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Varela v. FCA US LLC - 3/1/2022

Arizona Supreme Court holds that state tort law claims regarding automatic emergency braking technology are not preempted.

In 2015, a 2014 Jeep Grand Cherokee rear-ended a woman’s stopped car, injuring her and killing her four-year-old child.  The Jeep was not equipped with Automatic Emergency Braking (“AEB”) technology, although the technology was available at the time the Jeep was manufactured and was standard on higher trim levels.

The woman sued the auto manufacturer, arguing that the collision could have been avoided or the injuries lessened if the car had been equipped with AEB.  The auto manufacturer moved to dismiss the lawsuit because the National Highway Transportation Safety Administration (the “Agency”) had opted not to make the technology mandatory, which, according to the auto manufacturer, impliedly preempted state tort law claims.  The trial court granted the motion.  The court of appeals reversed, finding nothing in the record to indicate that the Agency intended to preempt tort law claims based on the absence of AEB.  In so holding, the court of appeals distinguished a case that had come to a contrary conclusion, Dashi v. Nissan North America, Inc., 247 Ariz. 56 (App. 2019).  The Supreme Court accepted review because the case involved an issue of statewide importance about which two different panels of the court of appeals had reached conflicting conclusions.

At issue was whether obstacle preemption applied, which is to say, whether allowing state tort claims to proceed against manufacturers based on the absence of AEB technology would stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.  Obstacle preemption may occur when a federal agency opts not to regulate a particular matter, but only if the decision not to regulate is accompanied by an “authoritative” message that the agency intends the lack of regulation to preempt state regulation of the same area.  The authoritative message need not be expressly stated, but the party asserting preemption bears the burden of showing an “actual conflict” between a clear federal policy and the state law or claim.

The auto manufacturer put forth several documents and statements issued by the Agency, but the Court found that none were sufficient to show a clear intent on the part of the Agency to preempt state tort law, and some of them expressly disavowed preemption. 

The Court also analyzed three U.S. Supreme Court cases that addressed obstacle preemption:  In Geier, the United States Supreme Court did find obstacle preemption in a case involving driver’s side airbags, which Congress had opted not to regulate.  Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000).  In Geier, the decision not to regulate had been an intentional effort to allow manufacturers to choose between several existing passive restraint systems because permitting a range of choices would best promote safety.  Id. at 881. 

In Sprietsma on the other hand, the U.S. Supreme Court found no preemption where the Coast Guard had declined to require propellor guards on outboard motors, not because some federal purpose would be served by non-regulation, but because then-available data about the safety of various versions of propellor guards was insufficient to meet the stringent requirements for federal rulemaking.

In Williamson v. Mazda Motor of Am., Inc., 562 U.S. 323 (2011), the Court analyzed the same authorizing Act and safety standard as in Geier.  However, this time the Court found no preemption because the decision not to mandate shoulder belts in rear middle seats was not part of a deliberate strategy to promote safety through permitting a range of choices, as it had been in Geier, but instead was the result of a determination that mandating shoulder belts would not be cost-effective.  Id. at 335­–36. 

The Arizona Supreme Court found that Sprietsma and Williamson governed this case because, here, the Agency declined to regulate AEB technology because it found the time-consuming and resource-intensive process of rulemaking to be less efficient at promoting the Agency’s safety objectives than alternative non-rulemaking strategies.  Thus, as in Sprietsma and Williamson, allowing tort suits to proceed and potentially influence the conduct of auto manufacturers does not directly conflict with any federal policy objective. 

The Court expressly overruled Dashi, a court of appeals case that applied Geier and found that the Agency’s failure to regulate AEB technology did result in obstacle preemption.  See Dashi, 247 Ariz. at 58 ¶ 3.  The Court held that Dashi was no longer good law, both because the Agency disavowed preemptive intent in a notice that post-dated Dashi, and because Dashi erred by following Geier’s analytical framework without the added insight of Williamson and Sprietsma.  Accordingly, the Court vacated ¶¶ 11–22 of the court of appeals’ opinion, but affirmed the rest and remanded for further proceedings.

Justice Montgomery authored the unanimous opinion.

Posted by: Heather Robles 

Posted On: 4/6/2022