Category: Transportation

Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles: Implementing Effective Data Security

Autonomous vehicles can be vulnerable to cyber attacks, including those with malicious intent. Identifying an appropriate framework with policies and procedures will help mitigate the risk of a potential attack.

The National Highway Traffic Safety Administration (NHTSA) recommends a layered approach to reduce the likelihood of an attack’s success and mitigate ramifications if one does occur. NHTSA’s Cybersecurity Framework is structured around the five principles of identify, protect, detect, respond and recover, and can be used as a basis for developing comprehensive data security policies.

NHTSA goes on to describe how this approach “at the vehicle level” includes:

  • Protective/Preventive Measures and Techniques: These measures, such as isolation of safety-critical control systems networks or encryption, implement hardware and software solutions that lower the likelihood of a successful hack and diminish the potential impact of a successful hack.
  • Real-time Intrusion (Hacking) Detection Measures: These measures continually monitor signatures of potential intrusions in the electronic system architecture.
  • Real-time Response Methods: These measures mitigate the potential adverse effects of a successful hack, preserving the driver’s ability to control the vehicle.
  • Assessment of Solutions: This [analysis] involves methods such as information sharing and analysis of a hack by affected parties, development of a fix, and dissemination of the fix to all relevant stakeholders (such as through an ISAC). This layer ensures that once a potential vulnerability or a hacking technique is identified, information about the issue and potential solutions are quickly shared with other stakeholders.

Other industry associations are also weighing in on best practices, including the Automotive Information Sharing and Analysis Center’s (Auto-ISAC) seven Key Cybersecurity Functions and, from a technology development perspective, SAE International’s J3061, a Cybersecurity Guidebook for Cyber-Physical Vehicle Systems to help AV companies “[minimize] the exploitation of vulnerabilities that can lead to losses, such as financial, operational, privacy, and safety.”

Article By Adam J. Brody, John J. Rolecki, Jeffrey M. Stefan II, Andrea M. Gumushian, and Justin M. Wolber at Varnum LLP

For more transportation legal news, click here to visit the National Law Review.

© 2022 Varnum LLP

New Jersey Employers Are Now Required to Provide Written Notice Before Using Tracking Devices in Employee-Operated Vehicles

Earlier this year, New Jersey Governor Phil Murphy signed into law Assembly Bill No. 3950, which requires employers in the State to provide written notice to an employee before using a tracking device on a vehicle used by the employee. The new law, which went into effect on April 18, 2022, recognizes that employers may have a legitimate business interest in being able to track their workforce’s whereabouts—particularly when traveling or working offsite—while also reconciling that with the protection of workers’ privacy rights. At the very least, the days of covertly tracking employee vehicles appear to be a thing of the past.

The law defines “tracking device” as any “electronic or mechanical device which is designed or intended to be used for the sole purpose of tracking the movement of a vehicle, person, or device,” with a specific carveout for devices used solely for the purpose of documenting employee expense reimbursement.

Significantly, the written notice requirement applies to the use of tracking devices in any vehicles used by an employee. It does not matter whether it is an employee’s personal vehicle (whether owned or leased) or company-owned or provided. Written notice must be provided regardless.

Failure to comply with the law’s notice requirements can carry substantial penalties. An employer who knowingly makes use of a tracking device in a vehicle used by an employee without providing written notice to the employee shall be subject to a civil penalty up to $1,000.00 for the first violation, and then up to $2,500.00 for each subsequent violation. These fines can add up quickly, especially for service businesses with large vehicle fleets, among others. Additionally, it is possible that failure to comply with the law’s notice requirements may implicate employee privacy rights that could lead to further civil exposure.

Private employers within the State must ensure they have appropriate policies and procedures in place to comply with the new law’s requirements and insulate their businesses from potential liability for violations. While it does not specify what the required “written notice” must look like or how it must be conveyed to employees, at minimum employers should update their employee handbooks as well as provide a stand-alone, written notice to employees, with signed confirmation and acknowledgement of receipt. Additionally, rule and regulations regarding GPS tracking of employee vehicles may vary from state to state, so employers with a multi-state presence or service area need to be aware of the different laws that may apply to them depending on where their employees are working.

Employers who have not yet updated their forms and procedures should immediately contact counsel and take steps to ensure that they are in compliance. Similarly, it may be prudent for employers who drafted their own policies to have experienced employment counsel perform a policy or handbook review and provide advice and guidance regarding employer responsibilities and obligations, including but not limited to ensuring compliance with New Jersey’s new vehicle tracking device law.

COPYRIGHT © 2022, STARK & STARK
Article By Cory Rand with Stark & Stark.
For more articles about New Jersey Legislation, visit the NLR New Jersey law section.

Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles: Best Practices

Autonomous and connected vehicles, and the data they collect, process and store, create high demands for strong data privacy and security policies. Accordingly, in-house counsel must define holistic data privacy best practices for consumer and B2B autonomous vehicles that balance compliance, safety, consumer protections and opportunities for commercial success against a patchwork of federal and state regulations.

Understanding key best practices related to the collection, use, storage and disposal of data will help in-house counsel frame balanced data privacy policies for autonomous vehicles and consumers. This is the inaugural article in our series on privacy policy best practices related to:

  1. Data collection

  2. Data privacy

  3. Data security

  4. Monetizing data

Autonomous and Connected Vehicles: Data Protection and Privacy Issues

The spirit of America is tightly intertwined with the concept of personal liberty, including freedom to jump in a car and go… wherever the road takes you. As the famous song claims, you can “get your kicks on Route 66.” But today you don’t just get your kicks. You also get terabytes of data on where you went, when you left and arrived, how fast you traveled to get there, and more.

Today’s connected and semi-autonomous vehicles are actively collecting 100x more data than a personal smartphone, precipitating a revolution that will drive changes not just to automotive manufacturing, but to our culture, economy, infrastructure, legal and regulatory landscapes.

As our cars are becoming computers, the volume and specificity of data collected continues to grow. The future is now. Or at least, very near. Global management consultant McKinsey estimates “full autonomy with Level 5 technology—operating anytime, anywhere” as soon as the next decade.

This near-term future isn’t only for consumer automobiles and ride-sharing robo taxis. B2B industries, including logistics and delivery, agriculture, mining, waste management and more are pursuing connected and autonomous vehicle deployments.

In-house counsel must balance evolving regulations at the federal and state level, as well as consider cross-border and international regulations for global technologies. In the United States, the Federal Trade Commission (FTC) is the regulatory agency governing data privacy, alongside individual states that are developing their own regulations, with the California Consumer Privacy Act (CCPA) leading the way. Virginia and Colorado have new laws coming into effect in 2022, the California Privacy Rights Act comes into effect in 2023, and a half dozen more states are expected to enact new privacy legislation in the near future.

While federal and state regulations continue to evolve, mobility companies in the consumer and B2B mobility sectors need to make decisions today about their own data privacy and security policies in order to optimize compliance and consumer protection with opportunities for commercial success.

Understanding Types of Connected and Autonomous Vehicles

Autonomous, semi-autonomous, self-driving, connected and networked cars; in this developing category, these descriptions are often used interchangeably in leading business and industry publications. B2B International defines “connected vehicles (CVs) [as those that] use the latest technology to communicate with each other and the world around them” whereas “autonomous vehicles (AVs)… are capable of recognizing their environment via the use of on-board sensors and global positioning systems in order to navigate with little or no human input. Examples of autonomous vehicle technology already in action in many modern cars include self-parking and auto-collision avoidance systems.”

But SAE International and the National Highway Traffic Safety Administration (NHTSA) go further, defining five levels of automation in self-driving cars.

Levels of Driving Automation™ in Self-Driving Cars

 

 

Level 3 and above autonomous driving is getting closer to reality every day because of an array of technologies, including: sensors, radar, sonar, lidar, biometrics, artificial intelligence and advanced computing power.

Approaching a Data Privacy Policy for Connected and Autonomous Vehicles

Because the mobility tech ecosystem is so dynamic, many companies, though well intentioned, inadvertently start with insufficient data privacy and security policies for their autonomous vehicle technology. The focus for these early and second stage companies is on bringing a product to market and, when sales accelerate, there is an urgent need to ensure their data privacy policies are comprehensive and compliant.

Whether companies are drafting initial policies or revising existing ones, there are general data principles that can guide policy development across the lifecycle of data:

Collect

Use

Store

Dispose

Only collect the data you need

Only use data for the reason you informed the consumer

Ensure reasonable data security protections are in place

Dispose the data when it’s no longer needed

Additionally, for many companies, framing autonomous and connected vehicle data protection and privacy issues through a safety lens can help determine the optimal approach to constructing policies that support the goals of the business while satisfying federal and state regulations.

For example, a company that monitors driver alertness (critical for safety in today’s Level 2 AV environment) through biometrics is, by design, collecting data on each driver who uses the car. This scenario clearly supports vehicle and driver safety while at the same time implicates U.S. data privacy law.

In the emerging regulatory landscape, in-house counsel will continue to be challenged to balance safety and privacy. Biometrics will become even more prevalent in connection to identification and authentication, along with other driver-monitoring technologies for all connected and autonomous vehicles, but particularly in relation to commercial fleet deployments.

Developing Best Practices for Data Privacy Policies

In-house counsel at autonomous vehicle companies are responsible for constructing their company’s data privacy and security policies. Best practices should be set around:

  • What data to collect and when

  • How collected data will be used

  • How to store collected data securely

  • Data ownership and monetization

Today, the CCPA sets the standard for rigorous consumer protections related to data ownership and privacy. However, in this evolving space, counsel will need to monitor and adjust their company’s practices and policies to comply with new regulations as they continue to develop in the U.S. and countries around the world.

Keeping best practices related to the collection, use, storage and disposal of data in mind will help in-house counsel construct policies that balance consumer protections with safety and the commercial goals of their organizations.

A parting consideration may be opportunistic, if extralegal: companies that choose to advocate strongly for customer protections may be afforded a powerful, positive opportunity to position themselves as responsible corporate citizens.

© 2022 Varnum LLP
For more articles about transportation, visit the NLR Public Services, Infrastructure, Transportation section.

Do You Qualify to File an NHTSA Whistleblower Lawsuit?

The National Highway Traffic Safety Administration (NHTSA) recently established a whistleblower program to address safety concerns regarding motor vehicle defects, violations of the Federal Motor Vehicle Safety Standards, and violations of the Vehicle Safety Act. Like other qui tam lawsuits, NHTSA whistleblowers who come forward with valuable information regarding motor vehicle safety violations may be rewarded with significant financial compensation for their bravery.

What Issues Can Be Reported Under the NHTSA Whistleblower Program?

NHTSA whistleblowers may be eligible to receive a financial reward for reporting safety violations, including:

  • Potential vehicle safety defects: Examples include engine failure, defective airbags, and faulty breaks.

  • Noncompliance with Federal Motor Vehicle Safety Standards: These are U.S. federal regulations regarding the design, construction, performance, and durability requirements for motor vehicles sold in America.

  • Violations of the Motor Vehicle Safety Act: This law requires motor vehicle manufacturers to follow certain safety standards to reduce the likelihood of accidents.

  • Violations of any motor vehicle safety reporting requirements

Who Can Become a NHTSA Whistleblower?

According to the NHTSA, any employee or contractor who works for a motor vehicle manufacturer, a motor vehicle parts supplier, or a motor vehicle dealership is eligible to become a whistleblower and receive protections under the Vehicle Safety Whistleblower Act.

Why Should I File a Whistleblower Lawsuit?

Employees with inside information regarding vehicle safety defects or the violation of safety regulations can play a critical role in keeping our nation’s roads safer. Additionally, NHTSA whistleblowers who offer valuable information that leads to a settlement are entitled to a portion of the recovery as a financial reward. Employees of motor vehicle manufacturers who become whistleblowers are also protected from retaliation from their employers and their identities are kept hidden.

How Are NHTSA Whistleblowers Protected?

Under the Vehicle Safety Act, motor vehicle manufacturers, parts suppliers, and dealerships are prohibited from retaliating against an employee for becoming an NHTSA whistleblower or for refusing to participate in actions that violated safety regulations. If retaliation does occur, a complaint should be made to OSHA who will further investigate the complaint.

Additionally, the U.S. Department of Transportation and NHTSA in most cases are not permitted to share any details that would disclose the identity of a whistleblower.

How Are NHTSA Whistleblowers Rewarded?

If a whistleblower shares information regarding safety defects or safety regulation violations that leads to a successful NHTSA whistleblower lawsuit, the whistleblower could be rewarded financially. Whistleblowers may receive between 10 and 30 percent of what the U.S. Department of Transportation collects from the defendant vehicle manufacturer, parts supplier, or dealership. In many cases, whistleblowers who come forward about a corporation’s illegal activities or fraud receive a significant financial reward.

Successful NHTSA Whistleblower Lawsuits

Last year, Kia Motors America agreed to pay civil penalties worth $70 million for failing to issue a timely recall for an engine crankshaft defect in certain vehicles as well as for inaccuracies in defect and compliance reports. According to the NHTSA, the defect could have potentially led to engine stalling.

Hyundai Motors agreed to pay $140 million in civil penalties last year for failing to issue timely recalls regarding a potential fuel leak that could have occurred due to a low-pressure fuel hose. Heat could have caused the fuel hose to crack over time creating an engine fire hazard.

In 2020, Daimler Trucks North America agreed to $30 million in civil penalties for violations of the Vehicle Safety Act related to a number of untimely recalls. One of the recalls involved a brake light failure that could have potentially increased the risk of an accident.

© 2022 by Tycko & Zavareei LLP
For more content about whistleblowers, visit the NLR White Collar Crime & Consumer Rights section.

Court Rejects Use of Eminent Domain for Recreational Trail

There has been a major development in the ongoing legal fight over the ability of the Mill Creek Metropolitan Park District in Mahoning County to condemn private property for its bikeway project.

While previous efforts to stop the bikeway focused on a newly passed state law providing that a park district cannot take property for a recreational trail in counties with populations of a certain size (i.e., the size of Mahoning County), the property owner in The Board of Commissioners of the Mill Creek Metropolitan Park District v. Hess tried a different tack, arguing that the statute authorizing park districts to take private property by eminent domain (Ohio Revised Code 1545.11) did not permit a taking for a recreational trail. Rather, it only permits such a taking for “conversion into forest reserves and for the conservation of the natural resources of the state.”

Although the trial court was not persuaded by this argument, the Seventh District Court of Appeals was. The Court of Appeals focused its analysis on whether the taking was to conserve natural resources, ultimately concluding it was not, despite the expansive definition of what constitutes a “natural resource,” i.e., any natural element of feature that supplies human needs; contributes to the health, welfare, and benefit of a community; and is essential for the well-being of such community and the proper enjoyment of its property.

In reaching its decision, the Court found it significant that another section of the Ohio Revised Code expressly empowers the Department of Natural Resources to condemn property for recreational trails. Based on this explicit statutory authorization, the Court was unwilling to read an implied authorization to exercise eminent domain for the same purpose into R.C. 1545.11.

The Court’s ruling was also influenced by the fact that the land at issue was in “a rural area where it appears the public need is speculative at best and the harm to the private property owners is great.”

Finally, the Court pointed out that the purpose of public recreation was not sufficient to authorize the Park District to take private property, reasoning that simply because something provides recreation does not mean it constitutes the conservation of natural resources. In this regard, the Court analogized the recreational trail at issue to movie theaters, shopping malls, and bowling alleys.

Based on these considerations, the Court held that the resolutions to appropriate passed by the Park District were insufficient because they did not include any language tying the demand for the recreational trail to the conservation of natural resources. The Court further held that the Park District abused its discretion by filing an eminent domain lawsuit. Accordingly, the Court remanded the case to the trial court with instructions to enter judgment in favor of the property owner.

The Hess case demonstrates the well-established principle that statutory delegations of the power of eminent domain must be strictly construed in favor of property owners, and is a reminder to all eminent domain practitioners that the legal authority for a proposed taking must be closely scrutinized.

©2022 Roetzel & Andress
For more content about city planning, visit the NLR Public Services, Infrastructure & Transportation section.

FTC Imposes Record-Setting $10M Fine Against Multistate Auto Dealer, Settling Charges of Racial Discrimination and Unauthorized Charges

On March 31, the FTC and Illinois State Attorney General announced a settlement of charges against a large, multistate auto dealer that allegedly discriminated against black consumers and included illegal junk fees for unwanted “add-ons” in customers’ bills.

Citing violations under the FTC Act, TILA, ECOA, and comparable Illinois laws, the complaint alleged that eight of the dealerships and two general managers of Illinois dealerships tacked on illegal fees for unwanted products to customers’ bills, often at the end of hours-long negotiations. These add-ons were allegedly buried in the consumers’ purchase contracts, which were sometimes upwards of 60-pages long, and sometimes added despite consumers specifically declining the products.

In addition, employees of the auto dealership also allegedly discriminated against black consumers during the process of financing vehicle purchases.  On average, black customers at the dealerships were charged $190 more in interest and paid $99 more for similar add-ons than comparable non-Latino white customers.

The multistate dealer will have to pay $10 million to settle the lawsuit per the stipulated order, the largest monetary judgment ever required in an FTC auto lending case.

Putting it into Practice:  From FTC Chair Lina Khan and Commissioner Rebecca Slaughter, the FTC appears poised to allege violations of the FTC Act’s prohibition on unfair acts or practices in light of discrimination found to be based on disparate treatment or having a disparate impact.  Their statement discusses how discriminatory practices can be evaluated under the FTC’s three-part unfairness test and concludes that such conduct fits squarely into the kind of conduct that can be addressed by the FTC’s unfairness prong.  This joint statement echoes similar announcements by CFPB Director Chopra about the use of unfairness to combat discrimination more broadly (we discussed Director Chopra’s statement and updates to the CFPB’s exam procedures in a recent Consumer Finance and FinTech blog post here).

The size of the financial judgment in this case underscores the seriousness with which the FTC takes discriminatory practices in consumer credit transactions entered into by entities over which they have authority, which includes auto dealerships.  As the FTC becomes increasingly focused on enforcement of key laws to protect consumers against discriminatory conduct, companies should use these latest agency pronouncements as a reason to be on high alert for potential discriminatory outcomes in their business activities, even if unintentional.

Article By Moorari Shah, A.J. S. Dhaliwal, and Katie Daw of Sheppard, Mullin, Richter & Hampton LLP

For more antitrust legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.

Vehicle Sales Continue Their Depression

Anyone want to buy a vehicle? A better question might be: anyone got a vehicle for sale? Whether because of supply side issues, demand side issues, other issues, or all of the above, the fact remains that the first quarter of 2022 was not a good quarter for vehicle sales.  Just ask the manufactures who saw double digit drops in new light-vehicle sales: 23% for Honda; 20% for GM; 17% for Ford; 15% for Toyota; and 14% for Stellantis. While the numbers sound like doom and gloom, the manufacturers were not dour. Honda was quite positive about its numbers, noting that demand was strong and they just could not make enough vehicles to sell more, “we’re riding a bit of a roller coaster due to fluctuating parts supply issues, but strong March sales for Honda and Acura speak to the fact that demand remains strong and our retail deliveries are based primarily on what we can supply to our dealers.”

Some other interesting tidbits from sales data:

As a result, LMC Automotive and Cox Automotive each reduced their full-year U.S. light-vehicle sales forecast to 15.3 million units, citing a slower pace to recovery from market constraints. LMC referred to inventory levels as “critically low.”  Cox led its report by noting that not only are inventories low, but prices are high and sales incentives have vanished (note – this is how that entire supply/demand thing works).  Cox laid it all at the feet of supply: “Auto sales will basically be stuck at the current level until more supply arrives.”

Globally, the pandemic is not over. This continues to have the potential to drastically impact global vehicle volumes, especially in China. Global vehicle production could lose up to 1.5 million units this year if China’s COVID-Zero policy is maintained, according to estimates from Fitch Solutions quoted in Bloomberg. Most recently, phased lockdowns in Shanghai in response to COVID-19 outbreaks disrupted production for several major automakers and suppliers.

Add to that, the ongoing microchip shortage (for which no end appears in sight) is causing production downtime at various plants: Jeep production at Stellantis’ Mack Assembly plant in Detroit and Belvidere Assembly plant in Illinois; Chevrolet Silverado 1500 and GMC Sierra 1500 production at GM’s Fort Wayne Assembly plant; and Mustang production at Ford’s Flat Rock Assembly plant. Let’s not forget the war in Ukraine, leading to German automakers potentially losing up to 150,000 units of production in March due to supply disruptions.

Oddly, the industry feels both healthy (revenue, profits, margins, etc.) and stressed with an unceratin future (see above) all at the same time.  Also oddly, but strangely not so oddly, nothing about this situation feels new.  Is this the new normal?

Article By Jeffrey A. Soble of Foley & Lardner LLP

For more transportation legal news, click here to visit the National Law Review.

© 2022 Foley & Lardner LLP

EV Buses: Arriving Now and Here to Stay

In the words of Miss Frizzle, “Okay bus—do your stuff!”1 A favorable regulatory environment, direct subsidy, private investment, and customer demand are driving an acceleration in electric vehicle (EV) bus adoption and the lane of busiest traffic is filling with school buses. The United States has over 480,000 school buses, but currently, less than one percent are EVs. Industry watchers expect that EV buses will eventually become the leading mode for student transportation. School districts and municipalities are embracing EV buses because they are perceived as cleaner, requiring less maintenance, and predicted to operate more reliably than current fossil fuel consuming alternatives. EV bus technology has improved in recent years, with today’s models performing better in cold weather than their predecessors, with increased ranges on a single charge, and requiring very little special training for drivers.2 Moreover, EV buses can serve as components in micro-grid developments (more on that in a future post).

The Investment Incline

Even if the expected operational advantages of EV buses deliver, the upfront cost to purchase vehicles or to retrofit existing fleets remains an obstacle to expansion.  New EV buses price out significantly more than traditional diesel buses and also require accompanying new infrastructure, such as charging stations.  Retrofitting drive systems in existing buses comparatively reduces some of that cost, but also requires significant investment.3

To detour around these financial obstacles, federal, state, and local governments have made funding available to encourage the transition to EV buses.4 In addition to such policy-based subsidies, private investment from both financial and strategic quarters has increased.  Market participants who take advantage of such funding earlier than their competitors have a forward seat to position themselves as leaders.

You kids pipe down back there, I’ve got my eyes on a pile of cash up ahead!

Government funding incentives for electrification are available for new EV buses and for repowering existing vehicles.5 Notably, the Infrastructure Investment and Jobs Act committed $5 billion over five years to replace existing diesel buses with EV buses. Additionally, the Diesel Emissions Reduction Act provided $18.7 million in rebates for fiscal year 2021 through an ongoing program.

In 2021, New York City announced its commitment to transition school buses to electric by 2035.  Toward that goal, the New York Truck Voucher Incentive Program provides vouchers to eligible fleets towards electric conversions and covers up to 80% of those associated costs.6  California’s School Bus Replacement Program had already set aside over $94 million, available to districts, counties, and joint power authorities, to support replacing diesel buses with EVs, and the state’s proposed budget for 2022-23 includes a $1.5 billion grant program to support purchase of EV buses and charging stations.

While substantial growth in EV bus sales will continue in the years ahead, it will be important to keep an eye out for renewal, increase or sunset of these significant subsidies.

Market Players and Market Trends, OEMs, and Retrofitters

The U.S is a leader in EV school bus production:  two of the largest manufacturers, Blue Bird and Thomas Built (part of Daimler Truck North America), are located domestically, and Lion Electric (based in Canada) expects to begin delivering vehicles from a large facility in northern Illinois during the second half of 2022.  GM has teamed up with Lighting eMotors on a medium duty truck platform project that includes models prominent in many fleets, and Ford’s Super Duty lines of vehicles (which provide the platform for numerous vans and shuttle vehicles) pop up in its promotion of a broader electric future. Navistar’s IC Bus now features an electric version of its flagship CE series.

Additionally, companies are looking to a turn-key approach to deliver complete energy ecosystems, encompassing vehicles, charging infrastructure, financing, operations, maintenance, and energy optimization. In 2021, Highland Electric Transportation raised $253 million from Vision Ridge Partners, Fontinalis Partners (co-founded by Bill Ford) and existing investors to help accelerate its growth, premised on a turn-key fleet approach.7

Retrofitting is also on the move.  SEA Electric (SEA), a provider of electric commercial vehicles, recently partnered with Midwest Transit Equipment (MTE) to convert 10,000 existing school buses to EVs over the next five years.8 MTE will provide the frame for the school uses and SEA will provide its SEA-drive propulsion system to convert the buses to EV.9 In a major local project, Logan Bus Company announced its collaboration with AMPLY Power and Unique Electric Solutions (UES) to deploy New York City’s first Type-C (conventional) school bus.10

Industry followers should expect further collaborations, because simplifying the route to adopting an EV fleet makes it more likely EV products will reach customers.

Opportunities Going Forward

Over the long haul, EV buses should do well. Scaling up investments and competition on the production side should facilitate making fleet modernization more affordable for school districts while supporting profit margins for manufacturers. EVs aren’t leaving town, so manufacturers, fleet operators, school districts and municipalities will either get on board or risk being left at the curb.

Article By Michael J. Small and Samantha Ruppenthal at Foley & Lardner LLP

For more utilities and transportation legal news, click here to visit the National Law Review.

 

 

1https://shop.scholastic.com/parent-ecommerce/series-and-characters/magic-school-bus.html

2https://www.busboss.com/blog/having-an-electric-school-bus-fleet-is-easier-than-many-people-think

3https://thehill.com/opinion/energy-environment/570326-electric-school-bus-investments-could-drive-us-vehicle

4https://info.burnsmcd.com/white-paper/electrifying-the-nations-mass-transit-bus-fleets

5https://stnonline.com/partner-updates/electric-repower-the-cheaper-faster-and-easier-path-to-electric-buses/

6https://www1.nyc.gov/office-of-the-mayor/news/296-21/recovery-all-us-mayor-de-blasio-commits-100-electric-school-bus-fleet-2035

7https://www.bloomberg.com/press-releases/2021-02-16/highland-electric-transportation-raises-253-million-from-vision-ridge-partners-fontinalis-partners-and-existing-investors

8https://www.electrive.com/2021/12/07/sea-electric-to-convert-10k-us-school-buses/#:~:text=SEA%20Electric%20and%20Midwest%20Transit,become%20purely%20electric%20school%20buses.

9 Id.

10https://stnonline.com/news/new-york-city-deploys-first-type-c-electric-school-bus/

© 2022 Foley & Lardner LLP

Ongoing Canadian Protests Shine Spotlight on Ripple Effect of Supply Chain Disruptions

Although the last two years have seen a nearly never-ending line of supply chain impacts for manufacturers, the latest disruption is also serving to shine a spotlight on the broader impact that relatively small disruptions in the supply chain can have on the global economy.  We all know that trucking is a critical component of the economy.  The U.S. estimates seventy two percent of goods in the U.S. travel by truck.  Trucking has become even more important in this era of increased deliveries and backlogs at ports and other logistics hubs.

In Canada, what began as protests by truckers regarding certain pandemic-related restrictions and mandates have snowballed into broader protests and blockages of roads, bridges, and border crossings.

Protesters have been blocking various bridges and roads in Canada in protest of certain pandemic-related restrictions and mandates.  On Tuesday, the bridge connecting Windsor, Ontario to Detroit (a critical linkage for cross-border travel) was largely blocked, with traffic stopped going into Canada and slowed to a trickle going into the United States. The blockades are now leading U.S. automakers to begin trimming shifts and pausing certain operations in their Michigan and Canadian plants. The bridge protests and automakers’ reduction in capacity continued on Thursday without an end in sight.

The ongoing protests in Canada have also served as a reminder of how seemingly local trucking disruptions in one country can cascade through the supply chain.  This is not the first time that trucking strikes and blockages have rippled through the supply chain and economy.  In 1996, a truckers’ strike in France lasted 12 days, barricading major highways and ultimately leading to concessions from the French government over certain worker benefits and hours.  The resulting agreement led to heightened tensions with Spain, Portugal, and Great Britain due to the impact felt across borders.  In 2008, truckers went on strike in Spain and blocked roads and border crossings, protesting fuel prices.  In 2018, truckers in Brazil staged a large strike and protest that lasted for 10 days, blocking roads, disrupting food and fuel distribution, canceling flights, and causing certain part shortages for automakers.

The ongoing protests in Canada have similarly expanded from Ottawa to the current blockage of border crossings, further raising their profile internationally as they begin to impact global trade.  It remains to be seen how the blockades and protests will resolve, as leaders call for de-escalation and re-opening of roads and crossings.  However, the ripple effects of what started as a localized protest will continue to be felt far beyond Canada’s borders.

Article By Lauren M. Loew of Foley & Lardner LLP

For more COVID-19 and supply chain legal news, click here to visit the National Law Review.

© 2022 Foley & Lardner LLP

How Many Whistleblowers Does It Take to Make Flying Safe?

Answer: at least seven. Seven whistleblowers who are either current or former employees of the Federal Aviation Administration (FAA), Boeing, and GE came forward to the U.S. Senate Committee on Commerce, Science, and Transportation (“Committee”) to report safety issues related to “aircraft safety and certification environment at the FAA and within the industry.” In response to these whistleblowers sharing their experiences as aviation industry engineers and the safety issues they observed, the Committee drafted the Aircraft Certification, Safety, and Accountability Act, which was enacted in December 2020.

Whistleblowers initially reported concerns to the Committee following two Boeing 737 MAX-8 catastrophes in 2018 and 2019, incidents which the Committee investigated extensively. The Aircraft Certification, Safety, and Accountability Act extended Federal whistleblower protections to employees, contractors, and suppliers of aircraft manufacturers. Since the passage of the Act, whistleblowers continued to engage with the Committee, alerting the Committee to continuing issues within the aviation industry.

According to the December 2021 “Aviation Safety Whistleblower Report” from the Democratic staff of the Committee, the major issues whistleblowers highlighted include:

Undue pressure on line engineers and production staff

  • One of the whistleblowers reported being in an “untenable position” of both having to test for the FAA and prepare aircraft engines to pass the FAA’s tests.

Line engineers with technical expertise ignored

  • Engineers who raised safety concerns and supply chain non-compliances at Boeing were “sidelined.”

Boeing oversight office in Seattle lacks enough safety engineers

  • Office was “chronically understaffed with only 25 engineers and technical project managers to oversee approximately 1,500 Boeing engineers who act on behalf of FAA.”

FAA certification processes do not require compliance with latest airworthiness standards

  • One whistleblower pointed out that the FAA was using “dated airworthiness standards” to certify aircraft safety and that some issues were “creatively hidden or outright withheld” from the FAA.

FAA’s strong oversight eroded under the Organization Design Authorization (ODA) program

  • The report alleges that the FAA has “over time, increasingly delegated away its authority” which leads to “safety issues at significant costs” in human lives and reputational harm.

FAA and industry struggle with technical engineering capacity necessary for complex aircraft systems

  • Automation in aviation manufacturing presents new safety challenges and demands “a significant amount of technical knowledge at the FAA,” said one of the whistleblowers.

If You See Something, Say Something

Fortunately, the whistleblowers offered recommendations for actions the FAA could take to implement fully the key provisions of the Aircraft Certification, Safety, and Accountability Act. They proposed more direct supervision of ODA staff by the FAA and that the FAA should ensure engineers with sufficient technical expertise are part of Boeing’s Aviation Safety Oversight Office (BASOO). As the whistleblowers pinpointed that some of the safety issues with the Boeing 737 MAX-8 may have stemmed from rushed production schedules and “undue pressure,” they recommended a review of Boeing’s safety culture. Other sections of the Aircraft Certification, Safety, and Accountability Act that the whistleblowers allege FAA has not yet addressed include: requiring that aviation manufacturers implement safety management systems, limiting delegation of certain safety tasks, performing an annual safety culture assessment within the Administration, and mandating an “integrated aircraft safety analysis of designs.”

These whistleblowers are a prime example of industry insiders using their expertise to highlight safety issues and possible wrongdoing that affect taxpayers (funding the FAA) and consumers (everyone who flies on an airplane). The Committee’s report notes, “Whistleblowers perform a critical public service by exposing wrongdoing in the government and private sector.” Aviation manufacturing insiders with information about safety violations are encouraged to step forward, as they can help thwart wrongdoing and preserve the future of safe air travel.

This article was written by Eva Gunasekera and Renee Brooker  of Tycko & Zavareei law firm. For more articles about whistleblowing, please click here.