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Automated vehicles will be part of the next generation of transportation technologies that will transform how we live, work, and get from Point A to Point B. The U.S. Congress and various states are developing regulations specific to automated vehicles, and many existing regulatory provisions governing conventional motor vehicles continue to be applied by government agencies.

In the United States, motor vehicles are regulated by the National Highway Transportation Safety Administration (NHTSA), an administrative agency within the federal Department of Transportation (DOT). NHTSA issues regulations regarding the design of motor vehicles, investigates safety-related incidents, and sometimes orders recalls of vehicles or components it deems unsafe.

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FEDERAL LEGISLATION
Proposed Federal Legislation

Federal law currently remains in flux. No existing legislation specifically governs the testing or deployment of automated vehicles, but there has been significant bipartisan support for such legislation. In the 2017–2018 session of Congress, the House of Representatives and the Senate drafted bills with some competing provisions, as described below. While the House bill passed, the Senate bill was not brought to a vote. Similar legislation, however, may be introduced in a future session of Congress.

On September 6, 2017, the House of Representatives unanimously passed the SELF DRIVE Act, which would create a regulatory framework for highly automated vehicles. The SELF DRIVE Act aimed to divide responsibility between state and federal regulators regarding the development and deployment of automated vehicles, with a goal of harmonizing at least portions of the patchwork of state laws that currently govern automated-vehicle testing and deployment. For example, the federal act would have preempted state regulation of vehicle design, construction, or performance, while allowing states to maintain control over vehicle registration, licensing, and collision investigation, among other vehicle-related regulations.

The SELF DRIVE Act built on the Federal Automated Vehicle Policy issued by the Department of Transportation (DOT) in 2016, seeking to make mandatory certain reporting requirements outlined in that Policy. The SELF DRIVE Act, if passed into law, also would have promoted further rulemaking by the DOT on issues related to safety certification, cybersecurity, data privacy, and consumer education.

The SELF DRIVE Act would have expanded the authority of the National Highway Traffic Safety Administration (NHTSA) to grant limited exemptions from the Federal Motor Vehicle Safety Standards (FMVSS) for automated vehicles. FMVSS are rules that establish specific technical requirements for particular vehicle components or systems, such as air bags, door locks, or electronic stability control systems. Manufacturers may apply for exemptions from particular FMVSS for a limited number of vehicles, and NHTSA may grant such exemptions if the manufacturer can prove the exempted vehicles would be safe notwithstanding their noncompliance with FMVSS. The SELF DRIVE Act would have expanded the number of exemptions a manufacturer can receive for automated vehicles, from 2,500 vehicles to 100,000 vehicles.

In the Senate, a separate bill—the AV START Act—was approved by the Committee on Commerce, Science, and Transportation on November 28, 2017. An amended draft of the AV START Act was circulated in December 2018. The 2018 draft clarified the Act’s preemption clause and, among other things, added more reporting requirements, including for partially automated vehicles.

The AV START Act would have directed the DOT to modernize the existing FMVSS to remove barriers to the deployment of automated vehicles, and to consider further rules that would promote safety in automated vehicles. Like the House bill, the Senate’s AV START Act also aimed to clarify state and local authority in regulating automated vehicles, and would have expanded NHTSA’s exemption authority. Unlike the House’s bill, the provisions of the AV START Act did not explicitly address large trucks or busses.

Additionally, the 2018 amendments to the AV START Act would have increased government oversight over the deployment of automated vehicles. The AV START Act would have required manufacturers to submit reports to the DOT on partially automated and highly automated vehicle safety and cybersecurity. In addition, the AV START act would have prohibited the use of predispute arbitration agreements in the cases of bodily injury or death until applicable safety standards are promulgated. It also would have required government agencies to study, among other things, the cybersecurity risks associated with automated vehicles, and the development of a uniform system for personal data removal upon vehicle transfer.

While the SELF DRIVE Act and the AV START Act did not pass into law, a future Congress may pass similar legislation. Several elements common to the SELF DRIVE Act and the AV START Act could become law in the near future, such as:

  • Clear delineation of state and federal authority, including preemption of state regulation of automated-vehicle design, construction, or performance;
  • Mandatory reporting on automated vehicle safety and cybersecurity; and
  • Expanded authority for DOT to grant exemptions to FMVSS to automated vehicles that do not conform to ordinary design conventions.

O’Melveny continues to monitor the progress of this legislation and update clients on its relevance to their businesses.

Federal Automated Vehicle Policy

The National Highway Traffic Safety Administration (NHTSA), an agency within the federal Department of Transportation (DOT), is charged with creating and enforcing vehicle safety standards. NHTSA has not yet issued regulations that specifically address automated-vehicle technology. In recognition of the rapid pace of technological advancement and the slow machinery of the rulemaking process, NHTSA and DOT have published guidance to automakers, technology developers, and state authorities on the subject of automated driving systems. The third iteration of this guidance, entitled “Automated Vehicles 3.0: Preparing for the Future of Transportation,” published in October 2018, applies a “market-driven, technology-neutral” approach to AV regulation that is intended to “encourage innovation in the transportation system.” We highlight some examples below.

DOT recommends that developers of automated-vehicle technology publish Voluntary Safety Self-Assessments (VSSAs) that address each of twelve “priority safety design elements” and that contain safety goals and approaches to achieve those goals. The DOT’s priority safety-design elements include some traditional areas of vehicle safety—including crashworthiness and consumer education and training—as well as other areas of unique or increased importance to automated vehicles, such as operational design domain, data recording, human-machine interface, and cybersecurity.

DOT encourages companies developing automated technologies to self-assess how they are addressing each of these elements, and to publicly disclose the VSSAs as “a way to promote transparency and strengthen public confidence in ADS technologies.” Pending legislation in the U.S. Congress would make some version of these self-reports mandatory.

AV 3.0 provides more guidance than the DOT provided in its 2.0 version regarding developing standards for AV. For example, AV 3.0 points to progress made by standards organizations such as SAE International, the Institute of Electrical and Electronics Engineers (IEEE), and the National Institute of Standards and Technology (NIST), among others, regarding automated systems design, on-road testing, and cybersecurity. AV 3.0 also encourages the industry to work with such standards organizations to develop voluntary data exchanges for information that could mutually benefit public and private actors, such as information regarding infrastructure conditions.

While AV 2.0 mentioned commercial vehicles only briefly, AV 3.0 provides more guidance on automation of commercial vehicles such as heavy trucks or buses. In AV 3.0, for example, DOT and the Federal Motor Carrier Safety Administration (FMCSA)—the federal agency that regulates the interstate trucking industry—encourage further development of automated technologies in commercial vehicles, stating “The best way to accomplish FMCSA’s core mission of reducing fatalities and crashes involving large trucks and buses is to avoid unnecessary barriers to the development of ADS in commercial vehicles.” To that end, “going forward FMCSA regulations will no longer assume that the [vehicle’s] driver is always a human or that a human is necessarily present onboard a commercial vehicle during its operation.”

AV 3.0 also includes a statement of support for consumer privacy, indicating that DOT “works closely with the Federal Trade Commission (FTC)—the primary Federal agency charged with protecting consumers’ privacy and personal information—to support the protection of consumer information and provide resources relating to consumer privacy.”< /p>

DOT’s guidance addresses the respective roles of federal and state law in regulating the safety of highly automated vehicles. DOT emphasizes that NHTSA is responsible for regulating motor vehicles and motor vehicle equipment, while states are responsible for “regulating the human driver and most other aspects of vehicle operations.” Accordingly, NHTSA views its responsibilities as creating and enforcing Federal Motor Vehicle Safety Standards (FMVSS) for automated vehicles, investigating potential safety issues, and, where appropriate, ordering recalls. States, by contrast, are responsible for licensing drivers, enacting traffic laws, and regulating automated-vehicle insurance and liability. DOT’s guidance also includes best practices for state legislatures and highway officials.

Although to date NHTSA has not yet issued FMVSS related specifically to automated vehicles, the agency’s guidance makes clear that it believes it retains substantial authority to investigate safety-related issues in automated vehicles through its enforcement powers. NHTSA claims broad authority to investigate potential safety-related defects in motor vehicles, and to order a recall where appropriate. The agency’s guidance indicates that it interprets this enforcement authority to extend to software underlying automated-vehicle systems, including the operation of the code and the overall cybersecurity of the system. While NHTSA has not ordered any recalls specific to automated vehicles, it has conducted investigations into automated-vehicle technologies.

O’Melveny advises early-stage companies and established industry leaders alike on legal issues associated with automated vehicles technologies, including advising on financings and acquisitions; responding to state and federal regulatory investigations; reviewing and advising regarding AV-related advertising; analyzing potential products liability for components suppliers; and predicting and mitigating other legal risks such as by developing incident response plans relating to privacy, data security, and accidents in automated vehicles. 

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