DOJ Challenges Fisker’s Controversial Recall Payment Plan
The U.S. Department of Justice (DOJ) has declared bankrupt EV manufacturer Fisker’s proposal to charge owners for recall-related labor costs as unlawful. In a recent court filing, the DOJ asserted this practice violates multiple provisions of the National Traffic and Motor Vehicle Safety Act.
Key Legal Objections
- Violation of Safety Act: The DOJ, representing NHTSA, filed objections to Fisker’s liquidation plan
- Improper Cost Allocation: The agency rejected Fisker’s attempt to separate parts and labor costs
- Bankruptcy Doesn’t Absolve Obligations: DOJ emphasized bankruptcy filing doesn’t negate safety compliance requirements
The Recall Controversy Unfolds
Fisker initially announced in September that Ocean SUV owners would bear labor costs for two critical recalls:
- Faulty Door Handles: Potential safety hazard in emergency situations
- Defective Water Pump: Could lead to sudden power loss while driving
After public backlash, Fisker briefly reversed its decision before reinstating the controversial policy in late September.
Financial Limitations Claimed
- Fisker allocated only \(750,000 for recall parts (half the estimated \)1.5M needed)
- No provisions made for labor costs in bankruptcy settlement plan
Regulatory Pushback Intensifies
NHTSA has proposed plan revisions to address its objections, contacting:
- Fisker’s legal team
- Creditor representatives
- U.S. Trustee’s office
The DOJ filing states: “The Safety Act is clear that all costs associated with remedying defective vehicles must be covered by the manufacturer.”
Bankruptcy Complications
- SEC investigation revealed (multiple subpoenas issued)
- Headquarters allegedly abandoned in disarray
- Concerns about proper record preservation
Consumer Impact and Legal Standing
Several owners have already paid recall labor costs out-of-pocket. While the DOJ supports reimbursing these consumers, it maintains:
“Section 30120 of the Safety Act requires manufacturers — not vehicle owners — to cover all remediation expenses. This ‘owner reimbursement’ scheme compounds Fisker’s ongoing violation.”
The court is expected to rule on the proposed settlement plan imminently, with a hearing scheduled as early as Wednesday.
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