Introduction: The States Lead on AI Regulation # While Congress debates, states are acting. In the absence of comprehensive federal AI legislation, state legislatures have become the primary source of AI regulation in the United States. The result is a rapidly evolving patchwork of laws that creates compliance challenges, and liability exposure, for organizations deploying AI.
Looking Ahead # Predicting legal developments is hazardous. Courts are unpredictable, legislation is contingent on politics, and technology evolves in unexpected ways. But certain trends are visible enough that we can make informed projections about where AI liability is heading.
A Global Regulatory Divergence # The United States, European Union, and China are the world’s three dominant AI powers. Together they produce most frontier AI research, deploy most commercial AI systems, and shape most global AI policy. Yet their approaches to AI regulation, and particularly AI liability, are strikingly different.
AI Liability Legal Timeline A chronological guide to landmark cases, regulations, and developments shaping the legal landscape for AI liability. Key Developments in AI Liability Law # 2018 Epic Sepsis Model Deployed Epic Systems deploys sepsis prediction algorithm to hundreds of hospitals. Later studies will reveal significant performance gaps between clinical validation and real-world deployment, raising questions about hospital liability for algorithm selection. March 2018 Uber AV Fatality - Tempe, AZ First pedestrian fatality involving a fully autonomous vehicle (Uber ATG). Raises fundamental questions about manufacturer vs. operator liability for autonomous systems. Criminal charges filed against safety driver; civil settlements reached. 2019 FDA De Novo Clearance for IDx-DR First FDA clearance for autonomous AI diagnostic device - diabetic retinopathy screening that operates without physician oversight. Establishes precedent for AI systems that can diagnose without human intermediary. 2020 EEOC Begins AI Hiring Investigations Equal Employment Opportunity Commission begins investigating AI-powered hiring tools for potential discrimination under Title VII. Signals increased regulatory scrutiny of employment algorithms. February 2021 Mobley v. Workday Filed Landmark class action alleging Workday’s AI hiring tools discriminate against Black, disabled, and older applicants. First major federal court test of AI hiring discrimination theories. 2022 Illinois BIPA Settlements Surge Biometric Information Privacy Act litigation accelerates, with Facebook ($650M), Google ($100M), and TikTok ($92M) settlements. Establishes significant liability exposure for facial recognition and biometric AI. June 2023 Mata v. Avianca - AI Hallucination Sanctions New York federal judge sanctions attorneys for submitting ChatGPT-generated brief with fabricated case citations. Becomes defining case for attorney competence obligations when using generative AI. November 2023 California State Bar AI Guidance California becomes first state bar to issue practical guidance on attorney AI use, addressing competence, confidentiality, and verification duties. Sets template for other jurisdictions. January 2024 Florida Ethics Opinion 24-1 Florida Bar issues comprehensive ethics opinion on AI, emphasizing verification requirements and establishing “reasonable attorney” standard for AI tool competence. April 2024 New York State Bar AI Report NYSBA Task Force releases comprehensive report suggesting that refusing to use AI may itself raise competence concerns in some circumstances - a significant shift in the standard of care discussion. July 2024 ABA Formal Opinion 512 American Bar Association issues national guidance on AI in legal practice, establishing baseline ethical obligations applicable across all jurisdictions. August 2024 EU AI Act Enters Force European Union’s comprehensive AI regulation takes effect, with extraterritorial reach affecting US companies. Establishes risk-based framework and mandatory requirements for high-risk AI systems. February 2025 Texas Ethics Opinion 705 Texas State Bar joins states with formal AI ethics guidance, emphasizing practical verification workflows and client disclosure requirements. Emerging Trends # The “Failure to Use AI” Question # Perhaps the most significant emerging question: When does failure to use available AI tools constitute malpractice? The NYSBA’s suggestion that AI refusal may raise competence concerns signals a potential inversion of traditional liability analysis.