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Democratizing Debt: Blockchain’s Quest for Inclusive Lending

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On September 25, 2023

In Blog Posts

By Bharat Manwani[1]

 

The size of the world’s debt market is humongous. By the end of 2022, it had surpassed $300 trillion.[2] The sheer size itself, brings along several challenges with mainstream lending markets such as financial inclusion and subprime problems. Financial inclusion has been affected post-global financial crisis due to stricter lending rules, particularly impacting small businesses, immigrants, and women. The rise of alternative lending markets, like peer-to-peer lending, fills the gap but faces challenges of high risk, fraud, and default due to less stringent regulations. Technology has played a part attempting to make lending markets relatively inclusive and efficient than previously, particularly the applications of AI with alternate credit scoring[3] that have made borrowing more inclusive. However, these problems persist, leaving small enterprises, immigrants and women with no recourse other than attaining credit at higher interest rates. High NPAs with respect to retail lending compel institutions to make borrowing even more inaccessible. Blockchain could be a promising avenue to resolve these concerns, with Decentralized Financing as a viable approach.

 

Lending markets and ancillary financial activities operate upon the notion of ‘trust’. The lender, banks or other institutions must bestow ‘trust’ in the borrower to uphold their end of the agreement. Otherwise, the parties would have to fall back on the legal systems to enforce such agreements in order to recover their debts. The need for ‘trust’ is the reason why financial systems tend to exhibit greater size and advancement in nations characterized by elevated social capital, increased trust levels, and more robust legal frameworks.[4] The introduction of blockchain, with lending activities conducted within decentralized finance (DeFi) markets holds potential to alleviate the need for trust altogether. DeFi dispenses with the requirement of trust, since lending agreements automatically enforce the terms of the “smart contract.”

 

What is DeFi? Understanding Smart Contracts as Vending Machines

As utopian as it gets, DeFi is not just a theoretical framework anymore. Over 6 million people trade within DeFi markets, with the total value locked surpassing $50 billion at the start of this year.[5] Financial arrangements in DeFi markets are designed solely with the help of smart contracts, which rely upon the Ethereum blockchain. These smart contracts are essentially computer codes that transfer digital assets relying upon pre-determined instructions agreed upon by contracting parties. Illustratively, it shares parallels with a vending machine. A vending machine relies upon a logical function to dispense a particular item at the instance of receiving money, with no intermediary such as a store or cashier overseeing the said transaction. Smart contracts contain an enforcement mechanism that bears semblance to a vending machine, they execute automatically once certain conditions are satisfied without the involvement of any intermediary. These encompass confidential, permissionless financial frameworks that endeavor to supplant conventional intermediaries through the execution of smart contracts that are immutable, deterministic computer programs within a blockchain environment. Every DeFi lending protocol comes with its own peculiarities, but almost all of them diverge from centralized credit assessment and deploy smart contracts to manage crypto assets.[6] In contrast to established financial frameworks reliant on intermediaries administered by external entities, this paradigm automation of contract execution holds the potential to mitigate challenges linked to human discretion[7] (like fraud, censorship, and cultural bias), enhance the accessibility of financial services, and complement established financial domains.

 

DeFi lending protocols offer significant advantages over conventional frameworks. With the advent of blockchain but more particularly the idea of “decentralizing” finance aims to bridge information asymmetry in lending markets.[8] Implemented within a public blockchain, the precise content of smart contracts within each DeFi lending protocol is openly accessible and subject to audit. Moreover, users’ historical engagements with protocols, along with their lending and borrowing activities, are meticulously documented on the blockchain, ensuring a transparent record. Market information is transparent and universally accessible. Another core advantage of DeFi lies in its approach to liquidity management. Within DeFi lending, funds contributed to lending protocols are strategically aggregated, fostering optimal utilization and enhancing overall market liquidity. This efficacy is bolstered by the integration of smart contracts and blockchain technology, which facilitate streamlined processes for lending, borrowing, and arbitrage, characterized by both rapidity and cost-efficiency. Furthermore, DeFi lending protocols extend their impact by ensuring the complete transferability and exchangeability of debt holdings. This is achieved through a robust mechanism wherein IOU tokens, representative of these holdings, are safeguarded by the guarantee of redemption to fund suppliers. This design not only promotes trust and reliability within the DeFi ecosystem but also contributes to a fluid marketplace where debt instruments can be seamlessly managed and traded.

 

Current use cases and the Collateral Paradox

Despite the apparent advantages of DeFi lending, its current use cases are restricted to mainly two practical applications; token rewards and arbitrage trading. Retail users often end up in a borrowing spiral wherein they continue to borrow cryptocurrency to pay off previous DeFi loans. Interestingly, such lending protocols reward tokens to their users for making periodic payments, and hence retail users voluntarily create such borrowing spirals. Another practical application of DeFi lending is arbitrage trading, wherein users borrow a certain cryptocurrency to sell it on a different platform which has it listed at a higher price. Such arbitrage transactions and token rewards have fueled the growth of DeFi lending protocols, and hence their market capitalization is valued over $4.75 billion dollars in August 2023.[9] A particular conundrum exists, which has cramped the real-word applications of DeFi lending. The fact that such loans can be secured after depositing collateral, which is in the sole form of cryptocurrency. Built on the foundation to serve retail users that are underserved by traditional finance and to make it more inclusive, DeFi lending protocols fallaciously require users to deposit tokenized collateral of up to 150% of the loan amount. The ridiculous collateral preconditions are in place owing to the volatile nature of cryptocurrency itself, and hence this lingers as a major disincentive to enter the world of decentralized finance.

 

Real Estate Tokens: New kid on the block(chain)

The collateral problem obscures a technological revolution altogether, combatting this conundrum would leverage DeFi’s innovative elements. Nevertheless, a solution exists, one that lies within the fundamental design of DeFi protocols themselves. These protocols offer composability in the blockchain, which essentially enables the interaction of different financial components. It is illustratively the same as building a Lego set, where the user can link several financial products to a single transaction. For example, a retail user when entering a lending contract, could link cryptocurrency that he has already lent to another user, to act as collateral for the present transaction. Duplicating the nature of Lego blocks, several different smart contracts are snapped together into blocks within a single transaction, promoting a more efficient blockchain.[10] This precise capability offers the opportunity to tokenize real world assets, which would fill the lacuna created by the collateral conundrum.

 

The approach behind the solution is straightforward, tokenized real-world assets could replace cryptocurrency as security of debt, and ultimately dispense with the strict collateral preconditions in DeFi lending protocols. Additionally, the relative low volatility of real estate would mitigate overcollateralization of such secured loans, making decentralized finance efficient and financially more inclusive. The proposed solution requires sovereign authorities to have frameworks in place, which would encompass properties or any sort of physical infrastructure and store them within a digital ledger. Blockchain’s composability would further enable users to pledge their tokenized assets as security to initiate DeFi lending protocols. Lending contracts would essentially comprise enforcement mechanisms that automatically execute, and hence transfer real-estate token ownership to the lender in the case of non-payment. This facilitates the acquisition and divestiture of fractional ownership in properties, streamlines the process, enhances market liquidity and assures that secured loans with DeFi lending protocols do not require overcollateralization of loan amounts.[11] Retail users would no longer need to pledge cryptocurrency in order to take a DeFi loan, expanding the class of individuals that would have access to debt within this framework. Blockchain based land record management models have already been implemented in certain parts of India[12], wherein the framework stores ownership information and transaction histories on a decentralized ledger, leaving no scope to tamper with such data. The moot point being that such efficient frameworks are already in place and offer the opportunity to make decentralized finance inclusive and accessible to a greater extent.

 

The world’s lending market is replete with challenges of financial inclusion and subprime issues, and hence DeFi reevaluates the trust-based lending system within traditional finance. Its transformative potential is evident in its operational shift from theoretical concept to practical reality, offering transparent, automated, and efficient lending mechanisms. The major roadblock in the way of technology revolutionizing lending systems, remains to be the collateral conundrum. Nevertheless, the remedy is inherent within DeFi, the ability to tokenize real-world assets, substituting the volatile cryptocurrency collateral. Real estate tokenization aligns with the existing frameworks for blockchain-based land record management, offering a way to enhance inclusivity and accessibility while streamlining lending processes. By reimagining lending dynamics through DeFi’s automated smart contracts and blockchain’s reliability, the potential emerges for a more equitable, transparent, and efficient financial future.

 

 

 

 

 

[1] Bharat Manwani is a Student pursuing BBA LLB (Hons.) at Gujarat National Law University (GNLU), Gandhinagar. He takes active interest in the intersection of Law and Technology. For any feedback, he can be contacted at bharat21bbl020@gnlu.ac.in

[2] Rodrigo Campos, Global debt on the rise, emerging markets cross $100 trillion mark, Reuters (May. 17, 2023), https://www.reuters.com/markets/global-debt-rise-em-crosses-100-trillion-mark-iif-2023-05-17/#:~:text=The%20Institute%20of%20International%20Finance,second%2Dhighest%20quarterly%20reading%20ever.

[3] Joginder Rana, Alternate Credit Scoring Can Further Financial Inclusion, Outlook India (May. 21, 2022), https://www.outlookindia.com/business/alternate-credit-scoring-can-further-financial-inclusion-in-india-read-here-for-details-news-197707.

[4] Luigi Guiso, The Role of Social Capital in Financial Development, 94 Am Econ Rev 3 (2022).

[5] What are the fastest-growing DeFi categories by market share, CNBC (May. 9, 2023) https://www.cnbctv18.com/cryptocurrency/what-are-the-fastest-growing-defi-categories-by-market-share-16612751.htm.

[6] Massimo Bartoletti, SoK: Lending Pools in Decentralized Finance, Vol. 12676 Lecture Notes in Computer Science (2022).

[7] Chiu, Jonathan and Ozdenoren, Emre and Yuan, Kathy Zhichao and Zhang, Shengxing, On the Fragility of DeFi Lending, SSRN E-Journal (2023).

[8] Jiahua Xu and Nikhil Vadgama, From Banks to DeFi: the Evolution of the Lending Market, in Horst Treiblmaier, Defining the Internet of Value (Springer 2022).

[9] Crypto, <https://crypto.com/price/categories/lending> (Aug. 31, 2023).

[10] Sirio Aramonte, DeFi lending: intermediation without information? BIS Bulletin (Jun. 14, 2022), https://www.bis.org/publ/bisbull57.pdf.

[11] Andres Zunino, The Future Of Real Estate: Tokenization And Its Impact On The Industry, Forbes (May. 22,  2023) https://www.forbes.com/sites/forbestechcouncil/2023/05/22/the-future-of-real-estate-tokenization-and-its-impact-on-the-industry/?sh=42f96ee346bf.

[12] Shruti Shashtry, Karnataka to use blockchain for property registration, Deccan Herald (Jan. 4, 2021) https://www.deccanherald.com/india/karnataka/karnataka-to-use-blockchain-for-property-registration 934862.html.

 

Data Protection in the Times of COVID-19: Indian Aspect

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On May 21, 2020

In Blog Posts

By: Aditi Jaiswal & Anubhav Das, 4th Year students of NUALS Kochi, RMLNLU Lucknow

Introduction

In the wake of COVID-19, where the collection of data is an essential tool to search and track the individuals infected, an issue might arise in the near future when this pandemic is over. The data collected now by the state can be used for its intended purpose, but it can also be used to the detriment of an individual. As a result of this data collection, the right to privacy, which has been declared a fundamental right by the Supreme Court, may be infringed.

Among the data collected to track individuals infected—or potentially infected—with COVID-19 is location data and  biographical data. This data is personal and can be used to understand an individual and make predictions about that individual which can be then be used against them. For an example, look at the app recently launched by the Indian government, the Aarogya Setu App. This app predicts the chances of an individual having COVID-19 by tracking the location of an individual. Using the individual’s location, the app then checks if that individual has come into proximity with an infected person. This location data can be used to predict the number of family members present, which grocery store they shop at, and more. Just as Target[1] predicted the pregnancy of a woman by analysing her shopping list, algorithms can be used to process the data collected, ostensibly for COVID-19 tracking, to learn things that one might never wish to reveal. The location tracking could even be used to predict something as personal as an extramarital affair.

Although the privacy policy[2] of the app mentions that the data collected, will be deleted after a certain period of time, do we have any legislation which could be used to make the state liable should they fail to do so? This article will deal with a very basic concept in data protection law: purpose limitation. This article will analyse the existing law in India and whether or not it can combat such issues, before further analysing the Data Protection Bill of 2019 and its importance in the current case.

The Present:

The principle of purpose limitation under the data protection law is this: the data collected must be used for the purpose specified and when that specified purpose is accomplished, the data must later be deleted. It is essential that this principle is adhered to with the data collected by the state to track COVID-19 cases. This is the only way to ensure the data can never be used later for any other purpose.

Currently, the IT (Reasonable Security Practices And Procedures And Sensitive Personal Data or Information) Rules, 2011 (“IT Act”) governs the collection of data.[3] The IT Act recognizes the need for a privacy policy, information collection requirements, information disclosure requirements and more. Rule 5 (4) of the IT Act deals with purpose limitation. Rule 5 states that the “body corporate” cannot retain the data collected after the purpose for which it was collected has been accomplished. This means the “body corporate” are mandated to delete the data once the purpose is accomplished. Had this rule been written more broadly, it could have effectively dealt with the issue of data collection by the state.  The problem lies in the definition of “body corporate” under the rule. Rule 5(4) only defines “body corporate” to be “any company and includes a firm, sole proprietorship or other association of individuals engaged in commercial or professional activities”.[4] Thus, this rule does not apply to the state and the data collection done by the state to track cases of COVID-19. This oversight in the IT Act can be dealt with, either through an amendment to the IT Act or with new data protection legislation.

The Future:

In the Puttuswamy case,[5] the Supreme Court acknowledged the need for separate legislation for data protection in India. As a result, after much deliberation, the Personal Data Protection Bill, 2019 (the “PDP Bill”) was introduced in parliament on December, 11 2019. The bill is currently being analysed by a Joint Parliamentary Committee and it includes important provisions which could be used to combat the problem of data collection by the state in the times of COVID-19.

Section 9(1) of the PDP Bill states that the “data fiduciary” shall not retain personal data once the purpose of collecting that data is fulfilled.[6] An important aspect of this provision is that the rule governs not just any “body corporate,” but rather any “data fiduciary.” Section 3 (13) of the PDP Bill defines “data fiduciary” to include the state. This means that if this Bill was law right now, the data collected by the state would be required to be deleted once the pandemic is over or once that data has been used for its purpose. Moreover, if the state does not comply with this provision then it “shall be liable to a penalty which may extend to fifteen crore rupees or four percent of its total worldwide turnover of the preceding financial year, whichever is higher.” However, the PDP Bill is not law right now and there is no a chance of it being enacted soon. This might give the state an active chance to evade liability, even if they violate the privacy of an individual.

The Reality:

As mentioned above, the PDP Bill is still being considered by a Joint Parliamentary Committee. It has not even seen the floor of discussion in the parliament. No one knows when or if this Bill will pass and become law. Moreover, considering the current situation of the COVID-19 pandemic, such discussions or deliberations will only take place once the pandemic is over. Thus, even if the Bill becomes an Act, the important thing to consider now is the retrospective applicability of it.

The state will only be liable for misuse of the data collected now if, when the PDP Bill becomes law, the law has retrospective application. The Bill, in its current form, is silent regarding retrospective application. As per the BN Srikrishna Committee report,[7] which presented the draft Personal Data Protection Bill 2018, the PDP Bill will have no retrospective application. The rationale given by the committee is that retrospective application of the law will not give the data fiduciary enough time to come into compliance. Thus, the state can evade all liability for misuse of personal data and the data collected now can be misused without legal repercussion until the PDP Bill becomes law. This will ultimately hamper the privacy of individuals.

Conclusion:

Data protection legislation in India is needed now. This legislation will help prevent data misuse in the future and will help to maintain the privacy of an individual. The issue of data collection in the times of COVID-19 can also be remedied by amending the IT Act’s definition of “body corporate” to include the state or by enacting the PDP Bill along with a provision for its retrospective application. The retrospective application of the Bill will be an essential step towards curbing the potential misuse of data being done now by the state. This in turn will preserve and protect the informational privacy of individuals.

[1] See Kashmir Hill, How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did, FORBES (Feb. 16, 2012, 11:02am), https://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/#69f563446668.

[2] See Rohit Chatterjee, Arogya Setu App Gets Revised Privacy Policy, ANALYTICSINDIAMAG (Apr. 2020), https://analyticsindiamag.com/arogya-setu-app-gets-revised-privacy-policy/.

[3] See S.S. Rana & Co, Advocates, India: Information Technology (Reasonable Security Practices And Procedures And Sensitive Personal Data Or Information) Rules, 2011, Mondaq (Sept. 5, 2017), https://www.mondaq.com/india/data-protection/626190/information-technology-reasonable-security-practices-and-procedures-and-sensitive-personal-data-or-information-rules-2011.

[4] See Elonnai Hickok, Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011, Centre for internet & society (Aug. 11, 2015), https://cis-india.org/internet-governance/blog/big-data-and-information-technology-rules-2011.

[5] See K. S. Puttaswamy v. Union of India, Writ Petition (Civil) No . 494 of 2012 (Sup. Ct. India Aug. 24, 2017).

[6] See The Personal Data Protection Bill, 2019, PRS Legislative Research, https://www.prsindia.org/billtrack/personal-data-protection-bill-2019.

[7] Committee of Experts Under the Chairmanship of Justice B.N Srikrishna, A Free and Fair Digital Economy: Protecting Privacy, Empowering Indians, Ministry of Electronics & Info. Technology,  July 2018, https://meity.gov.in/writereaddata/files/Data_Protection_Committee_Report.pdf.

Health Information Technology: Technology in Your Health Care

By

On May 3, 2020

In Blog Posts

By: Rachel Whalen

“In 2019, healthcare consumers continue to demand greater transparency, accessibility and personalization.”[1] In this increasingly digital age, incorporating Health information technology (“Health IT”) into the health industry is very important. Health IT is “the exchange of health information in an electronic environment.”[2] A variety of electronic methods are used, such as computerized disease registries, electronic record systems (“EHRs”), and electronic prescribing.[3] Health care systems are implementing Health IT to mange health information and care for individuals and groups.[4]

The widespread use of Health IT improves quality of care, prevents medical error, reduces costs, and decreases inefficiencies.[5] Communication between health care providers and patients is better than ever before thanks to advances in securing Health IT networks.[6] More accurate EHRs can follow a patient to different health care providers. Apps and increased access to information can give patients more control over their care. This has improved the ability to help patients meet their health goals and to give the patients more control over their health.[7] Health IT’s merging of technology with healthcare has improved access to healthcare and the consistency of care.[8]

There are several different components of Health IT that add complexity to the system which does not exist in other communication technologies. The central component of Health IT infrastructure is the EHR.[9] These EHRs, or electronic medical records (“EMRs”), contain all of a person’s official health record in a digital format.[10] These digital records can be viewed even when the doctor’s office is closed, providing greater access to a person’s health information.[11] EHRs can also be used to share information between multiple healthcare providers and agencies within the healthcare system.[12] This makes it easier for doctors to share information with specialists and ensure consistent care.[13] Health IT also works outside of the healthcare system with personal health records (“PHRs”). PHRs are self-maintained health records controlled by the patient themself.[14] PHRs can be used to track doctor visits and treatments, as well as activities outside of the doctor’s office.[15] Patients can track their eating and exercise habits, as well as their blood pressure, heartbeat, and other medical parameters.[16] PHRs may even record medications and prescriptions if the PHR is linked to the doctor’s electronic prescribing (“E-prescribing”).[17] E-prescribing connects the doctors directly to the pharmacy, so no paper prescriptions are lost or misread.[18] This gives patients wider access to pharmaceuticals without having to bring paper prescriptions with them.[19]

Developments in Health IT have improved the popularity and access to health records among patients. Smartphones and apps have encouraged patients to use PHRs and have helped patients become more comfortable with their digital health information.[20] Health care providers have also increasingly implemented and used patient portals due to more consumer-friendly designs. Apps and patient portals were clunky and limited near the beginning of Health IT, but modern systems provide more options and customization options.[21] Patient portals used to only provide information of upcoming appointments and perhaps some test results.[22] Now, patient portals are used to download health records, securely communicate with physicians, pay bills, check services, check insurance coverage, and order prescriptions.[23] These Health IT services grant patients more access to and control over their health information and health care treatment.

In addition to individual records, Health IT has established a health information exchange (“HIE”).[24] Health care providers must manage a mountain of patient health information. Thus, there has been a consequential increase in the importance of data analytics.[25] HIEs are systems developed by groups of health care providers to share data between Health IT networks.[26] These shared systems and agreements between health care providers not only allow for better communication and consistent care, but also provide a large database of health information to analyze the health of communities as a whole.[27] Academic researchers can use the shared health information to develop new medical treatments and pharmaceuticals.[28] This plethora of information can be used to manage population health goals and research health trends.[29]

Unfortunately, this amount of information is very difficult to manage, which again increases the reliance on data analytics to find relevant files.[30] This is where other Health IT technologies come in, specifically picture archiving and communication systems (“PACs”) and vendor-neutral archives (“VNAs”). While images have been of most importance to radiologists, other specialties, such as cardiology and neurology, are also producing a large amount of clinical images.[31] PACs and VNAs are widely used to store and manage patient medical images and, in some cases, have even been integrated into shared systems between facilities and health providers.[32] Some Health IT systems even use artificial intelligence (“AI”) to sort and manage files.[33]

In addition to the advantages discussed above, the ability to quickly share accurate information, called “interoperability,” could be the difference between life and death for a patient. Health IT tools improve the necessary cooperation between health care providers for improved patient care and lower healthcare costs.[34] The “interoperability” and rapid information sharing provided by Health IT tools provides health care providers with the most updated information and can even provide patients with immediate access to their health records. Health care providers need personal information and basic medical history, which requires patients to provide repetitive information and paperwork. Interoperability information sharing provides that basic information to health care providers without the excess paperwork and allows for faster treatment. Similarly, health care providers have access to test results from other facilities, which prevents unnecessary tests and improves consistency of treatment. Consistent treatment is further aided by follow up treatment with alerts and reminders for ongoing health conditions, appointments, and medications.[35]

Digital records protect patient information in the event of emergency by allowing recovery of documents, as well as constant access to health records, which can follow patients to any provider, regardless of location. This allows for consistent treatment. The use of electronic systems also provides the ability to encrypt information so only authorized personnel have access. Electronic information can also be tracked to record who accesses the information and when they accessed it. Several of these safety advantages are required by the Federal Government. For example, certified Health IT systems are required to designate professionals and others, to limit access to information, so as to manage care effectively.[36]

Strict government regulations limit Health IT due to the amount of confidential information contained in the health information managed by Health IT.[37] Privacy and security is a top priority for the Federal Government as well as patients and health care providers.[38] Medical records can commonly contain the most intimate details of a patient’s life.[39] These files document physical health, mental health, behavioral issues, family information including child care relationships, and financial status.[40] Health care providers need all of this sensitive information to properly treat patients, but a breach of that information could cause innumerable harms to the patients.[41] Therefore, patients are guaranteed clearly defined rights to the privacy of their health information, including electronic health information.[42]

Health care and technology touch on every aspect of our lives. Ever since the computer was invented, various methods have been implemented to improve the efficiency and access of health care incorporation.[43] From EHRs to electronic prescriptions, Health IT has been connecting vital information for patients and health care providers.[44] There are still some issues and miscommunications within the systems, but Health IT will improve as technology improves, providing crucial information and technical support to the health care industry.

[1] Ashley Brooks, What Is Health Information Technology? Exploring the Cutting Edge of Our Healthcare System, Rasmussen C. Health Sci. Blog (June 10, 2019), https://www.rasmussen.edu/degrees/health-sciences/blog/what-is-health-information-technology/ (quoting Patrick Gauthier, director of healthcare solutions at Advocates for Human Potential, Inc.).

[2] Health Information Technology Integration, Agency for Healthcare Research and Quality, https://www.ahrq.gov/ncepcr/tools/health-it/index.html (last visited Apr. 15, 2020).

[3] See id.

[4] See id.

[5] See Department of Health and Human Services, Health Information Technology, Health Information Privacy, https://www.hhs.gov/hipaa/for-professionals/special-topics/health-information-technology/index.html (last visited Apr. 15, 2020).

[6] See Brooks, supra note 1.

[7] See id.

[8] See id.

[9] See Margaret Rouse, Health IT (health information technology), SearchHealthIT (June 2018), https://searchhealthit.techtarget.com/definition/Health-IT-information-technology.

[10] See id.

[11] See Office of the National Coordinator for Health Information Technology, Health IT: Advancing America’s Health Care, https://www.healthit.gov/sites/default/files/pdf/health-information-technology-fact-sheet.pdf (last visited Apr. 15, 2020) [hereinafter “ONC”].

[12] See Rouse, supra note 9.

[13] See ONC, supra note 11.

[14] See Rouse, supra note 9.

[15] See ONC, supra note 11.

[16] See id.

[17] See id.

[18] See id.

[19] See id.

[20] See Rouse, supra note 9.

[21] See id.

[22] See id.

[23] See id.

[24] See id.

[25] See Rouse, supra note 9.

[26] See id.

[27] See id.

[28] See id.

[29] See id.

[30] See Rouse, supra note 9.

[31] See id.

[32] See id.

[33] See id.

[34] See Brooks, supra note 1.

[35] See ONC, supra note 11.

[36] See id.

[37] See Brooks, supra note 1.

[38] See ONC, supra note 11.

[39] See Institute of Medicine, Beyond the HIPAA Privacy Rule: Enhancing Privacy, Improving Health Through Research (Laura A. Levit & Lawrence O. Gostin eds., 2009).

[40] See id.

[41] See id.

[42] See ONC, supra note 11.

[43] See The History of Healthcare Technology and the Evolution of EHR, VertitechIT (Mar. 11, 2018), https://www.vertitechit.com/history-healthcare-technology/.

[44] See id.

Courts Across America Adapt and Respond to COVID-19

By

On April 29, 2020

In Blog Posts

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By: Derek Reigle

 

The COVID-19 pandemic has resulted in extraordinary changes across America and the world. This phenomena has not escaped the American legal system. Last week, the Supreme Court announced that it will begin hearing cases via teleconference, a first for the court.[1] The Supreme Court is not alone in its changes. Indeed, all over America, courts have moved hearings online, which are conducted through video teleconference software programs like Zoom.[2]

States have responded to these new online courts in interesting ways. In Texas, there are guidelines on how to dress and present oneself on Zoom in Court.[3] This makes sense because some attorneys are appearing online while still in bed, leading to judicial reprimands.[4] Further problems also have emerged. Some court hearings have even been hacked into—online trolls “zoom bombing” a court proceeding in order to disrupt the process.[5] As a result of “zoombombing,” federal prosecutors are now issuing warnings that declare intruding into uninvited zoom calls is a felony.[6]

Issues beyond just the logistical impact of online court proceedings have also developed. Some of these substantive concerns will inevitably lead to several interesting and complicated constitutional questions. One of the concerns raised by criminal defense counsels is already being argued in some state courts. They argue that the video examination of witnesses during criminal trials does not fulfill the confrontation requirement enumerated in our Constitution.[7]  Another issue is the right to a speedy trial. Cases are being pushed back to June and July across the country,[8] but what if the pandemic continues to linger? The result of these complicated legal questions could determine the future plans that are put in place for the next potential pandemic.

As of now, the extent and length of the pandemic is unknown. However, several additional changes are already permanently altering the legal landscape. Some of these changes could be beneficial in the long run for judges. Confrontation Clause issues aside, many courtroom procedures that require face to face interaction could be moved online.[9] This could help provide some transitional juice to an antiquated profession. Think about it: lawyers could handle cases further away, access to courts could be increased because people could call in remotely, and judicial efficiency could be increased as a result.

Another positive of this situation is that some prisoners who are eligible for parole are now being released in greater numbers.[10]  This is due to fears of the coronavirus spreading throughout our prisons and infecting prisoners.[11]America has highest number of incarcerated persons in the world,[12] and reducing those numbers through the release of non-violent offenders would be a great thing.

Ultimately, the next few months and, potentially, years will bring about a significant amount of changes in the way Court is conducted, both in person and online. There will also be changes in how we handle our vulnerable prison population.  All of this will lead to several interesting constitutional questions. Hopefully, we can take note of all of these noteworthy changes and implement the unexpected positives from a terrible situation.

[1] See Pete Williams, In Historic First, Supreme Court to Hear Arguments by Phone, NBC News (Apr. 20, 2020), https://www.nbcnews.com/politics/supreme-court/historic-first-supreme-court-hear-arguments-phone-n1182681.

[2] See Aaron Holmes, Courts and Government Meetings Have Fallen into Chaos After Moving Hearings to Zoom and Getting Swarmed With Nudity and Offensive Remarks, Business Insider (Apr. 20, 2020), https://www.businessinsider.com/zoom-courts-governments-struggle-to-adapt-video-tools-hearings-public-2020-4.

[3] See Electronic Hearings with Zoom, Texas Judicial Branch, https://www.txcourts.gov/programs-services/electronic-hearings-with-zoom/.

[4] See Danielle Wallace, Florida Judge Urges Lawyers to Get Out of Bed and Get Dressed for Zoom Court Cases, Fox News (Apr. 15, 2020), https://www.foxnews.com/us/florida-coronavirus-judge-lawyers-zoom-shirtless-bed-poolside-dressed.

[5] See Nick Statt,’Zoombombing’ is a Federal Offense That Could Result in Imprisonment, Prosecutors Warn, The Verge (Apr. 3, 2020), https://www.theverge.com/2020/4/3/21207260/zoombombing-crime-zoom-video-conference-hacking-pranks-doj-fbi.

[6] See id.

[7] See Interview with Hon. Anne Hartnett, Judge, Court of Common Pleas of The State of Delaware, in Dover, Del. (Apr. 21, 2020).

[8] See id.

[9] See id.

[10] See Iowa to Release Prisoners to Minimize Spread of COVID-19, KCCI (Apr. 20, 2020), https://www.kcci.com/article/iowa-to-release-prisoners-to-minimize-spread-of-covid-19/32216621.

[11] See id.

[12] See Drew Kann, 5 facts behind America’s High Incarceration Rate, CNN (Apr. 21, 2019), https://www.cnn.com/2018/06/28/us/mass-incarceratio.n-five-key-facts/index.html.

Image Source: https://www.drugtargetreview.com/news/57287/3d-visualisation-of-covid-19-surface-released-for-researchers/

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Blog: #Wanted on #WarrantWednesday

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On April 3, 2015

In Blog Posts

Patty_Hearst_FBI_posterBy: Milena Radovic, Associate Manuscripts Editor

In March 2015, Butler County Sheriff’s Office in Ohio posted a series of pictures and brief criminal history of Andrew Marcum on its Facebook page.[1]  The Sheriff’s Office requested that the public help in locating Mr. Marcum[2] because he was wanted for “burglary, kidnapping, domestic violence and criminal endangering.”[3]  Surprisingly, Mr. Marcum commented on the post and stated, “I ain’t tripping half of them don’t even know me.”[4]  Subsequently, the Sheriff’s Office responded with “If you could stop by the Sheriff’s Office, that’d be great,”[5] and then stated, “Hey, it doesn’t hurt to ask.”[6]  On Twitter, the Sheriff Richard K. Jones posted a picture of a jail cell with the caption “Hey Andrew Marcum we’ve got your room ready…”[7]  The following day the Sheriff’s Office arrested Mr. Marcum.[8]

Posts like the one by Butler County Sheriff’s Office are not uncommon. More and more police stations are utilizing social media websites, like Facebook and Twitter to catch criminals and request tips.[9]  These social media posts are essentially “electronic versions of traditional wanted posters,” and often include “a photo, description of the individual and crime, and a contact number for tips.”[10]  In order to protect the anonymity of tipsters and informants, law enforcement departments encourage the community to provide information through phone calls or emails and not directly through comments.[11]

In New York, Illinois, Colorado, and even Canada, police departments use “#warrantwednesday” on social media to catch criminals, while Florida and Indiana utilize “Turn ’em in Tuesday.”[12]  In 2014, New York State Police arrested fifteen as a result of #warrantwednesday posts and in total, arrested twenty-nine people as a result of tips received through social media.  According to Darcy Wells of the New York State Police, there is a spike in Facebook page activity on Warrant Wednesdays, and “Twitter town halls have increased the agency’s Twitter followers—which, ultimately, can help solve crimes and promote public safety.[13]

According to a study by LexisNexis, law enforcement “increasingly [rely] on social media tools to prevent crime, accelerate case closures and develop a dialogue with the public.”[14]  Although it is not rare for police to use social media to catch criminals, this method seems to be far less controversial.  In the past, police departments have faced criticism for using Facebook to catch criminals by creating fake profiles and gaining access to private information through a user’s Facebook friends.[15]  Ultimately, this method may be more effective in creating goodwill and promoting cooperation between citizens and the police.

 

[1]Tracy Bloom, Wanted Man Arrested in Ohio After Responding to Sheriff’s Facebook Post About Him, KTLA5 (Mar. 4, 2015, 8:55 AM), http://ktla.com/2015/03/04/wanted-man-arrested-in-ohio-after-responding-to-sheriffs-facebook-post-about-him/

[2] Bloom, supra note 1.

[3] Faith, Karimi, Ohio fugitive nabbed after taunting authorities on Facebook, CNN, http://www.cnn.com/2015/03/05/us/ohio-facebook-post-arrest/ (last updated Mar. 5, 2015, 9:46 AM).

[4] Bloom, supra note 1; see also Karimi, supra note 3.

[5] Bloom, supra note 1; see also Karimi, supra note 3.

[6] Bloom, supra note 1.

[7] Bloom, supra note 1; see also Karimi, supra note 3.

[8] Bloom, supra note 1; see also Karimi, supra note 3.

[9] See Judy Sutton Taylor, #WarrantWednesdays: Law enforcement jumps on a social media trend to help find criminals, ABA Journal, Mar. 2015, at 9, available at http://www.abajournal.com/magazine/article/law_enforcement_jumps_on_warrantwednesdays_trend_to_help_find_criminals/?utm_source=maestro&utm_medium=email&utm_campaign=tech_monthly (the title of the online version is Law enforcement jumps on #WarrantWednesdays trend to help find criminals).

[10] Taylor, supra note 9, at 9.

[11] See Taylor, supra note 9, at 9–10.

[12] See Taylor, supra note 9, at 10.

[13] Taylor, supra note 9, at 9–10.

[14] Lexis Nexis, Social Media Use in Law Enforcement:Crime prevention and investigative activities continue to drive usage 3 (2014), available at http://www.lexisnexis.com/risk/downloads/whitepaper/2014-social-media-use-in-law-enforcement.pdf.

[15] See Heather Kelly, Police embrace social media as crime-fighting tool, Facebook, CNN, http://www.cnn.com/2012/08/30/tech/social-media/fighting-crime-social-media/ (last updated Aug. 30, 2012, 5:23 PM).

 

Blog: Uber: Who Owns Whom?

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On March 16, 2015

In Blog Posts

By: Jillian Smaniotto, Associate Manuscripts Editor

On Wednesday, March 11, U.S. district court judges in California denied motions for summary judgment in two separate cases involving Uber and Lyft that could mean massive changes in the rapidly developing on-demand services market.[1]  Both cases will go to jury trial.[2]

Both Uber and Lyft are the subjects of suits brought by drivers seeking classification as employees, claiming they have been misclassified as independent contractors.[3]  The classification of these drivers as employees could lead to massive changes to the existing Uber and Lyft schemes, as the companies could then be held responsible for reimbursing drivers for costs incurred incidental to providing rides arranged via the Uber and Lyft services.[4]

These suits come at an interesting time as labor disputes between drivers and rideshare companies have been on the rise of late.  Recently, Uber came under fire in January for claiming to pay its drivers in New York city roughly twenty-five dollars per hour, while reports showed that estimate to be inaccurate, with the figure typically closer to nineteen dollars per hour.[5]  As a result, drivers have begun to move away from working exclusively for one service or the other, choosing instead to combine apps in order to take advantage of the differences.[6]  For example, drivers take advantage of Uber’s surge system—whereby fares rise based on demand—by using Lyft and turning off the Uber app during slow periods, and switching to Uber during surge periods.[7]  Some feel this is the best way to combat the expense of driving for one of these services, as drivers are responsible for gas, insurance, maintenance, and sometimes the purchase of a new-enough vehicle—all necessary expenses for Uber and Lyft drivers.[8]

In the cases brought against Uber and Lyft in the Northern District of California, juries will decide whether drivers have been correctly characterized as independent contractors.[9]  Drivers for both Uber and Lyft, seeking class-action status, argue that they are subject to the control of their respective services, as their fares are set and they are subject to termination for failure to follow certain rules.[10]  Uber and Lyft argue that their drivers are better classified as independent contractors because drivers have the flexibility to set their own schedules and choose their passengers.[11]

The ultimate outcomes in these cases may have far-reaching impacts on ridesharing services, as well as on other on-demand service companies and tech startups.[12]  Classification of Uber drivers—or perhaps on-demand grocery shoppers or housemaids—as employees would ultimately mean that these services would be required to pay for employee benefits and pay into state unemployment programs, clearly increasing overhead costs.[13]  Such changes could stifle the burgeoning startup on-demand service market, especially as the more traditional service sector has begun adopting similar customer-friendly policies.[14]

It is fitting that the District Court judges ruled that this issue is not one appropriate for summary judgment as it is clear that a reasonable jury may reasonably decide either way.  The platforms supporting these services are still evolving, and the regulation has yet to catch up; instead, juries will be “handed a square peg and [be] asked to choose between two round holes.”[15]

 

[1] See Ellen Huet, Juries to Decide Landmark Cases Against Uber and Lyft, Forbes (Mar. 11, 2015, 8:21 PM), http://www.forbes.com/sites/ellenhuet/2015/03/11/lyft-uber-employee-jury-trial-ruling/.

[2] See id.

 [3] See Katy Steinmetz, Uber, Lyft Lawsuits Could Spell Trouble for the On-Demand Economy, Time (Mar. 12, 2015, 2:11 PM), http://time.com/3742608/uber-lyft-lawsuits/.

 [4] See Huet, supra note 1; Steinmetz, supra note 3.

 [5] See Brian Fung, Why Drivers are Winning the Labor War Between Uber and Lyft, Wash. Post (Mar. 3, 2015), http://www.washingtonpost.com/blogs/the-switch/wp/2015/03/03/why-drivers-are-winning-the-labor-war-between-uber-and-lyft/.

[6] See id.

[7] See id.

[8] See id.

[9] See Steinmetz, supra note 3.

[10] See Huet, supra note 1; see also Ellen Huet, How Uber’s Shady Firing Policy Could Backfire on the Company, Forbes (Oct. 30, 2014, 10:00 AM), http://www.forbes.com/sites/ellenhuet/2014/10/30/uber-driver-firing-policy/ (describing how Uber drivers may be “deactivated” under no clear policy and with little to no warning).

Uber_ride_Bogota_(10277864666)[11] See Huet, supra note 1.

[12] See Bob Egelko, Court: Juries to Decide if Uber, Lyft Drivers Are Employees, SFGate (Mar. 11, 2015, 6:42 PM), http://www.sfgate.com/bayarea/article/Juries-to-decide-whether-Uber-Lyft-drivers-are-6128899.php.

[13] See id.; Huet, supra note 1.

[14] See, e.g., Taylor Soper, Taxi Companies Adopt New Apps to Keep Up with Uber, Lyft in Seattle, GeekWire (Mar. 9, 2015, 3:40 PM), http://www.geekwire.com/2015/taxi-companies-adopt-new-apps-to-keep-up-with-uber-lyft-in-seattle/.

[15] Tim Fernholz, Uber and Lyft Drivers Want To Be Paid Like Employees, Not Contractors. But What if They Are Neither?, Quartz (Mar. 12, 2015), http://qz.com/361293/uber-and-lyft-drivers-want-to-be-paid-like-employees-not-contractors-but-what-if-they-are-neither/.

 

Blog: The New Four Walls of the Workplace

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On February 16, 2015

In Blog Posts

social-media-488886_640By: Micala MacRae, Associate Notes and Comments Editor

The Supreme Court has recognized workplace harassment as an actionable claim against an employer under Title VII of the Civil Rights Act of 1964.[1]  The rise in social media has created a new medium through which workplace harassment occurs.  Courts are just beginning to confront the issue of when social media harassment may be considered as part of the totality of the circumstances of a Title VII hostile work environment claim.  Traditionally, harassment has occurred through face-to-face verbal and physical acts in the workplace.  However, the changing nature of the workplace has continued to expand with the rise of new technology, which allows employees to stay connected to the work environment at different locations outside the physical boundaries of the office.  Harassment has moved beyond the physical walls of the workplace to the virtual workplace.  The broadening conception of the workplace and increasing use of social media in professional settings has expanded the potential employer liability under Title VII.

Social media has become a powerful communication tool that has fundamentally shifted the way people communicate.  Employers and employees increasingly utilize social media and social networking sites.[2]  While companies have turned to social media as a way to increase their business presence and reduce internal communication costs, there has been the consequence of increased social media harassment.  Although social media and social networking sites are not new forms of communication, their legal implications are just now coming into focus.[3]  Several cases have addressed hostile work environment claims stemming from other forms of electronic communication, there are few addressing claims based on social media communications.[4]

The New Jersey Supreme Court, in Blakey v. Continental Airlines, Inc., was one of the first courts to consider whether an employer is responsible for preventing employee harassment over social media.[5]  In Blakey, an airline employee filed a hostile work environment claim arising from allegedly defamatory statements published by co-workers on her employer’s electronic bulletin board.[6]  The electronic bulletin board was not maintained by the employer, but was accessible to all Continental pilots and crew members.[7]  Employees were also required to access the Forum to learn their flight schedules and assignments.[8]

The court analyzed the case under a traditional hostile work environment framework, concluding that the electronic bulletin board was no different from other social settings in which co-workers might interact.[9]  Although the electronic bulletin board was not part of the physical workplace, the employer had a duty to correct harassment occurring there if the employer obtained a sufficient benefit from the electronic forum as to make it part of the workplace.[10]  The court made clear that an employer does not have an affirmative duty to monitor the forum, but that liability may still attach if the company had direct or constructive knowledge of the content posted there.[11]  The court limited consideration of social media harassment to situations where the employer derived a benefit from the forum and it could therefore be considered part of the employee’s work environment.[12]

Workplace harassment is not longer limited to the traditional four walls of the workplace.  As technology and the boundaries of the workplace have changed, courts have struggled to modernize their framework for assessing hostile work environment claims under Title VII.  These problems will only become exacerbated as society continues to embrace social media throughout our daily lives and employers continue to integrate social media into their business practices.

 

[1] See Meritor Sav. Bank v. Vinson, 477 U.S. 57, 64-67 (1986) (finding that workplace harassment based on individual’s race, color, religion, sex, or national origin is actionable under Title VII of the Civil Rights Act).

[2] Jeremy Gelms, High-Tech Harassment: Employer Liability Under Title VII for Employee Social Media Misconduct, 87 Wash. L. Rev. 249 (2012).

[3] See, e.g., Kendall K. Hayden, The Proof Is in the Posting: How Social Media Is Changing the Law, 73 Tex. B.J. 188 (2010).

[4] Id.

[5] Jeremy Gelms, High-Tech Harassment: Employer Liability Under Title VII for Employee Social Media Misconduct, 87 Wash. L. Rev. 249 (2012).

[6] Blakey v. Continental Airlines, Inc., 751 A.2d 538 (N.J. 2000).

[7] Id. at 544.

[8] Id.

[9] Id. at 549.

[10] Blakey, 751 A.2d at 551.

[11] Id.

[12] Id.

Blog: The New Meaning of Back Seat Driving

By

On February 16, 2015

In Blog Posts

2014-03-04_Geneva_Motor_Show_1186By: Peyton Stroud, Associate Notes and Comments Editor

Are we there yet?  The common adage of road trips has a whole new meaning with the advent of driverless cars.  Imagine a world where the front seat driver can face the backseat passengers, with the car driving itself down the highway.  As of this past January, this dream is becoming a reality.  Automotive giants such as BMW, Audi, and Mercedes-Benz unveiled prototypes of self-driving technologies in the recent 2015 Consumer Electronics Show (CES).[1]  These new vehicle models function autonomously while allowing its passengers to sit back and relax.  Industry experts expect these driverless vehicles to be on the road between 2017 and 2020.[2]

Many current models of cars are already featuring some self-driving technologies including automatic braking systems, adjustable cruise controls, and 360° cameras capable of stopping collisions while at low speeds.[3]  However, this year’s CESs brought more to the table than ever before.  During this year’s CES, Audi unveiled its self-driving car, nicknamed “Jack,” using its system known as the company’s Piloted Driving system.[4]  “Jack” drove an astounding 560 miles to the CES, more than any driverless car has driven before.  Its state of the art system incorporates a series of sensors and laser scanners allowing the car to drive itself in speeds of up to 70 mph.[5]  The Piloted Driving system is intended to be used for highway driving and does not work as well in urban environments, where drivers need to be at the wheel.[6]  Similarly, Mercedes-Benz introduced its driverless model called the Mercedes-Benz F105 Luxury in Motion.[7]  Its new features include a self-driving technology and a zero carbon emissions system, but most notably a new interior design.[8]  The new design allows for the vehicle’s front seats to swing around and face backwards while the vehicle drives its passengers on the highway.[9]

Other technology developers are joining forces with car manufactures to help advance this technology.[10] Nvidia, a large computer chip manufacturer, has introduced the Tegra X1 chip equipping vehicles with deep neural learning, which allows for recognition of pedestrians, cyclists, and other vehicles. More technological innovations on the horizon include systems setting a predetermined route, more adjustable cruise controls, and self-parking technologies.[11]

Legally, self-driving smart cars could pose some significant problems in both the regulatory and data privacy realm.[12]  In a regulatory sense, there are currently no transportation laws regarding self-driving cars.[13]  Furthermore, others remain weary of the “data collection” required by the cars. [14]  However, the most profound legal implication could be liability ridden – Who is responsible when something goes wrong?  More specifically, who is liable if a self-driving cars hits and kills someone?  Who is responsible for the parking ticket when the car did not recognize a no parking sign?[15]  Only four states and the District of Columbia have addressed laws regarding self-driving vehicles.[16]  Some of these states have passed laws allowing manufacturers solely for testing purposes.[17]  In an effort to predict the legal implications of these new cars, lawyers look to current liability laws for guidance.[18]  For example, in cases of parking tickets, the owners of the car will be liable.[19]  In cases of injury, product’s liability law will most likely govern cases of injury thereby allowing the victim to sue both the owner of the car and also the car’s manufacturer.  According to Professor John Villasenor, “product liability law, which holds manufacturers responsible for faulty products, tends to adapt well to new technologies.”[20]  Furthermore, Sebastian Thrun, inventor of driverless cars, opines that these driverless cars could help in reconstructing accidents and making assignment of blame more clear-cut.[21]  In his view, the trial lawyers are the ones in trouble.[22]

However, criminal penalties pose a more significant problem than civil penalties.[23]  Since criminal law centers around the intent of the perpetrator, it will be difficult to figure out how to adapt these laws to technology because robots cannot be charged with a crime.[24]  Further, “the fear of robots” and of a machine malfunctioning raise concerns for the American public.[25]  However, it seems as if Americans are willing to take the risk.  According to the Pew Research Center, nearly half of Americans would ride in a driver-less car.[26]  Time will tell if these self-driving cars will endure public scrutiny.

 

[1] See Steve Brachmann, Self-driving Cars and Other Automotive Technologies Take Center Stage at CES, IPWatchdog.com (Jan. 11, 2015), http://www.ipwatchdog.com/2015/01/11/self-driving-cars-center-stage-at-ces/id=53480/.

[2] Bill Howard, Self-driving Cars Are More Than A Promise, Extreme Tech (Jan. 12, 2015, 11:45 AM), http://www.extremetech.com/extreme/197262-its-2015-self-driving-cars-are-more-than-a-promise.

[3] Brachmann, supra note 1.

[4] Id.

[5] Brachmann, supra note 1.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] See Howard, supra note 3.

[11] See id.

[12] See id.

[13] See id.

[14] Id.

[15] See Claire Cann Miller, When Driverless Cars Break the Law, N.Y. Times (May 13, 2014), available at http://www.nytimes.com/2014/05/14/upshot/when-driverless-cars-break-the-law.html?_r=0&abt=0002&abg=0.

[16] See id.

[17] See id.

[18] See id.

[19] See id.

[20] Miller, supra note 11 (quoting John Villasensor, Products Liability and Driverless Cars: Issues and Guiding Principles for Legislation, Brookings (Apr. 2014), available at http://www.brookings.edu/~/media/research/files/papers/2014/04/products%20liability%20driverless%20cars%20villasenor/products_liability_and_driverless_cars.pdf).

[21] See Miller, supra note 11.

[22] See id.

[23] Id.

[24] See id.

[25] Miller, supra note 11.

[26] See id.

Blog: Is it a Bird? A Plane? No, it's a Drone

By

On January 23, 2015

In Blog Posts

By: Arianna White, Associate Staff

As a child, I spent many afternoons with my father and his two helicopter-enthusiast brothers.  We would go to the park and launch remote controlled helicopters and rockets in to the sky.  We flew the large, complex kind of helicopters that could drop packages from great heights and do flips while in the air.  Although craft helicopters are less in vogue today than they were twenty years ago, other small-scale flying devices have recently returned to popular consciousness.  I’m talking, of course, about drones.

When thinking about drones, many people imagine their military application.  Otherwise known as predator drones and Unmanned Combat Aerial Vehicle (UCAV), these machines are used to perform precise strikes of enemy targets.[1]  The use of these drones relies on information gathered by intelligence agencies to identify targets, and a remote operator who controls the drone’s movements.[2]

Beyond their common conception, however, the term drone refers to a larger class of Unmanned Aircraft Systems that have both public and private applications in the United States.[3]  Many Police departments, like the New York City Police Department, use drones to survey the public under the pretext that drones are intended to “check out people to make sure no one is… doing anything illegal.”[4]

Corporations and personal enterprises have also determined that drones can serve in varied, but important roles.  Amazon, for example, is interested in using drones for package delivery and has asked the Federal Aviation Administration (FAA) for permission to develop and test a drone program.[5]  While the FAA has yet to issue the necessary license to Amazon, the company persists in its request that the agency permit its use of drones.[6]

Mexican drug cartels have also developed drones to deliver packages, although their program follows a decidedly less legal route than Amazon’s.[7]  On January 19, 2015, a drone carrying nearly six pounds of methamphetamine crashed in a Mexican city along the Mexico-US border.[8]  In early 2015, a South Carolina man received a fifteen-year prison sentence for his attempt to deliver contraband to a South Carolina Prison.[9]  The crashed drone carried marijuana, cell phones and tobacco on to the prison’s grounds, although the delivery was never received by any of the prison’s inmates.[10]

Given the proliferation of unmanned aircraft, both sophisticated and home made, the FAA lacks a sophisticated policy that effectively regulates their use.  While the “current FAA policy allows recreational drone flights in the U.S.[, it] essentially bars drones from commercial use.”[11]  Although industry analysts expected the FAA to publish its proposed rules by the end of 2014 and begin the notice and comment period, the agency did not meet that goal.[12]  In fact, Gerald Dillingham, the GAO ‘s director of civil aviation said that the “consensus of opinion is the integration of unmanned systems will likely slip from the mandated deadline [and not be finalized] until 2017 or even later.”[13]

During the 112th legislative session, Congress passed the FAA Modernization Act of 2012.[14]  The act was designed to, among other non-drone-related purposes, “encourage the acceleration of unmanned aircraft programs in U.S. airspace.”[15]  Agency guidelines, in place since 1981, currently control the use of personal unmanned aircraft.[16]  Of these, individuals are prohibited from “flying above 400 feet, near crowds, beyond the line of sight or within five miles of an airport.”[17]  These types of guidelines seem reasonable and appropriate to regulate small scale, personal model aircraft and drone use.

However, there is a glaring need for federal policy that addresses and regulates the commercial use of drones.  In the absence of such a policy, local governments have begun to fill the gaps that the FAA left behind.  According to the New York Times, “At least 35 states and several municipalities have introduced legislation to restrict the use of drones in some way.”[18]  These different laws serve various functions, including governing the permissible police uses of drones, defining what type of use constitutes unlawful surveillance, and determining the punishments allowable for violations of the particular law.[19]  By allowing individual local governments to determine their own rules, in the absence of a federal standard, the FAA has missed the opportunity to both promote nationwide responsible drone use and ensure their safe, uniform use across the country.  While other countries, like Canada, Australia, and the United Kingdom have already begun enacting laws that allow commercial use of drones,[20] the United States is still stuck in 2012.

 

[1] http://www.nytimes.com/2012/05/01/world/obamas-counterterrorism-aide-defends-drone-strikes.html?_r=1

[2] http://www.nytimes.com/2012/05/01/world/obamas-counterterrorism-aide-defends-drone-strikes.html?_r=1

[3] Federal Aviation Administration. Unmanned Aircraft Systems. https://www.faa.gov/uas/.

[4] https://www.aclu.org/files/assets/protectingprivacyfromaerialsurveillance.pdf

[5] www.cnet.com/news/amazon-asks-faa-to-let-it-ramp-up-drone-developments/

[6] http://www.regulations.gov/#!documentDetail;D=FAA-2014-0474-0014

[7] http://thetequilafiles.com/2014/07/10/mexican-cartels-building-drones-to-traffic-drugs-into-the-us/

[8] http://www.latimes.com/world/mexico-americas/la-fg-mexico-meth-drone-20150121-story.html

[9] http://www.greenvilleonline.com/story/news/crime/2015/01/20/man-receives-years-flying-drone-sc-prison/22053651/

[10] http://www.washingtonpost.com/news/post-nation/wp/2014/07/31/a-delivery-drone-carrying-marijuana-cell-phones-and-tobacco-crashed-outside-of-a-s-c-prison/

[11] http://www.wsj.com/articles/drone-flights-face-faa-hit-1416793905

[12] http://www.bloomberg.com/news/2014-12-31/faa-fails-to-meet-2014-goal-for-proposed-drone-regulations.html

[13] http://www.washingtonpost.com/blogs/the-switch/wp/2014/12/10/the-faa-wont-make-up-its-mind-on-drone-rules-until-2017-at-the-earliest/

[14] https://www.congress.gov/112/plaws/publ95/PLAW-112publ95.pdf

[15] http://www.npr.org/2012/04/17/150817060/drones-move-from-war-zones-to-the-home-front

[16] http://www.nytimes.com/2014/12/07/sunday-review/things-to-consider-before-buying-that-drone.html

[17] http://www.nytimes.com/2014/12/07/sunday-review/things-to-consider-before-buying-that-drone.html, http://www.faa.gov/uas/publications/model_aircraft_operators/

[18] http://www.nytimes.com/2014/12/07/sunday-review/things-to-consider-before-buying-that-drone.html

[19] http://www.ncsl.org/research/civil-and-criminal-justice/2014-state-unmanned-aircraft-systems-uas-legislation.aspx

[20] http://www.bostonglobe.com/opinion/editorials/2014/12/07/faa-flying-blind-drone-regulation/OO4HIaE4HQv037gJ2PbXyL/story.html

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