We are living in an era of dramatic and unpredictable technological and business innovation. Federal agencies have been at the forefront of updating substantive legal rules to meet new challenges not originally contemplated by Congress. Yet some innovations--for example, autonomous vehicles--also upset longstanding allocations of authority between the federal and state governments. Significant uncertainty about whether local or national concerns will predominate as innovations develop requires temporary flexibility in allocations of regulatory authority. This Article identifies a new method that federal agencies can use to promote such flexibility before the initiation of a rulemaking or before Congress acts to address such disruptions--advisory nonpreemption. Ordinary preemption shifts the balance of power from the states to the federal government. Advisory nonpreemption has the opposite effect. Advisory nonpreemption can open a dialogue among the federal government, the states, interest groups, and industry not only about the best substantive rules to address innovation, but who ought to govern and enforce those rules. Most importantly, advisory nonpreemption is a method of inserting de facto dynamic jurisdiction temporarily into an existing dual federalism scheme. This Article both describes advisory nonpreemption and defends its use as a normative matter using autonomous vehicle safety regulation as a case study. The approach's costs in temporary regulatory uncertainty are outweighed by its benefits in promoting innovation, transparency, and the public interest.
TABLE OF CONTENTS INTRODUCTION I. PRECAUTIONARY FEDERALISM AND ADVISORY NONPREEMPTION A. Federalism Spectrum: Dual, Dynamic, and Precautionary B. Advisory Nonpreemption II. ROBOT FEDERALISM: THE RISE OF AUTOMATED VEHICLES A. Federalism in Auto Safety Regulation B. Autonomous Vehicle Innovation C. Federalism Disruption D. Regulation of A Vs Before 2016 1. Federal Policy 2. State Regulatory Experimentation E. 2016: Advisory Nonpreemption III. ADVISORY NONPREEMPTION AND THE COURTS A. Potential Conflict B. Role for Courts IV. DEMOCRATIC LEGITIMACY CONCLUSION INTRODUCTION
Innovations in technology are rapidly transforming people's lives. Autonomous vehicles (AVs) promise to revolutionize how we get from place to place, to improve mobility for those unable to drive, to reduce greenhouse gas emissions, and, most importantly, to reduce human driver error. (1) Unmanned aerial systems (drones) may not only deliver books more quickly from Amazon, but also facilitate "precision agriculture." (2) Smart homes and appliances can set thermostats to reduce energy demand, and can order more milk when supplies run low. (3) Smart textiles with embedded sensors can transform how people interact with their clothing, with significant potential in medical and military contexts, among others. (4) Technology is likewise transforming the business models that deliver these products and services. For example, the sharing or platform economy is upending longstanding legal relationships among people, goods, and services. (5) Each of these innovations may follow an unpredictable path. For example, we do not yet know whether automated vehicle technology will replace human drivers, rendering steering wheels obsolete and cars fully "driverless," or whether instead technology will enhance or assist human driving capabilities. Nor do we know whether local concerns--such as weather differences, local driving norms, or urban density--will render fully driverless cars, also known as "Highly Automated Vehicles," (HAVs) a more local than national phenomenon. (6) And while innovation often holds great promise, it can likewise harm users or third parties. (7) The law has traditionally protected us from significant risks; yet the law cannot always keep pace with the uncertainties of innovation. (8)
Innovation can challenge settled understandings of substantive legal rules, such as whether a robot can form the requisite "intent" to commit a crime, or whether an Uber or Lyft driver is an "employee" or "independent contractor," and may require the reconsideration of existing legal categories. (9) But innovation can also upset the balance of regulatory power among the federal, state, and local governments. (10) Federalism disruption occurs when the existing allocation of authority is based on an assumption regarding certain basic facts about regulated technologies or forms of business, and innovations challenge that assumption. (11) For example, the federal statute that has regulated motor vehicle safety in the United States for the past fifty years delegates authority to the federal government to regulate the safety of the "vehicle" to the exclusion of state legislation or regulation. (12) States retain primary authority to regulate "driver" behavior through insurance, licensing, and common law tort rules. (13) This general dividing line between state and federal authority was sensible at a time when vehicles and human drivers could be separated into two distinct categories, and both economies of scale in vehicle manufacturing and interstate transportation arguably favored uniform federal safety rules for vehicles. (14)
The rise of HAVs erodes the line between vehicles and drivers, creating a federalism disruption. Vehicle hardware and software can now perform functions once exclusively in the control of humans behind the wheel. While concerns regarding economies of scale in manufacturing and interstate spillovers remain, the rise of HAVs raises a number of new concerns. For example, the most significant benefit of HAVs is arguably their ability to reduce accidents that result from human error. (15) But if HAVs cannot drive safely in snow or heavy rain, they may be terrific in Nevada but terrible in Maine. Different states may have compelling reasons to want different rules not only for human drivers, but for vehicles themselves. It may therefore be the case that HAVs will become a local, rather than national phenomenon. On the other hand, if HAVs move out of local testing grounds and begin to cross state lines more frequently, different state rules for HAVs could themselves be the cause of accidents. And HAVs and human drivers are likely to be sharing the roads for some time, raising additional safely concerns. Such "innovation uncertainties" can arise temporarily, including questions about what the most significant risks and benefits of the activity are; how those risks and benefits will be distributed locally, regionally, and nationally; what path the innovation may take in its development, and the timing of that development, among others. (16)
Uncertainties about whether local concerns about safety, zoning, tailpipe emissions, or land use, or national concerns about safety, national security, privacy, greenhouse gas emissions, economies of scale, or interstate spillovers will predominate, or whether policy differences among states themselves create new risks, raise important questions about which level of government should decide how to govern now. But these uncertainties can also raise questions about who should decide in the future. Some recent scholarship has examined the substantive question of how (and whether) to regulate in the face of uncertainty. (17) And many jurists and scholars have recognized the general value of policy experimentation inherent in federalism, especially in cooperative federalism schemes, to address local variation in preferences or values. (18) The federalism literature is virtually silent, however, on a key question of regulatory design: how to inject temporary flexibility into the distribution of regulatory authority when regulators are not writing on a cooperative federalism blank slate. The auto industry has long argued that uniform national standards promote innovation, economies of scale, and address safety concerns better than fifty separate state rules. (19) In contrast, I have argued that just as we may not want substantive law to freeze in place the technology or business models of the moment, an allocation of regulatory authority among the federal, state, and local governments to address innovation should remain flexible--at least for a short period of time. (20) Flexibility in federalism has value in times of innovation uncertainty. Just as we may not yet know the best substantive rules to address innovation, we may not yet know who will be the best regulator, or whether one "best" regulator exists at all. (21) In focusing either on the virtues of cooperative federalism, or the best initial allocation of regulatory authority to confront a new problem, the existing literature has not addressed how to build temporary flexibility into an existing--and more rigid--allocation of authority.
This Article identifies a new method that federal agencies can use to achieve this time-limited flexibility before initiating notice-and-comment rulemaking: advisory nonpreemption, and defends its use as a normative matter. Ordinary preemption shifts the balance of power from the states to the federal government. (22) In contrast, advisory nonpreemption has the opposite effect. It is a federal agency's informal, advisory statement in policy guidance (rather than notice-and-comment rulemaking) that it has authority to regulate in a particular area. But the statement does not actually preempt states from regulating--at least temporarily (hence the moniker "nonpreemption"). And the agency sets a timetable to revisit the issue. (23)
We can view the National Highway Traffic Safety Administration's (NHTSA's) long-anticipated Federal Automated Vehicles Policy (2016 NHTSA Policy) as an example of advisory nonpreemption. (24) There, NHTSA offered its advisory interpretation of the terms "vehicle" and "vehicle equipment" in its authorizing statute, the National Traffic and Motor Vehicle Safety Act (Motor Vehicle Safety Act), to include HAV hardware and...