element of Exemption 4. 20 20 See the discussion of the categories of EWR information below. Those discussions demonstrate that the manufacturers have a commercial interest in the data. Second, the information must be obtained from a “person.” The word “person” encompasses business establishments, including corporations. *See FlightSafety Servs.* v. *Dep't of Labor,* 326 F.3d 607, 611 (5th Cir. 2003). EWR data is obtained from manufacturers, which are corporate business establishments. Thus, EWR data is obtained from persons within the meaning of Exemption 4. Third, the information must be confidential. 21 As noted above, in *National Parks* the Court declared that the term confidential should be read to protect governmental and private interests in accordance with a two part test: commercial or financial matter is “confidential” for the purposes of Exemption 4 if disclosure of the information is likely to have either of the following effects:
(1)To impair the Government's ability to obtain necessary information in the future; or
(2)to cause substantial competitive harm to the competitive position of the person from whom the information was obtained. 498 F.2d at 770. 22 21 Alternatively, privileged information may be withheld under Exemption 4. EWR data is not privileged. *See* 49 CFR 579.4(c) (definition of field report). 22 Impairment to the Government's ability to obtain this information in the future serves as an independent basis for withholding under Exemption 4. *See National Parks,* 498 F.2d at 770. The case law also strongly points to the availability of a “third prong” under Exemption 4—that of protecting other Governmental interests, such as compliance and program effectiveness. This third prong has been recognized, but not formally adopted, by the D.C. Circuit. *See Critical Mass* v. *NRC,* 975 F.2d 871, 879 (D.C. Cir. 1992) (noting that Exemption 4 can protect interests beyond impairment and competitive harm). *See also 9 to 5 Org. for Women Office Workers* v. *Bd. of Governors of the Fed. Res. System,* 721 F.2d 1, 11 (1st Cir. 1983) (adopting a third prong under Exemption 4 based on the Government's interest in administrative efficiency and effectiveness). Actual competitive harm need not be demonstrated for the purposes of the competitive harm prong. Rather, actual competition and a likelihood of substantial competitive injury is all that need be shown. *CNA Financial Corp.* v. *Donovan,* 830 F.2d 1132, 1152 (D.C. Cir. 1987). Vehicle and equipment manufacturers that submit EWR data operate in a highly competitive environment that is expected to become even more competitive. 23 There is competition for sales. 24 The industry is subject to a variety of competitive factors, including costs, competition in consumer-based surveys, and production differences. 25 23 *See, e.g. GM Looks to Future,* USA TODAY, at 10A (Feb. 7, 2007) (observing that the changing auto industry and fierce competition are forcing GM to undergo structural changes), Micheline Maynard, *Car Parts Maker Moves to Break its Union Deals,* NY TIMES, April 1, 2006, at A1 (noting increasingly stiff competition in the U.S. auto market), *and* Joann Muller, *Autos: A New Industry,* BUSINESSWEEK, July 15, 2002, at 98 (reporting on the changing U.S. auto market as “intense” competition changes the shape of the auto industry). 24 *See* comments of the Alliance and others on competition, discussed below under consumer complaints. 25 *See, e.g. Ford Ahead on Cost Savings Target for Materials,* REUTERS, Mar. 16, 2007 (available at *http://www.autonews.com* ) (noting challenges to Ford's ability to achieve future cost savings), Tony Lewin, *Nissan Factory Expertise Will Boost Laguna Quality,* AUTOMOTIVE NEWS, Oct. 30, 2006 (available at *http://www.autonews.com* ) (describing implementation of Nissan-developed quality control systems into Renault-manufactured vehicles), *and Domestics Gain in Quality Derby,* AUTOMOTIVE NEWS, Aug. 14, 2006 (available at *http://www.autonews.com* ) (reporting improvements by U.S. domestic automobile manufacturers in J.D. Power and Associates' Vehicle Dependability Study results). We now turn to certain categories of information that manufacturers must submit under the EWR rule. 1. Production Numbers The EWR rule requires larger volume manufacturers of light vehicles, medium-heavy vehicles and buses, motorcycles, trailers and tires and all child restraint manufacturers to submit production figures stating the number of vehicles, tires and child restraint systems, generally by make, model, and model (or production) year, produced during the model year of the reporting period and the prior nine model years (prior four years for child restraint systems and tires). See 49 CFR 579.21(a), 579.22(a), 579.23(a), 579.24(a), 579.25(a), 579.26(a). In the NPRM, NHTSA proposed to make a class determination that production figures in EWR data for motor vehicles, other than light vehicles, and for child restraints and tires would not be released to the public. The agency based this proposed class determination on the competitive harm prong of FOIA Exemption 4, as interpreted in *National Parks* . 26 71 FR at 63742. 26 The basis for excluding EWR production data on light vehicles (“any motor vehicle, except a bus, motorcycle, or trailer, with a gross vehicle weight rating of 10,000 lbs or less,” 49 CFR 579.4) from the class determination on confidentiality, as noted in the NPRM, is that those data are publicly available. Information that is already publicly available cannot be withheld by an agency under Exemption 4. *Niagara Mohawk Power Corp.* v. *Dep't of Energy* , 169 F.3d 16, 19 (D.C. Cir. 1999). We note that there are limits to the production information on light vehicles that is publicly available and which therefore is not withheld. The agency has granted confidential treatment for data on production of light vehicles with particular consumer features. Numerous parties have provided information to NHTSA on the question whether the disclosure of EWR production data, other than for light vehicles, would be likely to cause the manufacturer submitting the data to suffer competitive harm from the use of the information by competitors. The parties have addressed a number of related issues including whether EWR production data from reporting sectors other than light vehicles is publicly available and the consequences of the release of this production information, as well as the potential benefits of releasing it. Industry commenters stated that the production information was not publicly available in the detail that submitters must provide pursuant to the EWR rule. 27 Non-industry groups did not show otherwise. 27 For example, some manufacturers' total production of tires is publicly available, but the breakdown by model, size and production in a specified period is not. Vehicle production data that are available, other than for light vehicles, are limited and do not approach the same level of detail that these submitters provide to the agency in their EWR submissions. *See* Harley-Davidson Form 10-K Annual Report at 31 (Feb. 2, 2007) (stating production plans for 2007 by total motorcycle production). *See also http://www.jama.org* (offering total production numbers for individual Japanese motorcycle manufacturers). The Truck Manufacturers Association
(TMA)noted that that medium-heavy truck manufacturer EWR production data are detailed by model. They provide a compendium of detailed production data revealing the production history and sales trends for each individual model over time. TMA explained that these data can provide valuable insights into a manufacturer's production and marketing strategies. Since truck manufacturers offer a variety of different model lines, if the production data were released, competitors would gain valuable insights into the marketplace performance of a particular model or group of models without bearing any market risk. Competitors could analyze a reporting manufacturer's production data for all or select models to reach conclusions about a company's production and marketing strategies, production capacities, customer preferences and other commercially valuable information not otherwise obtainable. Using this information, TMA asserted, manufacturers can chart the strengths and weaknesses of their competitors' businesses within specific make, model and model years. The competitive impact of the disclosure of such information is of particular significance to medium truck producers since their collective customer base consists largely of fleet purchasers. A manufacturer can use medium-heavy vehicle production data to react more quickly to its competitors by changing its model offerings and shifting its sales and marketing strategies while avoiding the substantial costs and risks associated with new product development. 28 TMA used an example to make its point: 28 Manufacturers not only withhold this information from their competitors but also from their own suppliers. *See* Steve Konicki, *Just-In-Time Autos* , Techwebnews, 2001 WLNR 3151365 (May 7, 2001) (reporting that Ford Motor Company does not share its production data regarding medium and heavy truck applications with one of its largest diesel engine suppliers—International Truck and Engine Corporation). It is also commonly known that sales numbers, which closely track production numbers, are commercially sensitive data that companies do not routinely disclose. As an example of this practice, ArvinMeritor—a large supplier of various vehicle components—declined to disclose its diesel engine sales data, citing the data's competitively sensitive nature. Transcript of ArvinMeritor, Inc. Analyst Meeting at 38 (Dec. 22, 2005). Manufacturer A offers a medium-duty truck equipped with a diesel engine as standard equipment, and is considering whether to offer an optional gasoline engine on this model. Manufacturer A could access the EWR data of its competitors, identify similar models, and track their sales of similar vehicles equipped with gasoline engines to determine
(i)its competitors' production capacity for such vehicles,
(ii)the market acceptance for the gasoline option at given points in time, and
(iii)customer preference trends over time. Based upon this information, Manufacturer A can decide whether to offer this option before it invests money and other resources, and without bearing the same market risk and uncertainties as its competitors. (A similar analysis could be conducted model-by-model to evaluate the market acceptance of various vehicle configurations and features.) Utilimaster, a final stage manufacturer of walk-in vans for parcel delivery and baking products industry applications, as well as freight bodies for general commercial use, stated that production data, if disclosed, would likely be used by competitors in their marketing and promotional efforts to obtain a competitive advantage against the EWR data submitter. Blue Bird, a large manufacturer of buses, school buses and motor homes, described production data for its industry, which are not publicly available, as highly proprietary and sensitive information that would benefit competitors who could use the information to chart the strengths and weaknesses of Blue Bird's business within specific make, model and model year classifications. The information would provide a tool for competitors in conducting market research and strategic planning. Harley-Davidson, a motorcycle manufacturer, noted that detailed motorcycle production data such as submitted under the EWR rule are unavailable publicly and explained that the motorcycle business is essentially a bundle of niches, including touring, sport trails and a number of others. Companies base their product mix decisions on various factors. Future company plans are often based on an evolution of product direction and experience, including past production. The information reveals a company's internal future planning, providing competitors with information on a company's future production efforts. The Motorcycle Industry Council similarly observed that motorcycle production and sales data by model have not been publicly available. Utility, a trailer manufacturer, noted that EWR data are organized by make, model and model year. This information reflects a company's production capacity, sales performance and, in turn, the relative success of a company's marketing strategy. Utility asserted that competitors could use this sensitive information to monitor a manufacturer's current production capacity and over time to ascertain the amount of resources that a manufacturer has expended in adding to that production capacity. Similarly, it stated that a supplier examining the production data of one of its customers, the vehicle manufacturer, can confirm its status as a sole supplier, which can enhance its position during supply contract negotiations. National Marine, a trade group representing boat trailer manufacturers, and its affiliate the Trailer Manufacturers Association, added that because boat trailer manufacturers typically produce a smaller number of units, the disclosure of quarterly production data would permit competitors to ascertain information about the number of units sold, potential costs, and production concerns of the manufacturers. Such information, it noted, can be used competitively against a trailer manufacturer. The Juvenile Products Manufacturers Association (JPMA), representing manufacturers of child restraint systems, which are commonly known as child car seats, explained that the release of EWR quarterly production data would provide competitors and new entrants to the market with invaluable “real-time” ongoing competitive information about the reporting manufacturer's production capacity, sales and market performance. Such information, which would otherwise either be unobtainable or obtainable only through expensive market research, would give competitors invaluable insights into the operational and market strengths and weaknesses of submitters, enabling competitors to target their production and marketing efforts to areas where they detect vulnerabilities in a submitter's market position. Cooper Tire submitted a study, further confirmed through comments from the Rubber Manufacturers Association (RMA), regarding the competitive harm that disclosure of otherwise confidential tire production numbers would have in the tire industry. The RMA, a trade association that includes tire manufacturers, stated that tire manufacturers can change the course of tire production in a relatively short period of time. If production numbers were released, manufacturers could change the production of types, sizes and lines of tires after reviewing a competitor's data. The data could indicate whether a competitor, for example, could produce sufficient quantities to supply a market or could be planning a promotion. EWR production data are valuable since they allow competitors to change production depending on the production output of a competitor. In addition, if released, production volume by stock keeping unit
(SKU)could reveal marketing plans and vulnerabilities, facilitating targeting by competitors. 29 Similarly, disclosing production volume by tire line (and by SKU) could reveal private label (brand) customers' purchases. 29 *See* 49 CFR 579.26(a). The regulations define a stock keeping unit as “the alpha-numeric designation assigned by a manufacturer to uniquely identify a tire product. This term is sometimes referred to as a product code, a product ID, or a part number.” 49 CFR 579.4(c). In comments, RMA expanded on the Cooper study, noting that because tire manufacturers can alter their production within a relatively short period of time, this ability to change production dependent on the production output of competitors could significantly affect competition. RMA asserted that the quarterly tire production data reveal snapshots of the different segments within which a given company operates and its concentration of resources within those segments. In contrast to the statements by the vehicle, child restraint and tire industries on the substantial competitive harm that would result from the disclosure of EWR production data, Public Citizen asserted that a class determination covering production is irrational. It expressed its view that there is no evidence that competitive harm has occurred for light vehicle manufacturers whose production numbers have been released and stated that NHTSA did not show why disclosure of EWR production data will harm only vehicle manufacturers other than light vehicle manufacturers. 30 Public Citizen did not present specifics to justify its view favoring the disclosure of the EWR production numbers. While Public Citizen's comments on the October 2006 NPRM were filed almost a month after the close of the comment period and well after other commenters submitted their comments, significantly, Public Citizen did not rebut the industry commenters' statements on the competitive harm that would flow from the release of EWR production data. Other non-industry entities also objected to the proposed class determination of confidentiality of EWR production numbers, but none provided facts to refute the claims or explanations by industry commenters on the competitive effects of disclosure. 30 Public Citizen's Litigation Group had criticized the agency's class determination for production numbers. It stated that there is no history of prior administrative decisions concluding that these data are confidential under Exemption 4 and no comprehensive examination of the competitive value of the information to each affected industry sector. In the footnote that follows, we address competing views of historical decisions which generally involve a single product that is the subject of an investigation. This notice addresses comments regarding various sectors, which Public Citizen did not rebut. The literature further indicates that production numbers, by their very nature, are competitively valuable and useful in helping manufacturers improve their efficiency and in learning what their competitors are producing. *See* Sidney Hill, Jr., *Real Time's Role in Product Quality* , Manuf'g Bus. Tech., May 1, 2005, at 22 (commenting on the value of mining real-time production data to manufacturers). Knowledge of what a competitor manufactures and sells are basic pieces of information sought by companies. *See* Laurence A. Carr, *Front-Line CI* , Competitive Intelligence Magazine, March 2001, at 11 (indicating that company staff should have detailed information on competitor products, marketing strategies, tactics, and programs). Companies operating in the automotive sector are no different in this regard. *See* Agostino von Hassell & Mark Bella, *Making the Most of Automotive Data* , Modern Plastics, June 1, 2004, at 16 (noting the importance of production and sales numbers in helping to predict the likely volume of new orders). After carefully considering the comments and other information of record, NHTSA has determined that the release of EWR production numbers on medium-heavy vehicles and buses, motorcycles, trailers, child restraint systems and tires would be likely to result in competitive harm to the manufacturer submitting the data. The EWR production data, in pertinent part, are a comprehensive compendium of information by make, model and model year, for medium-heavy vehicles and buses, motorcycles, trailers, child restraint systems and tires. They are real time data that are updated quarterly. They are not publicly available. As noted by numerous commenters, the production data are proprietary. The industry expends efforts to maintain the confidentiality of their production figures. This was not disputed by non-industry commenters. 31 31 One matter raised in the comments is the availability of production data in individual investigations by NHTSA's Office of Defects Investigations, which investigates potential defects in vehicles and equipment. The agency noted in the NPRM, for example, that production data on child restraints and tires are not available. At the opening of an investigation, NHTSA often withholds production data or it groups it, as for example grouping a number of sizes of tires so that production of individual sizes is not stated. At later times in the process, NHTSA has disclosed the number of tires in recalls. E.g., Recall (NHTSA) number 07T-005 involving certain tires made by Cooper Tire. RMA and Public Citizen have made different assertions regarding the agency's historical practices. These issues need not be resolved here. More importantly, in terms of depth and scope, there are significant differences between the body of EWR data and data on the production of vehicles in individual investigations. While some production data on limited segments may be available for some reporting sectors, these data do not approach the level of detail or coverage contained in EWR submissions that is likely to cause substantial competitive harm to submitters. EWR production data are submitted quarterly and cover all models and model lines. In contrast, data involving vehicles and equipment in investigations typically involve a particular vehicle or equipment model or platform across one or several model or production years. The release of the production data on a single item is not comparable in terms of the scope of information released or the competitive effects of the release if the full compendium of EWR production data were released. As substantiated by the comments, production numbers reveal otherwise unobtainable data relating to business practices and marketing strategies. The EWR production data can be used by competitors to monitor the evolving and current production, on a model-by-model basis, of the company that submitted the data. The data also reveal a manufacturer's capacity to produce certain products. Using this information (if released), competitors could adjust their own production volumes to better compete against the manufacturer that submitted the EWR data and make other production or marketing-related decisions to the substantial detriment of the submitter. In a very real sense, production numbers reveal significant parts of a company's business plan to competitors. Production numbers reveal how the submitting manufacturer concentrates its production efforts. For example, RMA explained that the disclosure of tire production data would enable manufacturers to analyze their competitors' businesses. Cooper Tire added that production numbers reveal substantial information related to marketing plans and strategies. Cooper Tire further explained that because of the intense level of competition within the tire industry and the size differences among competitors, the disclosure of production data would make the risk of substantial competitive harm high, particularly for smaller manufacturers that produce for the replacement market. In addition, because production is closely related to sales in the ordinary course of business, EWR production data can be used to assess a competitor's sales and market performance, 32 through means otherwise unavailable without considerable market research expense. Sales data are generally regarded as having high competitive importance. This market-related information would be valuable to the reporting manufacturer's competitors, who commonly want to know how well their competitors' products have been and are selling. The competitors would use the production information in their own product planning and marketing. Knowledge of what competitors are selling can change marketing tactics, result in the redevelopment of strategic plans, and lead to key recruitments. Also, since product plans are based upon an evolution of production direction and experience, disclosure of production information would expose important aspects of manufacturers' future product plans to competitors. 32 See, *e.g.* *http://www.claritas.com/claritas/Default.jsp?ci=2&pn=cs&_bmwusa* . Similarly, EWR production data reveal a variety of valuable information related to the success of a competitor's marketing strategies. Through common monitoring activities, a company may know that a competitor has launched a new product or marketing campaign. But the critical information on the success of the campaign is not public. EWR data could be used to monitor the success of the campaign, without the cost of market research. The competitor could also avoid or minimize business risks by using the EWR production data to decide whether to launch a parallel effort. Using EWR production data, operating strengths and weaknesses of individual submitters would be discovered without resorting to costly market research and competitors would chart this information and use it to target a submitter's vulnerabilities. Suppliers to an EWR submitter can, in some instances, use the production information to gain a competitive advantage over that submitter. Suppliers compete with vehicle manufacturers in negotiations over prices. Suppliers can use production information during pricing negotiations with EWR submitters to confirm their positions as sole suppliers, which can help them secure higher prices for their equipment. Although non-industry commenters opposed the proposed class determination for EWR production data and suggested that production data are publicly available, they did not provide facts demonstrating that these data are available to the same extent as required by the EWR regulation. The non-industry commenters also did not provide facts contradicting the competitive value of production data to competitors or the competitive effects on the submitters that would be likely to accompany their disclosure. Their argument on the light vehicle sector is largely a *non sequitur.* Production data for light vehicles have been released for a long time. But that does not demonstrate that if they had not been released, there would not be any competitive harm from a change in policy of release. For example, Honda and Toyota went to considerable effort to design and produce their initial hybrid vehicles, the Insight and the Prius. Each of these vehicles is different. If a competing manufacturer were considering entering the regenerative hybrid market, information on which models sold well and which did not would be of considerable value. Honda and Toyota would have undertaken the market risk, but the competitor would benefit from the production numbers with highly reduced market research costs. Also, the mere statement that it has been released in the light vehicle sector is not a sufficient rebuttal to the specific comments from members of other industry sectors regulated under the EWR rule. For the foregoing reasons, in light of the competitive value of the EWR production data on medium-heavy vehicles and buses, motorcycles, trailers, child restraints and tires, the manner in which these data would be used by competitors and the competitive effects that would be likely to follow if the data were disclosed on a wholesale basis to competitors, their disclosure is likely to cause substantial harm to the competitive positions of the manufacturers that submit the data. 33 This harm would flow from the affirmative use of the proprietary data by competitors. 33 The regulatory language adopted in Appendix C to Part 579 at the end of this notice varies slightly from the language in the NPRM. The language in Appendix C includes clarifications and the words “is likely to cause”. The latter is consistent with the terms of NHTSA's assessments of the consequences of the release of the EWR information addressed in Appendix C and the standard of *National Parks.* 2. Consumer Complaints The EWR rule requires larger volume manufacturers of light vehicles, medium-heavy vehicles and buses, motorcycles, and trailers to submit the number of consumer complaints that they have received broken out, for each make and model, by specific component categories (e.g., steering, brakes), fires and for certain categories (rollovers), all of which are binned by code. See 49 CFR 579.21(c), 579.22(c), 579.23(c), 579.24(c). Manufacturers of child restraints submit combined numbers of consumer complaints and warranty claims. See 49 CFR 579.25(c). Consumer complaints are defined in the EWR regulation as: [A] communication of any kind made by a consumer (or other person) to or with a manufacturer addressed to the company, an officer thereof or an entity thereof that handles consumer matters, a manufacturer Web site that receives consumer complaints, a manufacturer electronic mail system that receives such information at the corporate level, or that are otherwise received by a unit within the manufacturer that receives consumer inquiries or complaints, including telephonic complaints, expressing dissatisfaction with a product, or relating the unsatisfactory performance of a product, or any actual or potential defect in a product, or any event that allegedly was caused by any actual or potential defect in a product, but not including a claim of any kind or a notice involving a fatality or injury. 34 34 49 CFR 579.4(c). Manufacturers are required to submit EWR data on consumer complaints regardless of whether they allege or appear to involve safety-related defects. 67 FR at 45849 (July 10, 2002). When NHTSA published the EWR rule, the agency expressly contemplated that the manufacturers would report a large volume of data and that the agency would then screen through this mass of information, looking for potential defect trends. *See* 67 FR 45822, 45865 (July 10, 2002); *see also* 71 FR 63738, 63741 (Oct. 31, 2006); 72 FR 29435, 29437-38 (May 29, 2007). This has proven true. NHTSA's experience with EWR data has shown that the vast bulk of EWR consumer complaint data has not been indicative of defect trends. Some consumer complaint EWR data have been helpful in identifying a potential defect trend. In the NPRM, the agency proposed to make a class determination that EWR consumer complaint numbers would not be released to the public. 71 FR at 63742. The agency based this proposed class determination on information on both the competitive harm and impairment prongs of *National Parks* . We first address the likely competitive harm from the release of consumer complaint data, then we discuss the impairment to the agency's ability to obtain as complete consumer complaint information as possible if the information was released. Competitive Harm Numerous parties have provided information to NHTSA on the question whether the disclosure of EWR complaint data would be likely to cause the submitting manufacturer to suffer competitive harm. This includes commenters from the automotive industry and non-industry commenters. Commenters from across different sectors of the automotive industry addressed the competitive value and use of consumer complaint data. At the outset of its comments, the Alliance stressed that there is actual competition in the auto industry. Manufacturers compete vigorously for new vehicle sales. Two of the elements over which manufacturers compete and expend substantial amounts of research money are consumer satisfaction and quality in the market for new vehicle sales. The Alliance supported its statement by information from Maritz Marketing Research, which identified factors considered by consumers in purchasing new vehicles, including overall quality and reliability (dependability). The Alliance further showed that EWR information, including consumer complaints, is proprietary and comprehensive in nature. Its competitive value is enhanced by its comprehensive nature (for light vehicles they involve 18 vehicle systems and components as well as fires and rollovers, 49 CFR 579.21(b)(2), (c)) and continuing content which permits a model-to-model comparison on the numerous systems and components in EWR reports. The release of EWR consumer complaint data would permit wholesale industry-wide comparisons of the quality or durability of all significant systems or components on models chosen for comparison. As explained by the Alliance, EWR consumer complaint data provide an extremely valuable window into the customer satisfaction of vehicle owners and the perceived quality of vehicle models on a make/model/model-year and system basis. Additionally, the EWR data provide valuable insights into a given manufacturer's business practices and decisionmaking, including, the methods used to collect consumer complaints. The Alliance maintained that the comprehensive nature of these submissions—covering all makes and models over a multi-year timeframe—makes them a valuable compendium of consumer satisfaction and quality information that could not be replicated easily at any price and could be used by competitors. Citing *Worthington Compressors, Inc.* v. *Costle,* 662 F.2d 45, 51 (D.C. Cir. 1981), the Alliance pointed out that the release of information collected at considerable cost by an entity that submitted information to the Government could easily have competitive consequences. In the immediate context, the submitters have expended considerable sums to gather large volumes of EWR data and the release of it would be contrary to the competitive interests of these entities and to the benefit of their competitors. AIAM's comments focused on the totality and comprehensive nature of the EWR data, including consumer complaint data, which give the data value that is enhanced by the EWR rule's standardized reporting format. AIAM stated that a knowledgeable competitor can view this mosaic of information and reach valuable conclusions. The comprehensive body of information facilitates manufacturer-to-manufacturer comparisons. It would enable one company to use the experience of another to select an optimal design, production process and pricing strategy, while avoiding the cost and risk that would otherwise be encountered. The data would provide useful information about cost and quality. AIAM provided examples. AIAM also explained that EWR complaint data would provide competitors useful information about the quality levels achieved by the submitting manufacturer or its suppliers, both for technologies used in vehicles and in their accompanying production processes, which permit competitors to evaluate a particular technology, process or supplier, at a risk and cost that is lower than otherwise attainable, as the competitor would not have to develop that information. Using this information, AIAM noted, competitors might be able to base decisions to pursue certain technologies to a substantial degree on their reviewing a submitter's EWR complaint information. Without this information, the competitor may have reached a different conclusion. The submitter may have expended substantial resources to help it decide whether to pursue a particular technology, while the competitor would gain a real world evaluation free of cost or the effort of a real world evaluation. This would impair the competitive position of the submitter. AIAM added that the EWR information would also provide a competitor with information about the submitters' cost structure. Competitors could evaluate the information and make decisions whether to pursue various products or marketing strategies based on an assessment pertaining to the submitter's costs. A submitter's relative costs can also be evaluated using these data. Nissan's comments noted that it uses inputs from customer call centers to gauge market responses to new features, to identify areas requiring consumer education and to help identify issues that could potentially require field or production adjustments. Customer inputs including consumer complaints help identify areas where field experience is showing an issue warranting further investigation. Nissan emphasized that the information is pointer information that may suggest further inquiry and is not necessarily indicative of a safety-related defect. The information primarily serves independent business reasons. If EWR consumer complaint information were publicly available, competitors could track that information and learn whether there is a market reaction to any new technology, supplier or product changes or new marketing effort. It is valuable, as a market reaction can lead a competitor to focus on it. The information would be valuable to competitors who may be considering deploying similar or competing technology. They could rely on Nissan's information in making a critical decision such as when to enter the market, which technology or suppliers to use, or how to best market the technology. It may be indicative of consumer confusion over a new technology. The value of this information is in that it would enable competitors to use information created by significant input to advance their own commercial interests. Complaints, Nissan explained, also reveal company practices and the performance of materials and components that are successful and those that are not. TMA stated that the EWR data that medium-heavy vehicle manufacturers report are comprehensive—they involve 22 vehicle systems as well as fires and rollovers. The compendium of consumer complaint data, laid out model-by-model and system-by-system has great competitive value and there are numerous ways in which competitors could use these data to their competitive advantage. TMA characterized the data as a data bank of quality control information that competitors can use to evaluate the performance, reliability and durability of various components and systems without the expense and risk associated with product development that would normally occur with field-testing and “trial and error” efforts, while shortening the amount of time competitors need to market competing products. TMA endorsed a comment by GM as applying with equal force to the truck industry. GM had explained that if a supplier offers a newly-designed system to a vehicle manufacturer, a manufacturer can undertake a tear down evaluation and test it, but no practical test duplicates the experience gained from hundreds of thousands of miles on the road. A vehicle manufacturer that installs the system gains the field experience. If EWR data were made available, other manufacturers would have access to some of the same information and would be able to make their decisions with less testing and analysis. The disclosure of the data would force the first manufacturer to subsidize its competitors, reducing their costs at the first manufacturer's expense. TMA presented a scenario to demonstrate how the information can be used: [i]t may be well known that Truck Manufacturer A uses Lighting Assembly X on one of its truck models. (The manufacturer of lighting equipment is typically identifiable on the lamp or lamp assembly.) If Manufacturer B is deciding whether to use the same assembly on one of its models, Manufacturer B could review the EWR warranty, consumer complaint and field report data to evaluate Manufacturer A's field experiences with its lighting equipment on that model. As a result, Manufacturer B will get all of the benefits of Manufacturer A's field experiences with that product—good or bad—while avoiding the costs, effort and risk that Manufacturer A has incurred. Moreover, Manufacturer B could *immediately* benefit from that experience data, while it took Manufacturer A years to be in the same position. (Emphasis in original.) TMA stated that the disclosure of consumer complaint data would provide competitors with valuable and previously unavailable insight into the field experience and performance of a submitter's entire product line and individual systems and components. TMA stated that competitors could use this information to assess the in-use performance of parts and systems. It would be used in purchasing, pricing, and sourcing decisions, all of which would have competitive impacts. TMA added that the release of the information would adversely affect these manufacturers' customers, in terms of fleet performance and durability. Utility observed that the EWR regulation requires trailer manufacturers to provide information relating to each make and model as well as for system components. Trailer manufacturers can use EWR complaint data to evaluate trailer performance, help identify technological and engineering improvements that might better satisfy customers and provide guidance to prioritize resources to implement these improvements. If these data were released, competitors would gain product and component performance data that they could implement into marketing strategies. Accordingly, Utility said it would be irreparably harmed. Harley-Davidson stated that it aggressively seeks consumer contact, including opinions. Consumer input would be counted in EWR reports when it meets the EWR rule's broad definition of consumer complaint. Harley's continued success depends on satisfying motorcycle enthusiasts. It asserted that disclosing this added feedback, which it obtained through considerable effort, would cause it harm. It added that the data are not likely to be related to a potential safety issue. The Juvenile Products Manufacturers Association
(JPMA)observed that different manufacturers maintain different information on consumer complaints. If the EWR information were disclosed, those with more limited submissions would obtain more information about their competitors' products than they would be disclosing, which would give them unequal access to competitively significant information. In addition, EWR information could be used by new entrants to the market to obtain valuable competitive information at virtually no cost that would otherwise be very expensive or impossible to obtain. JPMA added, for the compendium of EWR information on consumer complaints and warranty claims broken down by make and model of child car seat, this type of quality information on individual products is highly proprietary to individual manufacturers. These real time data provide ongoing competitive information about each submitter's market performance. According to JPMA, the data provide insights into a submitter's operational and market strengths and weaknesses by revealing the relative field performance through reports on consumer complaints and warranty claims of a manufacturer's product line. These data are either unobtainable or obtainable only through expensive market research. Several manufacturers addressed another consequence of disclosure: misleading and unfair comparisons of the data. The Alliance stated that the disclosure of the comprehensive compendiums of EWR information would be misleading to consumers and unfair to the submitting manufacturers because consumers would attempt to make comparisons of the performance of one model to another, across multiple model years, on a quarterly basis, which, as the Alliance observed, can not be done. Similarly, AIAM stated that public disclosure of the data would create a great potential for misunderstanding and mischaracterization. Reports with simple comparisons could affect the competitive positions of manufacturers in a way that was unfair. Also, TMA stated, with supporting explanation, that manufacturers and consumers could misuse it to draw unfair and unsubstantiated and misleading comparisons regarding competitors' products. JPMA added that the release of the encyclopedia of quality information encompassed in EWR data would cause submitters unwarranted competitive harm because the reports will include reports that are not safety related. This, JPMA said, will result in unwarranted disparagement. Several entities acknowledged the limited releases of information submitted by the manufacturers during investigations by NHTSA's Office of Defects Investigation (ODI). The Alliance stated that the release of limited consumer complaint information on specific models in a limited number of model years in investigations conducted by NHTSA does not support the release of the comprehensive compendium of information in EWR data submissions. A limited release is much different from a competitive standpoint than the automatic release of the continually collected full compendium of quality and customer satisfaction information that is represented by the quarterly EWR data submissions. Unlike EWR data, the release of data from investigations does not permit industry-wide comparisons of the quality or durability of all significant components across entire product lines and they are not a compendium of quality and customer satisfaction information developed over time. Thus, the Alliance concluded that the confidentiality of EWR information on consumer complaints should be maintained. Similarly, JPMA explained that although its members do not object to the release of the numbers of complaints on a specific make or model of child restraint within the context of a specific defect investigation, the wholesale disclosure of consumer complaint numbers by make and model would reveal highly proprietary information competitors, providing them with a compendium of quality information developed by a submitter. 35 35 The Motor Equipment Manufacturers Association/Original Equipment Suppliers Association (MEMA/OESA) also opposed treating complaint data as not confidential and stressed that quantitative differences between defect investigation and EWR submissions made comparisons between the two inapposite. On the other hand, non-industry commenters argued that EWR consumer complaint data should not be held confidential. Public Citizen agreed with NHTSA's statements in the NPRM that “the commercial value of complaint data is well recognized” and that “complaint data are a valuable data source used by companies to help them identify areas of concern including product performance, to consumers and provide guidance on where to allocate their limited resources.” Public Citizen added that “[c]onsumer feedback is vital for companies striving to maintain a profitable business.” Public Citizen raised issues of public availability of information, including information other than EWR data and EWR data. 36 It indicated that, to some extent, information is available through industry guides that are available to manufacturers for a fee and suggested that NHTSA should explore that. It said that NHTSA must prove that other industry groups do not have access to this information. In its view, industry can afford expensive trade publications. However, the public which would benefit from the data, often has severely limited access to these avenues of information, if access even exists. 36 Public Citizen referred to the Automotive Industry Status Report, noting vaguely that it already makes some of the proposed exempt information available to manufacturers for a fee. But it did not say what information, or compare the breadth or detail of EWR reporting to that in the Automotive Industry Status Report. We have placed a copy of the Report in the docket. Based on our review, in the absence of any specifics from Public Citizen, we do not accept its conclusion. Public Citizen asserted that under the EWR rule, only total numbers of complaints are provided to the agency, which greatly hinders its usefulness. It viewed these data as extremely basic and requiring no unnecessary details about company operations or future company plans. AAJ raised a policy argument to support its view that the data should be disclosed. AAJ argued that in proposing this class determination, NHTSA did not adequately mention that complaint data are crucial for consumers to make an expensive purchase of an item that has the potential to cause bodily injury. It said consumers are entitled to all available data to render their decision to purchase a motor vehicle. It also asserted that complaints would be valuable to a jury to render a verdict. Therefore, in AAJ's view, NHTSA did not reasonably consider the public's interest in disclosure and the public has a compelling interest in the information, financially and for safety. Neither Public Citizen, which filed its comments long after the close of the rulemaking comment period and long after the industry representatives had submitted comments, nor AAJ provided information rebutting the industry commenters' explanations of how the complaint data can be used competitively to the significant detriment of the competitive positions of the submitters. 37 37 Public Citizen's comments also incorrectly assume that the collected EWR data only relate to potentially unsafe products. In the literature, the commercial value of consumer complaint data is well recognized. *See e.g.* , Edward Bond & Ross Fink, *Meeting the Customer Satisfaction Challenge,* 43 Industrial Management, Issue 4 (July 1, 2001) (Noting the importance of measuring customer satisfaction, describing customer complaints as a data source to a company that can create a “big benefit” from small changes); John Goodman & Steve Newman, *Six Steps to Integrating Complaint Data into QA Decisions* , 36 Quality Progress, Issue 2 (Feb. 1, 2003) (Stressing the importance of complaint data in helping to identify issues with products and the data's effectiveness in assisting companies with resource allocation decisions to address quality assurance issues); Dep't of Commerce, *Managing Consumer Complaints*
(1992)(Complaint data may signal how products and services meet or do not meet consumer expectations and how products can be better designed. They may signal a need for better quality control. Complaint management can save business unwanted costs); Michael Graver, *Listening to Customers* (Recognized as a key component to various business strategies, world-class companies now measure and manage customer value and satisfaction. These are often a key performance measure, a leading indicator of financial performance, an important diagnostic measure for continuous improvement and a tool to manage competitive advantage); Robert Woodruff, *Customer Value: The Next Source for Competitive Advantage*
(1997)(Managers consider their customers when determining which improvements are needed. Competition for advantage in markets through superior customer value delivery); Jane Goodman-Delahunty, *Promoting Consumer Complaints in the Financial Sector*
(2001)(Industry providers should affirmatively encourage consumer complaints. Consumer complaints can be a valuable resource regarding defects in products and services that can otherwise result in a loss of business and market share). 38 38 *See also Heller* v. *Shaw Industries* , 1997 WL 786542 (E.D. Pa) at *5 (consumer complaints held confidential). After carefully considering the comments and other information of record, NHTSA has determined that the release of EWR consumer complaint data on light vehicles, medium-heavy vehicles and buses, motorcycles, trailers, and child restraint systems is likely to cause substantial harm to the competitive positions of the manufacturers that submit the data. The EWR consumer complaint data amount to compendiums of comprehensive information on consumer complaints. The manufacturers' reports cover broad landscapes of makes and models of motor vehicles and child restraints, providing information on current models and those produced in the previous 10 years for motor vehicles and 4 years for child restraints. They address numerous components and systems of vehicles and equipment and, for certain vehicles, include rollovers and fires. *See, e.g.* , 49 CFR 579.21(b)(2); 49 CFR 579.22(b)(2). The comprehensive nature of the compendiums of EWR data on consumer complaints is enhanced by their continuing content, which is updated by quarterly reports, and by their standardized reporting format. They can be used for industry-wide comparisons on these numerous systems and components. The amount of consumer complaint data is substantial. For the first 15 quarters of EWR data, an average of 65 light vehicle manufacturers per quarter reported over 12 million consumer complaints; an average of 87 medium-heavy vehicle and bus manufacturers reported over 365,000 consumer complaints; an average of 18 motorcycle manufacturers per quarter reported nearly 51,000 consumer complaints; an average of 285 trailer manufacturers per quarter reported nearly 97,000 consumer complaints and an average of 20 child restraint manufacturers reported a combination of nearly 65,000 consumer complaints and warranty claims. The manufacturers that submit the data expend considerable sums to collect the information. This includes staffing phone centers, reviewing mail and considering electronic communications. The consumer complaints that are amassed and binned by individual manufacturers for EWR reporting are collected for each manufacturer's internal use. The data are not publicly available and are highly proprietary. 39 The data could not be replicated easily at any price. 39 The disclosure of consumer complaint data in investigations is limited. It does not involve a compendium of information that is fairly comparable to the EWR data. Manufacturers compete and expend substantial amounts of research money on consumer satisfaction and quality in the market. There is competition to introduce new models and features that meet customer satisfaction. Companies seek to keep customers satisfied in order to maintain and grow their customer base. At the same time, companies seek to avoid expenses incurred in rectifying quality problems and the associated customer dissatisfaction that attends such problems. It is well recognized that consumer complaints are commercially valuable. This is recognized in the literature. They are particularly valuable in the highly competitive motor vehicle and equipment industries. EWR consumer complaint data are a very valuable information compendium on customer satisfaction of vehicles and child restraints. This data base provides information on perceived problems with the company's product. As Harley-Davidson explained, the data are reflective of opinions from consumer contact. This is valuable to companies, which depend on satisfying customers. Disclosing this added feedback, which a submitter obtained through considerable effort, would provide useful information to competitors. More broadly, the data also reveal market responses to various aspects of vehicles and equipment. They provide feedback on new features, areas requiring consumer education and issues that could potentially require field or production adjustments, regardless of safety. Customer inputs such as complaints help identify areas where field experience is showing an issue. Companies track what competitors are introducing, including product modifications and new technologies. Suppliers, which commonly promote the introduction and use of their equipment, are known. What is not known is whether a product was well received. If the consumer complaint information were publicly available, competitors could and likely would use it to learn whether there is a market reaction to any new technology, supplier or product changes or new marketing effort. The information would be valuable to competitors who may be considering deploying similar or competing technology. Competitors could rely on EWR information in making critical decision such as when to enter the market, which technology or suppliers to use, or how to best market the technology. The value of this information is in that it would enable competitors to use information created by significant input to advance their own commercial interests. In addition, the EWR consumer complaint information amounts to a data bank of quality control information of a manufacturer's products, model-by-model and system-by-system. It provides in-use information on technologies. Competitors can engage in “tear downs” of another company's products. They can run lab tests. But efforts such as these fall short of providing a good understanding of the quality of a product in operation in the field. EWR consumer complaint data provide information on the reliability and durability of various systems and components. Competitors would use this information to evaluate a particular technology or supplier, at a lower risk and cost than otherwise attainable, because the competitor would not have to develop that information. Using this information, competitors could base decisions whether (or not) to employ certain technologies or suppliers to a substantial degree on their reviewing a submitter's EWR complaint information. While the manufacturer submitting the data would have expended substantial resources in deciding whether to install a particular technology, the competitor would gain a real world evaluation without the time, expense and risk associated with product development that would normally occur with field-testing and associated pre-production modifications. Beyond selection of a technology, there are often questions on the preferable design approach. The EWR complaint data would enable one company to use the experience of others to select an optimal design. If released, a competitor could view this information, a model-to-model comparison on the numerous systems and components in EWR reports, and reach valuable conclusions. The release of the data would permit wholesale industry-wide comparisons of the quality or durability of significant components on models chosen for comparison. In a similar vein, EWR consumer complaints are useful in evaluating field experience and product performance. Complaints (or the absence thereof) reveal the performance of materials and components that are successful and those that are not. The disclosure of consumer complaint data would provide competitors with valuable and previously unavailable insight into the field experience and performance of a submitter's entire product line and individual systems and components. Competitors could use this information to assess the in-use performance of parts and systems. EWR consumer complaint data help identify where technological and engineering improvements that might better satisfy customers and provide guidance to prioritize resources to implement these improvements. It could also be used to select a production process or make purchasing, pricing, and sourcing decisions, while avoiding the cost and risk that would otherwise be encountered. This would have competitive impacts. The EWR consumer complaint information would also provide a competitor with information about the submitter's cost structure. In some contexts, the data would reveal rates of problems. These rates are an important factor in the costs of various technologies. Competitors could evaluate the information and make decisions whether to pursue various products or marketing strategies based on an assessment of the submitter's costs. Additionally, the EWR data provide competitors with valuable insights into a given manufacturer's business practices and decisionmaking, including the methods used to collect consumer complaints. Public Citizen agreed that consumer complaint information has value. But it disagreed in a general and conclusory manner with the proposal's view that EWR consumer complaint data is competitively valuable. Public Citizen filed its comments in 2007 long after both the close of the comment period on the NPRM and after the industry commenters had submitted comments. Its opinions that the reporting of only numbers of complaints greatly hinders the data's usefulness and that these data are extremely basic and require no unnecessary details about company operations or future company plans were contrary to the weight of the comments. Public Citizen did not provide facts to rebut the statements of the industry commenters. 40 Moreover, the industry has experience in considering consumer complaints and explained the value of these EWR data. 40 Some of Public Citizen's comments were based on a misunderstanding of the proposed rule. Public Citizen referred to fatalities, injuries and property damage claims, but those were outside the scope of the proposed rule. As the court recognized in *Worthington Compressors, Inc.* v. *Costle* , 662 F.2d 45, 51-52 (D.C. Cir. 1981): If * * * competitors can acquire the information only at considerable cost, agency disclosure may well benefit the competitors at the expense of the submitter. * * * Because competition in business turns on the relative costs and opportunities faced by members of the same industry, there is a potential windfall for competitors to whom valuable information is released under FOIA. If those competitors are charged only minimal FOIA retrieval costs for the information, rather than the considerable costs of private reproduction, they may be getting quite a bargain. Such bargains could easily have competitive consequences not contemplated as part of FOIA's principal aim of promoting openness in government. * * * [T]he essential test is the same: whether release of the requested information, given its commercial value to competitors and the cost of acquiring it through other means, will cause substantial competitive harm to the business that submitted it. The release of EWR consumer complaint information collected at considerable cost by manufacturers would have competitive consequences, as recognized in *Worthington Compressors* . The submitters expend considerable sums to gather large volumes of EWR data. Their information is valuable and could be used by competitors. The release of it would be to the significant benefit of the competitors of the submitters and to the detriment of the competitive position of the manufacturers that submitted the information. 41 41 As an alternative basis for confidentiality, the disclosure of the comprehensive compendiums of EWR information would likely result in result in consumer misuse. In *Worthington Compressors* , 662 F.2d at 53 n.43, the court permitted the consideration of consumer misuse of commercial information that is otherwise unavailable. (On remand, if the court finds the tests cannot be accurately duplicated, it should consider whether competitors or consumers may misuse the information to the detriment of appellants' competitive positions). The disclosure of the EWR information would be misleading to consumers and unfair to the submitting manufacturers. Consumers would attempt to make comparisons of the performance of one model to another across multiple model years, on a quarterly basis, which can not be done. The underlying foundations for the data are not the same. Different manufacturers have different systems for collecting consumer complaints. Some have wider nets than others. The net result would be unfair, unsubstantiated, and misleading comparisons. These comparisons would adversely affect the competitive positions of manufacturers in a way that was unfair. Public Citizen has asserted that this analysis amounts to an unwarranted product disparagement theory, and contends that the harm occurring from the disclosure of these data amounts to adverse public reaction, which is not a cognizable harm under Exemption 4. The agency disagrees with this attempt to recharacterize the harm. Since the EWR data are competitively sensitive for a valid reason under Exemption 4, other potential consequences such as adverse public reaction, do not dictate that we treat the information as non-confidential. *Occidental Petroleum Corp.* v. *SEC* , 873 F.2d 325, 341 (D.C. Cir. 1989). Public Citizen suggested that the data should be released because they involve safety concerns. 42 This is not a valid characterization of the data. By definition, consumer complaint data go well beyond safety data. 49 CFR 579.4. Also, our experience over 4 years has been that the vast bulk of consumer complaint data are not indicative of defect trends. 42 Public Citizen referred to dangerous products that injure and kill people. It also stated that the release of the data will encourage the production of better products which ultimately will benefit industry. Public Citizen did not support this statement, and it is outside the considerations under Exemption 4. Public Citizen had also raised issues about the availability of the EWR complaint data. These data are not publicly available, as repeatedly stated by industry commenters, and Public Citizen has not shown otherwise. The limited disclosures of limited consumer complaint data by the agency in ODI defect investigations of particular problems in specific products do not resemble the breadth or scope of the information that is submitted pursuant to the EWR rule. The agency's valid reasons for choosing to disclose certain data during investigations (e.g., to elicit additional consumer attention concerning a possible, specific defect, or to inform consumers of the specific scope of an investigation or recall) are not applicable in the EWR context. Similarly, the data collected by third-parties such as Consumer Reports and other publications is not comparable in depth, breadth or scope, and Public Citizen did not show otherwise. As the Alliance and others explained, NHTSA's current practice of generally disclosing limited, model- and model-year-specific consumer complaint numbers when such information relates to specific defect investigations does not justify the wholesale release of the EWR data. To the extent such limited disclosures are competitively useful, it is primarily to identify whether another manufacturer may have a similar issue ( *e.g.* , uses the same part and has a similar failure experience). These limited disclosures do not offer the same market-oriented base of information as the comprehensive collection of trend data provided pursuant to the EWR rule. Non-industry commenters did not dispute these points. As a result, a comparison between publicly available complaint data and the compendium of EWR complaint data submitted by manufacturers is not valid. Impairment In addition to proposing to hold EWR consumer complaint data confidential on grounds of competitive harm from their release, the NPRM proposed to hold these data confidential under the impairment prong of FOIA Exemption 4. 71 FR 63743. As reflected in that notice, manufacturers may obtain and receive customer input and feedback on product performance in a variety of ways, and establish differing practices for the receipt of customer complaints. The nature and level of effort expended by a company is discretionary. It is beneficial to NHTSA if a company expends considerable effort. More consumer input channels increase the robustness of the available data, which is submitted under the EWR program. Consumer complaints provide feedback on product performance that can be valuable to NHTSA in identifying problems, including potential defects that may point to the presence (or absence) of a safety problem. The agency seeks to ensure that it receives as much information as possible to identify possible defect trends. Under the early warning reporting provisions of the Safety Act, however, NHTSA may not require a manufacturer of a motor vehicle or motor vehicle equipment to maintain or submit records respecting information not in the possession of the manufacturer. 49 U.S.C. 30166(m)(4)(B). In other words, NHTSA may require manufacturers to submit reports based on information that they have collected but may not require manufacturers to collect and submit information not otherwise collected. In view of the fact that the quantity and comprehensiveness of the EWR consumer complaint data depend in part on the willingness of manufacturers to collect this information through a broad and multi-input approach, NHTSA does not want to take steps that discourage the collection efforts. Both industry and non-industry commenters addressed the agency's proposal. Industry commenters stated that a class determination for consumer complaints was justified on the basis that disclosure would impair the agency's ability to obtain this information in the future. The Alliance stated that there are variations in how manufacturers conduct their consumer complaint programs. Manufacturers can alter the manner in which these programs are conducted based on a variety of internal considerations, benefits, and costs. The Alliance cited a purpose of the TREAD Act, which is to enhance the ability to carry out the Safety Act, a purpose of which is to reduce the number of accidents and the fatalities and injuries arising from them. The Alliance reiterated an earlier statement by NHTSA (which is of continuing validity) that the agency's ability promptly to identify safety related defects would not be enhanced if disclosure of EWR data diminishes the volume or reliability of the information. Nor would the public interest in vehicle safety be served if disclosure has the result of discouraging manufacturers from being responsive to consumer concerns that may relate to motor vehicle safety or imposing greater costs on consumers who need to address such concerns. Confidential treatment of those data is necessary to avoid creating a disincentive to the continued voluntary creation of the information, since there is no requirement to collect the information in the first instance. The Alliance concluded that NHTSA's ability to collect comprehensive EWR information and, thus, its ability to address defect trends indicated by EWR data, will be impaired if the data are released. The Alliance also noted that apart from the early warning context, a reduction in consumer complaint data would have a deleterious effect on NHTSA's ability to conduct the defect investigations that it has opened. Utility emphasized that the quality and quantity of information relating to consumer feedback that NHTSA receives depends largely on a manufacturer's willingness to expend financial and administrative efforts to collect such information. It advised that manufacturers who currently collect and organize this information would be less inclined to do so if the information were disclosed and ended up generating frivolous lawsuits, the defense of which further raises the cost of doing business. AIAM stated that the public disclosure of the complaint information would impair NHTSA's interests in promoting safety. If less complete information relating to safety issues is provided to the agency faulty decisions could follow. In contrast, Public Citizen asserted that NHTSA has not shown that making the data public would hinder its ability to collect this information in the future. In Public Citizen's view, in light of the extreme value of consumer complaints to manufacturers, they are unlikely to stop collecting this information and unlikely to alter their practices in collecting complaints. It added that companies could not cease receiving complaints. Public Citizen also asserted that past events, such as the Ford/Firestone problems, illustrate the interest of the public in EWR data. Public Citizen further stated, without citation, that Congress intended for the public to use the data to monitor whether NHTSA is fulfilling its obligation to investigate significant safety issues. Finally, Public Citizen contended that the standard for withholding information under the impairment prong has not been met. Public Citizen has maintained that the impairment prong of FOIA Exemption 4 requires a rough balancing of the importance of the information and the extent of the impairment against the public interest in disclosure, citing *Washington Post* v. *HHS* , 690 F.2d 252, 269 (D.C. Cir. 1982); *Washington Post* v. *HHS,* 865 F.2d 320, 326-27 (D.C. Cir. 1989). However, in *Public Citizen Health Research Group* v. *FDA,* 185 F.3d 898, 904-05 (D.C. Cir. 1999), the Court rejected “a consequentialist approach to the public interest in disclosure” as “inconsistent with the “[balan[ce of] private and public interests’ th[at] Congress struck in Exemption 4.'' The Court went on to state that “[t]hat balance is accurately reflected in the test of confidentiality” established by *National Parks* and that a requester cannot “bolster the case for disclosure by claiming an additional public benefit” in release. *Id* . at 904. In other words, “the public interest side of the balance is not a function of” among others “any collateral benefits of disclosure.” *Id* . Accordingly, an Exemption 4 case may not be bolstered by claiming an additional public benefit from disclosure of data is beyond the test of *National Parks.* 43 In the following discussion, we will address the impairment that would result from disclosure. While we do not accept the balancing test under Exemption 4 advanced by *Public Citizen,* in the alternative, we will address a rough balance between the importance of the information and the extent of the impairment against the public interest in disclosure. 43 Public Citizen asserted that a guiding tenet of both FOIA and the TREAD Act's early warning system is to ensure that the public has the ability to monitor government institutions and protect themselves by being informed of potential defects. This is unsupported. This is not the guiding tenet of FOIA Exemption 4 and this was not the purpose of the early warning rule. The purposes were to enhance the Secretary's ability to carry out the Safety Act and assist in the identification of defects related to motor vehicle safety. 49 U.S.C. 30166(m)(1), (3)(A). NHTSA's Office of Defects Investigations
(ODI)has long viewed consumer complaints as a critical aspect of the data the agency considers to identify potential vehicle and equipment problems. 67 FR at 45847 (July 10, 2002). For this reason, NHTSA included consumer complaints in EWR reports. 67 FR at 45847-51. Consumer complaint information is a useful pointer to areas that, after appropriate assessment, may lead to defect investigations and ultimately to the remedy of safety defects. The importance of consumer complaints increases as warranties expire and the availability of warranty claims information correspondingly diminishes. The EWR regulation assures that the agency receives information about the amount of complaints received by manufacturers as to each of the specified components or systems. Our experience in defect investigations has been that companies generally receive considerably more consumer inputs than does the agency on any actual or potential vehicle problem. 67 FR at 45848. Because manufacturers ordinarily receive more complaints than consumers send to the agency, the agency must rely on manufacturer efforts to continue to amass as much information as possible. Companies may receive customer input and feedback on product performance in a variety of ways and establish differing practices for the receipt of complaints. The EWR definition takes this possibility into account. Companies may increase available staff at their toll-free telephone numbers or create web-based systems to accept complaints via electronic mail. Additional input sources increase the robustness of available data, which can be valuable both to the company collecting it and to NHTSA in identifying problems—including problems that may point to the presence (or absence) of a safety-related defect. The disclosure of consumer complaint information would be likely to discourage manufacturers' proactive efforts to obtain these data or to expend sums to receive more information or to use it more effectively. The release of the EWR information would not eliminate manufacturers' collection of consumer complaints, but they likely would take steps to reduce the collection of complaint data in order to improve their numbers. As a direct result, NHTSA would collect considerably less data in the future. The agency would be faced with attempting to conduct analyses with less robust reporting from manufacturers. NHTSA's ability to identify potential safety defect trends would be impaired. Such a result would affect the agency's ability to carry out the early warning program. 44 In sum, the disclosure of the information would be likely to impair NHTSA's ability to obtain necessary information in the future. 44 Limited disclosure of consumer complaint data collected by manufacturers during ODI investigations is different from the disclosure of EWR data sought by Public Citizen and others. The consumer complaint data released in the course of agency investigations is limited. It involves limited models and model years and specific alleged problems. EWR data amount to full compendiums, across makes, models and model years involving numerous systems. The release of consumer complaint data in investigations does not negate the competitive value of the EWR data or the likely impact that wholesale (rather than piecemeal) disclosure would have on submitters. We also note that there are benefits of releasing information in investigations, such as providing for public input which could enhance the agency's understanding of an issue. Also, data collections on consumer assessments by third parties are not comparable to the volume and depth of information received under the EWR rule. On the other hand, the public would not receive significant, if any, safety benefits from the release of EWR consumer complaint information. The EWR data cover a wide range of consumer satisfaction issues. As explained in the preamble to the EWR rule, we sought to obtain complaint information beyond that which would be likely to involve safety issues: The agency is unwilling to adopt the recommendation that the complaint must allege a safety-related defect, as this would unduly limit the reporting of consumer complaint information that NHTSA is seeking to collect through the early warning reporting rule. As stated in the NPRM, based on its past experience with defect investigations, the agency does not “believe that [it] would be appropriate to simply require reporting of ‘safety-related’ problems, since manufacturers often have a much more narrow view of what constitutes a safety-related problem tha[n] we do.” [66 FR] at 66202. If the term “consumer complaint” were limited to complaints specifically alleging a safety-related defect, communications expressing dissatisfaction with a product or relating that the product did not perform in a satisfactory manner would not necessarily be reported to the agency. 67 FR at 45849. The agency included this category of information in the early warning program to ensure the collection of a comprehensive amount of data for it to use in its analysis. This has proven true. The vast majority of this information has not been indicative of defect trends. NHTSA also has balanced the importance of consumer complaints and the extent of the impairment to the government against the public interest in disclosure. The importance of complaints is well-established. The magnitude of the numbers of complaints is important to us, as in our screening we will look for trends based in part on relatively high rates. We believe that, given manufacturers' substantial control over information collection, if the numbers of consumer complaints were disclosed to the public, it is likely that the numbers of consumer complaints would be reduced considerably and, as a consequence, our ability to detect potential safety problems would be substantially diminished. On the other hand, the public interest in disclosure of consumer complaints is limited. If the data were released, the public would have a generalized awareness of consumer dissatisfaction or a perception of a potential or actual problem broken out by the elements provided in 49 CFR Part 579. But based on EWR complaint data alone, it is not possible to identify a safety defect in a particular product. And, unlike ODI investigations, a specific potential defect is not identified in EWR data. Thus, to the extent balancing is required, the impairment prong balancing weighs in favor of nondisclosure of consumer complaint data. 3. Warranty Claims The EWR rule requires larger volume manufacturers of light vehicles, medium-heavy vehicles and buses, motorcycles, and trailers to submit the number of warranty claims, without regard to whether they are safety-related, that they have paid, broken out, for each make and model, by numerous specific categories of vehicle systems ( *e.g.* , steering, brakes), fires and for certain categories rollovers—all of which are binned by code. *See* 49 CFR 579.21(c), 579.22(c), 579.23(c), 579.24(c). In addition, the rule requires manufacturers of tires to report warranty adjustments they paid, other than for relatively low volume tire lines, on a number of categories of tire failures, such as the tread and sidewall. 49 CFR 579.26(c). In the child restraint category, warranty claims are combined with consumer complaints. 49 CFR 579.25(c). Repairs made outside of warranties that are covered by “good will” are also reported under warranty claims and warranty adjustments. 45 49 CFR 579.4. 45 These data include “good will” repairs that are conducted and paid for by the manufacturer outside of the warranty. “Good will” means “the repair or replacement of a motor vehicle or item of motor vehicle equipment, including labor, paid for by the manufacturer, at least in part, when the repair or replacement is not covered under warranty, or under a safety recall reported to NHTSA under part 573 of this chapter.” 49 CFR 579.4. The EWR warranty data reflect the costs that manufacturers have incurred in satisfying claims for payments arising from problems with their products. Ordinarily, those costs are the costs of repairs of vehicles or the repair or replacement of equipment. The early warning data on warranty claims involve a wide range of issues. For the most part they do not reflect defect trends. In the NPRM, the agency proposed to make a class determination that warranty claims (warranty adjustments in the tire industry) in EWR data would not be released to the public. 71 FR at 63743. The agency based this proposed class determination on both the competitive harm and impairment prongs of *National Parks* . We first address the competitive harm from the release of EWR warranty claims data, then we discuss the impairment to the agency's ability to obtain as complete warranty information that would follow the release of the information. Competitive Harm Numerous commenters have provided information to the agency on whether the disclosure of EWR warranty claims and warranty adjustment data (collectively warranty claims) would be likely to cause the submitting manufacturer to suffer competitive harm. This includes both industry and non-industry groups. Commenters from various sectors of the automotive industry explained the competitive value and use of EWR warranty claims data as well as the competitive harm that the release of the data likely would cause. As noted in the discussion of consumer complaints above, at the outset of its comments, the Alliance showed manufacturers compete vigorously for sales of new vehicles. Similarly, there is substantial competition for tire sales. The manufacturers expend substantial amounts of research money annually related to quality and consumer satisfaction in the market for new sales. The EWR warranty data are a comprehensive compendium of warranty claims. They cover numerous systems and components (e.g., 18 for light vehicles and 22 for medium heavy vehicles), as well as fires and rollovers for many reporting industry sectors. They cover makes and models going back many years and are updated quarterly. As noted by the Alliance, their value is enhanced by their continuing content, which permits a model-to-model comparison on the numerous systems and components in EWR reports. The data are proprietary and are not publicly available. Manufacturers have submitted a significant volume of warranty claims data to NHTSA under the EWR program. According to comments, the manufacturers have expended tens of millions of dollars in reporting under the program. The release of EWR warranty data would permit wholesale industry-wide comparisons of the quality or durability of all significant systems or components on models chosen for comparison. Disclosure of this information, as the Alliance explained, would financially benefit others who obtain and use the data for purposes that would be contrary to the competitive interests of the submitting manufacturers. The Alliance's discussion of EWR warranty data addressed the competitive aspects of those data including the competitive consequences of the release of warranty information in a context that also addressed consumer complaints and field reports. The Alliance explained that the EWR data provide valuable information on quality and consumer satisfaction of vehicle owners on a make/model/model-year basis. 46 The Alliance emphasized that warranty claims information is particularly sensitive from a competitive standpoint. Additionally, the Alliance noted that EWR data provide valuable insights into a given manufacturer's business practices and decisionmaking, including the application of warranty terms and conditions, the coverage of products and systems by a given warranty, and the manufacturer's willingness to provide good will adjustments after the end of an official warranty period. 46 The Alliance asserted that the comprehensive nature of these submissions—covering all makes and models over a multi-year timeframe—makes them a valuable compendium of quality and consumer satisfaction information that could not be replicated easily at any price and could be used by competitors to follow warranty trends that provide a window into submitters' warranty costs. The Alliance, citing *Worthington Compressors* , pointed out that the release of information collected at considerable cost by an entity that submitted information to the Government could easily have competitive consequences. The submitters expend considerable sums to gather large volumes of EWR data and the release of it would be contrary to the competitive interests of entities that submit the information and to the benefit of competitors. The Alliance referred to a report from a consultant, AutoPacific, which made several observations regarding the value and use of warranty data. Under a competitive harm analysis heading, AutoPacific stated that it is well-known that automobile and component manufacturers closely guard their warranty data for competitive product design and pricing reasons. Comparative component warranty, reliability, and durability experiences strongly influence component pricing and sourcing decisions. If an original equipment manufacturer
(OEM)47 purchases a component and obtains field experience with that component, it can be expected to use that information to make decisions about purchases and the prices it will pay. Providing that field experience to other manufacturers gives them a free ride at the submitter's expense. Auto Pacific also observed that component manufacturers can use vehicle manufacturer warranty data in preparing bids for new business, planning new business marketing strategies, and estimating the likely costs and pricing positions of vehicle manufacturers, with whom they may compete for sales in the aftermarket. The warranty claim experience at the component level could be useful to them, to the detriment of the vehicle manufacturers. 47 OEMs may be contrasted to aftermarket equipment manufacturers that produce replacement equipment. The Alliance pointed out two aspects of warranty claims data that are particularly sensitive from a competitive standpoint and explained that vehicle manufacturers and their dealers would be placed at a particular competitive disadvantage should EWR warranty claims information be released. Vehicle manufacturers, often through their franchised dealers, compete with independent aftermarket parts manufacturers for sales of parts used in repairs. Those independent aftermarket parts manufacturers would gain a significant competitive advantage from having routine access to warranty claims experience on the detailed level of EWR reporting. As an example, they would know the trends in warranty experience on brakes of various makes and models. The value of such information to aftermarket parts manufacturers is evidenced by publications sold by the Motor and Equipment Manufacturers Association/Original Equipment Suppliers Association (MEMA/OESA) that include forecasts and historical trend data where available. Aftermarket sales in the light duty market, the Alliance estimated, were $197 billion in 2005. 48 The sale of these data by aftermarket parts manufacturers illustrates the value of the data and the associated competitive harm from the release of a comprehensive collection of warranty claims experience. With this information, the Alliance explained, aftermarket parts manufacturers would know where to target their marketing efforts when vehicles come off warranty and benefit from this information at the direct expense of the vehicle manufacturers' competitive positions and their franchised dealers. 49 48 The Alliance stated that this figure was based on estimates from the Automotive Aftermarket Industry Association. However, the Association estimates that the amount of business in this area is much larger—nearly $270 billion. *See* *http://www.aftermarket.org/* (Press Release No. AAIA-26-06 (June 15, 2006) (reporting that aftermarket business related to light vehicles for 2006-2007 increased to $267 billion). 49 Comments by the MEMA/OESA lend further support to the value of the data. MEMA/OESA pointed out that the warranty data of original equipment manufacturer
(OEM)suppliers are of particular value to replacement parts and equipment manufacturers and that their wholesale disclosure would likely cause these suppliers to suffer serious competitive injury if the data are disclosed. It explained that this information is highly sought and competitively sensitive marketing intelligence. Suppliers would undoubtedly benefit from the disclosure of this information. The Alliance also stated that warranty claims should be withheld from public release on grounds of the existence of competition from new and potential new entrants to the U.S. market. In particular, it noted several Korean-based companies and the possibility of Chinese, Russian and European companies entering or reentering the United States market. Release of EWR information, it argued, would provide these potential competitors with access to an otherwise unavailable collection of comprehensive data about manufacturers' experiences with various components. These new entrants could benefit by reviewing EWR warranty data to estimate the probable ranges of warranty claims rates (and by inference, the associated costs), without having to expend resources to try to obtain this information privately, such as by paying for market research, or to take the risk of entering the market without the benefit of this information. Providing this field experience, the Alliance stated, would provide them with a free ride at the expense of the first manufacturer. The Alliance asserted that this is a competitive harm within the meaning of *Worthington Compressors* , 662 F.2d at 51-52. GM, a manufacturer of both light vehicles and medium-heavy vehicles, pointed out it maintains the confidentiality of warranty data. It views the data as proprietary and does not disclose voluntarily warranty data of the type and scope submitted under the EWR rule. 50 GM explained that manufacturers will be harmed by the competitive use of EWR warranty data. Because the EWR warranty claims represent costs incurred by manufacturers, counts of warranty claims provide an index of a manufacturer's costs. Cost information is competitively sensitive. 51 50 GM also explains that its own suppliers do not have full access to its warranty data and that any data that GM shares must be treated by those suppliers as proprietary information. 51 GM supported the statements in its comments with several examples of the manner in which competitors could use the information to their benefit and the detriment of the entity submitting the data, including reduced testing and analysis, and performance issues in the field: • A supplier offers a newly designed system to OEMs. While reverse engineering and testing by multiple OEMs is possible, those approaches do not duplicate field experience in numerous vehicles. If one OEM
(OEM1)installs the system in vehicles, it would gain field experience and could use it to make better decisions about the future use of the system. If the EWR warranty claims data were disclosed, other OEMs would have access to some of the same information and would be able to make their decisions with less extensive testing and analysis. • Two OEMs may purchase systems with similar designs from the same supplier, but the OEM with a greater sales/production volume may learn something about its performance first and use its knowledge to improve its product. If the other OEM has access to this company's information, it may be able to respond sooner and offset OEM1's competitive advantage. • If two OEMs are using the same systems/components from the same supplier, differences in performance of those systems may be exposed in the field due to differences in how each of those OEMs integrated those systems/components into its vehicle designs. After reviewing its competitor's EWR warranty data, an OEM “may be able to alter its vehicle design integration sooner based on differences in field performance, which would offset the other OEM's competitive advantage. • Warranty claims information on newly released vehicles can be used by competitors to decide what to emulate and what not to emulate without the expense of implementing those systems and processes. GM stated that since vehicle manufacturers increasingly purchase entire systems (i.e. all components used to perform a specific function such as steering, suspension, heating and cooling, occupant restraints, or seats) from suppliers, the disclosure of these data would provide competitor vehicle manufacturers with the warranty claims experience of systems made by various potential suppliers (e.g., for GM) that would give these competitors an advantage in selecting suppliers, at the expense of the manufacturer whose experience underlies the data. Also, competitors could use these data to assess the effectiveness of a particular OEM's systems and processes to identify and resolve quality and lead time issues. As GM explained, the loss of confidential information would force it or another OEM to subsidize other OEMs, reducing their costs at GM's expense and destroying GM's competitive advantage. GM also pointed out that OEMs compete for replacement part sales with other companies and that the release of warranty claims data can be used by these aftermarket competitors to make decisions on what parts to produce, in what quantities and at what price. This, GM noted, is a source of competitive harm. AIAM focused on the totality and comprehensive nature of the EWR data. AIAM's comments, which were discussed above in the context of consumer complaints, applied with at least equal force to warranty claims. AIAM stated that EWR warranty data would provide competitors useful information about the quality levels and the cost structure of the submitter. It would enable one company to use the experience of another to select an optimal design, production process and pricing strategy, while avoiding the cost and risk that would otherwise be encountered. We refer by reference to the discussion of AIAM's comments above. 52 52 AIAM stated, for example, that a knowledgeable competitor can view this mosaic of information and reach valuable conclusions. The comprehensive body of EWR information facilitates manufacturer-to-manufacturer comparisons. EWR warranty data would provide competitors useful information about the quality levels achieved by the submitting manufacturer or its suppliers, both for technologies used in vehicles and in their accompanying production processes, which permits competitors to evaluate a particular technology, process or supplier, at a risk and cost that is lower than otherwise attainable. Using this information, AIAM explained, competitors might be able to base decisions and reach conclusions to pursue certain technologies to a substantial degree on their reviewing a submitter's EWR warranty information. The submitter may have expended substantial resources to help it decide whether to pursue a particular technology, while the competitor would gain a real world evaluation free of cost or the effort of a real world evaluation. This would impair the competitive position of the submitter. The EWR information would also provide a competitor with information about the submitters' cost structure. Claims are an important factor in the costs of various technologies. Competitors could evaluate this cost information and make decisions about whether to pursue various products or marketing strategies based on the submitter's costs without undertaking the risks of producing a vehicle with the particular technology. Nissan stated that, in addition to their role as an accounting system between manufacturers and their dealers that is designed to maintain customer satisfaction, a purpose of warranty systems is to quickly identify issues. Warranty data assist manufacturers in implementing production adjustments or service actions to ensure that products are operating as intended and meeting consumer expectations. Nissan pointed out, for example, that warranty claims help the company identify areas where the field experience information suggests further investigation. The vast majority of these issues, it added, are not safety related. Nissan discussed the competitive consequences of the release of EWR warranty information together with consumer complaints and field reports. 53 Of particular note, warranty data would be valuable in the context of vehicle manufacturers' changes of suppliers. Competitors could, for instance, learn that the aggregate number of warranty claims in a category rose with a change of suppliers. Warranty data also provide insight into a company's warranty practices, particularly “good will” after a warranty expires. 53 Nissan pointed out the competitive aspects of EWR warranty data. EWR warranty claims data help identify areas where field experience is showing an issue. The data can reveal market trends in both company costs and consumer reaction. Competitors could consider the data before deploying new technologies. They would rely on Nissan's information in making critical decisions on which technology or suppliers to use and when to enter the market and how best to market the technology to consumers. Competitors can use this information to determine market reactions, supplier or product changes, and new marketing efforts. Nissan further noted that this information is competitively valuable irrespective of whether the specifics of each claim are accessed by competitors because competitors can use these data to focus on a particular factor that can then be readily identified through reverse engineering. Nissan explained that it develops warranty information only after significant investment in engineering and/or market research. Competitors, including suppliers, could use the information created by the significant investment of the manufacturer that submitted the data. These data could be used competitively against a submitter. TMA addressed warranty information as part of its overall comments on the competitive harm from disclosure of EWR information. It stated that public availability of detailed, comprehensive warranty data for each model and model year across numerous components and systems will provide significant market intelligence to competitors. TMA pointed out that the release of the information would provide competitors with valuable information to evaluate the performance, reliability and durability of various components, without the expense and risk associated with product development that would normally occur with field-testing efforts, while shortening the amount of time competitors need to market competing products, to the competitive disadvantage of the submitting manufacturer. 54 54 TMA stated that the EWR data that medium-heavy vehicle manufacturers report are comprehensive as they involve numerous vehicle systems as well as fires and rollovers. This compendium of EWR warranty data, model-by-model and system-by-system, has significant competitive value. TMA stated that the disclosure of EWR data would provide competitors with valuable and previously unavailable insight into the field experience and performance of a submitter's entire product line and individual systems and components. There are numerous uses that competitors could make of these data to their competitive advantage. TMA characterized the EWR information as a data bank of quality control information that competitors could use to assess the in-use performance of parts and systems. A competitor could use the reporting manufacturer's field experience, good or bad, while avoiding the costs, effort and risks that the reporting manufacturer has incurred. It would be used in purchasing, pricing, and sourcing decisions, all of which would have competitive impacts. TMA also cited a discussion by GM of EWR warranty data as a competitively valuable cost index and explained how EWR warranty data can be used. Blue Bird asserted that EWR warranty data are highly proprietary and have a high level of competitive sensitivity. If these data were available, competitors would have a free ride in learning about warranty experiences for various vehicle systems, components, and parts. It also stated that their wholesale disclosure would result in competitive harm. Harley-Davidson stated that warranty data are generally not disclosed by individual motorcycle companies. Warranty claims are part of continuous improvement, training programs and efforts to satisfy customers. The Motorcycle Industry Council echoed this concern, in light of the reservoir of information about customer satisfaction and quality concerns, and urged against the disclosure of warranty data. Utility explained that it uses warranty claims to help identify potential problems early in the life of a trailer and spot trends associated with potential problems. By analyzing such data, with its suppliers, Utility is able to update components, incorporate new technologies and achieve cost savings. Such information in the hands of competitors would enable them to assess the in-use performance of component parts, which in turn could be integral components of its purchasing, pricing and sourcing decisions. RMA, on behalf of tire manufacturers, asserted that NHTSA has treated tire manufacturer warranty adjustment data as confidential business information in the past. RMA asserted that because tire manufacturers use warranties as a marketing tool, adjustments are not necessarily an indication of tire performance. 55 It argued in favor of a class determination to cover all tire warranty adjustment data. 56 It further contended that since warranty data have been held confidential in the context of some investigations, the broader EWR warranty data base should be held confidential. As RMA observed, the tire industry competes tire line-by-tire line and even size-by-size. Tires are marketed by size in a given line. 55 RMA stated that it is a party to a consent order with the Federal Trade Commission prohibiting the association from collecting or disseminating competitively sensitive information, including warranty information. It submitted a copy of the order with its comments. The order reflects a concern about tire company competitors sharing information. 56 RMA suggested that this rulemaking should apply to warranty claim data submitted during defect investigations. Such a proposal is clearly outside the scope of this rulemaking, which applies to EWR data. As RMA has maintained (correctly) in legal proceedings, the vast majority of EWR data are not indicative of defect trends. Brief at 5-6 and 22; Reply Brief at 1 in *Public Citizen* v. *Peters* , No. 06-5403 (D.C. Cir.). We are declining RMA's suggestion. Several manufacturers advanced another consequence of disclosure: Misleading and unfair comparisons of the data. The Alliance explained that the disclosure of the comprehensive compendiums of EWR information would be misleading to consumers and unfair to the submitting manufacturers because consumers would attempt to make comparisons of the performance of one model to another, across multiple model years, on a quarterly basis, which, as the Alliance observed, can not be done. Similarly, AIAM stated that public disclosure of the data would create a great potential for misunderstanding and mischaracterization. AIAM pointed out that automotive warranties vary in length and scope of coverage. A model having a higher claims rate may simply have a more comprehensive warranty than the second model, rather than inferior quality. Reports with simple comparisons could, in AIAM's view, affect the competitive positions of manufacturers in a way that was unfair. Also, TMA stated, with supporting explanation, that manufacturers and consumers could misuse the data to draw unfair and unsubstantiated and misleading comparisons regarding competitors' products. JPMA added that the release of the encyclopedia of quality information encompassed in EWR data would cause submitters unwarranted competitive harm because the reports will include activities that are not safety related. This, JPMA said, will result in unwarranted disparagement. RMA noted that warranty policies differ among tire manufacturers, and from tire to tire. Both consumers and the marketplace influence the terms of these warranties. TIA noted that the disclosure of warranty data can provide a misleading picture of a tire model's performance that would competitively harm the manufacturer. Workhorse Custom Chassis also asserted that the wholesale disclosure of these numbers would competitively harm EWR submitters in part because of perceived problems by potential customers. Several entities acknowledged the limited releases of warranty information submitted by the manufacturers during investigations by NHTSA's ODI. The Alliance stated that the release of this limited information on specific models in a limited number of model years in investigations conducted by NHTSA does not support the release of the comprehensive compendium of information in EWR submissions. A limited release is much different from a competitive standpoint than the automatic release of the continually collected full compendium of quality and customer satisfaction information that is represented by the quarterly EWR submissions. Unlike EWR data, the release of data from investigations does not permit industry-wide comparisons of the quality or durability of all significant components across entire product lines and they are not a compendium of quality and customer satisfaction information developed over time. Thus, the Alliance concluded that the confidentiality of EWR warranty information should be maintained. GM added that the limited disclosure of warranty information in other contexts, such as during defect investigations, typically involves a limited number of makes, models, and model years of vehicles and are limited to a narrow group of warranty codes. GM concluded that the effects of disclosing all EWR warranty data, are, therefore, much different from the effects accompanying the disclosure of the more limited warranty data the agency currently discloses. Similarly, Nissan distinguished the EWR warranty claims data from those provided during ODI investigations, noting that the latter have limited competitive value compared to EWR warranty data because they do not offer the same market-oriented base of information as the comprehensive collection of trend data provided under the EWR rule. By contrast, non-industry commenters argued in favor of disclosing all EWR warranty data. Quality Control and Public Citizen argued that the disclosure of this information would permit the public to make educated decisions regarding products. Quality Control stated that the EWR warranty data should be disclosed because they would be useful to the public in spotting potential defect issues. Public Citizen stated that the EWR rule requires no unnecessary details about manufacturer business operations or future plans. Quality Control and Public Citizen did not provide any facts disputing the competitive value of the data or the harms of disclosure explained by the industry commenters. The literature also refers to the value of warranty claims data. At its core, warranty data are commercially valuable because of the myriad ways they can be used. *See* Tom Gelinas, *We Got You Covered* , Fleet Equipment, July 1, 2005, at 36 (noting ArvinMeritor's use of warranty data to perform many tasks, such as in the company's OnTrac Call Center's early warning system reports, which are used to help engineers “determine corrective actions on new or emerging product problems”) and Huaiqing Wu, *Early Detection of Reliability Problems Using Information from Warranty Databases* , TECHNOMETRICS, May 31, 2002, at 120 (explaining the value of using warranty data “to detect potentially serious field reliability problems). After carefully considering the comments and other information of record, NHTSA has determined that the release of EWR warranty claims numbers on light vehicles, medium-heavy vehicles and buses, motorcycles, and trailers, and EWR warranty adjustment data on tires is likely to cause substantial harm to the competitive positions of the manufacturers that submit the data. The EWR warranty data are a comprehensive compendium of warranty claims paid by manufacturers, for a broad range of products, generally by make, model year, going back for years and updated quarterly. They address numerous components and systems of vehicles and equipment and for certain vehicles include rollovers and fires. *See, e.g.* , 49 CFR 579.21(b)(2); 49 CFR 579.22(b)(2). The comprehensive nature of the compendiums of EWR data on warranty data is enhanced by their continuing content, which is updated by quarterly reports, and by their standardized reporting format. In general, these data reflect a repair or the replacement of an item. They can be used for industry-wide comparisons on these numerous systems and components. The amount of EWR warranty data is substantial. For the first 15 quarters of EWR data, an average of 65 light vehicle manufacturers per quarter reported 204 million warranty claims; an average of 87 medium—heavy and bus vehicle manufacturers per quarter reported nearly 11 million warranty claims; an average of 18 motorcycle manufacturers per quarter reported over 1.1 million warranty claims; an average of 285 trailer manufacturers per quarter reported 1.6 million warranty claims and an average of 27 tire manufacturers per quarter reported over 1.6 million warranty adjustment claims. These warranty data are not publicly available. Automobile, system, component and equipment manufacturers closely guard their warranty data. The compendiums of EWR warranty data submitted by manufacturers could not be replicated at all or at least not easily at any price. The EWR warranty data are a valuable indicator of the field experience of parts and systems in vehicles and tires. 57 The warranty data indicate the reliability and durability of various systems and components. 57 While this discussion applies to child restraints, they are covered under the aggregated submission of consumer complaints and warranty claims. EWR warranty data are a valuable source of information about the quality of the range of products, system-by-system, over time sold by a manufacturer or its supplier. Warranty information is useful in assessing performance, reliability and durability issues. These data can be used to select an optimal design and production process. Warranty claims help to identify potential problems early in the life of a vehicle. By analyzing such data, a company is able to update components, incorporate new technologies and achieve cost savings. Warranty data assist manufacturers in implementing production adjustments or service actions to ensure that products are operating as intended and meeting consumer expectations. Such information in the hands of competitors would enable them to assess the in-use performance of components, identify issues and avoid mistakes. If EWR warranty data were released, competitors would likely review the data to evaluate a particular product, technology or process. The EWR data have great bearing on the selection of a design or production process. The data are particularly valuable on future design decisions. While the manufacturer submitting the data would have borne expenses associated with the introduction of the product and the collection of the data, competitors would benefit from reduced development costs, including costs of testing and analysis. Competitors would also face a risk of performance issues in the field that is lower than would otherwise be attainable. Wholesale disclosure of EWR warranty data eliminates the expense and risk of obtaining this information through field testing and trial and error. Using this information, competitors could base decisions to pursue certain technologies to a substantial degree on their reviewing a submitter's EWR warranty information. The competitor would gain a real world evaluation free of the risk or the effort and associated cost of a real world evaluation. Thus, the public availability of detailed, comprehensive warranty data for each model and model year across numerous components and systems will provide significant market intelligence to competitors. In short, the release of the EWR warranty data would enable one company to use the experience of another. The loss of confidential information would force the OEM that submitted the EWR data to subsidize other OEMs, reducing their costs at the submitter's expense and undercutting its competitive advantage. This would impair the competitive position of the manufacturer that submitted the EWR data. The EWR data have a substantial bearing on purchasing decisions. EWR warranty information is useful in making decisions about purchases and the prices to be paid. Comparative component warranty, reliability, and durability experiences strongly influence component sourcing and pricing decisions. Since vehicle manufacturers increasingly purchase entire systems ( *i.e.* , all components used to perform a specific function such as steering, suspension, heating and cooling, occupant restraints, or seats) from suppliers, the disclosure of these data would provide vehicle manufacturing competitors with the warranty claims experience of systems made by various potential suppliers that would give these competitors valuable information at the expense of the EWR data submitter. Similarly, tire manufacturers have acquired complete tires from producers in China. An important question is the relative quality of the suppliers' products in the field. Some will be more reliable and the subject of fewer warranty claims. Providing that field experience to other vehicle manufacturers gives them a free ride at the expense of the submitting manufacturer. EWR warranty data would provide significant intelligence to a manufacturer making a decision as to which supplier to choose and what price to pay. Competitors could also learn for instance that the aggregate number of warranty claims in a category rose with a change of suppliers. Competitors would use the EWR data to follow warranty trends, which would provide a window into those competitors' costs and cost structure. Because the EWR warranty claims represent costs incurred by manufacturers, counts of warranty claims provide an index of a manufacturer's costs. Knowing whether costs for various systems are relatively high is useful and important information, because controlling costs is critical to the success of a business. The fact that an owner returned to a dealer for service, further, is indicative of customer satisfaction, or the lack thereof. As one commenter put it, the EWR information is a reservoir of information about customer satisfaction and on the company's efforts to satisfy customers. Warranty claims data would be valuable to competitors that produce, supply or sell aftermarket parts. Aftermarket parts are replacement parts for vehicles that have been sold to first purchasers. After the warranty on a vehicle expires, owners often have the vehicle repaired at shops other than dealerships. While franchised dealers generally must use service parts sold to them by vehicle manufacturers, independent repair shops have the option of using OEM parts or aftermarket parts made by independent manufacturers. Vehicle manufacturers, often through parts sales by their dealers, compete with independent component manufacturers for sales of aftermarket parts used in repairs. Independent aftermarket parts manufacturers could use vehicle manufacturer warranty data in targeting their marketing effort when vehicles come off warranty. The independents could use the EWR warranty data to make decisions on what parts to produce, in what quantities and at what price. They could use the data in planning marketing strategies, preparing bids for new business and estimating the likely costs and pricing positions of vehicle manufacturers, with whom they compete for sales in the aftermarket. The warranty claim experience at the component level would be very useful to them, to the direct expense and detriment of the vehicle manufacturers' competitive positions. The warranty data also provide insight into a company's warranty practices, particularly good will repairs after a warranty expires. The EWR data would be especially valuable to new entrants. Several manufacturers are currently considering entering or reentering the U.S. market. These potential new entrants would be likely to benefit competitively from the substantial amount of information contained in EWR data by reviewing the warranty history of vehicle manufacturers currently in the U.S. market. These data would provide these potential entrants with valuable insight into the likely warranty costs and issues they would face if they decide to enter the U.S. market. Quality Control and Public Citizen provided no facts disputing the competitive value of the data or the harms of disclosure raised by the industry commenters. 58 58 NHTSA disagrees with the analogy that they attempt to draw to the release of warranty data in ODI investigations of problems in particular vehicles. See the discussion above regarding the different impacts of the release of consumer complaint data in ODI investigations and EWR consumer complaint data. The same applies to EWR warranty data. The release of EWR warranty claims and warranty adjustment claims information submitted by manufacturers would have competitive consequences, as recognized in *Worthington Compressors,* 662 F.2d at 51-52. The large volumes of EWR warranty data are valuable and likely would be used by competitors. For the reasons discussed above, the release of this information would be to the significant benefit of the competitors of the submitters and to the significant detriment of the competitive position of the manufacturers that submitted the information. 59 59 As an alternative basis for confidentiality, the disclosure the comprehensive compendiums of EWR warranty information would likely result in consumer misuse. In *Worthington Compressors* , 662 F.2d at 53 n.43, the court permitted the consideration of consumer misuse of commercial information that is otherwise unavailable. The disclosure of the EWR information would be misleading to consumers and unfair to the submitting manufacturers. Consumers would attempt to make comparisons of the performance of one model to another across multiple model years, on a quarterly basis, which is problematic. The underlying foundations for the data are not the same. Different manufacturers have different warranty coverage, in terms of scope of coverage. Some have longer and more extensive coverage than others. The net result would be unfair and unsubstantiated and misleading comparisons. These comparisons would adversely affect the competitive positions of manufacturers in a way that would be unfair. Public Citizen has asserted that this analysis amounts to an unwarranted product disparagement theory, and contends that the harm occurring from the disclosure of these data amounts to adverse public reaction, which is not a cognizable harm under Exemption 4. The agency disagrees with this attempt to recharacterize the harm. Since the EWR data are competitively sensitive for a valid reason under Exemption 4, other potential consequences such as adverse public reaction, do not dictate that we treat the information as non-confidential. *Occidental Petroleum Corp.* v. *SEC* , 873 F.2d 325, 341 (D.C. Cir. 1989). Impairment In addition to proposing to hold EWR warranty claims data confidential on grounds of competitive harm from their release, the NPRM proposed to hold these data confidential under the impairment prong of FOIA Exemption 4. As reflected in that notice, manufacturers have considerable latitude in establishing the scopes and durations of their warranties. They have largely unfettered discretion in providing good will repairs outside of warranties, which are counted under the EWR rule as warranty claims. It is beneficial to NHTSA if a manufacturer has broad warranty coverage. More input channels increase the robustness of the available data. Warranties have historically provided feedback on product performance that can be valuable to NHTSA in identifying problems, including potential defects that may point to the presence (or absence) of a safety problem. The agency seeks to ensure that it receives as much information as possible to identify possible defect trends. As noted above, under the early warning reporting provisions of the Safety Act, NHTSA requires manufacturers of certain motor vehicles and motor vehicle equipment to provide reports on only the warranty claims that they pay, which are dependent in part on the scope of warranty coverage. *See* 49 U.S.C. 30166(m)(4)(B). NHTSA does not exercise control over the warranty coverage provided by manufacturers. In view of the fact that the quantity and comprehensiveness of the EWR warranty data depend in substantial part on the willingness of manufacturers to provide warranty coverage, NHTSA does not want to take steps that discourage extensive warranties, including good will. Both industry and non-industry commenters addressed the agency's proposal. Industry commenters stated that a class determination for warranty claims was justified on the basis that disclosure would impair the agency's ability to obtain this information in the future. These commenters noted that in light of the limitations in 49 U.S.C. 30166(m)(4)(B), manufacturers could adjust their warranty programs, which would affect the amount of data NHTSA receives. The Alliance explained that there is wide variation in manufacturers' programs. As to warranties, disclosure could cause manufacturers to reduce coverage. Manufacturers who offer longer or more generous warranty programs may curtail those programs, since generous warranty programs can generate a greater number of warranty claims and hence may cause a manufacturer's products to appear to be less reliable, even if they are not. As a result, the government's ability to obtain necessary information in the future will be impaired. TMA stated that the release of warranty claims data will likely lead to the strict application of manufacturer warranty programs that would deny good will and customer accommodation claims falling outside of their terms. Also, because manufacturers offer warranty programs that vary in length and scope, Utility asserted that manufacturers with longer and broader warranty programs will inevitably have more information in their possession. If the data were disclosed, manufacturers with generous warranty programs will have an incentive to curtail their programs in length and scope thereby decreasing the volume of information submitted to NHTSA. This would impair NHTSA's ability to obtain such information in the future. Blue Bird observed that the agency can reasonably anticipate that the quality and specificity of this information will be reduced if it is disclosed. It asserted that manufacturers would take measures to minimize their respective exposures. AIAM asserted that the quality of the EWR information, including warranty claims information, provided to NHTSA would suffer in part because of the generation of additional claims accompanying the publicity of warranty data received and disclosed by the agency. These additional claims, AIAM asserted, would distort the quality of EWR warranty data NHTSA collects. TIA argued that if EWR warranty information is not protected, companies will produce the bare minimum required. Protecting this information, it asserted, would ensure that the agency receives robust amounts of data. 60 60 TIA also noted that smaller tire dealers, in response to the disclosure of the number of claims honored, will be inclined not to make any adjustments. Public Citizen disputed the statements that if warranty data were disclosed manufacturers would alter their warranty and good will policies in order to report fewer claims. It asserted that manufacturers are under market pressures to offer good services and competitive warranties. In its view, the proposition that warranty practices would be altered was speculative and insufficient justification. It stated that the practice would only apply to potentially unsafe products. In the discussion that follows, we will address the impairment that likely would result from the disclosure of EWR warranty data. As discussed above in the context of consumer complaints, Public Citizen believes that under the impairment prong of *National Parks,* the confidentiality of information is determined by a balancing test. While we do not accept Public Citizen's view of Exemption 4, in the alternative we will address a rough balance between the importance of the information and the extent of the impairment against the public interest in disclosure. Warranty claims data have been and are a critical aspect of the data the agency considers to identify trends involving particular equipment and systems or components in a particular make, model and model year of a product. For this reason, in the EWR rule, NHTSA included warranty claims and adjustments in the reporting requirements. 67 FR at 45852-53. In fact, to obtain as much data as possible, the agency defined warranty claims to include not only warranty programs, but also extended warranties and good will. *Id; see also* 49 CFR 579.4 (definition of warranty claim). Warranty information is a valuable and useful pointer to areas that, after appropriate inquiry, may lead to defect investigations and ultimately to the remedy of safety defects. The more warranty information available to the agency, the more useful the warranty data will be in assisting the agency in identifying areas for further investigation. Warranty information is particularly important since it is generated early in the life of the vehicle, thus assisting in the prompt identification of potential defects. The disclosure of EWR warranty claims and adjustments would be likely to significantly reduce manufacturers' willingness to provide expansive warranty coverage or to apply warranty policies in a more generous and less restrictive way. Longer warranties, extended warranties, good will, and more liberal applications of warranty policy, will increase the number of claims paid by manufacturers and, therefore, the amount of data available to the agency. Moreover, changes in warranty policy caused by a reaction to disclosure of warranty data would likely reduce the ability of the agency to compare current data with historical data and to explore apparent changes in the data. Manufacturers have discretion in providing warranty coverage. For example, for marketing purposes, manufacturers may choose to make available to their customers warranties of longer duration and broader coverage (e.g., a company may offer a 5 year/50,000 mile warranty or a 3 year/36,000 mile warranty), making more warranty claims information available to the agency. Hyundai, for example, provides what it calls America's Best Warranty: 10 years/100,000 miles powertrain protection and 5 years/60,000 limited miles warranty covering nearly every new vehicle component. Toyota provides a 5 years/60,000 miles powertrain warranty and a 3 years/36,000 miles warranty covering all components other than normal wear and maintenance items. General Motors' limited warranty generally is for 3 years/36,000 miles, but its powertrain protection is for up to 5 years/100,000 miles, although some makes and models have different warranties. Ford's warranty generally is for 3 years/36,000 miles. Chrysler has a lifetime (for as long as you own your vehicle) limited powertrain warranty on some models. Extended warranties may be purchased for varying time periods. Some are not transferable. Thus, not only do warranties differ by manufacturer, they also differ based on the targeted market (e.g. luxury v. non-luxury), on system components and on the purchaser. Similarly, companies can choose strictly to adhere to their warranty policy limits or, alternatively, they may adopt policies of avoiding customer dissatisfaction by covering repairs arguably no longer covered under warranty, either because they may not fall within the terms of the warranty or because they fall outside their time or mileage parameters. The disclosure of early warning warranty data is likely to reduce good will and customer accommodation since such efforts will increase the number of warranty claims. 61 Manufacturers would do this because if these data were made public, they could lead consumers to assume that the product was of poorer quality than a similar competing product made by a manufacturer with a stricter approach to allowing warranty or good will claims. 61 We recognize that this is not a matter of corporate generosity. Some companies may choose as a matter of marketing or customer relations to apply their warranty policies liberally, thus generating additional numbers of warranty claims. Other companies may make decisions aimed primarily at avoiding potential warranty liability in the context of real or potential disputes. In either event, disclosing early warning warranty claims data may discourage customer satisfaction and early dispute resolution efforts. The disclosure of warranty claims and adjustment information is likely to limit manufacturers' offerings in extensive and extended warranties and good will. While the release of the information would not eliminate manufacturers' warranty programs, the disclosure of EWR warranty information likely would lead substantially to the contraction of current warranty policies. Less warranty data would be reported to NHTSA. This would result in substantially less robust data bases provided to NHTSA to screen for signs of early field problems. NHTSA's ability to identify potential safety defect trends would be impaired. Such a result would affect the agency's ability to carry out the early warning program. 62 Non-industry commenters provided no information countering the comments in the record pointing to the likelihood of this risk. In sum, the disclosure of EWR warranty claims, including warranty adjustment information, would be likely to impair NHTSA's ability to obtain necessary information in the future. 62 Limited disclosure of a manufacturer's warranty claims data in an investigation does not negate the competitive value of the data or the likely impact that wholesale (rather than piecemeal) disclosure would have on submitters. Such a response by manufacturers would also adversely impact consumers, who would be less likely to benefit from more generous warranty and good will policies as manufacturers impose restrictions in how they honor these policies. A class determination of confidentiality avoids these consequences. On the other hand, the public would not receive significant, if any, safety benefits from the release of EWR warranty information. The non-industry commenters raised a safety argument. But they did not provide facts to support the argument. The EWR warranty data are not safety data. The vast majority of the data are not indicative of a safety defect trend. Thus, to the extent that a balancing is required, non-release of the warranty data would have very little impact on the public. It is outweighed by the benefit to the EWR program. 4. Field Reports Field reports are communications from a manufacturer's representative or dealer about a malfunction or performance problem. *See* 49 CFR 579.4. The EWR rule requires larger volume manufacturers of light vehicles, medium-heavy vehicles and buses, motorcycles and trailers, and all manufacturers of child restraints to submit the number of field reports that they have received broken out, for each make and model, by specific component categories ( *e.g.* , steering, brakes), and for certain reporting sectors, fire and rollover—all of which are binned by code. *See* 49 CFR 579.21(c), 579.22(c), 579.23(c), 579.24(c), 579.25(c). Above and beyond the reports of the binned numbers of field reports, these manufacturers must also provide copies of field reports other than dealer field reports and product evaluation field reports. *Id.* The early warning field report data include field reports that are not safety-related and those that may involve safety-related defects. As noted above, when NHTSA published the EWR rule, the agency expressly contemplated that the manufacturers would report a large volume of data and that the agency would then screen it for possible defects. NHTSA's experience with EWR data has shown that the vast bulk of EWR field report information has not been indicative of defect trends. In the NPRM, the agency proposed to make a class determination that field report information in EWR data would not be released to the public. 71 FR at 63744. The agency based this proposed class determination on both the competitive harm and impairment prongs of *National Parks.* We first address the likely competitive harm from the release of EWR field report information, then we discuss the impairment to the agency's ability to obtain as complete field report information that would follow the release of the information. Competitive Harm Numerous parties have provided information to NHTSA on the question whether the disclosure of EWR field report information would be likely to cause the submitting manufacturer to suffer competitive harm. This includes comments from the motor vehicle and equipment industry and non-industry commenters. Commenters from various sectors of the automotive and automotive equipment industry addressed the competitive value and use of field report data. As noted above, there is competition in the auto industry. Manufacturers compete vigorously for sales. They compete in areas that include quality and consumer satisfaction, and expend substantial amounts of research money on quality and consumer satisfaction in the market for sales. As noted in comments, the EWR information is a comprehensive compendium of field reports. Manufacturers have submitted a significant volume of field report data and copies of field reports to NHTSA under the EWR program. They cover numerous systems and components, as well as fires and rollovers for many reporting industry sectors (e.g., 18 for light vehicles and 22 for medium heavy vehicles). They cover makes and models going back a number of years and are updated quarterly. As noted by the Alliance, their value is enhanced by their continuing content, which permits a model-to-model comparison on the numerous systems and components in EWR reports. The release of EWR field report information would permit wholesale industry-wide comparisons of the quality or durability of all significant systems or components on models chosen for comparison. The data are not publicly available. The Alliance pointed out that the EWR field report data are a comprehensive collection of information on the field experience of a manufacturer's vehicles on a make/model/model-year and component/system basis, pertaining to quality and customer satisfaction. The information is treated as proprietary. 63 63 The Alliance addressed the competitive consequences of disclosing EWR field reports as part of its comments on the disclosure of EWR data on consumer complaints, warranty claims and field reports. The Alliance emphasized that the comprehensive nature of these submissions—covering all makes and models over a multi-year timeframe that is updated quarterly—makes them a valuable compendium of quality and consumer satisfaction information that could not be replicated easily at any price and could be used by competitors. The Alliance added that the EWR data provide valuable insights into a given manufacturer's business practices and decisionmaking. Citing *Worthington Compressors,* the Alliance pointed out that the release of information collected at considerable cost by an entity that submitted information to the Government could easily have competitive consequences. The submitters expend considerable sums to gather large volumes of EWR data and the release of it would be contrary to the competitive interests of entities that submit the information. The financial benefit resulting from this effort flows to those who obtain the data without significant cost or effort and use the data for their own purposes is contrary to the competitive interests of the manufacturers who submit the EWR information. The Alliance observed that although the volume of field report information submitted is smaller than the volume of warranty claims, the information in the copies of field reports contains a great deal of detail. The field reports reveal the protocols used to identify, evaluate and remedy performance issues and would, in many cases, provide a detailed roadmap for performance issues with particular components and subsystems. The release of the information would allow competitors to improve on components and systems experiencing these performance issues, without incurring the full costs of doing so. This would cause competitive injury. AIAM, as discussed above, stated that the competitive value of the EWR data results from the totality and comprehensive nature of the information, which gives it value. The information would enable one company to use the experience of another to select optimal product design, production process and pricing strategies, while avoiding the cost and risk that otherwise would be encountered through trial and error. Similarly, Nissan explained that field reports serve as a useful means through which technical staff in the field can communicate with those who design, engineer, and manufacture the product. Through field reports, the company can discover and address issues, identify supplier successes or failures, and obtain useful information in developing future products. As with consumer complaints, field reports identify areas where field experience is showing an issue warranting further investigation. TMA addressed field report information as part of its comments on the range of EWR information. TMA pointed out that the release of the information would provide competitors valuable information to evaluate the performance, reliability and durability of various components without the expense and risk associated with product development that would normally occur with field-testing efforts, while shortening the amount of time competitors need to market competing products, to the competitive disadvantage of the submitting manufacturer. 64 64 TMA stated that the EWR data that medium-heavy vehicle manufacturers report are comprehensive; they involve 22 vehicle systems as well as fires and rollovers. This compendium of field report and other EWR data, laid out model-by-model and system-by-system has significant competitive value. There are numerous ways in which competitors could use these data to their competitive advantage. TMA characterized the data as a data bank of quality control information that competitors can use to evaluate the performance, reliability and durability of various components without the expense and risk associated with product development that would normally occur with field-testing and “trial and error” efforts, while shortening the amount of time competitors need to market competing products. TMA cited an example on the benefits of field testing that a competitor would receive. Also, a competitor could use the reporting manufacturer's field experience, good or bad, while avoiding the costs, effort and risks that the reporting manufacturer has incurred. TMA stated that the disclosure of EWR field report data would provide competitors with valuable and previously unavailable insight into the field experience and performance of a submitter's entire product line and individual systems and components. TMA stated that competitors could use this information to assess the in-use performance of parts and systems. It would be used in purchasing, pricing, and sourcing decisions, all of which would have competitive impacts. Utilimaster explained that field reports contain performance, maintenance or durability issues. Blue Bird stated that EWR field report information has a very high level of competitive sensitivity. It expressed concern about competitor usage of it to the detriment of its competitive position. Utility explained that field reports contain valuable “in-use” information about a manufacturer's product. The reports are used to identify and correct potential performance problems, with the intent of improving overall field performance. In the hands of competitors, it asserted, this information would enable them to avoid similar issues in their own products and eliminate the need to invest in research and development in improving their own products. This would result in a significant competitive advantage. Competitors could also incorporate field report information into their marketing strategies. Harley-Davidson addressed its field reports as part of its fully developed contact system with its dealer network that enables it to do what is right and obtain a competitive advantage over its competitors. As a result, Harley-Davidson urged that this information not be released as a matter of course. The Motorcycle Industry Council similarly urged the agency not to disclose EWR field report information. Equipment suppliers supported the vehicle manufacturers' statements. MEMA/OESA stated that field reports are often an invaluable source of information for companies in their efforts to improve product quality and performance. WABCO also expressed concern over the competitive impacts of disclosure. It explained that field reports can be used by skilled and experienced engineers to spot trends in product reliability and trigger follow-up actions. Industry commenters raised other concerns related to EWR field report disclosure. Although field report information can be useful in quickly finding possible problems, not all of this information is safety-related. As a result, the information primarily serves independent business purposes and merited protection from competitors. The Alliance, TMA and others stated that the release of EWR field report data would result in misuse, as they had stated with respect to consumer complaints and warranty data. More particularly, they raised concerns that the disclosure of EWR field report data would lead to erroneous conclusions that would cause submitters competitive harm. Manufacturers and consumers could misuse it to draw unfair and unsubstantiated and misleading comparisons regarding competitors' products. *See* discussion above under consumer complaints. The Alliance and others added that the release of limited field report information regarding particular concerns on specific models in a limited number of model years in investigations by NHTSA's Office of Defects Investigations does not support the release of the comprehensive compendium of information in EWR submissions. A limited release is much different from a competitive standpoint than the automatic release of the continually collected, full compendium of EWR information across virtually all makes and models, as is represented by the quarterly EWR submissions. In contrast to industry commenters, the three non-industry groups advocated that field report data be released by the agency. In its comments, Public Citizen recognized that manufacturers place importance on field reports for staying informed about their products' performance and dealers' handling of problems. It added that, as with consumer complaints, field reports offer vital real world information for a company. Like industry groups, its comments addressed consumer complaints, warranty data and field reports together. As noted above, it contended that NHTSA did not explore the extent to which information is available publicly and it emphasized the value of the information to the public. 65 It noted that field reports vary in nature and quality. 65 Public Citizen's Litigation Group, like some industry commenters, had addressed field reports with other EWR data. In its view, field reports are materials prepared for a defect investigation and are safety related and should be routinely disclosable because safety problems cannot provide a basis for finding substantial competitive injury. It added field reports vary in their quality and quantity, and should not be uniformly withheld. It also disputed that product disparagement is a basis for protection under Exemption 4. The group also stated that the agency has historically determined that this type of information is not covered by Exemption 4. Field reports are not prepared for defect investigations. They are prepared for business purposes as recognized in the EWR definition of field report and in industry comments. The statement that they routinely disclose safety problems is an unsupported assertion that is not correct. While they vary, they all meet the definition of field report and are commercially valuable to competitors. The allegations on product disparagement are addressed elsewhere. Quality Control cited the statement in the NPRM that competitors could use EWR field report information to help them avoid potential problems or improve their products without the need to invest in research, development or actual market experience. It did not dispute this but stated that if true, consumers would not necessarily suffer injuries or economic losses. It claimed, however, that this is the agency's safety mission. Accordingly, in its view, field reports should be disclosed. AAJ asserted that the disclosure of EWR field report data is vital to the public interest. It stated that disclosing this information would allow the public to be fully informed of all potential issues affecting a particular vehicle or piece of equipment and could lead to necessary safety enhancements. The non-industry groups did not refute the numerous specific competitive consequences that would result from the release of field report data stated by industry commenters. After carefully considering the comments and other information of record, NHTSA has determined that the release of EWR field report data and copies of field reports on light vehicles, medium-heavy vehicles and buses, motorcycles, trailers, and child restraint systems is likely to cause substantial harm to the competitive positions of the manufacturers that submit the information. The EWR field report data amount to compendiums of comprehensive information on field reports, both in terms of numbers, binned by make, model, model year and specified system or component, and in terms of field reports themselves. These cover an extensive range of makes and models of motor vehicles, for the reporting period and going back to the previous 10 years. They address numerous components and systems of vehicles and equipment and for certain vehicles include rollovers and fires. The comprehensive nature of the compendiums of EWR data on field reports is enhanced by their continuing content, which is updated by quarterly reports, and by their standardized reporting format. They can be used to compare numerous aspects of vehicles and equipment across industry sectors. The amount of field report information is substantial. For the first 15 quarters of EWR data, an average of 65 light vehicle manufacturers per quarter reported nearly 7.6 million field reports and submitted over 580,000 field reports; an average of 87 medium-heavy vehicle and bus manufacturers per quarter reported over 385,000 field reports and submitted over 26,000 field reports; an average of 18 motorcycle manufacturers per quarter reported over 134,000 field reports and submitted over 26,000 field reports; an average of 285 trailer manufacturers per quarter reported over 22,000 field reports and submitted nearly 500 field reports; and an average of 20 child restraint manufacturers per quarter reported over 11,000 field reports and submitted over 7,500 field reports. The manufacturers that submit field report information expend considerable sums to initiate and review field reports. The data are not publicly available and are highly proprietary. The data could not be replicated. Field reports reflect the in-use experience of a manufacturer's product collected by the company at its expense and with the intent of identifying problems associated with its products. Because of the depth of coverage required by the EWR rule, the field report numbers reveal a manufacturer's experience across its entire product line with respect to particular components and systems. These reports reflect a company's pursuit of feedback on a particular aspect of a product and can involve technical investigations into a problem detected through warranty, consumer complaint or other information available to the company. The field reports themselves often contain a great deal of detail and even those of lesser quality are valuable as an integral part of the whole compendium and for their identification of concerns. The disclosure of EWR field report information would provide competitors with valuable and previously unavailable insight into the field experience and performance, including at times reliability and durability, of individual systems and components in a submitter's entire product line. Field reports reveal aspects of the performance of components and materials that appear to be problematic. Competitors could use EWR field report information in assessing systems and parts with apparent shortcomings and identifying technological and engineering improvements that might better satisfy customers. If the information were released, competitors would gain product and component performance information, both in terms of numbers and from information in copies of field reports, developed at the cost of the submitting manufacturer, that they could implement. Thus, competitors would benefit, while the submitting manufacturer bore the cost. In addition, the EWR field report data are a compendium of quality information of a manufacturer's products, model-by-model, system-by-system. These data provide in-use information on technologies. Competitors can study and run lab tests on a competitor's products. But these efforts do not inform the competition of the quality of a product based on operation in the field. Competitors would use this information to evaluate particular technologies, including both technologies that have penetrated considerably numerous segments and newly introduced technologies, at a risk and cost that is lower than otherwise attainable, because the competitor would not have to develop that information. Using this information, competitors could base decisions to a substantial degree on their reviewing a submitter's EWR field report information. The EWR field report information would enable one company to use the experience of another in the selection of a design. It could also be used in the selection of a production process. The release of the data would permit broad comparisons of the quality or durability of components on vehicle models chosen for comparison. It would enable the person reviewing the materials to substantially avoid similar issues that gave rise to the field report. While the manufacturer submitting the information would have expended substantial resources in deciding whether to install a particular technology and associated design and testing as well as follow-up, the competitor would gain a real world evaluation without the time, expense and risk associated with product development that would normally occur with field-testing. The generation of a field report has an associated cost and the fact that a manufacturer has completed a field report on a particular issue indicates that a manufacturer has made an investment of resources to discover and understand that issue. The competitor could use the information while avoiding the cost and risk that would otherwise be encountered. This would have competitive impacts. Competitors can use the field report information to assist in their future purchasing (sourcing) decisions, including the technological approach, supplier and price. This information provides insights into whether a particular supplier has built durable and reliable systems and components. Additionally, the EWR data provide valuable insights into a given manufacturer's business practices and decisionmaking, including, the methods used to collect field reports. Field reports, by their nature, reveal the process by which a manufacturer examines an issue of interest. Further, a field report comprises the protocols a manufacturer follows when examining a particular problem and helps identify whether a problem (safety or non-safety related) is present in its products. Such information is commercially valuable to competitors because it provides them with additional insight on how to improve their own processes in identifying potential problems. EWR field report data are a valuable source of information related to customer satisfaction of vehicles. This data base provides information on perceived problems with the company's product, which gave rise to the field report. This is valuable to companies, which depend on satisfying customers. If the field report information were publicly available, competitors could and likely would use it to learn whether there is a market reaction to any new technology, supplier or product changes. The information would be valuable to competitors who may be considering deploying similar or competing technology. Competitors could rely on EWR information in making critical decision such as which technology or suppliers to use. 66 66 Also, the EWR data are different from investigation data in scope and competitive impact. As discussed above, as for example in the context of consumer complaint data, data released in the course of agency investigations are limited. The release involves limited models and model years and specific alleged problems. EWR data amount to full compendiums, across makes, models and model years involving numerous systems. Thus the release of field report numbers in ODI investigations has no real bearing on release of EWR field report data. We note that NHTSA has withheld field reports obtained in investigations. *See* discussion above regarding the release of information obgtained in investigations under consumer complaints. Public Citizen recognized the value of the information. It did not, however, provide facts to refute comments by industry sources. AAJ and Quality Control recognized that other manufacturers can benefit from the disclosure of these reports by using them to mitigate similar problems they are encountering or by deferring or changing purchasing decisions of particular components or technology. They thought that the release of the data would benefit the public. However, they did not demonstrate how. Also, the benefit to the public is not a factor in assessing confidentiality under Exemption 4 of the FOIA. The release of EWR field report data and the field reports submitted by manufacturers would have competitive consequences, as recognized in *Worthington Compressors* , 662 F.2d at 51-52. The volumes of EWR field report information are valuable and could be used by competitors. For the reasons discussed above, the release of it would be to the significant benefit of the competitors of the submitters and to the detriment of the competitive position of the manufacturers that submitted the information. 67 67 As an alternative basis for confidentiality, the disclosure of the comprehensive compendiums of EWR field report information would likely result in consumer misuse. In *Worthington Compressors,* 662 F.2d at 53 n.43, the court permitted the consideration of consumer misuse of commercial information that is otherwise unavailable. The disclosure of the EWR information would be misleading to consumers and unfair to the submitting manufacturers. Consumers would attempt to make comparisons of the performance of one model to another across multiple model years, on a quarterly basis, which can not be done. The underlying foundations for the data are not the same. Different manufacturers have different approaches to field reports, in terms of procedures and numbers of field reports generated. The net result would be unfair and unsubstantiated and misleading comparisons. These comparisons would adversely affect the competitive positions of manufacturers in a way that was unfair. Public Citizen has asserted that this analysis amounts to an unwarranted product disparagement theory, and contends that the harm occurring from the disclosure of these data amounts to adverse public reaction, which is not a cognizable harm under Exemption 4. The agency disagrees with this attempt to recharacterize the harm. Since the EWR data are competitively sensitive for a valid reason under Exemption 4, other potential consequences such as adverse public reaction, do not dictate that we treat the information as non-confidential. *Occidental Petroleum Corp.* v. *SEC,* 873 F.2d 325, 341 (D.C. Cir. 1989). Impairment In addition to proposing to hold EWR field report information data confidential on grounds of competitive harm from their release, the NPRM proposed to hold this information confidential under the impairment prong of FOIA Exemption 4. As reflected in that notice, manufacturers may obtain and receive feedback on product performance in a variety of ways, and establish differing practices for field reports. The nature and level of effort expended by a company is discretionary. It is beneficial to NHTSA if a company expends considerable effort. More inputs increase the robustness of the available data. Field reports provide feedback on product performance that can be valuable to NHTSA in identifying problems, including potential defects that may point to the presence (or absence) of a safety problem. The reports themselves, which are submitted under the EWR program, contain valuable technical information. The agency seeks to ensure that it receives as much information as possible to identify possible defect trends. As discussed above, under the early warning reporting provisions of the Safety Act, NHTSA may not require a manufacturer of a motor vehicle or motor vehicle equipment to maintain or submit records respecting information not in the possession of the manufacturer. 49 U.S.C. 30166(m)(4)(B). In view of the fact that the quantity and comprehensiveness of the EWR field report data depend in substantial part on the willingness of manufacturers to collect this information, NHTSA does not want to take steps that discourage the collection efforts. Both industry and non-industry commenters addressed the agency's proposal. Industry commenters stated that a class determination for field reports was justified on the basis that disclosure would impair the agency's ability to obtain this information in the future, citing 49 U.S.C. 30166(m)(4)(B). This limitation permitted submitters to expand or contract the scope of their programs generating field reports. The Alliance explained that there is wide variation in manufacturers' programs that generate field reports. The Alliance stated that the potential for impairment is particularly significant in the context of field report information. By protecting field reports, NHTSA creates an incentive to encourage free text descriptions or other candid analysis in field reports. On the other hand, if the information were disclosed, NHTSA could reasonably anticipate that field reports would be less thorough or candid. As a result, the government's ability to obtain necessary information in the future will be impaired. The Alliance added that this would impact ODI defect investigations, which consider field reports. AIAM stated that disclosure of this information would impair the agency's EWR program. It asserted that the quality of the information provided to NHTSA would suffer. The natural reaction of the individual who writes a field report would be to consider its appearance in the press or a contact by an investigator. This would affect the thoroughness and candor of the reports. TMA explained that field reports play an important role in the medium-heavy truck segment. Manufacturers receive frequent reports from field personnel, fleet owners and dealers regarding vehicle issues, both safety and non-safety. Field reports often contain the drafter's evaluations or assessments of a possible system, component or performance problem. TMA verified the flexibility that manufacturers have in preparation of field reports. It added that the routine dissemination of this information would lead to fewer and less reliable reports available to the agency in the future to identify promptly potential safety defects promptly. Blue Bird observed that the agency can reasonably anticipate that the quality and specificity of this information will be reduced if it is disclosed. It asserted that manufacturers would take measures to minimize their respective exposures to competitive harm. Utility explained that manufacturers take the initiative to generate field reports in an effort to identify product defects and analyze possible defect trends. This information is generated and studied to improve product quality. But it could be used by plaintiffs to help file lawsuits against the submitting manufacturer. Utility asserted that manufacturers would react to this situation by generating fewer and less comprehensive field reports. This would hamper the agency's ability to obtain substantive field reports in the future. Other commenters expressed similar concerns and recognized this impairment risk. Workhorse Custom Chassis explained that it relies extensively on reports from fleets to identify and correct problems but was concerned that the accuracy of those reports would be reduced if they are routinely disclosed. MEMA/OESA also asserted that the routine disclosure of field reports would impact the quality of these reports in future submissions. On the other hand, Public Citizen disputed the assertion that if field report information were disclosed manufacturers would alter their field reporting practices. It asserted that manufacturers place importance on field reports for staying informed about the performance of their products and dealers' handling of problems. Field reports offer vital real-world information for a company. In its view, NHTSA had not undertaken an adequate investigation relating to manufacturers' field reports and had not made an adequate showing of the impairment from disclosure of field reports. In the discussion that follows, we will address the impairment that would result from the disclosure of EWR field report data. As discussed above in the context of consumer complaints and warranty claims, Public Citizen believes that under the impairment prong of *National Parks,* the confidentiality of information is determined by a balancing test. While we do not accept Public Citizen's view of Exemption 4, in the alternative, we will address a rough balance between the importance of the information and the extent of the impairment against the public interest in disclosure. Under the EWR reporting program, manufacturers report the numbers of field reports, separately, by model and model year, and by system and component, to NHTSA. They also provide field reports, except dealer field reports and product evaluation field reports. The significance of field reports is indicated in part by the EWR definition of field report. Under the definition, an alleged failure, malfunction, lack of durability or other performance problem has been identified in a written communication to the manufacturer from one of its employees, representatives, dealers, or a fleet. 49 CFR 579.4(c). Both before and after the promulgation of the EWR rule, ODI has reviewed numerous field reports over the years and has often found them to be technically rich. See 67 FR at 45856. The magnitude of the numbers of field reports is important to NHTSA because our screening will look for trends based in part on relatively high numbers. These trends may result in inquiries to the manufacturers. In addition, field reports themselves generally contain information that provides insights. As with other EWR data (complaint and warranty claims data), the agency cannot compel the creation of field reports. Their continued creation depends on whether a manufacturer chooses to create them. In light of the value of the reports and the discretion that manufacturers have in not generating them or in including less detail and fewer insights in them, the agency does not want to do anything to discourage manufacturers from preparing accurate and comprehensive field reports about apparent problems with their products. Nor do we want to detract from the candor and specificity with which field reports are written. As noted in the comments, if these reports were disclosed, manufacturers likely would decide to generate fewer and less informative (less candid) field reports. Manufacturers would be reluctant to have negative information appear in documents that are subject to routine disclosure. As a consequence, less information would be available to the agency in its efforts to identify potential safety defects promptly. The agency has required the submission of hard copies of certain field reports, as well as the numbers of all field reports, because the agency believes that this information will be especially helpful in identifying the existence of defect trends. Thus, the availability of less information would be inconsistent with our goals. As made clear throughout the comments, disclosure of field reports would be likely to discourage candor on the part of field personnel and could adversely affect corporate policies and practices with respect to their preparation. One association was concerned about appearances of the documents in the media. This would have a chilling effect on candor. The available evidence shows that the disclosure of the field reports and the field report data would likely inhibit a significant feature of the agency's program to encourage the collection and reporting of information and to identify the potential existence of safety defects as soon as they begin to manifest themselves in the field. It would also reduce the amount of valuable information available to the agency during our defect investigations. The field reports themselves are very important to the government. The numbers of reports are indicative of potential problems in numerous systems and components. Many of the reports provide text that is not conveyed by the numerical reports. The views of manufacturers' engineers and technicians in reports are often helpful to us. If they were disclosed, manufacturers would react by decreasing both the number of reports generated and the level of detail contained in these reports. Without them, we often would not gain a full understanding of the issues, at least not without a steep and time-consuming learning curve. The agency would be faced with attempting to conduct analyses with considerably less information from manufacturers. NHTSA's ability to identify potential safety defect trends would be impaired. Such a result would affect the agency's ability to carry out the early warning program. 68 In sum, the disclosure of the field information would be likely to impair NHTSA's ability to obtain necessary information in the future. 68 Limited disclosure of field report numbers during agency investigations does not negate the value of the data or the likely impact that wholesale (rather than piecemeal) disclosure would have on submitters. Moreover, NHTSA has granted confidentiality to the field reports themselves. We recognize that some of the field reports would be of interest to some members of the public. But the public would not receive significant, if any, safety benefits from the release of EWR field report information. The non-industry commenters raised a safety argument. But they did not provide facts to support the argument. The EWR field report data are not safety data. The vast majority of the data are not indicative of a defect trend. And, standing alone, the EWR field report numbers simply indicate that there was a reported problem, by system or component. Thus, to the extent that a balancing is required, non-release of the data would have very little impact on the public. It is outweighed by the benefit to the EWR program. On balance, we are in a better position to address potential defects with as robust a set of field reports as possible, which benefit the public at large. 5. Common Green Tire Identifiers The EWR rule requires reporting tire manufacturers to provide a list of common green tire data, including all relevant tire lines, tire type codes, stock keeping unit
(SKU)number, brand names and brand name owners. 49 CFR 579.26(d). “Common greens” are tires “that are produced to the same internal specifications but that have, or may have, different external characteristics and may be sold under different tire, line names.” 49 CFR 579.4(c). A green tire is an assembly of the components of a tire formed in a machine. The green tire is placed in a mold where the tire is given its final shape, including the tread pattern and information on the sidewall such as the tire brand, size and tire identification number. In the mold, the tire is cured; it is exposed to high pressure and heat (i.e., vulcanization). Tires made from a common green tire have the same fundamental construction and composition. Based on the mold, the finished tires may and often do have different outward appearances, such as different treads and markings to differentiate them from one other and, importantly, the tires receive different brand names. Tire manufacturers use the term “common green” to describe a family of tires that are produced from the same “before cure” specification but are cured in different molds. The practice of using “common greens” allows maximization of economies of scale in manufacturing tires. The common green tire information submitted by individual manufacturers reveals which tire lines share the same internal structural and rubber compound specifications and the relationships between manufacturers and private brand name owners (e.g., tires with names commonly owned by large tire retailers). In the NPRM, NHTSA proposed to make a class determination that tire manufacturers' submissions of EWR common green data would not be released to the public. 71 FR at 63744 and 63749. This was based on the competitive harm prong of FOIA Exemption 4, as interpreted in *National Parks.* Several submissions from RMA and a submission from Cooper Tire described the nature of the common green EWR data and explained the manner in which competitors can use the data and the competitive consequences of their disclosure. RMA stated that the information on common green tires in EWR data is not available to the public and can not be derived from any public source. It explained that the disclosure of this information would cause substantial competitive harm since it would allow competitors to know with exact certainty which tires have the same specifications even though many are sold under different tire brand names. Manufacturers would have insight into their competitors' marketing strategies, business plans, pricing data, and future product plans. RMA added that substantial competitive harm would result to the manufacturer from disclosing the specific business relationships between tire manufacturers and private tire brand name owners. Cooper Tire's comments, which RMA re-submitted, included a study that detailed the nature of common green data. The study asserted that common green lists are confidential. The study indicated that tire manufacturers are required under the EWR rule to produce information on more than 24,000 tire lines. This information includes not only each green tire group produced, but each tire line originating from each green tire group. The study explained that green tires serve as the platform for the production of all tire lines and each individual tire SKU. It stated that the release of green tire groups and the identification of the green tire source for each finished tire would provide a complete and comprehensive road map to a tire manufacturer's production and marketing strategy. The study likened the release of this information as equivalent to the release of a tire manufacturer's business plan. RMA also noted that it has been NHTSA's practice to grant requests for confidentiality for common green information. RMA provided copies of relatively recent letters that responded to particular requests from tire manufacturers covering categories of information that granted confidential treatment to common green information submitted to the agency. Apart from RMA and Cooper Tire, only Quality Control specifically addressed common green tires. Quality Control opposed confidential treatment for common green tires. But it did not contradict the tire industry's repeated statements regarding the use of common green tires in the tire industry, the unavailability of information on common green tires to the public sector, the competitive value of common green tires or the competitive harm that would result from releasing the information. Instead, Quality Control asserted that a consideration of how to treat common green tire information should include an evaluation of its usefulness to researchers and the general public of this information in the avoidance of deaths, injuries, and economic losses. NHTSA has fully considered the comments and has reached the following conclusions. Green tires serve as the basic envelope of tire production. Common green tire lists identify the tires that share the same internal specifications and construction characteristics. Tire manufacturers treat their lists of common green tires as proprietary and competitively sensitive information. The EWR common green information is not publicly available and broadly applies across manufacturers' tire lines. The release of common green tire information would identify the tires made from the range of common greens. The disclosure of this information would allow competitors to know which tires have the same specifications and construction. The release of green tire groups and the identification of the green tire source for each finished tire would provide a complete and comprehensive road map to a tire manufacturer's production strategy. It would inform competitors of a tire manufacturer's basic economies of scale in tire production. Precise insights from another manufacturer's approach would enable a competitor to adjust its own production to more effectively compete against a competitor's particular tire line. Competitors would know which tires, sold under different tire brand names, are basically the same. The release of information linking green tires and finished tires, often of different labels, would inform competitors of a tire manufacturer's marketing approach. Manufacturers would, thus, have insight into their competitor's business plans and, with additions to and deletions from common green lists reported each quarter, future product plans. This information on tires that are basically the same can be used selectively by a manufacturer to compete against a particular tire line of another manufacturer and can harm the company that submitted EWR information by revealing less expensive but similarly constructed alternatives to more expensive tire lines. The release of common green information would also disclose the specific business relationships between tire manufacturers and private tire brand name owners. The foregoing demonstrates that the release of EWR common green tire information is likely to cause substantial harm to the competitive positions of the tire manufacturers that submit EWR information. As noted above, Quality Control's comments did not contradict the tire industry's statements. Quality Control suggested the further consideration of an evaluation of the usefulness of the information for safety and economic reasons, but it did not provide any information in these regards. Nor did it demonstrate the relevance of such considerations under FOIA Exemption 4. As discussed above, Exemption 4 does not involve a balancing of competitive harm to the party that provided the information to an agency against possible societal interests such as research or provision of information to the public. Accordingly, we are adopting a class determination on EWR information on common green tires. D. Class Determination Based on FOIA Exemption 6 The EWR rule requires larger vehicle manufacturers to submit the number of reports alleging that deaths or injuries occurred. These reports must contain the vehicle identification number
(VIN)of the vehicle(s) allegedly involved in these incidents. *See* 49 CFR 579.21(b)(2), 579.22(b)(2), 579.23(b)(2), 579.24(b)(2). The agency's October 2006 NPRM proposed creating a limited class determination that would redact the last six characters of VINs from EWR death and injury reports, based on Exemption 6 of the FOIA. 71 FR at 63745 and 63749. Each VIN consists of 17 characters. In general, the first eight of these characters denote the manufacturer and attributes of the vehicle including the make and type of vehicle (e.g., the relevant line, series, body, type, model year, engine type and weight rating). The ninth digit is a check digit. In the last eight characters, the first two represent the vehicle model year and plant of production, and the last six are the number sequentially assigned by the manufacturer in the production process. *See* 49 CFR 565.6 (detailing elements of the VIN code), SAE Standards J218 (passenger car identification terminology) *and* J272 (vehicle identification number systems). VINs can readily be used to track down personal information on an individual who owns, or at one point owned, a particular vehicle. Such information can include not only the name and address of an individual but other information as well. Exemption 6 of the FOIA addresses the withholding of “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy” to the subject of those files. 5 U.S.C. 552(b)(6). Several entities have addressed the privacy implications of release of the full VIN. Both NHTSA and the Alliance documented their efforts in using VINs to obtain personal information on individuals. 69 When coupled with a fatality—or injury—producing incident, VINs can be used to identify the owner of the vehicle. The Alliance explained that VINs can be used to track down information on individuals. Specifically, it stated that it is relatively easy to determine the name, address, social security number, home telephone number and other personal identification information from a VIN. Because of the relative ease in obtaining this information from a VIN, the Alliance urged the agency to consider protecting VIN information contained in EWR submissions involving fatalities or injuries. The Alliance supported the Agency's proposal, with an analysis that addressed the elements for withholding information from disclosure under Exemption 6. After pointing out that both the Alliance and NHTSA had been able to employ widely available databases to access personal information about the owner of a vehicle using a VIN, the Alliance asserted that the information met the threshold requirement of personal and similar files—information that applies to a particular individual. Next, it explained that the disclosure of this information would constitute a clearly unwarranted invasion of personal privacy. Finally, the Alliance offered a balance of the privacy interests at stake with the public interest in disclosure. Under an Exemption 6 case it cited, the public interest is limited to shedding light on the government's activities. And, disclosing the last 6 digits of the VIN would not advance that interest. Based on its analysis, the Alliance recommended that the last 6 digits of VINs in EWR death and injury reports not be disclosed. TMA supported the exemption. 69 *See* NHTSA Docket 2002-12150, Item Nos. 58 (Alliance's discussion of obtaining Social Security Numbers using VINs) and 64 (websites enabling users to locate personal information using VINs). The agency examined a widely available legal database—WESTLAW—and several websites that offered to provide personal information on individuals using the VIN of a vehicle for a nominal fee. Using WESTLAW, the agency could determine the name, address, date of birth, and lien information of the vehicle owner using the full VIN. In view of this easy identification, the disclosure of full VIN information would jeopardize the personal privacy of individuals involved in EWR reports of fatalities and injuries arising from motor vehicle crashes. Public Citizen stated that it respected NHTSA's intent to protect individual citizen's personal privacy. However, it contended that exempting the VIN is unnecessary and advocated that NHTSA abandon its proposal. Public Citizen noted that VINs are visible to the public on the vehicle's dashboard and are publicly available through police reports. Public Citizen contended that the last six figures of a VIN serve the important role of allowing members of the public to see if their personal records have made it into the early warning data base and would aid the public in seeing if multiple records are in reference to the same individual vehicle or different vehicles of the same make. Under Exemption 6, the information must fall within the category of “personal * * * and similar files.” The EWR information on deaths and injuries is submitted by manufacturers electronically into an electronic file in the agency's ARTEMIS database. The VIN information can easily be used with readily available databases to identify the owners of the vehicles in crashes that resulted in deaths or injuries, as alleged in claims or notices to the manufacturer. There was no dispute in the comments that the threshold requirement of personal and similar files was met and NHTSA finds that it has. If the threshold requirement is met, the focus of the inquiry turns to whether the disclosure of the records “would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C. 552(b)(6). This requires a balancing of the public's right to disclosure against the individual's right to privacy. The first step is an assessment of the privacy interests, if any, that would be threatened by the disclosure. In *Center for Auto Safety* v. *NHTSA,* 809 F. Supp. 148 (D.D.C. 1993), the court recognized the privacy interests in the names and addresses on consumer complaints received by NHTSA. The court noted that some of the complaints may refer to injuries of a personal and upsetting nature. It is possible that persons involved in such incidents would resent unsolicited intrusions into their experiences. *Id.* at 149. The same or similar interests exist here, as the EWR data at issue involves incidents that resulted in an injury or fatality. For example, it is foreseeable that the persons who could readily be identified from VINs or surviving family members would be contacted by attorneys and consultants, seeking involvement in legal activities related to the incident or information for a potentially related matter. Public Citizen did not address the interests of the individuals, who have been in an incident and had a relationship with a person who died in an incident or who was injured in an incident. We conclude that disclosure of the complete VINs in death and injury reports at issue would result in a substantial threat to individuals' personal privacy interest. The second step is an assessment of the public interest in disclosure. Under Exemption 6, the concept of public interest is limited to shedding light on the government's performance of its statutory duties. *United States Department of Justice* v. *Reporters Comm. for Freedom of the Press,* 489 U.S. 749, 773 (1989); *National Ass'n of Retired Federal Employees* v. *Horner,* 879 F.2d 873, 879 (D.C. Cir. 1989); cf., *DOD* v. *FLRA,* 510 U.S. 487, 497 (1994). With the limited redaction of part of the VIN under this rulemaking, the public would be able to review EWR information on claims for fatalities and injuries, including identification of the make, model and model year of the vehicle and the component or system implicated in the claim. This information apprises the public of significant information. Disclosing additional VIN information, with the sequential number unique to the vehicle, that would enable someone to identify the owner of the vehicle and other personal information would not, however, further serve the public interest. If disclosed, it would not answer the question of “what the government is up to.” *Reporters Comm.* , 489 U.S. at 773 (1989). Public Citizen contended that the last six figures of a VIN serve the important role of allowing members of the public to see if the incident in which they were involved is in the early warning database and would aid the public in seeing if multiple records are in reference to the same individual vehicle or different vehicles of the same make. This does not squarely address the question of what the government is up to. In any event, an interested person could review EWR data to see the date the make, model and model year of the vehicle, the first part of the VIN, the incident date, the numbers of deaths and injuries, the State where the incident occurred and the vehicle system or component that allegedly contributed to the incident. *See,* e.g., 49 CFR 579.21(b)(2). In the first 15 quarters of comprehensive EWR reporting, there have been 23,647 reports of deaths and injuries in vehicles based on claims and notices. That amounts to 1576 per quarter, or about 30 per State per quarter on the average. In view of the level of detail in EWR reporting, it is highly likely that if a reported incident matched the one that the person was involved in, it was reported by the manufacturer. 70 Similarly, multiple records are unlikely given the review of data by manufacturers before submission. Neither does the need to verify whether multiple records are duplicative outweigh these interests, particularly when other information related to those incidents would likely be disclosed, such as the time, date, and place of the incident. Individuals have a privacy interest when it comes to their involvement in a traumatic incident and it is not the province of outside parties to be the decision-maker in this regard. In any event, while of questionable relevance under Exemption 6, we note that redaction of the last six characters provides sufficient information for interested parties to determine a vehicle's identity down to its engine type and plant of production using the first 11 characters of the VIN. Using this information, the public can still ascertain whether a particular type of vehicle may be involved in a potential vehicle safety issue. 71 70 As a practical matter, individuals seeking this type of information on their own cases are free to file a Privacy Act request with the agency to confirm the inclusion of their cases in the EWR database. 71 Public Citizen also stated that the VIN is visible on the dashboard and that police reports are publicly available. However, it did not explain the likelihood of the public finding a vehicle, particularly if it is involved in a fatality and may have been sent to a salvage yard. Public Citizen has also not addressed the fact that in numerous states police reports are not generally available. *See* , e.g. Cal. Veh. Code section 20012 (placing limits on who may obtain accident reports); Mont. Code section 61-7-114 (restricting access to accident reports); and Ore. Veh. Code § 802.220 (limiting disclosure of accident reports). The final step in an Exemption 6 analysis is weighing the competing privacy and public interests against one another. *See Ripskis* v. *HUD,* 746 F.2d 1, 3 (D.C. Cir. 1984). In the case of the EWR VIN information, there is a strong privacy interest in not being contacted about a death or personal injury, which often involves personal distress. On the other hand, the public interest, in terms of information that reveals what the government is up to is at most, minimal. Thus, on balance, NHTSA has concluded that the privacy interests far outweigh the public interest. The balance is similar to that in *Center for Auto Safety* because there is no ascertainable public interest of sufficient significance or certainty to outweigh that right. 809 F. Supp. at 150. 72 The disclosure of the full VIN would constitute a clearly unwarranted invasion of personal privacy. As a result, the balancing required by Exemption 6 cuts in favor of protecting the privacy interests of those individuals over the interests that others may have in learning their identities. NHTSA is, therefore, according confidentiality to the last six digits of VINs under FOIA Exemption 6 using a class determination that is set out separately from the other EWR-based class determinations. 72 *See generally Horowitz* v. *Peace Corps,* 428 F.3d 271, 278-79 (D.C. Cir. 2005) (discussing balancing required under Exemption 6 and indicating that “seemingly innocuous information” can be subject to the Exemption's protection). NHTSA is adopting a new class determination in 49 CFR Part 512 Appendix D that applies only to those VINs that are provided in EWR submissions and does not apply as a rule of general application to the agency's treatment of VINs in other instances. IV. Exemption 3 The Rubber Manufacturers Association
(RMA)has historically maintained that NHTSA is precluded by statute from releasing all EWR data, subject to a limited exception. RMA has relied on a disclosure provision of the TREAD Act, 49 U.S.C. 30166(m)(4)(C), which provides: Disclosure.—None of the information collected pursuant to the final rule promulgated under paragraph
(1)shall be disclosed pursuant to section 30167(b) unless the Secretary determines the disclosure of such information will assist in carrying out sections 30117(b) and 30118 through 30121. 73 73 Sections 30117(b) and 30118 through 30121 involve the statutory remedy and recall requirements under the Safety Act. RMA has asserted that this provision is a FOIA Exemption 3 statute and therefore, NHTSA is precluded from releasing the data. RMA's views were rejected by the U.S. District Court for the District of Columbia in *Public Citizen* v. *Mineta,* 444 F.Supp.2d 12, 16-18 (2006). In the October 2006 NPRM, we noted that the judgment in that case is on appeal to the U.S. Court of Appeals for the District of Columbia Circuit (No. 06-5304). 71 FR at 63745. We stated that should the Court of Appeals reverse the District Court, the agency may proceed to issue a final rule exempting EWR data from disclosure in a manner consistent with the D.C. Circuit's decision or terminate the EWR Appendix C portion of this rulemaking as unnecessary. We did not seek comment on the Exemption 3 issue. RMA provided comments nonetheless. Apart from scope issues, the agency rejects RMA's views. As our rationale, we incorporate by reference the Brief for the Federal Appellee in the pending appeal in *Public Citizen* v. *Peters* (No. 06-5304) (filed July 6, 2007). V. Other EWR Data The data elements of the EWR rule were established in July of 2002. The 2003 CBI rule that was remanded by the district court did not resolve the confidentiality of EWR information on deaths and injuries, which is based on claims and notices, or the confidentiality of property damage claims. Those matters were left to individual manufacturers to pursue through individual requests for confidentiality should the manufacturers choose to pursue them. The October 2006 NPRM did not propose to include information on deaths or personal injury, or property damage claims (collectively claims data) as part of our Exemption 4-based class determinations. We stated that these items involve a collection of information, many pieces of which are publicly available in court documents and newspaper articles. 74 74 See, e.g. *http://www.pbs.org/wgbh/pages/frontline/shows/rollover/etc/synopsis.html* (noting the number of deaths attributed to failing Firestone tires mounted on Ford Explorer vehicles), *http://www.charlestonbusiness.com/pub/12_12/briefs/6704-1.html* (reporting on lawsuit arising from an alleged failure of a Yokohama tire), *http://www.cbc.ca/fifth/main_tire.html* (noting the number of deaths related to alleged failures involving Goodyear tires compiled by CBC News), and *http://www.cbc.ca/consumers/market/files/cars/dangeroustires/index2.html* (covering tire design problems and mentioning a multi-million dollar award against Dunlop). RMA submitted comments. RMA's comments are outside the scope of the NPRM. Should RMA or its members seek a rule on this issue, they should file an administrative petition for rulemaking. See 49 CFR Part 552. To be clear, NHTSA is not deciding in this notice that EWR claims data is or is not confidential. Insofar as a manufacturer desires confidential treatment for EWR claims data, it should submit a request for confidentiality for those data to NHTSA in accordance with 49 CFR Part 512. 75 75 The manufacturer that requests confidential treatment should address whether the information regarding these categories is already available through publicly accessible court documents. See, e.g. *Lambert* v. *Goodyear Tire & Rubber Co.,* Case No. 1:03-CV-00382 (W.D. Mich.) (June 11, 2003) (death case), *Bayanay* v. *Continental Tire,* Case No. 6:02-CV-00205 (E.D. Okla.) (April 22, 2002) (death case), and *Swank* v. *BridgestoneFirestone,* Case No. 1:01-CV-00982 (M.D. Ala. 2001) (property damage and injury case). The manufacturer should also address the obvious legal problem of granting confidentiality for information that is already publicly available. *See Niagara Mohawk Power Corp.* v. *Dep't of Energy,* 169 F.3d 16, 19 (D.C. Cir. 1999). In any event, in light of the availability of this information and its questionable utility by competitors, the manufacturer likely will have a substantial burden in showing that disclosure of this collected information would result in substantial competitive harm. VI. Identification of Confidential Business Information Located in Electronic Files The NPRM proposed amendments to the agency's regulations for requesting confidentiality for certain information submitted to the agency on electronic media. *See* 71 FR at 63736. In practice, NHTSA's Confidential Business Information regulations have been applied most often to the submissions of information in the context of enforcement and rulemaking actions and to other submissions required under the agency's regulations, as well as to voluntary submissions. NHTSA proposed to add new requirements for identifying confidential information submitted in electronic form. In the last few years, increasingly, the information that is the subject of a request for confidentiality has been submitted on CDs and DVDs, rather than on paper. Under the existing regulations, the submitter is required to mark each page of a paper submission containing information claimed to be confidential with the word “CONFIDENTIAL”. 49 CFR 512.6. In addition, brackets are to be used to designate information claimed to be confidential where the entire page is not claimed to be confidential. *Id.* Under the proposed rule, electronic submissions would be marked with sequential page numbers or identifiers, confidential materials within these submissions would be marked with brackets, individual pages would be marked as confidential as needed, 71 FR at 63746, and files that cannot be marked internally would be named to ensure that NHTSA can properly identify material that is claimed as confidential. *Id.* We noted that pagination requirements are not unusual and consistent with the rules governing Federal court filings. *See* 71 FR at 63746 (citing requirements of the Federal Rules of Appellate Procedure). The agency's proposed amendment to section 512.6, which would replace section 512.6(b)(3), read as follows:
(c)Submissions in electronic format.
(1)Persons submitting information under this Part may submit the information in electronic format. Except for early warning reporting data submitted to the agency under 49 CFR 579, the information shall be submitted in a physical medium such as a CD-ROM. The exterior of the medium (e.g., the disk itself) shall be permanently labeled with the submitter's name, the subject of the information and the word “CONFIDENTIAL”.
(2)Pages and materials claimed to be confidential must be designated as provided in § 512.6(b)(1)-(2). Files and materials that cannot be marked internally, such as video clips or executable files, shall be renamed prior to submission so the characters “CONF” or the word “CONFIDENTIAL” appear in the file name.
(3)Each page within an electronic file that is submitted for confidential treatment must be individually numbered in the order presented with a sequential numeric or alpha-numeric system that separately identifies each page contained in that submission.
(4)Electronic media may be submitted only in commonly available and used formats. The Alliance and AIAM submitted comments addressing the proposed changes to Section 512.6. Both commenters largely agree with the proposed changes. AIAM observed that the proposal is workable as is and did not foresee any problems with the changes. The Alliance raised questions about the practicability, feasibility, and desirability of the proposed requirement that electronic pages be marked “confidential” and that brackets be inserted around information claimed as confidential. The Alliance voiced similar concerns about the proposed requirement that pages in electronic submissions be marked with page numbers or other sequential identifiers. The Alliance asserted that the contents of some electronic submissions cannot be marked with brackets, be stamped as confidential or otherwise be numbered or marked with sequential identifiers. According to the Alliance, files such as video clips or executable files do not have individual pages, cannot be altered, and, therefore, cannot be marked. Other files, such as spreadsheet or database files, do not have page breaks or do not have the capacity to “bracket” information. As NHTSA often requests spreadsheet or database files in their “native” format, the Alliance noted that complying with such requests precludes marking these files unless the submitter converts the files to another format. In the Alliance's view, the agency's analogy in its proposal to the Federal Rules of Appellate Procedure, which require that all submissions to the court be paginated, is inapt because court documents are still submitted on paper. According to the Alliance, its member companies and NHTSA both wish to ensure that confidential data are properly identified when submitted, that NHTSA can properly review and segregate confidential data, and that the burdens placed on those submitting the data are reasonable. Given these goals, the Alliance notes that a variety of means could produce the same result as NHTSA's proposal. The Alliance urged the agency to be both flexible and pragmatic when considering the requirements of the final rule. If files or data cannot be marked with brackets or individual page notations, it suggested that submitters be allowed to designate materials for which confidentiality is sought in the request letter and, in this fashion, refer the agency to indices or placemarks that exist inside the file in their native format. Therefore, the Alliance stated that confidential portions of video files could be identified by the “running time” data embedded in the file. Confidential data within a spreadsheet could be identified in a confidentiality request letter designating only those columns or rows for which confidential treatment is sought. Noting that the language proposed for Section 512.6(c)(3) appeared to contemplate that page numbers or sequential markings need only apply to those pages for which confidential treatment is sought, the Alliance suggested that submitters could provide NHTSA with sufficient information to identify confidential data by numbering or marking only those pages. An alternative reading—that all pages in an electronic submission requesting confidentiality must be marked—would, in its view, be unduly burdensome. Consistent with these views, the Alliance suggested an alternative version of the agency's proposed regulatory text. These alternative versions modified both Section 512.6(c)(2)—which contains the agency's proposed requirements for brackets and marking individual pages—and Section 512.6(c)(3)—setting forth NHTSA's proposed requirements for page numbering—by altering Section 512.6(c)(2) to address page numbering and Section 512.6(c)(3) to address brackets and page marking. In particular, the Alliance suggested the following language:
(c)Submissions in electronic format.
(2)Electronic files with content that can be marked with page designations must be so marked so that any page can be located using the file name and page number. Files with content that has page designations shall be identified in the request for confidentiality by file name and page numbers or, at the option of the submitter, by sequence number. If files cannot be marked with page or sequence number designations, then the portions of the files that are claimed to be confidential shall be described by other means in the request for confidential treatment.
(3)Electronic files with content that can be marked must be marked “Confidential” at the top of each page. If only a portion of the content of a page is claimed to be confidential, the confidential portion shall be designated by brackets. If the confidential portion cannot be marked with brackets, it must be identified by another method, such as font change or symbols, whenever feasible. The submitter must use one method consistently for electronic files of the same type within the same submission and the method used must be described in the request for confidentiality. Files and materials that cannot be marked internally, such as video clips or executable files or files provided in a format specifically requested by the agency, shall be renamed prior to submission so the characters “Conf” or the word “Confidential” appear in the file name. The Alliance's suggested language differs from the agency's proposal in several ways. Marking file content with either page numbers, brackets or the legend “Confidential” is required only when that content can be marked. Where the content cannot be marked, submitters may choose other means of identification, including changing existing attributes of the content, if these changes are clearly and consistently identified in the submitter's request for confidential treatment. We are modifying our earlier proposal to address the issues raised by the Alliance and a governmental issue. The agency agrees that some materials do not have paper equivalents or are not, particularly when submitted in their original or “native” format, capable of being marked with brackets, page notations, page numbers or other sequential identifiers. We also concur in the Alliance's interpretation that our proposed Section 512.6(c)(3) would require numbering or sequential marking of only those pages or items for which confidential treatment is sought. The Alliance's suggestions for page numbering or sequential marking provide for accurate identification of confidential information within electronic submissions. However, in a number of respects, the revisions suggested by the Alliance lack sufficient specificity to ensure that confidential materials will be adequately identified in a consistent manner. The Alliance's suggested revision to proposed Section 512.6(c)(2) provides that content files that cannot be marked with page numbers or sequential marks be “described” by other means. However, the categories of materials that “cannot” be marked are not adequately defined by the Alliance's revision. Also, the “other means” suggested by the Alliance does not provide sufficient guidance to submitters. The agency also notes that when such other means are used, these other methods may only be ascertained through examination of the request for confidential treatment, which often becomes separated from the materials, and not by examination of the information alone. There have been other questions pertaining to whether within governmental parlance the word confidential refers to confidential business information. To address the foregoing issues, the final rule specifies that pagination or sequential marking is required, except when files are submitted in their “native” format and only to the extent that the native format does not contain, or allow for, any internal indices. For example, a video file does not readily lend itself to marking with page numbers. Such files do, however, contain indices in their native format in the form of individual frames within the file itself. Spreadsheets contain internal indices in the form of columns and individual rows. In both cases, existing indices within the files serve as a substitute for sequential numbering. The final rule requires that those submitters seeking confidentiality of files in their native format must state that the native format precludes sequential page marking and specify an alternate means of identifying specific confidential material within the file. If internal indices exist, the submitter must provide an explanation of how these internal indices are arranged and apply to data within the file. We are also adding a requirement that an electronic copy of the submitter's request for confidential treatment be provided on the media containing the confidential data to reduce the possibility that explanations of alternative marking schemes become separated from the data. We are also adopting the proposed requirement that electronic media may be submitted only in commonly used and available formats to address occasional problems the agency has encountered when attempting to review files prepared using uncommon software applications, such as proprietary databases. To address requests for confidentiality, we must be able to open the files and examine the data submitted. We received no comments addressing this issue. This requirement would be satisfied by the submission of data in widely used formats such as PDF, Word documents, and Excel spreadsheets. As proposed, requests for confidential treatment for information submitted to the agency must provide the information claimed as confidential in a physical medium such as a CD-ROM. They may not be sent to the agency by e-mail. No comments were received addressing this issue either. There have been occasions where manufacturers have attempted to submit information claimed as confidential via e-mail. Not only was this action not allowed under the existing regulations, but tracking requests for confidential treatment submitted in this manner is very difficult and far more prone to error than a physical submission. Permitting submissions and accompanying requests for confidential treatment in this manner affects the agency's ability to provide timely responses to these requests and the Chief Counsel's office's ability to transmit the information to the relevant office within NHTSA. In addition, the Department of Transportation limits the overall amount of e-mail information that an individual may maintain, which presents problems, including storage issues. We also have encountered difficulties in receiving attachments to e-mails that contain very large amounts of information. To ensure NHTSA's ability to properly track and handle this information, we are requiring that the information be placed on appropriate physical media, such as CDs, when requesting confidential treatment. Finally, a question has been raised whether the word confidential could result in confusion. NHTSA's longstanding view has been that the word confidential means confidential business information as used in the title of 49 CFR part 512 *Confidential Business Information* and that the focus is on information that is exempt from disclosure under FOIA. In another context, involving national security information, the word confidential has a different meaning. To make clear that we are dealing with confidential business information, we are adjusting the proposed regulation to use the words confidential business information instead of confidential. The foregoing changes are included in a new 49 CFR 512.6(c) that replaces 49 CFR 512.6(b)(3). VII. Updated Agency Contact Information In June 2007, the agency's offices moved to a new location. The current version of 49 CFR part 512 does not yet reflect this change. In today's notice, the new mailing address has been substituted at 49 CFR part 512.7. The agency's change of address does not require notice. 5 U.S.C. 553(b). VIII. Data Quality Act Issues Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (the “Data Quality Act”) requires agencies to take certain affirmative steps to maximize the utility, objectivity, and integrity of data agencies disseminate to the public. This final rule establishes a number of class determinations applicable to those portions of the early warning reporting information determined likely, if released, to cause substantial competitive harm and to impair the government's ability to obtain data necessary to the operation of the agency's defect detection and remediation program. Such submissions are entitled to confidential treatment under Exemption 4 of the Freedom of Information Act. RMA asserted that the class determinations that we proposed failed to satisfy the Data Quality Act. It contended that the Data Quality Act provides an independent basis to prohibit the disclosure of the EWR data the agency determined is not within the purview of Exemption 4. The RMA believes that the agency's release of EWR data would reasonably suggest to the public that the agency agrees with the data and would be relied on by the public as official NHTSA information. The RMA asserted that the EWR information is subject to the Data Quality Act because it is factual data prepared by third parties, and in the RMA's opinion, not covered by any of the 12 exceptions contained in the DOT guidelines. The RMA also argued that the final rule does not meet the Data Quality Act's “utility” requirement and as written would not present manufacturers” data in an accurate, clear, complete and unbiased manner and in a proper context. We disagree. Under today's rule, most of the categories of EWR data will not be disclosed to the public, except under 49 U.S.C. 30167 or court order. We note that the EWR information not addressed in today's rule—reports of claims and notices of deaths, personal injury and property damage and some production numbers—involves factual matter and does not constitute data relied on or developed as part of a determination by the agency. Also RMA's members may submit individual requests for confidentiality regarding these data. Accordingly, this rule does not implicate Data Quality Act concerns. Moreover, even if EWR data were subject to the Data Quality Act, the early warning program is not subject to the requirements of the Data Quality Act because it falls within an express exemption. The OMB guidelines define the dissemination of information as agency initiated or sponsored distribution of information to the public, but does not include responses to requests for agency records under the Freedom of Information Act, the Privacy Act, the Federal Advisory Committee Act or other similar law. (67 FR 8460). Thus, the Data Quality Act does not apply to data that the agency is required to disclose under FOIA, which would be the case with the quarterly reported death, injury, and property damage claim numbers provided under EWR, but only to information that the agency discloses as part of an agency-initiated or sponsored dissemination of information. Consistent with OMB's guidance, the Department of Transportation developed a set of guidelines on information dissemination, which includes an exception for “responses to requests under FOIA, Privacy Act, the Federal Advisory Committee Act or other similar laws.” 76 The information not covered by a class determination of confidentiality, or otherwise protected by a FOIA exemption, must be released under FOIA. 76 DOT's Information Dissemination Quality Guidelines, at 12 (Effective Oct. 1, 2002). The DOT guidelines are available for public inspection at *http://dms.dot.gov* (click on the “Data Quality” link and then “guidelines”). The process established by Part 512 allows the agency to make available to the public information subject to FOIA by determining in advance which information is entitled to protection under a FOIA exemption. The FOIA provides the analytic foundation for the determination of which data will be publicly available and which will be protected from public disclosure. Accordingly, this information qualifies under the FOIA exception created by the OMB guidelines. 77 77 The FOIA mandates that the agency make broadly available information that has already been the subject of a FOIA request granted by the agency. An agency must make available for public inspection and copying “records * * * which have been released to any person [under FOIA] and which, because of the nature of their subject matter, the agency determines have become or are likely to become the subject of subsequent requests for substantially the same records.” 5 U.S.C. 552(a)(2)(D). In addition, under the Electronic-FOIA Amendment of 1996, the information, if created after November 1, 1996, must be made available in an electronic format to the public. 5 U.S.C. 552(a)(2)(E). Finally, in *Public Citizen* v. *Mineta* (D.D.C. Civil No. 04-463), RMA dismissed its Data Quality Act claim regarding the CBI rule that ultimately was remanded. IX. Privacy Act Statement Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477) or you may visit *http://dms.dot.gov* . X. Regulatory Analyses and Notices A. Executive Order 12866 and DOT Regulatory Policies and Procedures Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735 (Oct. 4, 1993)), provides for making determinations whether a regulatory action is “significant” and therefore subject to review by the Office of Management and Budget
(OMB)and to the requirements of the Executive Order. The Order defines a “significant regulatory action” as one that is likely to result in a rule that may:
(1)Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or Tribal governments or communities;
(2)Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3)Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4)Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. NHTSA has considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures (44 FR 11034 (Feb. 26, 1979)). This rulemaking action is not significant under E.O. 12866, “Regulatory Planning and Review” or the Department's regulatory policies and procedures. There are no new significant burdens on information submitters or related costs that would require the development of a full cost/benefit evaluation. As indicated in the preamble, this document would remedy a deficiency identified by a Federal court and does not raise any new legal or policy issues. This rule does not present novel policy issues. Instead, it resolves issues that have been addressed in the past, including in litigation. B. Regulatory Flexibility Act We have considered the effects of this rulemaking action under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) This rule will not have a significant economic impact on a substantial number of small entities. This rule will impose no additional reporting obligations on small entities beyond those otherwise required by the Safety Act and the early warning reporting regulation. This rule addresses the agency's treatment of early warning reporting data and clarifies procedures for all submitters, including small entities, with regard to confidentiality. The rule protects certain categories of early warning reporting information from disclosure to ensure consistency in the treatment of information that is likely to cause substantial competitive harm to submitters if disclosed. In addition, small entities, which generally submit items in hard copy format, are expected to and may continue to do so. Those wishing to submit information in electronic format would be able to do so using the procedures that we are clarifying in this proposal. Therefore, a regulatory flexibility analysis is not required for this action. C. Executive Order 13132 (Federalism) NHTSA has examined today's rule pursuant to Executive Order 13132 (64 FR 43255, August 10, 1999). This action will not have “federalism implications” because it will not have “substantial direct effects on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government,” as specified in section 1 of the Executive Order. D. Unfunded Mandate Reform Act The Unfunded Mandate Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with a base year of 1995). This rule will not result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually. E. Executive Order 12988 (Civil Justice Reform) With respect to the review of the promulgation of a new regulation, section 3(b) of Executive Order 12988, “Civil Justice Reform” (61 FR 4729, February 7, 1996) requires that Executive agencies make every reasonable effort to ensure that the regulation:
(1)Clearly specifies the preemptive effect, if any;
(2)clearly specifies any effect on existing Federal law or regulation;
(3)provides a clear legal standard for affected conduct while promoting simplification and burden reduction;
(4)specifies the retroactive effect, if any;
(5)adequately defines key terms; and
(6)addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. This document is consistent with that requirement. NHTSA notes that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceedings before they may file suit in court. F. Paperwork Reduction Act The existing requirements of Part 512 are considered to be information collection requirements as that term is defined by the Office of Budget and Management
(OMB)in 5 CFR part 1320. Accordingly, the existing Part 512 regulation was submitted to and approved by OMB pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ). At the time that we submitted the prior requirements of Part 512, these requirements were approved through January 31, 2008. This rule does not revise the existing currently approved information collection under Part 512. Instead, the rule contains the same requirements as before and only clarifies procedures as to electronically-submitted items to the agency for which confidentiality is sought. It does not require electronic submissions. G. Executive Order 13045 Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that:
(1)Is determined to be “economically significant” as defined under E.O. 12866, and
(2)concerns an environmental, health or safety risk that NHTSA has reason to believe may have a disproportionate effect on children. This action does not meet either of these criteria. H. Regulation Identifier Number
(RIN)The Department of Transportation assigns a regulation identifier number
(RIN)to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda. List of Subjects in 49 CFR Part 512 Administrative procedure and practice, Confidential business information, Freedom of information, Motor vehicle safety, Reporting and recordkeeping requirements. In consideration of the foregoing, the National Highway Traffic Safety Administration amends 49 CFR Chapter V, Code of Federal Regulations, by amending Part 512 as set forth below. 1. The authority for Part 512—Confidential Business Information continues to read as follows: Authority: 49 U.S.C. 322; 5 U.S.C. 552; 49 U.S.C. 30166, 49 U.S.C. 30167; 49 U.S.C. 32307; 49 U.S.C. 32505; 49 U.S.C. 32708; 49 U.S.C. 32910; 49 U.S.C. 33116; delegation of authority at 49 CFR 1.50. 2. Section 512.6 is amended by removing paragraph (b)(3) and adding a new paragraph
(c)to read as follows: § 512.6 How should I prepare documents when submitting a claim for confidentiality?
(c)Submissions in electronic format—
(1)Persons submitting information under this Part may submit the information in an electronic format. Except for early warning reporting data submitted to the agency under 49 CFR part 579, the information submitted in an electronic format shall be submitted in a physical medium such as a CD-ROM. The exterior of the medium (e.g., the disk itself) shall be permanently labeled with the submitter's name, the subject of the information and the words “CONFIDENTIAL BUSINESS INFORMATION”.
(2)Confidential portions of electronic files submitted in other than their original format must be marked “Confidential Business Information” or “Entire Page Confidential Business Information” at the top of each page. If only a portion of a page is claimed to be confidential, that portion shall be designated by brackets. Files submitted in their original format that cannot be marked as described above must, to the extent practicable, identify confidential information by alternative markings using existing attributes within the file or means that are accessible through use of the file's associated program. When alternative markings are used, such as font changes or symbols, the submitter must use one method consistently for electronic files of the same type within the same submission. The method used for such markings must be described in the request for confidentiality. Files and materials that cannot be marked internally, such as video clips or executable files or files provided in a format specifically requested by the agency, shall be renamed prior to submission so the words “Confidential Bus Info” appears in the file name or, if that is not practicable, the characters “Conf Bus Info” or “Conf” appear. In all cases, a submitter shall provide an electronic copy of its request for confidential treatment on any medium containing confidential information, except where impracticable.
(3)Confidential portions of electronic files submitted in other than their original format must be marked with consecutive page numbers or sequential identifiers so that any page can be identified and located using the file name and page number. Confidential portions of electronic files submitted in their original format must, if practicable, be marked with consecutive page numbers or sequential identifiers so that any page can be identified and located using the file name and page number. Confidential portions of electronic files submitted in their original format that cannot be marked as described above must, to the extent practicable, identify the portions of the file that are claimed to be confidential through the use of existing indices or placeholders embedded within the file. If such indices or placeholders exist, the submitter's request for confidential treatment shall clearly identify them and the means for locating them within the file. If files submitted in their original format cannot be marked with page or sequence number designations and do not contain existing indices or placeholders for locating confidential information, then the portions of the files that are claimed to be confidential shall be described by other means in the request for confidential treatment. In all cases, submitters shall provide an electronic copy of their request for confidential treatment on any media containing confidential data except where impracticable.
(4)Electronic media may be submitted only in commonly available and used formats. 3. Section 512.7 is revised to read as follows: § 512.7 Where should I send the information for which I am requesting confidentiality? A claim for confidential treatment must be submitted in accordance with the provisions of this regulation to the Chief Counsel of the National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., West Building W41-227, Washington, DC 20590. 4. Appendix C to Part 512 is revised read as follows: Appendix C to Part 512—Early Warning Reporting Class Determinations
(a)The Chief Counsel has determined that the following information required to be submitted to the agency under 49 CFR 579, Subpart C, if released, is likely to cause substantial harm to the competitive position of the manufacturer submitting the information and is likely to impair the government's ability to obtain necessary information in the future:
(1)Reports and data relating to warranty claim information and warranty adjustment information for manufacturers of tires;
(2)Reports and data relating to field reports, including dealer reports, product evaluation reports, and hard copies of field reports; and
(3)Reports and data relating to consumer complaints.
(b)The Chief Counsel has determined that the following information required to be submitted to the agency under 49 CFR 579, Subpart C, if released, is likely to cause substantial harm to the competitive position of the manufacturer submitting the information:
(1)Reports of production numbers for child restraint systems, tires, and vehicles other than light vehicles, as defined in 49 CFR 579.4(c); and
(2)Lists of common green tire identifiers. 5. Appendix D to part 512 is redesignated as Appendix E to Part 512 and a new Appendix D to Part 512 is added to read as follows: Appendix D to Part 512—Vehicle Identification Number Information The Chief Counsel has determined that the disclosure of the last six
(6)characters, when disclosed along with the first eleven
(11)characters, of vehicle identification numbers reported in information on incidents involving death or injury pursuant to the early warning information requirements of 49 CFR part 579 will constitute a clearly unwarranted invasion of personal privacy within the meaning of 5 U.S.C. 552(b)(6). 6. Newly redesignated Appendix E to Part 512 is revised to read as follows: Appendix E to Part 512—OMB Clearance The OMB clearance number for this part 512 is 2127-0025 Issued on: October 10, 2007. Nicole R. Nason, Administrator. [FR Doc. E7-20368 Filed 10-18-07; 8:45 am] BILLING CODE 4910-59-P 72 202 Friday, October 19, 2007 Presidential Documents Part V The President Notice of October 18, 2007—Continuation of the National Emergency With Respect to Significant Narcotics Traffickers Centered in Colombia Title 3— The President Notice of October 18, 2007 Continuation of the National Emergency With Respect to Significant Narcotics Traffickers Centered in Colombia On October 21, 1995, by Executive Order 12978, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the actions of significant narcotics traffickers centered in Colombia, and the extreme level of violence, corruption, and harm such actions cause in the United States and abroad. The order blocks all property and interests in property that are in the United States, or within the possession or control of United States persons, of foreign persons listed in an annex to the order, as well as of foreign persons determined to play a significant role in international narcotics trafficking centered in Colombia. The order similarly blocks all property and interests in property of foreign persons determined to materially assist in, or provide financial or technological support for or goods or services in support of, the narcotics trafficking activities of persons designated in or pursuant to the order. In addition, the order blocks all property and interests in property of persons determined to be owned or controlled by, or to act for or on behalf of, persons designated in or pursuant to the order. The order also prohibits any transaction or dealing by United States persons or within the United States in property or interests in property of the persons designated in or pursuant to the order. Because the actions of significant narcotics traffickers centered in Colombia continue to threaten the national security, foreign policy, and economy of the United States and to cause an extreme level of violence, corruption, and harm in the United States and abroad, the national emergency declared on October 21, 1995, and the measures adopted pursuant thereto to deal with that emergency, must continue in effect beyond October 21, 2007. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency with respect to significant narcotics traffickers centered in Colombia. This notice shall be published in the **Federal Register** and transmitted to the Congress. GWBOLD.EPS THE WHITE HOUSE, October 18, 2007. [FR Doc. 07-5222 Filed 10-18-07; 12:42 pm]
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U.S. Code
67 references not yet in our index
  • 5 USC 801ff
  • 20 CFR 404
  • 20 CFR 416
  • Pub. L. 104-193
  • Pub. L. 108-203
  • 118 Stat. 509
  • Pub. L. 98-460
  • 98 Stat. 1794
  • 49 CFR 512
  • Pub. L. 89-563
  • Pub. L. 103-272
  • 108 Stat. 745
  • Pub. L. 93-492
  • 574 F. Supp. 1047
  • 49 CFR 573
  • Pub. L. 106-414
  • 114 Stat. 1800
  • 49 CFR 579.21-579
  • 49 CFR 579.29
  • 49 CFR 579.27
  • 49 CFR 579.26(d)
  • 49 CFR 579.21(b)(2)
  • 427 F. Supp. 2d 7
  • 444 F. Supp. 2d 12
  • 49 CFR 512.6
  • 49 CFR 512.7
  • 498 F.2d 765
  • 704 F.2d 1280
  • 830 F.2d 1132
  • 375 F.3d 1182
  • 873 F.2d 325
  • 185 F.3d 898
  • 49 CFR 579
  • 427 F. Supp. 2
  • 49 CFR 579.21(c)
  • 49 CFR 579.25(b)(2)
  • 49 CFR 579.26(b)(2)
  • 49 CFR 512.19
  • 49 CFR 512.8
  • 975 F.2d 871
+ 27 more
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Final rule
Fed. Reg.Notices
U.S.C.§ 402
Stat.Public Law 104–192
U.S.C.§ 902
U.S.C.§ 421
Fed. Reg.Proposed Rules
Fed. Reg.Notices
U.S.C.§ 30101
Stat.Public Law 89–563
F. Supp.574 F. Supp. 1047
F. Supp.427 F. Supp. 2d 7
F. Supp.444 F. Supp. 2d 12
Cites 93 · showing 12Cited by 0 across 0 sources
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