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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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<a id="Ford"></a>Nine Months Later: Personal Jurisdiction Since Ford

The United States Supreme Court issued its decision in Ford Motor Company v. Montana Eighth Judicial Dist. Ct., 141 S. Ct. 1017 (2021) on March 25, 2021, deciding in a consolidated appeal of two product liability lawsuits that jurisdiction over Ford was appropriate in a forum where the accident occurred and the plaintiff was a resident even though Ford did not design, manufacture, or originally sell the vehicle into that forum (a subsequent owner took the vehicle to the forum).

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In deciding the scope of the requirement that a claim must “arise out of or relate to” the defendant’s contacts in the forum, the Court held that even where the manufacturer did not place the subject vehicle into the forum, if it otherwise extensively served the forum market, including for the make and model of vehicle at issue, it had sufficient suit-related contacts with the forum to justify the exercise of personal jurisdiction. In the nine months since, state courts and lower federal courts have applied the decision in interesting ways. The following is a quick summary of some cases evaluating personal jurisdiction and deciding in favor of defendants:

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<a id="ADAS"></a>NHTSA Issues Standing General Order on ADAS and ADS Crash Reporting

On June 29, 2021, the National Highway Traffic Safety Administration (NHTSA) issued a Standing General Order (SGO), as amended on August 5, 2021, requiring manufacturers and operators of vehicles equipped with Level 2 advanced driver assistance systems (ADAS) and Levels 3-5 automated driving systems (ADS) to report crashes to NHTSA. The SGO highlights NHTSA’s increased interest in ADAS and ADS technologies. NHTSA explained that the purpose of the SGO is “to obtain timely notice of incidents that may provide information regarding potential safety defects on Level 2 ADAS, ADS, or vehicles equipped with these technologies.”

The SGO establishes two different reporting timelines for crashes, primarily depending on whether the crash resulted in death or serious injury. Specifically, crashes that meet the following criteria are subject to a one-day reporting timeline: (1) the vehicle involved in the crash was on publicly accessible roads in the United States; (2) the ADS or Level 2 ADAS was engaged for any amount of time during the period from 30 seconds immediately prior to the crash through the conclusion of the crash; and (3) the crash resulted in an individual being transported to the hospital for medical treatment, a fatality or an airbag deployment, or involved a vulnerable road user (such as a pedestrian or bicyclist). Further, crashes involving ADS but not meeting the third criteria must be reported to the agency on the 15th calendar day of the month following the calendar month in which notice of the incident was received. (NHTSA’s SGO does not require manufacturers to report Level 2 ADAS crashes that do not meet the third criteria.)

For any incident reported to NHTSA under the one-day or monthly reporting timelines, manufacturers must submit an updated incident report on the 15th calendar day of the month following any calendar month in which notice of any material new or materially different information about the incident is received. In the absence of any new or updated information, manufacturers are required to submit an incident report confirming the lack of any new/updated information to NHTSA.

<a id="IIJA"></a>Motor Vehicle Safety Provisions in the Infrastructure Investment and Jobs Act

On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (Infrastructure Act), which reauthorizes surface transportation programs for five years and puts $550 billion in new funds into transportation, broadband, and utilities. The Infrastructure Act also puts into motion changes to various National Highway Traffic Safety Administration (NHTSA) requirements, including changes to recall campaign requirements and the early warning reporting system, and mandates certain new Federal Motor Vehicle Safety Standards (FMVSSs).

Among other things, the Infrastructure Act’s motor vehicle safety provisions:

<a id="GHG"></a>EPA Issues More Stringent Light-Duty Vehicle Greenhouse Gas Emissions Standards for Model Years 2023-2026

At the tail end of December 2021, U.S. EPA <a href="https://www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-greenhouse-gas-emissions-passenger-cars-and" target="_blank" rel="noopener">issued its revised greenhouse gas (GHG) emissions standards</a> for passenger cars and light trucks for model years 2023 to 2026. 86 Fed. Reg. 74434. The “Revised 2023 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards” rescinds the Trump administration’s “Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks,” setting forth much more stringent emissions standards.

EPA touts the revised GHG standards as the strongest vehicle emissions standards ever established for light-duty vehicles in the United States. The standards increase in stringency from 2023 to 2026, accelerating at a rate of between 5% and 10% each year. In comparison, the prior standards under the SAFE Vehicles Rule increased at a rate of roughly 1.5% per year. The figure below depicts EPA’s revised standards compared to prior proposed and final standards.

EPA’s Revised Standards as Average Fleetwide GHG Emissions Targets (Cars and Trucks Combined) Projected Through MY 2026 and Compared to the 2012 GHG Rule and the SAFE Vehicles Rule

EPA image for MMQ Jan 2022

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Source: <a href="https://filehost.thompsonhine.com/uploads/Revised_2023__Later_Model_Year_Light-Duty_Vehicle_GHG_Emissions_Standards_%E2%80%93_Regulatory_Impact_Analysis_%E2%80%93_USEPA_%E2%80%93_December_2021_22bc.pdf" target="_blank" rel="noopener">"Revised 2023 and Later Model Year Light-Duty Vehicle GHG Emissions Standards: Regulatory Impact Analysis," December 2021, U.S. EPA</a>

EPA expects that the revised GHG standards will result in an average fuel economy label value of 40 miles per gallon (mpg). EPA also anticipates the rule will force automakers to implement “clean” technologies and produce more electric vehicles, and EPA is offering a number of program flexibilities and incentives to assist auto manufacturers in complying with the revised standards, such as:

The revised GHG standards final rule <a href="https://www.govinfo.gov/content/pkg/FR-2021-12-30/pdf/2021-27854.pdf" target="_blank" rel="noopener">is set to go into effect on February 28, 2022</a>, although it may yet be challenged in the D.C. Circuit Court of Appeals.

<a id="CABan"></a>California Bans Gas-Powered Small Off-Road Engines

On December 9, 2021, the California Air Resources Board (CARB) <a href="https://ww2.arb.ca.gov/news/carb-approves-updated-regulations-requiring-most-new-small-road-engines-be-zero-emission-2024" target="_blank" rel="noopener">approved regulations</a> banning the purchase of new gas-powered small off-road engines that produce less than 25 gross horsepower. This rule impacts gas-powered engines found in lawn equipment like leaf blowers, lawn mowers, pressure washers, and portable generators. The ban goes into effect for all lawn equipment except pressure washers and portable generators in 2024, with the pressure washer and portable generator ban effective in 2028. It does not prohibit the use of gas-powered equipment acquired before the ban takes effect, nor the purchase of gas-powered equipment already on store shelves when the ban takes effect.

The ban is part of California’s zero-emission strategy and impacts not only manufacturers, but also private homeowners and commercial landscapers. In order to assist small businesses impacted by the ban, California made $30 million in funds available to purchase new zero-emission equipment through its Clean Off-Road Equipment Voucher Incentive Project (CORE). Meanwhile, financial analysts <a href="https://www.freedoniagroup.com/Power-Lawn-Garden-Equipment.html" target="_blank" rel="noopener">estimate</a> that battery-powered lawn equipment will be a $14.1 billion industry by the end of 2024. Recent reports indicate that other states including New York and Illinois are considering implementing similar bans.

<a id="EV"></a>California Lithium-Ion Car Battery Recycling Advisory Group Submits Draft Recommendations for Regulations

On December 13, 2021, after 14 meetings that commenced in 2019, the California Lithium-Ion Car Battery Recycling Advisory Group (Advisory Group) submitted its “<a href="https://calepa.ca.gov/wp-content/uploads/sites/6/2021/12/Final-Draft-Policy-Recommendations-Lithium-ion-Car-Battery-Recycling-Advisory-Group-AB-2832-As-of-12-13-21-for-public-comment.pdf" target="_blank" rel="noopener">Draft Report</a>” regarding lithium-ion car battery recycling for public comment. As more electric vehicles (EVs) enter the market and eventually retire from service, California began to evaluate what should be done with these batteries once they reach their end of life. As discussed in the previous <a href="https://www.thompsonhine.com/publications/mobility-matters-quarterly---october-2021">Mobility Matters Quarterly newsletter</a>, California law AB2832 (2018) requires the Advisory Group to issue policy recommendations based on this Draft Report to help resolve this issue. The Draft Report will eventually be used to promulgate California regulations on lithium-ion recycling, with the United States EPA and other states potentially following suit. Public comment on the Draft Report is open through February 16, 2022.

As provided in the Draft Report, the Advisory Group’s recommended policies focused on two main areas: (1)&nbsp;defining responsibility for the coordination and payment of recycling in cases where the cost presents a burden on the vehicle owner and the battery is unwanted, and (2) mitigating the barriers that may currently inhibit the reuse, repurposing, and recycling of the vehicle battery. The most supported Advisory Group proposal was the “core exchange and vehicle backstop” policy, which builds on already existing industry standards and policies. In summary, this policy defines the responsibility for out-of-warranty batteries under three different possible scenarios: (1) EVs still in service, (2) EVs reaching end-of-life where a dismantler takes ownership of the vehicle, and (3) EVs reaching end-of-life where the vehicle has an OEM-certified battery and is not acquired and removed by a licensed dismantler.

The second most popular Advisory Group proposal was the “producer take-back” policy, which states that the auto manufacturer is responsible for ensuring proper repurposing, reuse, and recycling of its batteries at a licensed facility with no cost to the consumer as long as the batteries are no longer wanted by the owner and no other entity has taken possession of the batteries. Both policies require further consideration to define what constitutes “proper recycling” and how it should be verified.

In support of these policies, the Draft Report also included proposals to address specific concerns in EV battery reuse and recycling to ensure whatever processes are chosen are safe and environmentally responsible. Most of these policies surround labeling and digital identifier requirements, supporting the development of recycling facilities through incentive packages and a guaranteed permitting timeline, supporting the enforcement of unlicensed dismantling laws, and training programs to ensure that the people who handle end-of-life vehicles have the skills needed to safely work with the vehicles and assist with navigating regulatory requirements.

While the Draft Report provides only recommended policies at this time, it provides a glimpse into the potential direction and focus that California and possibly U.S. EPA and other states may take regarding regulation of EV battery recycling. The final report is expected to be submitted to California EPA by late March/April 2022.

Joel D. Eagle Partner, Environmental and Automotive &amp; Mobility 216.566.5938 <a href="mailto:Joel.Eagle@ThompsonHine.com">Joel.Eagle@ThompsonHine.com</a>

Tim Goodman Partner, Automotive &amp; Mobility, Transportation, Product Liability Litigation and Environmental 202.263.4117 <a href="mailto:Tim.Goodman@ThompsonHine.com">Tim.Goodman@ThompsonHine.com</a>

Conor A. McLaughlin Partner, Product Liability Litigation, Class Action Defense and Automotive &amp; Mobility 216.566.5807 <a href="mailto:Conor.McLaughlin@ThompsonHine.com">Conor.McLaughlin@ThompsonHine.com</a>

Tasha Nicole Miracle Senior Managing Associate, Environmental and Automotive &amp; Mobility 216.566.5622 <a href="mailto:Tasha.Miracle@ThompsonHine.com">Tasha.Miracle@ThompsonHine.com</a>

Kerem Bilge Associate, International Trade, Transportation and Automotive &amp; Mobility 202.263.4104 <a href="mailto:Kerem.Bilge@ThompsonHine.com">Kerem.Bilge@ThompsonHine.com</a>

Will Godfrey* Director, Mobility, Automation and Safety, Automotive &amp; Mobility, Transportation, Product Liability Litigation and Environmental 202.263.4119 <a href="mailto:Will.Godfrey@ThompsonHine.com">Will.Godfrey@ThompsonHine.com</a><a href="mailto:Will.Godfrey@ThompsonHine.com"> </a>*Not licensed to practice law

Jake M. Levin** Law Clerk, Environmental 216.566.5628 <a href="mailto:Jake.Levin@ThompsonHine.com">Jake.Levin@ThompsonHine.com</a><a href="mailto:Jake.Levin@ThompsonHine.com"> </a>**Not admitted to the practice of law

or any member of our <a href="https://www.thompsonhine.com/services/automotive-industry">Automotive &amp; Mobility</a> or <a href="https://www.thompsonhine.com/services/environmental">Environmental</a> practices.

This publication may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

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Mobility Matters Quarterly – January 2022

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