Insights

Those familiar with the supplier and buyer contracting realm will have likely heard of a “requirements contract” or a “blanket purchase order” which essentially allows parties to mutually guarantee that they will buy and sell to each other for a specific period of time, but lets the parties figure out the exact amount of a product later, often on an order-by-order basis. This approach is often favored for its reliability in knowing your supply needs are met (or you have a reliable buyer), while letting the supply move up or down based on real and variable demand. These arrangements are particularly prevalent in supply agreements in the automobile industry.

In 2023 and 2024, several U.S. states enacted extensive “Right to Repair” laws, reflecting a growing legislative focus on ensuring consumers have access to the parts and resources needed to repair their own products without relying on the product’s original manufacturer. Most recently, California, Colorado, Minnesota, New York, Massachusetts, and Oregon implemented comprehensive regulations aimed at providing consumers direct access to tools, parts, and information for the repair of various electronic devices and equipment, including digital products and agricultural machinery. As the “Right to Repair” movement continues to gain significant traction across the United States, it is critical that manufacturers understand these laws and how these laws will impact their individual businesses.

The opportunity to create and shape major policies impacting the transportation sector will be teed up in 2025. Some changes will be led or initiated by the change in Administration, some will come from expected retirements or potential changes in majorities, and other changes will be put in the forefront of congressional leaders because of expiring laws. In this client alert, part of our Election 2024 series, we identify some of the expected changes, opportunities, and challenges ahead for transportation policy.

On December 28, 2023, the Department of Transportation (DOT) published a final rule increasing the statutory maximum monetary civil penalty for regulated entities. The final rule raised the minimum and maximum fines for 2024 by about 3.2 percent from the 2023 level across most DOT modes. The new fine amounts became effective on December 28, 2023 and will only apply to violations that take place after that date.

On Tuesday, July 11, the Michigan Supreme Court issued a decision that could have profound impacts on the purchase and supply of automotive and other manufactured component parts under contracts governed by Michigan law. In MSSC, Inc. v. Airboss Flexible Products Co., Michigan’s high court found an automotive Tier 1 supplier’s purchase order contract unenforceable to compel future production from its supplier because the purchase order did not specify a quantity of parts to be supplied. In doing so, the Court formally titled a previously unnamed variation on a supply contract—the “release-by-release contract.”

Can a state court, consistent with the Due Process Clause, compel a foreign corporation seeking to do business in the state to consent to general (“all-purpose”) personal jurisdiction?  Until its decision this week in Mallory v. Norfolk Southern Railway Co.,[1] the majority of courts forecast that the Supreme Court would answer that question with a resounding “no.”  Instead, five Justices in Mallory agreed that Pennsylvania’s business registration statute, which requires foreign corporations to consent to the state’s personal jurisdiction over “any cause of action” brought against them in state court, did not violate the Due Process Clause.[2] The decision is sure to encourage forum shopping and perhaps lead other states to adopt similar “consent-by-registration” statutes.

The Department of Transportation’s Federal Highway Administration has issued final standards for the installation, operation, and maintenance of electric vehicle (EV) charging stations paid for with federal funds pursuant to the Infrastructure Investment and Jobs Act (IIJA) and other federal authorities. The standards, which go into effect on March 30, 2023, regulate the types of chargers that may be installed, as well as payment processing, labor, cybersecurity, and data privacy practices for EV charging infrastructure on federal highways.

Last week, the House passed the Drone Infrastructure Inspection Grant Act, which establishes programs within the Department of Transportation (DOT) to support the use of small unmanned aircraft systems (sUAS) when inspecting, repairing, or constructing a variety of types of infrastructure, including roads, electric grids, water, and other critical infrastructure. 

President Biden will soon sign into law the Inflation Reduction Act (IRA), which provides $750 billion in funding and major federal policy changes impacting the U.S. energy, environment, healthcare and tax sectors. On August 7, 2022, the IRA passed the U.S. Senate by an all-Democrat 50-50 party line vote, with Vice President Harris breaking the tie and ensuring passage. On August 12, 2022, the IRA passed the U.S. House by a vote of 220 to 207. The President's signature, will make the bill law, and allow President Biden, U.S. Senate Majority Leader Chuck Schumer (D-NY), and U.S. House Speaker Nancy Pelosi (D-CA) to claim a major victory while making progress on a portion of the President's Build Back Better agenda just three months before the mid-term elections on November 8, 2022.

Crowell & Moring held its Transportation & Logistics workshop on Thursday, March 10, 2022 in Dana Point, California. The conference featured key developments and trends in the transportation sector and legal strategies to support supply chain resiliency in the midst of industry uncertainty, evolving regulatory regimes, and unprecedented workforce challenges. Conference participants included transportation leaders and decision-makers across retail, food & beverage, hospitality, telecommunications, healthcare, rail, automotive, aviation, surface, maritime, mobility, shipping, logistics, and beyond. Topics included:

On December 13, 2021, the Biden administration announced several actions to begin the build out of electric vehicle charging infrastructure in support of its goal of transitioning 50 percent of new vehicle sales to electric vehicles by 2030 and in response to the recently enacted Infrastructure Investment and Jobs Act (also known as the Bipartisan Infrastructure Law). 

On November 15, President Biden signed into law the Infrastructure Investment and Jobs Act (“Infrastructure Act”), which reauthorizes various surface transportation programs and allocates $550 billion for new infrastructure spending over the next five years. Notably, the legislation also includes provisions requiring the Secretary of Transportation (“Secretary”) to establish a number of vehicle safety standards, and various federal agency officials to conduct vehicle safety studies.

Yesterday, President Biden issued a Fact Sheet entitled Biden Administration Efforts to Address Bottlenecks at Ports of Los Angeles and Long Beach, Moving Goods from Ship to Shelf to help address the “delays and congestion” across the transportation supply chain. As has been widely reported in recent weeks and months, the global supply chain has been hard hit by large increases in e-commerce and delays and shutdowns implemented to curb the spread of COVID-19. Yesterday’s release confirms public and private commitments to move goods more quickly and to secure the resiliency of American and global supply chains. To do so, the Biden Administration is focusing on the Ports of Los Angeles and Long Beach, which act as the ports of entry to the United States for 40% of containers received. The President, together with leadership from these ports, are undertaking a series of public and private commitments as noted below.

In its seventh decision on personal jurisdiction over out-of-state defendants in the past decade, the United States Supreme Court yesterday ruled 8-01 that due process does not require a strict causal link between the defendant’s in-forum conduct and the plaintiff’s injury. Ford Motor Co. v. Montana Eighth Judicial District Court et al., No. 19-368 (March 25, 2021). Writing for the Court, and joined by Chief Justice Roberts and Justices Breyer, Sotomayor, and Kavanaugh, Justice Kagan held: “When a company like Ford serves a market for a product in a State and that product causes injury in the State to one of its residents, the State’s courts may entertain the resulting suit.”2 The suit need only “arise out of or relate to the defendant’s contacts with the forum.”3 Reviewing the Court’s personal jurisdiction decisions since International Shoe Co. v. Washington, 326 U.S. 310 (1945), Justice Kagan emphasized that the decision was consistent with precedent, including Bristol-Myers Squibb Co. v. Superior Ct. of Cal., 137 S. Ct. 1773 (2017), and announced no new test of specific jurisdiction.

In a recently published RAIL, The Journal of Robotics, Artificial Intelligence & Law article, “NHTSA Proposes Rule on Safe Deployment of Self-Driving Vehicles,” Crowell & Moring’s Rebecca Baden Chaney and Rukiya Mohamed discuss the National Highway Traffic Safety Administration’s (NHTSA) advance notice of proposed rulemaking that marks a departure from the way in which the agency has previously addressed automated driving systems (ADS), and automotive safety more generally. Although NHTSA does not intend to issue any Federal standards around ADS yet, the agency is considering how it can use regulatory authority to place a focus on safety measures as ADS technology develops. This article outlines NHTSA’s proposed safety framework and possible implementation of that framework.

On Monday, December 21, 2020, Congress passed the Consolidated Appropriations Act of 2021, which includes the House-Senate compromise of the Boeing 737 MAX aircraft certification reform legislation, the Aircraft Certification, Safety and Accountability Act (“ACSAA”), as well as an extension of the Payroll Support Program, one of the significant lifelines provided to the aviation industry under the CARES Act.

Transportation policy is a central feature of the incoming Biden administration’s “Build Back Better” economic recovery plan, which includes a $2 trillion infrastructure plan that would reimagine the nation’s transportation sector to one that takes advantage of new technology, new energy sources, and new workers. President-Elect Biden announced Pete Buttigieg, the former mayor of South Bend, Indiana and presidential rival, as the nominee to serve as Secretary of Transportation. If confirmed, Buttigieg is expected to play a key role in steering President Biden’s infrastructure plan through Congress and ensuring it does not go off the rails (pun intended). To deliver these changes as promised, Congress and the incoming Biden administration will need to tackle a number of tricky policy issues that have bedeviled previous reform efforts.

On December 3, 2020, the National Highway Traffic Safety Administration (NHTSA) published an advance notice of proposed rulemaking (ANPRM) that may signal a sea change in the way the Agency regulates developing automotive technologies. In this ANPRM, NHTSA seeks public comment on a number of specific issues aimed to aid the Agency in developing a “safety framework” to “define, assess, and manage the safety of [Automated Driving System] ADS performance while ensuring the needed flexibility to enable further innovation.” This marks a departure from the way in which the Agency has previously addressed ADS, and automotive safety more generally, which typically focuses on developing Federal Motor Vehicle Safety Standards (FMVSS). While NHTSA here recognizes that “it may be premature to develop and promulgate a specialized set of FMVSS or other performance standards for ADS competency,” the ANPRM suggests that NHTSA does ultimately intend to issue ADS-specific FMVSS.  

On June 15, the National Highway Traffic Safety Administration (NHTSA) announced its new Automated Vehicle Transparency and Engagement for Safe Testing initiative (AV TEST), a new online log that will track the status of Autonomous Vehicles’ (AVs) public roadway efforts nationwide. Specifically, the log will track submissions of state and federal AV activity as well as AV developer testing activities.

The COVID-19 epidemic has led to a critical shortage in respiratory protective devices. An amendment to the Secretary of Health and Human Services’ declaration under the Public Readiness and Emergency Preparedness (PREP) Act, published today in the Federal Register, may promote and expedite the production and use of such devices by allowing them to automatically be considered “Covered Countermeasures” for the purposes of PREP Act immunity.