Can Driverless Cars Steer Clear of Litigation? In addition to lawsuits, federal and state regulation await on the road ahead

Saturday, April 8, 2017 - 08:20

A renaissance of epic proportions is underway in the United States, where 4,000-pound objects will soon be motoring alongside us on freeways, through intersections, crosswalks and school zones without a driver. Ground Zero for this marvel centers around the creation of digital hardware and its associated software that will propel these vehicles among us, while simultaneously increasing safety and roadway efficiency. It will herald a fundamental change in how our society functions, similar to the creation of the automobile, airplane and cellphone. The U.S. government, noting that 94 percent of the 30,000 annual deaths on our roads are caused by human choice or error, sees “great potential” in this new frontier to save lives. In fact, the U.S. Department of Transportation (DOT) has defined autonomous vehicles as “the archetype of our future transportation.”

Labeled “highly automated vehicles” (HAV) by DOT, these vehicles will operate through a network of highly sophisticated technology carefully developed by reputable manufacturers who see the vision of the future. California, Michigan and other states will play a significant role in the development of HAVs; as of Feb. 9, the California Department of Motor Vehicles (Cal. DMV) has issued autonomous vehicle testing permits to, among others, Volkswagen, Mercedes-Benz, Google, Delphi Motors, Tesla, Bosch, Nissan, General Motors, BMW, Honda and Ford. Several other states have raced to follow suit with similar legislation, passing preliminary regulations governing the testing of HAVs. California, however, will no doubt play a significant role in paving the way for safe HAV testing and deployment, and its DMV has already taken steps to do so. Effective Sept. 16, 2014, it successfully passed regulations governing the testing of HAVs. On March 10, 2017, Cal. DMV released its latest (proposed) regulations that may soon govern testing and deployment of automated vehicles where no driver is present.  

Federal and State Regulations Remain Inadequate

While manufacturers are anxiously working to deploy HAVs, California has not yet passed (but has carefully proposed) regulations governing deployment. These are currently undergoing intense scrutiny by the public, public interest groups and the automotive industry at large. Cal. DMV’s proposed regulations are in turn heavily influenced by the National Highway Traffic Safety Administration (NHTSA), which recently released its Federal Automated Vehicles Policy. NHTSA enthusiastically defines its new policy as “accelerating the next revolution in roadway safety.” The policy also adopts autonomous vehicle categories created by SAE International (SAE) based on the level of interaction of the driver. For example, SAE Level 1-2 defines semiautonomous vehicle interaction (AV) where the driver maintains primary responsibility for monitoring the driving environment. DOT classifies HAVs as those utilizing technology within SAE Level 3-5, where automated technology primarily controls the operation of the vehicle. The policy offers a 15-point guidance recommending best practices for the “pre-deployment design, development and testing of HAVs.” However, no federal regulations yet exist pertaining to testing or deployment. The space is literally that new – evolving right before our eyes.   

The Short Term May Be the Most Dangerous

However, as when releasing baby seals into the ocean, those with fins on their backs await. It is imperative that general counsel of the automated car industry get ready for the potential onslaught of litigation that may follow after the first HAV makes a misstep. Ironically, greater product liability risk likely exists with the implementation of lesser-automated technology that is set to enter the market first. How can this be? While industry is quickly evolving HAV technology, our government(s) have assumed the seemingly practical approach of requiring that industry first develop, test and then safely implement AV technology. That is, technology where the automobile can operate without the active interaction of a driver, but where the driver may (must) retake control when an emergency occurs. Cal. DMV (as an example) is not yet ready to allow fully autonomous vehicles (HAVs) on its roadways just yet, and has excluded them from its draft regulations. This has led to an interesting and dangerous paradox. While AVs will first take to the roads – relying on a human driver to intervene when the automated system requires or requests intervention – the technology requires the human driver to be attentive. But their increasing confidence in, and reliance on, the automated systems may create the opposite effect.

Industry sources have thus expressed concern that this initial phase of automated development may actually be the most dangerous period for this technology. In a recent study by Stanford University, the authors questioned whether semiautonomous vehicles are sustainable, because as drivers become more confident in autonomous systems, they are less likely to pay attention and may become even more dangerous than those who do not use such systems. (See http://ai100.standford.edu/2016-report.) On June 30, 2016, Joshua Brown was killed as he allegedly watched a Harry Potter movie while relying on Tesla semiautomated technology. The technology did not stop his vehicle, and Mr. Brown’s vehicle struck a flatbed truck that had turned in his path. Brown could have taken control, but his reliance on the technology took his eyes and attention from the road.

Lawsuits Are Inevitable

Further accidents like this are inevitable, as this new frontier is further developed and explored. And human error is but one pitfall facing the future of automated vehicles. Thieves and terrorists also join the mix. Consequently, cybersecurity measures also appear in DOT’s and Cal. DMV’s guidance (and proposed regulations). HAVs will present two new avenues for cyber attack; the theft of abundant personal information contained within these highly sophisticated vehicles, and hacking designed to disrupt, incapacitate or even crash HAVs as a basis for coercion, ransom or just plain harm. Criminals are likely already plotting to steal data from, or commandeer, automated vehicles. But NHTSA is wary of this danger. Just months ago, it released further guidance for the industry with a report titled Cybersecurity Best Practices for Modern Vehicles. The government’s guidance urges manufacturers to develop technology not just to identify cyber attacks, but where such attacks are successful, to develop mechanisms for immediate response, mitigation and resumption of control.

NHTSA’s Guidance May Define the Battlefield for Litigants

Enter now, stage left, two of the most popular “vehicles” for class action lawsuits that likely await the launch of automated vehicles: product liability- and cybersecurity-based claims. How can general counsel prepare their companies for these inevitable attacks made by those seeking to exploit the technology for potential gain? In this instance, a litigation-avoidance strategy to protect AVs and HAVs is, for many companies, a matter of first impression. Counsel must therefore envision and anticipate the basis for the attack(s), and create a robust internal protocol that relies on NHTSA’s new policy, which in turn complements the Federal Motor Vehicle Safety Standards and is furthered by NHTSA’s advice on cybersecurity. 

The federal government’s guidance on operational design, object event detection and response, fall-back response, post-crash behavior and validation methods should form the templates upon which industry can rely – if they comply. The government is expecting from industry detailed processes and plans pertaining to each of its guidance points and will request manufacturers’ written compliance with them. Corporations that push down (and ensure compliance with) these requirements throughout the relevant sectors of their AV and HAV programs will best defend against later efforts to prove that they were negligent. Plaintiffs lawyers will be looking at the same guidance to find oversights to exploit in the courtroom. An example: NHTSA recommends that manufacturers create a “documented process” for testing, validation and collection of events, incidents and crash data to improve the technology. Cal. DMV will also require this transparency from manufacturers prior to permitting HAVs to operate on its roads. Plaintiffs lawyers will search for failure(s) to adhere to guidance like this and use it as a basis to establish negligence with a manufacturer’s crash avoidance or cybersecurity systems. Robust compliance by manufacturers will have the opposite effect, and help insulate them from harm.

General counsel involved in the development and sale of AVs and HAVs have thus found themselves in the enviable and exciting position of becoming the gatekeepers for the most significant development in transportation since the creation of the automobile itself. The future of this technology is bright. There will be autonomous taxicabs and 18-wheelers.  Disabled and elderly people who can no longer drive will be set free. The future is limitless. But industry must not allow automated vehicle technology to face the litigation challenges that contributed to the demise of three-wheeled off-road motorbikes in the 1980s, or the more recent misguided attack(s) on compact recreational off-highway vehicles that have redefined off-roading.

Planning ahead will be key. 

The views expressed here are the personal views of the author; they do not necessarily reflect those of the law firm with which he is associated.
 

Paul F. Rafferty is a partner in Jones Day's business and tort litigation practice and is based in the firm's office in Irvine, California.