SEATTLE—The Washington state attorney general's office is investigating the Northwest Tire Dealers Association for possible violation of antitrust laws, according to NWTDA Executive Director Richard Nordness. The NWTDA has drawn the state's scrutiny for urging dealers to adopt a policy of only installing studded tires on all four wheels of front-, four- and all-wheel-drive vehicles, even if customers ask for only two, and distributing literature calling studded tires on all four wheels a tire industry mandate, Mr. Nordness said.
The consumer protection and antitrust divisions of the attorney general's office are questioning the group's tactics, he said. The agency may find no fault with the NWTDA, but if it decides otherwise, the group could be slapped with an antitrust lawsuit, Mr. Nordness said.
The attorney general's office would neither confirm nor deny that it is investigating the NWTDA and will not comment unless action is taken, said Doug Walsh, an assistant attorney general.
Despite the state's probe, the NWTDA feels it did the right thing in developing and disseminating the studded-tire policy, which was intended to serve public safety, Mr. Nordness said.
The group has hired an attorney and is taking the state's investigation seriously, he added.
Last September, the association began encouraging dealers to refuse customer requests to install only two studded tires on front-, four- and all-wheel-drive vehicles. The group wanted to warn consumers of the dangers of driving on only two studded tires and protect dealers from potential litigation, Mr. Nordness said.
``As an association, we felt like we needed to get the word out to the public that this was an important issue,'' he said. ``The industry is not as strong as we'd like to see on this particular policy.''
The NWTDA produced large, diamond-shaped, yellow signs—which many of the group's members posted in their dealerships—that stated the following warning in bold, black letters: ``For your safety, when studded tires are used on front-wheel, four-wheel and all-wheel-drive vehicles, they must be placed on all four wheels as required by the Tire Industry Safety Council, the AAA Safety Council and the Northwest Tire Dealers Association.''
At issue is the phrase ``required by,'' because the tire industry has always used the words ``recommended by'' in reference to tire studs, Mr. Nordness said. The state also questions that language because car owner manuals have no information on studded-tire installation.
The Tire Industry Safety Council's official statement on studded tires, contained in its Motorist's Tire Care and Safety Guide, is: ``When studded snow tires are mounted on the front axle, studded tires also must be placed on the rear axle.'' The group is an arm of the RMA.
The dilemma for dealers, Mr. Nordness explained, is that when customers are told the use of four studded tires is recommended, but not required, by the industry, some customers will push dealers to stud just two tires and will even travel from retailer to retailer until they find one who will do the job.
However, any retailer who does install only two studded tires, thereby going against the recommended industry practice, opens himself up to litigation if that vehicle later is involved in an accident.
That risk was highlighted recently by a $1.3 million lawsuit involving Les Schwab Tire Centers Inc. The dealership is being sued by the estate of a woman killed when her car was struck by a vehicle that had had studded tires installed at a Les Schwab outlet on its front wheels only—but only at the customer's insistence. Dealership employees had advised him that studs were recommended on all four wheels. The suit was scheduled to go to trial last November but has been pushed back to April 20.
Ironically, the current investigation also involves a customer's experience with studded tires from a Les Schwab outlet. After employees at a Les Schwab store in Tacoma, Wash., insisted on installing four studded tires on a customer's car based on the NWTDA's signs and literature, the irritated customer filed a five-page complaint with the state attorney general's office, said Mr. Nordness, who also received a copy of the complaint.
``This is basically the situation we're all in—we're damned if we do and damned if we don't,'' Mr. Nordness said.
The state then sent the NWTDA a letter, dated Nov. 15, asking for an explanation of the policy, Mr. Nordness said.
The NWTDA submitted a one-page explanation, to which the attorney general's office responded with a 22-page interrogatory requesting the group's minutes from the past year's meetings, its newsletters, lists of names and addresses of all directors, officers and members, and information on the group's studded-tire policy.
The NWTDA also was asked to explain all correspondence between itself, the Rubber Manufacturers Association and the American Automobile Association regarding studded tires, Mr. Nordness said. The group had to respond to the interrogatory by Feb. 25 and expects a ruling from the attorney general's office within the next 30 to 60 days.
The NWTDA sold some of its studded-tire signs and brochures to other state and regional associations, including the New England Association of Independent Tire Dealers, the Utah Tire Dealers & Retreaders Association and the Mountain States Tire Dealers Association.
Big O Tires Inc. also purchased the literature to distribute at its stores in California, Washington and Oregon.
The NWTDA hasn't yet notified those groups of the Washington investigation, but will address its legal problems in its April newsletter, Mr. Nordness said.
The association has alerted Tire Association of North America (TANA) and the RMA of the situation, Mr. Nordness said, adding that he wished the groups had developed a stronger stance on studded tires prior to the investigation.
``It would be nice to have more support from the national organizations,'' he said.
Both TANA and the RMA declined to comment on NWTDA's situation or on the studded-tire issue.
Mr. Nordness said he expected some opposition when the association decided to take a tougher stance on studded tires, but the NWTDA still wanted to raise public awareness of the issue.
``You always have a certain percentage of people who fight anything. Just putting two (studded tires) on a front-wheel drive is just like committing suicide.''