On Wednesday, January 27, a Massachusetts federal judge heard oral argument on a motion filed by the Massachusetts Attorney General's Office seeking early dismissal of a constitutional challenge brought by the Alliance for Automotive Innovation against a state law regulating vehicle telematics systems and data (the "Data Law") passed by Massachusetts voters by ballot initiative last November. The Alliance contends that the Data Law—which would require manufacturers to make significant changes to telematics systems installed in their vehicles beginning with model year 2022—is preempted by the comprehensive federal regulatory scheme already in place for vehicles manufactured and distributed in the United States.

The case is currently scheduled for a bench trial in June 2021, and the presiding judge in the matter, Judge Douglas Woodlock, warned the parties at the outset of the case in early December that any preliminary injunction or dispositive motion made before the trial would be met with extreme skepticism. During the most recent hearing, the judge reiterated his preference to decide the case "based on things, not words," but conceded that the Attorney General's motion was "not without considerable force" and pressed counsel for the Alliance to identify with specificity what federal regulations are inconsistent with the Data Law.

The Data Law requires that vehicles sold in Massachusetts be equipped with "an inter-operable, standardized and open access platform" that permits owners, independent repair shops, and others to access vehicle telematics data, and imposes harsh penalties on manufacturers who fail to comply, including a private right of action by any owner or independent repair shop denied access to telematics data. The Alliance—a trade association representing the interests of vehicle manufacturers—sought a preliminary injunction barring enforcement of the statute last December but later withdrew that motion after the Massachusetts Attorney General, Maura Healey, stipulated that she would not enforce any provision of the Data Law "until after the Court rules on the claims expected to be tried to the bench on an expedited schedule in 2021," or if the "adjudication of those claims is delayed beyond July 1, 2021," only after "first providing 14 days advance notice to [the Alliance] and the Court of its intent" to enforce the Data Law.

In her motion to dismiss, the Attorney General argued that the Alliance's claims rehash the same cybersecurity arguments that Massachusetts voters "rejected at the ballot box"; rely on non-binding guidance from the National Highway Traffic Safety Administration; and fail to identify a specific federal motor vehicle safety regulation or statutory provision in conflict with the Data Law. The Attorney General also argued that the Alliance lacks "associational standing" because there are significant differences between the Alliance's members and their proprietary telematics systems. The Alliance countered in its opposition papers that compliance with the Data Law would require OEMs to remove or render inoperative cybersecurity and other access controls in vehicles sold in Massachusetts, making it impossible for OEMs to comply with the federal National Traffic and Motor Vehicle Safety Act, the Clean Air Act, and the Data Law.

At the hearing on Wednesday, Judge Woodlock made short work of the associational standing issue, rejecting the Attorney General's argument and explaining that "while members of the association are competitors and consequently have different perspectives," they "want to avoid getting swallowed up in the whirlpool of state police action and want to avoid having their head snapped off by the federal regulatory authority." The judge warned counsel for the Alliance that "people in business are supposed to be nimble and are supposed to be able to respond to changes" and that manufacturers had "better be prepared" if the Data Law is ultimately upheld, but he did not indicate how he intends to rule on the Attorney General's motion to dismiss and took the motion under advisement at the conclusion of the hour-long hearing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.