Administrative Procedure -- active



American Chemistry Council v. EPA   (D.C. Circuit)

Protecting against the waiver of confidentiality of business information

On November 15, 2023, the NAM filed an amicus brief asking the D.C. Circuit to review an EPA rule concerning the treatment of confidential business information reported to or obtained by EPA under the Toxic Substances Control Act. TSCA requires EPA to maintain an inventory of chemicals manufactured, imported, and processed in the United States for non-exempt commercial purposes. Accordingly, companies must report a new chemical substance or a new use of an existing substance to EPA. Companies that manufacture the substance can claim confidentiality for the submitted information when reporting to EPA.

In this case, EPA's final rule allows third-party waivers of TSCA’s confidentiality protections when a third party, such as a chemical customer or processor, reports a new use of a substance that a manufacturer claimed was confidential. This could allow downstream customers or processors of a chemical who submit information to EPA to waive manufacturers’ confidentiality claims and rights. We argue in our amicus brief that TSCA does not authorize third party waiver of a manufacturer’s confidentiality protections in the fashion contemplated by EPA in its final rule. Protecting confidential business information is important to the competitive strength of the chemical industry to bring innovative solutions and new products to market. Making confidential business information freely available to other companies will disincentivize companies from investing in product development.


Related Documents:
NAM brief  (November 15, 2023)

 

Chamber of Commerce of the United States of America v. SEC   (6th Circuit)

Whether the SEC violated the APA in rescinding its 2020 proxy advisory firm rule

On June 27, 2023, in a parallel case to the NAM’s challenge to the SEC’s 2022 recission of the 2020 proxy firm rule, the NAM filed an amicus brief urging the 6th Circuit to reverse the district court grant of summary judgment for the SEC and vacate the SEC’s recission of the rule. As in our case, the U.S. Chamber of Commerce, Business Roundtable and Tennessee Chamber of Commerce and Industry brought this challenge to the 2022 rescission arguing that it is both substantively arbitrary and capricious and was adopted without observance of the Administrative Procedure Act’s mandated rulemaking procedures. Both cases seek to have the 2022 recission vacated. Our amicus brief expands on the appellants’ position that the concerns about proxy firms that animated the 2020 proxy firm rule have not abated, that the SEC failed to provide meaningful opportunity for comment prior to rescission of the 2020 rule, and that the SEC’s policy reversal is arbitrary and capricious.


Related Documents:
NAM brief  (June 27, 2023)

 

Chamber of Commerce of the United States of America v. SEC   (U.S. District Court for the Middle District of TN)

Whether the SEC violated the APA in rescinding its 2020 proxy advisory firm rule.

On September 30th, the NAM filed an amicus brief urging the Middle District of Tennessee to vacate the SEC’s recission of the rule. As in our case, plaintiffs U.S. Chamber of Commerce, Business Roundtable, and Tennessee Chamber of Commerce and Industry, brought this challenge to the 2022 rescission arguing that it is both substantively arbitrary and capricious several times over and was adopted without good-faith observance of the Administrative Procedure Act’s mandated rulemaking procedures. Both cases seek to have the 2022 recission vacated ahead of the 2023 proxy season. Our amicus brief expands on the plaintiffs’ position that the concerns about proxy firms that animated the 2020 proxy firm rule have not abated, that the SEC failed to provide meaningful opportunity for comment prior to rescission of the 2020 rule, and that the SEC’s policy reversal is arbitrary and capricious.

Unfortunately, on April 24, 2023, the court denied the plaintiffs' motion for summary judgment and granted the SEC's cross-motion.


Related Documents:
NAM brief  (September 30, 2022)

 

Earthworks v. Department of Interior   (D.C. Circuit)

Protecting the availability of critical mineral production

On July 27, 2023, the NAM filed an amicus brief in support of the government's and intervenors' position that mining law authorizes mining companies to use more than one mill site--nonmineral land used for mining support activities--per plot of land the companies seek to mine if no individual mill site is larger than five acres. Multiple mill sties are necessary to support mining. We argue that critical minerals obtained from mining play an important role in manufacturing, providing crucial inputs needed to make electric vehicles, batteries, computers and a wide range of other products. Reduced production of critical minerals would undermine U.S. national security interests by making the core military apparatus dependent on foreign sources of critical minerals. Reduced production of critical minerals would also produce worse environmental and safety outcomes by making less critical minerals available for the U.S. to develop a reliable renewable energy network and allowing nations that have weaker environmental and labor standards to dominate the critical mineral market.


Related Documents:
NAM brief  (July 27, 2023)

 

Medical Imaging & Technology Alliance v. Library of Congress   (D.C. Circuit)

Preserving the reviewability of executive action

On June 9, 2023, the NAM filed an amicus brief urging the D.C. Circuit to reverse the dismissal of an Administrative Procedure Act (APA) challenge to a final rule issued by the Librarian of the Library of Congress for lack of jurisdiction. The final rule exempts from copyright liability third-party service companies that circumvent technological protective measures for the purpose of diagnosing and repairing software-enabled medical devices, including MRI, CAT scan and X-ray machines. The trial court found that it lacks jurisdiction to consider the APA challenge because the Library of Congress is exempt from the APA.

We argue in our brief that allowing third-party repair of manufacturers’ products poses a danger to consumers and exposes companies’ intellectual property to theft by competitors. The APA authorizes judicial review of the Librarian's actions when the Librarian exercises rulemaking authority.


Related Documents:
NAM brief  (June 9, 2023)

 

National Association of Manufacturers & National Gas Services Group, Inc. v. U.S. Securities and Exchange Commission   (5th Circuit)

Whether the SEC violated the APA in rescinding its 2020 proxy advisory firm rule

In 2022, the NAM appealled the district court’s grant of judgment to the SEC on the NAM’s claims challenging the SEC’s rescission of the 2020 proxy firm rule. We argue in this appeal that the district court failed to engage on the substance of the NAM’s claims that the SEC failed to justify its rescission and to give the public a meaningful opportunity to comment in violation of the Administrative Procedure Act.


Related Documents:
NAM Reply Brief  (March 13, 2023)
Amicus brife of US Chamber and BRT  (January 13, 2023)
Amicus Brief of Former SEC Officials  (January 13, 2023)
Amicus Brief of the Society for Corporate Governance  (January 13, 2023)
NAM brief  (January 6, 2023)

 

National Association of Manufacturers & Natural Gas Services Group, Inc. v. U.S. Securities and Exchange Commission   (W.D. Tex.)

Whether the SEC violated the APA in rescinding its 2020 proxy advisory firm rule

In July 2022, the SEC issued a final rule to rescind the 2020 critical reforms subjecting proxy advisory firms—unregulated third parties with outsized influence on shareholder votes and manufacturers’ corporate governance policies—to reasonable SEC oversight just like every other participant in the securities markets. The NAM sued the SEC in the Western District of Texas arguing that the 2022 recission is arbitrary and capricious as well as procedurally defective. We have asked the court to vacate the 2022 recission in its entirety and declare that the recession is unlawful and void.

Unfortunately, on December 4, 2022, the court denied the NAM’s motion for summary judgment and granted the SEC's cross-motion.


Related Documents:
Decision  (December 4, 2022)
NAM Reply brief  (November 4, 2022)
SEC Opposition  (October 21, 2022)
NAM Motion for Summary Judgment  (September 9, 2022)
Complaint  (July 21, 2022)

 


Antitrust -- active



FTC v. Amgen   (N.D. Ill.)

Challenging the FTC’s speculative theory of anticompetitive conduct

On August 28, 2023, tthe NAM filed an amicus brief opposing the FTC’s attempt to block Amgen’s merger with Horizon, the sole manufacturer of two unique FDA-approved medicines for thyroid eye disease and chronic refractory gout. Even though Amgen and Horizon are not competitors, the FTC seeks to prevent the merger based on the speculative theory that hypothetical new competitors to Horizon’s products might achieve regulatory approval at some undetermined time in the future and that Amgen may then engage in price discounting practices to limit competition.

We argue in our brief that the FTC’s speculative theory of competitive harm is unsupported by antitrust law. Adopting the FTC’s theory would harm competition and consumers by chilling merger activity--due to uncertainty over what activity the FTC could construe as anticompetitive--which could result in further innovation and efficiencies.

Fortunately, on September 1, 2023, the parties reached an agreement on a consent order to resolve the case and allow Amgen to continue with its acqusition of Horizon.

 


Civil Procedure -- active



E. Ohman J:Or Fonder AB v. Nvidia Corporation   (9th Circuit)

Preserving the heightened pleading requirements under the PLSRA

On October 20, 2023, the NAM filed an amicus brief urging the full 9th Circuit to enforce the robust pleading standards required by the Private Securities Litigation Reform Act (PSLRA) to assert a securities fraud claim. Public companies, including many NAM members, are often the targets of frivolous securities litigation. The PSLRA created a heightened pleading standard for bringing securities fraud suits. Nevertheless, a 9th Circuit panel allowed the plaintiffs in this case to rely on an expert’s post hoc analysis to support their securities fraud claim without alleging with particularity the contents of any internal report or data source that would have put the defendant’s executives on notice that their public statements about who was purchasing the company’s gaming processing units were false or misleading when made.

We argue in our amicus brief that the full 9th Circuit should rehear this case. The panel’s decision will create a playbook for securities plaintiffs to evade the PSLRA’s stringent pleading requirements by pointing to post-hoc, made-for-litigation expert opinions resting on unreliable assumptions and devoid of any basis in internal company data.

Unfortunately, on November 15, 2023, the 9th Circuit declined to rehear the case.

 


Class Actions -- active



In re HIV Litigation   (9th Circuit)

Pushing back on inflated class actions

Yesterday, the NAM filed an amicus brief urging interlocutory review of a district court’s flawed class certification ruling that artificially inflated the size and scope of the putative class by allowing the named plaintiffs to (1) bring antitrust claims under the laws of states where they neither reside nor were injured, and (2) to seek “umbrella damages”—damages for paying for a competitor’s product because a generic drug was unavailable. In this case, In re HIV Antitrust Litigation, the named plaintiffs alleged that defendants engaged in anticompetitive conduct that prevented generic drug companies from selling cheaper HIV drugs. Ignoring the Supreme Court’s and other California district courts’ precedent, the district court here concluded that whether a named plaintiff can bring class claims under the laws of a state where they neither reside nor were injured should be considered under the typicality or adequacy requirements of Rule 23, not as a threshold Article III standing issue. According to the court, the named plaintiffs satisfied those requirements by asserting individual claims sufficiently like the antitrust or consumer protection claims under the laws in states where they neither reside nor were injured. And the damages class could include individuals who purchased competitor HIV drugs, not defendants’ HIV drug, because the alleged anticompetitive conduct could have been the proximate cause for those individuals paying more for competitor HIV drugs.

The NAM filed an amicus brief in support of the pharmaceutical defendants’ petition for interlocutory review emphasizing that plaintiffs seeking to represent a class must have Article III standing to bring each claim asserted. Here, the district court erred by following the minority approach, holding that whether a plaintiff can assert claims under laws of states other than those where the plaintiff resides or was injured is an issue of adequacy or typicality. Further, the district court artificially enlarged the class size by including in the class those who bought products from the defendants’ competitors, not defendants. As we explain in our brief, the 9th Circuit should grant the petition to protect “the courts and defendants from prolonged, expensive litigation, as well as abusive, in terrorem settlements driven by defendants’ risk aversion, not justice.” All manufacturers have an interest in ensuring that class certifications are properly tailored to concrete claims and that aggregating litigation does not distort outcomes that would have resulted had the litigants filed their claims individually.


Related Documents:
NAM brief  (October 18, 2022)

 

Xavier, et al. v. Evenflo Co., Inc. et al.   (1st Circuit)

A Concrete Injury is Required for Article III Standing

Last Friday, the NAM filed an amicus brief in the 1st Circuit asking the court to affirm dismissal of a putative class action where the proposed class members sustained no concrete harm. In this case, Xavier, et al. v. Evenflo Co., Inc., et al., the class alleged a purely economic injury—that they would not have purchased defendant’s booster seat or would have paid less for it had they known about the seat’s purported safety risks for children weighing under a certain amount. But each member of the proposed class received the full benefit of the bargain: they paid for a booster seat, they received a booster seat, and they used the booster seat without suffering any harm. Accordingly, the District of Massachusetts dismissed the claims for failing to allege a cognizable injury. The instant appeal followed.

As NAM’s brief explains, no-injury class actions can wreak havoc on the judicial system. They often lead to prolonged litigation, vacuous settlements that provide no real benefits to the class, and outcomes inconsistent with product liability and other substantive areas of law. Despite the U.S. Supreme Court’s recent holding in TransUnion v. Ramirez—"under Article III, an injury in law is not an injury in fact,”— class counsel around the country continue to bring cases under inventive damage theories, suggesting that the discovery of a potential defect or an alleged misrepresentation, even if it never caused physical harm, created a theoretical risk of harm and an undefined economic loss for the entire class based on that unrealized risk. Here, the district court properly applied the law and dismissed the claims because the plaintiffs made no showing in their pleadings that they suffered any real-world harm. The 1st Circuit should affirm that ruling to rein in abusive class actions and ensure that judicial resources are spent on claims involving actual injuries.

Unfortunately, on November 23, 2022, the 1st Circuit held that the plaintiffs have standing to seek monetary relief and remanded the case for further proceedings.


Related Documents:
NAM brief  (July 29, 2022)

 


Contracts -- active



Industrial Specialists, LLC v. Blanchard Refining Co. LLC & Marathon Petroleum Co. LP   (Texas Supreme Court)

Where businesses expressly agree to indemnification, their agreement controls under fundamental principles of contract law

The NAM filed an amicus brief in the Texas Supreme Court concerning the interpretation and enforceability of indemnity provisions in contracts between sophisticated commercial entities. In this case, the owner and operator of an oil refinery contracted with a large industrial contractor to perform specialty work. In the contract, the contractor agreed to indemnify the owner for losses or other liabilities due to bodily injury claims in connection with the contractor’s work. The owner was later sued after some of the contractor’s employees were injured. Although the owner reached a settlement with the injured workers, the contractor refused to participate in that settlement or honor its indemnity obligations. The owner filed suit, and the contractor moved for summary judgment, arguing that the owner had forfeited its contractual rights by settling with the workers. That motion was denied, and the instant interlocutory appeal followed.

Manufacturers consistently enter into contracts, like the general services agreement at issue in this case, with indemnification provisions governed under Texas law. The ability of sophisticated private parties to negotiate the allocation of risks and potential liability through contract is crucial to manufacturers’ business interests. The NAM’s brief argues that fundamental principles of contract law require Texas courts to honor the contractor’s express agreement to indemnify. The contractor’s position here would disrupt countless contracts between commercial parties and severely disincentive personal injury settlements, unnecessarily wasting judicial resources. Happily, on December 10, 2021, the court agreed to hear the case.


Related Documents:
NAM brief  (November 5, 2021)

 


Discovery -- active



In re Fluor Intercontinental, Inc. et al.   (4th Circuit)

Protecting privileged communications

The MCLA filed an amicus brief in support of Fluor Corporation's petition to the Fourth Circuit Court of Appeals seeking review of a trial court order requiring Fluor to produce privileged communications related to an internal investigation because they had been disclosed to the government pursuant to a regulatory requirement. Under the Federal Acquisition Regulation Mandatory Disclosure Rule (MDR), federal contractors must timely disclose instances in which the contractor has credible evidence that an employee has violated certain criminal laws or the civil False Claims Act. While investigating an employee's actions, Fluor found “credible evidence” of misconduct, and reported the conclusions of its investigation to the Defense Department pursuant to the MDR. That employee then sued Fluor, asserting defamation and other claims, and sought Fluor’s internal investigative files in discovery. Fluor objected on the basis that the files were protected by the attorney-client privilege and attorney work product doctrine. The district court held that Fluor’s governmental disclosure had waived privilege because it made a set of statements as part of its MDR disclosures that were “legal conclusions, . . . which only a lawyer is qualified to make,” and because Fluor had inadvertently characterized these disclosures as “voluntary” in filings before the court. Fluor sought emergency relief in the form of a writ of mandamus, and on March 6, 2020, the MCLA filed a coalition amicus brief arguing that the trial court's order poses significant adverse consequences for manufacturers in numerous regulated industries, and may ultimately chill participation in voluntary and mandatory disclosure and compliance programs. On March 13, 2020, while denying our motion to participate as amicus, the Court granted mandamus review indicating that the district court’s decision was “clearly and indisputably incorrect.”


Related Documents:
NAM brief  (March 6, 2020)

 


Energy -- active



Arizona Public Service Co. v. Arizona Corp. Commission   (Arizona Court of Appeals)

Manufacturers need reliable and affordable electric service

On August 17, the NAM filed an amicus brief urging the Arizona Court of Appeals to overturn a decision by the Arizona public utilities regulator to prevent Arizona Public Service Co.—the largest electric utility in the State—to recoup the cost of prudent capital investment in emissions-reduction technology. This case, Arizona Public Service Co. (APS) v. Arizona Corporation Commission, involves a reasonable investment by APS to install EPA-required emission controls for one of its coal power plants. The utilities regulator, Arizona Corporation Commission, acknowledged the significant costs involved in the project (nearly $370M) and found the plan prudent. After the plant had helped to preserve the reliability of Arizona’s electrical grid for several years, APS retired that plant. Despite its assurances that the investment was prudent when made, the Commission reversed course, adopting a new “planning imprudence” standard and disallowing over $200M of APS’s investment.

The NAM filed an amicus brief in support of APS’s appeal to the Arizona Court of Appeals. Our brief argues that the Commission’s new standard violates both administrative and constitutional law. First, by altering the prudence standard without engaging in formal rulemaking, the Commission violated the Arizona Administrative Procedure Act. Second, by excluding the costs of the emissions-reduction technology, the Commission flouted its constitutional mandate to set “just and reasonable rates” that are “related to” the fair value of the property used to generate electricity. The court should reject the Commission’s hindsight-biased approach which judged APS’s reasonable investment decision in light of later, unpredictable developments. Without the court’s intervention, the reliable and affordable power depended upon by manufacturers and consumers alike will be undermined.


Related Documents:
NAM brief  (August 17, 2022)

 

Enbridge Energy Ltd. Partnership, et al. v. Whitmer, et al.   (W.D. Mich.)

Federal government's exclusive role in regulating pipeline safety

On February 1, 2022, the NAM filed an amicus brief in support of Enbridge Energy’s lawsuit seeking to prevent Michigan from revoking its easement and shutting down its Line 5 pipeline. Enbridge has operated the Line 5 pipeline—which originates in Wisconsin, passes through Canada, and transports light crude and natural gas liquids into Michigan since 1953. In 2020, Michigan unilaterally revoked and terminated the nearly 70-year old easement because Enbridge had purportedly violated the public trust doctrine due to the risk of an anchor strike and potential rupture. Various lawsuits followed, including the current case, Enbridge Energy Ltd. V. Whitmer, in which Enbridge is seeking summary judgment in the Western District of Michigan on its claims that Michigan’s actions (1) are preempted by the Pipeline Safety Act and (2) violate the Foreign Affairs Doctrine.

The NAM’s amicus brief emphasizes the federal government’s exclusive role in regulating pipeline safety under the Pipeline Safety Act (49 U.S.C. § 60104). We further argued that permitting Michigan to shut down an international pipeline governed by treaty would undermine the U.S. government’s exclusive authority over transboundary pipelines, unduly burden international commerce, and weaken the federal government’s ability to speak with one voice on foreign affairs. Manufacturers have a shared interest in preventing novel attempts by states to force closure of vital pipelines based on speculative risks and despite significant economic impacts.


Related Documents:
NAM brief  (February 1, 2022)

 


Environmental -- active



United States v. Denka Performance Elastomer LLC   (E.D. La.)

Preserving the chemical risk assessment process

On August 14, 2023, the NAM requested permission to file an amicus brief in an enforcement action the EPA commenced in the Eastern District of Louisiana under the Clean Air Act to compel Denka Performance Elastomer to limit its chloroprene emissions or cease production of the chemical. Chloroprene is a chemical used to manufacture synthetic rubber. The EPA brought this action, based on its Integrated Risk Information System (IRIS) value for chloroprene and view that the IRIS value demonstrates that the emissions from Denka’s plant exceeding that value present an imminent risk of harm to the public.

We argue in our brief that IRIS values are neither statutes nor regulations and therefore the values are an improper basis for an enforcement action. IRIS simply assists the EPA in developing its emissions standards and other related rules under the Clean Air Act to assess the possible health effects of chemical exposure; IRIS does not definitely measure adverse effects of exposure. If the use of IRIS values for an enforcement action is condoned, companies could be subject to liability for their chemical emissions levels even if compliant with statutes, regulations and permit requirements.

Unfortunately, on August 16, 2023, the district court denied our motion for leave to file an amicus brief.


Related Documents:
NAM brief  (August 14, 2023)

 

Air-Conditioning, Heating & Refrigeration Institute, et al. v. U.S. EPA   (D.C. Circuit)

Emergency Compliance Relief for PIP (3:1) rule

The NAM joined with partner organizations to bring a prophylactic challenge to a final rule regulating PIP (3:1)—a persistent, bio-accumulative chemical that is ubiquitous in manufacturing operations and supply chains—under the Toxic Substances Control Act. The rule called for the prohibition of PIP (3:1) on an aggressive timeline that would have severely impacted supply chains for a wide variety of electronics, from cell phones, to robotics used to manufacture semiconductors, to equipment used to move COVID-19 vaccines and keep them at the appropriate temperature. After the NAM coalition files it petition in the D.C. Circuit raising these compliance issues, the EPA agreed to seek additional public input on the rule for a period of 60 days, with a special focus on alternative exposure reduction measures for certain products. The agency also issued a issued a rare “No Action Assurance” to notify regulated industry that it would not enforce the rule for 180 days pending next steps in the rulemaking process to provide longer-term relief. The case is currently in abeyance pending the new rulemaking.


Related Documents:
NAM comments  (May 17, 2021)
NAM Petition for Review  (March 4, 2021)

 

American Chemistry Council v. EPA   (D.C. Circuit)

Risk Management Program litigation

In 2017, the MCLA sued the EPA to challenge the agency’s rule governing risk management plans for chemical facilities and oil refineries. The rule imposed costly and burdensome requirements on facilities that handle hazardous substances without improving worker or community safety. The court stayed the litigation after the EPA delayed enforcement of the rule and proposed a substantive replacement. The EPA then issued a final rule in 2019. The litigation remains stayed pending further orders from the court.


Related Documents:
Petition for review  (March 13, 2017)
Petition to EPA for reconsideration  (February 28, 2017)

 

Baker v. Saint-Gobain Performance Plastics Corp.   (2nd Circuit)

Medical monitoring and economic loss claims in class action lawsuit

A group of individual plaintiffs brought a class action lawsuit against defendant Saint-Gobain Performance Plastics Corp., alleging that Saint-Gobain released perfluorooctanoic acid (PFOA) into groundwater that seeped into the plaintiffs' nearby land. The plaintiffs argued that they are entitled to financial damages to pay for ongoing medical health monitoring because of their alleged exposure to PFOA, and to compensate them for lower property values allegedly caused by the contamination. Saint-Gobain moved to dismiss the complaint because New York law does not recognize claims for medical monitoring absent any evidence of physical harm and does not recognize diminution of property value due to alleged groundwater contamination. The district court denied the motion to dismiss but certified immediate appellate review by the United States Court of Appeals for the Second Circuit. The NAM filed an amicus brief on behalf of Saint-Gobain to ensure that the law limiting medical monitoring and diminution-of-value claims remains appropriately balanced and favorable to manufacturers. Without appropriate limitations on these types of claims, manufacturers would be subject to massive and unwarranted increases in liability exposure.


Related Documents:
NAM brief  (March 1, 2018)

 

City and County of San Francisco v. EPA   (U.S. Supreme Court)

Challenging General NPDES Permit Prohibitions to Protect CWA Permit Shield

On February 12, 2024, the NAM filed an amicus brief asking the U.S. Supreme Court to address whether the Clean Water Act allows the EPA to include generic (and vague) prohibitions in National Pollutant Discharge Elimination System permits that subject permitholders to enforcement for exceedances of water quality standards. A NPDES permit is required to discharge a pollutant through a “point source” into “a water of the United States.” In this case, San Franscisco v. EPA, the 9th Circuit affirmed EPA’s use of a generic prohibition in San Francisco’s NPDES permit for a water treatment facility—stating that water discharge “shall not cause or contribute to the violation of any applicable water quality standard.” This ruling directly conflicts with 2nd Circuit precedent deeming generic prohibitions impermissible and could impact manufacturers’ ability to assert the permit shield defense—a defense that provides protection from liability if a manufacturer is operating under a valid permit and its facility discharges waste in accordance with the permit. Permit operators need specific guidance as to allowable discharges in accordance with the permit.

Our brief urges the Supreme Court to review this case to resolve the circuit split and highlights the key role of the permit shield defense in guarding against citizen suits and unforeseen enforcement actions.


Related Documents:
NAM brief  (February 12, 2024)

 

Commonwealth of Kentucky v. EPA   (D.C. Circuit)

Challenging PM 2.5 NAAQS

On March 6, 2024, the NAM joined a coalition of other major business trade associations to file suit in the D.C. Circuit to challenge the Environmental Protection Agency’s misguided final rule lowering the National Ambient Air Quality Standards for fine particulate matter (PM2.5) to 9 micrograms per cubic meter. The Clear Air Act requires manufacturers to obtain preconstruction permits for new and modified emissions sources obtainable only after showing that emissions from the proposed new source will not cause or contribute to a PM 2.5 NAAQS violation. The Clean Air Act also requires the EPA to review the NAAQS every five years to determine whether the PM2.5 standard should be retained or revised. In December 2020, following a complete review of the PM NAAQS, the EPA decided to retain the PM2.5 standard of 12 micrograms per cubic meter. But in June 2021, the agency announced it would reconsider that decision. The EPA ultimately issued the revised standard in an out-of-cycle reconsideration becoming the first administration to redo a promulgated NAAQS. The standard stands to impede economic development in much of the country due to many manufacturers’ inability to establish that a proposed new construction or modified emission source will not cause or contribute to a PM 2.5 NAAQS violation. The NAM therefore sued to protect manufacturers’ ability to obtain permits, expand facilities and pursue long-term investment plans, and defend our country’s competitive advantage.


Related Documents:
Petition for Review  (March 4, 2024)

 

County of San Mateo v. Chevron Corp.   (9th Circuit)

Public nuisance cases seeking to drive national energy policy on climate change.

The NAM filed an amicus brief in support of rehearing en banc by the 9th Circuit in one of over two dozen public nuisance cases seeking to drive national energy policy on climate change. This case is part of a coordinated, national litigation campaign filed in carefully chosen states and federal circuits by agenda-driven lawyers and activists. The issue presented is whether putative state-law tort claims alleging harm from global climate change are removable because they arise under federal law. In April 2022, the 9th Circuit rejected federal-question jurisdiction and all other bases for subject matter jurisdiction and remand the case to state court. In support of rehearing, the NAM filed an amicus brief arguing that the subject matter and remedies sought through this litigation are inherently national, as well as legislative and regulatory in nature, and that such complex policy matters should not be driven by individual state judges in individual state courtrooms applying (or misapplying) various state liability laws.

Unfortunately, on June 27, 2022, the 9th Circuit denied the petition for rehearing.


Related Documents:
NAM brief  (May 27, 2022)

 

Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp.   (5th Circuit)

Citizen suit interference with environmental regulation

In 2015, the NAM filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit supporting a federal judge’s decision not to impose excessive penalties on ExxonMobil for various permit violations. On remand to the district court, the groups reduced their requested penalties from $642 million to about $40 million, and the district judge awarded them about $20 million, prompting Exxon’s appeal back to the Fifth Circuit. In 2018 and 2021, the NAM filed additional amicus briefs arguing that the Constitution and Clean Air Act limit citizen suits under the Clean Air Act and asking the Fifth Circuit to enforce the constitutional line that limits federal courts to deciding discrete cases and controversies and prevents them from acting as regulators or policymakers.

Unfortunately, on August 30, 2022, the Fifth Circuit affirmed the district court's latest decision imposing a $14.25M penalty on defendant-appellants (for 3,651 purported violations). On, October 20, 2022, the NAM filed an amicus brief in support of Exxon’s petition for the 5th Circuit to rehear en banc its appeal challenging the district court’s penalty award.

Happily, on February 17, 2023, the 5th Circuit granted the petition for rehearing en banc and vacated the panel decision. On March 27, 2023, the NAM filed an amicus brief asking the full 5th Circuit to reverse the panel’s decision to enforce the limits of federal courts’ jurisdiction. This case is important to manufacturers because courts should exercise discretion in determining civil penalties to prevent creating perverse incentives for plaintiffs.


Related Documents:
NAM En Banc brief  (March 27, 2023)
Per Curiam Order  (February 17, 2023)
NAM brief in support of Exxon’s petition for rehearing en banc  (October 20, 2022)
Decision on Exxon’s second appeal  (August 30, 2022)
NAM brief in support of Exxon’s second appeal  (July 14, 2021)
NAM brief in support of Exxon’s first appeal  (January 19, 2018)
NAM brief in support of the district court’s initial decision  (September 17, 2015)

 

Environmental Comm. of the Fla. Elec. Power Coord. Grp. v. EPA   (D.C. Circuit)

Challenging the EPA's effort to amend state plans regarding emissions during startups, shutdowns and malfunctions

The NAM sued the EPA in 2015 to challenge the EPA’s declaration that 36 states’ state implementation plans (SIPs) under the Clean Air Act are invalid because they allow air emissions in excess of permit limits during startup, shutdown or equipment malfunctions. That flexibility is important to manufacturers that might temporarily exceed permit limits for reasons beyond their control. The litigation has been held in abeyance since April 2017 while the EPA considers whether to revise or rescind the rule.

 

Environmental Defense Fund v. EPA   (D.C. Circuit)

Air permitting streamlining

On June 25, 2018, the NAM moved to intervene in a case involving permitting requirements for manufacturers under the Clean Air Act. Environmental groups sued to challenge a guidance document from the U.S. Environmental Protection Agency (EPA) that streamlines Clean Air Act permits under the New Source Review program for facilities that expand or modify their operations. If the plaintiffs' claims are successful, facility modifications could be significantly delayed and rendered more expensive. The NAM's motion asks the court to allow the NAM to become a co-defendant in the case with EPA to bring the voice of manufacturers in defense of the EPA's sensible policy.

On July 13, 2018, the court held the case in abeyance pending the completion of an EPA rulemaking to implement the terms of the guidance document. The litigation is expected to reactivate when the final rule issues.


Related Documents:
NAM Motion to Intervene  (June 25, 2018)
NAM brief  (May 31, 2018)

 

Lighthouse Resources, Inc. v. Inslee   (9th Circuit)

Local interference with free trade

The NAM filed an amicus brief in a case involving the state of Washington’s authority to prohibit certain exports from Washington’s coastal ports. Washington state denied several environmental permits necessary to construct a new coal export terminal near Longview, Washington. The denials were improperly based on concerns about the use of coal for electricity generation in foreign countries. The state’s actions have dangerous implications for the power of individual states to interfere with interstate and international trade. A federal district court rejected the plaintiffs’ claims. On appeal to the 9th Circuit, the NAM’s amicus brief explained how state and local interference with foreign trade undermines a uniform foreign policy and is harmful to the national economy. Moreover, we argued that Washington’s actions violate the foreign commerce clause and that allowing the state’s actions to stand would give a green light to state and local interference with foreign trade policy.


Related Documents:
NAM brief  (November 6, 2019)

 

Natural Resources Defense Council v. Wheeler   (S.D.N.Y.)

Applicability of "Waters of the United States" rule

On February 6, 2018, the EPA issued a final rule that adds an applicability date of February 6, 2020, to the EPA’s 2015 rule governing jurisdictional “Waters of the United States” under the Clean Water Act (2015 WOTUS rule). A coalition of environmental groups sued EPA to challenge the rule, arguing that EPA lacks the statutory authority to impose an applicability date. The applicability date rule is important to manufacturers because it precludes application of the 2015 WOTUS rule while EPA develops and issues a sensible replacement WOTUS rule. The 2015 WOTUS rule asserts federal jurisdiction over millions of acres of landscape features throughout the United States, triggering permitting requirements that will slow development and increase permitting costs on manufacturers. The rule’s vague and ambiguous terms also create confusion and increase the risk of inadvertent violations. The NAM intervened in the litigation to help EPA defend the applicability date rule to allow EPA the necessary time to develop and issue a new WOTUS rule.


Related Documents:
NAM brief  (June 29, 2018)

 

North Dakota v. EPA   (D.C. Circuit)

Challenging the EPA's denial of reconsideration of Clean Power Plan

On 2/16/17, the NAM and other associations moved to intervene in a case brought by North Dakota challenging the EPA's latest action on its Clean Power Plan (CPP). The agency rejected a petition to reconsider the rule, and that decision is now being challenged in court. The case is likely to be affected by the court's soon-to-be-issued ruling in our main challenge to the CPP rule, since the procedural and substantive defects in the petition for reconsideration overlap significantly with the issues raised in the case already before the court. A motion to hold the case in abeyance pending EPA reconsideration was granted, and the case remains in abeyance.


Related Documents:
Motion to Intervene  (February 16, 2017)

 

North Dakota v. EPA   (D.C. Circuit)

EPA’s New Source Performance Standards (NSPS) for greenhouse gases from electric utilities

The NAM sought review in the U.S. Court of Appeals for the D.C. Circuit of the Environmental Protection Agency’s (EPA) 2015 Clean Power Plan rule governing New Source Performance Standards (NSPS) for greenhouse gases from electric utilities. The rule is an attempt to address emissions from new, modified and reconstructed electric generating units. This case is important for manufacturers because EPA should not rely on policy preferences rather than the rule of law.

The NAM sued the EPA with a broad industry coalition to challenge the NSPS rule. We seek to invalidate the rule to pave the way for a sensible alternative. Our briefs argue that the rule is unlawful because EPA’s conclusions are arbitrary and capricious, not supported by substantial evidence, and fail to make the requisite endangerment findings. In 2017, the D.C. Circuit held the rule in abeyance while the current administration considers whether to revise or rescind the rule.


Related Documents:
Brief on the merits  (October 13, 2016)
Preliminary statement of issues  (January 25, 2016)

 

North Dakota v. EPA   (D.N.D.)

Challenge to "Waters of the United States" rule

Upon promulgation of the EPA's 2015 rule defining jurisdictional "Waters of the United States" (WOTUS) under the Clean Water Act, a coalition of states led by North Dakota sued the EPA in federal district court in North Dakota to challenge the rule. The states then moved for preliminary injunction against the rule, which the court granted within the territorial boundaries of the plaintiff states (North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, New Mexico, Nevada, South Dakota, and Wyoming). Soon thereafter, however, the U.S. Court of Appeals for the Sixth Circuit claimed authority to consider all challenges to the WOTUS rule—to the exclusion of the North Dakota district court and several other district courts in which lawsuits had been filed, including an NAM coalition lawsuit in the U.S. District Court for the Southern District of Texas. In January 2018, however, the U.S. Supreme Court ruled that the Sixth Circuit lacked jurisdiction to consider the various WOTUS challenges. This reactivated the North Dakota case, allowing the court to proceed to the states’ merits challenges to the 2015 rule. On June 8, 2018, the NAM filed an amicus brief on behalf of the states that explains how the rule was promulgated without required procedure and how the rule violates the Clean Water Act and the U.S. Constitution.


Related Documents:
NAM brief  (June 8, 2018)

 

Oklahoma v. EPA   (10th Circuit)

Challenge to 2015 "Waters of the U.S. Rule"

Oklahoma and a coalition of business groups sued to challenge the EPA's 2015 rule governing jurisdictional "Waters of the United States" under the Clean Water Act. The rule adversely impacts manufacturers by asserting federal jurisdiction and permitting requirements over millions of acres of dry land throughout the country and by imposing unclear rules on land development. Oklahoma sought a preliminary injunction to stop the rule. A district court denied that injunction, and Oklahoma appealed. In support of their appeal, the NAM filed a coalition amicus brief that explains the impact of the rule on manufacturers and other sectors of the economy and supports an injunction in Oklahoma.


Related Documents:
NAM brief  (August 16, 2019)

 

Portland Pipe Line Corporation v. City of South Portland   (1st Circuit)

Local interference with energy exports

The NAM filed an amicus brief in the U.S. Court of Appeals for the First Circuit to overturn the city of South Portland, Maine’s ban on crude oil exports from the city’s harbor. The city council claimed it enacted the ban for health and safety reasons, but various public statements revealed a political opposition to the planned transportation of Canadian crude oil by pipeline to the harbor for export. The pipeline owner sued the city, arguing the ban violates the U.S. constitution’s commerce clause. A federal district court sided with the city. If such local energy export bans are allowed to stand, energy production and transportation would be restricted, shutting some products out of some markets, and increasing energy prices for many manufacturers. On appeal to the First Circuit, the NAM’s amicus brief explains the importance of the free trade of energy for manufacturers and argues that the city’s interference with free trade violates the U.S. constitution. On January 10, 2020, the court "sidestepped" the federal constitutional questions and certified three questions to Maine’s high court concerning potential preemption of the ordinance by state law.


Related Documents:
NAM brief  (February 19, 2019)

 

Sierra Club v. EPA   (D.C. Circuit)

Challenge to affirmative defense for equipment malfunctions

In June, 2014, the Sierra Club challenged 9 EPA Clean Air Act rules in court, alleging that provisions in each rule are no longer valid as a result of a decision in April by the U.S. Court of Appeals for the D.C. Circuit. The provisions at issue allows companies an affirmative defense to civil penalties for exceeding emissions limits that are caused by malfunctions. A company must prove that the malfunction was sudden, infrequent, not reasonably preventable and not caused by poor maintenance or careless operation, and that it took steps to correct the malfunction and minimize resulting emissions.

In April, the court decided in Natural Resources Defense Council v. EPA to vacate portions of a Portland cement industry rule pertaining to the affirmative defense, finding that the EPA lacked the authority to create a defense applicable in federal court. This Sierra Club suit attempts to remove the defense from 9 other rules in which it arises, involving various industries and kinds of equipment. Challenges to regulations must be brought within 60 days of their promulgation unless the petition "is based solely on grounds arising after such sixtieth day . . . ." The suit claims that the NRDC case decision constitutes grounds arising after the rules were promulgated.

In July, the NAM and 13 other business associations filed a motion to intervene in the suit. Manufacturers will be negatively impacted if the suit is successful, since it could make them liable for permit violations arising from unavoidable equipment malfunctions. That liability can arise both from EPA citations and from citizen suits around the country.

The rules at issue govern chemical manufacturing, pulp and paper mills, steel pickling, marine tank vessel loading operations, industrial steam-generating units, nitric acid plants and others.

On July 25, the court ordered the case held in abeyance while the EPA decided on a pending administrative petition from the Sierra Club to revise the rules. The EPA granted the petition, and on December 17, 2014, the court held this case in abeyance until the EPA completes the rules revision process. As of July 30, 2019, the EPA has not yet completed its administrative process.


Related Documents:
NAM Motion to Intervene  (July 17, 2014)

 

South Carolina Coastal Conservation League v. Wheeler   (D.S. Car.)

Defending EPA's rescission of the 2015 "Waters of the United States" rule

The MCLA intervened in an environmental group’s legal challenge to the EPA’s rescission of the prior administration’s 2015 “Waters of the United States” rule. The EPA rescinded the 2015 rule because the rule’s lack of clarity resulted in regulatory uncertainty and confusion. Additionally, because some federal courts invalidated the 2015 rule in some parts of the country and not others, manufacturers faced a regulatory patchwork that made compliance across different states very difficult. The EPA’s rescission of the 2015 rule restored regulatory consistency and clarity. A coalition of environmental groups sued to challenge the rescission, arguing that the EPA exceeded its authority in doing so. The NAM and other leading industry trade associations intervened in the case to help defend the rule and to represent the interests of our members in the litigation.

 

State of New York v. Wheeler   (S.D.N.Y.)

Applicability of "Waters of the United States" rule

On February 6, 2018, the EPA issued a final rule that adds an applicability date of February 6, 2020, to the EPA’s 2015 rule governing jurisdictional “Waters of the United States” under the Clean Water Act (2015 WOTUS rule). A group of states led by New York sued EPA to challenge the rule, arguing that EPA lacks the statutory authority to impose an applicability date. The applicability date rule is important to manufacturers because it precludes application of the 2015 WOTUS rule while EPA develops and issues a sensible replacement WOTUS rule. The 2015 WOTUS rule asserts federal jurisdiction over millions of acres of landscape features throughout the United States, triggering permitting requirements that will slow development and increase permitting costs on manufacturers. The rule’s vague and ambiguous terms also create confusion and increase the risk of inadvertent violations. The NAM intervened in the litigation to help EPA defend the applicability date rule to allow EPA the necessary time to develop and issue a new WOTUS rule.


Related Documents:
NAM brief  (June 28, 2018)

 


ERISA -- active



The ERISA Industry Committee v. City of Seattle   (U.S. Supreme Court)

Seattle's ordinance mandating health care coverage for part-time hotel workers is expressly preempted by ERISA

On February 18, 2022, the NAM filed an amicus brief urging the U.S. Supreme Court to review and reverse a 9th Circuit decision which sanctions a patchwork system of local regulation of healthcare and retirement benefits in square conflict with ERISA’s expansive preemption provision. This case, ERISA Industry Committee (ERIC) v. City of Seattle, involves a challenge to a Seattle ordinance requiring certain employers to make monthly healthcare expenditures to employees at Seattle-specific thresholds. The 9th Circuit rejected the challenge even though Congress intended for federal law—the Employee Retirement Income Security Act of 1974 (ERISA)—to provide a single uniform national scheme for the administration of healthcare and retirement plans without interference from states or municipalities. Indeed, the 1st and 4th Circuits have held that similar laws are preempted under well-established ERISA preemption principles.

The NAM filed an amicus brief in support of Supreme Court review explaining that ERISA preemption plays a critical role in making benefits possible for employees, and state and local rules that conflict with ERISA’s national uniformity must be struck down. As a practical matter, state and local mandates like this one harm workers, forcing employers to divert resources away from providing quality health coverage, and instead spend money to comply with a complex and mismatched patchwork of state and local rules. Already, localities across the country have begun to adopt similar ordinances with varied minimum benefit rates, timelines, definitions, and recordkeeping requirements—a completely unworkable, fragmented regulatory regime. Supreme Court intervention is sorely needed.

Unfortunately, on November 21, 2022, the Supreme Court denied cert.


Related Documents:
NAM brief  (February 18, 2022)

 


Expert Testimony -- active



3M Co. & Arizant Health Care, Inc. v. Amador   (U.S. Supreme Court)

Eighth Circuit Erred by Applying Erroneous Standard to Plaintiffs' General Causation Experts

The NAM filed an amicus brief urging the U.S. Supreme Court to review and reverse a deeply flawed Eighth Circuit opinion applying an erroneous standard to the admissibility of expert testimony and usurping the gatekeeping role of the trial court. This multidistrict litigation involves allegations that 3M’s Bair Hugger patient warming device causes surgical site infections. After conducting a thoughtful and thorough review of plaintiffs’ general causation experts’ opinions—a faithful application of Fed. Rule of Evidence 702—the district court found that the opinions included large analytical gaps and were not generally accepted, and, accordingly, granted summary judgment in favor of 3M.

The Eighth Circuit reversed, applying a pre-Daubert standard. Under that standard, it is an abuse of discretion to exclude expert testimony unless the experts’ opinions are “so fundamentally unsupported” that they’re of no help to a jury. This obsolete standard essentially abrogates any discretion a district court has to exclude expert testimony.

The NAM filed an amicus brief urging the Court to grant 3M’s cert petition to resolve the widespread confusion in the courts on applying Rule 702 and safeguard the scientific underpinnings of the American health care system. The Eighth Circuit’s liberal admissibility standard threatens to adversely affect those who rely on the benefits of a medical device or drug—approximately 50,000 people per day. Such critical products, which are subject to substantial scientific analysis and review by the federal government, should not be deemed defective by juries applying an erroneous, overly permissive admissibility standard.

Unfortunately, on May 16, 2022, the Supreme Court denied cert.


Related Documents:
NAM brief  (March 11, 2022)

 

Bader v. Johnson & Johnson   (California Supreme Court)

Challenging the failure to exclude unreliable expert testimony

On February 28, 2023, the NAM filed an amicus letter requesting that the California Supreme Court review and reverse a California Court of Appeal decision affirming the trial court’s admission of unreliable expert testimony that equated talc with asbestos. In this case, the plaintiff-appellee maintained that the defendants’ cosmetic talc products were contaminated with asbestos and that her exposure thereto caused her mesothelioma. A California trial judge allowed, over defendants-petitioners’ objection, the admission of expert testimony proffered by the plaintiff-appellee that equated talc’s and asbestos’ effects on DNA--a novel theory excluded in other talc trials. After a jury returned a verdict in the plaintiff-appellee’s favor, a California Court of Appeal affirmed the trial judge’s evidentiary ruling on the ground that the appellants-petitioners did not invoke a particular case name to support their challenge. In fact, the appellants-petitioners validly challenged the admissibility of the disputed testimony as an unsupported and unreliable scientific theory not accepted within the scientific community.

In our letter brief, we argue that review is necessary to clarify how to challenge a novel scientific technique--the Court of Appeal’s holding sows confusion in how to preserve expert challenges and creates an artificial, distinct standard for evaluation of certain expert testimony that is not supported by the relevant case law or California’s evidentiary rules. Unfortunately, on April 12, 2023, the California Supreme Court denied the petition for review.


Related Documents:
NAM brief  (February 28, 2023)

 

Vanderventer, et al. v. Hyundai Motor America, et al.   (Supreme Court of Wisconsin)

Challenging the failure to exclude unreliable expert testimony

On December 9, 2022, the NAM filed an amicus brief urging the Supreme Court of Wisconsin to review and reverse a trial court’s failure to exercise its gatekeeping duty to exclude unreliable expert testimony. In this case, Vanderventer, et al. v. Hyundai Motor America, et al., the plaintiffs allege that the defective design of a driver seat caused one of the plaintiffs to experience enhanced injuries from a car accident. Over the defendant’s objection, the trial court admitted the testimony of plaintiffs’ expert witnesses and the jury returned a verdict of $38 million in the plaintiffs’ favor.

Our coalition brief argues that the Supreme Court of Wisconsin should grant the petition to clarify Wisconsin trial courts’ gatekeeping obligation to ensure that expert testimony is the product of reliable principles and methods prior to admission into evidence. The trial court failed in this regard by allowing (1) plaintiffs’ expert witnesses—a biomechanical engineer and a medical doctor—“to extend their [causation] testimony beyond their specific fields of expertise”; and (2) the plaintiff’s biomechanical engineer to give design defect testimony without his ever testing the actual car seat at issue under conditions similar to those that occurred during the accident. All manufacturers have an interest in ensuring that trial courts closely scrutinize the factual foundation of expert testimony, as that testimony tends to have an outsized influence on juries.

Unfortunately, on February 21, 2023, the Supreme Court of Wisconsin denied the petition for review.


Related Documents:
NAM brief  (December 9, 2022)

 


False Claims Act -- Active



Shoshone-Bannock Tribes of the Fort Hall Reservation v. Daniel-Davis   (9th Circuit)

Scope of the Federal Land Policy and Management Act

On January 22, the NAM filed an amicus brief in an appeal to the 9th Circuit challenging a lower court finding that an Idaho land exchange between a manufacturer and the federal government violated federal law. In this case, Shoshone-Bannock Tribes of the Fort Hall Reservation v. DOI, Simplot acquired federal land from the Bureau of Land Management in accordance with the Federal Land Policy and Management Act (FLPMA) to build new gypstacks containing waste products from fertilizer in exchange for Simplot land. Nevertheless, the trial court agreed with a local tribe that the exchange was precluded by a 1900 law that restricted the potential uses of exchanged federal land.

We argue in our brief that the exchange is authorized by both the 1900 Act and FLPMA. FLPMA is a comprehensive land management statute that must be read to allow for all federal land dispositions to satisfy business expectations and foster resource development on public lands in the United States, which are crucial to supply chain and energy security for American manufacturing.


Related Documents:
NAM brief  (January 22, 2024)

 

U.S. ex rel. Island Industries, Inc. v. Sigma Corp., et al.   (9th Circuit)

An objectively reasonable reading of a statute cannot be the basis for a finding of falsity under the False Claims Act

On June 9, 2022, the NAM filed an amicus brief in the 9th Circuit arguing that, where a business acts in accordance with an objectively reasonable interpretation of an ambiguous government regulation, the business’s conduct does not fall within the ambit of the False Claims Act (FCA.) Originally enacted in 1863 in response to defense contractor fraud during the Civil War, the FCA is a federal statute used to combat fraud against the government. In this case, U.S. ex rel. Island Industries, Inc. v. Sigma Corp., a company brought a FCA suit against its competitor based on the purported failure to pay required antidumping duties. In a separate proceeding before the Court of International Trade, however, the court ruled that the antidumping duty order at issue was ambiguous and based upon the publicly available information, it was not clear whether the defendant’s product was subject to the duty. Further, the Department of Commerce thereafter agreed that the order was ambiguous, and as a result, held that no duties were owed. Nonetheless, a C.D. Cal. jury found the defendant liable for failing to pay the duties, returning an $8M verdict, before trebling.

The NAM filed a brief arguing that exposing companies to this type of draconian penalty for behaving in conformance with reasonable interpretations of legal requirements would create untold liability traps and unmoor the FCA from its narrow fraud-prevention purpose. Where, as here, a company takes an “objectively reasonable” position regarding a regulation or contract term that it was not warned away from by authoritative guidance, the FCA’s scienter—or knowledge—requirement simply is not satisfied. Further, a reasonable interpretation of an ambiguous regulation defeats any claim that there is an obligation to pay the government, or that the failure to adhere to a different reasonable interpretation is material to any payment to the government. Allowing the judgment to stand would transform the FCA into a blunt enforcement instrument and would impose unwarranted risks and uncertainties on manufacturers and other businesses that must navigate complex regulatory terrains.


Related Documents:
NAM brief  (June 9, 2022)

 

U.S. ex rel. Streck v. Eli Lilly and Company   (7th Circuit)

An objectively reasonable reading of a statute cannot be the basis for a finding of falsity under the False Claims Act

On December 22, 2023, the NAM filed an amicus brief asking the 7th Circuit not to impose False Claims Act liability where a defendant subjectively believes that it is following a legal obligation based on an objectively reasonable interpretation of an ambiguous statutory, regulatory or contract provision. In this case, a drug manufacturer participated in the federal government’s Medicaid drug rebate program which requires manufacturers to pay a rebate back to the state and federal government for each drug sold to the program based on the Average Manufacturer's Price for the drug. The plaintiff-relator alleged that Lilly miscalculated the rebate it was required to provide under the program by miscalculating the AMP even though Lilly based its calculation on a reasonable interpretation of an ambiguous term and informed the government of its interpretation without the government taking any action. The relator obtained a verdict of over $61 million, which the district court subsequently trebled.

We joined other business groups in arguing that the plaintiff failed to satisfy the falsity and knowledge requirements necessary to impose False Claims Act liability. We explained that those requirements are not satisfied where, as here, a party’s legal obligations are unclear, and the party acts in accordance with its genuinely held reasonable interpretation. Expanding False Claims Act liability to situations like this would expose government contractors to protracted litigation and potential liability any time a relator comes up with an alternative interpretation to a manufacturer’s interpretation of an ambiguous legal obligation.


Related Documents:
NAM brief  (December 22, 2023)

 


Free Speech -- active



ExxonMobil v. Healey   (2nd Circuit)

Government investigations to chill corporate speech

The NAM filed an amicus brief to oppose overbroad government investigations intended to chill corporate scientific inquiry, debate, and discussion. ExxonMobil sued the attorneys general of New York and Massachusetts to challenge overbroad subpoenas and civil investigative demands seeking more than 40 years of communications between the company and other parties involving the topic of climate change. On appeal to the U.S. Court of Appeals for the Second Circuit, the NAM’s brief explains that corporations contribute to important policy discussions involving economic, scientific and other issues of public concern and that expansive use of government investigatory powers can chill corporations’ contributions to the free exchange of ideas.


Related Documents:
NAM brief  (August 10, 2018)

 


Government Contracting -- active



Elorreaga v. ViacomCBS, Inc.   (9th Circuit)

Protecting the government contractor defense

On November 20, 2023, the NAM also filed an amicus brief asking the 9th Circuit to reverse a trial court’s decision limiting the application of the government contractor defense to state law claims. In this case, the plaintiffs brought wrongful death claims against Viacom under federal maritime law. They allege that the decedent developed mesothelioma from exposure to equipment on a U.S. Naval vessel manufactured by Viacom’s predecessor while serving in the Navy. Viacom moved to dismiss the claims as barred by the government contractor defense—applicable to contractors who provide products to the federal government that meet the government’s specifications—but the trial court denied the motion. The trial court concluded that the defense applied to bar state, not federal, claims. Thereafter, the 9th Circuit granted Viacom’s request to review the trial court’s decision on interlocutory appeal.

We argue in our amicus brief that the federal government contractor defense is an extension of the federal government’s sovereign immunity. The defense allows government contractors to receive the benefits of sovereign immunity when a contractor complies with the specifications of a federal government contract. The defense applies equally to state and federal claims. All government contractors have an interest in broad immunity to prevent them from facing liability for an alleged violation of law when they carry out the government’s objectives.


Related Documents:
NAM brief  (November 20, 2023)

 


Government Regulation -- active



Biotechnology Innovation Org., et al. v. Alex M. Azar II, et al.   (N.D. Cal.)

Challenging “Most Favored Nation” rule which creates price controls on pharmaceutical drugs

The NAM filed an amicus brief in support of the pharmaceutical industry's challenge to the Trump administration's Most-Favored Nation (MFN) Rule. The rule, which bypassed the notice and comment process that agencies must ordinarily follow before making rules effective, creates a new payment model for Medicare Part B drugs, tying payments for certain drugs (a set of 50 that encompass a high percentage of Medicare Part B drug spending) to the lowest price paid by other wealthy countries. In this case, the NAM filed an amicus brief in the Northern District of California in support of plaintiffs'--the Biotechnology Innovation Organization (BIO) and two California-based biotechnology organizations--motion for preliminary injunction. A near-identical case was filed in the District of Maryland by the Pharmaceutical Research and Manufacturers of America (PhRMA) and groups representing cancer treatment providers. The NAM's brief argues that the MFN rule is yet another fatally flawed attempt by the government to use the COVID-19 pandemic as the basis for an end-run around the Administrative Procedure Act's (APA) notice and comment procedures. The NAM's members have a vital institutional interest in ensuring that the federal government is held to the procedural safeguards provided in the APA.

Happily, oOn December 28, 2020, the district court granted the plaintiffs' motion for a preliminary. Injunction .


Related Documents:
NAM brief  (December 17, 2020)
Order Granting Preliminary Injunction  (December 17, 2020)

 

Huntsman Petrochemical LLC v. EPA   (D.C. Circuit)

Preserving the chemical risk assessment process

On July 31, 2023, the NAM filed an amicus brief urging the D.C. Circuit to vacate the EPA’s 2020 rule that sets emission standards for ethylene oxide. Ethylene oxide is frequently used to sterilize critical medical products in the United States. In a 2016 Integrated Risk Information System (“IRIS”) assessment, the EPA developed a value that estimates the health risk of inhalation exposure to ethylene oxide. The EPA used this value as a basis for setting ethylene oxide emissions standards in 2020 that limited the emissions from over 200 chemical manufacturing facilities. In 2022, the EPA issued a decision on reconsideration of its 2020 rule, reaffirming the rule and its reliance on the 2016 IRIS value.

We argued in our brief that the EPA violated the Administrative Procedure Act by using its 2016 IRIS value without following its own guidance for setting standards and providing an adequate explanation for failing to do so. Specifically, the EPA failed to follow the best available science, to take into consideration disagreement within the scientific community as to the proper approach to calculating cancer risks and to subject its 2016 IRIS value to peer review. This case is important to all chemical manufacturers who oppose using IRIS values to assess safe emission levels because such values are usually set at detect levels rather than levels that would contribute to harm. It will also have an impact on the medical community because some medical devices and instruments can only be sterilized with ethylene oxide, making the availability of the chemical necessary for safe and high-quality medical devices necessary for use in medical procedures.


Related Documents:
NAM brief  (July 31, 2023)

 

Nat'l. Pork Producers & Am. Farm Bureau Fed. v. Ross, et. Al.   (U.S. Supreme Court)

Challenging California's improper efforts to regulate the national pork market

The NAM filed an amicus brief urging the U.S. Supreme Court to review and reverse the lower courts’ dismissal of a challenge to a California ballot initiative that regulates the conduct of farmers, manufacturers, and producers nationwide. Proposition 12 bans the sale of imported pork and veal in California unless farmers and producers outside of California meet strict animal confinement standards set by California voters. The NAM argued in the brief that Proposition 12 violates the Commerce Clause by regulating conduct beyond California’s borders, impinging on other states’ sovereign authority to legislate within their own jurisdictions, and, substantially burdening out-of-state pork producers absent a sufficient and legitimate local interest.

On May 28, 2022, the Supreme Court granted the cert. petition. On June 17, the NAM filed an amicus brief asserting the same arguments included in its amicus brief filed in support of the U.S. Supreme Court granting review. This litigation is important to all manufacturers because if upheld, Proposition 12 may embolden other states to regulate out-of-state conduct, resulting in a complex web of inconsistent and competing extraterritorial regulations in the agriculture and food industries, and beyond.

Unfortunately, on May 11, 2023, the Supreme Court affirmed the 9th Circuit's decision affirming the lower court's dismissal of the case.


Related Documents:
NAM brief  (June 17, 2022)
NAM brief  (November 18, 2021)

 

PhRMA v. Landsberg   (9th Circuit)

California law freezing the Wholesale Acquisition Cost of prescription drugs violates the Commerce Clause

The NAM filed an amicus brief in the Ninth Circuit in support of PhRMA’s constitutional challenge to California’s Senate Bill 17, a drug pricing law that allows California to control wholly out-of-state prices and directly regulate conduct outside its borders. SB 17 effectively freezes a prescription drug’s wholesale acquisition cost (WAC)—the uniform, nationwide list price, akin to the sticker price for a car— nationwide for 60 days before it can be raised. As the NAM’s brief explains, by freezing a nationally uniform pricing benchmark, SB 17 impermissibly regulates the price of wholly out-of-state drug transactions. Further, upholding SB 17 threatens the success of the national common market by encouraging every state to find and manipulate pricing benchmarks in hopes of influencing downstream prices.

Unfortunately, on July 25, 2022, the Ninth Circuit affirmed the district court's decision, concluding that it did not err in finding that issues of fact exist regarding whether "SB 17's practical effect is to directly regulate transactions in interstate commerce."


Related Documents:
NAM brief  (November 26, 2021)

 

Sunoco Pipeline L.P. v. U.S. Dep't of Trans., et al.   (D.D.C.)

FOIA protections

The NAM filed an amicus brief seeking to enjoin the federal government from publicly disclosing sensitive risk assessment and hazard modeling documents associated with Sunoco's pipeline operations. Sunoco initiated this lawsuit in the U.S. District Court for D.C. after the Pipeline and Hazardous Materials Safety Administration—which had historically protected this type of information from public disclosure under the Freedom of Information Act (FOIA) given its sensitive nature—reversed course and sought to disclose the information publicly within a matter of days. Our amicus brief argues that risk assessment and hazard modeling documents provided to the federal government to help protect against a major physical or cyber-attack are critical to maintaining pipeline operations and should be protected from disclosure under FOIA for both security and commercial reasons. Manufacturers in the oil & gas industry and beyond customarily protect the type of information at issue in this case from public disclosure due to significant threats to disruption of operations and public safety from bad actors seeking to exploit potential vulnerabilities. The government's decision to disregard the applicable FOIA exemptions presents grave concerns regarding the treatment of similar information that manufacturers routinely provide to regulators.


Related Documents:
NAM brief  (October 22, 2021)

 


Immigration -- active



Chamber of Commerce of the United States, et al. v. Department of Homeland Security   (N.D. Cal.)

Challenging two rules intended to damage the H-1B program

Citing the COVID-19 pandemic as a pretext for emergency rulemaking, the Departments of Labor and Homeland Security issued two rules in mid-October 2020 creating a series of new restrictions on the H-1B visa program that would have slammed the door on talented workers in hard to fill specialty and technical roles. The rules were especially unsound because they were directly issued as final rules, with no notice or opportunity to provide comment on their harmful impacts despite cost estimates that put these rules among the most expensive federal rules ever issued. The NAM joined with a coalition of business groups, health care organizations and prominent universities to challenge the rules, filing a lawsuit against the Trump administration arguing that they were unlawful and hugely detrimental to American competitiveness. On December 1, 2020 a federal judge agreed and handed manufacturers a crucial victory that immediately vacated both rules and protected the H-1B program.


Related Documents:
NAM Motion for Preliminary Injunction or Summary Judgment  (October 23, 2020)

 

National Association of Manufacturers v. Department of Homeland Security   (N.D. Cal.)

Challenging the Trump Administration's proclamation restricting high-skilled and temporary worker nonimmigrant visas

In July 2020, the NAM filed a lawsuit in the Northern District of California against the Trump administration’s unlawful restrictions to a wide range of nonimmigrant work visas. The restrictions, which were part of a June 22 Presidential Proclamation that essentially shut off the flow of high-skilled workers for hard-to-fill jobs in the manufacturing sector, were the subject of intense member interest and concern. The restrictions were so disruptive that they quickly began to inflict irreparable harm on our members, and we argued that they lacked legal basis because economic policy–the justification for the Proclamation—is a uniquely Congressional domain, and the Proclamation exceeds the President’s constitutional authority by rewriting existing law. On October 1, 2020, Judge White granted our request for a preliminary injunction. The Justice Department has appealed that decision to the Ninth Circuit for review.


Related Documents:
Motion for Preliminary Injunction  (July 31, 2020)
Complaint  (July 21, 2020)

 

Save Jobs USA v. Dep't of Homeland Security   (D.D.C.)

H-4 visa work authorization for spouses

The NAM filed an amicus brief in the U.S. District Court for the District of Columbia supporting employers in their efforts to retain highly skilled workers. Spouses of H-1B skilled workers who have been approved for permanent residence can apply for and receive H-4 visas allowing them to work in the United States. If this rule were invalidated, manufacturers would lose access to leading talent, harming their ability to remain competitive in the global economy. A federal district court ruled that the plaintiffs lacked standing to bring the case, but the D.C. Circuit reversed and remanded the case for further proceedings. Now, following cross-motions for summary judgment, the NAM filed an amicus brief urging the court to preserve H-4 employment authorization. The NAM’s brief details the devastating impact that eliminating H-4s would have on affected employees and their families, employers, and the health of the overall economy.

Happily, on March 28, 2023, the district court upheld the rule allowing H-4 visa-holders to apply for employment authorization.


Related Documents:
NAM brief  (May 14, 2021)

 

State of Texas v. U.S.   (5th Circuit)

Supporting the DACA Program

On February 1, 2024, the NAM joined a coalition amicus brief urging the 5th Circuit to uphold DHS’s new Deferred Action for Childhood Arrivals rule. DACA is a program that allows undocumented immigrants who were brought to this country as children to apply for protection from deportation and permission to work in the United States. In this case, the 5th Circuit affirmed a district court ruling that DHS lacked authority to adopt DACA. The 5th Circuit remanded the case to the district court for consideration of whether DHS may accept new and renewal DACA applications based on DHS's promulgation of a new DACA rule. On remand, the district court invalidated the new rule, and barred DHS from approving new DACA requests.

Alongside 55 other businesses and trade associations, we argue in our brief that invalidating DACA will harm the economy because (1) businesses rely on DACA recipients as employees, customers, and job creators; and (2) DACA recipients fill jobs that would otherwise remain vacant. Moreover, DACA is a lawful exercise of executive authority.


Related Documents:
NAM brief  (February 1, 2024)

 


Insurance coverage -- active



Merck & Co., Inc. v. Ace American Insurance Co.   (New Jersey Supreme Court)

Insurance coverage for cyber events

On October 2, 2023, the NAM filed an amicus brief urging the New Jersey Supreme Court to affirm the Appellate Division’s determination that Merck’s insurers improperly denied coverage for losses arising out of a cyberattack. In this case, Merck sought coverage for losses from the 2017 NotPetya cyber event under its "all risk" property policies. The policies contained an express grant of coverage for electronic data corruption or destruction, including broad business interruption coverage. Nevertheless, the insurers denied coverage, contending that standard-form “war” exclusions—developed by the insurance industry years before cyber-risks emerged—barred coverage. The trial court and Appellate Division agreed with Merck that, by its plain language, the war exclusion was limited to situations involving the use of armed forces, and therefore did not apply. The instant appeal followed.

The NAM’s amicus brief underscores the significant threat posed by cyber risks to businesses of all sizes and across all industrial sectors. By developing and employing consistent rules of interpretation, New Jersey courts have created an environment in which policyholders can conduct business and prepare for cyber risks in a predictable and reasonable manner. The NAM further explains that the result advocated for by the insurance industry would undermine core principles of insurance policy interpretation that are critically important to manufacturers seeking coverage under policies purchased at considerable expense.

The case was resolved by the parties prior to oral argument.

 


International -- active



Thailand - Customs and Fiscal Measures on Cigarettes from the Philippines   (World Trade Organization)

Customs valuation issue in Thailand

The NAM led a group of associations in filing two World Trade Organization (WTO) statements because Thailand failed to abide by its WTO commitments on customs valuation and now threatens a company with fines of more than $2 billion and imprisonment of several individuals. Proper valuation is important because many manufacturers operate through interconnected commercial relationships and supply and production chains with producers and suppliers throughout the United States and foreign countries. The statements emphasize the importance of the WTO’s customs valuation rules to international trade, which allow companies to produce goods as efficiently as possible and to access international consumers in the global marketplace.


Related Documents:
WTO second statement  (January 25, 2019)
WTO statement  (May 12, 2017)

 


Issue Advocacy -- active



Dwyer v. Ameriprise Financial   (Pennsylvania Supreme Court)

Judicial Discretion to Decline to Award Treble Damages Under State Consumer Protection Statute

On May 24, 2023, the NAM filed an amicus brief urging the Pennsylvania Supreme Court to affirm trial courts’ discretion to refuse to award treble damages under Pennsylvania’s consumer protection law for conduct that is already the basis of an award of punitive damages. In this case, Dwyer, et al. v. Ameriprise Financial, et al., the plaintiffs-appellants asserted several tort claims and a claim under the Unfair Trade Practices and Consumer Protection Law (UTPCPL) stemming from alleged misrepresentations made regarding the plaintiffs’ payments for whole life insurance. A jury returned a verdict for the plaintiffs on their misrepresentation claims and awarded them punitive damages. The trial court subsequently ruled in the plaintiffs’ favor on their UTPCPL claim while declining to award remediable treble damages under the statute.

We argue that the plain language of the UTPCPL supports trial courts having the discretion to refuse to award treble damages under these circumstances. Interpreting the UTPCPL in this manner also avoids running afoul of the safeguards that the U.S. Supreme Court has placed on punitive damages awards. All manufacturers have an interest in avoiding crushing damages awards that could result if courts are required to award both punitive damages and treble damages for violations of a state consumer protection statute.


Related Documents:
NAM brief  (May 24, 2023)

 

Harrington v. Purdue Pharma   (U.S. Supreme Court)

Preservation of third-party releases in bankruptcy

On October 27, 2023, the NAM filed an amicus brief asking the U.S. Supreme Court to uphold bankruptcy courts’ broad equitable authority to issue third-party releases to ensure the success of a corporate reorganization plan. In this case, Purdue Pharma sought to resolve mass civil claims alleging that the company contributed to the opioid epidemic through the bankruptcy system. The Sackler family—owners of Purdue—agreed to personally contribute billions of dollars to the bankruptcy provided that all civil claims against them were released. A trial court ruled that the bankruptcy court lacked authority under the Bankruptcy Code to approve a reorganization plan that included nonconsensual releases for third parties (like the Sacklers), a decision the 2nd Circuit later reversed. The U.S. Supreme Court granted certiorari to consider “[w]hether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties, without the claimants’ consent.

We argue in our amicus brief that nonconsensual third-party releases are important tools for addressing mass tort claims efficiently and fairly. Bankruptcy courts can confirm reorganization plans containing nonconsensual third-party releases consistent with due process requirements by giving claimants notice of the releases and an opportunity to be heard.


Related Documents:
NAM brief  (October 27, 2023)

 


Jurisdiction -- active



Cameron Parish v. Apache, Inc.   (5th Circuit)

The 5th Circuit should enforce the consistent and clear application of the procedures codified in 28 U.S.C. § 1446, governing the removal of cases from state to federal courts

On September 12, 2023, the NAM joined a coalition brief in the 5th Circuit concerning removal under federal officer jurisdiction. This case is one of over 40 cases filed by a group of Louisiana parishes seeking relief for alleged damage to Louisiana’s coastal environment. The plaintiffs allege that the defendants--energy producing companies--violated the Louisiana State and Local Coastal Resources Management Act by violating or failing to obtain a use permit for oil production activities on the Louisiana coast. Defendants are authorized to remove cases against them from state to federal court for actions taken while “acting under” an officer of the United States. The defendants removed this case, in part, based upon acts taken to assist the Allies in World War II, pursuant to Shell Oil Company’s contracts with the government to refine oil. The district court found that Shell Oil Company’s contracts were insufficient to establish "acts under" a federal officer because the defendants failed to show that Shell Oil Company was "acting under" a federal officer in carrying out a specific directive to engage in the activity that provides the basis for the plaintiff’s suit.

In our amicus brief, we argue that Shell Oil Company "acted under" a federal officer because oil production was how the companies fulfilled their contractual obligation to produce refined oil to the government. Ensuring that courts properly apply federal-officer removal jurisdiction is important to all manufacturers who provide goods or services to the United States government pursuant to a contract and face potential liability claims in state courts.

 

Ethridge v. Samsung   (5th Circuit)

Scope of personal jurisdiction over out-of-state defendants

On September 22, 2023, the NAM filed an amicus brief urging the 5th Circuit to decline to extend Texas personal jurisdiction to an out-of-state manufacturer who never sold the product at issue in a lawsuit to consumers, advertised it to consumers, or directed anyone else to sell or advertise it to consumers. In this case, the plaintiff claims that a Samsung-manufactured 18650 lithium-ion battery in the plaintiff’s e-cigarette exploded in his pocket, causing severe burns. Although the plaintiff claimed that he purchased the battery on Amazon.com from a third-party seller, he sued Samsung in Texas state court asserting contract and tort claims. The defendants removed the case from state to federal court and the federal district court granted the defendants’ motion to dismiss for lack of personal jurisdiction, concluding that Samsung’s contacts with Texas were insufficient for it to exercise personal jurisdiction. Although Samsung provided batteries to companies in Texas engaged in manufacturing or repairing products, Samsung did not authorize the sale of its battery by a third-party to the plaintiff or sale of its batteries to be used in an e-cigarette.

We argue in our brief that there is an insufficient basis to exercise personal jurisdiction where a claim arises independent of a defendant’s deliberate efforts to serve a market. And exercising personal jurisdiction in this case would create unpredictability for the business community.


Related Documents:
NAM Brief  (September 22, 2023)

 

American Petroleum Institute v. Minnesota   (U.S. Supreme Court)

Jurisdiction for climate change lawsuits

On September 21, 2023, the NAM filed an amicus brief in support of energy manufacturers’ petition seeking U.S. Supreme Court review of a lower court’s remand order in a case asserting state liability claims related to climate change. This is a case seeking to hold oil and gas companies liable for the impacts of climate change in Minnesota. The 8th Circuit upheld the federal district court’s decision to remand the case to state court for lack of subject matter jurisdiction. In our brief, we argue that the subject matter and remedies sought through this litigation are inherently national, as well as legislative and regulatory in nature, and that such complex policy matters should not be driven by individual state judges in individual state courtrooms applying (or misapplying) various state liability laws. This case has important implications for all manufacturers because of the growing trend among plaintiffs’ lawyers of using public nuisance and consumer deception claims to seek monetary damages from manufacturers for broad, societal issues that are ill-suited for consideration by a patchwork of state court determinations and should be addressed in the policy process.

Unfortunately, on January 8, 2024, the U.S. Supreme Court denied the energy manufacturers' petition.


Related Documents:
NAM brief  (September 21, 2023)

 

Cemex Construction Materials Pacific, LLC v. National Labor Relations Board   (9th Circuit)

Challenging Mandatory Card Check Recognition

On February 9, 2024, the NAM joined 15 other leading business groups in filing an amicus brief urging the court to reject the National Labor Relations Board’s decision that does away with the longstanding policy of protecting workers’ rights to secret ballots in union organizing efforts. This case involved a bargaining unit of approximately 366 cement truck drivers who voted against representation by the International Brotherhood of Teamsters. Following this “no” vote, the Union accused the employer of unfair labor practices—specifically, that the employer engaged in coercive conduct to dissuade employees from voting in favor of Union representation—and asked that the results of the election be set aside, and that the employer be ordered to bargain with the Union. Although an Administrative Law Judge recommended that a new election be held, the NLRB’s Democratic majority instead used the case to announce a troubling new framework for determining when employers are required to bargain with unions without a representation election. The NLRB determined that if a union claims to have majority support and demands recognition, an employer must either (1) grant recognition without the benefit of a secret ballot election, or (2) file its own NLRB petition seeking an election. If the employer fails to take either step, the union can file an unfair labor practice charge, and the NLRB will order mandatory union recognition unless the employer proves the union did not have majority support in an appropriate bargaining unit. And, perhaps most worrying, even if the employer files a petition for election, the NLRB may cancel the election and issue a bargaining order if the employer commits virtually any unfair labor practice during the period preceding the election—this would include seemingly innocuous conduct like having a “workplace civility rule” in an employee handbook.

Our coalition argues that the Cemex decision is contrary to congressional intent by defaulting union representation to card check rather than via secret ballots and puts the burden on employers to call for an NLRB-supervised election, rather than the union as currently required. The brief also argues that the decision violates Supreme Court precedent by making any unfair labor practice sufficient to support the issuance of a bargaining order against the employer, forcing the employer to recognize a union that may not have majority support from the workforce.


Related Documents:
NAM brief  (February 9, 2024)

 

Chevron v. San Mateo County, California   (U.S. Supreme Court)

Public nuisance case seeking to drive national energy policy on climate change belong in federal court

On Wednesday, December 28, the NAM filed an amicus brief in support of energy manufacturers’ petition seeking U.S. Supreme Court review of the lower courts’ remand order in a case asserting “public nuisance” claims related to climate change. This case, Chevron Corporation, et al. v. San Mateo County, California, et al., is one of over two dozen public nuisance cases seeking to drive national energy policy on climate change. The 9th Circuit upheld the district court’s decision to remand the case to state court for lack of subject matter jurisdiction.

In our brief, the NAM argues that the subject matter and remedies sought through this litigation are inherently national, as well as legislative and regulatory in nature, and that such complex policy matters should not be driven by individual state judges in individual state courtrooms applying (or misapplying) various state liability laws. This case has important implications for all manufacturers because of the growing trend among plaintiffs’ lawyers of using public nuisance and consumer deception claims to seek monetary damages from manufacturers for broad, societal issues that are ill-suited for consideration by a patchwork of state court determinations and should be addressed in the policy process.

Unfortunately, on April 24, 2023, the Court denied the energy manufacturers' petition.


Related Documents:
NAM brief  (December 28, 2022)

 

Gulden v. Exxon Mobil Corp.   (3rd Circuit)

Scope of jurisdiction over preliminary administrative orders in Sarbanes Oxley whistleblower cases

On October 18, 2023, the NAM filed an amicus brief urging the 3rd Circuit to affirm a lower court holding that federal courts lack the authority to enforce preliminary Department of Labor orders entered in administrative whistleblower retaliation cases. In this case, a district court found that the Sarbanes-Oxley Act does not allow enforcement of a DOL preliminary order requiring immediate reinstatement of terminated plaintiffs pending final resolution of the case by a DOL administrative law judge. The plaintiffs appealed the district court’s decision to the 3rd Circuit.

We argue that the plain language of the applicable statute authorizing judicial review makes clear that district courts lack jurisdiction to enforce preliminary orders of reinstatement; judicial review should only be available when the Secretary of Labor has issued a final order finding an actual violation of the Sarbanes-Oxley Act (as opposed to a preliminary order finding just “reasonable cause” to believe there has been a violation). A decision rejecting the plaintiffs’ appeal is critical for protecting employers’ administrative due process right to challenge preliminary orders in DOL proceedings.


Related Documents:
NAM Brief  (October 18, 2023)

 

Parish of Plaquemines, et al v. Chevron USA, Inc., et al.   (5th Circuit)

The 5th Circuit should enforce the consistent and clear application of the procedures codified in 28 U.S.C. § 1446, governing the removal of cases from state to federal courts

The case concerns a group of Louisiana parishes, supported by the Louisiana Department of Natural Resources and the Louisiana Attorney General as intervenors, seeking relief for alleged damage to Louisiana’s coastal environment based on acts committed during World War II that were controlled, directed, and regulated by the federal government. After learning of the WWII connection to plaintiffs’ claims via the plaintiffs’ 2018 expert report, the defendant oil companies sought to remove 42 related cases to federal court. In the defendants' first appeal, the Fifth Circuit held that removal was untimely because the defendants should have ascertained the federal question earlier based on vague references buried in an exhibit to the plaintiffs’ complaint. On September 15, 2020, the NAM filed an amicus brief in support of the defendants’ petition for rehearing en banc, arguing that the court's decision created uncertainty in all forms of removal, forcing defendants to file protective removal notices for fear that even equivocal and uncertain statements by plaintiffs may start the 30-day removal clock. The NAM maintained that the decision undermined the purpose of the removal statute to the detriment of both litigants and courts. On August 5, 2021, the court agreed with the defendants that their removal based on federal-officer jurisdiction was timely, but remanded the case for consideration of whether federal question jurisdiction exists.

On remand, the district courts found federal questions jurisdiction wanting, which the Fifth Circuit affirmed. The panel held that the defendants failed to present evidence that they acted pursuant to a federal officer's directive in the absence a contract that made them accountable to the federal government. On November 16, 2022, the NAM filed an amicus brief in support of the defendants' petition for a panel rehearing or, in the alternative, rehearing in banc, arguing that the panel decision conflicts with Congress's expressive directive, Supreme Court precedent, and other Circuits' case law, which do not require evidence of an express contract to establish "guidance or control" by the federal government for removal purposes.

Unfortunately, on November 29, 2022, the Fifth Circuit the petition.


Related Documents:
NAM brief  (November 16, 2022)
NAM brief  (September 15, 2020)

 

Plaquemines Parish v. BP America Prod. Co.   (5th Circuit)

The 5th Circuit should enforce the consistent and clear application of the procedures codified in 28 U.S.C. § 1446, governing the removal of cases from state to federal courts

On July 3, the NAM joined a coalition brief in the 5th Circuit concerning removal under federal officer jurisdiction. This case is one of over 40 cases filed by a group of Louisiana parishes seeking relief for alleged damage to Louisiana’s coastal environment. The plaintiffs allege that the defendants—energy producing companies violated the Louisiana State and Local Coastal Resources Management Act by violating or failing to obtain a use permit for oil production activities on the Louisiana coast. Defendants are authorized to remove cases against them for actions taken while acting under an officer of the United States. The defendants removed this case, in part, based upon acts taken to assist the Allies in World War II, pursuant to a contract with the government to refine oil. The district court found that Gulf Oil Corporation’s contract was insufficient to establish “acts under” a federal officer “because it imposed no federal supervision or control whatsoever over Gulf Oil’s oil production activities.

In our amicus brief, we argue that The Texas Company and Gulf Oil Corporation “acted under” a federal officer because oil production was how the companies fulfilled their contractual obligation to produce refined oil to the government. Ensuring that courts properly apply federal-officer removal jurisdiction is important to all manufacturers who provide goods or services to the United States government pursuant to a contract and face potential liability claims in state courts.


Related Documents:
NAM brief  (July 3, 2023)

 

Shell Oil Prods. Co. v. Rhode Island   (U.S. Supreme Court)

Public nuisance cases seeking to drive national energy policy on climate change belong in federal court

On January 5, 2023, the NAM filed an amicus brief in support of energy manufacturers’ petition seeking U.S. Supreme Court review of the lower courts’ remand order in a case asserting “public nuisance” claims related to climate change. This case is one of over two dozen public nuisance cases seeking to drive national energy policy on climate change. The 1st Circuit upheld the district court’s decision to remand the case to state court for lack of subject matter jurisdiction.

In our brief, the NAM argues that the subject matter and remedies sought through this litigation are inherently national, as well as legislative and regulatory in nature, and that such complex policy matters should not be driven by individual state judges in individual state courtrooms applying (or misapplying) various state liability laws. This case has important implications for all manufacturers because of the growing trend among plaintiffs’ lawyers of using public nuisance and consumer deception claims to seek monetary damages from manufacturers for broad, societal issues that are ill-suited for consideration by a patchwork of state court determinations and should be addressed in the policy process.

Unfortunately, on April 24, 2023, the Court denied the energy manufacturers' petition.


Related Documents:
NAM brief  (January 5, 2023)

 

Sunoco LP v. City and County of Honolulu   (U.S. Supreme Court)

Public nuisance cases seeking to drive national energy policy on climate change belong in federal court

On January 5, 2023, the NAM filed an amicus brief in support of energy manufacturers’ petition seeking U.S. Supreme Court review of the lower courts’ remand order in a case asserting “public nuisance” claims related to climate change. This case is one of over two dozen public nuisance cases seeking to drive national energy policy on climate change. The 9th Circuit upheld the district court’s decision to remand the case to state court for lack of subject matter jurisdiction.

In our brief, the NAM argues that the subject matter and remedies sought through this litigation are inherently national, as well as legislative and regulatory in nature, and that such complex policy matters should not be driven by individual state judges in individual state courtrooms applying (or misapplying) various state liability laws. The NAM also argues that the petitioners plainly satisfy the requirements for federal officer removal by asserting they are “person[s]” in a “civil action” “for or relating to” acts performed while “acting under” federal officers and “raise[d] a colorable federal defense”—which are the only requirements Congress and the Court have established for when the statute provides a right of removal. This case has important implications for all manufacturers because of the growing trend among plaintiffs’ lawyers of using public nuisance and consumer deception claims to seek monetary damages from manufacturers for broad, societal issues that are ill-suited for consideration by a patchwork of state court determinations and should be addressed in the policy process.

Unfortunately, on April 24, 2023, the Court denied the energy manufacturers' petition.


Related Documents:
NAM brief  (January 5, 2023)

 

Syngenta Crop Protection, LLC v. Nemeth   (Pennsylvania Superior Court)

Scope of personal jurisdiction over out-of-state defendants

On November 22, 2023, the NAM filed an amicus brief urging the Pennsylvania Superior Court to review and reverse a trial court decision finding Pennsylvania’s consent by registration statute—which conditions the privilege of doing business in the State on an out-of-state corporation’s submission to general personal jurisdiction—constitutional. In this case, the plaintiffs assert that they developed Parkinson’s disease from exposure to Syngenta’s herbicide and sued Syngenta in Pennsylvania state court even though a majority of the plaintiffs’ claims and Syngenta itself have no significant connection to the state. Syngenta objected to the trial court’s exercise of jurisdiction on the ground that Pennsylvania’s consent by registration statute violates the U.S. Constitution. The trial court, however, denied Syngenta’s request to dismiss the case for lack of personal jurisdiction.

We argue that the Pennsylvania Superior Court should hear the case to address a question left unresolved by the U.S. Supreme Court in Mallory v. Norfolk Southern Railway Co., 143 S. Ct. 2028 (2023): whether Pennsylvania’s consent by registration statute violates the dormant Commerce Clause. We maintain that the statute violates the dormant Commerce Clause by interfering with the efficiency of company operations and forcing companies to defend suits in locations where alleged injuries did not occur and neither party is a resident. In addition, Pennsylvania’s exercise of jurisdiction over residents of another state in cases asserting claims unconnected to the State raises federalism concerns as that conduct should be rightfully policed by some other State. Pushing back against expansion of a state court’s jurisdiction to hear such cases is important to prevent plaintiffs from forum shopping to plaintiff-friendly jurisdictions.


Related Documents:
NAM brief  (November 22, 2023)

 


Labor Law -- active



Arrmaz Prods. And Internat'l Chem. Workers Union   (NLRB)

The NLRB should reject General Counsel Abruzzo’s effort to imposep “make-whole” relief for an employer’s refusal to bargain

On August 26, the NAM filed an amicus brief urging the National Labor Relations Board to reject General Counsel Jennifer Abruzzo’s radical proposal to overturn longstanding and established precedent by awarding prospective, compensatory make-whole relief for the period when an employer refuses to bargain while challenging a union’s certification in court. The traditional remedy for cases where an employer unlawfully refuses to bargain with the chosen bargaining representative of its employees is a bargaining order whereby the NLRB commands the employer to stop its unlawful refusal and bargain with the representative. Over 50 years ago, in Ex-Cell-O Corp., the Board explicitly rejected make-whole relief—in that case raises for employees—as too speculative. The Board concluded that compelling employers “to accede to terms never mutually established by the parties” would violate the plain language of the National Labor Relations Act and Supreme Court precedent.

In this case, Arrmaz Prods. And Internat’l Chem. Workers Union, GC Abruzzo asked the Board to “make the bargaining unit employees whole for the lost opportunity to engage in collective bargaining” during the period when the employer refuses to bargain in order to test the union’s certification in the courts.” As the NAM’s brief explains, this inherently speculative and arbitrary remedy would chill the protected rights of every employer to petition a court to review certification of a union as the exclusive representative of the employer’s employees. Further, section 8(d) of the National Labor Relations Act flatly states that the obligation to bargain collectively “does not compel either party to agree to a proposal or require the making of a concession.” Here, the proposed make-whole remedy cannot be calculated without presuming an agreement that the Board is not entitled to presume or to compel. Employers and employees alike rely on the Board to maintain labor relations stability. Such reliance interests are severely undermined when longstanding and established precedents are overturned without adequate justification, as is threatened in this case.

On December 8, 2022, the Board held that respondent ArrMaz Products, Inc. violated the National Labor Relations Act by refusing "to recognize and bargain with the Union as the exclusive collective-bargaining representative of the employees in the appropriate unit." The Board did not address make-whole relief. The Board has severed this issue and plans to issue a supplemental decision regarding a make-whole remedy at a later date.


Related Documents:
NAM brief  (August 26, 2022)

 

Ralphs Grocery Co. and Terri Brown   (NLRB)

Arbitration agreements do not interfere with employees’ rights under the National Labor Relations Act

On March 21, 2022, the NAM filed an amicus brief urging the National Labor Relations Board to adhere to U.S. Supreme Court and Board precedent by preserving the validity of employment arbitration agreements. In Epic Systems v. Lewis, the Supreme Court held that the Federal Arbitration Act prevents the NLRB from challenging enforcement of arbitration agreements between employers and employees. Building on that holding, the NLRB ruled in 2020 that an arbitration agreement explicitly and prominently assures employees that their right to file charges with the Board does not interfere with employee rights under the National Labor Relations Act.

Despite this clear precedent, the current NLRB is seeking to abrogate its prior holdings and reconsider whether arbitration agreements interfere with employees’ right to file Board charges or otherwise access the Board’s processes. The NAM filed an amicus brief urging the Court to adhere to its current standard. Our brief highlights the Court’s holding in Epic Systems—that Congress does not alter the fundamental details of one statutory scheme (the FAA) through vague pronouncements in another (the NLRA). Any action by the Board to overrule its prior precedent and impose liability on an employer for enforcing its arbitration agreement would violate the FAA and lead to another confrontation with the Supreme Court. Many NAM members rely on lawful, voluntary arbitration agreements with their employees to reduce litigation costs and reach timely resolution of employment disputes through neutral fact finding and decision making, consistent with the FAA.


Related Documents:
NAM Brief  (March 21, 2022)

 

South Carolina State Ports Authority v. NLRB   (4th Circuit)

Protecting the bar against secondary boycotts

On October 30, 2023, the NAM filed an amicus brief urging the U.S. Supreme Court to review the 4th Circuit’s refusal to reverse a National Labor Relations Board decision that eviscerates the long-standing prohibition on secondary boycotts (where a union coerces a neutral employer to cease doing business with an employer with whom a union has a labor dispute). In this case, the South Carolina State Ports Authority operates the Port of Charleston by employing state workers to run lift-equipment and having International Longshoremen’s Association members perform the other longshoreman work there. After SCSPA opened another terminal at the port in 2022 and attempted to use the same division of labor, ILA sued the United States Maritime Alliance (USMX), a multi-employer association of carriers that deliver and pick up containers at the ports, and two of its carrier-members, alleging that they were violating the parties’ collective bargaining agreement by using state employees to perform port work. USMX, the State of South Carolina and SCSPA countered by filing unfair labor charges, maintaining that the lawsuit sought to obtain an illegal secondary objective in violation of the NLRA’s secondary boycott provision. The NLRB disagreed and the 4th Circuit refused to reverse the NLRB’s decision on appeal.

We argue in our amicus brief that the union’s actions in this case constitute a quintessential secondary boycott: the union is coercing neutral parties (the carriers) to stop doing business at a port unless a different party—the South Carolina State Ports Authority—accedes to the union’s demands. All manufacturers have an interest in limiting this type of coercive and intimidating conduct by unions. Unfortunately, on February 20, 2024, the U.S. Supreme Court declined to hear the case.


Related Documents:
NAM brief  (October 30, 2023)

 

Starbucks v. McKinney   (U.S. Supreme Court)

Pushing back against lower standard for NLRB to obtain preliminary relief

On November 6, 2023, the NAM filed an amicus brief urging the U.S. Supreme Court to review and reverse a lower court decision granting preliminary relief in favor of a union—including forcing the employer to reinstate terminated employees—while the Board’s adjudication process remains ongoing. Under the National Labor Relations Act, federal district courts are empowered to grant preliminary relief at the NLRB’s request while an NLRB adjudication remains pending. In this case, the 6th Circuit affirmed a district court’s grant of preliminary relief—which is considered an extraordinary remedy reserved for extreme cases—under an unduly permissive standard. Specifically, the 6th Circuit, along with the 3rd, 5th, 10th and 11th Circuits, has held that the NLRB is entitled to preliminary relief upon a showing of reasonable cause to believe that the unfair labor practice alleged has occurred and that preliminary relief is just and proper. By contrast, other circuit courts have applied the traditional, and more stringent, four factor test to determine whether the NLRB is entitled to preliminary relief. Under that test, the NLRB must establish that (1) that it is likely to succeed on the merits of its claim, (2) that it is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in its favor, and (4) that an injunction is in the public interest.

We argue in our amicus brief that the Court should grant Starbuck’s petition to resolve the circuit split and that the 6th Circuit’s lenient standard places unreasonable burdens on employers subject to unfair labor practice proceedings.

Happily, on January 12, 2024, the Court granted the petition.


Related Documents:
NAM brief  (February 28, 2024)
NAM brief  (November 6, 2023)

 


OSHA -- active



NAHB v. Acosta   (W.D. Okla.)

Safety incentive programs and post-incident drug testing

The NAM filed an amicus brief supporting safety incentive programs and post-incident drug testing. Since 2016, the NAM has fought the U.S. Occupational Safety and Health Administration's (OSHA) overreaching "injury and illness" rule, which sought to restrict employers' ability to administer drug tests to employees after safety incidents. The rule also limited incentive programs that encourage safe workplaces. The incoming presidential administration in 2017 announced it would reconsider the rule, then OSHA issued guidance to clarify that post-incident drug testing and safety incentive programs are not prohibited. This case is important because a favorable ruling will help preserve pro-safety measures and keep a future administration from easily reinstating the guidance that was so harmful to manufacturers. The NAM’s brief asks a federal judge to invalidate the regulatory provisions underpinning OSHA's 2016 restrictions on post-incident drug testing and safety incentive programs.


Related Documents:
NAM brief  (May 24, 2019)

 


Patents, Copyrights and Trademarks -- active



Celanese Int’l Corp. v. International Trade Commission   (Federal Circuit)

Whether a patentee’s sale of an unpatented product made by a secret patented process is a bar to patentability under Section 102 of the Leahy-Smith America Invents Act of 2011

On October 28, 2022, the NAM filed an amicus brief in an appeal addressing an issue of first impression under U.S. patent law, as amended by the Leahy-Smith America Invents Act of 2011 (AIA)—whether a company’s sale of an unpatented product made by a secret patented process is a bar to patentability of that process under the AIA. In its appeal, Celanese sought to enforce its patent for the secret process used to create artificial sweetener Ace-K (which itself is not patented) against Chinese-based companies that were unlawfully using that patented process. The International Trade Commission concluded that Celanese’s sale of Ace-K invalidated the patent for its secret manufacturing process under the AIA’s on-sale bar.

In our brief, the NAM requests that the Federal Circuit reverse the International Trade Commission and hold that Celanese’s sale of Ace-K did not invalidate the patent for its secret manufacturing process. The International Trade Commission’s decision “finds no basis in the text of the AIA, undermines Congressional intent, and prevents manufacturers from developing complementary patent and trade secret rights.” All manufacturers depend on stable intellectual property laws to protect their investments and share an interest in knowing that their innovations will be subject to consistent protection worldwide.


Related Documents:
NAM brief  (October 28, 2022)

 


Preemption -- active



Janssen Pharm., et al. v. A.Y., et al.   (U.S. Supreme Court)

Preemption of state law for failure-to-warn of off-label use claims

The NAM filed an amicus brief urging the U.S. Supreme Court to grant cert to reinforce the preemptive authority of the federal government to regulate pharmaceutical drug labeling. Federal law bars drug manufacturers from unilaterally changing drug labels to include warnings for off-label uses; in fact, manufacturers can face potential criminal liability for “misbranding” a drug if the label includes information about unapproved uses. Yet in this case, Janssen Pharm., et al. v. A.Y., et al., a Philadelphia jury awarded plaintiffs $70 million in damages because the manufacturer did not include a warning about an off-label use of the drug Risperdal. There are over 10,000 nearly identical cases still pending against the company in Pennsylvania state court. Manufacturers across federally regulated industries are subject to carefully calibrated federal labeling regimes that provide the certainty and predictability needed to operate. As the NAM’s brief argues, the use of state tort law to undermine federal labeling requirements will, if allowed to continue, create a confusing and ultimately destructive “dual track” system where federal agencies and state tort law will conflict and ultimately undermine the federal goal of targeting labeling to a specific audience.

Unfortunately, on May 17, 2021, the Supreme Court denied cert.


Related Documents:
NAM brief  (March 8, 2021)

 

Creagan v. Wal-Mart Transportation   (6th Circuit)

Liability for negligent acts of truckers

The NAM filed an amicus brief to argue that the 6th Circuit should hold that businesses that hire independent trucking companies to transport goods are not liable for the negligent acts of those independent truckers. An individual was injured in a traffic collision involving a trucking company hired by a freight broker. The injured person argued that the broker was negligent in selecting the trucking company because it knew or should have know about the company’s prior regulatory infractions. The freight broker responded that the hiring directly concerns the services a freight broker provides under the Federal Aviation Administration Authorization Act of 1994, and therefore preempts state law, including state common law for negligence. The district court agreed. On appeal to the 6th Circuit, the NAM’s amicus brief explained the careful balance that congress struck in regulating drivers under the Act, and why the plaintiffs’ theory of liability is unworkable in practice.


Related Documents:
NAM brief  (November 7, 2019)

 

Jones, et al. v. Goodrich Corp., et al.   (2nd Circuit)

FAA preempts design defect claims under state law

The NAM filed an amicus brief in the Second Circuit seeking to uphold a summary judgment ruling in favor of the manufacturing defendants in a helicopter design defect case based on the doctrine of implied field preemption. The case arose from a fatal crash of a U.S. Army helicopter. The decedents’ estates brought design defect and manufacturing defect claims against the manufacturers of the helicopter, even though the Army required that the Federal Aviation Administration (FAA) approve all aspects of the helicopter’s design. The trial court rejected the plaintiffs’ claims after finding clear congressional intent to occupy the entire field of aviation safety, including aviation product liability cases. The NAM joined the General Aviation Manufacturers’ Association (GAMA) in filing an amicus brief arguing for affirmance of the trial court’s ruling. As the NAM’s brief explains, the FAA exercises pervasive authority to establish aviation design standards and approve compliance with those standards. The FAA also retains ultimate, exclusive authority over changes to approved designs and monitors aviation products throughout their lives in service to address any safety issues. This federal regulatory scheme requires preemption to prevent an unworkable array of conflicting requirements that would jeopardize the safety and viability of the aviation industry—in the United States and globally.


Related Documents:
NAM brief  (March 23, 2021)

 

Swinomish v. BNSF   (9th Circuit)

Challenging restrictions on goods shipped by rail

The NAM filed an amicus brief supporting BNSF and underscoring the importance of the freight rail network for manufacturers that rely on it to efficiently move materials. The plaintiff seeks an unprecedented injunction restricting the type and quantity of goods that can be shipped over an interstate railway that crosses its land, particularly hazardous materials. Such an injunction would disregard the exclusive federal regulatory scheme governing interstate rail transportation, would undermine shippers’ common-carriage rights and would obstruct interstate commerce in economically critical products. The NAM’s brief explained why the court should not allow the obstruction of commerce of lawful products by giving landowners an unprecedented ability to veto the quantity or types of cargo being shipped through interstate commerce.


Related Documents:
NAM brief  (November 21, 2018)

 


Product Liability -- active



American Honda Motor v. Milburn   (Texas Supreme Court)

Product liability for products complying with federal safety standards

On August 29, 2023, the NAM filed an amicus brief urging the Texas Supreme Court to rigorously enforce the State’s non-liability defense under Section 82.008 of the Texas Code for manufacturers that comply with federal safety standards. In this case, Sarah Milburn, a passenger seated in the middle seat of the third row of an Uber minivan, was severely injured when a pickup truck collided with the passenger side of the minivan. Sarah and her parents sued Honda for negligence in designing, manufacturing, and marketing the minivan’s third-row middle seat belt system, maintaining that the seat belt was not adequately designed, manufactured, or marketed to minimize the risk of injury. A jury returned a verdict for the plaintiffs, which a Texas court of appeal affirmed on appeal. And the Texas Supreme Court granted Honda’s request to hear the case.

We argue in our amicus brief that Honda’s seat belt system complied with federal safety standards. For a plaintiff to overcome a non-liability defense asserted under Section 82.008, the plaintiff must establish federal regulations are inadequate to protect from an unreasonable risk of injury or damage because there has been such a material change in technology or society that no reasonable manufacturer at the time of manufacture could believe that the standard remains adequate to protect the public. The plaintiffs failed to meet their burden. Further, the plaintiff’s proposed alternative design for the seat belt system was insufficient to support a product liability claim because it would have destroyed the utility of the third-row seats in the minivan and a manufacturer need not destroy a product’s utility to make it safer. Ensuring rigorous enforcement of Texas’ non-liability defense is important to prevent a broad tort—product liability—from becoming entirely boundless from a plaintiff expert’s benefit of hindsight to second guess a product’s design and manufacture.


Related Documents:
NAM brief  (August 9, 2023)

 

The Sherwin-Williams Company v. Certain Underwriters at Lloyd’s London   (Ohio Supreme Court)

Insurance coverage for public nuisance claims

On September 5, 2023, the NAM filed an amicus brief arguing to the Ohio Supreme Court that commercial general liability (CGL) insurance policies cover public nuisance claims. In this case, a California trial court held Sherwin-Williams liable for public nuisance claims, alleging that it contributed to a public health crisis by promoting lead paint for interior and exterior use despite knowing the use of lead was hazardous to human beings. The parties subsequently settled the case and Sherwin-Williams sought insurance coverage for monies paid to abate the conditions created by interior residential lead paint in 10 California jurisdictions. An Ohio court of appeal held that Sherwin-Williams' insurance policies provide coverage for the monies Sherwin-Williams had to pay, and the Ohio Supreme Court granted the insurers’ request to hear the case.

In our brief, we argue that the monies Sherwin-Williams was ordered to pay to abate the public nuisance are “damages” and that the Insurers’ CGL policies cover public nuisance claims. Further, knowledge of the risk of harm a product poses at the time of manufacturing and selling the product is not a sufficient basis to deny coverage under the clause in CGL insurance policies that excludes damages that are “expected or intended.” That exclusionary clause only applies to allow an insurance company to deny coverage when a company that is insured intends for a resulting harm or injury to occur. This case is important to prevent insurance companies from being able to deny coverage under their insurance policies any time a manufacturer has knowledge that a product might cause harm.


Related Documents:
NAM brief  (September 5, 2023)

 

City of New York v. BP   (2nd Circuit)

Opposing misguided public nuisance lawsuits

The NAM filed an amicus brief in the U.S. Court of Appeals for the Second Circuit to oppose misguided efforts to impose “public nuisance” liability on energy manufacturers. The city of New York sued several energy companies to seek damages for local impacts of climate change, arguing that the defendants’ sale of fossil fuels is a public nuisance that entitles the city to financial compensation. This theory of liability poses a grave risk for manufacturers because it would impose liability on manufacturers despite a plaintiff’s inability to prove the manufacturer actually caused the plaintiff’s injuries. A federal district court dismissed the lawsuit. On appeal to the Second Circuit, the NAM’s amicus brief explains how Supreme Court precedent forecloses such lawsuits by recognizing the federal legislature as the appropriate branch of government to set national energy policy, including addressing climate change. Our brief also highlights the extensive technological innovations that manufacturers have already deployed to reduce carbon emissions, and which they will continue to pursue to address climate change and other environmental challenges.


Related Documents:
NAM brief  (February 14, 2019)

 

Earth Island Institute v. The Coca-Cola Company   (D.C. Court of Appeals)

Protecting against the limitless reach of consumer protection statutes

On May 22, 2023, the NAM filed an amicus brief urging the D.C. Court of Appeals to affirm the dismissal of an environmental group’s claim that Coca-Cola's vocal support for recycling and environmental sustainability are misleading in violation of D.C.’s Consumer Protection Procedures Act (CPPA). In this case, Earth Island Institute v. The Coca Cola Company, the trial court correctly found that the challenged statements were aspirational in nature and not actionable—the instant appeal filed. Our brief argues that to be subject to the CPPA, statements must be (1) made in connection with a “consumer transaction” or advertisement about “goods and services” directed to D.C. residents to facilitate a consumer transaction; and (2) be material to a reasonable consumer’s decision as to whether they would receive fair value in purchasing the product or service. The statements at issue here plainly do not satisfy these requirements because they were cherry-picked from global communications having no direct tie with any product or service. Affirmance of the lower court’s decision is required to avoid special interest groups using the CPPA to push their political agenda in an effort to silence corporations with different views on public policy issues. All manufacturers have an interest in limiting the reach of sweeping consumer protection statutes and receiving fair notice of prohibited conduct.


Related Documents:
NAM brief  (May 22, 2023)

 

Eastern Maine Medical Center v. Teva   (Maine Supreme Court)

Protecting against unprecedented expansion of public nuisance liability

On November 2, 2023, the NAM filed an amicus brief asking the Maine Supreme Court to affirm a trial court decision rejecting public nuisance claims brought by various hospital operators based on the manufacturing defendants' marketing or distribution of opioid medications. In this case, the hospital operators allege that marketing and distribution of opioids contributed to the opioid epidemic and increased operating costs to treat impacted patients.

We argue in our amicus brief that the trial court's decision is consistent with longstanding public nuisance liability principles and to reverse the decision would threaten open ended, industry-wide liability for a variety of products that may also have foreseeable risks or inherent externalities, including pharmaceuticals, oil and gas, and household chemicals. This case is important for all manufacturers because if the lower court's ruling is reversed, manufacturers could be subject to industry-wide liability in Maine for selling and marketing products with known risks of harm with few, if any, defenses.

 

Gilead Sciences, Inc. v. Superior Court of the City and County of San Francisco   (California Supreme Court)

Challenging a radical change in the tort of negligence for manufacturers

On March 12, 2023, the NAM filed a coalition amicus letter urging the California Supreme Court to review a Court of Appeal decision endorsing a novel theory of liability where plaintiffs do not have to prove that a product is defective or unreasonably dangerous, but rather can assert that a company is liable for researching and developing another product that it “knew” was “safer” and failing to bring that product to market. In this case, the plaintiffs concede that the product at issue—a medication used to prevent and treat HIV/AIDS—is useful and not defective. Nevertheless, the Court of Appeal agreed with the plaintiffs that the manufacturer of the product can be held liable for the delay in bringing to market a different product the plaintiffs contend is safer.

We will argue that the decision conflicts with longstanding law and will result in a flood of litigation if left in place. The negligence theory that the Court of Appeal accepted could be repurposed against any manufacturer, not just a drug maker. And it will not be hard for enterprising plaintiffs’ lawyers to plead a claim under this new theory of negligence. California Supreme Corut review is necessary to clarify the scope of manufacturer liability and to bring California law back in line with the general and sound rule that a manufacturer can be held liable only for the products it made and sold, not products it could have made and sold.


Related Documents:
NAM letter  (March 12, 2024)

 

In re Aearo Technologies, LLC   (7th Circuit)

Addressing liabilities through bankruptcy rather than through the mass-tort system

On December 19, 2022, the NAM filed an amicus brief urging the 7th Circuit to stay or enjoin ongoing mass tort litigation against a manufacturer’s solvent parent to allow the manufacturer to resolve its overwhelming tort liabilities through bankruptcy. Debtor Aearo Technologies LLC sought chapter 11 relief and, on the same day, requested, under relevant provisions of the Bankruptcy Code, a stay or injunction of all pending and future actions seeking to hold Aearo and 3M (its parent) liable for alleged injuries related to military earplugs manufactured by the companies. Litigation over the earplugs’ alleged defective design and marketing has become the largest multidistrict litigation in history, with over 290,000 claims. The bankruptcy court denied Aearo’s request, finding that the Bankruptcy Code only authorized it to enter orders to protect the “debtor, not non-bankruptcy co-debtors like 3M. The bankruptcy court further determined that a stay of pending litigation and an injunction against future actions were unwarranted because, ultimately, under the terms of their funding agreement, 3M will fully fund any liability incurred by Aearo” related to the earplugs. The instant appeal followed.

Our brief argues that bankruptcy, unlike MDL, is well equipped to resolve mass-tort lawsuits of this magnitude in an efficient manner. Further, unlike in the MDL context, bankruptcy promotes global resolution of a company’s liabilities, by sweeping in even future claims based on injuries that have not yet manifested. We urge the 7th Circuit to clarify that a bankruptcy court can and should do what is necessary and appropriate to enable a bankruptcy proceeding’s success—including staying parallel mass-tort litigation against a related entity whose liabilities redound to the debtor.


Related Documents:
NAM brief  (December 19, 2022)

 

Johnson v. Emerson Electric Co.   (Texas Supreme Court)

Duty to warn of product risks

The NAM filed an amicus brief in the Texas Supreme Court to seek reversal of a Texas appellate court decision that improperly imposed liability on a manufacturer for its alleged failure to adequately warn of risks from one of its commercial air conditioners. An experienced HVAC repairman was injured when an HVAC compressor released pressurized fluids. The repairman sued the manufacturer, claiming the warning of such releases was insufficiently descriptive. A Texas jury found in the plaintiff’s favor, and an appeals court affirmed. In support of review by the Texas Supreme Court, the NAM filed an amicus brief that argued against the court of appeals’ unsupported expansion of the duty of a manufacturer to warn licensed professionals of known risks. The NAM’s brief also asks the court to clarify the jury instructions in failure-to-warn cases such as this.

The court granted review in June 2020. On April 16, 2021, the court affirmed the jury verdict, however the court took a giant leap forward by agreeing with NAM and Emerson's position that a jury in a design-defect case can be instructed on the five risk-utility balancing factors commonly used in other jurisdictions. The court failed to address the court of appeals’ unsupported expansion of the duty of a manufacturer to warn licensed professionals of known risks, deeming the issue waived based on Emerson's failure to object to a particular jury instruction. The NAM filed an amicus brief in support of Emerson's petition for rehearing on that issue, arguing that the court should have requested supplemental briefing before disposing of a case on an issue not raised or briefed by the parties.

Unfortunately, on September 3, 2021, the Texas Supreme Court denied the petition for rehearing.


Related Documents:
NAM Brief in Support of Rehearing  (June 9, 2021)
NAM Brief in Support of Review  (February 19, 2019)

 

Johnson & Johnson, et al. v. State of California   (U.S. Supreme Court)

Challenging the failure to provide fair notice of conduct that gives rise to severe penalties and scope of potential punishment

The NAM filed an amicus brief urging the U.S. Supreme Court to review California’s imposition of over $300 million in civil penalties under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL) without providing fair notice of the conduct that gave rise to those penalties and the scope of the potential punishment. In this case, the trial court imposed $344 million in civil penalties under the UCL and FAL—an amount 50 times greater than the largest penalties previously awarded under those statutes and larger than all other reported UCL and FAL awards combined—based on communications about FDA-approved pelvic mesh products. A California court of appeal reduced the civil penalty award to approximately $302 million but rejected the defendants-appellants’ argument that the trial court’s imposition of over $300 million in penalties violated their Fourteenth Amendment due process rights. The Supreme Court of California denied review.

We argue in our amicus brief that California’s—as well as many other states’—unfair, deceptive, and abusive practices statutes have failed to provide fair notice of the conduct that gives rise to civil penalties and the scope of the potential punishment. We urge the Supreme Court to grant the defendants-appellants’ petition for certiorari to (1) articulate the constitutional bounds for civil penalties; (2) establish principles states can use to ensure their civil penalties are objective and rational; and (3) draw from the principles the Court applies in the punitive damages and civil forfeiture contexts to place similar bounds on the aggregation of “per violation” civil penalties.

Unfortunately, on February 22, 2023, the Supreme Court denied the petition for certiorari.


Related Documents:
NAM brief  (December 15, 2022)

 

BP, et al. v. Mayor and City of Baltimore   (U.S. Supreme Court)

Jurisdiction for climate change "public nuisance" lawsuits

The NAM filed an amicus brief in support of an application to the U.S. Supreme Court to stay a remand order transferring litigation involving “public nuisance” claims related to climate change to state court. Twenty-six energy company defendants in the case filed the stay request to allow appeals to progress on the question of which court has proper jurisdiction over the claims. The case is part of a coordinated, national litigation campaign involving over two dozen public nuisance cases filed in carefully chosen states and federal circuits by agenda-driven lawyers and activists. This issue is important to energy producers and all manufacturers because public nuisance claims involving climate change implicate federal questions and the preemption of federal laws that are appropriately heard by federal courts rather than state courts. The NAM’s amicus brief explained to the court the broader context of the plaintiffs’ legal strategy and that these suits implicate federal issues and therefore should be in federal court. Unfortunately, Chief Justice Roberts denied the stay petition. Thereafter, following the Fourth Circuit's decision to remand the case to state court, the NAM filed an amicus brief in support of BP's petition for cert. pressing the high court to resolve the circuit split regarding the scope of appellate review of remand orders involving the federal officer removal statute. Happily, on October 2, 2020, the Court granted review.

On November 23, the NAM filed an amicus brief on the merits in support of removal jurisdiction in this case, asking the Court to ensure that lower courts evaluate all grounds for removal prior to issuing remand orders.

On May 17, 2021, in a 7-1 decision with Justice Gorsuch writing for the majority, the Court reversed the Fourth Circuit’s denial of full federal appellate review of the important jurisdictional issues raised by this case and remanded the case for the Fourth Circuit to consider those issues in the first instance. Unfortunately, on April 7, 2022, the Fourth Circuit affirmed the district court's remand order, holding that none of the asserted basis for removal permit the Court to exercise jurisdiction.

On November 17, 2022, the NAM filed an amicus brief in support of the petitioners' petition to the U.S. Supreme Court for cert. The NAM's brief again argues that the subject matter and remedies sought through this litigation are inherently national, as well as legislative and regulatory in nature, and that such complex policy matters should not be driven by individual state judges in individual state courtrooms applying (or misapplying) various state liability laws.

Unfortunately, on April 24, 2023, the Court denied the petition.


Related Documents:
NAM brief  (November 17, 2022)
Opinion  (May 17, 2021)
NAM brief  (November 23, 2020)
NAM brief  (April 30, 2020)
NAM brief  (October 4, 2019)

 

People v. Johnson & Johnson   (California Supreme Court)

Improper application of the “likely to deceive” standard under California’s Unfair Competition Law and False Advertising Law

The NAM filed an amicus letter urging the California Supreme Court to review a lower court decision that eviscerates the rational boundaries for liability under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL). In this case, the trial court imposed $344 million in civil penalties under the UCL and FAL—an amount 50 times greater than the largest UCL or FAL award previously reported and larger than all other reported UCL and FAL awards combined—based on the defendant’s communications about its FDA-approved pelvic mesh products. To reach this extraordinary result, the court refused to judge the communications from the perspective of their target audiences: trained physicians who treat pelvic floor conditions and the patients whom those physicians consent prior to prescribing mesh products. Instead, the court ruled that medical device risk disclosures must include all potential risks, no matter whether they are already known to physicians or likely to mislead prospective patients.

The NAM’s amicus letter emphasizes that proper application of the “likely to deceive” standard under the UCL and FAL is vital to protect against speculative allegations of deceit that are not grounded in the real-world context in which the communications were made. The UCL and FAL have already spawned a number of product lawsuits premised on idiosyncratic readings of existing representations or demands that every conceivable malfunction be disclosed prominently before purchase. Ensuring that any omission of risk information is assessed through a rigorous “likely to deceive” standard keeps the most highly speculative UCL and FAL lawsuits from clogging the judicial system

Unfortunately, on July 13, 2022, the California Supreme Court denied the petition for review.


Related Documents:
NAM brief  (June 27, 2022)

 

Suncor Energy (U.S.A.) Inc., et al. v. Board of Cnty. Commissioners of Boulder Cnty., et al.   (U.S. Supreme Court)

Public nuisance cases seeking to drive national energy policy on climate change belong in federal court

On July 8, the NAM filed an amicus brief asking the U.S. Supreme Court to grant cert in one of over two dozen public nuisance cases seeking to drive national energy policy on climate change. The case, Suncor Energy Inc., et al v. Board of Cnty. Commissioners of Boulder Cnty., et al., is part of a coordinated, national litigation campaign filed in carefully chosen states and federal circuits by agenda-driven lawyers and activists. The issue presented is whether putative state-law tort claims alleging harm from global climate change are removable to federal court because they arise under federal law. On the few occasions where federal courts have reached the substance of these claims, the courts have concluded that the claims arise under federal common law and are displaced by the Clean Air Act.

Earlier this year, the 10th Circuit agreed with the plaintiffs’ novel argument that their claims became viable under state law and could not be removed because Congress exercised its authority and displaced the federal common law by enacting the Clean Air Act—a theory that the Second Circuit referred to in a related case as “too strange to seriously contemplate.” Further, the 10th Circuit concluded that under the well-pleaded complaint rule, federal courts are not permitted to look behind the veneer of the claims’ state law labels even when the labels are clearly masking federal law claims. In support of Supreme Court review, the NAM filed an amicus brief arguing that the subject matter and remedies sought through this litigation are inherently national, as well as legislative and regulatory in nature, and that such complex policy matters should not be driven by individual state judges in individual state courtrooms applying (or misapplying) various state liability laws.

Unfortunately, on April 24, 2023, the Court denied the petition for cert.


Related Documents:
NAM brief  (July 8, 2022)

 

The DCH Health Care Authority v. Purdue Pharma L.P.   (Alabama Supreme Court)

Protecting against unprecedent expansion of public nuisance liability

On May 1, 2023, the NAM filed an amicus brief urging the Alabama Supreme Court to review and reverse a lower court order extending Alabama’s law of public nuisance to the marketing and distribution of legal and highly-regulated products—FDA-approved medications. In this case, Ex Parte Janssen Pharmaceuticals, Inc., Alabama hospitals sued the manufacturers and distributors of opioid medications in Alabama state court alleging that the defendants’ activities created a public nuisance—the opioid epidemic—that caused them to incur increased operational costs. Notably, however, public nuisance law in Alabama—as in other states—is a land and water use cause of action, directed at resolving local disturbances that interfere with the right of the public to use a public road, communal space, or local waterway.

We argue in our brief that the trial court’s decision departs from long-standing public nuisance liability principles and threatens open-ended, industry-wide liability for a variety of products that may also have foreseeable risks or inherent externalities, including pharmaceuticals, oil and gas, and household chemicals. This case is important for all manufacturers because if the trial court’s ruling can stand, manufacturers could be subject to industry-wide liability in Alabama for selling and marketing products with known risks of harm with few if any defenses.

Unforturnately, on June 2, 2023, the Alabama Supreme Court denied the request for review.


Related Documents:
NAM brief  (May 1, 2023)

 


Securities Regulation -- active



National Center for Public Policy Research v. SEC   (5th Circuit)

Pushing Back Against Shareholder Activists' Outsized Role in Corporate Governance

This case was brought in the 5th Circuit by activist group NCPPR accusing the SEC of applying its Rule 14a-8 in an inconsistent and politically motivated manner. Under SEC Rule 14a-8, public companies are required to include certain shareholder proposals on their proxy ballot. Historically, companies could exclude proposals that encroached on the company’s "ordinary business operations." However, in November 2021, the SEC released new guidance (SLB 14L) making proposals that raise issues with "broad societal impact" presumptively non-excludable. And activist groups from across the ideological spectrum are increasingly using shareholder proposals to inject contentious ideological policy fights into corporate governance. In May 2023, we intervened in this case to push back on this troubling trend.

On July 21, 2023, we filed our opening brief arguing that Rule 14a-8 violates the First Amendment by compelling a company to include shareholder-selected proposals unrelated to the company’s core business or the creation of shareholder value on the company’s own proxy statement at the company's own expense. Aside from these constitutional concerns, the SEC lacked authority to issue Rule 14a-8. Congress only authorized the SEC to enact rules prohibiting deceptive or misleading statements by corporations when they solicit shareholder-proxy votes. Rule 14a-8, however, does not address such statements.

On October 3, 2023, we filed our reply brief urging the 5th Circuit to reject the SEC's jurisdictional and procedural arguments and hear this important challenge to the SEC's authority to dictate which proxy ballot items investors should consider. We explain in our reply brief that, contrary to the SEC's assertions, there are no jurisdictional or procedural barriers preventing the 5th Circuit from holding that the SEC lacks authority to compel companies to include and subsidize shareholder speech within the company's own proxy statement. And in addition to the SEC's failure to clear the First Amendment barrier to its compelled subsidized speech regime, the SEC fails to identify a clear statement from Congress giving it the authority to hijack a corporation's own speech in contravention of state corporation law that does not enable shareholders to insert their speech or voting proposals onto a corporation's own proxy statement.


Related Documents:
NAM brief  (July 21, 2023)
NAM Opposition to Motion to Dismiss  (June 12, 2023)

 

Nat'l. Center for Pub. Policy Research v. SEC   (5th Circuit)

Pushing Back Against Shareholder Activists' Outsized Role in Corporate Governance

This case was brought in the 5th Circuit by activist group NCPPR challenging an SEC no-action letter--stating that it would not recommend enforcement action against Kroger if Kroger excluded NCPPR's proposal from its proxy ballot--and accusing the SEC of applying its Rule 14a-8 in an inconsistent and politically motivated manner. Under SEC Rule 14a-8, public companies are required to include certain shareholder proposals on their proxy ballot. Activist groups from across the ideological spectrum are increasingly using shareholder proposals to inject contentious ideological policy fights into corporate governance. We intervened in this case to raise two arguments not addressed by the parties: (1) Rule 14a-8 violates the First Amendment by compelling a company to include shareholder-selected proposals unrelated to the company’s core business or the creation of shareholder value on the company’s own proxy statement at the company’s own expense; and (2) the SEC lacks authority to compel company speech on its own proxy statement.


Related Documents:
NAM brief  (July 23, 2023)

 


Statute of Limitations -- active



American Chemistry Council v. Department of Toxic Substances Control   (California Supreme Court)

Statute of limitations for California Environmental Quality Act claims

On February 16, 2023, the NAM filed an amicus letter seeking intervention by the California Supreme Court in a case involving a party’s ability to challenge agency action under the California Environmental Quality Act (CEQA). This case arises from the California Department of Toxic Substances Control (the Department) listing spray foam systems as a priority product under California’s "Green Chemistry" law. This listing subjects the spray foam industry in California to potential restrictions or ban on the sale of its product. The petitioners--American Chemistry Council (ACC) and General Coatings Manufacturing Corp--sued the Department challenging the listing as a violation of the CEQA. The trial court found for the petitioners on their CEQA claim. On appeal, however, the Department maintained that the petitioners’ claim should have been dismissed as untimely under CEQA’s 180-day statute of limitations. In turn, the petitioners argued that their claim was timely because the statute of limitations period began to run after ACC fully exhausted the Department’s administrative appeals process under relevant regulations implementing the Green Chemistry law. The Court of Appeal agreed with the Department, concluding that litigants do not need to exhaust administrative remedies before initiating CEQA claims unless the underlying administrative review process specifically references CEQA--here, the relevant regulations make no reference to CEQA. We argued in our amicus letter that review is necessary because the Court of Appeal’s decision provides little guidance as to what level of detail is required to incorporate CEQA claims into administrative exhaustion procedures enumerated in other statutory schemes. Allowing the Court of Appeal’s decision to stand will undermine three key tenants of the California judicial system: (1) the efficiency and conservation of resources that administrative exhaustion affords; (2) legal clarity that precludes agencies from shielding their decision-making from judicial review; and (3) a preference for resolving disputes on the merits instead of on technicalities. All manufacturers involved in CEQA litigation would benefit from clear rules regarding what steps are required before CEQA litigation can be initiated. Unfortunately, on March 29, the California Supreme Court denied theh petition for review.


Related Documents:
NAM brief  (February 16, 2023)

 

Ford v. Parks   (Texas Supreme Court)

Urging Enforcement of Statue of Repose

On February 9, 2024, the NAM filed an amicus brief urging the Texas Supreme Court to enforce the state’s statute of repose. In this case, Ford v. Parks, the plaintiff brought a product liability suit against Ford after being injured in an auto accident more than 15 years after he purchased the SUV from a dealership. A Texas trial court properly applied the statute of repose to enter judgment for Ford. That statute requires a plaintiff to “commence a products liability action against a manufacturer or seller of a product before the end of 15 years after the date of the sale of the product by the defendant.” An intermediate appellate court, however, reversed the trial court’s decision, holding that Ford failed to conclusively establish that the plaintiff commenced his action more than 15 years after the “date of sale” because Ford failed to show that it received payment from the dealership on the date that it released the vehicle to the dealership.

We argue in our amicus brief that the “sale” of a product occurs when the product is transferred to the buyer—irrespective of when payment is received—and that a manufacturer need not prove the exact date of sale. We further contend that, if allowed to stand, the appellate court’s decision would disrupt the risk allocation that the Texas Legislature set not only for the auto-manufacturing business, but for all businesses that produce and sell durable goods in Texas.


Related Documents:
NAM brief  (February 9, 2024)

 

Textron Aviation Defense LLC v. United States   (Federal Circuit)

Accrual of the statute of limitations for submitting a certified claim to a contracting officer

On February 22, 2023, the NAM filed an amicus brief urging the Federal Circuit to reverse the lower court’s dismissal of over $19M in breach of contract claims against the federal government as barred by the statute of limitations for submitting a claim to a contracting officer, a prerequisite to pursuing litigation. In this case, a contracting officer denied Textron’s claim for payment of pension costs recoverable under government contracts as time-barred under the applicable six-year statute of limitations for submitting a claim. Textron promptly filed a complaint against the government in the U.S. Court of Federal Claims, which granted summary judgment in favor of the government based on the statute of limitations, holding that Textron’s claim had accrued more than six years before July 2020 (when Textron submitted the claim).

We argue in our brief that the trial court failed to apply the proper claim accrual standard. Textron’s request for the government to pay its share of pension costs following a segment closing should not be considered a "claim"--it is a routine submission that is not in dispute when submitted and the government must be afforded sufficient time to conduct its administrative review of the submission before the request can be considered a claim. Even assuming a request for payment of pension costs after a segment closing could be considered a claim, the trial court misapplied the remaining elements of claim accrual. Textron did not experience an injury and was unable to present its claim until the government denied payment. Claim accrual can only commence when all events have transpired to fix the government’s liability. All manufacturers who are government contractors subject to administrative adjustments between contracting partners have an interest in an efficient, collaborative, and non-litigious framework for the claim accrual standard.


Related Documents:
NAM brief  (February 20, 2023)

 


Taxation and State Taxation -- active



3M v. Commissioner   (8th Circuit)

Challenging the IRS’s blocked-income rule

On February 14, 2024, the NAM filed an amicus brief urging the 8th Circuit to reverse the IRS’s increase of a manufacturer’s taxable income by more than $23 million. In this case, 3M v. Commissioner, 3M licensed certain intellectual property to a Brazilian subsidiary who was barred by Brazilian law from paying 3M the arms-length price for use of the IP. The Tax Court erroneously endorsed the IRS’s view that it could increase the company’s taxable income to reflect a hypothetical arms-length transaction even though foreign law precluded the company from receiving the arms-length price in the transaction.

We argue in our brief that the IRS’s actions contradict controlling precedent and that allowing the IRS to increase 3M’s revenue would upend the public’s settled expectations upon which businesses rely to make investment decisions. We will also argue that the 8th Circuit should not allow the IRS to flout its Administrative Procedure Act obligations by relying on a rule for its actions that did not go through the notice and comment process.


Related Documents:
NAM brief  (February 14, 2024)

 

Little Sandy Coal Co., Inc. v. Comm'r   (7th Circuit)

Appeal from tax court regarding whether support and supervision of research activities qualify as research for purposes of the R&D tax credit

On March 31, 2022, the NAM filed an amicus brief urging the Seventh Circuit to reverse the Tax Court’s misapplication of tax code regulations which rendered a taxpayer’s valid research expenditures ineligible for the R&D tax credit. This case is of critical importance to manufacturers as the manufacturing sector leads all others in performing private sector R&D. Here, after finding that the taxpayer (a manufacturer of oil tankers and dry docks) undertook the type of research that the credit was intended to incentive, the Tax Court nonetheless denied the claimed credit after concluding that the taxpayer failed to prove that “substantially all” (80%) of its development activities “constitute[d] elements of a process of experimentation.” To reach this erroneous conclusion, that Tax Court distinguished costs incurred for employees engaging in qualified research from costs incurred for those directly supporting or supervising qualified research—a distinction not supported by the tax code or the relevant Treasury regulations.

The NAM’s brief explains that the Tax Court’s approach is inconsistent with the text, structure, history, and purpose of the Tax Code and with the relevant implementing regulations. Fabrication of prototypes or pilot models used in testing can be essential to the development of new products, particularly in the manufacturing sector. And, as was true in this case, the labor costs for such fabrication can be substantial. The Tax Court’s reasoning inexplicably penalizes manufacturers who, in performing legitimate and potentially important R&D, incur substantial costs to test new designs or concepts. If affirmed, that reasoning will undermine Congress’ efforts to encourage increased investments in domestic R&D, including increased spending on employees who directly support R&D efforts—results completely at odds with the purpose of the law.

On March 7, 2023, although the Seventh Circuit affirmed the Tax Court's decision, it clarified that both support time and supervision time as well as the costs of building and testing a prototype can be elements of a process of experimentation for purposes of the R&D tax credit.


Related Documents:
NAM brief  (March 31, 2022)

 

Quad Graphics, Inc. v. North Carolina Department of Revenue   (U.S. Supreme Court)

Challenging North Carolina’s Tax on Out-of-State Sales

On April 17, 2023, the NAM filed an amicus brief urging the U.S. Supreme Court to review and reverse a North Carolina Supreme Court decision disregarding precedent that precludes a state from taxing the sale of goods that occurs outside its borders. Quad Graphics is a Wisconsin-based commercial printer that prints books, magazines, catalogs, and direct-mail items for customers throughout the United States, including in North Carolina. The North Carolina Department of Revenue imposed a sales tax on Quad for sales to North Carolina residents even though those sales were consummated in Wisconsin by passing title to the merchandise (and risk of loss) when the merchandise arrived at a common carrier’s shipping dock outside of North Carolina for shipping. The North Carolina Supreme Court upheld the tax, concluding that subsequent U.S. Supreme Court precedent implicitly overruled McLeod v. J.E. Dilworth Co., 322 U.S. 327 (1944), which precludes taxing out-of-state sales.

We argued in our amicus brief that review is necessary for manufacturers to have clear rules about where and when taxes will be imposed. Further, the U.S. Supreme Court should grant the petition because the Commerce Clause precludes a state regulating conduct outside its borders. All manufacturers have an interest in limiting a state’s ability to regulate conduct occurring outside its borders as well as reducing the untenable risk of double taxation.

Unfortunately, on June 20, 2023, the Court denied the petition for certiorari.


Related Documents:
NAM brief  (April 17, 2023)

 

United States v. Microsoft Corp.   (W.D. Wash.)

IRS tax advice

The NAM filed an amicus brief in the U.S. District Court for the Western District of Washington supporting protection of confidential communications between taxpayers and their non-attorney tax advisors. Federal law under the “tax Privilege” generally makes such communications confidential, but an exception exists for communications relating to “the promotion of the direct or indirect participation” in a “tax shelter.” While a tax shelter is broadly defined, “promotion” is not, and the government wants to remove routine tax advice and common tax planning from the protections of the tax privilege, which would make it more difficult for manufacturers access to important tax advice. The NAM filed an amicus brief arguing that Congress did not intend such a broad interpretation, tax policy favors the free flow of information between taxpayers and their advisors, and routine advice should not make a tax advisor a promoter of a tax shelter. The court refused to consider NAM's or any other amici briefs and the case was closed in 2017.


Related Documents:
NAM amicus brief  (November 11, 2016)

 


White Papers -- active



The First Amendment and Mandatory Commercial Disclosures   (White Paper)

MCLA Constitutional Law Series

This white paper explores the First Amendment implications of mandatory product disclosures and transparency initiatives, when such disclosures compel manufacturers to disparage their own products, or to in-effect take sides in controversial public policy debates they might otherwise avoid. Such mandates raise important free speech concerns under the First Amendment, and as a result courts should apply strict scrutiny when reviewing them.


Related Documents:
White Paper  (August 16, 2019)

 

Government Investigations and the First Amendment   (White Paper)

MCLA Constitutional Law Series

The First Amendment prohibits public officials from wielding the coercive power of the government to silence private organizations—including corporations—with differing or opposing viewpoints on controversial issues of public concern. Corporations, either alone or through their participation in trade associations, and in conjunction with other third parties, make substantial and important contributions to issues of public debate contributing their industry knowledge, experience and research to enhance understanding of important issues of public concern.

This white paper argues that in order to safeguard these rights, Government officials and courts must cautiously evaluate motives for subpoenas and investigative demands that target activities relating to legitimate participation in the public policy process and must guard against the use of these powers to silence or censure particular points of view.


Related Documents:
White Paper  (August 16, 2019)

 

When the First Amendment Meets Chevron Deference: Free Speech and the Administrative State   (White Paper)

MCLA Constitutional Law Series

This white paper explains how regulatory actions can impinge on core First Amendment rights and identifies fundamental principles that should inform agency action and judicial review of such action to ensure that agencies properly recognize the First Amendment as a limitation on government power.


Related Documents:
White Paper  (January 1, 2019)