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The California Department of Motor Vehicles indicated this week that an updated set of proposed rules for self-driving cars would only require companies that test self-driving cars to notify local authorities about when the testing would occur, but need not ask for permission. Peter Sweatman, predicted that fully autonomous cars will probably be in use for ride-sharing and parcel delivery within 18 months, and according to the California Department of Motor Vehicles, forty-two companies are already testing 285 autonomous vehicles with backup drivers on California roads. Current California rules require a human driver as backup on public roads; however, the updated set of proposed rules may not include a human driver requirement. This disclosure should concern interested parties from several different viewpoints.

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First, safety concerns of pedestrians and other drivers on the road should be the primary focus of inquiry where autonomous vehicles are operated without human oversight. Not only does all technology inevitably malfunction, but the hacking of new technologies has become increasingly prevalent in today’s society. The hacking of consumer data and personal information has been the primary focus recently, but that could change if hackers are given a new target with no human fail-safe in place. For example, the malfunction of a navigation system of an eighteen-wheeler could result in numerous fatalities, particularly in California where the roads are consistently congested. The consequences are largely speculative at this point, but if commercial vehicles full of consumer goods are entirely autonomous, it is plausible to suggest that hackers could enter the vehicles navigation system and alter destinations, or cause the vehicle to crash and destroy the vehicles payload. Such an accident would be widely publicized and would likely have significant impacts on a company’s stock.

One of the leading international manufacturers of motorcycles has been sued by an injured motorcyclist following a crash allegedly resulting from Harley Davidson’s failure to warn Kenneth LaMountain about a defect in the cooling line system. More specifically, Mr. LaMountain, the plaintiff, crashed while operating his Harley Davidson motorcycle after the engine oil cool line line system malfunctioned, causing oil to leak onto the rear tire resulting in the motorcycle crashing and injuring the plaintiff.

There are several different legal doctrines upon which a products liability claim can be based. The first, a manufacturing defect, alleges that the motorcycle part in question was faulty or failed to conform with the specifications of how the part was normally designed and manufactured. Thus, when alleging a manufacturing defect, the plaintiff must prove that the product is more dangerous than a consumer would reasonably expect when using the product in its intended manner, or that the product is in a condition not intended by the manufacturer and the defect existed at the time it left the defendant’s hands. Moreover, the law imposes strict liability upon manufacturers where a product is in an unreasonably dangerous defective condition, meaning that any plaintiff who is a user, consumer or bystander injured while using a defective product may recover damages. Strict liability differs from a negligence action where a plaintiff must prove that the defendant owed plaintiff a duty, the defendant breached that duty, and the plaintiff suffered injuries as a proximate result of the defendant’s breach. Here, the complaint alleges that Harley Davidson should be held strictly liable for a manufacturing defect, as the oil clamps were in a flawed condition when it left the manufacturer’s control.

The second legal doctrine is failure to warn, where the plaintiff must show that the defendant breached its duty to warn about risks of which it knew or should have known. Typically, a plaintiff will show that the injury is attributable to the defendant by showing that the defect that injured the plaintiff was in existence at the time it left the defendant’s control. The general requirement that the plaintiff show that the defect was in existence at the time it left the defendant’s control is likely why the plaintiff brought the duty to warn claim in the suit against Cowboy Motorsports, the distributor, rather than the manufacturer. In this case, absent clear evidence, the plaintiff will likely be unable to prove that the manufacturer, Harley Davidson, knew or should have known about the risk. Thus, the plaintiff’s attorney brought this duty to warn against the party against whom he was more likely to prevail.

Automobile body shops filed several complaints against insurance companies, including State Farm, alleging violations of state tort law as well as violations of the Sherman Act’s antitrust laws, which prohibit certain anti-competitive conduct. The claims were based upon allegations that that the insurance companies engaged in a two-tiered scheme designed to depress the shops’ rates for automobile repair. First, according to the allegations, the insurance companies scheme was designed to set an artificial price, or “market rate.” The second part of the scheme was designed to force the body shops into accepting the artificially set rate by steering the insureds who sought automotive repairs away from the non-compliant shops that charged more than the artificial rate. The lower court initially dismissed the complaint for failure to state a claim upon which relief may be granted, based upon an assertion that the automobile body shops failed to plead facts that directly supported the existence of a violation of antitrust laws. The Court of Appeals reversal of the dismissal was due in part to the standard of review for dismissal for failure to state a claim, which requires the court to accept factual allegations as true and draw all reasonable inferences in favor of the claimant, and viewed in the light most favorable to the plaintiffs.

The first part of the scheme was essentially a horizontal price fixing agreement, where competitors unlawfully came together to form an agreement to set a price at which all agreed to sell a good or service. The Sherman Act makes unlawful “any unreasonable contract, combination, or conspiracy in the restraint of interstate trade or commerce. As stated above, the body shops plead facts supporting the circumstances from which the shops infer the existence of an agreement, rather than facts that directly supported the existence of the agreement. The circumstances pled by the body shops demonstrated parallel conduct, adoption of a uniform price, and uniform practices. When pleading antitrust violations based upon a horizontal price fixing agreement, plaintiffs usually must demonstrate that such a contract or conspiracy is unreasonable and anticompetitive, otherwise known as the “rule of reason” test. However, especially egregious violations are often classified as “per se” violations which are “conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.” But, as was the case for the body shops, where no direct evidence of an agreement has been proffered, an antitrust claimant “must show parallel conduct” as well as “further factual enhancement.” Thus, because the body shops “readily and plausibly” established an inferred agreement, the Court of Appeals found that they pled facts sufficient to survive a motion to dismiss for failure to state a claim.

The second part of the scheme, which was essentially a boycott, also runs afoul of the Sherman Act. The Sherman Act’s prohibition against any unreasonable contract, combination or conspiracy in the restraint of trade extends to boycotting, which the court defined as “a method of pressuring a party with whom one has a dispute by withholding, or enlisting others to withhold, patronage or services from the target.” So, while boycotting is not a classical form indicative of a concerted effort amongst competitors, it is, by definition, an agreement to take action, or refrain from doing so. While the Court of Appeals only found that the first part of the scheme amounted to a facial violation, the Court found that the allegations regarding the boycotting scheme amounted claims sufficient to amount to a per se violation.

62565_white_semi-truckThe National Transportation Safety Board (“NTSB”) recently released a report discussing its findings as to a fatal crash in May 2016 involving an automated vehicle manufactured by Tesla. The automobile was equipped with a quasi-experimental automated driver assistance system that failed to detect a semitrailer crossing an intersection in front of the car. However, the NTSB report concluded that the vehicle’s cruise control was set at 74 miles per hour, above the 65 miles per hour speed limit at the time of the accident. Like other “self-driving” vehicles that are being introduced on the roadways, the Tesla is also equipped with “torque sensors” on the steering wheel that monitor when and for how long the human operator’s hands are on the steering wheel. According to the report, the driver had Autopilot engaged for 37 of the total 41 minutes of the trip, and data removed from the vehicle following the crash indicates that the driver only had his hands on the wheel seven times when the system was engaged for a total of 25 seconds.

Skeptics of the autonomous vehicle movement have been warning that the automated driver assistance systems as currently designed do not sufficiently monitor driver engagement in the operation of the vehicle to an extent necessary to prevent the occurrence of similarly fatal wrecks. NTSB investigators suggested that the driver’s lack of engagement indicated an over-reliance on the autopilot system, meaning that the torque monitors are not effectively ensuring sufficient driver engagement. Moreover, the most important aspect of driving, visually observing the roadway and any obstructions that may exist, is not monitored by the torque monitors on the steering wheel. So, even where a driver has his hands on the wheel, the technology in its current form has no requirements that the driver be actually paying attention to the roadway. Moreover, as indicated in the NTSB report, the actual time that a driver is required to place his hands on the steering wheel while the autopilot function is engaged appears to be minimal.

The design and programming of the autopilot systems raises important legal considerations regarding who may be held liable for this sort of accident – where a vehicle operator is following the prompts set forth by the automated driver assistance system, but crashes anyways. If the manufacturer requires that a driver be vigilant and alert at all times, especially when autopilot is engaged, can the manufacturer still be held liable if the system designed to monitor the drivers engagement is defectively designed? In such a scenario, an injured party may argue that the manufacturer knew, or should have known, that the automated driver assistance system could not effectively ensure that the human operator was sufficiently engaged. After all, the fact that the manufacture installed a torque monitor on the steering wheel indicates that the design of the system was dependent upon a human fail-safe. If that human fail-safe was defective – the torque monitor failed to effectively monitor driver engagement – there is a strong argument that the entire design of the automated driver assistance system was defective.

The Driver’s Privacy Protection Act (DPPA) generally protects the personal information of civilian citizens that is contained in government databases from access by government employees for reasons other than legitimate law enforcement purposes. Because of the special authority positions held by law enforcement personnel and the potential for abuse of that power, DPPA provides that the court may award actual damages, punitive damages, as well as attorneys’ fees and other reasonably incurred litigation costs. Such damages may be awarded for each instance that a person knowingly obtains, discloses, or uses personal information from a motor vehicle record with an improper purpose.

The facts of Ela v. Destefano represent the exact type of circumstances DPPA was enacted to protect. Kathleen Destefano was an Orange County Sheriff’s Deputy who was romantically involved with Dennis Ela while he was married to Theresa Ela. Using her access to law enforcement databases, Destefano searched for Mrs. Ela while sitting alone in her patrol car 101 times. According to the record, Destefano used Mrs. Ela’s name to review photographs, addresses, vehicle information, and the like without any legitimate law enforcement purpose. Destefano’s misuse was not discovered until Mrs. Ela requested access to public records and discovered Destefano’s misuse of the databases. Mrs. Ela subsequently complained to the Professional Standards Division of the Orange County Sheriff’s Office and she filed a civil suit against Destefano seeking compensation for emotional distress, over $1,000,000 in compensatory damages and $153,787 in attorney’s fees. However, she was awarded only $15,379 in attorney’s fees and $2,500 in liquidated damages, which she appealed to the 11th Circuit Court of Appeals.

On appeal, Mrs. Ela argued that the statute’s plain language explicitly required $2,500 per violation, entitling her to over $1,000,000 in liquidated damages. The Court of Appeals, however, disagreed, holding that the award of any damages under DPPA was permissive and discretionary, “therefore, the district court, in its discretion, may fashion what it deems to be an appropriate award.” Thus, the Court of Appeals upheld the District Court’s award of $2,500 in liquidated damages and rejected Mrs. Ela’s arguments for $2,500 in compensation per violation.

The Eleventh Circuit Court of Appeals recently ruled that a person’s status as an authorized user on a credit card account can be used to calculate an individual’s credit score, even where the individual is not financially responsible for any debts on the card. The plaintiff in the case, Kathleen Pedro, was designated as an authorized user on her parents’ credit card when they were diagnosed with, and began suffering from, disabling illnesses. Pedro used the card to assist her ill parents in making purchases, as well as to purchase airline tickets that she used to visit with her parents. The Capital One account held by Pedro went into default following their deaths in 2014. Despite never assuming financial responsibility for any debts on the card, TransUnion and Equifax, both credit reporting agencies, included in the calculation of Pedro’s credit score the default on her parents’ credit card, causing her credit score to drop more than 100 points on the Equifax report. Pedro’s status as an authorized user on the Capital One account was subsequently revoked pursuant to Pedro’s request, but the credit reporting agencies refused to remove the account from Pedro’s credit report until Capital One requested that Equifax and TransUnion delete the account from Pedro’s credit reports. Following Capital One’s request and the removal of the credit card from her credit report, Pedro’s account returned to its prior excellent level.

Pedro’s complaint in the district court was based on the Fair Credit Reporting Act, 15 U.S.C. § 1681, and alleged that Equifax and TransUnion had failed to “follow reasonable procedures to assure maximum possible accuracy” of the credit reports of authorized users of credit card accounts. In affirming the District Court’s dismissal of the cause of action, the Court of Appeals agreed that the agencies “followed and objectively reasonable interpretation of the act” when they “read section 1681e(b) to permit them to report information about accounts which the consumer is an authorized user.” In rejecting Pedro’s argument, the court upheld the high burden of proof imposed upon individual plaintiffs who may bring suit under the Fair Credit Reporting Act. To prevail against a credit reporting agency under the Fair Credit Reporting Act, a plaintiff must first establish that a credit reporting agency willfully failed to comply with the relevant section by either knowingly or recklessly violating the act. But, unfortunately for Kathleen Pedro, the Court of Appeals held that when a credit reporting agency adopts a reading of the act that it not objectively unreasonable the conduct falls well short of raising the “unjustifiably high risk” of violating the statute necessary for reckless liability.

This holding indicates that there are many important considerations that consumers should keep in mind before agreeing to be included as an authorized user on the credit card of another. First, the holding demonstrates that consumers should familiarize themselves with the spending habits or history of the holders of the credit cards to which they are considering being added. Because a consumer’s credit report can now include accounts to which the consumer is only an authorized user, the spending habits of others can negatively impact the consumer’s ability to take out loans, and may increase the amount of an initial deposit that must be made when buying a car. Second, consumers should consider alternatives to simply being added as an authorized user to a pre-existing account, such as creating a trust. In this case, because Ms. Pedro was using the credit card to care for her parents and to purchase airline tickets so that she could provide care for them in person, an attorney could have created a trust for her to use that would limit the use of the money to certain purposes, while protecting Ms. Pedro’s previously impeccable credit score.

A deadly crash earlier this week has left a motorcyclist dead and another in custody on suspicions that he was driving under the influence. The driver, 35 year-old Tarus Riggins, was operating a silver Porsche SUV when his vehicle struck Patrick Kuhen as he was driving his motorcycle at Ponce de Leon Avenue and Clifton Road, resulting in Kuhen’s death. While the criminal case may take years to arrive at a resolution, the surviving family members of Kuhen are likely entitled to compensation for the wrongful death of Kuhen at the hands of Riggins. A wrongful death suit entitles the claimant to the full value of the life of the decedent resulting from a homicide, which is defined in the Georgia Code as “all cases in which the death of a human being results from a crime, from criminal or other negligence.”

Moreover, aggravating circumstances can increase the amount the family members of a victim may receive. Aggravating circumstances give rise to punitive damages, which may be awarded only in tort actions in which “it is proven by clear and convincing evidence that the defendant’s actions showed willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences.” Furthermore, the Georgia Code specifically provides that if it is found that the defendant acted, or failed to act while under the influence of alcohol or drugs, “there shall be no limitation regarding the amount which may be awarded as punitive damages against an active tort-feasor.” Thus, the amount which the victims of a drunk driver may recover is limitless, although actual recovery of the funds awarded in a judgment can occasionally pose difficulties due to the drunk driver’s financial situation. For example, if a defendant against whom a civil verdict is rendered for a tort action arising from drunk driving is impoverished, there may be little that a prevailing plaintiff can do to recover the amount awarded. However, where such a defendant is financially stable, or owns a significant number of assets, the prevailing plaintiff can reach all of the assets to recoup the amount awarded through the judgment.

Additionally, even bankruptcy cannot protect a financially stable defendant from recovery. Although bankruptcy generally discharges the debts of the filing party some debts are non-dischargeable, meaning that even after filing for bankruptcy, the filing party is still liable for the amount owed under the debts, and a debt incurred through a tort suit as a result of drunk driving is a type of debt that is non-dischargeable. This rule operates so as to protect injured plaintiffs from forfeiting their recovery due to a wealthy defendant hiding behind the bankruptcy laws. So, where the court finds that an award of punitive damages is proper, the plaintiff can then seek discovery of the defendant’s assets, bank accounts, or other financial holdings to demonstrate to the jury what amount of damages will be sufficient to deter, penalize, or punish the defendant in light of the circumstances of the case. The actual amount of punitive damages awarded is then left for the jury, or trier of fact, to determine.

Generally, the Federal and State Governments and the respective agencies within each enjoy sovereign immunity from suit unless it unequivocally waives its immunity through statute. However, even when Congress or a state legislature waives sovereign immunity, the courts will construe the scope of the waiver narrowly in favor of the sovereign entity. The Tennessee Valley Authority (“TVA”) is a corporate agency of the United States created to engage in commercial power-generating activities. The TVA Act, which creates the TVA, expressly provides that TVA “may sue-and-be-sued in its corporate name.” Although the language of the Act provides that TVA’s sovereign immunity is waived, other exceptions may still protect the quasi-governmental corporation from tort liability.

Whether an exception protects TVA from tort liability depends upon the circumstances surrounding the plaintiff’s claim, and more specifically, what sort of actions in which TVA was engaged. In this case, the plaintiffs were participating in a local fishing tournament while TVA was attempting to raise a downed power line that was partially submerged in the river. When TVA began lifting the power line out of the water, the plaintiff’s fishing boat passed through the area at a high rate of speed and the conductor struck both plaintiffs, resulting in serious injuries to one and the death of the other. The plaintiff’s complaint alleged that TVA negligently failed to exercise reasonable care in the assembly and installation of power lines across the Tennessee River, and failed to exercise reasonable care in warning boaters on the Tennessee River of the hazards TVA created. The specific exception at issue here was the discretionary-function exception.

Courts use a two-part test to determine whether an agency’s conduct falls within the discretionary-function exception. First, the courts evaluate whether the conduct at issue is “a matter of choice for the acting employee.” Where an employee is required to follow a directive, such as where a federal statute or regulation prescribes a course of action for the employee to follow, the employee’s actions are not discretionary and do not fall within the exception. If the employee’s act is a matter of choice, the court moves on to step two, where the court considers whether the conduct at issue involves “the kind of judgment designed to be shielded by the discretionary-function exception. This second step is much broader than the former, and essentially involves actions or decisions based on considerations of public policy. Considerations of public policy can include everything from the allocation of resources, like personnel and time, to environmental impact. In this case, the Court declined to hear the plaintiff’s argument on the first part due to a procedural misstep – it is improper for the Court of Appeals to hear arguments raised for the first time in a reply brief – thus satisfying the first prong of the discretionary-functions exception. The Court also found that the challenged actions, that is the raising of the downed lines, could require TVA to consider public safety and cost concerns, thus satisfying the requirement that the decisions be based on considerations of public policy. As such, the Court ruled that the discretionary-function exception applied, that TVA was immune from tort liability in this case, and the Court affirmed the district court’s dismissal of the case.

As technology continues to advance further towards the widespread use of autonomous vehicles, companies that manufacture automobiles and the autonomous driving programs will have to evaluate how to best mitigate the inherent risks involved in the creation and use of autonomous vehicles. Although eliminating human control will likely reduce the rate of accidents because of error in judgment or intoxication, the rate of injuries due to design or manufacturing defects will likely increase. Thus, the frequency of injuries and deaths will decrease, but the frequency of suits against various parties for defects will increase, as human error will no longer be a shield to liability for those manufacturers of the parts or programs for the vehicles.

In instances involving the software used to direct and control the vehicles, the programmers that design the autonomous driving systems which detect hazards or initiate maneuvers to avoid collisions will likely be the first group against whom suit will be brought following a non-human error accident. However, the manufacturers of the automobile parts could as Tesla, also face liability as downstream manufacturers or sellers of the automobiles that utilize the programs. The manufacturer or designer that will ultimately be liable will likely depend upon the nature of the accident at issue, but the nature or cause of the accident will likely not be unearthed until thorough and complex discovery is conducted. So, the sellers and manufacturers of the automobiles, as well as the programmers of the software and the designers of the control systems will all be parties to any lawsuit arising from a manufacturing or design defect claim.

Moreover, companies will also need to comply with whatever regulations the country, state or city in which it wishes to operate have enacted. But, this could prove difficult, as different states will likely enact different regulations tailored to most effectively serve the interests of its residents; Nebraska, for example will likely enact different regulations for its flat and straight roads and interstates than the winding mountainous roads of Tennessee or Colorado. Such regulations could differ as to licensing requirements for the operators of the vehicles, as well as specific programming mandates that dictate the degree of control operators must exercise at periodic intervals during the operation of the vehicle. Because of the potential difficulty that varying regulations across numerous jurisdictions would pose to the distribution of autonomous vehicles into society, the manufacturers will likely lobby Congress for a nationwide regulatory scheme to preempt any local or state regulations. While a nationwide regulatory scheme would be beneficial as to helping manufacturers minimalize expenditures, it would detrimentally curb innovation and novelty in the autonomous vehicle industry.

A recent decision handed down by the South Carolina Supreme Court in Patton v. Rock Hill Gynecological & Obstetrical Associates, P.A., et. al.,  expanded the parties whom may bring a claim for a child’s medical expenses. The holding applied a broadened interpretation of Rule 17(a) of the South Carolina Rules of Civil Procedure, which provides, “Every action shall be prosecuted in the name of the real party in interest.” By definition, a real party in interest is “the party who, by the substantive law, has the right to be enforced. It is the ownership of the right sought to be enforced which qualifies one as a real party in interest.” Bank of Am., N.A. v. Draper, 405 S.C. 214 (Ct. App. 2013). Other commentaries regarding the equivalent Federal Rule provides that “the action should be brought in the name of the party who possesses the substantive right being asserted” and “the ‘real party in interest’ . . . is defined as the person holding the substantive right to be enforced, and not necessarily the person who will ultimately benefit from the recovery.” Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1541 (3d Ed. 2010). Georgia has a similar provision, O.C.G.A. § 9-11-17, which provides “if an infant or incompetent person does not have a duly appointed representative, he may bring an action by his next friend or by a guardian ad litem.”

In Patton, the mother filed a medical malpractice lawsuit in November, 2009 only in her capacity as Alexia’s “next friend” and sought damages for her daughter’s injuries and past and future medical expenses arising from her obstetrician’s improper management of the resolution of shoulder dystocia. The primary issue reviewed by the South Carolina Supreme Court revolved around the fact that Patton brought the claim only in her representative capacity-and not in her own capacity. The defendants argued that Patton could have recovered damages for the minor’s medical expenses if she sued in her own capacity, but not in her capacity as the minor’s representative, pursuant to Rule 17(a) of the South Carolina Rules of Civil Procedure. The Supreme Court analyzed whether Patton was a real party in interest categorically by each type of medical expenses, and held that Patton would be a real party in interest in her individual capacity if she had an obligation to pay each type of medical expenses. The Court held that the first category, those incurred at the time of trial, were recoverable by Patton because she was a real party in interest, as she was obligated to pay them in her individual capacity. Patton was also a real party in interest as to the second type of medical expenses, those covered by Medicaid. Because the Medicaid expenses had no third-party payor, and were actually paid by the parent, a representative had no obligation for reimbursement, and thus the parent is the only real party in interest.

However, the most crucial aspect of the South Carolina Supreme Court’s ruling rested upon the language of Rule 17(a) which holds that it is improper to immediately dismiss a lawsuit simply because it was not brought in the name of the real party in interest. O.C.G.A. § 9-11-17 has identical language, which also prohibits the immediate dismissal of an action on the ground that it is not prosecuted “in the name of the real party in interest until a reasonable time has been allowed, after objection, for ratification of commencement of the action by, or joinder or substitution of, the real party in interest.”

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