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Cruise reveals DOJ, SEC probes as it releases internal report on pedestrian crash

Cruise, the GM self-driving subsidiary, said Thursday that federal prosecutors and securities regulators have opened investigations into the October 2 incident that left a pedestrian stuck under and then dragged by one of its robotaxis.

The probes by the Department of Justice and the Securities and Exchange Commission, which were revealed as part of an internal report conducted by law firm Quinn Emanuel Urquhart & Sullivan and released Thursday, join numerous other investigations at nearly every level of government, including the California Department of Motor Vehicles, the California Public Utilities Commission and the National Highway Traffic Safety Administration.

The October 2 incident — and the decisions by Cruise leadership in the days following — has put the company's future at risk, forcing GM to slash costs and take greater control of the troubled company. Cruise lost the permits it needed to operate commercially in the state of California and has since grounded its fleet elsewhere. Its co-founder and CEO Kyle Vogt resigned and nearly 24% of its workforce had been laid off in the wake of the event.

Problems with Cruise began almost immediately after the company received the last remaining permit required to operate its robotaxi service commercially throughout San Francisco. But it was the October 2 incident, and the decisions and communication immediately following, that sent the company into free fall.

On that day, a pedestrian crossing a street in San Francisco was initially hit by a human-driven car and landed in the path of a Cruise robotaxi and run over. It wouldn't be until days later that media and some regulators learned that the stopped robotaxi then tried to pull over, dragging the pedestrian 20 feet. It was that lack of disclosure — along with the robotaxi's decision to execute a dangerous maneuver — that escalated Cruise's already tentative relationship with regulators.

The California DMV, which regulates the testing and deployment of autonomous vehicles in the state, accused Cruise of withholding video footage from its investigation, prompting the agency to suspend its permits.

That video footage, and whether it was purposely withheld, was a central question in the review conducted by Quinn Emanuel. The law firm, which was hired by GM, concluded that Cruise didn't purposely mislead regulators. Instead, a lack of judgement, missteps by leadership, an "us versus them" relationship with regulators and a fixation on correcting the inaccurate media narrative that the Cruise AV, not the human-driven Nissan, had caused the accident were all contributing factors to Cruise's problems, according to the 195-page report.

"This myopic focus led Cruise to convey the information about the Nissan hit-and-run driver having caused the Accident to the media, regulators, and other government officials, but to omit other important information about the Accident. Even after obtaining the Full Video, Cruise did not correct the public narrative but continued instead to share incomplete facts and video about the Accident with the media and the public. This conduct has caused both regulators and the media to accuse Cruise of misleading them."

Curiously, the Quinn Emanuel report focuses less on the technology, which caused the vehicle to pull over and drag the pedestrian, and more on what happened after October 2. At one point, the report calls the loss of DMV permits a "proverbial self-inflicted wound by certain senior Cruise leadership and employees who appear not to have fully appreciated how a regulated business should interact with its regulators."

Quinn Emanuel said that by October 3, more than 100 Cruise employees, including some senior members of its senior leadership, policy, legal, government affairs, and systems integrity teams were informed prior to their meetings with regulators that the Cruise AV had moved forward after the initial pedestrian impact and, in doing so, had dragged the pedestrian for approximately 20 feet.

Instead of explicitly describing to regulators what happened, Cruise employees just played the full video in these meetings, including numerous times when internet connectivity may have hampered or prevented them from seeing it in its entirety.

"Because Cruise adopted that approach, it did not verbally point out these facts. This is because Cruise assumed that by playing the Full Video of the Accident for its regulators and other government officials, they would ask questions and Cruise would provide further information about the pullover maneuver and pedestrian dragging," the report reads.

The report also found that some of the most critical leaders at Cruise, including Vogt, Chief Legal Officer Jeff Bleich and COO Gil West appeared to be playing catch up after the DMV suspended the permits.

In Slack messages reviewed by Quinn Emanuel and highlighted in the report, Vogt expressed frustration about the DMV Suspension Order, writing “I am very much struggling with the fact that our GA team did not volunteer the info about the secondary movement with the DMV, and that during the handling of the event I remember getting inconsistent reports as to what was shared. At some point a bad judgement call must have been made, and I want to know how that happened."

The report notes that the Slack messages between Bleich, West and Vogt "convey that the three senior leaders of the company -- the CEO, CLO, and COO -- were not actively engaged in the regulatory response for the worst accident in Cruise's history. Instead, they were trying to piece together what happened after the fact."