Torts of the Future Addressing the Liability and Regulatory Implications of Emerging Technologies
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Torts of the Future Addressing the Liability and Regulatory Implications of Emerging Technologies MARCH 2017
© U.S. Chamber Institute for Legal Reform, March 2017. All rights reserved. This publication, or part thereof, may not be reproduced in any form without the written permission of the U.S. Chamber Institute for Legal Reform. Forward requests for permission to reprint to: Reprint Permission Office, U.S. Chamber Institute for Legal Reform, 1615 H Street, N.W., Washington, D.C. 20062-2000 (202.463.5724). 2 Torts of the Future
Table of Contents Executive Summary.................................................................................................................................. 1 Autonomous Vehicles.............................................................................................................................. 5 Commercial Use of Drones................................................................................................................... 13 Private Space Exploration..................................................................................................................... 24 The Sharing Economy............................................................................................................................ 32 The Internet of Things............................................................................................................................ 42 Guiding Principles for Addressing the Liability and Regulatory Implications of Emerging Technologies..................................................................................................................... 53 Prepared for the U.S. Chamber Institute for Legal Reform by Cary Silverman, Phil Goldberg & Jonathan Wilsont, Shook, Hardy & Bacon L.L.P.
Executive Summary
Emerging technologies are changing how we live, travel, and buy
goods and services. If the pace of this transformation continues as
expected, in 2025 it may be common for a refrigerator to reorder
our food and a drone to deliver it, while a driverless car takes us to
the spaceport for a flight into low-earth orbit. New technologies
will undoubtedly improve lives, but they also come with new risks.
How can courts and policymakers address legitimate safety and
privacy concerns without derailing or delaying progress?
While there are many emerging legislatures, and government agencies are
technologies worthy of consideration, this addressing these emerging technologies.
report closely considers five areas:
After providing this background, the report
1. Autonomous vehicles; examines current and anticipated litigation.
It considers such questions as:
2. Commercial use of drones;
• hat types of claims are businesses in
W
3. Private space exploration; these markets likely to face?
4. The “sharing economy,” which allows • o traditional liability principles
D
people to generate income from adequately address risks stemming
underused assets, such as cars and from the new technology?
rooms; and
• ill courts alter these principles to
W
5. The Internet of Things, which involves expand liability?
products that are connected to collect
and share data. • Is there significant potential for
overregulation by Congress, state and
In each area, the report examines local governments, and government
where the new technology stands in its agencies?
development and the expected timeline for
advancement. It then provides an overview • ow might regulation and liability
H
of the existing regulatory and liability interact?
frameworks and how Congress, state
1 Torts of the Future• Is there adequate insurance coverage excessive liability does not improperly
available? chill this promising technology and the
huge advances in overall public safety it
• Is there a need to place constraints
promises. Legislatures and courts should
on liability?
consider all of these issues to ensure
The report concludes by drawing from that the liability framework around this
experience in each area to present guiding technology advances sound public policy.
principles for addressing the liability
and regulatory implications of emerging Commercial Use of Drones
technologies. Small unmanned aircraft systems, also
known as drones, are already used in
Autonomous Vehicles industries ranging from agriculture to real
Experts predict that fully autonomous estate. As a result of new FAA regulations
vehicles will be widely available by that make it easier for businesses to
2025. Cars that drive themselves and operate drones, commercial drone sales
communicate with each other and are expected to surge from a few thousand
infrastructure are expected to eliminate to millions per year. However, continued
human error, saving thousands of lives each restrictions on flying drones over people
year. But some accidents will undoubtedly and beyond an operator’s line of sight keep
continue to happen, including as a result of drones unavailable for many uses, such as
people who continue to drive themselves, delivering products. Efforts are underway
failures in the human-car interaction, or to reduce these constraints, even as some
decision-making errors by the car. state and local governments adopt their
own restrictions.
When an accident occurs, who will be
responsible for compensating those who are At this point, there is little drone-related
injured? Will car accidents routinely result in litigation. As drones come into routine use,
product liability lawsuits against automakers, however, there will inevitably be instances
rather than the typical negligence or fault- in which they collide with people or
based approach that currently exists property, distract drivers, or capture images
between drivers? If so, how would that or video of people on private property.
liability be balanced against the thousands of Such encounters will likely result in product
people who each year are no longer killed on liability claims against drone makers,
the roadways because of that technology? and negligence, trespass, nuisance, and
How will these changes alter the invasion of privacy claims against the
responsibility of people and manufacturers to businesses that operate them. In most
have insurance? Will these changes require cases, traditional principles of tort law,
a new liability framework? potentially guided by FAA regulations that
may inform the standard of care, should
Plaintiffs’ lawyers have suggested imposing sufficiently address claims that arise.
strict liability on manufacturers for any
car accident involving an autonomous Drone use may require courts to address
vehicle. Others are considering alternatives long unresolved legal issues, such as
to traditional tort liability, such as no- where private property ends and the public
fault insurance or an accident victim airspace begins. Courts will also consider
compensation fund, to make sure that whether a drone is defective if it does
U.S. Chamber Institute for Legal Reform 2not include the most sophisticated safety This balanced approach to regulation and
technology, which could make drones liability policy has facilitated a thriving
prohibitively expensive. Some states commercial space industry. To continue
have adopted drone-specific privacy laws, this progress, regulators should promote
including a private right of action, which will development of voluntary industry
lead to novel claims. consensus standards for commercial
spaceflights. When an incident inevitably
The extent of liability exposure could cause
occurs, they should resist the urge to
businesses that have developed technology
impose heavy-handed regulations that go
to deliver packages, pizzas, or even burritos
beyond addressing an identified problem.
by drone to rethink their plans.
Without reasonable constraints on liability,
a single failure could place the commercial
Private Space Exploration space industry, and companies that insure
Over the past three decades, the United their operations, into a tailspin.
States has increasingly relied on private
companies for its space program. These The Sharing Economy
companies are already developing and People have long bartered for goods and
testing vehicles that will take space tourists services, but the internet and spread of
to low-earth orbit and even to the moon. mobile devices has vastly expanded the
Other firms are developing technology pool of potential sellers and consumers.
to gather resources from asteroids to Companies have now developed platforms
make fuel, which could make deep space that facilitate these transactions and create
exploration possible. While offering the trust needed for exchanges between
incredible opportunities, these activities also complete strangers. This is known as
have significant inherent risks. Private space the sharing economy. Ride-sharing and
exploration, as with historically government- home-sharing services are among the best
led missions, could have tragic results. known and rapidly growing examples,
International law governing liability for but companies have already developed
damages that occur as a result of space over 10,000 new platforms that facilitate
activities dates back to before the first everything from dog walking to providing
moon landing. Meanwhile, Congress has medical services.
passed a series of laws to encourage The sharing economy comes with its own
growth of commercial space activity, adopt set of liability risks that can jeopardize
a shared approach to liability, and provide a its viability. For example, companies that
“learning period,” precluding government provide ride-sharing platforms face litigation
regulation of commercial spaceflights until over whether drivers are independent
2023, unless an actual experience warrants contractors or employees. If courts view
action. In addition, at least seven states these companies as employers, they will
have enacted laws designed to attract be exposed to wage-and-hour litigation and
companies to locate spaceflight operations could be held liable when a driver gets into
in their states. These laws generally require an accident.
private operators to inform spaceflight
participants of the inherent risks and limit The sharing economy can also be crushed
the operators’ liability. by unnecessary regulation. These
types of businesses have rapidly grown
3 Torts of the Futureprecisely because entry barriers are low reexamine tort law principles that limit a
and existing restrictions have resulted in business’s liability for the criminal acts of
unmet consumer needs. Before imposing third parties, evaluate whether a product is
burdensome or ill-fitting regulations, defective at the time of sale, and severely
policymakers should evaluate whether limit post-sale duties to warn consumers
current safeguards adopted by the of product risks. If courts expand liability,
companies, such as background checks, manufacturers of connected products
insurance requirements, two-way rating could find themselves exposed to a
systems, and complaint resolution centers, continuing obligation to monitor and patch
address concerns. vulnerabilities for the life of the product.
The Internet of Things Regulators are beginning to weigh in.
While there are no IoT-specific laws
Many everyday items are embedded with or regulations, five federal agencies
technology allowing them to collect and recently published guidance addressing
share information—from televisions to baby how manufacturers should incorporate
monitors. This is known as the “Internet security into connected devices. Courts
of Things” (IoT). It will not be long before may look to these guidelines, as well as
devices connected to the internet are as industry practices, to evaluate whether a
common as those connected to an electrical manufacturer met the standard of care in
outlet. This new connected world provides developing a connected device.
consumers and businesses with significant
benefits, but also poses liability risks. Guiding Principles for Addressing
There is already litigation targeting the Liability and Regulatory
connected products. Automakers, a Implications of Emerging Technology
medical device manufacturer, and children’s
toymakers have faced lawsuits claiming There is no one-size-fits-all approach to
that their products could be maliciously addressing liability and regulatory issues
hacked or used to spy on consumers. associated with emerging technology.
The key is to strike the right balance that
More of these types of lawsuits can be promotes innovation and entrepreneurship,
expected in the future, and courts may be while addressing legitimate safety and
tempted to relax traditional requirements, privacy concerns. To achieve this goal, this
such as the need for a plaintiff to have report offers eleven “guiding principles”
standing to sue by showing an actual injury, for the consideration of courts and
not fear of a future harm. Courts may also policymakers.
U.S. Chamber Institute for Legal Reform 4Autonomous Vehicles
Researchers estimate that autonomous vehicles can reduce accident
rates by up to 90%,1 which would save over 30,000 lives each year2
and avoid millions of injuries on American roads. As General Motors
Chairman Bob Lutz said, “The autonomous car doesn’t drink, doesn’t
do drugs, doesn’t text while driving, and doesn’t get road rage.
Autonomous cars don’t race other autonomous cars, and they don’t
go to sleep.”3 But technology is not perfect. Though people may be
much safer in a driverless car than a traditional vehicle, it is still
likely that accidents will occasionally occur due to a failure in
technology, the human driver-car interface, maintenance, or other
factors. There is a vigorous debate over how to fairly apportion
liability in these situations without chilling life-saving technology.
The human health and safety benefits to destinations more quickly, burning less
of autonomous vehicles (AVs), also fuel, and lowering emissions.7 They also
known as driverless cars, are broadly can provide mobility to seniors, people with
hailed. A 2013 study by the Eno Center vision problems, and others who cannot
for Transportation found that if only 10% drive on their own.8 It is widely expected
of the cars on the road were self-driving, that cities will be stocked with fleets of
1,000 lives and $18 billion would be shared driverless cars and that people who
saved each year.4 When 90% of the cars spend long stretches of time on the road will
are autonomous, those numbers jump be able to do so more efficiently. In short,
to 22,000 lives and $350 billion.5 In a driverless cars promise to fundamentally
widely cited study on the auto insurance change the way people get around. Auto
industry, audit company KPMG found travel will be significantly safer with benefits
that autonomous technology will reduce that ripple throughout society.
accident frequency by 80% by 2040.6
The National Highway Transportation and
In addition, driverless cars are expected to Safety Administration (NHTSA), in an
have broader societal benefits, including effort to facilitate the advancement and
easing traffic congestion, moving people development of automated car technology,
5 Torts of the Future“ In short, driverless cars promise to fundamentally change the
way people get around. Auto travel will be significantly safer with
”
benefits that ripple throughout society.
issued the Federal Automated Vehicles liability among automated vehicle owners,
Policy in September 2016. The guidance, operators, passengers, manufacturers, and
titled “Accelerating the Next Revolution others.10 The agency suggests that, given
in Roadway Safety,”9 recognizes that the complexity of these issues and the need
autonomous car technology will be for a certain level of uniformity, “[i]t may be
introduced in stages. Already, many desirable to create a commission to study
features, such as front-end collision, lane liability and insurance issues and make
assist and modified cruise control, are recommendations to states.”11
having an impact. To assist the progression
toward fully autonomous cars, NHTSA Autonomous Car Technology
provides a framework for data sharing, When people refer to autonomous cars, they
privacy and cyber security, ethics, and other are largely referring to technology that exists
issues likely to arise in the next few years. within each car that allows the car to read
“
its surroundings and make driving decisions
based on those readings. The Society of
NHTSA guidance advises Automobile Engineers (SAE International)
has developed a taxonomy and definitions
states to consider how to for terms related to these systems that
appropriately allocate liability have become widely used. SAE identified
six automation levels, from Level 0 (no
among automated vehicle automation) to Level 5 (full automation).12
owners, operators, passengers,
”
A key distinction exists between SAE’s
manufacturers, and others. Levels 2 and 3. Level 2 is called “partial
automation,” and the human driver remains
responsible for monitoring the environment
and performing key driving tasks. When
NHTSA’s report identifies liability—and
a car reaches Level 3 automation, which
the resulting insurance implications for
SAE calls “conditional automation,” the
consumers and manufacturers—as a major
automated car performs all of the dynamic
issue that needs to be addressed. However,
driving tasks, with the human driver acting
it recognizes that, at least to this point,
as the fallback option.
liability and insurance issues have largely
been left to the states under a patchwork of As indicated, cars operating at Level 3
negligence, product liability, and insurance are equipped with computer mapping
laws. NHTSA guidance advises states to systems, radar, cameras, sensors and other
consider how to appropriately allocate technologies that allow them to read their
U.S. Chamber Institute for Legal Reform 6environment, including the shape of the the nature of any construction zones, and
roads, traffic and driving conditions, and when lights are about to turn red. Rather
perform key dynamic driving tasks. Yet, than accelerate through a yellow light, as
these cars are not fully automated. They many humans do, the car could anticipate
ultimately require human control and may the red light sooner and slow down more
have features, such as steering wheel safely and comfortably.
sensors, to require the human driver to stay
The greatest safety gains will be made
alert and engaged. It is anticipated that the
when all three of these technologies
automated features may work only when
work together.
the driver’s hands are on the wheel because
the system anticipates the driver will take
control of the car in certain situations.
The Race to Autonomous Driving
About 20 companies are developing
Highly automated vehicles (Level 4), self-driving cars, including traditional auto
which in most environments are fully manufacturers, technology companies,
autonomous, are anticipated to be widely and ride-sharing services.16 Several of
available by 2025.13 Between 2025 and them have test cars on the road and are
2040, experts expect that vehicles will collecting data on the ability of the cars
move towards Level 5—a “new normal” to properly read the environment and
of integrated driving in which there is make the right driving decisions. Humans
communication between vehicles and can repeat mistakes over and over again,
infrastructure and vehicles can operate but the goal for automated cars is to be
without any driver present.14 programmed to learn from and not repeat
Vehicle-to-vehicle communication (V2V) will mistakes. To this end, NHTSA is working
rely on short-range radio devices to transmit on a data-sharing program, which it hopes
vehicle speed, direction, braking and other to have in place by the end of 2017, so that
key data points between vehicles. The companies can learn from each other and
benefit of this technology is that it will allow accelerate the elimination of errors.
a car to “see” around corners and through Among the more well-known self-driving
traffic so that it can better anticipate features is Tesla’s “autopilot” technology,
when it needs to brake and avoid potential which is intended to guide drivers on
collisions. In early stages of automation, highways. In May 2016, a driver was killed
this information can be given to human when he reportedly relied entirely on the
drivers to make their own decisions. autopilot system to drive his Model S,
NHTSA, which is developing standards which was not its intended use.17 The car
for V2V communication, estimates that crashed into the side of a truck that was
this technology can eliminate 81% of crossing the highway. Tesla found that the
all crashes.15 autopilot did not recognize “the white side
Congress has also funded NHTSA’s of the tractor against a brightly lit sky.”18
research into vehicle-to-infrastructure In January 2017, NHTSA completed its
communication (V2I) networks, whereby investigation, concluding that there was
cars receive data from roadways and traffic no defect in the design or performance
lights. Such data may include bad weather of Tesla’s autopilot system.19 The agency
conditions, the shape of the road and recognized that since autopilot is not cross-
whether there are any steep curves ahead, traffic aware, it requires a driver’s “continual
7 Torts of the Futureand full attention to monitor the traffic Google car sideswiped the bus.22 No one
environment,” and the driver had sufficient was injured in the February 2016 collision.
time to brake to avoid the accident.20
The ride-sharing service Uber began test-
driving its autonomous cars in Pittsburgh
in September 2016. Consumers have the
“
option to choose an autonomous car, which
has a driver ready to take control along
In January 2017, NHTSA with an engineer in the passenger seat.
The Pennsylvania Insurance Department is
completed its investigation,
treating the cars’ self-driving features in the
concluding that there was no defect same way it treats cruise control, meaning
the human driver is fully responsible for
in the design or performance of
”
accidents under a negligence standard.
Tesla’s autopilot system. Uber announced that it has $1 million in
third-party liability insurance and $5 million
in total coverage per incident.23
California took a different approach, requiring
a special permit for autonomous cars and
instructing Uber to stop its self-driving car
service in San Francisco until it did so.24 Uber
Nevertheless, the incident has been a took the position that its cars did not need
touchpoint for liability discussions. Was the permit because each car had a driver
the driver to blame for not being attentive? behind the wheel, ready to take control.
Does Tesla have liability because the car The state then revoked the registration
did not stop on its own? Or is responsibility of 16 Uber-owned vehicles in December
shared? If shared, then how is that 2016.25 Uber’s San Francisco program lasted
responsibility divided? only a week before the company loaded its
vehicles on a flatbed and moved them to
Google has also received significant Arizona.26 Arizona Governor Doug Ducey
attention for its autonomous car program, welcomed the program with “open arms
which is not yet available to the public. and wide open roads.”27
Google first retrofitted existing cars
with its driverless technology, but has Major auto manufacturers, which have
since developed its own “bubble car.” been incorporating elements of self-driving
Collectively, Google’s cars have more than technology into cars, are also heavily
two million miles of driving data.21 Google’s investing in research and development
vision is to have no steering wheels, brakes toward fully autonomous vehicles. In
or any other human controls to avoid February 2017, Ford announced plans to
confusion in the human-car interface. invest $1 billion over the next five years in
start-up company Argo AI, with a goal of
A minor accident occurred when a Google producing self-driving cars for ride-sharing
car, which had a human engineer inside, services by 2021.28 General Motors made
was negotiating merging traffic. Both the a similar investment in Cruise Automation
car and the engineer thought a bus would and the ride services company Lyft. It
let them in, but the bus continued and the
U.S. Chamber Institute for Legal Reform 8is anticipated that ride-sharing services Industry experts broadly agree with both
such as Uber and Lyft will be the way the complexity and importance of getting
that most people will be introduced to the liability right during this phase-in period.
autonomous vehicles. “We’re entering a whole new world of
assessing who’s at fault in an accident
The Vigorous Debate Over the and where the ultimate liability and risk
Liability Framework for Injuries ultimately falls,” explained Joe Schneider,
an insurance analyst with KPMG.33 David
Involving Autonomous Vehicles Strickland, a former NHTSA Administrator,
While heavy-handed regulation can quickly echoed this point: “There is going to be a
drive out autonomous vehicles, the area moment in time when there’s going to be
with the greatest potential “to derail a crash and it’s going to be undetermined
this important technology” is excessive who or what was at fault. . . . That’s where
litigation.29 Outsized liability, particularly the difficulty begins.”34
in the early development and deployment
stages, “could seriously undermine this States are beginning to tackle these liability
potentially unprecedented public health issues. California and Nevada law explicitly
success story.”30 It “could delay or even places liability for any accident on the
wipe out the vision of driverless cars “operator” of the autonomous vehicle,
gaining widespread consumer use.”31 defining the operator as the person behind
the controls or who “causes the technology
LIABILITY BASED ON A FAILURE IN THE to engage.”35 Under general tort law
HUMAN-CAR INTERFACE principles, the element of control is likely
The immediate question for Congress, to be determinative in other states as well.
state legislatures, and courts to decide is “Suppose you’re in a driverless car, and you
how to treat liability over the next twenty see that you’re about to rear-end another
or so years as society transitions to car. Whether you bear some responsibility
widespread use of fully-automated cars. for the crash may ultimately turn on the
During this period, humans and cars’ self- degree of control you had over the car. Could
driving technology will share the roads you have reasonably prevented the accident,
and responsibility and control over driving or not?”36 One question that has arisen is
decisions. Therefore, as the Brookings whether this test can be applied fairly when
Institution’s Center for Technology the human “driver” has a disability, such as
Innovation found in a 2014 study, there will blindness, and cannot take control.
be “complex questions of liability shared Other questions also arise: What happens
by both the human driver and autonomous if a driver falls asleep and the vehicle had
vehicle technology providers.”32 driver monitoring systems that failed to
“ While heavy-handed regulation can quickly drive out
autonomous vehicles, the area with the greatest potential ‘to derail
”
this important technology’ is excessive litigation.
9 Torts of the Futurewake up the driver? Can a driver legally result of human error absent a showing of a
rely on this feature (or lane or brake assist) defect in the autonomous vehicle?
and sue the manufacturer when the car
did not alert him or her of a hazard? Should
“
the driver be absolved of his or her own
negligence? Can a manufacturer be subject
to liability for not preventing an accident, Novel liability issues will
even though its technology did not cause arise when accidents occur
the harm?
between human drivers and
”
As a legal matter, complete reliance on
such prophylactic safety devices is likely autonomous cars.
to be seen as unreasonable. It also does
not make practical sense to subject
manufacturers to liability just because
their safety devices were not able to NEGLIGENCE VS. PRODUCT LIABILITY
prevent harm in every instance. Even Courts will be faced with determining
if a preventative safety device avoids the appropriate standard of care for
harm 20% of the time, it still offers evaluating whether an autonomous-vehicle
improved safety over vehicles without manufacturer is subject to liability for a
that technology. Excessive liability for the car accident. Traditionally, car accidents
remainder of the cases could delay their are assessed through the lens of driver
introduction or stop these technologies negligence, with the potential for product
from being improved over time. If the liability only when a defect in the car
device did not cause harm, there should causes the accident or is alleged to have
be no liability under commonsense and exacerbated the injuries. A manufacturer
traditional tort principles. has never had a duty “to design an
accident-proof or fool-proof vehicle.”38
Novel liability issues will arise when
accidents occur between human drivers Legal scholars suggest that negligence
and autonomous cars. For example, there should continue governing liability for car
may be differences between how humans accidents, whether due to the decision-
and autonomous cars drive.37 Autonomous making of autonomous vehicles or human
cars may be programmed to drive in 100% drivers. They explain that these situations
compliance with the law. They may drive differ from traditional product harms
at the speed limit on a highway where the because of the huge safety gains: “Holding
traffic customarily moves significantly faster, computer-generated torts to a negligence
come to a full stop and pause at a stop sign, standard will result in an improved outcome;
or stop at a yellow light where most drivers it will accelerate the adoption of automation”
would have continued through. People who and thereby reduce accidents.39
are unaccustomed to such “safe” driving
could rear-end an autonomous vehicle. A negligence assessment would focus on
Finally, when a fender bender involves whether the car’s decision or act showed a
a human driver and a fully-autonomous lack of due care under the circumstances,
vehicle, should the law recognize a not whether the computer was improperly
presumption that the accident occurred as a designed or marketed.40 In the accident
U.S. Chamber Institute for Legal Reform 10between Google’s autonomous car and the The RAND Corporation found that rather
bus, the inquiry would be whether it was than shift liability from the driver to the
negligent to merge into traffic given the auto manufacturer, as AAJ suggests, it
speed of the bus, distance between the would be more beneficial for drivers to
bus and car in front of it, and other such carry no-fault liability insurance.46 A dozen
factors. The car’s programming can then be states have used no-fault liability since
updated to account for any new information the 1970s. The benefit of this system is
gained as a result of the incident to help the that drivers maintain their own insurance
cars make better decisions going forward. and are compensated up to a certain level
regardless of whether anyone, including
“Personal injury attorneys fearing that their the driver, was legally at fault. Lessons can
business may dry up with the adoption be learned from current no-fault systems
of driverless cars,” however, are looking so that one can be tailored to autonomous
for ways to pursue “autonomous-vehicle cars to maximize efficiency.
makers and their deep pockets.”41 They
want to shift liability away from negligence Another option is for states or the federal
claims against drivers with liability government to establish a fund to
insurance limits to product liability lawsuits compensate those who are injured, much
targeting car manufacturers, software like the National Childhood Vaccine Injury
designers, and component makers.42 Fund. Congress established the Vaccine
Fund in 1986 when liability concerns
To this end, the American Association of threatened public health by jeopardizing
Justice (AAJ), the national plaintiffs’ lawyer access to vaccines. Under this system,
organization, issued a report in February anyone injured by a vaccine can apply to the
2017, advocating that manufacturers should Fund for fair compensation without having
bear the burden of car injuries.43 While to establish fault. The trust fund is financed
AAJ acknowledged the “revolutionary through a nominal ($0.75) excise tax on
impact” that so-called “robot cars” will each dose of vaccine routinely administered
have on public safety,44 it asserted that to children to prevent disease.47 As a
imposing strict liability on automakers “may result of the Fund, immunizations have
eventually be the most appropriate approach increased, supplies have remained stable,
to liability.”45 Under AAJ’s approach, and prices have decreased. A fund tailored
“manufacturers would accept responsibility to the autonomous car market could
for all crashes caused by their cars.46 have a comparable effect—assuring that
those who are injured in accidents receive
ALTERNATIVE LIABILITY THEORIES
compensation while not allowing excessive
The desire to provide compensation for
liability to impede the development and
people injured in autonomous cars without
advancement of technology that makes the
chilling the advancement of this life-
roads safer for everyone.
saving technology has led legal scholars
to consider alternatives to traditional tort Federal preemption of state tort claims in
liability. Two oft-mentioned options are no- conjunction with either of these no-fault
fault insurance and a victim compensation regimes “could speed the development
fund. Both have precedent and both can be and utilization of this technology and
shaped to address the specific needs of the should be considered, if accompanied by a
autonomous vehicle market. comprehensive federal regulatory regime.”48
11 Torts of the Future“ The desire to provide compensation for people injured in
autonomous cars without chilling the advancement of this life-
saving technology has led legal scholars to consider alternatives
”
to traditional tort liability.
The Road Forward error: “Whatever system fails, the car
should still have the ability to bring itself to
Consumers, manufacturers, and insurers a safe stop.”49
need to feel they are treated fairly in the
event of a crash. Developing confidence in Tesla has stated that it will accept liability if
the safety of autonomous vehicles and the an accident is “endemic to our design.”50
availability of a just remedy should an injury Tesla’s Elon Musk said that “point of views
occur is important to gaining acceptance of on autonomous cars are much like being
the new technology. stuck in an elevator in a building. Does the
Otis [Elevator Company] take responsibility
Understanding this need, some for all elevators around the world, no they
manufacturers have said that they will don’t.”51 But they do when an incident is
accept liability for accidents involving their their fault. Tesla has shared information
fully-autonomous cars. Erik Coelingh, with NHTSA showing that crash rates
Volvo’s senior technical leader for safety involving its vehicles dropped nearly 40%
and drive support technologies, explained since autopilot came online.52
that when the company’s fully-autonomous
system debuts as anticipated in 2020, its In the shortterm, courts will need to work
vehicles will include several redundancies through these thorny issues, and determine
to avoid accidents and eliminate human and allocate liability, on a case-by-case basis.
U.S. Chamber Institute for Legal Reform 12Commercial Use of Drones
In August 2016, the Federal Aviation Administration (FAA)
significantly lowered restrictions on the commercial use of small
unmanned aircraft systems (sUAS), also known as unmanned aerial
vehicles (UAVs) or drones.53 As a result, the agency predicts that the
number of drones registered for commercial use will expand from
20,000 prior to the new regulations to 600,000, a 30-fold increase,
within one year.54 By 2020, the FAA predicts 2.7 million commercial
drones, in addition to 4.3 million recreational drones, will be sold
annually.55 As drones fill the skies, courts are likely to experience a
surge of litigation resulting from accidents and privacy concerns.
Commercial use of drones has been them to get birds-eye videos of properties,
authorized since 2014, but, until recently, and they are helpful for inspecting and
restrictive FAA regulations kept them from monitoring buildings, cell phone towers,
widespread use. Commercial operators construction sites, and bridges.59 Ranchers
needed to have a manned aircraft pilot’s use drones to count cattle.60 Drones
license or obtain special case-by-case also help farmers with planting and crop
authorization from the agency, known rotation strategies.61 Drones are used by
as a “Section 333 exemption.”56 Before filmmakers, for firefighting, for search-and-
September 2016, the FAA approved over rescue work, and for academic research.62
5,500 of these exemptions based on They can be controlled by smartphone,
individual safety evaluations.57 (Separate iPad, or other device.
regulations govern use of drones for
Businesses that deliver goods are
recreational purposes.) Critics noted that
watching, waiting, and planning to take
the Section 333 exemption process was
advantage of the technology to serve
“cumbersome, lacked flexibility and often
their customers. Amazon and Google,
took many months,” posing a roadblock
for example, are developing and testing
to innovation.58
technology to deliver products purchased
Drones already have a variety of online by drone.63
commercial uses. They are popular for
In the northern Russian city of Syktyvkar,
aerial photography, real estate agents use
Dodo Pizza began deliveries by drone
13 Torts of the Futurein 2014.64 Even before that, however,
“
engineers from Yelp developed a prototype
“Burrito Bomber” that drops food via drone
with the aid of a parachute to fulfill app- FAA regulations that
placed customer orders.65 They planned
on starting deliveries in 2015, when they took effect on August 29, 2016,
anticipated that the FAA would lift tight mark a new era for commercial
”
restrictions on drone use. They are still
waiting to make deliveries by drone. drone use.
The New Drone Regulations
The FAA regulations that took effect on
August 29, 2016, mark a new era for
commercial drone use. They replace the
Section 333 exemption process with a rule
that broadly allows businesses to use small
drones in low-risk scenarios. No longer There continue to be significant limitations
does a drone operator need to obtain a on drone use, however. A drone must
traditional pilot’s license or obtain case- weigh less than 55 pounds, including
by-case approval from regulators. There is any item it is carrying.67 Flights cannot
now a new and simpler aviation knowledge go beyond the operator’s line of sight, be
exam and background check that results in conducted at night, go above 400 feet
a two-year remote-pilot certificate.66 in the air, or move at speeds faster than
100 miles an hour.68 All drones must be
registered with the FAA. Drone operators
TOP 5 MARKETS FOR can seek a waiver of most of these
restrictions, so long as they can show the
COMMERICAL DRONES operation can be conducted safely.69 The
agency encourages applicants to submit
a request at least 90 days before the
proposed operation.70 Operators can make
REAL ESTATE/ AGRICULTURE a request through quick submission of an
AERIAL 19% online form.71 The FAA has granted about
PHOTOGRAPHY 320 waivers since August 2016, with all but
22% a handful seeking to operate drones outside
of daylight hours.72 Time will tell whether
INSURANCE
15% the waiver process provides the flexibility
and speed that commercial operators seek.
INDUSTRIAL
INSPECTION By significantly reducing entry barriers and
42% restrictions, the new regulations are likely
GOVERNMENT to lead to an immediate rise in drone use
2% in some industries, such as insurance,
construction, and real estate.73 As a
practical matter, however, the line-of-sight
Source: FAA Aerospace Forecast: Fiscal Years 2016-2036, at 33 (2016). requirement and prohibition against flying
U.S. Chamber Institute for Legal Reform 14over people remain major obstacles for In addition, the FAA established a Drone
the use of drones in other areas, such as Advisory Committee (DAC) in July 2016,
by news organizations, law enforcement, tasking it with developing consensus-based
and companies that would like to make recommendations for regulatory priorities
deliveries. that “simultaneously promote innovation,
safety, efficiency and rapid integration”
Expanded Commercial Use on of drones into U.S. airspace.80 The group
the Horizon is led by Intel CEO Brian Krzanich. Its 35
members include representatives of the
As noted earlier, the FAA expects that media, airlines, aircraft manufacturers,
its new regulations will lead to a surge in aircraft pilots and owners associations,
commercial drone sales over the next three airports, traditional delivery companies,
years.74 The agency anticipates that two academics, Amazon, Google, Garmin, and
categories of small drones will emerge: Facebook.81 The FAA views the DAC as
low-end models, primarily for hobbyist and having an ongoing advisory role.82
recreational use, with an average sale price
of $2,500; and higher-end models, likely for The FAA has not set a timeline for
commercial use, with an average sale price addressing the use of drones to deliver
of $40,000.75 Low-end models are predicted products.83 To take this step, the FAA
to make up about 90% of the market.76 will need to allow drones to fly beyond
the operator’s visual line of sight.
The 2016 regulatory changes, however, are Accomplishing this goal may require
just the first steps in lowering barriers to technology to reduce the potential for mid-
commercial drone use. air collisions. NASA is reportedly developing
The FAA already has an effort underway technology that could provide air traffic
to develop a regulatory framework control for low-flying commercial drone
that would allow drones to operate over operations.84 The FAA is also working with
people not directly involved in the operation other agencies to test technology that
of the aircraft in certain conditions.77 The would detect unauthorized drones near
Aviation Rulemaking Committee (ARC), airports or critical infrastructure.85 The FAA
composed of a diverse range of aviation expects demand “to soar” once it allows
stakeholders, issued a final report to drones to fly beyond visual line of sight.86
the FAA on April 1, 2016.78 The ARC Some businesses would like to see the
recommended no restrictions for drones FAA move more quickly to make expanded
that weigh 250 grams or less (about one- commercial use of drones a reality. As
half pound). For larger drones, the ARC FAA Administrator Michael Heurta has
recommended risk-based standards for acknowledged, “innovation moves at the
flying over people. Drones over 250 grams speed of imagination, [while] government
would be placed into three categories, each has traditionally moved at, well, the speed
with additional restrictions, based on an of government.”87 Heurta indicated in
“impact-energy threshold” and the chance a speech to stakeholders that the FAA
of a serious injury. Though stakeholders is trying to move faster and maintain a
anticipated release of the drone-over-people “flexible regulatory approach.”88
rule in late 2016, the FAA is still considering
privacy and safety concerns as it prepares
the rule for public comment.79
15 Torts of the Future“ As FAA Administrator Michael Heurta has acknowledged,
‘innovation moves at the speed of imagination, [while] government
”
has traditionally moved at, well, the speed of government.’
The Potential for Overregulation does not own, as well as over any school,
hospital, place of worship, prison, or police
Drone makers expect that commercial use station, or using drones for surveillance
of drones will create more than 100,000 purposes.94 Violators are subject to a fine of
jobs and generate more than $82 billion for between $500 and $5,000, imprisonment for
the economy over the next decade.89 But up to 180 days, and seizure of the drone.95
overregulation of drone use could impede
innovation and pose a barrier to production. Although the Chicago ordinance was
adopted before the FAA finalized its new
While safety concerns necessitate some regulations governing small drones, the
degree of federal regulation of drones, ordinance appears to carve out operating a
there is a danger that state and local drone within the terms of an FAA-approved
government will impose additional layers waiver.96 Requirements to register drones
of regulations that could unnecessarily with the city, attach identification tags,
discourage businesses from using the and mandate drone operators to obtain
technology. According to the National insurance coverage naming the city as an
Conference of State Legislatures, 38 states additional insured were dropped from the
considered legislation related to drones in final ordinance.97
2016 and 18 states enacted new laws.90
Several major cities, such as Chicago, Los The following month, as the FAA continued
Angeles, and Miami, have also imposed to develop its new drone regulations,
restrictions in recent years.91 the FAA’s Office of the Chief Counsel
opined that a “patchwork quilt” of varying
Chicago became the first major city to restrictions on drone use could jeopardize
regulate drones in November 2015.92 Many the agency’s efforts. The FAA issued a Fact
of the provisions of the ordinance track the Sheet, finding that the proposed federal
FAA regulations, such as prohibiting drones framework preempts certain state and local
from flying near airports, higher than 400 laws “[t]o ensure the maintenance of a safe
feet, over people, outside the line of sight of and sound air transportation system and of
the operator, at night, or when the operator navigable airspace free from inconsistent
is under the influence of alcohol or drugs.93 restrictions.”98 The Fact Sheet provides
But the ordinance also imposes additional examples of local regulations that are not
operational restrictions. Absent the owner’s permissible without FAA approval, such as
consent, the ordinance broadly prohibits those that impose additional registration
flying drones over property the operator or training requirements, regulate altitude
U.S. Chamber Institute for Legal Reform 16“ [Governor Brown] expressed concern that a ‘patchwork of federal,
state, and local restrictions on airspace’ creates ‘significant regulatory
”
confusion. Piecemeal is not the way to go.’
or flight paths, or attempt to ban drones deputizing local law enforcement to issue
within the airspace of a city.99 The guidance citations for violations.107 Some states, such
document takes the position that states as Arizona, Delaware, and Rhode Island
and localities may continue to enact laws enacted legislation in 2016 preventing
regarding drone use that are related to localities from regulating drones.108 While
traditional state policy powers, such as laws local regulations may be well-intended,
protecting privacy or addressing use of they are particularly likely to create conflicts
drones by law enforcement.100 The FAA is with federal law and create a complex and
on solid legal ground in taking this position, burdensome regulatory environment.
as courts have consistently ruled that federal
It remains to be seen whether and to what
aviation regulations sufficiently demonstrate
extent courts find that FAA regulation of
Congressional intent to preempt the field of
drones preempts state and local laws.
aviation safety.101
Ultimately, Congress may need to take
California Governor Jerry Brown has heeded action so that companies can rely on one
the FAA’s position, vetoing several bills set of rules.
passed by the California General Assembly
“
in 2015 and 2016. These bills would have
imposed restrictions on flying drones
over property,102 prohibited drones from It remains to be seen
flying over parkland,103 and required drone whether and to what extent
makers to outfit products with geo-fencing
technology that prevents a drone from courts find that FAA regulation
entering restricted areas,104 among other of drones preempts state and
”
provisions. He expressed concern that
a “patchwork of federal, state, and local local laws.
restrictions on airspace” creates “significant
regulatory confusion.”105 “Piecemeal is not
the way to go,” declared Governor Brown.106 Liability Exposure
Nevertheless, cities continue to regulate While federal regulatory changes are
drones, including in Governor Brown’s own reducing the barriers to drone use, liability
state. San Diego is currently considering risks, including privacy concerns, remain a
an ordinance that would incorporate the hurdle to their wider commercial use. Tort
FAA’s regulations into its municipal code, litigation involving drones is on the horizon.
17 Torts of the Future“ When an accident occurs, plaintiffs’ lawyers are much more likely
to file a lawsuit when a drone is operated for commercial use—viewing
”
the owners as a deep pocket—than they are to target a hobbyist.
FAA INVESTIGATIONS AND FINES POTENTIAL TORT LIABILITY
Businesses operating drones must ensure As drones come into routine use, accidents
that they comply with FAA regulations. leading to litigation are inevitable. When
In addition to specific restrictions an accident occurs, plaintiffs’ lawyers are
on operations, the FAA’s new drone much more likely to file a lawsuit when a
regulations impose several broad legal drone is operated for commercial use—
duties. For example, operators must viewing the owners as a deep pocket—
maintain drones in condition for safe than they are to target a hobbyist.
operation,109 may not “[o]perate a drone
in a careless or reckless manner so as to NEGLIGENCE
endanger the life or property of another,”110 A 50-pound object—the equivalent of four
“[a]llow an object to be dropped in a to five bowling balls—moving as fast as a
manner that creates an undue hazard car, can result in serious injuries or property
to persons or property,”111 or operate a damage. A drone could crash as a result of
drone while under the influence of alcohol a distracted operator or a depleted battery.
or drugs.112 The regulations also require There is also the potential for a catastrophe
commercial drone operators to report any if, for example, an inexperienced or
serious injury to a person or damage to uninformed operator flies a drone above
property exceeding $500 within 10 days.113 the FAA’s height limitation or too close
to an airport, colliding with a plane. Even
Violations of the small-drone regulations before the FAA relaxed drone regulations,
are subject to the existing FAA process for the agency logged 1,200 reports of airlines
regulatory violations, which may include encountering drones in the air.117 On the
revocation of a certificate or civil penalties.114 other hand, a low-flying drone could distract
In January 2017, for example, the FAA drivers, contributing to a car accident.
announced a settlement agreement with
SkyPan International Inc. of Chicago, Businesses that operate drones will need
which specializes in aerial photography of to be prepared for negligence claims
property in urban areas for clients such as stemming from such accidents. Case law
developers.115 The FAA accused the firm of will set expectations of reasonable care in
operating drones in congested airspace over the drone context. Plaintiffs may attempt
Chicago and New York City. SkyPan agreed to use violations of FAA regulations to
to pay a $200,000 civil penalty to settle an establish negligence per se.
enforcement action in which the FAA sought
a $1.9 million fine.116
U.S. Chamber Institute for Legal Reform 18PRODUCT LIABILITY When courts consider product liability
Drone manufacturers should also anticipate claims, plaintiffs’ lawyers may urge judges
product liability lawsuits. Much like to view drone operations as “abnormally
automakers or aircraft manufacturers, dangerous activities.”121 Unlike ordinary
plaintiffs’ lawyers are likely to consider product liability claims, which are based
suing the company that made the drone by on fault, individuals or businesses that
alleging an aspect of the design or the lack conduct abnormally dangerous activities are
of a warning to the operator contributed to subject to absolute liability when an injury
an injury. For example, drones come with a or property damage occurs related to that
wide range of features (and price ranges), activity. This form of super-strict liability
some of which can reduce the potential applies only when an activity creates a
for a collision. Some products include a foreseeable and highly-significant risk
geo-fencing system that can prevent a of physical harm, even when the actor
drone from flying outside a specified area exercises reasonable care.122
or height. Manufacturers are developing
This doctrine does not apply to common
“sense and avoid” technology that can
activities, even though dangerous, such as
avoid crashing into trees, buildings, or other
driving cars, because such activities are not
obstacles.118 Eventually, the technology
deemed abnormal to their surroundings.
may help drones avoid mid-air collisions
Courts have applied it to activities such
with aircraft or other drones.
as blasting that throws debris or causes
As these technologies become more widely vibrations, damaging neighboring property,
available, manufacturers whose products or storing hazardous chemicals in a
do not incorporate state-of-the-art features residential area.123 Before drones come
may face product liability claims alleging into widespread use, plaintiffs’ lawyers
there was a safer alternative design. Such may argue for application of this rarely
lawsuits could threaten to make drones used doctrine. As commercial drone use
cost prohibitive by eliminating all but the becomes routine, the likelihood that a court
most advanced—and expensive—drones will consider it an abnormally dangerous
from the market. In addition, warnings activity will fall.
that accompany the drone will need to
“
sufficiently alert operators to the risks of
harm to themselves and others.119
Drone use will not only
Drone manufacturers may also face lawsuits
from third parties alleging that a drone raise negligence and product
operator would not have injured them or liability claims, but is likely to
damaged their property if the manufacturer
had provided better warnings or instructions spark significant trespass,
on how to safely fly a drone.120 Such claims nuisance, and invasion of
”
may challenge the adequacy of warnings on
the packaging, in the owner’s manual, and privacy litigation.
on the drone itself.
19 Torts of the FutureTRESPASS NUISANCE
Drone use will not only raise negligence Nuisance law requires judicial balancing of
and product liability claims, but is likely to the interests involved. Generally, a person
spark significant trespass, nuisance, and is subject to a private nuisance claim if his
invasion of privacy litigation. or her conduct invades another’s interest
in the private use and enjoyment of land
Drones typically rely on a mounted camera and if the invasion is intentional and
for navigation, which can capture images unreasonable.125 In determining whether an
or video of people in their backyards and invasion is “unreasonable,” courts consider
homes. Many drones are specifically used whether the gravity of harm to the property
for high-resolution photography. These owner outweighs the utility of the actor’s
cameras can intentionally or inadvertently conduct.126 Commercial use of drones could
peer into homes and backyards. give rise to a nuisance claim if, for example,
Trespass claims based on drone flights a company’s automated drones routinely
reopen the door to the age-old question follow a route directly above a certain
of where private property ends and the individual’s property to make deliveries
open sky begins. Traditionally, property law to others, essentially creating a drone
recognized cujus est solum, ejus est usque expressway above a person’s backyard.
ad coelum et ad infernos, which is Latin for The U.S. Supreme Court last addressed
“he who owns the soil also owns to the a case implicating these areas of law in
heavens and to the depths.”124 In modern 1946, when a North Carolina chicken farmer
times, the principle may apply in some
alleged that aircraft landing on a particular
circumstances (imagine a city building a
runway at an adjacent military airport passed
bridge directly over a house), but not others
just 63 feet above his barn and 67 feet
(such as an airplane flying over that house
above his home.127 The noise and light not
at 10,000 feet to a nearby airport). Drone only caused him loss of sleep and distress,
flights at a very low level above private but led to the death of his chickens, which
property may give rise to a trespass claim.
“ The Supreme Court explicitly did not
determine the ‘precise limits’ of airspace within ‘the
immediate reaches above the land,’ which is private
property, and airspace that falls within ‘the public
domain.’ Seventy-one years later, it has not
”
answered that question.
U.S. Chamber Institute for Legal Reform 20You can also read
