Nov 2, 2018

Clear federal regulations would lower legal risks for AV developers

Illustration: Rebecca Zisser/Axios

In October the Department of Transportation (DOT) released its latest policy statement on AV technologies, which is broadly in line with past guidance. But if the DOT wants to “ensure safety without hampering innovation,” maintaining the status quo is not the correct approach.

Why it matters: Although some companies may worry about heavy-handed regulation curtailing the advancement of AV technology, the unknown risks of litigation and liability have the greatest potential to derail progress at this stage of development.

Details: The new DOT policy reiterates that state and local governments cannot set safety standards different from the Federal Motor Vehicle Safety Standards. But there's still room for liability under state common law. Even if an automaker complies with the FMVSS, for example, a court could find that it caused harm to vehicle owners that would entitle them to compensation.

What's needed: Federal regulations for the design, data collection and communication systems of AVs would allow developers to understand, and plan for, their risks and liabilities. As it stands, they need to account for not only the laws of 50 states, but also creative plaintiffs’ attorneys and an unpredictable judiciary. Federal pre-emption will help to manage this otherwise impossibly complex task.

  • If an AV is in an accident, someone could cherry pick from the patchwork of state regulations to bring a lawsuit — claiming, for example, that the manufacturer could have prevented the accident, or at least minimized injury, by using a different vehicle communication system.
  • Federal regulations for such a system that supersede state law could greatly limit this litigation risk. If well designed, they will provide clarity to manufacturers while still setting high standards for safety.

The bottom line: Concrete federal regulations could provide safety, stability and certainty. Otherwise, a patchwork of state laws governing design defects, privacy and cybersecurity could inhibit innovation.

Michael Mallow is a partner and Rachel Straus is an associate with Sidley Austin LLP’s Consumer Class Action Defense practice.

This article has been prepared for informational purposes only. It does not constitute legal advice or reflect the views of Sidley Austin LLP.

Go deeper

Exclusive: Global trust in the tech industry is slipping

Illustration: Aïda Amer/Axios

The backlash against Big Tech has long flourished among pundits and policymakers, but a new survey suggests it's beginning to show up in popular opinion as well.

Driving the news: New data from Edelman out Tuesday finds that trust in tech companies is declining and that people trust cutting-edge technologies like artificial intelligence less than they do the industry overall.

"It was 30 years ago, get over it": Mike Bloomberg's partner brushes off NDA concerns

Diana Taylor at a Mike Bloomberg event last month. Photo: Ron Adar/Echoes Wire/Barcroft Media via Getty Images

Diana Taylor, Mike Bloomberg's longtime partner, dismissed the concerns surrounding non-disclosure agreements used at his company, Bloomberg LP, telling CBS News that she would say to those bothered by the allegations, "It was 30 years ago, get over it."

Why it matters: Democratic candidates have used the NDAs as a talking point against Bloomberg, calling on him to allow women to speak about the reported sexual harassment and gender discrimination they faced while working for him.

Trump's opportunity to use Bernie as an economic scapegoat

Illustration: Aïda Amer/Axios. Photos: Zach Gibson/Stringer, The Washington Post/Getty Contributor

Bernie Sanders is poised to become an economic scapegoat for both the White House and Corporate America, assuming that Sanders comes through Super Tuesday unscathed.

The big picture: If the U.S. economy remains strong, President Trump and CEOs will claim credit (as they've been doing for three years). If it turns sour, they'll blame Bernie (even though it's a largely baseless charge).