Tex. Ass'n of Mfrs. v. CPSC (5th Circuit) -- active

Challenge to CPSC phthalates rule

On 12/14/17, the NAM and American Chemistry Council, along with local Texas groups, filed a challenge in the Fifth Circuit Court of Appeals to the Consumer Product Safety Commission’s (CPSC) final rule on phthalates, which restricts the phthalate DINP. The CPSC’s decision to restrict DINP was misguided, scientifically inaccurate and the result of a deeply flawed process that fabricated rationales for a predetermined outcome. The Commission should have relied on scientifically reasonable statistics when assessing the exposure data, which demonstrate the cumulative risk of exposure to these phthalates is actually well below any level of concern – even for sensitive populations. DINP, as currently used in commercial and consumer products, does not pose a risk to human health at typical exposure levels. The CPSC’s unfounded decision here could be a slippery slope to restrict other chemicals that special interests find objectionable.

On 2/5/18, the NAM filed a response to the CPSC's motion to dismiss. The NAM's filed its opening brief on 8/20/18 and its reply brief on 12/3/18.


Related Documents:
NAM reply brief  (December 3, 2018)
NAM opening brief  (August 20, 2018)
NAM response  (February 5, 2018)
NAM petition for review  (December 14, 2017)

 

GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC (U.S. Supreme Court) -- active

Enforceability of international arbitration agreements

The NAM filed an amicus brief in the U.S. Supreme Court supporting enforceability of international arbitration agreements. The Federal Arbitration Act (FAA) established a “national policy favoring arbitration” by placing arbitration agreements on equal footing with all other contracts, including international arbitration agreements. The plaintiff in this case sought to create a loophole to avoid arbitration. Manufacturers regularly rely on arbitration agreements to ensure predictability and reliability in resolving international trade and investment disputes. The NAM’s brief in support of Supreme Court review argued that international arbitration agreements are enforceable—if not, international commerce will suffer. On June 26, 2019, the Court granted review for the Court's 2019-2020 term.


Related Documents:
NAM brief  (March 13, 2019)

 

Tillage v. Comcast Corp. (9th Circuit) -- active

Arbitration of California public injunction claims

The NAM filed an amicus brief to reverse a 9th Circuit ruling that would eviscerate arbitration agreements in California. The case implicates the question of whether consumer arbitration agreements in California are enforceable if they waive a plaintiff’s right to seek a “public injunction” against the defendant company. California’s consumer protection laws generally allow a consumer to seek a public injunction that compels the defendant company to take public action to remedy the alleged consumer protection violation. In this case, for example, the plaintiffs sought a public injunction compelling Comcast to include certain broadcasting fees in the base monthly price advertised to consumers. Successful public injunction claims can force companies to undertake major and disruptive changes to their business, products or services. A federal district court and the 9th Circuit invalidated Comcast’s arbitration agreement because it contained a public injunction waiver. Comcast petitioned the full 9th Circuit to review the case en banc. In support of review, the NAM filed an amicus brief that argues the Federal Arbitration Act preempts California law and that requiring arbitration of public injunction claims frustrates and undermines the purpose and benefits of individualized arbitration.


Related Documents:
NAM brief  (August 20, 2019)

 

Pfizer Inc. v. Adamyan (U.S. Supreme Court) -- active

Mass action litigation fairness

The NAM filed an amicus brief in support of a petition for certiorari seeking U.S. Supreme Court review and reversal of an appellate decision that undermines the efficient resolution of “mass action” lawsuits under the Class Action Fairness Act (CAFA). The case involves claims by over 4,000 plaintiffs alleging that Lipitor caused them to develop Type II diabetes. The plaintiffs brought the claims in state court. The state court judge proposed to remove the case to federal court under a CAFA provision that allows removal of such “mass actions” when claims for monetary relief by more than 100 people “are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” 28 U.S.C. 1332(d)(11)(B)(i). A federal judge rejected the proposed removal, however, finding that that statutory language allows only plaintiffs -- not state court judges -- to propose to remove mass actions to federal court. On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed. In support of the defendant’s petition for Supreme Court review, the NAM filed a coalition amicus brief that identifies the problematic consequences of the Ninth Circuit’s decision for manufacturers that face mass action claims.


Related Documents:
NAM brief  (July 25, 2019)

 

In re Loestrin 24 Fe Antitrust Litigation (1st Circuit) -- active

Antitrust liability for branded pharmaceutical manufacturers

The NAM filed an amicus brief to argue against overbroad antitrust liability for pharmaceutical manufacturers that settle patent infringement litigation with potential generic competitors. A group of plaintiffs brought a class action lawsuit against the manufacturer of a branded contraceptive pill, arguing that a litigation settlement agreement between the branded manufacturer and a potential generic competitor delayed market entry for the generic product and artificially maintained prices for the branded product. Only 26 wholesalers purchased the branded product. Courts generally require at least 40 plaintiffs to meet the numerosity requirement of class certification. The plaintiffs’ counsel sought to expand the size of the plaintiff class by including wholesale purchasers of other generic contraceptive pills made by another manufacturer. They argued that under the “umbrella theory” of antitrust injury, antitrust violators who limit output thereby bring about higher market prices for related products. By this logic, the group of potential plaintiffs increased from 26 to 47. A federal district court accepted that reasoning and certified the class action. The defendants sought immediate review from the U.S. Court of Appeals for the First Circuit. The NAM’s amicus brief in support of review explains why the umbrella theory of antitrust injury is invalid and identifies the harms to manufacturers if such a theory is upheld.


Related Documents:
NAM brief  (July 23, 2019)

 

Bahamas Surgery Center, LLC v. Kimberly-Clark Corp. (9th Circuit) -- active

Excessive punitive damages

The NAM filed an amicus brief urging the U.S. Court of Appeals for the Ninth Circuit to reverse the lower court’s decision awarding a judgment of more than $20 million in punitive damages—a 5:1 ratio of punitive to compensatory damages—with no explanation and in a case with only economic harm, no physical harm. The lower court awarded plaintiffs compensatory awards totaling more than $4 million against Kimberly-Clark and added the excessive punitive damages, ignoring constitutional limits and U.S. Supreme Court precedent that generally limits the ratio to 1:1. Excessive punitive damages unjustly punish manufacturers and discourage efficient settlement of cases, especially where, as in this case, no physical harm occurred. The NAM’s brief explains why punitive damages exceeding a 1:1 ratio are inconsistent with constitutional due process and excessive when the harm is purely economic in nature.


Related Documents:
NAM brief  (August 29, 2018)

 

Harris v. Union Pacific (8th Circuit) -- active

Americans with Disabilities Act class action certifications

The NAM filed an amicus brief supporting Union Pacific in the U.S. Court of Appeals for the Eight Circuit in its challenge to overbroad class actions that do not include the required rigorous analysis before a court certifies a class. Union Pacific appealed a lower court order certifying a class of more than 7,000 current and former employees bringing claims under the Americans with Disabilities Act (ADA). The plaintiffs challenged methods of ensuring that workers in safety-critical jobs are fit for duty and do not have a medical condition that could suddenly incapacitate them while operating a train or performing jobs that implicate public safety. This case is significant for manufacturers because resolving ADA claims, and the employer’s defenses, requires individualized assessments before liability under the ADA can be determined. The NAM’s brief argued that the lower court’s approach to class certification would eviscerate class action protections and is not permitted in ADA cases.


Related Documents:
NAM brief  (April 29, 2019)

 

Lewis v. Lead Industries Ass'n (Illinois Supreme Court) -- active

No-injury class actions for medical testing

The NAM filed an amicus brief in the Illinois Supreme Court to overturn an appellate ruling that would expose manufacturers to open-ended lawsuits where the plaintiffs suffered no actual harm. Plaintiffs sued several NAM member companies, claiming those companies conspired to hide the potential harms of lead pigment in paints and other products. The only alleged harm the plaintiffs could allege, however, was the cost of blood tests for lead exposure. The tests did not reveal any elevated lead levels, so the plaintiffs sought to recover the costs of the tests—even though Medicaid paid for the entire cost of the tests. An Illinois trial court ruled against the plaintiffs, but an Illinois appellate court reversed, concluding that the cost of the tests could establish harm even though the federal government covered the costs. If not reversed by the Illinois Supreme Court, this precedent could expose manufacturers to limitless potential liability for a range of no-injury class action lawsuits. The NAM’s amicus brief explains the potential ramifications of this litigation for manufacturers and explains why the appellate ruling should be reversed.


Related Documents:
NAM brief  (April 23, 2019)

 

Mozilla Corp. v. FCC (D.C. Circuit) -- active

Repeal of the 2015 net neutrality rule

The NAM filed an amicus brief in the U.S. Court of Appeals for the D.C. Circuit supporting the Federal Communications Commission’s (FCC) repeal of the 2015 net neutrality rule. In August, a group of plaintiffs sued alleging the FCC unlawfully overturned the 2015 rule by mischaracterizing how the internet access works. Manufacturers are the beneficiaries of a global broadband infrastructure, which has transformed the way they operate, providing numerous opportunities to create and market innovative products and services. The NAM’s brief explains that regulating broadband providers as common carriers is unwise, and the FCC’s change promotes investment that is critical to developing the next generation of technologies. We are confident the court will agree that the FCC acted within the law to end the Obama-era heavy-handed approach that was neither appropriate nor necessary for the rapidly evolving, highly competitive broadband market.


Related Documents:
NAM brief  (October 18, 2018)

 

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

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 would impose 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. A final rule is expected in 2019. The litigation remains stayed pending the final rule.


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

 

Atlantic Coast Pipeline, LLC v. Cowpasture River Preservation Ass'n (U.S. Supreme Court) -- active

Unreasonable pipeline permitting restrictions

The NAM filed an amicus brief in support of a petition for certiorari seeking U.S. Supreme Court review and reversal of a 4th Circuit holding that invalidated a federal permit for a major natural gas transmission pipeline that crosses U.S. Forest Service lands. An environmental group sued the U.S. Forest Service to invalidate its permit allowing the Atlantic Coast Pipeline to cross beneath the Appalachian Trail hiking route. A panel of the Fourth Circuit held that the Mineral Leasing Act does not allow agencies to grant rights-of-way for pipelines to cross any stretch of the Appalachian Trail; rather, such approvals must come from a majority vote of the U.S. congress. This holding effectively converts the Appalachian Trail into a 2,200-mile barrier to pipeline construction from Maine to Georgia. The court’s reasoning could also be applied to any one of the dozens of pipelines that currently cross beneath the trail because such pipelines require periodic permit renewals. In support of the pipeline’s petition for Supreme Court review, the NAM filed an amicus brief that explained the legal flaws in the panel’s reasoning and highlighted the important benefits that pipelines provide for manufacturers and the national economy.


Related Documents:
NAM brief  (July 26, 2019)

 

Atlantic Richfield Co. v. Christian (U.S. Supreme Court) -- active

Preemption of private restoration plans by CERCLA

In May of 2018, the NAM filed an amicus brief to urge the U.S. Supreme Court to review and reverse a Montana Supreme Court decision that undermines the predictability of EPA’s environmental remediation orders. The case arises under the federal Comprehensive Environmental Response, Compensation, and Liability Act (known as “CERCLA” or “Superfund”). Under CERCLA, EPA has the authority to order comprehensive clean up orders for sites containing hazardous wastes. Those orders preempt state and individual efforts to impose remediation requirements. The Montana Supreme Court nonetheless allowed nearby landowners to seek compensation for a remediation plan that conflicts with the EPA’s cleanup order. If not overturned, that decision will undermine the certainty and predictability for manufacturers that own Superfund sites. In support of a petition for review by the U.S. Supreme Court, the NAM filed an amicus brief that explains how the Montana Supreme Court’s decision frustrates environmental remediation. On June 10, 2019, the Court granted review of the case for the Court’s 2019-2020 term.


Related Documents:
NAM brief  (May 31, 2018)

 

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

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)

 

Center For Biological Diversity v. EPA (5th Circuit) -- active

Protecting offshore energy development

The NAM filed an amicus brief opposing environmental groups' efforts to invalidate a critical Clean Water Act permit for offshore oil and natural gas development. The case involves EPA's reissuance of a regional general permit under the Clean Water Act that authorizes certain pollutant discharges from offshore oil and natural gas platforms in the Gulf of Mexico. EPA's environmental review in support of that permit adopted a recent environmental analysis of the Gulf of Mexico by another federal agency. The plaintiffs argue that federal law required EPA to perform a separate and redundant environmental review. If their argument prevails, EPA would be required to undertake time-consuming environmental reviews for a range of new energy infrastructure projects and any other economic activity that could impact the environment. Those delays would in turn delay new projects. In support of the defendant EPA, the NAM filed an amicus brief that highlights the importance of oil and natural gas development to the national economy and energy security and argues that EPA's adoption of the related environmental review is lawful, appropriate, and consistent with past practice.


Related Documents:
NAM brief  (September 28, 2018)
NAM brief  (August 23, 2018)

 

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

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)

 

City of Oakland v. BP (9th Circuit) -- active

Public nuisance liability for climate change

The NAM filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit to oppose misguided efforts to impose “public nuisance” liability on energy manufacturers. The city of Oakland, California, 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 Ninth 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  (May 17, 2019)

 

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

Citizen suit interference with environmental regulation

In 2015, the NAM filed an amicus brief, along with other business groups, in the Fifth Circuit supporting a federal judge's decision not to impose an additional $642 million in penalties on ExxonMobil for various permit violations at its large Baytown, Texas facility. On remand to the district court, the groups reduced their requested amount of 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. The plaintiffs also asked for an additional $6 million in fees. On January 19, 2018, the NAM and other leading business associations filed another amicus brief arguing that the Constitution and Clean Air Act limit citizen suits under the Clean Air Act. We have asked 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.


Related Documents:
NAM brief  (January 19, 2018)
NAM brief  (September 17, 2015)

 

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

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.


Related Documents:
Industry reply brief  (September 26, 2016)
Industry brief  (March 16, 2016)

 

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

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)

 

Georgia v. Wheeler (S.D. Ga.) -- active

Challenge to WOTUS rule

In 2015, a coalition of states led by Georgia sued the U.S. Environmental Protection Agency (EPA) to challenge an EPA regulation governing jurisdictional "Waters of the United States" (WOTUS) under the Clean Water Act. Soon after Georgia filed suit, the court stayed the litigation while a separate federal appellate court asserted jurisdiction to resolve the case. In January of 2018, the U.S. Supreme Court ruled that challenges to the WOTUS rule should be heard in federal district courts. The Georgia district court thereafter reopened the case to allow Georgia's suit to proceed. The NAM's litigation coalition moved to intervene in the case to bring the voice of manufacturers to the case. On July 10, 2018, the Court granted the NAM's intervention. On August 31, 2018, the NAM filed its motion for summary judgment with the court, and on September 26, 2018, filed a motion for a nationwide injunction against the rule.


Related Documents:
NAM brief  (December 24, 2018)
NAM Motion  (September 26, 2018)
NAM Motion  (August 31, 2018)
NAM Complaint  (June 29, 2018)
NAM Motion  (June 29, 2018)

 

County of Maui, Hawaii v. Hawaii Wildlife Fund (U.S. Supreme Court) -- active

Scope of Clean Water Act jurisdiction

The U.S. Supreme Court should rule that the federal Clean Water Act does not regulate groundwater because the Act by its terms applies only to surface waters and would conflict with other environmental laws specifically tailored to protect groundwater. The U.S. Court of Appeals for the Ninth Circuit held in 2018 that groundwater is jurisdictional under the Clean Water Act, reasoning that groundwater can serve as a conduit to jurisdictional surface waters. Under this "conduit theory" of jurisdiction, certain industrial activities on dry land could give rise to lawsuits alleging such activities polluted nearby surface waters through groundwater connections. On appeal to the U.S. Supreme Court, the NAM’s amicus brief argued that this broad interpretation goes far beyond the scope and intent of the Clean Water Act, interferes with other environmental statutes focused on groundwater protection, would be impossible to implement, and would impose incalculable liability risk on manufacturers and other regulated industries.


Related Documents:
NAM Brief  (May 16, 2019)

 

In re: PennEast Pipeline Company LLC (3rd Circuit) -- active

State interference with energy development

The NAM filed an amicus brief to oppose New Jersey’s efforts to stop construction of a major new proposed natural gas pipeline to deliver natural gas from Pennsylvania to the eastern United States. The proposed PennEast Pipeline is natural gas transmission pipeline to bring abundant and low-cost natural gas from northeastern Pennsylvania to manufacturers, power generators, and other customers in New Jersey and throughout the eastern United States. The state of New Jersey resisted the pipeline's exercise of eminent domain under the federal Natural Gas Act, arguing that the 11th Amendment to the U.S. Constitution prohibits federal courts from effectuating the eminent domain over lands in which the state has a property interest (such as a conservation easement). If New Jersey's argument prevails, it would give that state and others a unilateral veto over federally approved natural gas transmission pipelines. Those vetoes would restrict future pipeline infrastructure development, leading to lower availability of natural gas and increased costs to manufacturers for natural gas, electricity, and other products derived from natural gas. The NAM's amicus brief explains the practical implications of New Jersey's argument and argues why the 11th Amendment does not support the state's interpretation.


Related Documents:
NAM brief  (May 15, 2019)

 

Lighthouse Resources Inc. v. Inslee (W.D. Wash.) -- active

State 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 climate 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. The NAM’s amicus brief argued that this interference is unconstitutional and harms the national economy.


Related Documents:
NAM brief  (March 11, 2019)
NAM brief  (May 3, 2018)

 

Meritor, Inc. v. EPA (D.C. Circuit) -- active

Superfund vapor intrusion mitigation

The NAM filed an amicus brief in the U.S. Court of Appeals for the DC Circuit challenging the Environmental Protection Agency’s (EPA) decision to place an industrial site on the National Priorities List (NPL) under the Superfund program. The NPL is a list of contaminated sites that EPA has determined have the highest priority for investigation and possible cleanup. The site at issue in this case was placed on the list based solely on subsurface intrusion, also known as “vapor intrusion,” without considering the site’s sub-slab depressurization system used to mitigate vapor intrusion. If upheld, the EPA’s decision to exclude the mitigation system would undermine the efforts of manufacturers who have proactively installed and operated these systems. The NAM’s brief argued that the EPA arbitrarily and unlawfully failed to take into account the active mitigation system and used a residential rather than industrial exposure benchmark.


Related Documents:
NAM brief  (April 8, 2019)

 

Murray Energy Corp. v. EPA (D.C. Circuit) -- active

Challenging 2015 ozone standard

In 2015 the NAM sued the U.S. Environmental Protection Agency to challenge its final rule lowering the ozone National Ambient Air Quality Standard (NAAQS) from 75 to 70 parts per billion. The rule could be one of the most expensive in history and burden manufacturers by limiting their air emissions and ability to grow and expand operations. The NAM seeks to invalidate the standard and secure an instruction from the court to raise the standard. The court stayed litigation in April 2017 to allow the new presidential administration to determine whether to revise the standard. On August 1, 2018, EPA announced that it would not revise the standard but instead expedite the consideration and issuance of the 2020 NAAQS standard. Oral argument was heard December 18, 2018, with a ruling from the court possible in 2019.


Related Documents:
Opposition Motion to Intervene  (July 17, 2017)
Industry Reply Brief  (September 14, 2016)
Intervenor Brief  (August 17, 2016)
Opening Brief  (April 22, 2016)
Statement of Issues  (January 25, 2016)
Motion to intervene in Sierra Club challenge  (January 22, 2016)

 

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

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.N.D.) -- active

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)

 

North Dakota v. EPA (D.C. Circuit) -- active

Challenge to the EPA's New Source Performance Standards (NSPS) for greenhouse gases from electric utilities

In addition to the Clean Power Plan rule for existing power generators, the EPA in 2015 also issued a new Clean Power Plan rule governing new power plants. The MCLA also challenged that rule. In 2017, the D.C. Circuit held the rule in abeyance while the current administration considers whether to revise or rescind the rule. According to the EPA’s most recent status report with the court, the agency expects to propose a replacement rule for public notice and comment soon. The litigation over the 2015 rule will likely remain stayed during that process.


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

 

North Dakota v. EPA (D.C. Circuit) -- active

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)

 

Oklahoma v. EPA (10th Circuit) -- active

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) -- active

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.


Related Documents:
NAM brief  (February 19, 2019)

 

Puget Soundkeeper Alliance v. Wheeler (W.D. Wash.) -- active

Challenge to delayed implementation of EPA's 2015 "Waters of the U.S." rule and waste treatment exclusion

The NAM intervened in a legal challenge by environmental groups to the EPA’s delayed implementation of the 2015 rule governing jurisdictional “Waters of the United States” (WOTUS) under the Clean Water Act, and to that rule’s jurisdictional exception for waste treatment systems. After a change in presidential administrations in early 2017, the EPA delayed the effective date of the 2015 WOTUS rule until February 2020. The purpose of that delay was to preserve the pre-rule status quo while the EPA proposes and finalizes a replacement WOTUS rule. A coalition of environmental groups sued to challenge that delay. On November 26, 2018, the court found that the delay failed to comply with applicable procedural requirements. The court invalidated the delay rule, thereby causing the 2015 WOTUS rule to come back into effect. After this procedural win, the environmental plaintiffs then turned their attention to the merits of the 2015 WOTUS rule. In May of 2019, the plaintiffs filed a motion for summary judgment to seek to invalidate the 2015 WOTUS rule’s exception of waste treatment systems from Clean Water Act jurisdiction. Waste treatment systems are essential elements of various industrial operations. They are used in mining, power generation, pulp and paper mills, manufacturing, infrastructure, and a host of other activities. Waste treatment systems prevent pollution by treating, settling, retaining, or removing pollutants before being discharged into rivers, lakes, streams, or other waters. The NAM’s litigation coalition filed a motion opposing the plaintiffs’ summary judgment motion. In our brief we explained the environmental benefits of waste treatment systems and the Clean Water Act’s express allowance and process for creating and issuing permits for those systems. We also attacked the plaintiffs’ standing to bring the challenge.


Related Documents:
NAM brief  (May 29, 2019)
NAM Motion  (June 28, 2018)

 

Sierra Club v. EPA (D.C. Circuit) -- active

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 12/17/14, the court held this case in abeyance until the EPA completes the rules revision process.


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

 

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

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)

 

West Virginia v. EPA (D.C. Circuit) -- active

Challenging EPA's Clean Power Plan

In 2015, the NAM challenged the EPA’s Clean Power Plan, a rule that went beyond the EPA’s legal authority to regulate under the Clean Air Act. Before the rule became effective, the U.S. Supreme Court stayed the rule pending the resolution of the litigation. Then, in 2017, the D.C. Circuit held the litigation itself in abeyance to allow the incoming administration to decide whether to rescind or revise the rule. The EPA proposed a replacement rule—the Affordable Clean Energy Rule—in August 2018. A final rule issued in June 2019. With the Clean Power Plan rule now replaced by the Affordable Clean Energy Rule, the parties moved to dismiss the case.


Related Documents:
NAM response in support of abeyance  (April 6, 2017)
NAM reply brief  (April 22, 2016)
NAM merits brief on core legal issues  (February 19, 2016)
NAM Motion for Stay  (October 23, 2015)
NAM Petition  (October 23, 2015)

 

Putnam Investments, LLC v. Brotherston (U.S. Supreme Court) -- active

ERISA liability for employer 401(k) plans

The NAM filed an amicus brief supporting a petition for certiorari that asks the Supreme Court to reverse an appellate decision that will expose companies to class-action lawsuits targeting their employee retirement plan offerings. A group of former employees sued their former employer under the Employee Retirement Income Security Act of 1974, claiming the company violated its fiduciary duty under ERISA by offering actively managed mutual funds in the company’s 401(k) plan that ultimately underperformed certain index funds. The U.S. Court of Appeals for the 1st Circuit concluded that the burden of proof rested on the company to disprove loss causation under ERISA, reasoning that a company “can easily insulate itself” from liability by selecting index funds rather than active funds in its 401(k) plan. This holding will encourage class-action plaintiffs to target companies that offer 401(k) plans and will make it more difficult for companies to defend against such litigation. In support of a petition for certiorari to the U.S. Supreme Court, the NAM’s amicus brief identifies the deluge of ERISA litigation already facing companies and explains how the 1st Circuit’s decision will harm plan sponsors and their participants.


Related Documents:
NAM brief  (February 15, 2019)

 

Intel Corporation Investment Policy Committee v. Sulyma (U.S. Supreme Court) -- active

Statute of limitations for ERISA claims

In March of 2019, the NAM filed an amicus brief seeking U.S. Supreme Court review of an appellate decision that improperly expands the statute of limitations period for employee lawsuits against their employers under the Employee Retirement Income Security Act. The case arose with a class action claim by a former Intel employee alleging that Intel violated its fiduciary duty under ERISA by investing in risky assets that lost value. A district court dismissed the case because the plaintiff brought his claim after ERISA’s three-year statute of limitations period expired. On appeal to the 9th Circuit, the plaintiff argued that even though he received information about the investments more than three years before the lawsuit, he did not recall reading the documents and therefore lacked “actual knowledge” of the investments necessary to trigger the statute of limitations period. That reasoning somehow persuaded the 9th Circuit to reverse the district court’s dismissal and reinstate the case. The Ninth Circuit’s decision inappropriately expands exposure to potential litigation for manufacturers that sponsor retirement plans. In support of Intel’s petition for Supreme Court review, the NAM filed an amicus brief that explains the harmful implications of the decision on manufacturers and why the Court should grant review. On June 10, 2019, the Court granted review of the case for the Court’s 2019-2020 term.


Related Documents:
NAM brief  (April 3, 2019)

 

Walsh v. BASF (Pennsylvania Supreme Court) -- active

Accepted standards for expert testimony

The NAM filed an amicus brief in the Pennsylvania Supreme Court supporting review of a wrongful-death suit against multiple pesticide manufacturers to determine whether the lower courts improperly tossed expert testimony. The trial court struck the plaintiffs experts’ testimony as unsupported because the experts gave novel scientific testimony without showing they followed methods generally accepted by the scientific community. The Superior Court reversed the trial court, and BASF appealed. This case is important because manufacturers frequently confront expert opinions involving exposure to allegedly toxic substances, and those expert opinions need to conform to generally accepted scientific and medical standards. The NAM’s brief argued that the Superior Court failed to respect the discretionary role of judicial gatekeeping to consider the reliability of expert methodology in a case-specific context.


Related Documents:
NAM brief  (May 14, 2019)

 

ExxonMobil v. Healey (2nd Circuit) -- active

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)

 

Oakland Bulk & Oversized Terminal, LLC v. City of Oakland (9th Circuit) -- active

Opposing local interference with energy exports

The NAM filed an amicus brief to defend energy producers against efforts by municipalities to ban energy exports from costal ports. In 2016, the city of Oakland, California, passed an ordinance that restricted the construction of a proposed new coal export terminal along the San Francisco Bay. The public explanation for the ordinance was the protection of local health and safety, but the actual rationale for the ban is the city’s ideological objection to the exportation of American coal to global markets. If allowed to stand, this action has dangerous implications for the power of individual cities to interfere with interstate and international trade. The NAM's amicus brief highlights how such restrictions can harm manufacturers and argues that this interference violates the U.S. Constitution.


Related Documents:
NAM brief  (February 15, 2019)

 

R.T. Vanderbilt Co. v. Hartford Accident & Indemnity Co. (Connecticut Supreme Court) -- active

Insurance coverage issues for asbestos claims

The NAM filed two separate but related amicus briefs in the Connecticut Supreme Court to argue against restrictive limitations on insurance coverage for asbestos claims. The case involves personal injury claims against a manufacturer for alleged asbestos exposure. The company’s insurers denied coverage, and the manufacturer sued the insurer to compel payment. A Connecticut trial court and appellate court issued a mixed ruling that held in the manufacturers’ favor on some grounds but not others. Questions of insurance policy interpretation and the common law for asbestos claims are important to manufacturers operating in Connecticut and elsewhere. On appeal to the Connecticut Supreme Court, the NAM filed an amicus brief that highlights the importance of this issue for manufacturers and argued in favor of liability coverage for the manufacturer.


Related Documents:
NAM brief  (January 10, 2019)
NAM Brief  (November 13, 2018)

 

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

Customs valuation issue in Thailand

The NAM led a group of associations in filing a joint WTO statement because Thailand has failed to abide by its WTO commitments on customs valuation, which now threatens a company with fines of more than $2 billion and imprisonment of several individuals. The dispute raises important systemic issues for the international business community, and our statement emphasizes the importance of the WTO’s customs valuation rules to international trade.

As way of background, this statement is based on the Philippines’ panel request filed at the World Trade Organization (WTO) on June 29, 2016, which raised complaints against Thailand under, among others, the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, more commonly known as the Valuation Agreement. Of particular concern to our associations are the allegations that Thailand has engaged in improper customs valuation.

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. These supply and production chains often involve related-party transactions of the type at issue in the present dispute. Companies rely on these supply and production chains to produce goods as efficiently as possible and to access international consumers in the global marketplace.


Related Documents:
WTO statement  (May 12, 2017)

 

Hammons v. Ethicon (Pennsylvania Supreme Court) -- active

Jurisdiction over out-of-state defendants

The NAM filed an amicus brief on behalf of medical device manufacturers to argue that manufacturers should be immune from being sued in states where they do not do business. Even though plaintiff’s injuries did not occur in Pennsylvania and her claims did not relate to any of defendant’s contacts in the state, a Pennsylvania trial court allowed her case over an out-of-state defendant. This case is significant for manufacturers that operate only in one state or region in the United States, and who should not be subject to being sued across the country. The NAM’s brief in the Pennsylvania Supreme Court argued that recent U.S. Supreme Court rulings do not permit state courts to exercise jurisdiction over companies based on activities in a state that are unrelated to a claim.


Related Documents:
NAM brief  (June 21, 2019)

 

BNSF Railway Co. v. EEOC (U.S. Supreme Court) -- active

ADA definition of disability for preemployment screenings

The NAM filed an amicus brief with the U.S. Supreme Court urging the court to reject expansion the scope of the Americans with Disabilities Act (ADA) “regarded as” prong of the definition of “disability.” This litigation arises from an Equal Employment Opportunity Commission (EEOC) charge after BNSF withdrew a conditional offer of employment because the company lacked enough information to determine whether an applicant suffered from an impairment that could limit his ability to perform the essential functions of the position. If allowed to stand, the decision would impose significant costs and expose employers to uncontrolled liability. A Supreme Court decision in this case would resolve a circuit split between the Ninth Circuit and other circuits that have considered this question. The NAM’s brief argued that 1) under the Ninth Circuit’s reasoning, an employer that requires an employee to undergo an individualized medical examination “for the purposes of determining whether he has an impairment” will be deemed to per se perceive the employee as having such an impairment and “regard” the employee as disabled; 2) other circuits have rejected this logic; and 3) that the Ninth Circuit’s holding improperly imposes the costs of medical examinations on employers.


Related Documents:
NAM brief  (April 3, 2019)

 

Boeing v. Int'l Ass'n of Machinists and Aerospace Workers (NLRB) -- active

Supporting appeal of fractured, small union bargaining unit determination

The NAM filed an amicus brief to support Boeing’s request for the National Labor Relations Board (NLRB) to review its finding that a small group of employees constituted a unit appropriate for collective bargaining. The Boeing Company’s 787 Dreamliner manufacturing facility in South Carolina employs approximately 3,000 production and maintenance employees, who have twice voted against joining a union. The NLRB Regional Director of Region 10 directed the election for a subset of employees at the plant. The flight readiness technicians and flight readiness technician inspectors, according to the Regional Director, constituted an appropriate independent unit for collective bargaining. In reaching this decision, the Regional Director did not evaluate it under the required PCC Structurals standard, which relies on the “community of interest” standard to determine whether employees excluded from the bargaining unit have meaningfully distinct interests that outweigh their similarities. If the Regional Director’s decision stands, manufacturers could have their workforces artificially fractured into smaller bargaining units in violation of the “community of interest” standard required in making bargaining unit determinations.

The NAM’s amicus brief argues that the Regional Director improperly applied a standard that had been overturned by PCC Structurals. The fragmented unit created by the Regional Director creates an artificial barrier that separates employees and departments and frustrates the ability to maintain stable labor relations.


Related Documents:
NAM brief  (July 16, 2018)

 

Busk v. Integrity Staffing Solutions, Inc. (U.S. Supreme Court) -- active

Compensation for security screenings

The NAM filed an amicus brief with the U.S. Supreme Court urging review of a lower court decision that Nevada and Arizona employers were obligated to compensate warehouse workers for time spent going through security screenings at the end of the day. That decision identified a federal standard for compensable “work” under the Fair Labor Standards Act independent of the Portal to Portal Act; the court held that Nevada and Arizona did not have to take the Portal to Portal Act into account because neither state adopted the Act. If allowed to stand, that decision would have adverse consequences for businesses who would incur significant liability from the opportunistic plaintiffs’ bar or significant costs in revamping their procedures to try to avoid liability. The NAM’s brief argued that the decision undermines Supreme Court precedent and that it will invite significant financial implications for employers across the country.


Related Documents:
NAM brief  (April 5, 2019)

 

Caesars Entertainment Corp. v. Int'l Union of Painters (NLRB) -- active

Protection of employer email systems

The NAM filed an amicus brief before the National Labor Relations Board (NLRB) in response to the NLRB’s request for input on whether to reconsider legal precedent that held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system for union communications. The NAM’s brief argues that employers should be allowed to safeguard their electronic communications for legitimate business interests, including to minimize distractions in the workplace, to prevent misuses of communications systems, to guard against data security vulnerabilities and to address other liabilities.


Related Documents:
NAM brief  (October 1, 2018)

 

Cellco Partnership v. NLRB (9th Circuit) -- active

Restriction on use of email in employee handbooks

The case arises from a decision by the NLRB that deems illegal portions of Verizon's workplace Code of Conduct that prohibits employee use of company email and other systems in various ways. The NLRB said the policies violate employee rights to discuss wages, hours and terms of employment. The NAM joined with the Chamber of Commerce, the Coalition for a Democratic Workplace, the HR Policy Association and the National Federation of Independent Business in an amicus brief arguing that the ruling ignores the rights of employers to establish safe and productive workplaces and secure email systems, creates legal and practical problems for employers of all sizes, and infringes First Amendment speech rights. The rule does not impinge on employee opportunities to use a wide variety of other personal communications technology during their non-work time.


Related Documents:
NAM brief  (November 16, 2017)

 

Communication Workers v. NLRB (9th Circuit) -- active

Use of company email by employees

This case involves the use of company email systems by employees. It arises from a 2014 decision by the NLRB that, if a company allows employees to use their email system, the employees have a statutory right to use the system on nonworking time for a wide range of messages, and companies have extremely limited, if any, oversight authority.

That decision, known as the Purple Communications case, reversed a previous NLRB decision and spawned substantial additional litigation involving other companies. The rule seeks to provide access to a company's own email system when other email systems can easily be accessed for free outside of the company's operations. The rule allows for extensive workplace distractions and personal misuse of business communication systems developed for business purposes.

The NAM joined with the HR Policy Ass'n, NFIB, and the Coalition for a Democratic Workplace in an amicus brief arguing that the ruling creates legal and practical problems for employers of all sizes, is unnecessary in today's world of social media and free email accounts, and infringes First Amendment speech and Fifth Amendment property rights. Further, the NLRB failed to provide an adequate justification and rationale for departing from longstanding precedent.


Related Documents:
NAM amicus brief  (October 10, 2017)

 

McDonald's v. Serv. Emp.'s Int'l Union (NLRB) -- active

NLRB preclusion standards

The NAM filed an amicus brief urging the National Labor Relations Board (NLRB) to uphold specific, well-established recusal standards. This case involves the Service Employees International Union’s (SEIU) attempt to force two republican NLRB members to recuse themselves because their former law firms represented clients with similar issues as the issues in this case, even though neither NRLB member nor their former law firms served as counsel for any of the parties in this case. This “issue preclusion” standard advocated by the SEIU is an extraordinary departure from established recusal procedures, is irreconcilable with federal regulations and unmanageable as a practical matter. The NAM’s brief explains why prior recusal standards should be upheld to allow the NLRB to efficiently decide the many matters it confronts without fundamentally altering how it functions.


Related Documents:
NAM brief  (August 28, 2018)

 

Nevada v. U.S. Dep’t of Labor (5th Circuit) -- active

Defending the overtime preliminary injunction from a collateral attack

The NAM filed an amicus brief on behalf of Chipotle Mexican Grill, supporting the nationwide injunction of the overtime rule. In 2017, the judge in Plano Chamber of Commerce v. Perez held that the Department of Labor (DOL) contradicted the express will of Congress and issued a nationwide injunction to prevent implementation of the new Overtime Rule. Later, in an unrelated case in a different jurisdiction, a plaintiff filed suit against her employer, Chipotle, for violating the new overtime rule. The judge who issued the nationwide injunction in Plano held the plaintiff in contempt for filing a suit that seeks to enforce an enjoined rule. The plaintiff is appealing that contempt order, arguing that she was not within the judge’s jurisdiction and, therefore, cannot be held in contempt. If the plaintiff can sue her employer under the enjoined rule, the nationwide injunction would be functionally invalid, and manufacturers would be subjected to billions of dollars in overtime liability under the new rule.

The NAM argues that the validity of the nationwide injunction should not be relitigated when determining whether it was proper for the Plano judge to hold a party in another jurisdiction in contempt of court. The NAM’s amicus brief argues that the only question before the court is whether the contempt order was valid, not whether the nationwide injunction was meritorious. For more information on Plano, click here .


Related Documents:
NAM brief  (July 13, 2018)

 

Save Jobs USA v. Department of Homeland Security (D.C. Circuit) -- active

H-4 visa work authorization for spouses

The NAM filed an amicus brief in the U.S. Court of Appeals for the DC Circuit 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 world economy. The NAM’s brief argued that 1) the H-4 has had positive economic results, including adding billions of dollars in economic activity and tax revenues; 2) families have reasonably relied on the H-4 rule and made irrevocable life decisions in reliance on the rule; and 3) the rule is a lawful exercise of DHS’ authority.


Related Documents:
NAM brief  (April 8, 2019)

 

United Nurses & Allied Professionals (NLRB) -- active

Challenging the NLRB's presumption that union dues spent for lobbying are germane to collective bargaining

The NAM filed an amicus brief with the NLRB in a case that could significantly alter the current way employees exercise their Beck rights to object to union dues expenditures for political activities such as lobbying. The U.S. Supreme Court in Beck explained that mandatory union dues may be used only to support union activities germane to collective bargaining, contract administration and grievance adjustment, and may not be used for political speech that conflicts with the First Amendment rights of the union members who pay dues. The decision does allow a union to charge for core union activities to prevent the “free rider” problem where benefits are bestowed on employees who might not otherwise contribute financially to the union’s activities.

Our brief argued that lobbying is not a core union function, and that the Supreme Court has already decided the issue in a case under an equivalent statute. Non-member employees should not be compelled to fund these union political activities.

In this case the NLRB is considering imposing a presumption that union dues for certain lobbying activities are germane to collective bargaining and other core union functions. The NAM argued that a union must bear the burden to prove that a lobbying expense is germane.

The Board also decided that an employee who objects to the union’s expenditures may not seek any verification of how the union spends funds. The NAM believes that all employees are entitled to a copy of an annual audit verification letter certifying that the union’s expenses were actually incurred, and the union must provide a statement of its chargeable and non-chargeable expenses.

If the NLRB adopts its presumption, it will be much harder if not impossible for objecting employees to determine whether any of the dues they pay are legitimate. The NAM’s approach prevents union dues from being used to promote political causes to which employee's object.


Related Documents:
NAM amicus brief  (February 19, 2013)

 

UPMC Presbyterian Shadyside v. NLRB (3rd Circuit) -- active

Court limits on NLRB's subpoena authority

The NAM filed an amicus brief with the Third Circuit Court of Appeals in UPMC Presbyterian Shadyside v. NLRB. In the case, the NLRB issued subpoenas requesting information to UPMC Presbyterian Shadyside Hospital, and under a “single employer” theory, to its corporate parent, UPMC, purportedly in connection with an NLRB investigation of unfair labor practice charges filed by the SEIU against Presbyterian Shadyside.

The district court found that those subpoenas are unprecedented in breadth and unrelated to the union’s underlying unfair labor practice charges. Indeed, the district court indicated that in view of “the NLRB’s efforts to obtain said documents for, and on behalf of, the SEIU, arguably moves the NLRB from its investigatory function and enforcer of federal labor law, to serving as the litigation arm of the Union, and a co-participant in the ongoing organization effort of the Union.” Although the district court found that (i) “there is a minimal or no relationship between the Subpoenas and the underlying unfair labor practice charges”; (ii) “the unfair labor practices are being used, under the guise of the ‘single employer’ rubric, to attempt to legitimize a massive document request”; and (iii) compliance with the subpoenas “would be an expensive, time-consuming, and potentially disruptive of the daily business activities” of the Appellants, the court nonetheless granted the NLRB’s application to enforce the subpoenas. According to the court, the “practical effect” of the Third Circuit’s “case law as to enforcement of subpoenas of federal government agencies is that [the district court] is constrained to essentially ‘rubber stamp’ the enforcement of the Subpoenas at hand.”

The NAM brief argued that the NLRB lacks the authority to compel an employer to produce information, such as documents demanded by an administrative subpoena. Instead, that authority, which necessarily requires impartial evaluation of an employer’s objections to the subpoena, is vested exclusively in Article III courts. This structural limitation on the NLRB’s authority, emanating from the Constitution’s separation of powers and due process requirements, protects against abuse of subpoena power.


Related Documents:
NAM brief  (April 14, 2015)

 

UPS Ground Freight v. NLRB (D.C. Circuit) -- active

As-applied challenge of the ambush election rule

The NAM filed an amicus brief in support of UPS in the first as-applied challenge of the ambush election rule. In 2014, the National Labor Relations Board (NLRB) issued the election rule, which elevated speed above due process and transparency. Shortly thereafter, because the Election Rule failed to balance other important policy objectives, the NAM brought a facial challenge to the rule in the U.S. District Court for the District of Columbia, which rejected the challenge based on its belief that the rule would be applied in a fair manner. A fair, transparent and thorough election process is important for manufacturing employees to be able to have an informed choice whether they want to be represented by a union. The NAM’s brief argues that this case serves as a prime example of how the rule has been applied to deny employers due process, such as by failing to resolve a voter eligibility issue before the election and denying an appropriate hearing.


Related Documents:
NAM brief  (October 22, 2018)

 

Wash. Alliance of Tech. Workers v. U.S. Dept. of Homeland Security (D.D.C.) -- active

Workforce program for STEM graduates

The NAM moved to intervene in a lawsuit that seeks to end a program that provides hundreds of thousands of skilled workers for manufacturers and other American businesses. To address a shortfall of certain skilled workers in the American economy, the federal government in 1992 established the "optional practical training" (OPT) program. That program and a subsequent extension for STEM students (STEM OPT) allows foreign-born students to continue their educational training by working in the United States for up to three years after completing college or a graduate degree. Without the OPT program and STEM OPT, manufacturers would be unable to fill critical positions requiring specialized training in engineering, math, technology and the sciences. A special interest group is seeking to invalidate the entire OPT program by suing the U.S. Department of Homeland Security. To help ensure the continued availability of hundreds of thousands of highly skilled workers for manufacturers, the NAM asked a federal court to allow our intervention in the case as a defendant. Becoming a defendant will allow the NAM to present the best legal arguments possible in support of the OPT program and STEM OPT. If the plaintiff somehow prevails at this stage of the litigation, the NAM can appeal. On July 1, 2019, the court granted the NAM's intervention.


Related Documents:
NAM Reply  (November 8, 2018)
NAM Motion  (October 18, 2018)

 

NAHB v. Acosta (W.D. Okla.) -- active

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)

 

Avco Corp. v. Sikkelee (U.S. Supreme Court) -- active

Federal Aviation Administration preemption of state law design-defect claims

The NAM filed an amicus brief in the U.S. Supreme Court urging review of a lower court opinion that a jury may hold Avco liable under state law for alleged defects in 1969 Federal Aviation Administration (FAA)-approved designs of part of a plane engine. The question before the Court is whether the FAA preempts state-law design-defect claims in the aviation industry, which is what Congress intended. This is important for manufacturers because a consistent safety standard is vital for regulation of critical modes of transportation. The NAM’s brief argued that the FAA’s requirement of prior approval of any aircraft or aircraft component design preempts state law that requires a design change because simultaneous compliance with state and federal law is impossible.


Related Documents:
NAM brief  (April 22, 2019)

 

Swinomish v. BNSF (9th Circuit) -- active

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)

 

2711 Hollywood Beach Condominium Ass'n v. NIBCO, Inc. (Florida Court of Appeals) -- active

Product liability for building components

The NAM filed an amicus brief in the Florida court of appeals to preserve Florida’s rule limiting tort liability for manufacturers of building products and materials. The developer of a residential condominium building in Florida improperly combined metal and PVC pipes in the building’s sprinkler system, causing the system to leak. The condo association, which purchased the building from the developer, then sued the developer and the pipe manufacturers under tort and contract theories of liability. The condo association did not claim that the pipes themselves were defective; rather, it asserted that the pipe manufacturers had a duty to warn about the alleged incompatibility of the pipes being installed together. A trial court ruled that Florida’s “economic loss rule” limits the condo association’s claims against the pipe manufacturers to contract and warranty claims and bars tort-based claims because the pipes did not injure people or other property. A broader rule would expose manufacturers to significantly more potential liability and could force them to raise prices or seek expensive liability insurance. On appeal, the NAM filed an amicus brief in support of the pipe manufacturers to preserve Florida’s economic loss rule and contain the potential for open-ended tort liability for the misuse of building products and materials.


Related Documents:
NAM brief  (June 7, 2019)

 

Burningham v. Wright Medical Group (Utah Supreme Court) -- active

Product liability for medical devices

The NAM filed an amicus brief in the Utah Supreme Court that seeks to relieve medical device manufacturers of overbroad product liability. The legal issue before the court is whether medical device manufacturers should be held strictly liable for any harms caused by their products, or instead whether plaintiffs must prove the manufacturer negligently designed or manufactured the device. The NAM’s amicus brief argued the latter standard should apply because a strict liability standard would stifle innovation and drive life-saving medical devices from the market.


Related Documents:
NAM brief  (October 5, 2018)

 

City of Pomona v. SQM North America Corp. (9th Circuit) -- active

Unlimited historical liability

The NAM filed an amicus brief in the U.S. Court of Appeals for the 9th Circuit addressing the “risk-benefit” test for strict products liability as applied to historically used products. The City of Pomona, California, claims that a fertilizer product sold more than 70 years ago contained small amounts of naturally occurring perchlorate that contaminated the city’s groundwater supply. The resolution of this question has the potential to impact manufacturers because it involves the proper legal standard for strict product liability for historically used products. The NAM’s brief argues that a defendant cannot be liable for risks based on science and technology not available at the time a product was manufactured.


Related Documents:
NAM brief  (December 21, 2018)

 

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

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. The company is seeking review by the Texas Supreme Court. In support of review, the NAM filed an amicus brief that argued against 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.


Related Documents:
NAM brief  (February 19, 2019)

 

McGinnis v. C.R. Bard, Inc. (N.J. Super. Ct. App. Div.) -- active

Allowing evidence of conformance with FDA’s safety standards

The NAM filed an amicus brief supporting an appeal of a trial court’s ruling that evidence of a U.S. Food and Drug Administration (FDA) medical device 510(k) approval process, which determined a device is safe and effective, may be excluded from evidence in a personal injury lawsuit. After the trial court excluded the evidence, including on the question of punitive damages for egregious conduct, the jury awarded large compensatory and punitive damages. This case is important because manufacturers could be adversely impacted if courts reach liability decisions based on an improper understanding of the principles of safety and effectiveness that underlie each 510(k) clearance. The NAM’s brief argued that Congress and the FDA established the 510(k) process to ensure the safety of medical devices and that evidence of a manufacturer’s conformance with the FDA’s safety standards is essential to a fair determination of product defects and punitive damages.


Related Documents:
NAM brief  (May 23, 2019)

 

Pneumo Abex LLC v. Jones (Illinois Supreme Court) -- active

Manufacturer civil conspiracy liability

The NAM filed an amicus brief with the Illinois Supreme Court in an asbestos case appeal to explain that civil conspiracy claims should not be used to impose liability on innocent manufacturers for the actions of others when the manufacturer did not commit an unlawful act. A lower court incorrectly ruled that plaintiffs presented sufficient evidence from which a reasonable jury could find an underlying agreement to hide product hazards. This litigation is important for manufacturers because entire industries could be held liable for a plaintiff’s injuries, without sufficient evidence. The NAM’s brief argues that the plaintiffs’ claim is an attempt to expand civil conspiracy without proof of an agreement to commit an unlawful act, courts have previously rejected these attempts, and if this ruling is allowed to stand, it will introduce an unprecedented expansion of litigation in Illinois.


Related Documents:
NAM brief  (February 1, 2019)

 

Roverano v. John Crane, Inc. (Pennsylvania Supreme Court) -- active

Apportionment of asbestos liability

The NAM filed an amicus brief in the Pennsylvania Supreme Court that seeks to uphold application of a Pennsylvania law that fairly apportions asbestos liability on companies in proportion to their fault rather than applying a pro-rata approach that would impose excessive liability on some manufacturers. The case arose from an employee’s lawsuit against 30 companies for asbestos exposure. A Pennsylvania trial court found six companies liable and divided the employee’s damages equally among the six companies. The court failed to comply with Pennsylvania’s “Fair Share Act,” which requires courts to apportion asbestos liability based on each defendant’s relative fault in causing a plaintiff’s injuries. By contrast, a pro-rata approach unfairly imposes more liability on some manufacturers than they legally bear responsibility for. On appeal to the Pennsylvania Supreme Court, the NAM’s amicus brief argues that asbestos liability should follow the Fair Share Act and argues against other legal loopholes that impose heightened financial damages on manufacturers.


Related Documents:
NAM brief  (November 16, 2018)

 

McKiver v. Murphy-Brown, LLC (4th Circuit) -- active

Private nuisance lawsuits for food production operations

The NAM filed an amicus brief in the U.S. Court of Appeals for the 4th Circuit to overturn a district court ruling that imposed punitive damages on a pork production facility in North Carolina under a "private nuisance" theory of liability. The case began with a lawsuit by property owners who reside near the facility in North Carolina, alleging that aspects of the facility’s operations are a private nuisance under tort common law. A federal district court ruled for the plaintiffs and awarded compensatory damages and millions of dollars in additional punitive damages. On appeal to the 4th Circuit, the NAM filed an amicus brief that explained why nuisance liability and punitive damages are inappropriate when companies comply with applicable environmental regulations, and further explained North Carolina’s extensive statutory and regulatory control over pork production facilities in North Carolina. This case has important implications for food producers and all manufacturers because the legal standard for what constitutes a “nuisance” under tort law will vary from jury-to-jury, risking the imposition of significant liability—including punitive damages—for manufacturers engaged in legal and thoroughly-regulated conduct.


Related Documents:
NAM brief  (March 6, 2019)

 

Altera v. Commissioner of IRS (9th Circuit) -- active

IRS rule change threatens double taxation on cross border transactions.

The NAM filed an amicus brief urging the U.S. Court of Appeals for the Ninth Circuit to uphold the Internal Revenue Service’s (IRS) “arm’s-length transaction standard.” The Commissioner of the IRS departed from this longstanding approach in a policy shift, thus destroying the established precedent and reducing its effectiveness. Under the arm’s-length standard, a transaction was judged by looking at how the parties priced it as if they were two independent entities, not parts of the same group of related entities. The NAM’s brief argued that the longstanding, consistent approach was key to avoiding double taxation on cross border transactions. The Ninth Circuit held that the Commissioner did not exceed his rule-making authority and that his rule was entitled to deference. Altera filed a petition for rehearing, and the NAM filed an amicus brief in support of rehearing.


Related Documents:
NAM brief  (September 23, 2016)

 

National Association of Manufacturers v. United States Department of the Treasury (U.S. Court of International Trade) -- active

Challenging final duty drawback rule

The NAM sued to challenge a federal regulation that strips manufacturers of a congressionally-mandated tax incentive to increase domestic manufacturing and exports. The regulation at issue involves “duty drawback”—the refund of taxes, duties, or fees paid on imported goods when the same or similar goods are exported. By way of example, drawback would allow a distilled spirits company that exports vodka from the United States to claim a refund on taxes and duties paid on the same quantity of imported vodka. These incentives encourage domestic production and have been used by the wine industry since 2004 to increase exports. Despite a clear statutory mandate from congress in 2016 legislation, a recent federal rule disallows certain categories of drawback claims for distilled spirits, wine, beer, and other products. The NAM's lawsuit seeks to invalidate the rule and require a replacement rule that reflects congress’ clear intent in allowing such claims.


Related Documents:
NAM opening brief  (June 24, 2019)
NAM Complaint  (April 17, 2019)

 

Ford Motor Co. v. United States (Federal Circuit) -- active

Clarity and consistency in tariff determinations for imports

The NAM filed an amicus brief to seek to reverse an appellate decision that will generate uncertainty for tariff determinations for imported products, including imported automobiles. The case arose from Ford Motor Co.’s imports of the Transit Connect van. After importing the vans as passenger vehicles, Ford reconfigured the vans to allow their use as cargo vans. The U.S. Customs and Border protection applied a 25% tariff on the vehicles, concluding that the vans are properly classified as trucks subject to a 25% tariff rather than a passenger vehicle subject to a much lower 2.5% tariff. Ford challenged the tariff determination in the U.S. Court of International Trade and prevailed. On appeal, however, the Federal Circuit reversed, concluding that the ultimate intended use of the vehicles as cargo vans supported the higher tariff rate. Ford sought en banc review by the full Federal Circuit, and the NAM filed an amicus brief in support to identify the uncertainty that manufacturers will face if tariffs are imposed based on possible subsequent reconfigurations of goods rather than their actual condition as imported.


Related Documents:
NAM brief  (August 9, 2019)

 

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

IRS tax advice

This case involves the protection of confidential communications between taxpayers and their non-attorney tax advisors. Federal law (the "Tax Privilege") generally makes such communications confidential, but there is an exception for communications relating to "the promotion of the direct or indirect participation" in a "tax shelter." While a tax shelter is extremely broadly defined, "promotion" is nott. The government wants the court to define it broadly, which could result in removing routine tax advice and common tax planning from the protections of the Tax Privilege.

The NAM filed an amicus brief 10/27/16 arguing that Congress did not intend such a broad interpretation, and tax policy favors the free flow of information between taxpayers and their advisors. Such routine advice should not make a tax advisor a "promoter" of a tax shelter. Instead, something more is required, such as where an advisor has a financial interest in the advice given other than what he typically bills. We provided a list of factors for a court to consider when determining whether a tax consultant is actually promoting a tax shelter.


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

 

The First Amendment and Mandatory Commercial Disclosures (White Paper) -- active

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) -- active

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)

 


Kisor v. Wilkie (U.S. Supreme Court) -- 2019

Scope of judicial deference to agency regulations

The NAM filed an amicus brief in support of certiorari to the U.S. Supreme Court in a case involving judicial deference to administrative agencies’ interpretations of their own regulations. The case arose from a veteran’s lawsuit against the Veterans’ Administration over his post-service benefits. The sole legal question before the Supreme Court is whether the landmark case of Auer v. Robbins (S. Ct. 1997) should be overturned. Auer held that reviewing courts should give “extreme deference” to administrative agencies’ interpretations of their own regulations. This so-called “Auer deference” allows agencies to promulgate vague regulations then enjoy broad judicial deference to their own interpretation of their regulation. This case has important implications for manufacturers because a favorable ruling by the Supreme Court would discourage agencies from promulgating vague regulations and would give more certainty to manufacturers that their own reasonable interpretations of regulations will be upheld in response to a government enforcement proceeding or other regulatory action. The NAM’s brief in support of certiorari explained how extreme judicial deference to agencies harms manufacturers. On December 10, 2018, the Court granted certiorari to hear the case. The NAM then submitted an amicus brief on the merits that reinforced our arguments for why the doctrine should be abolished. On June 26, 2019, the Court declined to overrule the doctrine but substantially narrowed its application. This ruling will result in more regulatory certainty and clarity for manufacturers.


Related Documents:
NAM brief  (August 1, 2018)

 

Doe v. Nestle (9th Circuit) -- 2019

Scope of Alien Tort Statute

The NAM filed an amicus brief to oppose a class action lawsuit that seeks to impose overbroad civil liability on manufacturers under the U.S. Alien Tort Statute. The lawsuit alleges that major food producers violated the Alien Tort Statute by purchasing cocoa from African producers engaged in criminal conduct and human rights violations. The defendant food producers moved to dismiss the complaint. A federal district court granted the motion to dismiss, finding that the complaint seeks an improper extraterritorial application of the Alien Tort Statute because the alleged violations occurred in Africa. On appeal, the U.S. Court of Appeals for the Ninth Circuit held that the plaintiffs should be allowed to pursue their claims against the major food producers for "aiding and abetting" the cocoa producers' alleged violations. The Ninth Circuit reasoned that the major business decisions about the cocoa purchases and related payments were made within the United States, and therefore a domestic application of the Alien Tort Statute is appropriate. This interpretation of the Alien Tort Statute would open the floodgates to potential claims against manufacturers for any payments to foreign suppliers whom a plaintiff could allege is involved in any conduct that violates international norms. Over the past two decades, companies have been named as defendants in hundreds of these types of lawsuits. The suits are typically litigated for a decade or more, imposing substantial legal and reputational costs on corporations that operate in developing countries and chilling further investment. A class-action lawsuit on such a basis could impose massive settlement pressure on companies involved in no wrongdoing whatsoever. Such a precedent would enrich opportunistic trial lawyers while harming manufacturers and doing nothing to alleviate violations of international law. The NAM's amicus brief supports en banc review by identifying the harmful consequences this decision would have on all manufacturers. On July 6, 2019, the court denied en banc review.


Related Documents:
NAM brief  (December 7, 2018)

 

United States v. AT&T, Inc. (D.C. Circuit) -- 2019

Support for efficient vertical mergers

The NAM filed an amicus brief supporting AT&T in the United States Court of Appeals for the District of Columbia Circuit. The government appealed the district court’s determination that AT&T’s merger with Time Warner is unlikely to “substantially lessen competition.” Preserving flexibility to pursue efficient mergers and promoting predictable and transparent antitrust enforcement is important to all of industry. The NAM’s brief argued that mergers such as this increase efficiency and benefit consumers, and clear merger standards are important to provide the business community with confidence to invest in transactions that have the potential to lower prices and benefit everyone. The D.C. Circuit rejected the government's challenge.


Related Documents:
NAM brief  (September 27, 2018)

 

McArdle v. AT&T Mobility LLC (9th Circuit) -- 2019

Arbitration of California public injunction claims

The NAM filed an amicus brief to reverse a 9th Circuit ruling that would eviscerate arbitration agreements in California. The case implicates the question of whether consumer arbitration agreements in California are enforceable if they waive a plaintiff’s right to seek a “public injunction” against the defendant company. California’s consumer protection laws generally allow a consumer to seek a public injunction that compels the defendant company to take public action to remedy the alleged consumer protection violation. In this case, for example, the plaintiffs sought a public injunction compelling AT&T to change its disclosures regarding certain roaming fees. Successful public injunction claims can force companies to undertake major and disruptive changes to their business, products or services. A federal district court and the 9th Circuit invalidated AT&T’s arbitration agreement because it contained a public injunction waiver. AT&T petitioned the full 9th Circuit to review the case en banc. In support of review, the NAM filed an amicus brief that argues the Federal Arbitration Act preempts California law and that requiring arbitration of public injunction claims frustrates and undermines the purpose and benefits of individualized arbitration.


Related Documents:
NAM brief  (August 19, 2019)
NAM brief  (April 2, 2018)

 

Behr Dayton Thermal Products v. Martin (U.S. Supreme Court) -- 2019

Reasonable class action certification standards

The NAM filed an amicus in support of a petition to certiorari to the U.S. Supreme Court to ask the court to reverse an appellate ruling that would expose manufacturers to overbroad class action lawsuits. The case involves class action litigation arising from alleged groundwater contamination by manufacturers in Dayton, Ohio. The Sixth Circuit court of appeals found that the proposed class of plaintiffs lacked the requirements for class certification but nonetheless certified seven legal issues for class treatment. This overbroad interpretation of class certification threatens manufacturers by allowing a far broader range of claims to be brought against manufacturers than federal law allows. The NAM's amicus brief asks the Supreme Court to take the case and reverse the appellate holding. On March 18, 2019, the Court denied certiorari.


Related Documents:
NAM brief  (November 13, 2018)

 

FCA US LLC and Harman Int’l Industries, Inc. v. Flynn (U.S. Supreme Court) -- 2019

No harm class action standing

The NAM filed an amicus brief to oppose class action standing where there is no harm. A class of plaintiffs allege that Jeep infotainment systems have cyber-security “vulnerabilities” that render the subject vehicles “more” susceptible to hacking than other vehicles, though no FCA US vehicle has ever been hacked in real world conditions. This case raises important and unsettled questions regarding standing and class certification standards, which threaten to open the floodgates to class action lawsuits over every connected product in which consumers could allege that the product they own is “defective” because it is more “vulnerable” to a hack than other similar products even if no hack has ever occurred in real world conditions. The NAM’s brief explains why certifying a class for a mere risk of a “hack” is not a violation of a manufacturers’ standard of care, is not compensable harm and circumvents clear precedent. The Supreme Court declined to hear the case.


Related Documents:
NAM brief  (October 29, 2018)

 

Nguyen v. Nissan North America (9th Circuit) -- 2019

Class action damages for automotive manufacturers

The NAM filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit to argue that courts should reject class action lawsuits that seek to extract excessive damages from automobile manufacturers for automotive parts that might deteriorate prematurely in some vehicles. The case arises from a class action lawsuit claiming that Nissan failed to disclose a design defect in the transmission of several of its vehicle models. The plaintiffs sought damages totaling the cost of replacing every potential impacted part in every potentially-affected vehicle. A federal district court denied the plaintiffs’ request for class certification because granting the plaintiffs such a financial recovery would overcompensate the plaintiffs because only a portion of vehicle owners experienced transmission problems, and even then, the parts worked as intended for long periods of time. The plaintiffs asked the U.S. Court of Appeals for the Ninth Circuit to review the district court’s denial of class certification, and the court agreed to consider the appeal. This case has important implications for manufacturers because if the Ninth Circuit agrees with the plaintiffs’ reasoning, then any alleged product defect could impose potential liability and settlement pressure on manufacturers far beyond the actual harm caused by the alleged product defect. The MCLA’s amicus brief argued against such potential excessive damages and explained why the district court properly denied class certification. On July 26, 2019, the Ninth Circuit reversed the district court, concluding that class certification could proceed.


Related Documents:
NAM brief  (February 4, 2019)

 

Philip Morris v. Boatright (U.S. Supreme Court) -- 2019

Due process limits on class actions

The NAM filed an amicus brief asking the U.S. Supreme Court to review cases on the constitutional due process limits on class-action litigation involving R.J. Reynolds and Philip Morris. The lower courts allowed a jury determination on general liability in one case to prevent a defense in another case as to whether each of a manufacturer’s products was defective. If allowed to stand, these decisions have the potential to improperly expose manufacturers to burdensome litigation without the proper opportunity to defend themselves. The NAM has previously filed amicus briefs in related cases, also arguing that class-action defendants have a due process right to a judicial determination of every element of a claim. The Supreme Court denied the petition for certiorari.


Related Documents:
NAM brief  (December 20, 2018)

 

R.J. Reynolds Tobacco Co. v. Searcy (U.S. Supreme Court) -- 2019

Due process limits on class actions

The NAM filed an amicus brief asking the U.S. Supreme Court to review cases on the constitutional due process limits on class-action litigation involving R.J. Reynolds and Philip Morris. The lower courts allowed a jury determination on general liability in one case to prevent a defense in another case as to whether each of a manufacturer’s products was defective. If allowed to stand, these decisions have the potential to improperly expose manufacturers to burdensome litigation without the proper opportunity to defend themselves. The NAM has previously filed amicus briefs in related cases, also arguing that class-action defendants have a due process right to a judicial determination of every element of a claim. The Supreme Court denied the petition for certiorari.


Related Documents:
NAM brief  (December 20, 2018)

 

BouSamra v. Excela Health (Pennsylvania Supreme Court) -- 2019

Attorney–client privilege for non-lawyers

The NAM filed an amicus brief in the Pennsylvania Supreme Court arguing that documents shared between counsel and non-lawyers working with a company on a complex legal issue should be privileged. The issue is whether company conversations with public relations and legal counsel are privileged when determining how best to represent the company. Privilege over documents should not be waived merely because they are shared with public relations professionals to ensure that the company’s comments in the media are consistent with their legal positioning. It serves the interests of justice to extend the attorney–client privilege and work product doctrine so that businesses can properly integrate the lawyering and communications aspects of high-profile litigation. The Pennsylvania Supreme Court held that the attorney-client privilege can extend to communications among a company, its outside counsel, and a public relations firm involved in the matter


Related Documents:
NAM brief  (March 12, 2018)

 

American Farm Bureau Federation v. EPA (S.D. Texas) -- 2019

Challenging Waters of the United States regulation

The NAM and 13 other organizations sued the EPA and the U.S. Army Corps of Engineers in 2016 to challenge the agencies’ 2015 rule defining the scope of jurisdictional “Waters of the United States” under the Clean Water Act (2015 WOTUS rule). The 2015 WOTUS rule exerts jurisdiction over a staggering range of waters and dry landscape features -- large and small; permanent, intermittent, or ephemeral; flowing or stagnant; natural or manmade; and interstate or intrastate. The NAM’s complaint argues that the rule exceeds the Clean Water Act and the United States Constitution.

The 2015 WOTUS rule defines which waters and land areas require a permit under the Clean Water Act for discharges of pollutants to those areas. The rule’s definitions and prohibitions are complex and vague, and often require case-by-case determinations by the agencies. Manufacturers will be required to undertake expensive and laborious efforts to determine whether landscape features on their property are jurisdictional. Penalties for unpermitted discharges (which can include simply moving dirt or mud without a permit) are tens of thousands of dollars per day, per violation.

The U.S. Court of Appeals for the Sixth Circuit initially asserted jurisdiction to hear the various legal challenges to the 2015 WOTUS rule. Due to questions about that Court’s authority to decide these cases, however, the NAM asked the United States Supreme Court to rule that federal district courts in fact are the proper venue for challenges to the 2015 WOTUS rule. In a unanimous decision issued on January 22, 2018, the Supreme Court ruled in the NAM’s favor, declaring that challenges to jurisdictional rules under the Clean Water Act must proceed in the federal district courts. That decision gave manufacturers and other regulated industries long-needed clarity on judicial resolution of rulemakings under the Clean Water Act. That clarity will expedite future litigation under the Clean Water Act.

While that procedural wrangling unfolded, the agencies began the regulatory process of rescinding the 2015 WOTUS rule and replacing it with a new jurisdictional rule. To ensure that the 2015 WOTUS rule does not come back into effect while the agencies complete their rule replacement process, the agencies issued a rule on February 6, 2018, that delays the effectiveness of the 2015 WOTUS rule until February 2020. In August 2018, a federal court enjoined that rule, which bring the 2015 WOTUS rule back into effect in the 26 states not already subject to a stay of the rule.

On October 18, 2018, the NAM filed our motion for summary judgment, which seeks to invalidate the 2015 WOTUS rule in its entirety. Our brief argues that the rule violates federal law and the U.S. Constitution, and should be invalidated in its entirety.

In a major win for manufacturers, on May 28, 2019, the court ruled that the EPA violated the law by issuing the rule without adequate notice and opportunity to comment on the proposed rule. The court remanded the rule to the agency to re-propose the rule and provide adequate opportunity to comment.


Related Documents:
Motion for Reconsideration  (July 25, 2019)
NAM Reply  (December 3, 2018)
NAM Reply  (November 7, 2018)
NAM Motion  (October 18, 2018)
NAM Motion  (February 7, 2018)
NAM Opposition to Motion to Dismiss  (May 13, 2016)
NAM Complaint  (July 2, 2015)

 

Appalachian Voices v. FERC (D.C. Circuit) -- 2019

Federal review of new energy infrastructure projects

The NAM filed an amicus brief in support of the Mountain Valley Pipeline, a major new natural gas transmission pipeline to bring natural gas from the Marcellus shale region to manufacturers, electricity generators, and other consumers in the eastern United States. The U.S. Federal Energy Regulatory Commission (FERC) approved the pipeline under Section 7 of the Natural Gas Act. Environmental groups sued to challenge that authorization, arguing that FERC's environmental review under the National Environmental Policy Act (NEPA) should have quantified the greenhouse gas emissions impacts of all possible downstream uses of the natural gas. If courts interpret NEPA as imposing that requirement, the approval process for major energy infrastructure projects will only become more complex, delayed, and uncertain as FERC undertakes a speculative GHG analysis that environmental groups would inevitably challenge in court to delay project commencement. The NAM's amicus brief argued that NEPA does not compel a GHG analysis for every new energy infrastructure project, and that FERC properly exercised its discretion in determining that GHG emissions are not indirect effects of its approval of the Mountain Valley Pipeline. On February 19, 2019, the U.S. Court of Appeals for the D.C. Circuit upheld FERC's approval, concluding that FERC's consideration of the potential emissions impacts was reasonable under NEPA.


Related Documents:
NAM brief  (November 27, 2018)

 

California Communities Against Toxics v. EPA (D.C. Circuit) -- 2019

Hazardous waste recycling

The NAM intervened in a lawsuit by environmental groups that seeks to constrain manufacturers' ability to recycle hazardous waste. The plaintiffs challenged a 2018 rule by the U.S. Environmental Protection Agency (EPA) that removed significant burdens on manufacturers to recycle hazardous waste under the federal Resource Conservation and Recovery Act (RCRA). Those burdens had been removed in the 2018 rule as a result of successful NAM litigation in 2017 that challenged an earlier EPA regulation that unreasonably burdened manufacturers. Hazardous waste recycling is important to many segments of the manufacturing industry because it allows companies to reuse or repurpose chemicals, minerals, or other products that otherwise would require disposal (typically at significant expense). By intervening on behalf of EPA, the NAM sought to preserve the 2018 rule and to bring the voice of manufacturers to the litigation. On July 2, 2019, the D.C. Circuit, in a unanimous ruling, rejected the plaintiffs’ challenge. This ruling preserves a safe and cost-effective means for companies to recycle hazardous waste.


Related Documents:
NAM Motion  (July 12, 2018)

 

California Communities Against Toxics v. EPA (D.C. Circuit) -- 2019

Streamlined air permitting under the Clean Air Act

The NAM filed an amicus brief to defend the EPA’s withdrawal of a prior EPA policy known as "once in, always in" that imposed unreasonable and unlawful regulatory burdens on manufacturers under the Clean Air Act. In January of 2018, the EPA issued a guidance memorandum withdrawing the prior policy for the classification of major sources of hazardous air pollutants under section 112 of the Clean Air Act. With the new guidance, sources of hazardous air pollutants previously classified as “major sources” may be reclassified as “area” sources when the facility limits its potential to emit below major source thresholds. The new policy promotes regulatory clarity and reduces burdens for manufacturers while continuing to ensure stringent and effective controls on hazardous air pollutants. Environmental groups sued to challenge the policy change. The NAM filed an amicus brief in support of the EPA. Our brief explaines how the policy change will continue to preserve air quality while removing unlawful and excessive regulatory burdens on manufacturers. In a win for manufacturers, on August 20, 2019, the court dismissed the challenge, finding the guidance was not final agency action subject to judicial review.


Related Documents:
NAM brief  (January 14, 2019)

 

Cowpasture River Preservation Ass'n v. U.S. Forest Service (4th Circuit) -- 2019

Unreasonable pipeline permitting restrictions

The NAM filed an amicus brief in support of en banc review by the U.S. Court of Appeals for the Fourth Circuit to reverse a panel holding that invalidated a federal permit for a major natural gas transmission pipeline that crosses U.S. Forest Service lands. An environmental group sued the U.S. Forest Service to invalidate its permit allowing the Atlantic Coast Pipeline to cross beneath the Appalachian Trail hiking route. A panel of the Fourth Circuit held that the Mineral Leasing Act does not allow agencies to grant rights-of-way for pipelines to cross any stretch of the Appalachian Trail; rather, such approvals must come from a majority vote of the U.S. congress. This holding effectively converts the Appalachian Trail into a 2,200-mile barrier to pipeline construction from Maine to Georgia. The court’s reasoning could also be applied to any one of the dozens of pipelines that currently cross beneath the trail because such pipelines require periodic permit renewals. In support of the intervenor Atlantic Coast Pipeline’s petition for en banc review by the Fourth Circuit, the NAM filed an amicus brief that explained the legal flaws in the panel’s reasoning and highlighted the important benefits that pipelines provide for manufacturers and the national economy. On February 25, 2019, the Fourth Circuit denied en banc review.


Related Documents:
NAM brief  (February 19, 2019)

 

Environmental Defense Fund v. EPA (D.C. Circuit) -- 2019

TSCA inventory reset intervention

The MCLA intervened in a lawsuit by environmental groups that seeks to overturn an EPA rule implementing the Toxic Substances Control Act (TSCA). The rule, “TSCA Inventory Notification (Active-Inactive) Requirements,” governs the process whereby the EPA must update the list of chemicals used in commerce in the United States. The EPA’s final rule allowed companies to keep certain information about the chemical free from public disclosure on confidentiality grounds. An environmental group sued to challenge the rule, arguing that the EPA failed to comply with various procedural requirements in promulgating the rule and that the rule unlawfully shields information from public disclosure. The confidentiality of chemical information is critically important to chemical manufacturers. To help defend the rule, the MCLA intervened in the case. On June 26, 2019, the D.C. Circuit Court of Appeals rejected all but one of the plaintiffs’ claims. It broadly upheld the confidentiality aspects of the rule of greatest concern to chemical manufacturers. Given the EPA’s relatively minor procedural misstep on only one aspect of the rule, the court allowed the rule to continue in force while the EPA addresses the procedural error.


Related Documents:
NAM intervenor brief  (May 31, 2018)
Motion to Intervene  (October 2, 2017)

 

Martinez v. Colo. Oil & Gas Conservation Comm'n (Colorado Supreme Court) -- 2019

Colorado oil and gas permits

In April of 2018, the NAM filed an amicus brief that asked the Colorado Supreme Court to reverse an appellate ruling that required the Colorado Oil and Gas Conservation Commission (COGCC) to consider a rulemaking request that would have effectively banned oil and natural gas development in Colorado. A group of Colorado residents filed the rulemaking proposal for the purpose of restricting fossil fuel development, and hydraulic fracturing in particular. On January 14, 2019, the Colorado Supreme Court ruled that the COGCC properly rejected the rulemaking proposal. This ruling benefits energy producers and manufacturers in Colorado and beyond by ensuring the continued supply of abundant and cost-effective energy.


Related Documents:
NAM brief  (April 2, 2018)
NAM brief  (May 18, 2017)

 

Natural Resources Defense Council v. EPA (D.C. Circuit) -- 2019

Defending regulatory clarity for Clean Air Act permits

The NAM intervened in a legal challenge by environmental groups to a policy by the U.S. Environmental Protection Agency (EPA) that clarifies manufacturers' permitting obligations under the Clean Air Act. The lawsuit seeks to invalidate an EPA interpretive memorandum that identifies factors to guide a facility’s determination of whether separate physical or operational changes to the facility constitute a single “project” under the EPA’s New Source Review (NSR) permitting program. Determining the extent of a project under NSR is important for many manufacturers because combining several pollution sources at a facility can trigger NSR permitting requirements that mandate expensive air pollution control technologies. The NAM moved intervened as a defendant on behalf of the EPA to help defend the interpretation and preserve regulatory clarity for manufacturers. On June 25, 2019, the environmental plaintiffs moved to dismiss their case. Although their dismissal motion did not state the reasons, we infer that our intervention arguments might have caused them to realize the weakness of their case.


Related Documents:
NAM Motion  (February 13, 2019)

 

Otsego 2000 v. FERC (D.C. Circuit) -- 2019

Greenhouse gas analysis of pipelines

The NAM filed an amicus brief to argue that the Federal Energy Regulatory Commission (FERC), when reviewing a pipeline company’s permit application for a new pipeline infrastructure project, does not have a categorical obligation under federal law to forecast the speculative greenhouse gas impacts of possible uses of the natural gas by unknown and unknowable customers of the natural gas. The case arises from FERC’s approval of upgrades to an existing natural gas pipeline in New York state. In reviewing the environmental impacts of those upgrades under the National Environmental Policy Act (NEPA), FERC declined to undertake a speculative analysis of the greenhouse gas impacts of the possible uses of the natural gas by the ultimate customers of the gas. An environmental group sued FERC to challenge that determination. In FERC’s defense, the NAM filed an amicus brief to support FERC’s approach of determining on a case-by-case basis whether a greenhouse gas analysis is appropriate for a particular energy infrastructure project. This approach is important to manufacturers because it avoids prolonged and speculative environmental reviews that opposition groups can use as a basis to challenge and delay new energy infrastructure development. On May 9, 2019, the court found the plaintiffs lacked standing and therefore dismissed the case.


Related Documents:
NAM brief  (February 1, 2019)

 

South Carolina Coastal Conservation League v. Wheeler (D.S. Car.) -- 2019

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. On August 16, 2018, the court ruled in the plaintiffs' favor, finding that EPA violated the Administrative Procedure Act by failing to request and consider comments on the flaws of the 2015 WOTUS rule and by refusing to consider the substantive implications of suspending the rule.


Related Documents:
NAM brief  (July 6, 2018)

 

Cochise Consultancy v. United States (U.S. Supreme Court) -- 2019

Statute-of-limitations for private false claims act cases

The NAM filed an amicus brief in the U.S. Supreme Court urging a limited time frame for private relators to bring False Claims Act (FCA) cases. The FCA establishes two distinct statute-of-limitations periods: six years for relators’ claims and up to ten years for claims brought by a government official or with the knowledge of a government official. The U.S. Supreme Court considered the issue of whether the “government knowledge” period of ten years applies only when the government intervenes in the case or whether that period also applies to relators even when the government has chosen not to pursue the claim. The shorter statute of limitations would reduce the number of very old claims that manufacturers would be forced to defend—at significant expense and with the disadvantage of faded memories. The NAM’s brief argued that a relator in an FCA action is limited to the six-year statute of limitations, but the Court held that the longer limit of up to ten years applies.


Related Documents:
NAM brief  (January 9, 2019)

 

American Beverage Association v. City of San Francisco (9th Circuit) -- 2019

Compelled speech for food and beverage advertising

In 2015, the City of San Francisco enacted an ordinance that requires large warnings on advertisements for certain beverages containing added sugar. The warnings declare that "Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay." Groups representing the affected industries sued in federal court to enjoin the ordinance. They lost at the trial level but won on their initial appeal. The city is now seeking a further appeal to the full United States Court of Appeals for the Ninth Circuit. The legal issues in this case will have far-reaching implications for manufacturers. If governments like San Francisco’s can force manufacturers to speak out against the very products they create or compel companies to spread controversial messages on their products or advertising, companies’ voices could be silenced, and their business harmed. The NAM filed an amicus brief in support of the beverage companies that fights back against the city’s ordinance and the larger problem of regulation through compelled speech. Our brief explains how the ordinance violates the First Amendment to the U.S. Constitution by impermissibly compelling commercial speech. On February 1, 2019, the court ruled for the plaintiff on its free speech claims.


Related Documents:
NAM brief  (March 5, 2018)

 

American Fuel & Petrochemical Manufacturers v. O'Keeffe (U.S. Supreme Court) -- 2019

Restriction on the free trade of energy

The NAM filed an amicus brief in support of a petition for certiorari to the U.S. Supreme Court to oppose Oregon’s economic discrimination against transportation fuels manufactured outside of Oregon, and to defend the free trade of fuels and other manufactured products within the United States. The case involves Oregon’s “Clean Fuel Program,” which ascribes a “carbon intensity” score to all fuels and requires higher-scoring fuels to pay a financial penalty to sell those fuels in Oregon. Oregon officials responsible for the program acknowledged that one purpose of the program was to discriminate against fuels manufactured outside of Oregon. A federal district court and the U.S. Court of Appeals for the Ninth Circuit upheld the program. An association representing the oil refining industry petitioned the U.S. Supreme Court to review the case. The NAM’s amicus brief in support of certiorari argues that the Oregon law improperly seeks to regulate energy production in other states, and that the lower courts failed to properly scrutinize the program and find that it violates the U.S. Constitution’s prohibition against a state’s economic discrimination against products made out-of-state. Our brief also highlights the problematic consequences for manufacturers if states may enact a patchwork of similar economic restrictions on the free trade of transportation fuels and other manufactured products. On May 13, 2019, the Court denied certiorari.


Related Documents:
NAM brief  (February 8, 2019)

 

ExxonMobil v. Healey (U.S. Supreme Court) -- 2019

Personal jurisdiction for subpoenas

The NAM filed an amicus brief to oppose the power of state attorneys general to subpoena out-of-state corporations over issues that are unrelated to the company’s activity in the state. The Massachusetts attorney general issued a subpoena to ExxonMobil that sought decades of communications related to climate change.

The company challenged the subpoena, arguing that its in-state activity was not sufficiently related to the scope of the subpoena. The Massachusetts Supreme Court upheld the subpoena despite the tenuous connection between the focus of the subpoena (climate change) and the company’s limited in-state activity (licensing agreements with independently-owned gas stations). That low bar for jurisdiction over out-of-state defendants threatens all manufacturers by massively expanding the range of courts through which plaintiffs or government officials may pursue claims against manufacturers. The NAM’s amicus brief in support of the company's petition for certiorari to the U.S. Supreme Court argues that subpoenas like this are valid only when the nature of the company’s in-state conduct has a substantial relationship with the focus of the subpoena.

On January 7, 2019, the Court denied certiorari.


Related Documents:
NAM petition  (October 11, 2018)

 

Marathon v. NLRB (6th Circuit) -- 2019

Unreasonable union document requests

The NAM filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit to support Marathon Petroleum in its appeal from a National Labor Relations Board (NRLB) decision that required Marathon to produce documents during a union discussion. The underlying issue is whether “meet and discuss” means “bargain” under labor law. Marathon agreed to meet and discuss over outside contractors but not to bargain. Manufacturers and their employees rely on maintaining a fair and balanced system for economic growth and job creation. The NAM’s brief argues that the NLRB abuses its discretion by finding that Marathon incurred a bargaining obligation by agreeing to meet and discuss with the union. The Sixth Circuit agreed with Marathon, denied enforcement of the NLRB decision and remanded the case to determine if Marathon had any duty to bargain with the union over outside contractors.


Related Documents:
NAM brief  (December 26, 2018)

 

Nat’l Women’s L. Ctr. v. OMB (D.D.C.) -- 2019

EEO-1 Component 2 pay data reporting

The NAM filed an amicus brief urging the U.S. District Court for the District of Columbia to delay the deadline for filing the Revised EEO-1 Report “Component 2” pay data. Because Component 2 significantly expands the data fields employers must submit, employers need sufficient time to revise their systems, implement new procedures and train employees in order to collect the data. Component 2 creates an administrative burden for employers who will now be forced to bear the costs of complying with the requirements. The NAM’s brief argued that the EEOC has previously recognized that changes to EEO-1 require implementation time; 2) employers reasonably relied on EEOC’s direction and did not take the steps need to comply with collection of the data; 3) consistent with these reasons employers should receive sufficient time to prepare for the revised EEO-1; and 4) the data should not be required until EEOC can preserve confidentiality. The court declined to delay the filing deadline.


Related Documents:
NAM summation  (April 22, 2019)
NAM brief  (April 4, 2019)

 

Parker Drilling Management Services v. Newton (U.S. Supreme Court) -- 2019

Employment liability on the outer continental shelf

The NAM filed an amicus brief in the U.S. Supreme Court to overturn an appellate court ruling that workers on offshore drilling platforms may bring state-law labor and employment claims. An employee located on an offshore drilling platform in federal waters on the Outer Continental Shelf sued his employer—an offshore drilling services company—alleging the employer failed to pay the employee for his non-working “standby” time on the platform. The employee argued that California’s labor laws entitled him to payment for the standby time. The drilling company countered that federal labor laws applied because the platform is located on the Outer Continental shelf. A district court ruled that federal law applies, but the U.S. Court of Appeals for the 9th Circuit reversed. The drilling company petitioned the U.S. Supreme Court for review. The NAM filed an amicus brief in support of review. The Court granted review, and on June 10, 2019, concluded that federal labor law applies because the Outer Continental Shelf Lands Act broadly preempts state labor and employment laws. This decision restores certainty for offshore platform owners and operators and removes the specter of hundreds of millions of dollars in unwarranted wage-and-hour liability.


Related Documents:
NAM brief  (February 27, 2019)
NAM brief  (October 26, 2018)

 

Taylor v. Burlington Northern Santa Fe Railway Co. (Washington State Supreme Court) -- 2019

Whether obesity is an impairment under Washington state law

The NAM filed an amicus brief in the Washington State Supreme Court arguing that obesity is not a legally protected disability unless the obesity is the result of a physiological disorder. The U.S. Court of Appeals for the 9th Circuit sent a certified question to the Washington State Supreme Court asking whether obesity is an impairment under Washington law to resolve allegations by a plaintiff that his denial of employment because he was obese constituted discrimination. An adverse ruling on this question could affect employee relations and a wide variety of business interactions negatively and could impose significant costs and uncertainty on Washington businesses. The NAM’s brief argues that defining obesity as a “per se” disability would encompass 40 percent or more of the adult population, would be at odds with legislative intent and would place significant burdens on employers. The court held that obesity is always an “impairment” under Washington law, regardless of whether obesity is related to an underlying medical condition.


Related Documents:
NAM brief  (January 14, 2019)

 

Zino v. Whirlpool Corp. (6th Circuit) -- 2019

Whether collective bargaining agreement entitles retirees to vested healthcare benefits for life.

The NAM filed an amicus brief supporting Whirlpool in this appeal to the Sixth Circuit. The issue is whether a collective bargaining agreement provides health benefits for life absent explicit language that the agreement provides for such benefits. Previously, the Sixth Circuit has provided conflicting holdings in similar cases, at times holding that the collective bargaining agreements do not provide such lifetime benefits and at times reading them into the agreement. However, in Tackett, the Supreme Court held that using ordinary contract principles, parties to collective bargaining agreements would not intend retiree benefits to vest for life if not explicitly stated in the agreement. The NAM encouraged the Sixth Circuit to provide a clear standard that does not conflict with Tackett, which it did by holding that the agreement did not provide lifetime health benefits.


Related Documents:
NAM brief  (January 12, 2018)

 

Air and Liquid Systems v. DeVries (U.S. Supreme Court) -- 2019

Overbroad asbestos liability

The NAM filed an amicus brief on behalf of a metal parts manufacturer to argue against overbroad asbestos liability for companies whose products do not contain asbestos. Individual plaintiffs who worked on ocean vessels sued manufacturers of metal parts used in the vessels. The defendant’s parts did not contain asbestos but were later combined with other third-party parts that did, which the plaintiffs claimed caused them to develop lung disease.

The U.S. Court of Appeals for the Third Circuit found the metal component manufacturers liable for the plaintiffs' injuries, concluding that it was "reasonably foreseeable" that the metal components would be integrated with asbestos components on the ship. If not reversed, that liability standard could impose limitless potential liability on manufacturers whose products do not even contain asbestos. That same theory could also be used to hold manufacturers liable for third-party products beyond the asbestos context. The U.S. Supreme Court granted review. The NAM filed an amicus brief in support of the company to argue against this overbroad scope of liability that could hurt manufacturers by making them liable for asbestos exposure for manufacturing products that do not even contain asbestos.

On March 19, 2019, the Court rejected the 3rd Circuit's overbroad holding that would have imposed liability on manufacturers whenever it is "foreseeable" that their products might be integrated with other third-party products that could cause harm. Instead, the Supreme Court ruled that a manufacturer only has a duty to warn when the manufacturer's product requires incorporation of another part (such as asbestos) that the manufacturer knows or has reason to know is likely to make the integrated product dangerous.


Related Documents:
NAM brief  (July 16, 2018)

 

Torres v. BNSF (New Mexico Court of Appeals) -- 2019

Asbestos take-home exposure

The NAM filed an amicus brief in the New Mexico Court of Appeals arguing that manufacturers should not owe a duty of care to people exposed to toxic substances outside of the workplace. Imposition of a duty on premises owners to prevent off-site exposures to asbestos or other toxic substances in the workplace would lead to potentially limitless and indefinite liability. Further, such a duty would substantially burden the remaining but increasingly remote defendants in decades old asbestos litigation. Courts in many states have articulated strong public policy reasons for rejecting a duty, and, in fact, courts in states like New Mexico that do not focus on foreseeability as part of the duty analysis have uniformly rejected take-home asbestos exposure claims. The case was dismissed on March 8, 2019.


Related Documents:
NAM brief  (February 12, 2018)

 

Lindenberg v. Jackson Nat'l Life Ins. Co (6th Circuit) -- 2019

Limits on punitive damages

The NAM filed an amicus brief urging the full U.S. Court of Appeals for the Sixth Circuit to rehear a decision that invalidated Tennessee’s statutory limit on excessive punitive damages awards. A Sixth Circuit panel ruled that the limit on punitive damages was contrary to the Tennessee Constitution because it violated the right to a jury trial and separation of powers. If upheld, manufacturers facing lawsuits under Tennessee law will be exposed to significant and unwarranted liability exposure. The NAM’s brief argued that the ruling is inconsistent with Tennessee’s longstanding presumption that statutory enactments are constitutional, contrary to the vast majority of state courts and conflicts with every federal circuit that has considered the constitutionality of a state limit on damages. In 2016, the NAM filed two other amicus briefs in this line of cases. On March 28, 2019, the court denied en banc review.


Related Documents:
NAM brief  (January 23, 2019)

 

First Solar, Inc. v. Mineworkers' Pension Scheme (U.S. Supreme Court) -- 2019

Loss causation proof in private securities actions

The NAM filed an amicus brief in the U.S. Supreme Court urging it to review a case on securities losses from alleged fraud. The lower court’s ruling set forth a broad loss-causation standard under which there is no need to establish that any alleged fraud was ever disclosed to the market, which directly conflicts with other decisions that have required a plaintiff show that the market became aware of the existence of fraud or, at least, of the facts that the defendant allegedly misrepresented. Courts should require proof that an act or omission of the defendant caused the loss for which the plaintiff seeks to recover damages. If successful, this argument could lead to even more federal securities class actions. The NAM’s brief explains why the law and precedent does not support this theory of liability and highlights the need to promote fair markets that support capital for business growth. On June 24, 2019, the Court denied certiorari.


Related Documents:
NAM brief  (September 5, 2018)

 


Pfizer Inc. v. Rite Aid (U.S. Supreme Court) -- 2018

Antitrust scrutiny for pharmaceutical reverse payments

The NAM filed an amicus brief in the U.S. Supreme Court urging it to review a lower court decision accusing Pfizer of making an illegal reverse payment to keep a generic version of the cholesterol drug Lipitor off the market. Antitrust scrutiny should apply only to “large” and “unjustified” reverse payments made to a patent challenger in an effort to persuade the challenger to stay out of the market, and the lower court's decision extended antitrust scrutiny to “commonplace” and “traditional” settlements by focusing on just one aspect of the agreement. The ability of the pharmaceutical companies to efficiently settle disputes is highly beneficial to the public, and speculative antitrust challenges will needlessly chill such settlements. The NAM's brief urged the Supreme Court to provide greater guidance on what qualifies as an impermissible reverse payment and what facts plaintiffs must include in a complaint to plausibly allege anticompetitive conduct in order to subject a pharmaceutical patent settlement to antitrust scrutiny. Providing such direction would be helpful to manufacturers so that they can protect their intellectual property rights in ways consistent with the antitrust laws and avoid improper antitrust challenges to their patent settlements.The U.S. Supreme Court issued a brief order declining to review.


Related Documents:
NAM brief  (December 22, 2017)

 

Epic Systems Corp. v. Lewis (U.S. Supreme Court) -- 2018

Permissibility of class-action waivers and mandatory arbitration provisions

The NAM filed two amicus briefs in the U.S. Supreme Court regarding the permissibility of class-action waivers and mandatory arbitration provisions in employment contracts. Class-action waiver and arbitration provisions are permissible under the Federal Arbitration Act (FAA), and arbitration encourages efficient employment practices by providing lower costs to the parties and faster results in a dispute, thus avoiding drawn-out and costly litigation. The NAM’s briefs argued that arbitration provisions are valuable to employers and employees, that arbitration agreements are governed under the FAA and that courts should not defer to incorrect interpretations of the law. The Court upheld the enforceability of arbitration agreements that waive an employee’s right to participate in class action lawsuits against the employer.


Related Documents:
NAM brief on the merits  (June 16, 2017)
NAM brief supporting review  (October 3, 2016)

 

Ernst & Young, LLP v. Morris (U.S. Supreme Court) -- 2018

Permissibility of class-action waivers and mandatory arbitration provisions

The NAM filed two amicus briefs in the U.S. Supreme Court regarding the permissibility of class-action waivers and mandatory arbitration provisions in employment contracts. Class-action waiver and arbitration provisions are permissible under the Federal Arbitration Act (FAA), and arbitration encourages efficient employment practices by providing lower costs to the parties and faster results in a dispute, thus avoiding drawn-out and costly litigation. The NAM’s briefs argued that arbitration provisions are valuable to employers and employees, that arbitration agreements are governed under the FAA and that courts should not defer to incorrect interpretations of the law. The Court upheld the enforceability of arbitration agreements that waive an employee’s right to participate in class action lawsuits against the employer.


Related Documents:
NAM brief on the merits  (June 16, 2017)
NAM brief supporting review  (October 3, 2016)

 

Five Star Senior Living, Inc. v. Mandviwala (U.S. Supreme Court) -- 2018

Federal Arbitration Act preemption of California claims

The NAM filed an amicus brief asking the U.S. Supreme Court to review and reject California’s rule prohibiting arbitration of Private Attorneys General Act (PAGA) claims. The California Supreme Court held that California public policy precludes enforcement of an agreement that requires PAGA claims to be submitted to arbitration and that California’s policy is not preempted by the Federal Arbitration Act (FAA). This holding means representative PAGA claims will likely become even more common, resulting in the effective invalidation of millions of arbitration agreements that are governed by the FAA. The NAM’s brief argued that arbitration agreements allow disputes to be resolved promptly and efficiently while avoiding the costs associated with traditional litigation. Such arbitration is speedy, fair, inexpensive and less adversarial than litigation in court. Unfortunately, the U.S. Supreme Court denied review.


Related Documents:
NAM brief  (April 26, 2018)

 

CNH Industrial N.V. v. Reese (U.S. Supreme Court) -- 2018

Interpretation of benefits provided in a collective bargaining agreement

The NAM filed an amicus brief supporting CNH Industrial’s appeal to the Supreme Court of an adverse decision involving its obligation to provide lifetime healthcare benefits for retirees. The issue in the case is whether a collective bargaining agreement that does not expressly provide for lifetime vesting of such benefits can be interpreted to include them. The NAM’s brief argued that while the Supreme Court has already addressed this issue in the Tackett>/i> case in 2015, the U.S. Court of Appeals for the Sixth Circuit struggled to properly implement that ruling and improperly tipped the scales in favor of employees. The case is important for companies with similar provisions in their collective bargaining agreements. The U.S. Supreme Court granted the petition for certiorari and issued a per curiam decision reversing the Sixth Circuit and rendering judgment in CNH’s favor.


Related Documents:
NAM brief  (November 6, 2017)

 

Davidson v. Kimberly-Clark Corp. (9th Circuit) -- 2018

Standing requirements for an injunction relating to product labeling

The NAM filed an amicus brief asking the full U.S. Court of Appeals for the Ninth Circuit to review a three-judge panel’s decision granting a plaintiff standing for an injunction when it was not clear she had any actual or imminent injury. The case implicates the question of whether hypothetical or conjectural injury was sufficient to allow the suit to proceed, and it is important to manufacturers because such an expansive theory of standing encourages abusive, lawyer-driven litigation in which plaintiffs’ lawyers pursue meritless claims in the hope that the costs and risks of litigation will drive businesses to settle. The NAM’s brief argued that the panel decision lowered the bar for showing harm and encourages class-action litigation over product labeling by plaintiffs who will never buy the product in question. Unfortunately, the Ninth Circuit denied the request to rehear the case.


Related Documents:
NAM brief  (November 13, 2017)

 

In re New York City Asbestos Litigation (New York Supreme Court) -- 2018

Punitive damages in asbestos cases

The NAM filed an amicus brief supporting the appeals of several companies seeking to vacate or modify a New York City Case Management Order (CMO) that rejected the New York City Asbestos Litigation practice of deferring punitive damages claims. In 2017, a New York City administrative judge issued a CMO governing certain procedures for handling complex asbestos litigation. If upheld, the CMO could jeopardize compensation for future plaintiffs and threaten the viability of companies involved in the litigation. The NAM’s brief argued that 1) the CMO should be rejected, or at a minimum modified to continue the longstanding practice, 2) that the court should also modify the CMO to require plaintiffs to file all eligible asbestos trust claims early in the discovery process and 3) the court should specify that trust claims materials are admissible in asbestos cases which would help prevent manipulation and abuse of the trust claim and litigation process. Unfortunately, the court declined to modify the CMO.


Related Documents:
NAM brief  (October 10, 2017)

 

Case v. American Honda Motor Co. (California Supreme Court) -- 2018

Overbroad class action certifiction

The NAM filed an amicus brief opposing an overbroad class action lawsuit against an automotive manufacturer. A group of plaintiffs sued Honda, alleging that some of its vehicles are prone to transmission failure. A California trial court denied the plaintiffs class certification because the vast majority of them suffered no transmission problems whatsoever. An appeals court reversed, finding that the plaintiffs need only articulate a “theory of the case” to obtain class certification. If that standard is allowed to stand, manufacturers in California could be faced with massive and unwarranted potential liability in product defect lawsuits. In support of Honda’s request for the California Supreme Court to review the case, the NAM’s brief argued that courts should authorize class action lawsuits only when the plaintiffs suffer actual harm and that harm is shared by the other plaintiffs in the proposed class. The California Supreme Court denied the petition for review.


Related Documents:
NAM letter  (September 27, 2018)

 

GlaxoSmithKline LLC v. Louisiana (U.S. Supreme Court) -- 2018

Sovereign immunity and duplicative state government suits

The NAM filed an amicus brief in support of GlaxoSmithKline’s (GSK) petition for certiorari to the U.S. Supreme Court seeking review of an appellate court’s decision that allowed the state of Louisiana to sue GSK after the state received benefits from a class action settlement involving the same claims. At issue was whether the state can be bound by the settlement agreement when it claimed sovereign immunity from litigation under the Eleventh Amendment. Certainty and fairness in class actions settlements are important to manufacturers who seek litigation closure. The NAM’s brief explained why the Supreme Court should have reviewed the case to resolve the conflict between the appellate decision and numerous other decisions holding that sovereign immunity does not extend beyond claims filed against a state. GSK agreed to a favorable settlement with the state, and as a result of the settlement, the U.S. Supreme Court dismissed the petition for review.


Related Documents:
NAM brief  (August 8, 2018)

 

Grayson v. General Electric Co. (2nd Circuit) -- 2018

Class certification without harm

The NAM filed an amicus brief in an appeal to the U.S. Court of Appeals for the Second Circuit of a large class-action suit against General Electric (GE) over alleged consumer misrepresentations regarding their microwave ovens. The suit contended that the glass on certain ovens broke after nine years and the owners paid more than they should have paid. The NAM’s brief argued that the court improperly certified a class that includes all owners, 99% of whom never experienced glass breakage, and that includes disparate claims by customers who are covered by differing state consumer protection laws. The class was also improperly certified because less than 20% of the class members could be identified. The Second Circuit unfortunately denied the appeal.


Related Documents:
NAM brief  (March 28, 2017)

 

Martin v. Behr Dayton Thermal Products (6th Circuit) -- 2018

Class action certification standards

The NAM filed an amicus brief on behalf of manufacturers to reverse a ruling by a three-judge panel of the U.S. Court of Appeals for the Sixth Circuit that would expose manufacturers to overbroad class action lawsuits. The case involved class action litigation arising from alleged groundwater contamination by manufacturers in Dayton, Ohio. The Sixth Circuit panel found that the proposed class of plaintiffs lacked the requirements for class certification but nonetheless certified seven legal issues for class treatment. This misguided interpretation of class certification threatens manufacturers by allowing a wider range of claims to be brought against manufacturers than federal law allows. The NAM’s brief argued that the full Sixth Circuit Court of Appeals should reverse the panel ruling because the panel’s extreme position is inconsistent with class certification requirements. The Sixth Circuit denied en banc review, and the company filed a petition for certiorari with the U.S. Supreme Court, which also denied review.


Related Documents:
NAM brief  (August 6, 2018)

 

R.J. Reynolds Tobacco Co. v. Graham (U.S. Supreme Court) -- 2018

Challenging the use of a broad design defect ruling from a decertified class action

The NAM filed an amicus brief urging the U.S. Supreme Court to reverse a lower court ruling that allowed individual plaintiffs to rely on a jury finding of design defect from the preliminary stage of a prior class action case. A jury found that some cigarettes made by many companies over four decades were defectively designed, which is an essential element of the case. However, the class was later decertified, and individual suits began. A company should not be barred from contesting a design defect issue in a subsequent case unless that issue was specifically decided as to that company and its products beforehand. Otherwise, plaintiffs can avoid proving essential elements of their claim on facts specific to them and can rely on previous judicial determinations based on facts which do not clearly apply to their individual case. The NAM’s brief argued that preventing defendants from contesting the core basis of their liability violates due process and that the original jury determination was so broad and general that it would be unfair to hold a company liable for design defects without looking at each individual product. The Supreme Court denied the petition for certiorari.


Related Documents:
NAM brief  (October 19, 2017)

 

Scharfstein v. BP West Coast Products (Ore. Ct. App.) -- 2018

Class action statutory damages award

The NAM filed an amicus brief in the Oregon Court of Appeals supporting BP in an appeal of a class action statutory damages award that was grossly excessive and disproportionate to actual damages. The plaintiffs alleged that BP violated Oregon’s Unlawful Trade Practices Act by failing to display a 35-cent charge the stations imposed on debit card purchases; however, class plaintiffs did not claim that consumers lacked notice of the 35-cent fee (there was plenty of notice throughout the gas station), but instead argued that the state’s gasoline pricing rule required notice on the stations’ street signs or fuel dispensers. Businesses are at a risk of significant and unwarranted liability exposure without a statutory limit on punitive damages. The NAM’s brief argued that the 14th Amendment has been recognized to limit statutory damages for over a century, when, as here, the damages assessed against BP bear no relationship to the gravity of its conduct, the harm caused by that conduct or any other consideration that could rationally justify a large punishment. Unfortunately, the court rejected the challenge as untimely.


Related Documents:
NAM Brief  (November 22, 2016)

 

Hodgin v. UTC Fire & Security Americas Corp. (4th Circuit) -- 2018

Manufacturer liability for third-party telemarketing calls

The NAM filed an amicus brief in the U.S. Court of Appeals for the Fourth Circuit addressing the issue of vicarious liability for alleged telemarketing calls made by third party dealers that sold equipment. The court below held that UTC and Honeywell could not be held vicariously liable under the Telephone Consumer Protection Act (TCPA) for the complained-of telemarketing calls placed by “authorized dealers” as UTC and Honeywell, were only the manufacturers of the equipment, and had no control over the calls whatsoever. Holding otherwise would have serious economic consequences and could punish manufacturers for a wide range of unlawful conduct by third parties that they do not control. The NAM’s brief argued that for vicarious liability to be established, a principal-agent relationship must have existed, and that it is clear from both contractual language and the general nature of the manufacturer’s relationship with the third-party dealers that no such relationship existed. The Fourth Circuit agreed with the NAM by affirming the lower court’s decision.


Related Documents:
NAM brief  (September 1, 2017)

 

Cooper Tire & Rubber Co. v. Koch (Georgia Supreme Court) -- 2018

Less strict standard for sanctions against spoliation for plaintiffs

The NAM filed an amicus brief in the Georgia Supreme Court supporting Cooper Tire & Rubber Co. in an appeal of a product liability judgement and urging the court to apply objective spoliation standards equally to plaintiffs and defendants. In the underlying product liability case alleging a tire tread separation, the plaintiff preserved as evidence only the “carcass” of the tire and allowed parts of the detached tread, the wheel, the three other tires and the vehicle to be destroyed. The destroyed evidence would have allowed Cooper Tire & Rubber Co. to better defend itself. The NAM’s brief argued that a different spoliation standard for plaintiffs and defendants improperly skews the scales of justice, will make product defect claims harder to defend and could result in false findings of defect that can lead to redesigns of products in ways that are less safe. The court held that the plaintiff has a duty to prevent spoliation of evidence only when a reasonable person would do so while the defendant must preserve evidence whenever it can be anticipated that a person could be contemplating litigation.


Related Documents:
NAM amicus brief  (January 17, 2017)

 

Kiobel v. Cravath, Swaine & Moore LLP (2nd Circuit) -- 2018

Foreign confidential document discovery

The NAM filed an amicus brief supporting Shell in an appeal in the U.S. Court of Appeals for the Second Circuit. The case concerned a district court’s authority to order the New York-based law firm representing Shell to turn over documents produced under a confidentiality order in prior litigation for use in a Dutch court suit against Shell. The NAM’s brief drew the court’s attention to the serious consequences such discovery could have for attorney-client communications and to litigants’ confidence in confidentiality stipulations. The Second Circuit reversed the district court's order requiring production of the documents.


Related Documents:
NAM brief  (April 20, 2017)

 

Regents of the Univ. of Cal. v. Affymetrix, Inc. (Federal Circuit) -- 2018

Privileged attorney communications

The NAM filed an amicus brief in the U.S. Court of Appeals for the Federal Circuit to protect attorney-client privilege for manufacturers. The plaintiffs sought privileged communications between the defendant company and a third-party supplier. The defendant company sought to withhold the documents on privilege grounds under the common interest doctrine. A district court granted the plaintiffs’ discovery request, reasoning that the third-party supplier was not represented by its own legal counsel, which broke the privilege. The district court’s holding set a troubling precedent that could sow uncertainty, encourage protracted and expensive discovery fights and expose confidential communications to a courtroom adversary. The NAM’s brief argued that the purposes of the attorney-client privilege and common-interest doctrine do not support a separate-representation requirement, and separate representation is often inefficient and unduly burdensome. Unfortunately, the court denied the mandamus petition.


Related Documents:
NAM brief  (November 5, 2018)

 

Airborn, Inc. v. OSHA (8th Circuit) -- 2018

Challenging OSHA's beryllium standard

The NAM and other associations and companies involved in the manufacture or use of beryllium filed a petition with the U.S. Court of Appeals for the District of Columbia Circuit seeking an administrative stay of U.S. Occupational Safety and Health Administration’s (OSHA) new rule regulating beryllium and to reopen the rulemaking record. Beryllium is critical to some manufacturing processes and products, and OSHA did not adequately address industry’s concerns about overly restrictive provisions of the new rule.The NAM requested that the effective date of the standards be delayed for six months, and that OSHA re-open the rulemaking record to allow comment on the substantial changes made between issuance of the proposed rule and adoption of the final rules, and to allow the new Secretary of Labor to take office and have adequate time to consider the standards in accordance with a new policy to freeze and review all holdover regulations. OSHA agreed to undertake a new rulemaking to propose and implement sweeping changes to the regulation that will benefit companies that manufacture and use beryllium.


Related Documents:
NAM Motion  (June 23, 2017)
NAM petition  (February 9, 2017)

 

Chamber of Commerce v. EPA (10th Circuit) -- 2018

Jurisdictional issue in challenge to Waters of the US rule

The NAM filed an amicus brief in the U.S. Court of Appeals for the Tenth Circuit in an appeal to a court ruling which held that challenges to the EPA’s rule establishing jurisdiction over waters of the United States should be heard in appellate courts, rather than in district courts. Federal law specifies that, while most lawsuits are filed in trial courts, a few types of suits must be filed directly in the federal courts of appeals; however, the statute that provides appellate jurisdiction for certain challenges to EPA regulations does not apply to this challenge. Resolving this procedural issue is an important first step in resolving substantive arguments by many states and members of the business community against EPA’s decision to assert jurisdiction over many areas of the country previously not under their jurisdiction. The NAM’s brief argued that the district court erred when it deferred to the U.S. Court of Appeals for the Sixth Circuit’s jurisdictional decision and that the district court, in fact, had jurisdiction over plaintiffs’ complaint. On January 22, 2018, the Supreme Court ruled unanimously in favor of the NAM's position in a case that determined that district courts, rather than appellate courts, should be the first courts to hear challenges to the new regulation defining the waters of the United States.


Related Documents:
NAM amicus brief  (July 8, 2016)

 

Constitution Pipeline Company v. New York (U.S. Supreme Court) -- 2018

State veto authority over interstate natural gas pipelines

The NAM filed an amicus brief in the U.S. Supreme Court in support of Constitution Pipeline Company’s authority to construct a new natural gas pipeline from Pennsylvania to New York State. New York rejected the proposed pipeline because the state disagreed with the pipeline’s proposed route. Because routing decisions for natural gas pipelines are within the power of the Federal Energy Regulatory Commission, New York’s denial improperly encroached on FERC’s siting authority. The NAM’s brief argued that the Supreme Court should hear this case because New York’s rejection violates the law and would harm manufacturers and other users of natural gas. Unfortunately, the Court denied certiorari.


Related Documents:
NAM Brief  (February 20, 2018)

 

Georgia v. McCarthy (11th Circuit) -- 2018

Which court has jurisdiction to decide Waters of the US challenges?

This is one of several cases filed in various courts challenging the EPA's new rule regarding the scope of its jurisdiction over land in the United States that is subject to permitting requirements of the Clean Water Act. The issue on appeal before the 11th Circuit is whether a federal appeals court has jurisdiction to hear challenges to the rule in the first instance.

The NAM and others in a coalition of organizations challenging the EPA rule argued that nothing in the Clean Water Act says that our challenge should go first to the appeals court. Rather, we argued that a federal district court is the proper forum for filing suit. Only a few exceptions are written into the Clean Air Act, and none of them applies in the challenge to the waters rule.

The court ruled on August 16, 2017, to stay the case pending the outcome of the Sixth Circuit's jurisdictional determination. On January 22, 2018, the U.S. Supreme Court ruled that jurisdiction over the various WOTUS challenges belong in the district courts. The 11th Circuit thereafter remanded the case back to the district court.


Related Documents:
Motion to dismiss  (November 3, 2015)
NAM amicus brief  (September 21, 2015)

 

Hawaii Wildlife Fund v. County of Maui (9th Circuit) -- 2018

Opposing conduit theory under Clean Water Act

The NAM filed an amicus brief in the Ninth Circuit to oppose a district court decision that broadly interpreted the scope of liability under the Clean Water Act. The district court adopted a liability theory, the "conduit theory," which stated that any pollutants released to dry land or underground that might seep into groundwater then to nearby surface waters are an illegal "discharge" under the Clean Water Act (CWA). That ruling could impose incalculable liability risk on manufacturers and other regulated industries. The NAM’s brief argued that the CWA clearly distinguishes between point sources and nonpoint sources, and the conduit theory impermissibly extends the EPA's authority. Unfortunately, the Ninth Circuit affirmed the district court’s ruling.


Related Documents:
NAM amicus brief  (March 28, 2016)

 

Kentucky Waterways Alliance v. Kentucky Utilities Co. (6th Circuit) -- 2018

"Conduit theory" of liability under the Clean Water Act

The NAM filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit to oppose lawsuits by environmental plaintiff groups that sought to massively expand manufacturers’ liability under the Clean Water Act. In a lawsuit against electric generation facilities, the plaintiffs argued that federal jurisdiction applies to all groundwater throughout the United States (in addition to certain categories of surface waters). If that theory of jurisdiction prevails, manufacturers could be subject to massive and unpredictable liability for any impacts their operations may have on groundwater. The NAM’s amicus brief argued against this overbroad theory of liability. The Sixth Circuit ruled against the plaintiffs and in favor of manufacturers by rejecting the plaintiffs’ claims and holding that the Clean Water Act does not apply to discharges to groundwater.


Related Documents:
NAM brief  (May 4, 2018)

 

Monsanto Co. v. Office of Envtl. Health Hazard Assessment (California Supreme Court) -- 2018

Constitutional problems for Prop 65 chemical listings

The NAM filed an amicus brief in support of Monsanto urging the California Supreme Court to grant review of this case to address the serious constitutional questions presented by California’s Proposition 65, which maintains a list of chemicals that can potentially cause cancer, birth defects and other reproductive harm. If a product contains or produces any of the chemicals on that list, manufacturers are required to place a warning label on that product before it may be sold in California. In addition, Proposition 65 requires that a chemical be automatically listed if the International Agency for Research on Cancer (IARC) classifies it as carcinogenic. What chemicals are listed is important because of the costs borne by manufacturers and the public by the listing of a chemical under Proposition 65. The NAM’s brief argued that substances listed under Proposition 65 should be based on sound and generally-accepted science and that delegating that authority to IARC is unconstitutional. Unfortunately, the California Supreme Court denied review of this case.


Related Documents:
NAM brief  (June 28, 2018)

 

Murray Energy Corp. v. EPA (6th Circuit) -- 2018

Rule broadening definition of "waters of the United States"

The NAM intervened in a group of consolidated cases challenging a final rule from the EPA defining its jurisdiction over navigable “Waters of the United States” under the Clean Water Act (CWA). Federal law specifies that, while most lawsuits are filed in federal district courts, some suits must be filed directly in the federal courts of appeals. The statute that provides appellate jurisdiction for certain challenges to EPA regulations does not apply to the WOTUS challenge, though the EPA argued that it did. Prompt resolution of this jurisdictional issue was important so that the WOTUS case could proceed expeditiously through the courts. The NAM’s brief explained that certain legal challenges, such as this issue, belong in the federal district courts and argued that this is not the type of appeal from agency rulemakings under the CWA that is limited to the federal appeals courts by statute. On January 22, 2018, the Supreme Court held that jurisdiction properly belongs in the federal district courts.


Related Documents:
Industry brief on the merits  (November 1, 2016)
NAM petition for rehearing en banc  (February 29, 2016)
NAM motion to dismiss  (October 2, 2015)
NAM motion to intervene  (August 11, 2015)

 

National Association of Manufacturers v. U.S. Dep't of Defense (U.S. Supreme Court) -- 2018

Appeal of Waters of the United States (WOTUS) jurisdictional issue

The MCLA secured a 9–0 victory in the U.S. Supreme Court that resolved a procedural obstacle that had delayed the appropriate federal court from considering legal challenges to the Environmental Protection Agency’s (EPA) 2015 “Waters of the United States” (WOTUS) Rule. This legal win cleared the path for the MCLA’s lawsuit to invalidate the rule to proceed in federal district court, where the U.S. District Court for the Southern District of Texas ultimately invalidated the rule and remanded it back to the EPA for reproposal.


Related Documents:
NAM merits reply brief  (September 11, 2017)
NAM merits brief  (April 27, 2017)
NAM reply brief  (December 20, 2016)
NAM petition  (September 2, 2016)

 

Natural Resources Defense Council v. EPA (2nd Circuit) -- 2018

Supporting EPA in NRDC challenge to TSCA Section 5

The NAM intervened in a lawsuit in the U.S. Court of Appeals for the Second Circuit to support the EPA’s new regulations on chemicals under the updated Toxic Substances Control Act (TSCA). The Natural Resources Defense Council (NRDC) claimed that the new standards put consumers at risk of harmful exposure. In this case, NRDC challenged Section 5 of TSCA, which deals with the risk assessment standard for significant new use rules (SNURs) for chemicals. This challenge could have been harmful to manufacturers by potentially hindering approvals of new uses of chemicals. The NAM intervened to support EPA and attacked NRDC’s standing to bring the case. The NAM argued that the proposed rule is not subject to challenge, is consistent with TSCA and would protect human health and the environment. Soon after the NAM filed its principal brief in the case, NRDC moved to dismiss its case with prejudice, which the court granted.


Related Documents:
NAM response  (August 28, 2018)
NAM intervenor brief  (August 14, 2018)
NAM Motion  (February 5, 2018)

 

Sierra Club v. EPA (D.C. Circuit) -- 2018

Boiler MACT reconsideration rule

The NAM intervened in a case before the U.S. Court of Appeals for the D.C. Circuit involving a 2015 EPA Rule regarding environmental restrictions on industrial boilers. The rule requires maximum achievable control technology (MACT) for equipment to reduce emissions of hazardous air pollutants, taking into consideration the cost of achieving such reductions. There are two primary issues in the case: (1) whether the EPA properly established a minimum standard level of 130 parts per million (ppm) of carbon monoxide for certain boiler emissions and; (2) whether the EPA reasonably established work practice standards for periods of startup and shutdown where it is impracticable to determine compliance with numerical standards during those periods. Manufacturers would bear a large burden and financial hardship if the Sierra Club prevailed in its challenge to this rule. Our brief argued that EPA properly justified setting the limit at 130 ppm for carbon monoxide as a proxy for hazardous air pollutants The court held that the 130 ppm limit is not reasonable and also held that the rule’s flexibility on emissions during startup and shutdown of the boilers is reasonable and consistent with the Clean Air Act. The plaintiffs filed a petition for rehearing with the court, which the NAM opposed, and the court denied the rehearing request.


Related Documents:
NAM Petition  (June 5, 2018)
NAM intervenor brief  (November 16, 2016)
NAM motion to intervene  (February 18, 2016)

 

Tennessee Clean Water Network v. Tennessee Valley Authority (6th Circuit) -- 2018

Conduit theory of liability for pollutants

The NAM filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit to oppose lawsuits by environmental plaintiff groups that sought to massively expand manufacturers’ liability under the Clean Water Act. In a lawsuit against electric generation facilities, the plaintiffs argued that federal jurisdiction applies to all groundwater throughout the United States (in addition to certain categories of surface waters). If that theory of jurisdiction prevails, manufacturers could be subject to massive and unpredictable liability for any impacts their operations may have on groundwater. The NAM’s amicus brief argued against this overbroad theory of liability. The Sixth Circuit ruled against the plaintiffs and in favor of manufacturers by rejecting the plaintiffs’ claims and holding that the Clean Water Act does not apply to discharges to groundwater.


Related Documents:
NAM brief  (February 7, 2018)

 

Upstate Forever v. Kinder Morgan (4th Circuit) -- 2018

"Conduit theory" of liability under the Clean Water Act

The NAM filed an amicus brief in the U.S. Court of Appeals for the Fourth Circuit to support Kinder Morgan’s request for a rehearing of a lawsuit by environmental plaintiff groups that sought to expand the scope of liability under the Clean Water Act. The case involved a pipeline release of gasoline to dry land, which then allegedly migrated through groundwater to a nearby stream. The plaintiffs alleged that the gasoline seepage to the stream violated the Clean Water Act. This case is significant for manufacturers because the plaintiffs’ theory would impose massive liability for any pollution to dry land (no matter how insignificant) that migrates through groundwater to nearby surface waters. The plaintiffs lost in federal district court but prevailed on appeal to the Fourth Circuit. The NAM’s brief explained how the Fourth Circuit’s decision conflicts with Supreme Court and appellate court precedent. The Fourth Circuit denied the petitions for rehearing and rehearing en banc.


Related Documents:
NAM brief  (May 3, 2018)

 

Weyerhaeuser v. U.S. Fish and Wildlife Service (U.S. Supreme Court) -- 2018

Government overreach under the Endangered Species Act

The NAM filed an amicus brief in the U.S. Supreme Court to oppose government overreach under the Endangered Species Act (ESA) that restricts land use in the name of helping an endangered species that does not even live on the land. The U.S. Fish and Wildlife Service (FWS) declared 1,544 acres of private property in Louisiana as “critical habitat” for the dusky gopher frog, which does not live on that property and could not even survive there under current conditions. Such designations can significantly harm manufacturers and other landowners by severely restricting land use activities and driving up permitting costs and delays. The NAM’s brief in support of the landowner argued that FWS exceeded its statutory authority under the ESA and highlighted how FWS’s actions imposed significant harm and business uncertainty on manufacturers. The Supreme Court issued a largely favorable decision for manufacturers and remanded to the lower court the question of whether the property at issue even qualifies as habitat for the frog (a question that suggests the answer is “no”) and ruled that an agency’s critical habitat designation is subject to judicial review.


Related Documents:
NAM brief  (April 30, 2018)

 

Bradford v. CITGO Petroleum (Louisiana Supreme Court) -- 2018

Necessity for expert testimony in toxic tort cases

The NAM filed an amicus brief urging the Louisiana Supreme Court to review a claim where the plaintiffs alleged adverse health effects resulting from a release of oil and gas from CITGO’s Lake Charles, Louisiana refinery in 2006. The plaintiffs did not offer expert testimony establishing the levels of their exposure to oil or gas from the release or even that any exposure was possible given the time and location of their alleged exposures. Nevertheless, the presiding judge awarded each plaintiff damages because she found the plaintiffs’ claims to be “very credible.” CITGO appealed to the Louisiana Court of Appeals, which affirmed the trial judge’s findings. CITGO then appealed to the Louisiana Supreme Court, in which it argued that the plaintiffs were required to provide expert testimony regarding their alleged injuries. An unreasonably low legal standard for establishing liability threatens to expose defendants to significant and unwarranted financial liability. The NAM’s brief explained the significant negative impacts of the appellate decision on manufacturers and provided strong legal arguments against such a lax liability standard. Unfortunately, the Louisiana Supreme Court denied review.


Related Documents:
NAM brief  (February 9, 2018)

 

CTIA - The Wireless Association v. City of Berkeley (U.S. Supreme Court) -- 2018

Government-compelled speech about speculative hazards from cell phones

The NAM filed an amicus brief in a U.S. Supreme Court case that involved a Berkeley, California, city ordinance that required mobile phone retailers to post warnings about alleged risks of cellular phone radiation. An association sued to challenge the ordinance, arguing it violated the store owners’ free speech rights; however, the U.S. Court of Appeals for the Ninth Circuit ruled against the owners, concluding that government-compelled commercial speech is subject to the least rigorous level of judicial review. If left to stand, that precedent could harm manufacturers by allowing the government to dictate how manufacturers speak about their own products. The NAM’s brief argued that compelled speech should be subject to strict judicial scrutiny. The Supreme Court summarily reversed the Ninth Circuit and ordered it to reconsider its decision. On remand, the Ninth Circuit declined to stop enforcement of the ordinance.


Related Documents:
NAM brief  (February 9, 2018)

 

In re Murphy-Brown LLC (4th Circuit) -- 2018

Gag order restraints on free speech

The NAM filed an amicus brief seeking to persuade the U.S. Court of Appeals for the Fourth Circuit to invalidate a judicial gag order that limited manufacturers’ free speech rights. A federal judge issued the gag order, without prompting by either party, to restrain corporate speech in several major cases against pork producers in North Carolina. Manufacturers are frequently subject to litigation that attracts media attention, and they must be able to convey information accurately to the public about a case and their products to defend their company and products in the court of public opinion. The NAM’s amicus brief explained the harms to manufacturers if the gag order stood. The Fourth Circuit vacated the order and cited the NAM’s amicus brief in support of its holding.


Related Documents:
NAM brief  (August 6, 2018)

 

Public Citizen, Inc. v. Trump (D.D.C.) -- 2018

Standing to challenge Exec. Order on 2-for-1 regulatory relief

The NAM filed an amicus brief supporting President Trump’s Executive Order 13771, which begin the process of making government regulation more efficient by requiring, with certain exceptions, government agencies to repeal two outdated or ineffective regulations for every new regulation. The executive order focused on low-yield regulations that fail to provide sufficient societal benefits when compared to their compliance costs. Federal regulations impose 297,696 separate restrictions on manufacturers’ operations and cost an average of $19,564 per employee. The NAM’s brief emphasized the importance of making the regulatory system efficient and described the way the order was an extension of a bipartisan history of executive orders with the same goals. The brief also highlighted important recent successes in similar regulatory budgeting efforts in the United Kingdom and Canada. For example, in its first two years, the UK’s “one-in, one-out” policy in 2011 reduced annual net costs to business by nearly £1 billion without causing significant economic, environmental or public health impacts. The court dismissed the challenge on standing grounds, which is a win for regulatory reform.


Related Documents:
NAM brief  (June 12, 2017)

 

European Comm'n v. Stichting Greenpeace Nederland (European Court of Justice) -- 2018

Intellectual Property

The NAM intervened in an appeal before the European Court of Justice that could have set a dangerous precedent for intellectual property protection. The plaintiffs requested the public disclosure of a massive amount of confidential business information relating to certain pesticides and herbicides used both in the U.S. and Europe, particularly glyphosate. This case had broad implications, not only for the crop protection industry, but for many, if not all U.S. chemical manufacturers operating both in the U.S. and in Europe. The NAM filed six motions/statements with additional legal and technical information to supplement the primary parties’ arguments. The court ruled completely in the NAM’s favor.


Related Documents:
NAM Oral Statement  (March 23, 2018)
NAM Observations  (February 2, 2017)
NAM Oral Statement  (February 4, 2016)
NAM Statement in Intervention  (April 14, 2015)
NAM Annexes  (April 13, 2015)
NAM Motion to Intervene  (April 18, 2014)

 

TCE Television Taiwan Ltd. v. Taoyuan Cty. Former RCA Emp.s Solicitude Ass'n (Taiwan Supreme Court) -- 2018

International legal norms and corporate separateness in Taiwan

The NAM filed a Civil Report Brief in the Taiwan Supreme Court supporting General Electric (GE) in a case it fought for fourteen years. Decades ago, GE purchased a subsidiary, RCA-Taiwan, which produced chemicals in a factory in Taiwan prior to GE’s acquisition. Years later, a lower court in Taiwan attempted to hold GE liable for the alleged prior harms of RCA-Taiwan, which was then appealed to the Taiwan Supreme Court. The NAM’s brief explained why the lower court’s ruling violated international norms of corporate law and how Taiwan’s legal system traditionally encouraged foreign investment by honoring the principle of corporate separateness and providing foreign investors with lawful assurance that their liabilities relating to those investments would be limited to the amount invested – a fundamental principle of corporate law. Unfortunately, the Taiwan Supreme Court held GE liable for the obligations of RCA-Taiwan and applied Taiwan’s law in a manner that is harmful to the critical interests of Taiwan in supporting its manufacturing industry and attracting foreign investment.


Related Documents:
NAM brief  (April 3, 2018)

 

United States v. Microsoft Corp. (U.S. Supreme Court) -- 2018

Search warrant issued under the Stored Communications Act

The NAM filed an amicus brief in the U.S. Supreme Court supporting Microsoft in its litigation against the Department of Justice (DOJ) stemming from a U.S. government warrant for access to e-mail stored by Microsoft on a server in Ireland. The U.S. Court of Appeals for the Second Circuit previously held that the Stored Communications Act does not authorize courts to enforce the warrant and that the government should follow the Mutual Legal Assistance Treaty adopted by Ireland the United States in 2001, but that ruling was appealed to the Supreme Court. Protection of confidential information is important to all businesses, including manufacturers. The NAM’s brief argued that enforcement of the warrant would harm economic and security interests and that the warrant, issued under the Stored Communications Act, could not compel Microsoft to produce information stored outside of the United States. In 2018, after the passage of the Clarifying Lawful Overseas Use of Data Act, the Supreme Court declared the case moot with a direction for the district court to vacate the ruling against Microsoft.


Related Documents:
NAM brief  (January 18, 2018)

 

Align Corp. v. Boustred (U.S. Supreme Court) -- 2018

Judicial jurisdiction over out-of-state defendants

The NAM filed an amicus brief in the U.S. Supreme Court in a case involving the question of whether a manufacturer may be sued in a state in which the manufacturer has no operations or business presence. A foreign toy manufacturer sold its products to a U.S.-based distributor, who then sold the toys to retailers throughout the United States. The Colorado Supreme Court ruled that the foreign manufacturer could be sued in Colorado state court despite the manufacturer having no business presence in the state. The NAM’s brief argued against court jurisdiction over out-of-state defendants that have no business presence in the state other than third parties simply selling their products in the state. The U.S. Supreme Court denied certiorari.


Related Documents:
NAM brief  (April 2, 2018)

 

Hughes v. United States (U.S. Supreme Court) -- 2018

Controlling holding of split Supreme Court decisions

The NAM filed an amicus brief in the U.S. Supreme Court addressing the question of how federal courts should interpret split decisions from the Supreme Court where fewer than five justices agree on a common rationale for deciding a case. One example of such a decision of importance to manufacturers is the Court’s 4-1-4 decision in Rapanos v. United States, which involves the scope of federal jurisdiction over “waters of the United States” under the Clean Water Act. Lower courts have taken divergent approaches to interpreting such split decisions, which has caused confusion and chaos. Clarity in this case would help make any new “waters of the United States” rule less susceptible to legal challenge and provide needed clarity for other laws and regulations, thereby fostering certainty for manufacturers. The NAM’s brief highlighted Rapanos as the poster child for why the Court must resolve this judicial confusion and supplied the Court with arguments to protect the validity of the “waters of the United States” rule. The Court resolved the merits of the case without addressing the interpretive questions, which is a missed opportunity that will result in continued confusion among the lower courts in interpreting split decisions from the Supreme Court.


Related Documents:
NAM brief  (January 26, 2018)

 

Alvarado v. Dart Container Corp. (California Supreme Court) -- 2018

Proper formula for computing overtime pay

The NAM filed an amicus brief with the California Supreme Court in support of Dart Container Corp. in its dispute regarding the proper formula for calculating overtime wages. This is an appeal from a lower court decision which held that Dart Container was correct to use the federal overtime formula when it calculated wages because, although the federal law did not preempt state law, there was no valid state law specifying a formula to calculate overtime. Employers should not be penalized because of the ambiguity of state law when trying to pay their employees fairly. The NAM's brief argued that no California law provides guidance to calculate overtime on bonuses, and in the absence of such a law, courts should look to federal regulations for guidance and employers should be able to rely on existing law. Unfortunately, the California Supreme Court held that the lower court erred in finding that there was no state law specifying a formula to calculate overtime.


Related Documents:
NAM brief  (September 28, 2016)

 

Associated Builders & Contractors v. Perez (E.D. Ark.) -- 2018

DOL Persuader Rule chills employer and employee communications

The NAM challenged the Department of Labor’s (DOL) Persuader Rule, which required employers, third-party lawyers and other labor consultants to disclose their relationships more frequently than under the 50-year-old "bright line" standard. The new rule required employers to file reports if consultants provided guidance to employers even if the consultants did not contact employees directly. If upheld, the rule would have restricted manufacturers’ ability to communicate with their workforce and would have resulted in employers not seeking counsel for guidance on important employer and employee related questions. The NAM’s brief argued that the Rule was arbitrary and capricious, unconstitutionally overbroad under the First Amendment, vague under the Fifth Amendment and interfered with ethical duties to maintain confidentiality. In July 2018, the DOL officially rescinded the Rule.


Related Documents:
NAM Motion to Stay Brief  (December 12, 2016)
NAM Summary Judgment Brief  (August 19, 2016)
NAM Memorandum  (April 2, 2016)
NAM Motion  (April 1, 2016)
NAM Complaint  (March 30, 2016)

 

Browning-Ferris Indus. v. NLRB (D.C. Circuit) -- 2018

What constitutes a "joint-employer"

The NAM filed an amicus brief in the D.C. Circuit supporting Browning-Ferris in its appeal from an adverse decision by the National Labor Relations Board (the Board) in a dispute regarding the legal standard that should apply when determining whether two or more companies are “joint employers” under federal labor law. The Board abandoned its longstanding legal standard for joint employer determinations, replacing it with a new standard that evaluated whether an entity exercised indirect control over the means or manner of the employees’ work and terms of employment, or whether the entity had the potential to exercise such control. If upheld, the new standard would unreasonably expand the companies deemed to be an individual’s employer and impose employment obligations and liabilities on those employers. The NAM’s brief argued that the longstanding “direct control” standard should remain the standard for determining joint employment and that the Board’s loosened standard subjected companies to unmerited liability, without providing the same benefits as the old rule. The D.C. Circuit upheld the Board’s consideration of “reserved right to control” and “indirect control” in the joint-employer inquiry but remanded the case to the NLRB for it to adequately define what constitutes control.


Related Documents:
NAM amicus brief  (June 14, 2016)

 

Cooper Tire & Rubber Co. v. NLRB (8th Circuit) -- 2018

Challenging NLRB ruling that racist statements are not grounds for firing

The NAM filed an amicus brief defending an employer’s right to implement and follow anti-discrimination and anti-harassment policies in an employment termination appeal. A National Labor Relations Board (NLRB) decision reinstated a Cooper Tire employee who was fired for using racial epithets toward replacement workers while the employee was on the picket line. Employers have a moral and legal obligation to protect the employees’ right to be free from discrimination and harassment in the workplace. The NAM’s brief urged the court to reverse the NLRB decision and establish that there is no statutory protection for racist or discriminatory statements made on the picket line and that protecting these statements is contrary to federal policies against discrimination and harassment. Unfortunately, the court deferred to the NLRB’s decision because the harassment took place in the context of picket-line activities during a strike.


Related Documents:
NAM brief  (September 29, 2017)

 

DirecTV v. Hall (U.S. Supreme Court) -- 2018

Joint employer liability under FLSA

The NAM filed an amicus brief urging the U.S. Supreme Court to review a case addressing standards applicable to joint employment liability under the Fair Labor Standards Act (FLSA). The U.S. Court of Appeals for the Fourth Circuit’s ruling would treat any business as an FLSA joint-employer if the business is “not completely disassociated” from a worker’s direct employer and applies even if a business has no direct relationship with the employee, or if the business has only a limited relationship. That ruling unreasonably expands the scope of companies deemed to be an individual’s employer and imposes employment obligations and liabilities on those employers. The NAM’s brief explained that the Supreme Court should hear the case to bring uniformity to joint employment liability standards and avoid the potential imposition of extensive unanticipated liability on the many employers impacted by this new rule. Although the Supreme Court denied certiorari, the National Labor Relations Board overturned the Browning-Ferris case that initially broadened the definition of a joint employer.


Related Documents:
NAM amicus brief  (July 6, 2017)

 

Emerson Electric Co. v. Superior Court of California (U.S. Supreme Court) -- 2018

Federal OSHA preemption of state unfair competition law

The NAM filed an amicus brief in the U.S. Supreme Court supporting Emerson Electric Co.’s request for review of the California Supreme Court’s decision that enforcement actions under California’s Unfair Competition Law (UCL) are not preempted by the federal Occupational Safety and Health Act (OSH Act). The OSH Act subjects employers and employees to one set of workplace safety regulations and imposes uniform health and safety requirements. States may regulate and enforce additional workplace safety only pursuant to a federally approved plan that avoids duplicative and counterproductive regulation. One California county sidestepped an approved state plan to seek additional penalties against Emerson for an alleged workplace violation. That circumvention could set a dangerous precedent for manufacturers by allowing counties to impose duplicative and conflicting workplace requirements on manufacturers. The NAM’s amicus brief argued that the federal OSH Act preempts such conflicting requirements and asked the U.S. Supreme Court to hear and reverse the decision, but the U.S. Supreme Court declined review.


Related Documents:
NAM brief  (July 27, 2018)

 

McAdams v. Marquette University (Wisconsin Supreme Court) -- 2018

Right of employers to terminate employees for disruptive conduct

The NAM filed an amicus brief on behalf of Marquette University in a case involving the authority of a private employer to terminate an employee for conduct that violates the employment contract between the employee and employer. The NAM’s brief argued that private employers should remain free to discipline employees for conduct or speech that disrupts or adversely affects the employer’s mission, and where an employment contract establishes a process to resolve disciplinary disputes, courts should not disrupt that process. The Wisconsin Supreme Court ruled 4-2 that Marquette breached its employment contract with the professor by suspending him.


Related Documents:
NAM brief  (March 21, 2018)

 

Newton v. Parker Drilling Management Services, Inc. (9th Circuit) -- 2018

Applicability of state employment laws on the outer continental shelf

The NAM filed an amicus brief arguing for en banc review of a decision by a panel of the U.S. Court of Appeals for the Ninth Circuit that held that workers employed on drilling platforms on the outer continental shelf (OCS) may bring claims under state wage and hour laws. The panel’s holding not only sharply departs from the settled expectations of both employers and employees working on OCS platforms, it also creates hundreds of millions of dollars of potential retroactive liability for employers and invites lawsuits in an area long understood to be under exclusive federal authority. The NAM’s brief argued that the panel opinion disrupts existing employer-employee relationships formed in reliance on longstanding interpretations of the Outer Continental Shelf Lands Act and that the decision improperly elevates state law to supremacy over federal law, conflicting with congressional intent and inviting states to frustrate offshore oil and natural gas development. The court denied the petition for rehearing en banc; however, the court issued a stay on the mandate that allows OCS platform workers to bring claims under state law pending the filing of a petition for a writ of certiorari in the U.S. Supreme Court.


Related Documents:
NAM brief  (April 2, 2018)

 

Solus v. Superior Court of California (California Supreme Court) -- 2018

Federal OSHA preemption of state unfair competition law

The NAM filed an amicus brief urging the California Superior Court to hold that federal preemption prohibited a district attorney’s action under California’s Unfair Competition Law (UCL). The district attorney sought civil penalties, in addition to those already imposed by the California Division of Occupational Safety and Health, against a manufacturer under the state’s unfair competition law and fair advertising law. This litigation is concerning to manufacturers that are already subjected to federal workplace safety regulations, which impose uniform, deliberate and predictable health and safety requirements, because they would be subjected to duplicative and counterproductive regulation. The NAM’s brief argued that 1) the lawsuit is preempted by federal law, which determines the regulations and enforcement methods for workplace safety standards in California; 2) the UCL is inconsistent with California’s approved penalty structure for workplace safety violations; and 3) the court should require pre-approval under the state plan of unfair competition claims for workplace safety violations. Unfortunately, the California Supreme Court held that the UCL was not preempted by the federal Occupational Safety and Health Act.


Related Documents:
NAM brief  (May 28, 2015)

 

Australia - Certain Measures Concerning Trademarks (World Trade Organization) -- 2018

Challenging Australia's Plain Packaging Law

The NAM filed a letter with a World Trade Organization (WTO) adjudicative panel in support of challenges by various countries to Australia’s Tobacco Plain Packaging Act of 2011, which restricts the use of trademarks in marketing tobacco products and prohibits all distinctive elements of packaging. The consolidated cases were an effort to have Australia's law declared inconsistent with international trade agreements. Trademarks enable the public to identify and recognize goods or services, help companies associate their reputations with their products and are an effective mechanism to protect against counterfeiting and consumer deception. Our letter also explained why Australia cannot meet its substantial burden to demonstrate that the restriction is justified, since the measure will not contribute materially to its objectives and there are less restrictive means of achieving them. Unfortunately, the WTO panel held that the Australian law may continue to restrict trademark use in tobacco product marketing.


Related Documents:
NAM Letter to WTO  (August 21, 2014)

 

General Motors LLC v. Bavlsik (U.S. Supreme Court) -- 2018

Opposing damages-only retrial after impermissible compromise verdict

The NAM filed an amicus brief in support of General Motors in a case involving the standards a court must apply to require a new trial when the previous trial ended in a “compromise verdict.” Compromise verdicts arise when a jury cannot agree on the defendant’s liability but, out of sympathy for the plaintiff, the jury awards the plaintiff a small monetary damages award. In this case, a jury rendered a compromise verdict in a product liability case against GM, and the court ordered a new trial but only on the question of damages (rather than liability). A damages-only retrial by a new jury could result in a massive and improper damages award. The NAM’s amicus brief argues against damages-only retrials in circumstances such as this. The Supreme Court denied certiorari.


Related Documents:
NAM brief  (April 2, 2018)

 

ConAgra Grocery Products Co. v. California (U.S. Supreme Court) -- 2018

"Public nuisance" liability

The NAM filed an amicus brief in the U.S. Supreme Court on behalf of paint manufacturers to oppose an overbroad “public nuisance” theory of product liability. The case involves lawsuits by several California counties against companies that previously sold lead paint. A California court concluded that the plaintiffs could establish over $1 billion in liability against the companies under a “public nuisance” theory of tort liability. That theory is dangerous for manufacturers because it does not require plaintiffs to prove reliance or causation and could lead to crushing damage awards in other lawsuits against manufacturers. The NAM’s brief supported the companies’ request for review by the Supreme Court. Unfortunately, the Court declined to review the case.


Related Documents:
NAM brief  (August 17, 2018)

 

City of Modesto v. The Dow Chemical Company (California Supreme Court) -- 2018

Concerns of generalized causation over direct evidence

The NAM filed an amicus brief urging the California Supreme Court to grant review in a case involving industry-wide liability for a dry-cleaning solvent. Various courts have shown a growing interest in nuisance cases, especially in California, and this case raised the question of whether a company can be held liable for nuisance even when there is no proof connecting culpable conduct to the particular harm. The City of Modesto sought damages for contamination of soil and groundwater by dry-cleaner releases of a perchloroethylene (PCE) dry-cleaning solvent. If handled properly, PCE solvents can be used safely and without environmental contamination, and no evidence existed that the PCE manufacturers, including Dow, were directly involved in the use of the solvents at the dry-cleaner sites. The NAM’s brief argued that allowing a generalized notion of causation to supplant proving direct evidence raises deep concerns for all manufacturers that lawfully manufacture, market and distribute beneficial, though potentially hazardous, products. The court denied review.


Related Documents:
NAM brief  (March 12, 2018)

 

Condon v. Advance Thermal Hydronics, Inc. (N.J. Super. Ct. App. Div.) -- 2018

Allowing non-settling defendants to present cross-claim proofs

The NAM filed an amicus brief in support of the trial court’s decision to allow non-settling defendants to present cross-claim proofs in a case concerning apportioning liability for asbestos exposure between multiple defendants. The issue is whether settled defendants remain “parties” for purposes of allowing non-settling defendants to present cross-claim proofs and enable the jury to apportion fault among all defendants (settled and non-settling) that may have contributed to the plaintiff’s harm. The presentation of cross-claim proofs against settled defendants is critical to help ensure that non-settling defendants do not bear an unfair and disproportionate burden and to preserve assets for future claimants that could be threatened if current plaintiffs are able to receive large, windfall recoveries for their injuries in the tort system. The NAM’s brief argued that 1) providing windfall recoveries to plaintiffs would harm manufacturers; 2) windfall recoveries threaten potential recoveries for future plaintiffs; and 3) non-settling defendants should be allowed to introduce settled defendants’ prior deposition testimony to prove their cross claims. In a win for manufacturers, the appellate court vacated the jury verdict against one of the remaining defendants.


Related Documents:
NAM brief  (November 24, 2015)

 

Alcon Laboratories v. Cottrell (U.S. Supreme Court) -- 2018

Fighting class-action abuse over "wasted" medication

The NAM filed an amicus brief in the U.S. Supreme Court in a class action lawsuit against manufacturers of eye droppers that dispense glaucoma medication. The suit alleged that the droppers dispense droplets that are too big for the average human eye to absorb, and therefore the “wasted” medication defrauds consumers. The plaintiffs’ logic could extend to various other items that plaintiffs could allege over-dispense or under-dispense a product. To help protect manufacturers against having to face these baseless claims, the NAM’s brief supported the defendant manufacturers in support of a petition for certiorari. Our brief argued that the plaintiffs failed to establish any real injury, their claims are preempted by federal law and that allowing cases like this to move forward would invite abusive class-action litigation. The Court denied certiorari.


Related Documents:
NAM brief  (April 23, 2018)

 

Dolin v. GlaxoSmithKline LLC (7th Circuit) -- 2018

Brand manufacturer's "innovator" liability

The NAM filed an amicus brief supporting GlaxoSmithKline in a tort case on appeal to the U.S. Court of Appeals for the Seventh Circuit. Plaintiffs prevailed below in asking the court to hold GSK liable for tort damages for a generic product that injured the plaintiffs, even though GSK made the name brand of the drug and did not participate in the selling or manufacturing of the generic drug. Imposing liability for products that a company did not manufacture or sell would deter innovation and stunt the growth of the pharmaceutical industry. Pharmaceutical manufacturers would have to consider a higher level of risk when innovating, which may increase the cost or lower the availability of lifesaving and life-enhancing medicines. The NAM’s brief asked the Seventh Circuit to hold to the longstanding principle that defendants cannot be held liable for tort damages for products they did not sell or manufacturer, despite plaintiff’s desire to create an exception for the pharmaceutical industry. The Seventh Circuit reversed the judgment against GSK and concluded that GSK could not be held liable because the U.S. Food and Drug Administration actively prohibited GSK from adding the plaintiff’s desired warning.


Related Documents:
NAM brief  (January 29, 2018)

 

Duffy v. CBS Corp. (Maryland Court of Appeals) -- 2018

Statute of repose for asbestos cases

The NAM filed an amicus brief in the Maryland Court of Appeals urging the court to uphold a statute of repose for improvements to real property and reject a carve out for manufacturers. A statute of repose establishes an absolute bar to a claimant’s legal action; the absolute legal bar has been upheld by the vast majority of courts, including challenges based on state constitutions. These statutes are especially important to manufacturers that would otherwise be held perpetually liable for improvements to real property. The NAM’s brief explained that statutes of repose for improvements to real property, such as the law at issue, represent an important component of a balanced liability system. The Maryland Court of Appeals held that the statute of repose does not bar asbestos personal injury claims when the plaintiff’s last exposure to asbestos-containing products occurred before the statute of repose was enacted.


Related Documents:
NAM brief  (November 7, 2017)

 

Evans v. NACCO Materials Handling Group, Inc. (Virginia Supreme Court) -- 2018

Admissibility of expert evidence

The NAM filed an amicus brief in the Supreme Court of Virginia asking the court to reaffirm established rules governing the admissibility of expert testimony and contributory negligence. This case concerned the trial court’s admission of expert testimony despite the expert testifying to an opinion without having conducted any testing or independent analysis, and admitting that the product at issue met government and industry standards for operation. Expert testimony and contributory negligence standards must be applied equally to both plaintiffs and defendants. The NAM’s brief argued that, in order to be admissible, expert testimony must be predicated upon both a sufficient factual foundation and a sufficient scientific foundation, neither of which were present in this case. Furthermore, the NAM urged the court to affirm the trial court’s finding of contributory negligence because NACCO demonstrated that the plaintiff’s negligence was the proximate cause of the accident, and the plaintiff’s own expert admitted that the decedent in the case was not certified to use the lift truck. The Virginia Supreme Court ruled 7-0 in NAACO's favor, finding that the plaintiff’s evidence failed as a matter of law to establish a design defect.


Related Documents:
NAM brief  (June 27, 2017)

 

Gustavsen v. Alcon Laboratories, Inc. (1st Circuit) -- 2018

Class action to recover for "wasted" medication

The NAM filed an amicus brief in the U.S. Court of Appeals for the First Circuit in a class-action lawsuit brought by individuals suing over eye droppers for glaucoma medication. The suit alleged that the droppers dispense droplets that are too big for the average human eye to absorb, and therefore the “wasted” medication defrauds consumers. The plaintiffs’ logic could extend to various other items that plaintiffs could allege over-dispense or under-dispense a product. To help protect manufacturers against having to face these baseless claims, the NAM’s brief argued that the plaintiffs failed to establish any real injury and therefore have no right to bring this case, that their claims are preempted by federal law and that allowing cases like these to move forward would invite abusive class-action litigation. The First Circuit ruled against the plaintiffs, finding that their state-law claims are preempted by federal law.


Related Documents:
NAM brief  (April 11, 2018)

 

Juni v. A.O. Smith Water Prods. Co. (New York Court of Appeals) -- 2018

Opposing any exposure theory of causation in asbestos case

The NAM filed an amicus brief in the New York Court of Appeals opposing the “any” exposure theory of causation in this asbestos liability case. The lower courts in New York rejected plaintiffs’ argument that any exposure to asbestos is enough to prove causation after the plaintiffs argued that mechanics and their family members should only need to prove that they were exposed to any amount of asbestos in order to relieve them from having to prove causation or harm. An imposition of a duty of care to third parties will permit potentially limitless and indefinite liability. The NAM’s brief urged the court to reject the “any” exposure theory and instead require the plaintiffs to show that workers were exposed to enough asbestos to actually cause harm in order to prevail in their case. In a win for manufacturers, the Appeals Court agreed with the NAM’s arguments and ruled against plaintiffs.


Related Documents:
NAM brief  (January 24, 2018)

 

Miller v. Ford Motor Co. (Oregon Supreme Court) -- 2018

Court undermining statute of repose

The NAM filed an amicus brief in the Oregon Supreme Court supporting Ford Motor Company in a lawsuit brought by an Oregon plaintiff alleging that a used car was defective because it had an electrical issue more than eleven years after the original sale date. Oregon’s statue of repose declares that a product is non-defective as a matter of law if it remained in use for ten years without showing a defect. However, a lower court determined that this provision allowed for no statute of repose for a product produced in a state without a statute of repose, such as the Ford car at issue, which makes doing business in Oregon much less attractive for manufacturers. The NAM’s brief argued that the Oregon Supreme Court should reverse the lower court’s statute of repose interpretation because it is contrary to legislative intent and has far-reaching negative implications for any manufacturers doing business in Oregon. The court unfortunately ruled that when the state of manufacture did not have a statute of repose, then there is no governing statute of repose at all.


Related Documents:
NAM brief  (November 16, 2017)

 

People v. Conagra Grocery Products Co. (California Supreme Court) -- 2018

Validity of public nuisance claims

The NAM filed an amicus letter urging the California Supreme Court to review a lower court’s ruling and require plaintiffs to prove unreasonable interference and causation to prevail on their lead paint public nuisance claim. This case was appealed to the California Supreme Court on the issue of whether manufacturers that sold lead paint more than 65 years ago should face liability under a public nuisance theory for promoting their products at that time. The court below held that defendants could be held liable simply based on circumstantial evidence at the time the paint was sold that lead paint could be harmful, which could open the door to a range of lawsuits against manufacturers. The NAM’s letter urged the California Supreme Court not to apply knowledge we have now to the actions of manufacturers decades ago when the information was not available and argued that plaintiffs should be required to prove causation between a specific company’s product and the harm suffered, as is traditionally required in public nuisance cases. Unfortunately, the California Supreme Court declined to review this case, so the decision of the lower court stands.


Related Documents:
NAM letter  (January 19, 2018)

 

Quisenberry v. Borgwarner Morse Tec, Inc. (Virginia Supreme Court) -- 2018

Liability for take-home exposure to asbestos

The NAM filed an amicus brief asking the Virginia Supreme Court to expand the universe of people to whom employers owe a duty of care under tort law. This issue was put before the court as a certified question of whether an employer owes a duty of care to the family member of an employee who alleges exposure to asbestos from the work clothes of the employee at a shipyard, where such exposure takes place off of the employer’s premises and the employer has no relationship with the family member. This case is important because imposition of a duty on employers to prevent off-site exposures to asbestos (and presumably other toxic substances) could lead to potentially boundless and indefinite liability. The NAM’s brief explained that such a duty would substantially burden the still-solvent but increasingly remote defendants in the asbestos litigation and that a duty finding here also could open the door to lawsuits against employers over any number of hazards that workers carry off-site. In a 4-3 decision, the Virginia Supreme Court held that the shipyard does owe a duty of care to prevent employees from carrying asbestos fibers home.


Related Documents:
NAM amicus brief  (February 23, 2018)

 

Rafferty v. Merck & Co. (Massachusetts Supreme Judicial Court) -- 2018

Innovator liability

The NAM filed an amicus brief urging the Massachusetts Supreme Court to reject a claim by a consumer over alleged injuries from a drug made by another company. The drug is a generic version of one originally made by Merck but now sold by competitors. The overwhelming majority of courts that have addressed this issue have rejected such “innovator liability,” and making innovators liable for injuries alleged to occur from the consumption of generics would expose them to massive liability. The NAM’s amicus brief argued that brand-name manufacturers do not owe a duty to users of generic medicines and that imposing such an obligation is bad social policy and fundamentally unfair. The Massachusetts Supreme Court upheld the trial court, holding that “where the failure to warn is with respect to a drug that Merck has never advertised, offered to sell, or sold,” it would unreasonably expand the limits of products liability.


Related Documents:
NAM brief  (August 25, 2017)

 

Ramsey v. Georgia Southern Univ. Advanced Dev. Center (Del.) -- 2018

Manufacturer liability for take-home exposure to asbestos

The NAM filed an amicus brief urging the Delaware Supreme Court to affirm the lower court’s ruling in an asbestos litigation regarding manufacturer liability for take-home exposure to asbestos. The plaintiffs argued that employers and premises owners owed a duty of care to warn the family members of workers exposed to asbestos through contact with occupationally exposed workers or their clothing. Allowing such a claim could bring a flood of claims, and manufacturers have limited options to warn those third parties. The NAM’s brief explained that manufacturers are too far removed to have a duty to warn such remote parties. Unfortunately, the Delaware Supreme Court reversed recent precedent by holding that employers can be liable for take-home asbestos exposures.


Related Documents:
NAM brief  (December 15, 2017)

 

BNSF Ry. Co. v. California State Board of Equalization (N.D. Cal.) -- 2018

Opposing $45 fee on rail shipments of hazardous materials

The NAM submitted a declaration supporting BNSF and Union Pacific Railroads in their suit against California following the imposition of a $45 per car fee for transportation of hazardous materials. The new law, which only applies to rail shipments, requires railroads to collect the fee from their customers and turn it over to the state with the proceeds of the fee to be used for hazmat training and equipment. This matter is important because imposing a new fee will increase costs to rail customers and unlawfully interfere with interstate commerce. The declaration described the disadvantages to shippers, customers and railroads from the new charge and explained how the charge runs contrary to the long-standing benefits of federal preemption of transportation-related state statutes that help manufacturers by keeping transportation costs affordable and competitive. The U.S. Court of Appeals for the Ninth Circuit affirmed the lower court’s decision, which granted a preliminary injunction against the fee and issued a stay of the case.


Related Documents:
Declaration of Robyn Boerstling (NAM)  (August 1, 2016)
Motion for preliminary injunction  (August 1, 2016)
Complaint  (July 29, 2016)

 


Conagra Brands, Inc. v. Briseno (U.S. Supreme Court) -- 2017

Class action certification

The NAM filed an amicus brief urging the U.S. Supreme Court to grant review of a class action certification case that could remedy a circuit split and defend fair class action standards for all class members. The litigation involved whether a class of plaintiffs, which includes purchasers over ten years and across eleven states, can be certified if there is no reliable way to find class members, short of an unmanageable series of mini-trials. Many NAM members are defendants in class actions and are therefore interested in ensuring that courts rigorously analyze whether a plaintiff has satisfied the requirements for class certification before certifying a class. The NAM’s brief argued that the circuit split encourages plaintiffs to circumvent ascertainability requirements adopted in four circuits by filing nationwide or multi-state class actions in the U.S. Court of Appeals for the Ninth Circuit and that the decision imposes a burden on businesses without benefiting absent class members. Unfortunately, the Supreme Court denied certiorari, leaving the issue unresolved.


Related Documents:
NAM amicus brief  (May 12, 2017)

 

Cottrell v. Alcon Laboratories, Inc. (3rd Circuit) -- 2017

Class action to recover for "wasted" medication

The NAM filed a brief in the U.S. Court of Appeals for the Third Circuit to support manufacturers in a class action litigation suit brought by plaintiffs who did not allege physical injury or that the product was ineffective. Instead, the plaintiffs claimed that Alcon’s medicated eyedroppers caused financial harm because the eyedroppers dispensed more liquid than required for treatment. This argument could encourage speculative class action litigation challenging business practices that could be portrayed as potentially inefficient. The NAM’s brief argued that the plaintiffs’ claim is speculative and did not identify a recognizable harm. Unfortunately, the court did not agree with NAM’s argument and reversed the lower court’s dismissal.


Related Documents:
NAM brief  (September 28, 2016)

 

Graham v. R.J. Reynolds Tobacco Co. (11th Circuit) -- 2017

Defending due process rights in preclusion cases

The NAM filed an amicus brief in the U.S. Court of Appeals for the Eleventh Circuit arguing that the lower court violated the defendant’s due process rights when it discarded the longstanding principle that preclusion is only acceptable when identical issues have been actually and necessarily decided. The lower court’s decision, which allowed the plaintiffs’ claims to proceed without requiring a showing that any specific theory or issue was decided, was at odds with the traditional test for issue and claim preclusion. That ruling had the potential to dramatically transform the law of preclusion and improperly increase the liability exposure of manufacturers by relieving plaintiffs of the burden of proving fundamental elements of their causes of action. The NAM’s brief argued that the lower court’s decision eliminated due-process protections and businesses’ fundamental right to defend themselves when they are sued, and that it endangered American business because these rulings could authorize the use of any general verdict against defendants in mass-tort proceedings to foreclose litigation over basic liability issues as to all defendants and all products for the entire time they were on the market. The Eleventh Circuit unfortunately reimagined the lower court’s decision with an even more fundamental error and found each defendant liable as to every product during the entire forty-year period at issue and further held that this “finding” must be given issue preclusive effect.


Related Documents:
NAM brief  (April 22, 2016)

 

In re Flonase Antitrust Litigation (3rd Circuit) -- 2017

Sovereign immunity and duplicative state government suits

The NAM filed an amicus brief in the U.S. Court of Appeals for the Third Circuit brief opposing Louisiana’s attempt to file a lawsuit against GlaxoSmithKline stemming from the company’s Flonase marketing. The State of Louisiana previously received a settlement, as a member of a class, from GlaxoSmithKline. This case could establish a precedent allowing states to recover damages twice for the same conduct and could prolong litigation and bring uncertainty to the finality of settlements. The NAM’s amicus brief argued that Louisiana can be bound by the settlement agreement even when it claims sovereign immunity from litigation under the Eleventh Amendment. Unfortunately, the Third Circuit did not agree with NAM’s argument but held that Louisiana retained the ability to sue because, pursuant to the Eleventh Amendment, Louisiana did not waive its sovereign immunity.


Related Documents:
NAM amicus brief  (November 1, 2016)

 

International Paper Co. v. Kleen Products LLC (U.S. Supreme Court) -- 2017

Presumption of classwide antitrust impact

The NAM filed an amicus brief in the U.S. Supreme Court urging it to consider a class certification approved by the U.S. Court of Appeals for the Seventh Circuit. In the proceedings below, the district court applied, and the Seventh Circuit approved, a presumption of class-wide antitrust injury based on alleged price increases that occurred in an unrepresentative price index despite extensive evidence showing that the index price did not reflect the prices that individual class members actually paid. This case raises concerns that manufacturers in industries which feature price indexes will be exposed to expansive class action antitrust liability. The NAM’s brief explained that the Seventh Circuit departed from Supreme Court precedent when it approved a presumption of class-wide injury to avoid individualized inquiries that would otherwise preclude class certification. Unfortunately, the Supreme Court declined to hear the case.


Related Documents:
NAM brief  (February 3, 2017)

 

Microsoft Corp. v. Baker (U.S. Supreme Court) -- 2017

Class certification

The NAM filed two amicus briefs urging the U.S. Supreme Court to affirm its precedent limiting review of class action certification decisions. After the named plaintiffs voluntarily dismissed their defective design claims with prejudice, they appealed the district court ruling that denied class certification. This litigation is important to manufacturers because piecemeal appeals from a single district court proceeding can prolong litigation, thereby increasing litigation costs. The NAM’s brief argued that 1) the case was moot after the parties agreed to dismiss the action with prejudice, 2) the district court’s holding ignored Supreme Court precedent regarding piecemeal appeals and 3) the holding was at odds with proper interpretation of the statue. In a win for manufacturers, the Supreme Court agreed with the NAM’s arguments.


Related Documents:
NAM amicus brief on the merits  (March 18, 2016)
NAM brief in support of petition  (November 11, 2015)

 

DeCoster v. United States (U.S. Supreme Court) -- 2017

Prison sentence under Responsible Corporate Officer Doctrine

The NAM filed a brief with the U.S. Supreme Court in support of two corporate officers who were subject to criminal liability solely as a result of their position. Jack and Peter DeCoster, respectively the owner and Chief Operating Officer of Quality Egg LLC, pled guilty as Responsible Corporate Officers to violating the Food, Drug, and Cosmetic Act (FDCA) by unknowingly introducing eggs containing salmonella into interstate commerce. This standard imposes strict liability on C-level executives and holds executives liable for every unwitting decision by employees. The NAM’s brief argued that the Court should reconsider the Park standard, which imposes criminal liability on managerial officers regardless of their knowledge or participation in the FDCA violation. Unfortunately, the Supreme Court declined to review the case.


Related Documents:
NAM amicus brief  (February 10, 2017)
NAM amicus brief  (July 28, 2015)

 

Goodyear Tire & Rubber Co. v. Haeger (U.S. Supreme Court) -- 2017

Penalties for discovery misconduct

The NAM filed an amicus brief in the U.S. Supreme Court urging the court to review an appellate ruling that upheld a high penalty imposed on a company for alleged misconduct by their lawyers during the discovery phase of a lawsuit. The Ninth Circuit upheld a $2.7 million award imposed against Goodyear as sanctions for failing to turn over a document in discovery. If upheld, this decision could have subjected manufacturers, who generate large amounts of data, to considerable sanctions if an error occurs during a discovery request. The NAM’s brief argued that that failure to require a direct causal link between a litigant’s alleged discovery violations and compensatory damages to other parties will lead to abusive sanctions, particularly for manufacturers. The court overturned the $2.7 million award and remanded the case to the lower courts for determination of the appropriate sanction.


Related Documents:
NAM brief  (November 21, 2016)

 

American Petroleum Institute v. EPA (D.C. Circuit) -- 2017

Challenging EPA's new rules on definition of solid waste

The NAM challenged two final regulations promulgated by the Environmental Protection Agency (EPA) that define hazardous solid waste and would impose stringent regulatory obligations governing waste generation, treatment, storage, disposal and permitting. The EPA asserted jurisdiction to regulate solid and hazardous waste under the Resource Conservation and Recovery Act (RCRA), which defined “hazardous waste” as “solid waste” that may pose a danger to human health or the environment. The definition is important to manufacturers that reuse materials in the manufacturing process, as well as for disposal and recycling procedures. The NAM sued the EPA to resolve concerns related to new affirmative duties and conditions on in-process materials that are not discarded. The NAM argued that EPA’s attempt to regulate materials that are not yet waste exceeds the agency’s authority. In a win for manufacturers, the court held that that some of the requirements imposed on companies using third-party recyclers exceeded the EPA's statutory authority and improperly presumed that recycled materials were discarded simply because the recyclers did not meet various paperwork requirements.


Related Documents:
NAM reply brief  (May 19, 2016)
Opening brief of industry petitioners  (December 9, 2015)

 

California Chamber of Commerce v. California Air Resources Board (California Supreme Court) -- 2017

Challenging CARB cap-and-trade auction allowance revenues

The NAM asked the California Supreme Court to review a case challenging a greenhouse gas cap-and-trade auction system created by California’s Air Resources Board (CARB) as an unauthorized tax disguised as a regulatory action. This was an appeal of an adverse decision where the lower court held that revenues collected by CARB from California businesses, which must acquire greenhouse gas emissions allowances from the state in order to remain in business, are not taxes subject to Proposition 13. Proposition 13 requires an authorization by two-thirds of the legislature. This decision brings uncertainty to California manufacturers who are now unsure of the application to any other financial exactions. The NAM argued that the California Supreme Court did not apply existing precedent to assess whether a charge imposed for regulatory purposes is a tax, and by rejecting that precedent, the court provided a roadmap for the evasion of Proposition 13. Furthermore, the lower court’s holding defies precedent, the record evidence and common sense, and taken to its logical conclusion, would mean that virtually all taxes are “voluntary.” Unfortunately, the California Supreme Court declined to hear this appeal.


Related Documents:
NAM reply brief  (June 26, 2017)
NAM petition for review  (May 16, 2017)

 

Chemical Manufacturers Association v. EPA (U.S. District Court for the District of Columbia) -- 2017

Superfund

This suit, filed by the NAM, CMA, American Automobile Manufacturers Association, American Petroleum Institute, Electronics Industry Association, and the Chamber of Commerce of the United States, challenges an EPA policy that allows municipalities to avoid some liability for Superfund cleanup costs. It affects all companies at "co-disposal" Superfund sites (with both industrial and municipal wastes), by allowing municipalities to escape liability by paying a fixed price for cleanup costs. The suit was dismissed by U.S. District Court for the District of Columbia for lack of jurisdiction (EPA's policy was not "final agency action") on 11/16/98. A similar suit filed in the D.C. Circuit was stipulated for dismissal on 7/2/98 by the EPA.

 

Constitution Pipeline Co. v. New York State Dep't of Envtl. Conservation (2nd Circuit) -- 2017

Supporting FERC approval of pipelines

The NAM filed an amicus brief in the U.S. Court of Appeals for the Second Circuit supporting Constitutional Pipeline in an energy infrastructure litigation suit after New York state denied a permit for construction of a natural gas pipeline through part of the state, although the Federal Energy Regulatory Commission (FERC) approved the project. The Clean Water Act permit was denied after extensive environmental, safety and economic review, and approval by FERC. This litigation is important to manufacturers because state intervention can impede the efficient, transparent and predictable approval of natural gas pipelines even when those projects have been approved by other agencies. The NAM’s brief argued that FERC conducted a thorough review process that assessed the environmental impact of the pipeline as required by the National Environmental Policy Act and the Natural Gas Act and that although states should play an important role in the pipeline approval process, states should not be permitted to override FERC’s assessment of a pipeline’s benefits and environmental impact. Unfortunately, the court rejected the arguments and deferred to the judgment of state officials.


Related Documents:
NAM brief  (July 19, 2016)

 

Ohio Valley Env'l Coalition, Inc. v. Fola Coal Co. (4th Circuit) -- 2017

Effect of water quality standards on existing CWA permit shield

The NAM filed an amicus brief in the U.S. Court of Appeals for the Fourth Circuit arguing that courts should not apply new conditions to an existing National Pollution Discharge Elimination System (NPDES) water discharge permit when the regulatory agency has already considered those conditions and did not require them in the permit. Although West Virginia’s permit included boilerplate language that prohibited discharges that cause violations of state water quality standards, the district court used the boilerplate language to convert those water quality standards into enforceable effluent limits in the permit. That decision is important as NAM members who hold these permits with similar boilerplate language may now be subjected to civil and criminal penalties and injunctive action. The NAM’s brief argued that Fola was entitled to protection from the permit and that the district court’s interpretation usurps the state’s authority to establish water quality standards. Unfortunately, the Fourth Circuit did not agree with NAM’s arguments, leaving current permit holders liable for discharges that are otherwise permitted at the time of issuance.


Related Documents:
NAM amicus brief  (April 20, 2016)

 

Orange Cty. Water Dist. v. Sabic Innovative Plastics US, LLC (California Supreme Court) -- 2017

Erroneous expansion of California Superfund liability

The NAM filed an amicus brief urging California’s Supreme Court to review a series of cases that grant a private right of action to impose liability for environmental remediation, regardless of prior remediation efforts and regulatory action. Historically, California businesses were able to rely on state agency direction when remediating contaminated sites, potentially obtaining a “No Further Action” letter that signified the sites were safe for productive economic use; businesses would only face liability for additional remediation in exceedingly rare cases. Private liability for environmental remediation undermines the relationship between businesses and regulators and discourages proactive remediation efforts. The NAM’s brief explained that these cases will discourage both voluntary remediation and swift compliance with regulators’ Remedial Action Plans, which runs counter to the interest of California citizens and discourages cooperation between businesses and regulators. Unfortunately, the California Supreme court denied review.


Related Documents:
NAM letter  (October 13, 2017)

 

Sciscoe v. Enbridge Gathering (North Texas), L.P. (Texas Supreme Court) -- 2017

Preemption of tort claims for permitted emissions

The NAM submitted an amicus letter urging the Texas Supreme Court to grant review of a lower court decision that did not clarify whether the Federal Clean Air Act and the Texas Clean Air Act preempt state tort law claims for damages. The issue stemmed from an earlier claim where residents near natural gas compressor stations and a metering station sued alleging that the facilities interfered with their rights by generating noise and fumes. If tort law claims like these are not preempted by the federal or state Clean Air Act, manufacturers would be exposed to massive additional liability. The NAM argued that both the Federal Clean Air Act and the Texas Clean Air Act preempt state tort claims for damages against facilities lawfully operating under the regulations. The matter remains unsettled as the court dismissed petitioners appeal on other grounds.


Related Documents:
NAM brief  (November 9, 2015)

 

Sierra Club v. EPA (D.C. Circuit) -- 2017

Defending EPA's sulfur dioxide regulation against accelerated enforcement

The NAM intervened in a suit brought by the Sierra Club and Natural Resources Defense Council against the EPA for its regulation on sulfur dioxide (SO2). The regulation, published August 5, 2013, designated 29 areas as “nonattainment” for SO2 based on recorded air quality monitoring data, and the EPA announced its intention to address the rest of the country in separate regulations in the future. The modeling predictions urged by the Sierra Club would allow areas to be designated as nonattainment when in fact they are not. That would increase the number of such areas, and manufacturers would have to spend billions of dollars to achieve far greater emission reductions than would be required if designations were based on actual air quality monitoring data. The NAM intervened to help secure a more positive regulation for manufacturers. A district court approved a consent decree requiring the EPA to include any areas with stationary sources that emitted more than 16,000 tons of SO2 in 2012 and extending the timeline for the EPA to promulgate a new rule. The deadline is now December 31, 2020, which will allow for real-life modeling data to be used instead of the Sierra Club's recommendation of computer modeling. This is a favorable outcome for manufacturers. The consent decree was appealed to the U.S. Court of Appeals for the Ninth Circuit, which affirmed the district court’s approval.


Related Documents:
Motion to Intervene  (November 4, 2013)

 

Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers (D.D.C.) -- 2017

Continuing to delay pipelines is unnecessary and harmful

The NAM filed an amicus brief supporting the continuance of Dakota Access Pipeline (DAPL) operations. The litigation arose from alleged deficiencies in National Environmental Policy Act review, assessment and analysis following a procedural error in the U.S. Army Corps’ Environmental Assessment. This issue is important to manufacturing as halting DAPL would significantly impede access to crude oil on which manufacturers heavily rely. The NAM’s brief argued that halting operations due to a procedural error is not an appropriate remedy but would instead produce serious and irreparable harm including harm to energy businesses, states benefiting from DAPL operations and individuals employed through DAPL. The court agreed with the NAM’s arguments that the pipeline should be permitted to continue operations while the U.S. Army Corps of Engineers conducted further NEPA review.


Related Documents:
NAM brief  (July 17, 2017)

 

TransCanada Keystone XL Pipeline, LP v. Kerry (S.D. Texas) -- 2017

Challenge to Executive authority to block Keystone XL Pipeline

The NAM filed an amicus brief in support of TransCanada’s challenge to the Obama Administration’s disapproval of a cross-border permit for the Keystone XL pipeline. The denial violates the separation of powers and would directly affect U.S. trade with other nations. The NAM’s brief argued that the president’s justification for denial was not based on national security but was instead intended to regulate foreign commerce, which is an impermissible exercise of the foreign affairs power to usurp Congress’s authority over foreign commerce. This matter was dismissed as moot when the new administration granted the pipeline permit.


Related Documents:
NAM amicus brief  (May 9, 2016)

 

O'Banion v. Ford Motor Co. (Indiana Supreme Court) -- 2017

Expert witness standard in Indiana

The NAM filed an amicus brief in the Indiana Supreme Court supporting Ford Motor Company in a suit regarding Indiana’s evidentiary rules of expert testimony. This litigation stems from an Indiana Court of Appeals holding that applied higher standards to expert scientific testimony as compared to engineering or other highly technical knowledge. This is important because jurors place significant weight on expert testimony; therefore, engineering or other highly technical testimony should be subject to the same standards. The NAM’s brief argued that Indiana courts should follow the majority of state courts in ensuring that engineering testimony is “based on reliable principles” before the testimony is presented to a jury. The court did not agree with the majority approach but followed the minority in allowing an engineer’s testimony to reach the jury.


Related Documents:
NAM brief  (October 9, 2015)

 

United States ex rel. Customs Fraud Investigations LLC v. Victaulic Co. (U.S. Supreme Court) -- 2017

False Claims Act pleading standard

The NAM filed an amicus brief in the U.S. Supreme Court urging the Court to consider a case from the U.S. Court of Appeals for the Third Circuit involving False Claims Act (FCA) qui tam pleading standards. The issue arises from a circuit split where eleven court of appeals have adopted conflicting tests to evaluate the sufficiency of a relator’s complaint. The pleading standard applies to manufacturers who contract, either directly or indirectly, with the federal government, thus subjecting them to increased litigation. The NAM’s brief explained that the Third Circuit’s qui tam pleading standards for alleging an FCA claim is the most lenient of those adopted by any circuit and would therefore require the pleading party to show nothing more than an opportunity for fraud by a business. Unfortunately, the Supreme Court denied the petition for certiorari, declining to resolve the circuit split.


Related Documents:
NAM amicus brief  (June 22, 2017)

 

Microsoft v. U.S. Dep't of Justice (W.D. Washington) -- 2017

Government access to private email

The NAM filed an amicus brief in the U.S. District Court for the Western District of Washington on behalf of Microsoft Inc. in its litigation against the Department of Justice’s (DOJ) attempts to search Microsoft customer’s data. DOJ’s violated Microsoft customers’ privacy, and DOJ’s use of Electronic Communications Privacy Act (ECPA) gag orders violates the Constitution. The DOJ sought to search data belonging to Microsoft customers without a warrant and used the ECPA to impose a gag order to bar third-party service providers from notifying customers that the government had sought access to the data. The NAM’s brief argued that the DOJ's actions violated the First and Fourth Amendments to the Constitution and that the benefits of cloud computing will not be fully realized if private information receives diminished legal protections. In a win for manufacturers, the court granted Microsoft’s motion to dismiss.


Related Documents:
NAM amicus brief  (September 2, 2016)

 

United States ex rel. Harman v. Trinity Industries, Inc. (5th Circuit) -- 2017

FCA liability despite compliance with federal requirements

The NAM filed an amicus brief in a product liability suit in the U.S. Court of Appeals for the Fifth Circuit urging the court to reverse a $663 million lower court judgement against Trinity Industries for allegedly defrauding the federal government despite the government’s determination that Trinity’s product had consistently complied with the applicable federal requirements. This case is important to manufacturers as NAM members contract directly and indirectly with the government. The NAM’s brief argued that 1) the claim was not a False Claims Act (FCA) claim because the government expressly disagreed the claim was false and 2) the decision created uncertainty and devastating consequences for businesses both in terms of financial costs and in reputational harm from an unwarranted FCA suit. In a win for manufacturers, the Fifth Circuit overturned the lower court’s ruling, thus lessening the likelihood that a business would be held liable under the FCA after relying on authoritative assurance of compliance from the government.


Related Documents:
NAM amicus brief  (March 28, 2016)

 

National Resources Defense Council v. U.S. Consumer Product Safety Commission (S.D.N.Y.) -- 2017

Intervention in suit forcing CPSC rulemaking on phthalates

The NAM filed a motion to intervene in a chemical litigation suit against the Consumer Product Safety Commission (CPSC) arguing that the plaintiffs lacked standing because the plaintiffs could not provide evidence that they suffered an injury or future injury. The plaintiffs sued the CPSC after a missed deadline to force the CPSC to move forward with a final rulemaking process to ban certain phthalates from the market. The NAM intervened on behalf of manufacturers. Our brief argued that the plaintiffs could neither establish a showing of credible harm, nor show a link between their alleged harm and the procedural delay in implementing the rule. This litigation forced CPSC to expedite its review process and backtrack on its previously stated view of the amount of time needed to implement a scientifically sound rule. The parties settled the case by signing a consent decree that required the CPSC to vote on a final phthalates rule by October 18, 2017.


Related Documents:
Additional Reply Brief  (May 5, 2017)
Reply Brief  (April 25, 2017)
Motion to Intervene  (April 6, 2017)
Motion to Dismiss  (April 6, 2017)

 

Abbott Labs., Inc. v. Schmidt (Missouri Supreme Court) -- 2017

Venue for multiple out-of-state plaintiffs joined in one suit

The NAM filed an amicus brief urging the Missouri Supreme Court to overturn a ruling that allows out-of-state plaintiffs access to St. Louis trial courts. The plaintiffs brought suit against Abbott Labs, in a Missouri trial court, alleging that there were inadequate warnings on an FDA-approved prescription drug; however, the plaintiffs’ injuries did not occur within Missouri. This case brings uncertainty to manufacturers that conduct business in Missouri and encourages forum shopping among plaintiffs. The NAM’s brief argued that the plaintiffs were not injured in Missouri, therefore, venue was improper and the plaintiffs could not use joinder to circumvent venue rules. The court did not address whether venue was proper and affirmed the trial court’s judgment.


Related Documents:
NAM Amicus Brief  (February 28, 2017)

 

BNSF Ry. Co. v. Tyrrell (U.S. Supreme Court) -- 2017

Clarifying "at home" provision of general jurisdiction

The NAM filed an amicus brief urging the U.S. Supreme Court to safeguard manufacturers’ due process rights by affirming that a company was not “at-home” for jurisdictional purposes where the company is not incorporated or has not established its principal place of business. The appeal stems from two separate workplace injury claims against BNSF in Montana under the Federal Employers’ Liability Act (FELA) where the Montana Supreme Court held that the “at home” requirement applies only to foreign (outside the United States) defendants and that FELA’s venue provision supersedes constitutional due process limits on jurisdiction. As manufacturers continue to expand their distribution chains, jurisdiction and venue are important to manufacturers who can become subject to burdensome lawsuits in states where they do not have continuous and systematic contact. The NAM’s brief argued that Montana’s application of jurisdiction violates the “at home standard” and that expanding jurisdiction encourages forum shopping. In a win for manufacturers, the U.S. Supreme Court held that simply transporting trains through a state, without any other connection, is insufficient under the due process clause of the 14th Amendment to allow a court to exercise jurisdiction over a defendant.


Related Documents:
NAM brief  (March 6, 2017)
NAM brief  (October 28, 2016)

 

Banner Health Sys. v. NLRB (D.C. Circuit) -- 2017

Challenging NLRB decision undermining confidentiality of investigatory interviews

The NAM filed an amicus brief in support of an employer’s right to manage internal company investigations of employee misconduct. This case stemmed from a previous National Labor Relations Board (NLRB) decision where Banner Health Systems instructed employees to maintain confidentiality during ongoing investigations of employee misconduct. This issue is important to manufacturers because their business operations would be disrupted by employees discussing the details of a sensitive internal company investigation. The NAM’s brief argued that the NLRB’s ruling would burden employers by requiring them to justify the need for investigatory confidentiality at a point where such justification would be almost impossible. Although the decision is narrowly tailored, the outcome is a win for manufacturers as the court did not opine on the NLRB’s case-by-case approach to justify employer confidentiality.


Related Documents:
NAM amicus brief  (January 21, 2016)

 

EEOC v. Day & Zimmermann NPS, Inc. (D. Conn.) -- 2017

EEOC interference with employer free speech

The NAM filed an amicus brief supporting manufacturers’ employment rights in an Equal Employment Opportunity Commission (EEOC) claim against an employer for retaliation and interference under the Americans with Disabilities Act (ADA) based on a letter sent from the employer to employees identified as witnesses advising the employees of their rights during a disability discrimination investigation. Not only would the EEOC’s interpretation have negatively impacted the employer/employee relationship by making it more difficult for manufacturers to provide information to employees, but the interpretation also violated employers’ constitutional rights to communicate with employees. The NAM’s brief argued that the EEOC’s action was unlawful because the letter did not violate the ADA and that the EEOC interfered with the employer’s First Amendment right to communicate with its employees. The parties settled the case.


Related Documents:
NAM brief  (October 28, 2016)

 

FedEx Home Delivery v. NLRB (D.C. Circuit) -- 2017

Delivery service contractors as employees

The NAM filed an amicus brief in support of FedEx’s position that delivery service contractors working for FedEx were independent contractors, not employees of FedEx. The facts of this case were “materially indistinguishable” from a prior case where the U.S. Court of Appeals for the District of Columbia Circuit determined that a group of delivery service contractors were not FedEx employees, but were independent contractors under the National Labor Relations Act. This case is important as worker classification may have broad ramifications affecting the use of independent contractors and partnerships between manufacturers and commercial vehicle drivers are a key asset. The NAM’s brief explained that worker classification issues directly impact all segments of the economy and more directly, the trucking industry. In a win for manufacturers, the court ruled against the plaintiffs.


Related Documents:
NAM brief  (August 17, 2015)

 

International Brotherhood of Boilermakers v. NASSCO Holdings Inc. (Cal. Ct. App.) -- 2017

Notice requirements under the California WARN Act

The NAM filed an amicus brief in the California Court of Appeals to challenge the California WARN ACT, which requires employers to provide 60-days’ notice before any “mass layoff, relocation, or termination.” This is an appeal from a lower court decision which held that NASSCO violated the WARN Act when it failed to provide required notice before informing 90 employees that they should not return to work for four to five weeks. California manufacturers, particularly those with cyclical employees or staffing requirements that ebb and flow, need certainty in meeting their staffing needs. The NAM’s brief argued that the court erred by reading “layoff” in the Act to include a furlough — a brief break during which about 90 employees (less than 3% of NASSCO’s workforce) did not earn wages but nevertheless remained as NASSCO employees. Unfortunately, the court did not agree with this view but instead affirmed the lower court’s decision, requiring an employer to provide 60 days’ notice prior to a mass layoff, even if the layoff is not permanent and is for less than six months.


Related Documents:
NAM brief  (May 1, 2017)

 

Mendoza v. Nordstrom, Inc. (California Supreme Court) -- 2017

Understanding California's Day-of-Rest law

The NAM filed an amicus brief supporting Nordstrom Inc. in an employment litigation suit to defend reasonable rest periods for manufacturing employees under California labor law. The plaintiff argued that Nordstrom violated California labor laws when the company failed to provide statutorily guaranteed rest days. The issues in this case are 1) whether employees are statutorily required to take a rest on a defined weekly basis, rather than an undefined consecutive period; and 2) whether an employer may permit an employee to independently choose to decline a rest day. This case is important for manufacturers because it implicates employers’ ability to reasonably manage their workforce and allow flexible rest days to accommodate both the needs of the employer and the employee. The NAM’s brief argued that a defined workweek is the proper and most reasonable framework for calculating the required day of rest and the law should be interpreted to encourage employee flexibility and autonomy in scheduling. The court agreed with the NAM’s arguments, which allows manufacturers to continue to provide employees with flexible scheduling options.


Related Documents:
NAM brief  (November 30, 2015)

 

Nevada v. U.S. Dept. of Labor (5th Circuit) -- 2017

Appeal of DOL's new overtime rule

The NAM filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit asking the court to uphold a preliminary injunction of a Department of Labor (DOL) overtime rule that would place significant economic burdens on businesses. The overtime rule would have increased the minimum salary exemption thresholds by more than 100% from $23,660 to $47,476 annually. If the injunction was not upheld, more than 4.2 million employees, many of them in manufacturing, would have immediately lost their exempt status causing economic harm to both employers and employees. The NAM’s brief argued that the DOL’s overtime rule is inconsistent with decades of regulations and failed to consider the business community’s legitimate interests. The court granted a motion by the DOL to dismiss the appeal, and the DOL reopened the rulemaking process.


Related Documents:
NAM amicus brief  (January 24, 2017)

 

Plano Chamber of Commerce v. Perez (E.D. Tex.) -- 2017

Challenging DOL's new overtime rule

The NAM sued the Department of Labor (DOL) to challenge its overtime rule. The rule was scheduled to become effective on December 1, 2016 and would have increased the minimum salary exemption threshold for executive, administrative or professional employees by more than 100%, from $23,660 to $47,476 annually. This case is important as more than 4.2 million employees, many of them in manufacturing, would have immediately lost their exempt status causing economic harm to both employers and employees. The NAM argued that the rule exceeded the DOL’s authority under the Fair Labor Standards Act, and as such the rule is invalid. In a win for manufacturers, the judge granted summary judgement allowing business to continue to operate without a detrimental impact.


Related Documents:
NAM Opposition Motion to Intervene  (December 15, 2016)
NAM Opposition Motion to Stay  (December 15, 2016)
NAM Reply Brief  (November 21, 2016)
NAM Response  (October 21, 2016)
NAM Motion to Consolidate  (October 17, 2016)
NAM Summary Judgment Brief  (October 14, 2016)
NAM Complaint  (September 20, 2016)

 

The Boeing Company v. National Labor Relations Board (9th Circuit) -- 2017

Employee confidentiality in workplace investigations

The NAM filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit challenging a National Labor Relations Board (NRLB) holding that prohibits employers from recommending employee confidentiality during workplace investigations. The NLRB disapproved of a Boeing form which recommended that employees refrain from discussing a case with any other Boeing employee, other than company representatives investigating the issue or the employee’s union representative. If upheld, this holding would have undermined the ability of employers and employees to engage in confidential workplace investigations for legitimate business purposes. The NAM’s brief explained that the NLRB’s holding infringes on employers’ free speech rights and impedes employers’ abilities to conduct effective workplace investigations. The court remanded the case back to the district court because the NLRB established new rules after the case was filed.


Related Documents:
NAM amicus brief  (May 23, 2016)

 

Volkswagen Group of Am., Inc. v. United Auto Workers, Local 42 (D.C. Circuit) -- 2017

Application of Specialty Healthcare to maintenance employee union micro unit

The NAM filed an amicus brief in the U.S. Court of Appeals for the D.C. Circuit supporting Volkswagen in a collective bargaining dispute with the United Auto Workers (UAW). The UAW brought the complaint after Volkswagen opposed the creation of a micro-bargaining unit exclusively for maintenance employees; UAW argued that because maintenance employees “share a unique function” they are readily identifiable and therefore should be recognized as a bargaining unit. This litigation is important to manufacturers because micro-bargaining units disrupt highly integrated manufacturing operations. The NAM’s brief argued that the Specialty Healthcare case, which reversed 70 years of precedent and instated a new standard for determining a collective bargain unit, should not apply because that case is inconsistent with the statue and the legislative history. After the National Labor Relations Board (NLRB) issued a revised ruling in another case, the D.C. Circuit remanded this case back to the NLRB for reconsideration.


Related Documents:
NAM amicus brief  (February 2, 2017)

 

Williams v. S.C. (Marshalls of CA) (California Supreme Court) -- 2017

Discovery limits under California's Private Attorney General Act

The NAM filed an amicus brief urging the California Supreme Court to uphold longstanding discovery rules and to limit the delegation of state enforcement power to private plaintiffs to protect the public’s interest in an employment litigation case. The plaintiff brought this litigation against Marshalls under California’s Private Attorneys General Act (PAGA), alleging that Marshalls failed to provide its employees with meal and rest breaks or premium pay in lieu thereof, to provide accurate wage statements, to reimburse employees for necessary business-related expenses and to pay all earned wages during employment. Manufacturers need civil litigation and workplaces laws in California that are balanced, reflect sound public policy and respect due process. Allowing private plaintiffs to pursue discovery demands broader than their allegations contributes to the growth of opportunistic lawsuits, which harm manufacturers and California’s economic climate. The NAM’s brief argued that allowing private plaintiffs to leverage PAGA without first laying the factual and legal foundation for their claims goes around longstanding discovery rules, and the delegation of state enforcement power to private plaintiffs must be safeguarded to protect the public’s interest. Unfortunately, the court did not agree with NAM’s arguments.


Related Documents:
NAM amicus brief  (May 6, 2016)

 

North America's Bldg. Trades Unions v. OSHA (D.C. Circuit) -- 2017

Challenging OSHA's Silica Rule

The NAM intervened in a challenge a new Occupational Safety and Health Administration (OSHA) crystalline silica rule, which imposed crushing regulatory burdens on manufacturers. The new rule cut the current permissible crystalline silica exposure limit in half and required employers to implement costly engineering controls. The NAM has members in each of the 24 manufacturing industry subsectors that are affected by the rule. The NAM intervened against OSHA but sought to work with OSHA to make this a feasible, effective rule with a clear justification based on reliable, current data. The NAM argued that the rule relies on out-of-date economic data and drastically underestimated the costs that will be inflicted on manufacturers and the entire economy. Unfortunately, the court upheld OSHA’s new silica regulation, leaving the industry to bear the draconian burden of compliance.


Related Documents:
Industry Reply Brief  (March 3, 2017)
Industry Joint Brief  (February 24, 2017)
Industry opening brief  (November 18, 2016)
NAM motion to intervene  (May 2, 2016)
NAM petition for review  (May 2, 2016)

 

Texo ABC/AGC, Inc. v. Perez (N.D. Tex.) -- 2017

Challenging OSHA's injury and illness rule

The NAM filed a lawsuit on Friday, July 8, 2016, to challenge the Labor Department’s Occupational Safety and Health Administration (OSHA) workplace injury and illness New Rule. The NAM’s complaint challenges the New Rule’s prohibitions and limits on employer safety incentive programs and drug testing programs.

By encouraging all employees, including supervisors, to improve workplace safety, incident-based safety incentive programs jump start a change in culture that results in a prompt and sustained decrease in accident frequency and severity. Without these incident-based safety incentive programs, instituting a culture of safety in the workplace is much more slow and difficult and seldom leads to the same dramatic reductions in serious accidents.

On July 12, 2016, the NAM filed a preliminary injunction motion seeking to prohibit OSHA from implementing the New Rule, which will otherwise take effect on August 10, 2016, causing irreparable harm to many thousands of employers across the country. The New Rule irreparably harms employers and employees by making their workplaces less safe and increasing the likelihood of workplace injuries and fatalities. OSHA’s main goal is to eliminate or minimize the frequency and severity of workplace injuries, illnesses and deaths--this misguided New Rule does not accomplish that goal.

On 8/19/16, the government filed its opposition to our motion for preliminary injunction, claiming that there is no irreparable harm in limiting employment programs designed to protect worker safety. Their motion further argues that the balance of hardships and public interest both counsel in favor of allowing OSHA to ban injury-based incentive programs and post-injury drug testing. The government's arguments against preliminary injunction lack common sense and would only serve to increase worker injuries.

On 9/2/16, the NAM filed a reply to the government's opposition. Our reply argued that OSHA's claim of unlimited Congressional authority is both dangerous and wrong. OSHA fails to justify the "anti-safety" provisions of the New Rule, which is ripe for review and remains arbitrary and capricious. Contrary to OSHA's opposition, the criteria for a preliminary injunction are met, and manufacturers and the public will be irreparably harmed if the New Rule is implemented.

On 9/27/16, the NAM filed a response to the government's objections to the scope of relief requested, and, on 11/1/16, the NAM filed a supplemental brief in support of the nationwide scope of preliminary injunction.

On 11/28/16, the judge unfortunately denied our preliminary injunction motion without reaching the merits. The government then moved to dismiss. We also filed an amended complaint on 2/8/17, which caused the judge to dismiss the government's motion to dismiss as moot. OSHA has proposed delaying the compliance date to 12/1/17. On 6/30/17, in response to an OSHA motion for an indefinite stay of proceedings, the judge issued an unusual order “administratively closing” the case.


Related Documents:
NAM response to stay  (March 31, 2017)
NAM amended complaint  (February 8, 2017)
NAM motion to dismiss  (January 18, 2017)
NAM supplemental brief  (November 1, 2016)
NAM response to objection  (September 27, 2016)
NAM reply brief  (September 2, 2016)
NAM preliminary injunction  (July 12, 2016)
NAM preliminary injunction memorandum  (July 12, 2016)
NAM complaint  (July 8, 2016)

 

In re Wellbutrin XL Antitrust Litigation (3rd Circuit) -- 2017

Antitrust scrutiny of patent litigation settlements

The NAM filed an amicus brief in a patent litigation matter urging the U.S. Court of Appeals for the Third Circuit to support flexible settlement agreements, which avoid costly and complex litigation. The plaintiffs alleged that a proposed patent litigation settlement agreement was anticompetitive under the antitrust laws. The development of legal rules that enable parties to efficiently resolve disputes and avoid lengthy litigation that delays a product’s entry into the consumer market is important for manufacturers. The NAM’s brief argued that courts should encourage flexibility in settlement terms and that agreements by the brand manufacturer not to compete with the authorized generic manufacturer, for a limited time, is akin to a routine patent license and therefore not anticompetitive. In a win for manufacturers, the Third Circuit held that the plaintiffs failed to show that they had an “antitrust injury” because they could not prove that their injuries were caused by the settlement agreement.


Related Documents:
NAM brief  (May 10, 2016)

 

Eli Lilly and Co. v. Canada (ICSID) -- 2017

NAFTA challenge of Canada’s promise-utility doctrine for patents

The NAM filed an amicus brief in an international tribunal supporting Eli Lilly in its dispute with the Canada involving the scope of patent protections for pharmaceutical products. Lilly’s claims against the Canadian government arose from a new patentability requirement under Canadian law, the “promise utility doctrine,” which imposed heightened requirements on patents for pharmaceutical products. The doctrine harmed pharmaceutical companies because Canadian courts used the doctrine to invalidate more than 25 patents. The NAM’s brief supported Lilly’s argument that the promise utility doctrine discriminates against patents, and therefore, Canada was in breach of its obligations under the North American Free Trade Agreement (NAFTA). The tribunal found in Canada’s favor; however, it did not address whether Canada was in breach of its obligations under NAFTA or address the core investment and intellectual property issues at the heart of the case.


Related Documents:
NAM brief  (February 12, 2016)

 

California v. Conagra Grocery Products Co. (Cal. Ct. App.) -- 2017

Validity of public nuisance claims

The NAM filed an amicus brief in the California Court of Appeals supporting lead pigment manufacturers against lawsuits by ten California cities and counties alleging that lead paint is a “public nuisance” and therefore the manufacturers are liable for all remediation costs to remove lead paint in those counties. This case could expand the law of public nuisance bringing uncertainty to manufacturers and opening the door to litigation against any industry with a malleable standard for the tort of public nuisance. The NAM’s brief explained that the trial court’s decision 1) expanded the law of public nuisance and stripped away traditional product liability elements and defenses; 2) watered down the government’s burden of proof by allowing suits against companies based solely on the fact that the products had foreseeable risks of harm; and 3) flew against public policy by allowing California governments to bring public nuisance based on private harms. Unfortunately, the Court of Appeal affirmed the trial court’s ruling and held that the companies were liable for remediation, but limited remediation to houses built before 1951.


Related Documents:
NAM amicus brief  (February 23, 2015)

 

Cerveny v. Aventis, Inc. (10th Circuit) -- 2017

Preemption of drug labeling challenge

The NAM filed an amicus brief to support manufacturers rights in complying with federal labeling regulation in a pharmaceutical litigation suit. The plaintiffs alleged that the drug Clomid failed to provide sufficient warning labels about use before pregnancy. This decision would have imposed dueling labeling requirements on manufacturers subjected to product labeling litigation. The NAM’s brief argued that the Food, Drug & Cosmetic Act (FDCA) preempted any state-law requirement that would require a company to change a label without complying with federal law. In a win for manufacturers, the court determined that the claims regarding the failure to warn are preempted by federal law; however, the case was remanded back to the lower court to further address claims related to the FDA’s prior language on Clomid’s risk.


Related Documents:
NAM brief  (September 19, 2016)

 

Ford Motor Co. v. Trejo (Nevada Supreme Court) -- 2017

Reasonable alternative design test for liability involving complex products

The NAM filed an amicus brief in the Nevada Supreme Court urging the court to adopt the “reasonable alternative design” test with a risk-utility component rather than the historical “consumer expectation test” in a complex product design liability litigation involving a rollover accident. This was an appeal from a lower court judgement which awarded the plaintiffs damages based on strict product liability theory. The test supported by the NAM encourages manufacturers to continue to be innovative and design products to optimize safety. The NAM’s brief supported this position and urged the Nevada Supreme Court to instead support a “reasonable alternative design” test with a risk-utility component that allows companies to design optimally safer products and provides the factfinder with an objective standard for evaluating whether a proposed alternative design for a complex product would have resulted in an overall safer product. The Nevada Supreme Court did not agree with the NAM’s arguments and declined to adopt a risk-utility test for strict product liability design defect claims.


Related Documents:
NAM brief  (November 19, 2015)

 

Juni v. A.O. Smith Water Prods. Co. (N.Y. App. Div.) -- 2017

Opposing any exposure theory of causation in asbestos case

The NAM filed an amicus brief urging a New York appellate court to uphold a lower court’s rejection of the plaintiff’s exposure theories in an asbestos litigation. The lower court dismissed the plaintiff’s claims that mechanics, who were engaged in work with brakes, clutches and gaskets, as well as their family members, suffered harm because they were exposed to small amounts of chrysotile asbestos contained in those parts. It is important to manufacturers that the standards applied in asbestos litigation are consistently applied. The NAM’s brief argued that the plaintiff’s “no safe dose” theory for a carcinogen was not scientifically sound because dose assessment is critical to all toxins and the plaintiff’s argument of mere exposure was insufficient to prove the case. In a win for manufacturers, the appellate court upheld the lower court’s decision.


Related Documents:
NAM reply brief  (July 15, 2016)
NAM brief  (March 30, 2016)

 

T.H., a Minor v. Novartis Pharm. (California Supreme Court) -- 2017

Brand name manufacturer liability after divestiture

The NAM filed a brief urging the California Supreme Court to reject “innovator liability,” a theory that seeks to hold pharmaceutical manufacturers of brand name drug products liable for injuries caused by competing generic products. The issue in this case is whether the brand name manufacturer of a pharmaceutical drug that divested all ownership interest in the drug can be held liable for injuries caused years later by another manufacturer’s generic version of that drug. The ruling could subject a manufacturer that invents a product to perpetual liability for harms caused, not by its own product, but for comparable products made and sold by entirely different businesses. The NAM’s brief argued that innovator liability should not be allowed to circumvent fundamental principles of liability law against product manufacturers, and the court should follow other federal and state courts in rejecting innovator liability. Unfortunately, the court held that the brand-name drug manufacturer can be liable for alleged harms caused by the generic version sold by a third party.


Related Documents:
NAM brief  (December 7, 2016)

 

Taylor v. Intuitive Surgical, Inc. (Washington State Supreme Court) -- 2017

Learned intermediary duty to warn

The NAM filed an amicus brief in the Washington Supreme Court to argue against expanding the “learned intermediary” duty to warn in products liability law. The plaintiff appealed from a lower court holding that Intuitive Surgical Inc. was not required to notify the hospital that bought the surgical device about risks because the manufacturer properly notified the doctor who used it. Medical device manufacturers are concerned about expanded requirements to warn multiple parties about potential risks of using a device and potential increased liability. The NAM’s brief argued that Intuitive did not have a direct duty to warn the plaintiff or the hospital of risks associated with the device because the physician was the learned intermediary and that the court should maintain the fault-based failure-to-warn standard for all prescription medical products rather than a strict liability standard. Unfortunately, the Washington Supreme Court found that the company had a duty to warn both the hospital that bought the device and the doctor who used it, and that the learned intermediary doctrine only applies to warnings that are owed to patients, not hospitals.


Related Documents:
NAM brief  (April 22, 2016)

 

Sidney Hillman Health Ctr. v. Abbott Labs., Inc. (7th Circuit) -- 2017

RICO drug pricing case -- proximate cause issue

The NAM filed an amicus brief arguing that pharmaceutical companies should not be subject to treble damages under the Racketeer Influenced and Corrupt Organizations Act (RICO) for injuries allegedly arising from misrepresentations to doctors about the efficacy of a prescription drug. A group of plaintiffs sued pharmaceutical company Abbott Labs alleging that the company’s misrepresentations about the drug, Depakote, caused the plaintiffs’ injuries under RICO. If courts allow RICO claims against pharmaceutical manufacturers for alleged misrepresentations to doctors, the potential liability could chill the development of new medications and impair patient safety. The NAM’s brief argued that multiple intervening factors broke any causal link between the defendant’s statements and plaintiffs’ injuries, thus the plaintiffs’ injuries were not directly caused by the defendants’ statements. In a win for manufacturers, the court accepted NAM’s argument and held that any connection between misrepresentations to doctors and claims for damages by third-party payors is too remote to prove causation.


Related Documents:
NAM amicus brief  (June 12, 2017)

 

Deykes v. Cooper-Standard Auto. Inc. (6th Circuit) -- 2017

Whistleblower definition must apply across all Dodd-Frank provisions

The NAM filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit in a case addressing the definition of a whistleblower under the Dodd–Frank Wall Street Reform and Consumer Protection Act, which is implemented by the Securities and Exchange Commission (SEC). The litigation follows a district court ruling against Deykes, an employee who filed a Dodd-Frank retaliation claim based on his internal reporting of alleged violations of the Foreign Corrupt Practices Act even though he did not meet the definition of a whistleblower. This litigation raises issues of direct concern to manufacturers, many of which are publicly-traded companies and subject to the jurisdiction of the Securities and Exchange Commission. The NAM’s brief explained that the statutory definition of “whistleblower” must be applied across all provisions of Dodd-Frank, including that law’s anti-retaliation provisions. The court granted the appellee's stipulation to voluntarily dismiss the case before oral arguments were held.


Related Documents:
NAM brief  (April 21, 2017)

 

Leidos, Inc. v. Indiana Pub. Ret. Sys. v. Indiana Pub. Ret. Sys. (U.S. Supreme Court) -- 2017

Liability for securities fraud under Section 10(b)

The NAM filed two amicus briefs in the U.S. Supreme Court in this case concerning the U.S. Court of Appeals for the Second Circuit’s ruling on liability for securities fraud under Section 10(b) of the Securities Exchange Act of 1934 based on a failure to disclose adverse “trends” and “uncertainties” in the “Management Discussion & Analysis” section of Item 303. The Second Circuit extended the private right of action to omissions of material fact that do not render a statement misleading. Many manufacturers are publicly traded companies and this ruling could expose manufacturers to increasing liability. The NAM’s brief argued that manufacturers may be subject to private suits for securities fraud for failing to disclose information that may not be material and could be exposed to “fraud-by-hindsight” litigation if shrewd plaintiffs allege that an event was known to management as being reasonably likely to occur. The Supreme Court did not hear the case because the parties settled.


Related Documents:
NAM brief on the merits  (June 28, 2017)
NAM brief supporting review  (November 30, 2016)

 

National Association of Manufacturers v. SEC (U.S. District Court for the District of Columbia) -- 2017

Challenging law and SEC rule on Conflict Minerals

The NAM challenged the conflict minerals rule issued by the Securities and Exchange Commission (SEC) in August 2012. The challenge was transferred from the U.S. Court of Appeals for the D.C. Circuit to the U.S. District Court for D.C. The rule harmed manufacturers because it required misleading and stigmatizing public statements unfairly linking products to human rights violations. The NAM argued that the SEC incorrectly interpreted the statute, which required reporting of certain minerals that “did originate” in and around the Democratic Republic of the Congo (DRC), to cover minerals that “may have originated” there. In April 2017, the D.C. District Court entered final judgment declaring the SEC regulations on conflict minerals unconstitutional to the extent that the statute and the rule require regulated entities to report to the SEC and to state on their websites that any of their products “have not been found to be ‘DRC conflict free.’”

 

Automated Industrial Machinery, Inc. v. Christofilis (Ill. App. Ct.) -- 2017

Illinois courts refuse to enforce restrictive covenants

The NAM filed an amicus brief in an Illinois appellate court in support of manufacturer trade secrets. Automated Industrial Machinery (AIM) brought suit after an employee, who worked for AIM for thirteen years, left AIM five months after signing a non-compete agreement and opened a competing business. An Illinois lower court found the non-compete agreement unenforceable due to lack of adequate consideration since the employee had signed it less than two years before leaving. The NAM’s brief argued that the appellate court should reject a two-year bright line rule in favor of a fact-specific totality of the circumstances analysis to determine whether an employee’s continued employment is adequate consideration to support a non-compete agreement. The appellate court held that the defendant was not subject to the non-compete because the five months of employment at issue in this case was not a “substantial period of time.” This sets a detrimental precedent that Illinois manufacturers should wait two years after employees sign confidentiality agreements before exposing confidential information.


Related Documents:
NAM brief  (March 22, 2017)

 

General Motors LLC v. Elliott (U.S. Supreme Court) -- 2017

Validity of bankruptcy sale of assets "free and clear"

The NAM filed an amicus brief in the U.S. Supreme Court supporting manufacturers’ rights in a bankruptcy suit that attempted to hold General Motors liable for pre-bankruptcy claims. A lower court held GM liable for product liability claims arising from an ignition switch defect five years before the sale of the company’s assets in bankruptcy. This ruling will make it difficult for companies to receive value for assets in bankruptcy and unfairly places liability on parties without fault. The NAM’s brief argued that disallowing the “free and clear” sale provision undermines the integrity of asset sales in bankruptcy, negatively impacts debtors, creditors and buyers, and that the decision below also violates a technical provision in bankruptcy law that requires the issuance of a stay prior to revoking the “free and clear” finding in a sale order. Unfortunately, the Supreme Court declined to hear the appeal.


Related Documents:
NAM amicus brief  (January 17, 2017)

 

Chamber of Commerce v. Internal Revenue Service (W.D. Tex.) -- 2017

Challenging IRS inversion limitations

The NAM filed an amicus brief in a lawsuit challenging the immediate implementation of the “multiple domestic entity acquisition rule” because the rule effectively circumvents congressional intent to curtail the Treasury’s authority to eliminate inversions. The Treasury and Internal Revenue Service (IRS) ignored the tax code and the Administrative Procedure Act’s (APA) notice and comment requirements by rendering the rule immediately effective. The rule exacerbates uncertainty in tax law and undermines manufacturers’ abilities to compete and succeed in the global marketplace; therefore, manufacturers must have the ability to comment before the rule is implemented. The NAM’s brief argued that 1) the United States cannot insulate itself from a pre-enforcement review under the APA, 2) the Treasury has promulgated a rule that is beyond the scope of its regulatory authority and 3) under the APA’s language there is not “clear and convincing evidence” of congressional intent to protect the Treasury or IRS from court action. The court agreed with the NAM’s arguments and held that the language of the APA mandates that even temporary rules are subject to notice and comment requirements.


Related Documents:
NAM amicus brief  (November 8, 2016)

 

ETC Marketing, Ltd. v. Harris County Appraisal Dist. (U.S. Supreme Court) -- 2017

State taxation of temporarily stored natural gas

The NAM filed a brief urging the U.S. Supreme Court to review a circuit court split over whether it is permissible for states and municipalities to levy taxes on natural gas while the gas remains in transit. This litigation stems from a Supreme Court of Texas holding which levied taxes on large quantities of temporarily stored natural gas while in interstate transit. This issue is important because imposing new state and local taxes on natural gas will harm both interstate commerce and natural gas consumers. The NAM’s brief argued that taxes on natural gas while it is in transit violate the “in-transit” principle of the Commerce Clause which mandates that goods that remain in the transit process cannot be locally taxed. Unfortunately, the Supreme Court denied the petition for certiorari leaving consumers to bear the burden of high costs.


Related Documents:
NAM brief  (October 20, 2017)

 

Naifeh v. Oklahoma (Oklahoma Supreme Court) -- 2017

Whether a regulatory fee is actually a new tax

The NAM filed an amicus brief in support of Naifeh’s claim that Oklahoma Senate Bill 845 is a tax rather than a fee and must therefore be enacted following the mandated procedures. Naifeh alleges that SB 845 was intended to raise revenue; therefore, as the bill levied a tax and not a fee, SB 845’s passage did not comply with the mandated procedures. Manufacturers should not be unfairly targeted by onerous taxes imposed by states in an attempt to balance the state’s budget for the next fiscal year. The NAM’s brief argues that the fee, imposed on each pack of cigarettes, is actually a tax and as such required approval by a three quarters supermajority of the legislature prior to implementation. The court agreed with NAM’s arguments and held that as the primary purpose of the fee was to raise revenue, it must therefore be enacted following the tax-enactment procedures mandated by the Oklahoma Constitution.


Related Documents:
NAM amicus brief  (July 21, 2017)

 

Sonoco Prods. Co. v. Dep't of Treasury, Michigan (U.S. Supreme Court) -- 2017

Challenging retroactive withdrawal from Multistate Tax Compact

The NAM filed an amicus brief in the U.S. Supreme Court urging the Court to hear an appeal challenging Michigan’s repeal of a tax provision that had allowed multistate companies to use a standard three-factor formula to compute taxes. The appeal arises from a lower court ruling that allowed Michigan to renege on its obligations under the Multistate Tax Compact, which was designed to prevent double taxation. Multistate companies could now be liable for more than $1 billion in extra taxes. The NAM’s brief argued that the compact was a binding contract and that imposing retroactive tax liability could have detrimental implications for businesses that reasonably relied on the tax scheme. Unfortunately, the Supreme Court declined to review the case.


Related Documents:
NAM amicus brief  (December 23, 2016)

 


Nestle USA, Inc. v. Doe (U.S. Supreme Court) -- 2016

Validity of suit under Alien Tort Statute

The NAM filed an amicus brief supporting Nestle USA and urging the U.S. Supreme Court to clarify the reach of the Alien Tort Statute. This appeal followed a U.S. Court of Appeals for the Ninth Circuit decision that split with other federal courts of appeals on three legal issues: whether U.S. courts should entertain extraterritorial litigation, whether there is a well-defined consensus that corporations can be sued for violations of the Law of Nations; and the extent of knowledge or intent that a business must have to be liable for the acts of others. The NAM’s brief argued that the decision below 1) ignores a prior Supreme Court ruling; 2) invites international friction by expanding the scope of the Alien Tort Statue; and 3) is inconsistent with generally accepted principles of international law on intentional wrongdoing and corporate liability. Unfortunately, the Court denied the petition for review.


Related Documents:
NAM brief  (October 21, 2015)

 

McWane, Inc. v. FTC (U.S. Supreme Court) -- 2016

Antitrust legal standards that apply to exclusive dealing arrangements

The NAM filed an amicus brief urging the U.S. Supreme Court to provide guidance on exclusive dealing arrangements between distributors. The Federal Trade Commission brought an enforcement action against a ductile pipe fittings manufacturer alleging that the manufacturer violated antitrust laws because it monopolized the domestic pipe fittings market by announcing that it might temporarily suspend its traditional rebate to any distributors who sold products from other manufacturers and cease providing its domestic pipe fittings to distributors who purchased domestic pipe fittings from competitors. This litigation is important to manufacturers because lack of clarity regarding the legality of exclusive-dealing arrangements discourages manufacturers and suppliers from entering into those arrangements, which in turn chills pro-competitive conduct. The NAM’s brief highlighted the importance of exclusive dealing arrangements and their pro-competitive traits. Unfortunately, the Court declined to hear this appeal.


Related Documents:
NAM amicus brief  (December 30, 2015)

 

Mylan Pharm. Inc. v. Warner Chilcott Pub. Ltd. Co. (3rd Circuit) -- 2016

IP protections for incremental pharmaceutical innovations

The NAM filed an amicus brief supporting manufacturers’ rights to innovation in a pharmaceutical litigation suit and arguing that the manufacturer is not liable for anticompetitive conduct by patenting incremental innovations. The plaintiff brought this antitrust lawsuit alleging “product hopping” that ostensibly provided no significant improvements but prevented filling prescriptions automatically with generics. If accepted, this theory would have created a rule that is at odds with antitrust law and severely hindered innovation. The NAM’s brief argued that 1) a robust intellectual property regime is critical to creative activity and investments necessary to innovate; and 2) intellectual property developers often will make the necessary investments only if they are able to recover the costs. In a win for manufacturers, the court held against the appellant.


Related Documents:
NAM amicus brief  (December 21, 2015)

 

Konstantin v. 630 Third Avenue Assocs. (New York Court of Appeals) -- 2016

Opposing asbestos case consolidations in New York

The NAM filed an amicus brief in the New York State Court of Appeals urging the court to review the troubling practice of consolidating asbestos litigation suits that are neither factually similar nor legally similar. In this case, the trial court consolidated two asbestos-related personal injury cases that featured dissimilar factors including different worksites, occupations, products, types and duration of exposure, liability theories and defendants, counsels and witnesses. Consolidating cases with dissimilar factors is highly prejudicial towards manufacturers and creates administrative and jury biases that result in verdicts at abnormally large amounts. The NAM’s brief argued that, because the facts of the cases are dissimilar, combining them is unlikely to increase judicial efficiency but is instead highly prejudicial, thus raising due process concerns. Unfortunately, the appeal was rejected on procedural grounds leaving the issue unresolved.


Related Documents:
NAM amicus brief  (February 29, 2016)

 

Spokeo, Inc. v. Robins (U.S. Supreme Court) -- 2016

Article III injury-in-fact standing requirement for statutory injuries

The NAM filed an amicus brief urging the U.S. Supreme Court to reverse a U.S. Court of Appeals for the Ninth Circuit decision that erroneously conflated injury-in-law with injury-in-fact for purposes of Article III standing in an alleged violation of the Fair Credit Reporting Act (FCRA). In this case, Robins alleged that Spokeo violated the FCRA when it published inaccurate information on its website about Robins’ education and income. This decision might invite abusive class action litigation in which plaintiffs’ attorneys could amass huge classes of plaintiffs, most or none of whom would have actually suffered any negative consequences as a result of the alleged FCRA violation. The NAM’s brief argued that statutory injury-in-law is not a substitute for Article III injury-in-fact because Congress does not have the ability to abrogate the constitutional standing requirements. The Supreme Court remanded the case back to the Ninth Circuit, which then found that Robins had alleged a sufficient concrete harm to establish an injury-in-fact.


Related Documents:
NAM brief  (July 9, 2015)

 

Brown v. Electrolux Home Prods., Inc. (11th Circuit) -- 2016

Class action certification without injury

The NAM filed an amicus brief urging the U.S. Court of Appeals for the Eleventh Circuit to review a class action certification where the trial court improperly certified a class of plaintiffs that included individuals who were not harmed and individuals who may never be harmed by the product at issue. The plaintiffs alleged that they overpaid for front loading washers because they were more likely than top-loading washers to develop mold and odors. This matter is important to manufacturers because improper class certification places undue pressure on companies to settle otherwise meritless cases. The NAM’s brief argued that the trial court improperly took the position that all doubts about certifying a class should be resolved in favor of certification and should have instead, followed the U.S. Supreme Court’s view that class actions remain “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” In a win for manufacturers, the Eleventh Circuit held that class certification was improperly granted and remanded the case to the lower court.


Related Documents:
NAM brief  (June 22, 2015)

 

Dow Chemical Co. v. Industrial Polymers, Inc. (U.S. Supreme Court) -- 2016

Commonality of damages suffered by purchasers in antitrust class actions

The NAM filed an amicus brief urging the U.S. Supreme Court to review a class action certification in an antitrust conspiracy certified solely based on presumptions of class-wide injury. This appeal came after a lower court denied the defendant the opportunity to rebut a presumption that all plaintiffs, purchasers of urethane foam, suffered the same damages as a result of the antitrust conspiracy even though each purchaser negotiated an individual price with the manufacturers. This case threatened to expose businesses to the risk of staggering class judgments and even for those who manage to defeat liability, substantially higher litigation costs. The NAM’s brief argued that 1) in class actions, parties have the right to raise any claim or defense specific to the individual class member; and 2) the lower court’s decision impeded due process and threatened to permit any conspiracy to be certified as a class action, thus potentially expanding the scope of class liability. This case settled on February 26, 2016.


Related Documents:
NAM brief  (April 13, 2015)

 

Terrill v. Electrolux Home Prods., Inc. (11th Circuit) -- 2016

Class action certification without injury

The NAM filed an amicus brief in the U.S. Court of Appeals for the Eleventh Circuit supporting Electrolux Home Prods., Inc. in its appeal of a lower court’s certification of a class of plaintiffs that included parties who were not harmed or were unlikely to be harmed by the alleged defect. The plaintiffs alleged that they overpaid for the appliances because front loading washers were more likely than top-loading washers to develop mold and odors. This matter is important to manufacturers because improper class certification places undue pressure on companies to settle otherwise meritless cases. The NAM’s brief argued that 1) the court ignored evidence showing that the vast majority of class members would be unable to assert or prevail on any claim because more than 99% of them never experienced any moldy odors; 2) many plaintiffs knew of the issue prior to purchase because it was widely publicized; and 3) many plaintiffs received a free warranty replacement of the allegedly defective part. In a win for manufacturers, the appeals court held that the class was certified improperly and remanded the case back to the trial court to determine whether there were sufficient common issues of causation.


Related Documents:
NAM amicus brief  (November 1, 2013)

 

United States Telecom Ass'n. v. Federal Communications Commission (D.C. Circuit) -- 2016

Net Neutrality

The NAM filed an amicus brief supporting the telecommunications industry and opposing the Federal Communications Commission’s (FCC) reclassification of broadband service providers as telecommunications services subject to common carrier regulations. This litigation was a challenge to the FCC’s net neutrality rule, which reclassified and regulated broadband service providers as common carriers. That rule discouraged investment, stifled innovation and invited uncertainty for companies trying to predict how they may do business. The NAM’s brief argued that 1) the FCC’s reclassification must be set aside because it was contrary to the Communications Act of 1934; 2) the reclassification was promulgated in violation of the Administrative Procedure Act; and 3) broadband providers “rates” and “practices” would be subject to the broad and ambiguous standards, which would decrease the variety and quality of internet services. Unfortunately, the court rejected the challenges.


Related Documents:
NAM brief  (August 5, 2015)

 

Alaska Wilderness League v. Jewell (9th Circuit) -- 2016

Validity of BOEM permit for exploratory drilling in Chukchi Sea

The NAM filed an amicus brief supporting oil and gas exploratory drilling that complied with the National Environmental Policy Act (NEPA). Environmental groups challenged the issuance of a permit by the Bureau of Ocean Energy Management (BOEM) allowing exploratory drilling by Shell in Alaska. This case is important because attempts to prevent oil and gas exploration significantly impact access to energy sources and stifle job growth. The NAM’s brief argued that the Outer Continental Shelf (OCS) Lands Act was specifically designed to expedite OCS exploration and development and that BOEM properly approved Shell's revised exploration plan pursuant to NEPA. Shell terminated its exploratory efforts, and the court granted the parties' request to dismiss the case as moot.


Related Documents:
NAM amicus brief  (September 25, 2015)

 

American Chemistry Council v. EPA (D.C. Circuit) -- 2016

Challenging EPA regulation of boilers for area sources (boiler GACT)

The NAM challenged an Environmental Protection Agency (EPA) final rule on hazardous air pollutants, which imposes burdensome regulatory requirements on boilers, incinerators and process heaters. The rule requires “generally available control technologies” (GACT) or management practices to reduce emissions of hazardous air pollutants, taking into consideration the cost of achieving such reductions. This rule imposes costly compliance requirements on manufacturers subject to the rule. The NAM argued that 1) the EPA did not have sufficient data to property calculate an emissions standard based on the best performing 12% of combustions units as statutorily required but instead used the Upper Prediction Limit (UPL) methodology to estimate the emissions limits based on fewer data points; and 2) by requesting a voluntary remand, the EPA effectively conceded that the methodology used to calculate the UPL standards is flawed. While the court rejected the NAM’s arguments in 2016, it ordered the agency to provide further justification for some of its conclusions.


Related Documents:
Reply Brief of Industry Petitioners  (January 21, 2015)
Brief of Industry Intervenor-Respondents  (December 23, 2014)
Opening Brief of Industry Petitioners (incl. NAM)  (August 26, 2014)
NAM Reply Brief in support of motion for affirmative relief  (April 17, 2014)
NAM motion for affirmative relief  (March 13, 2014)
NAM Statement of Issues  (May 1, 2013)
Petition for Review  (April 2, 2013)

 

American Farm Bureau Federation v. EPA (U.S. Supreme Court) -- 2016

EPA micromanagement of state water discharges

The EPA has exerted control over land uses in the Chesapeake Bay watershed by dictating the minute details of what can be discharged into it and reserving to itself authority to approve any future changes necessary to allow for state and local adjustments to the mix of land uses within their jurisdictions. Congress neither envisioned nor authorized this expansion of EPA’s authority in the Clean Water Act.

This micromanagement upends the model Congress intended for the Clean Water Act. Local businesses throughout the Chesapeake Bay watershed must now comply with a regulatory scheme that imposes new federal burdens on businesses and industry formerly regulated by the states, impedes state programs to address state water quality issues, and limits opportunities for growth and innovation. Allowing the EPA’s control to stand would provide the EPA nearly unchecked power over land use decisions affecting local businesses throughout the nation.

The NAM filed an amicus brief urging the Supreme Court to review an adverse decision from the Third Circuit that allows such micromanagement by the EPA. Our brief argued that this overreach is not authorized by the Clean Water Act because it makes individual permit holders responsible for excess effluents from others. It severely constrains companies with discharge permits and delays revisions and approvals, disfavoring innovation and growth and curtailing development.

On Feb. 29, the Court declined to review this appeal.


Related Documents:
NAM amicus brief  (December 9, 2015)

 

American Forest & Paper Ass'n. v. EPA (D.C. Circuit) -- 2016

Challenging EPA's CISWI regulations

The NAM challenged the Environmental Protection Agency’s (EPA) new regulations on commercial and industrial solid waste incineration (CISWI) units that impose stricter emissions limits on industrial, commercial and institutional boilers. The new rule amended a rule previously issued in 2011 by placing further restrictions on materials used as fuels or ingredients in combustion units. The regulations will impose additional costs on manufacturers that will now require additional resources to remain compliant with the regulations. The NAM argued that 1) the EPA failed to account for variability in waste materials when classifying best-performing units; 2) the EPA should consider emissions occurring during startups, shutdowns and malfunctions when determining whether emissions limits are achievable; and 3) the EPA does not have legal authority to impose recordkeeping requirements through the CISWI rule on operators who combust non-hazardous secondary materials that are not waste. Although the court rejected the NAM’s arguments, it ordered the agency to provide further justification for some of its conclusions.


Related Documents:
NAM intervenor brief  (February 9, 2015)
NAM Reply Brief in support of motion for affirmative relief  (April 17, 2014)
NAM motion for affirmative relief  (March 13, 2014)
Shopfloor Blog  (May 9, 2011)
NAM Petition for Review  (April 29, 2011)
NAM Petition for Administrative Stay  (April 27, 2011)

 

American Petroleum Institute v. EPA (D.C. Circuit) -- 2016

Challenging EPA greenhouse gas regulation (tailoring Step 3)

The NAM challenged an Environmental Protection Agency (EPA) effort to interpret its authority with the “Tailoring Rule,” which attempts to regulate greenhouse gas emissions from stationary sources. After earlier interpretations of the rule caused absurd consequences, the EPA raised thresholds to impact only the largest emitters of greenhouse gases. The rule will impose significant administrative and cost burdens on manufacturers. The NAM argued that 1) the EPA could have adopted a more reasonable interpretation of its power so as to avoid the absurdities the rule attempts to mitigate; 2) although the EPA tried to avoid these absurd results by modifying the express statutory thresholds defining who is regulated, the action is outside of the EPA’s legal authority; and 3) as the rule is at odds with Congress’s intent when it enacted the Clean Air Act, the court must avoid agency interpretations that undermine the purpose of the law. The parties voluntarily dismissed this case in February 2016.

 

BCCA Appeal Group, Inc. v. City of Houston (Texas Supreme Court) -- 2016

Preemption of Houston's air regulation

The NAM filed an amicus brief urging the Supreme Court of Texas to overturn a lower court ruling that allowed the City of Houston to run its own clean air enforcement office. BCCA Appeal Group, Inc. sued after the City of Houston issued an ordinance allowing criminal prosecutions, without following the procedures required by the Texas Water Code and mandating that all facilities be registered with the city. If upheld, the regulation would have subjected manufacturers to inconsistent enforcement requirements and multiple permit systems at the local level. The NAM’s brief argued that such local enforcement is preempted under provisions of the Texas Constitution by the Texas Clean Air Act. The court agreed with NAM’s arguments that Houston may not subject companies to criminal penalties that conflict with the requirements of the Texas Clean Air Act.


Related Documents:
NAM amicus brief  (January 12, 2015)

 

In re Deepwater Horizon (5th Circuit) -- 2016

Standard for punitive damages in Clean Water Act litigation

The NAM filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit supporting BP’s challenge to a district court’s improper findings of fact and conclusion of law. Under a procedure known as multidistrict litigation (MDL), most cases in federal courts involving the Deepwater Horizon accident were sent to a single district court in Louisiana for consolidated pretrial proceedings. The MDL district court correctly determined that under the Fifth Circuit’s standard BP was not liable for punitive damages but incorrectly opined that BP would be liable in other circuits where some of the cases consolidated in the MDL originated and may ultimately return for trial. That incorrect comment had the potential to undermine the efficiency and fairness established through the MDL procedure and create judicial inefficiencies. The NAM’s brief argued that the MDL judge wrongly opined on the availability of punitive damages under standards applied by other circuits and instead should have focused only on the law of the Fifth Circuit. The case was dismissed by stipulation of the parties.


Related Documents:
NAM brief  (June 8, 2015)

 

JELD-WEN, Inc. v. EPA (D.C. Circuit) -- 2016

Challenging EPA regulation of boilers and process heaters (boiler MACT)

The NAM challenged an Environmental Protection Agency (EPA) final rule on hazardous air pollutants, which would impose burdensome regulatory requirements on boilers, incinerators and process heaters. Because the rule requires the “maximum degree of reduction” in emissions of hazardous air pollutants achievable, taking into consideration the cost of achieving such reductions, the rule also requires “maximum achievable control technology” (MACT) for such equipment. This rule is burdensome, will impose additional costs and require additional resources for industrial sectors subject to the rule. The NAM argued that 1) the startup work practices were incorporated into the new rules without giving key stakeholders adequate opportunity to comment; 2) important safety considerations for the regulated community were overlooked in the definitions; 3) the rule failed to take account of the importance of encouraging efficient and cost effective use of resources; 4) the fuel requirements in the rule do not incorporate national goals of safeguarding fuel diversity; and 5) the EPA does not have legal authority to impose the energy assessment requirement. This case was consolidated with U.S. Sugar Corp. v. EPA, a similar challenge to EPA’s boiler MACT regulations, and in 2016, that court rejected all industry arguments, finding that the EPA's approach was reasonable.


Related Documents:
Statement of Issues  (May 2, 2013)
NAM Petition for Review  (April 1, 2013)

 

Lennox Int'l, Inc. v. U.S. Dep't of Energy (5th Circuit) -- 2016

Challenging Dept. of Energy efficiency standards for walk-in coolers and freezers

The NAM filed an amicus brief in a challenge to a new Department of Energy (DOE), energy-efficiency standard for walk-in coolers and freezers. The new standard used a calculation of the “social cost of carbon” when aggregating purported benefits of the standard but was, however, not subjected to peer review, thus calling into question the quality and accuracy of the data used. This issue is important to manufacturers because DOE violated established requirements that influential information used by federal agencies to inform public policy decisions be developed through a transparent process. The NAM’s brief argued that the “social cost of carbon” estimates were developed by an ad-hoc interagency working group operating behind closed doors and outside the purview of notice-and-comment rulemaking or other meaningful public scrutiny. The case settled and was dismissed in 2016.


Related Documents:
NAM amicus brief  (April 17, 2015)

 

National Association of Manufacturers v. EPA (EPA) -- 2016

Petition for stay of EPA's Clean Power Plan Rule

The NAM petitioned the Environmental Protection Agency (EPA) to issue an administrative stay to delay the effective date of the Clean Power Plan rule until a court rules on the rule’s legality. The rule, issued as a regulation of greenhouse gases from electric utility generating units, went much further than regulation of electric power plants. If the rule were to take effect, manufacturers would see their costs increase and some trade-exposed industries might be forced to relocate production overseas. The NAM’s petition argued that 1) the rule was already causing irreparable harm by forcing the closure of vast numbers of existing coal-fired generating units, constituting the backbone of the American electric grid; 2) that legal challenges to the rule are likely to prevail in court, since the Clean Air Act expressly forbids EPA from regulating existing fossil fuel-fired generating; and 3) the rule imposed standards of performance for the entire energy sector, rather than only for the individual sources of greenhouse gases from the power plants themselves. Although the EPA denied our petition, the U.S. Supreme Court issued a nationwide stay of the rule on Feb. 9, 2016, until the litigation over the rule is completed. Further developments in this case can be found .


Related Documents:
NAM Petition for Administrative Stay  (October 2, 2015)

 

North Dakota v. Heydinger (8th Circuit) -- 2016

Challenge to Minnesota's Next General Energy Act restricting out-of-state electricity

The NAM filed an amicus brief in the U.S. Court of Appeals for the Eight Circuit challenging a Minnesota regulation, the Next Generation Energy Act (NGEA), which would have placed significant burdens on coal-fueled facilities and unlawfully regulated out-of-state commerce. The NGEA, sought to regulate and impose energy and environmental policies on electricity generated in other states by prohibiting importing electricity into Minnesota from any new large energy facility that would contribute to statewide power sector carbon dioxide emissions. If upheld, this matter would have caused uncertainty to manufacturers in the energy sector and others impacted by the NGEA. The NAM’s brief argued that 1) the law would substantially impede the interstate market for electricity in violation of the Commerce Clause; 2) the law could spur other states to adopt similar laws, which could result in a web of inconsistent and clashing local regulations that would destroy the national common market and impose untold costs on manufacturers and other consumers; and 3) the law was unconstitutional because it purported to allow a state to ban imported products based solely on how they were produced in other states. In a win for manufactures, the Eighth Circuit struck down Minnesota's law.


Related Documents:
NAM amicus brief  (January 27, 2015)

 

Pakootas v. Teck Cominco Metals, Ltd. (9th Circuit) -- 2016

Expansive interpretation of CERCLA

The NAM filed an amicus brief opposing the expansion of arranger liability under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). This is an appeal from a lower court holding that a Canadian company was liable as an “arranger” of the “disposal” of the hazardous materials under CERCLA after airborne particles from its mining operations landed on the earth and water of the United States. As emissions can travel long distances by air, expanding arranger liability will expose manufacturers to expensive litigation. The NAM’s brief argued that both the plain text of CERCLA and controlling precedent make it clear that the statutory definition of “disposal” is not satisfied by the mere emission of hazardous substances into the air, even if portions of the emissions later come to rest at a facility. In a win for manufacturers, the U.S. Court of Appeals for the Ninth Circuit reversed the trial court’s holding.


Related Documents:
NAM amicus brief  (August 11, 2015)

 

Portland Cement Ass'n v. EPA (D.C. Circuit) -- 2016

Challenging EPA regulation of CISWI

The NAM challenged the Environmental Protection Agency’s (EPA) 2013 final rule on commercial and industrial solid waste incineration (CISWI) units, which imposes stricter emissions limits on industrial, commercial and institutional boilers. The rule follows a 2011 rule that also imposed restrictions on materials used as fuels or ingredients in combustion units. The rules will impose additional costs and require sectors impacted by the rule to provide additional resources to remain compliant. The court consolidated this case into , a challenge to the 2011 rule on CISWI units, where the NAM argued that 1) the EPA failed to account for variability in waste materials when classifying best-performing units; 2) the EPA should consider emissions occurring during startups, shutdowns and malfunctions when determining whether emissions limits are achievable; and 3) the EPA could not impose recordkeeping requirements through the CISWI rule on operators that combust non-hazardous secondary materials that are not waste. Although the court rejected the NAM’s arguments, it ordered the agency to provide further justification for some of its conclusions.


Related Documents:
NAM Petition for Review  (April 1, 2013)

 

U.S. Army Corps of Engineers v. Hawkes Co. (U.S. Supreme Court) -- 2016

When courts may review CWA jurisdictional decisions

The NAM filed an amicus brief urging the U.S. Supreme Court to support manufacturers’ rights to respond to jurisdictional decisions that impose additional costs and reduce the feasibility of constructing infrastructure. Under the Clean Water Act (CWA), a manufacturer must obtain a permit from the U.S. Army Corps of Engineers before discharging any dredged or fill material into waters of the United States that are subject to federal regulatory jurisdiction; however, the Corps has broadly construed the CWA to prohibit any productive use, improvement, alteration or repair of property without first obtaining a permit. This case provided the opportunity for manufacturers to request judicial review of Army Corps or Environmental Protection Agency decisions that may exceed those agencies' jurisdiction. The NAM’s brief argued that the regulated community must be afforded an early opportunity to respond to overly aggressive jurisdictional determinations and requested that the court resolve uncertainty over the scope of the CWA. In a win for manufacturers, the Court agreed with the NAM.


Related Documents:
NAM brief  (March 1, 2016)

 

U.S. Sugar Corp. v. EPA (D.C. Circuit) -- 2016

Challenging EPA's boiler MACT regulations

The NAM challenged the Environmental Protection Agency’s (EPA), Boiler Maximum Achievable Control Technology (MACT) standard used to regulate emissions of hazardous air pollutants generated by boilers. The challenge came after EPA issued the final MCAT rule; however, the EPA did not have enough data to properly calculate an emissions standard based on the statutory requirement. This decision will impose enormous costs on key industrial sectors. The NAM argued that the EPA exceeded its authority in imposing an energy assessment requirement on portions of the facility that are not part of the defined source category (boilers and process heaters); 2) the emissions limitations are unlawful because they have not been achieved in practice; 3) the standards are not achievable because they were set without accounting for malfunctions; 4) EPA improperly established a numeric emission limitation for organic pollutants rather than a work practice as it has done in a comparable rule; and 5) EPA failed to justify its reversal of previously established health-based limits for hydrogen chloride. In 2016, the court rejected all industry arguments, finding that the EPA's approach was reasonable.


Related Documents:
NAM Brief in Response to Environmental Petitioners  (December 17, 2014)
Opening Brief of Industry Petitioners  (August 12, 2014)
NAM Reply Brief in Support of Affirmative Relief  (April 17, 2014)
Shopfloor Blog  (May 9, 2011)
NAM Petition for Review  (April 29, 2011)
NAM Petition for Administrative Stay  (April 27, 2011)

 

West Virginia v. EPA (U.S. Supreme Court) -- 2016

Supreme Court grants stay pending litigation of EPA's Clean Power Plan

The NAM filed an application for an immediate stay of the final rule for existing electric utility generating units pending litigation over the rule in the U.S. Court of Appeals for the District of Columbia Circuit. The Environmental Protection Agency’s (EPA) Clean Power Plan attempted to aggressively transform the domestic energy generation industry in violation of the Clean Air Act. If upheld, this rule would have imposed significant regulatory costs on manufacturers, thereby threatening global competitiveness. The NAM’s brief argued that the rule is far in excess of EPA’s statutory authority under the Clean Air Act and would cause irreparable harms to NAM members if a stay was not granted. In a win for manufacturers, the Supreme Court granted the stay.


Related Documents:
Coalition Reply Supporting Stay  (February 4, 2016)
Coalition Application for Stay  (January 27, 2016)

 

ExxonMobil Corp. v. New Hampshire (U.S. Supreme Court) -- 2016

Challenging trial by formula

The NAM filed an amicus brief urging the U.S. Supreme Court to review a water pollution decision that upended well-settled due process principles. The appeal followed after the trial court departed from longstanding legal principles when it permitted the state of New Hampshire to hold Exxon liable for contamination involving the gasoline additive MTBE in private wells across the state, including non-existent potential future wells, based only on evidence from a small sample of wells and some statistical extrapolation by an expert witness. All manufacturers have a right to receive due process protection at trial and not be subjected to results-oriented shortcuts at trial such as “trial by formula.” The NAM’s brief argued that 1) the lower court’s decision cannot be reconciled with principles of due process that protect defendants at trial; 2) the case provides an opportunity for the Court to clarify that the due process clause forbids “trial by formula”; and 3) “trial by formula” distorts outcomes and encourages speculative litigation. The Supreme Court declined to hear this appeal.


Related Documents:
NAM amicus brief  (February 22, 2016)

 

Motorola, Inc. v. Murray (D.C. Court of Appeals) -- 2016

Standard for admissibility of expert testimony in DC

The NAM filed two amicus briefs urging the District of Columbia Court of Appeals to review a claim regarding the admissibility of expert testimony in product litigation. This is an appeal of a lower court decision that permitted the “Frye test” rather than using the “Daubert test” in determining the admissibility of expert testimony. This litigation is important to manufacturers because liability decisions should be based on credible evidence. The NAM’s brief argued that 1) the Daubert standard is more in line with current D.C. law and is a fairer and more realistic test of expert testimony; 2) adoption of the updated standard would position D.C. courts to be better gatekeepers against unreliable expert testimony; and 3) moving to the “Daubert” standard would level the playing field for D.C. based businesses, who are at a competitive disadvantage by being subject to the “Frye” standard. In a win for manufacturers, the court agreed with NAM’s arguments.


Related Documents:
NAM amicus brief on the merits  (February 23, 2015)
NAM amicus brief  (October 24, 2014)

 

AT&T, Inc. v. United States ex rel. Heath (U.S. Supreme Court) -- 2016

Whether False Claims Act pleadings must include specific false claims allegations

The NAM filed an amicus brief supporting AT&T Inc. in its petition to the U.S. Supreme Court seeking review of an alleged False Claims Act (FCA) violation where the relator’s pleading did not include facts about any express or implied false claims, nor alleged any personal knowledge of the supposed improper conduct. The issue is whether relators filing FCA claims must include specific allegations of false claims in their pleadings. Unwarranted and excessive FCA claims increase the expense and disruption of burdensome discovery and protracted litigation for manufacturers. The NAM’s brief argued that that a circuit split encourages speculative claims and forum shopping and urged the Court to step in to resolve the split and clarify that FCA claims must, at a minimum, include an allegation of a specific false claim. Unfortunately, the Supreme Court declined review.


Related Documents:
NAM brief  (October 23, 2015)

 

Universal Health Services, Inc. v. United States (U.S. Supreme Court) -- 2016

Opposing false certification litigation under the False Claims Act

The NAM filed an amicus brief urging the U.S. Supreme Court to reject suits under the “implied false certification” theory, which allows False Claims Act (FCA) lawsuits without intent to defraud the government. This is an appeal from a U.S. Court of Appeals for the First Circuit ruling that took a broad view of what may constitute a “false or fraudulent” claim, after the respondent filed a qui tam lawsuit alleging that Universal Health had violated the FCA. This case raised concerns for manufacturers that the rapid rise in qui tam claims would subject them to increased litigation. The NAM’s brief argued that Congress did not intend for regulatory or contractual violations to be deemed false or fraudulent claims under the FCA, thus the broad interpretation of the FCA is at odds with congressional intent, and that the FCA’s intent is to hold those who knowingly intend to defraud the government accountable. In a win for government contractors, the Court held that the First Circuit’s interpretation was too broad.


Related Documents:
NAM amicus brief  (January 26, 2016)

 

Grocery Manufacturers Ass'n v. Sorrell (D. Vt.) -- 2016

Vermont labeling law for genetically engineered products

The NAM filed a lawsuit challenging Vermont’s genetically modified organism labeling law as unconstitutional. Vermont required labels on products that contain genetically engineered plants and prohibited such products from being labeled as natural. This litigation is important because labeling food with these disclosures would stigmatize certain foods and require that manufacturers implement expensive separate labeling systems, stock-keeping units and Vermont-specific distribution chains. The NAM’s brief argued that 1) compelled speech violates the First Amendment guarantee of freedom to speak and freedom to not speak; 2) any such requirement must accomplish a compelling government interest and be the least restrictive means possible and 3) the Vermont government did not meet these requirements. The case became moot after President Obama signed the National Bioengineered Food Disclosure Standard, which preempted the state law.


Related Documents:
Reply Brief in Support of Motion for Prelim. Injunction  (December 5, 2014)
NAM Opposition to Motion to Dismiss  (September 11, 2014)
Memo in Support of Motion for Preliminary Injunction  (September 11, 2014)
NAM Complaint  (June 12, 2014)

 

Grocery Manufacturers Ass'n v. Sorrell (2nd Circuit) -- 2016

First Amendment limits on government-mandated labelling disclosures and restrictions

The NAM filed an appeal in the U.S. Court of Appeals for the Second Circuit of a district court’s refusal to grant a preliminary injunction in a constitutional challenge to Vermont’s genetically engineered food labeling law. Vermont required labels on products that contain genetically engineered plants and prohibited such products from being labeled as natural. This litigation affected companies that sell food products nationwide, since establishing distribution networks to supply products with unique labels in Vermont is very difficult and expensive. The NAM’s brief argued that the district court should have granted a preliminary injunction because intermediate scrutiny should apply to this highly controversial issue, the law does not serve a substantial government interest and the law further does not directly advance Vermont’s asserted interests because it is exceedingly vague and replete with exemptions. The NAM filed a stipulation dismissing the appeal after President Obama signed the National Bioengineered Food Disclosure Standard, which preempted the state law.


Related Documents:
NAM Reply Brief  (September 8, 2015)
NAM Brief  (June 24, 2015)

 

Deere & Co. v. New Hampshire (U.S. Supreme Court) -- 2016

Expansion of protectionist state legislation to equipment dealers

In 2013, New Hampshire enacted amended legislation to redefine “motor vehicle” as including “equipment,” which “means farm and utility tractors, forestry equipment, industrial equipment, construction equipment, farm implements, farm machinery, yard and garden equipment, attachments, accessories, and repair parts.” This subjected equipment manufacturers to New Hampshire’s protectionist state automobile dealer legislation that imposes artificially high costs on out-of-state manufacturers and consumers, solely for the benefit of in-state dealers, and bars recovery of those costs in New Hampshire. The legislation also retroactively voids conflicting provisions of existing contracts between manufacturers and their dealers.

Equipment manufacturers appealed New Hampshire’s protectionist state legislation all the way to the U.S. Supreme Court. The NAM filed a brief urging the U.S. Supreme Court to hear this case concerning the expansion of protectionist state auto dealer laws to include equipment dealers. This unjustified legislation upends constitutionally protected contracting rights and damages manufacturer-dealer relationships. Protectionist state legislation is anti-competitive and harms consumers. This case presents the Court an opportunity to ensure that statutes voiding private contracts are meaningfully reviewed to assess the merits of a purported public benefit against the harms of the economic restriction.


Related Documents:
NAM brief  (May 19, 2016)

 

United Student Aid Funds, Inc. v. Bible (U.S. Supreme Court) -- 2016

To overturn Auer case deferring to agency interpretations of their own regulations

The NAM filed an amicus brief urging the U.S. Supreme Court to review a case where a lower court afforded deference to an agency interpretation of a rule that was offered for the first time in an amicus curiae brief during litigation. If courts defer to agency interpretations of their own opinions offered for the first-time during litigation, agencies will be disincentivized to provide regulatory clarity and predictability in rulemaking necessary for business planning. The NAM’s brief argued that: the Administrative Procedure Act allocates interpretive authority to the courts; and; deferring to agency interpretations is inconsistent with the allocation of powers in the Constitution and undermines an important check on the excesses of the legislative and executive branches of government. Unfortunately, the Supreme Court denied the review.


Related Documents:
NAM amicus brief  (February 3, 2016)

 

Microsoft Corp. v. United States (2nd Circuit) -- 2016

Search warrant issued under the Stored Communications Act

The NAM filed an amicus brief in support of Microsoft’s challenge to the Department of Justice’s (DOJ) request to gain access to digital personal information stored on a server in Ireland using the Stored Communications Act, rather than the proper legal channels. This is an appeal to a lower court decision that held that the government can use a search warrant, issued under the Stored Communications Act, to gain access to digital information within the control of a U.S. based internet service provider but stored on a foreign server. If upheld, this decision would have had a chilling effect on the ability of U.S. companies to compete internationally. The NAM’s brief argued that the government’s position would significantly deter the use of remote data management technologies by businesses and individuals and that there is no legal basis for the government’s request. The court held that the Stored Communications Act does not authorize courts to enforce the warrant.


Related Documents:
NAM brief  (December 15, 2014)

 

Bristol-Myers Squibb Company v. Superior Court (Anderson) (California Supreme Court) -- 2016

Business and industry opposes finding of California jurisdiction

The NAM filed an amicus brief in the California Supreme Court to safeguard manufacturers’ due process rights. The NAM’s involvement followed a California court decision to extend specific jurisdiction to force a non-resident corporate defendant to appear in California courts because the corporation had engaged in “substantial, continuous economic activity” in California. If upheld, this decision would have dramatically increased manufacturers’ exposure to liability. The NAM’s brief argued that it is unreasonable and unlawful to extend jurisdiction to the California court system when neither the plaintiffs nor defendants are residents of the state. While the California Supreme Court did not hold in NAM’s favor, the U.S. Supreme Court later overturned that holding.


Related Documents:
NAM brief  (June 10, 2015)
NAM amicus letter  (September 25, 2014)

 

Merritt v. Texaco Inc. (La. Ct. App.) -- 2016

Corporate registration in state does not confer general jurisidiction

A judge in Louisiana ruled that Hunt Refining Co. could be sued there by an out-of-state plaintiff for alleged exposure to benzene in Mississippi, on the theory that the company can be sued for any claims arising elsewhere in the country because the company registered to do business in Louisiana. This theory that a company is subject to general jurisdiction was rejected by the U.S. Supreme Court two years ago, and the MCLA filed an amicus brief in this case asking a Louisiana appeals court to reverse the lower court's decision. Companies do not give up fundamental due process rights by registering to do business in a state, and allowing general jurisdiction in this case could turn Louisiana into a magnet for forum shopping in mass tort or other cases.

The case was dismissed in July.


Related Documents:
NAM brief  (July 15, 2016)

 

Augustus v. ABM Sec. Serv., Inc. (California Supreme Court) -- 2016

Prohibiting on-call rest periods

The NAM filed two amicus briefs with the California Supreme Court, in an employment litigation suit, to defend reasonable rest periods for manufacturing employees under California labor laws. The plaintiff alleged that while on-call rest periods are allowed under California law, an employer cannot satisfy its obligation to relieve employees from duties during rest periods when the employer nonetheless requires its employees to remain on call. This limitation could present manufacturers with operational uncertainty and impose additional costs. The NAM’s briefs argued that: under the plain language of the governing statutes and regulations, employers need not relieve employees of all duty during rest breaks because California wage regulations treat rest breaks differently than meal breaks; and the legislative history of the relevant statutes and regulations confirmed that California law authorizes on-call rest breaks. Unfortunately, the California Supreme Court denied the petition for rehearing.


Related Documents:
NAM amicus letter supporting reconsideration  (January 12, 2017)
NAM amicus brief  (November 23, 2015)

 

Constellation Brands US Operations, Inc. v. NLRB (2nd Circuit) -- 2016

Standard for determining bargaining units

The NAM filed an amicus brief supporting Constellation Brands in a collective bargaining dispute stemming from the application of the National Labor Relations Board’s (NLRB) new Specialty Healthcare doctrine. The NLRB determined that 46 winemaking cellar employees within a completely integrated production facility constituted an appropriate bargaining unit because they were “readily identifiable as a group” that “shared a community of interest.” This litigation is important to manufacturers because under the new standard, employers would have multiple bargaining agreements that make it difficult to address employee concerns and halt operations until those concerns are addressed. The NAM’s brief argued that 1) the NLRB wrongly decided Specialty Healthcare, which should be overruled because the Specialty Healthcare rule grants too much deference to the union’s proposed unit; 2) Specialty Healthcare represents a radical departure from the NRLB’s longstanding precedent and encourages a multiplicity of fractured units within workplaces throughout the country; and 3) in deciding Specialty Healthcare the NLRB violated the Administrative Procedure Act. Although the court upheld the Specialty Healthcare standard, it found the regional director did not apply the standard correctly.


Related Documents:
NAM brief  (December 16, 2015)

 

District of Columbia v. U.S. Dep't of Labor (D.C. Circuit) -- 2016

Davis Bacon Act does not apply to private construction projects

The NAM filed an amicus brief in a labor litigation lawsuit to oppose the Department of Labor’s (DOL) application of the Davis-Bacon Act, which requires “prevailing wages” for construction workers on public buildings or public works projects funded by the federal or D.C. government, to a private construction project. This is an appeal after DOL ruled that the City Center DC project was subject to the 1931 Davis-Bacon Act. If left unchecked, the DOL’s attempt to apply the Davis-Bacon Act to the private construction industry would have had a significant and potentially negative impact on private industry, the government and the economy. The NAM’s brief argued that DOL’s application of the Davis-Bacon Act to a private construction project was contrary to the language of the Act and that it was an unprecedented attempt to expand the scope of the Davis-Bacon Act into the private construction industry. The court applied common sense reasoning to reject DOL’s expansion of federal law.


Related Documents:
NAM brief  (March 11, 2015)

 

In re Cooper Tire & Rubber Company (NLRB) -- 2016

ALJ rules that racist statements are not grounds for firing

The NAM filed an amicus brief defending employers’ rights to implement and follow anti-discrimination and anti-harassment policies in an employment litigation suit. The litigation arose from Cooper Tire’s discharge of an employee for racist statements made by the employee while on a picket line. Manufacturers have a moral and legal obligation to ensure that employees are free of discrimination and harassment in the workplace. The NAM’s brief argued that 1) the National Labor Relations Act (NLRA) should not protect racist comments, regardless of where or when the comments are made; 2) the National Labor Relations Board (NLRB) cannot force employers to violate other federal statutes through its protection of racist speech used on a picket line; and 3) employers need to be able to rely on and apply their legitimate anti-discrimination and anti-harassment policies. Unfortunately, the NLRB held that although the employee’s “statements most certainly were racist, offensive and reprehensible,” they did not forfeit the protection of the NLRA.


Related Documents:
NAM brief  (August 20, 2015)

 

In re Kellogg Brown & Root, Inc. (D.C. Circuit) -- 2016

Privilege for investigations supervised by in-house lawyers

The NAM filed an amicus brief supporting employers’ rights to protect sensitive communications between employees and an employer’s counsel. This case involves an in-house investigation of tips alleging potential False Claims Act violations where, although the company provided 100,000 pages of documents during the discovery phase, the trial judge ordered that 89 documents identified as privileged be disclosed. If upheld, this precedent will penalize companies for adopting internal compliance programs and force companies to either risk a waiver of attorney-client privilege or to forego legal advice. The NAM’s brief argued that 1) a communication with counsel should be protected provided that the predominant or primary purpose of the communication is for securing legal advice; and 2) if these communications were to lose their privilege solely because they were part of a compliance investigation, “required by regulatory law’” many regulatory programs would be frustrated. In 2014, the appellate court overruled the trial court’s decision and ruled that the communications were protected by the attorney-client privilege. The trial court again ruled against the privilege assertions, and the NAM filed a second amicus brief in 2015 supporting mandamus to the appellate court. In a win for manufacturers, the appellate court reversed the district court for a second time.


Related Documents:
NAM brief  (January 30, 2015)
NAM brief  (March 19, 2014)

 

In re Miller & Anderson (NLRB) -- 2016

Defining multi-employer bargaining units

The NAM filed an amicus brief opposing the creation of a joint bargaining unit composed of employees employed solely by one of the entities that comprise a joint employer without the consent of both employers. In this case, a union filed a petition seeking to represent a “multi-employer” bargaining unit consisting of employees from Miller & Anderson and temporary employees from a staffing company. This matter is important to manufacturers because a bargaining model where one entity has no employment relationship with all bargaining unit employees creates conflicting interests that are disruptive to productive bargaining. The NAM’s brief argued that any bargaining unit seeking to include employees employed solely by one of the constituent entities that comprise a joint employer is, of necessity, a multi-employer unit, which requires consent of both employers. The National Labor Relations Board decided that the union was not required to obtain consent from both employers and that it would apply traditional community-of-interest factors to determine if such a joint union is appropriate.


Related Documents:
NAM brief  (September 18, 2015)

 

In re Space Exploration Technologies Corp. (Dept. of Labor Admin. Rev. Bd.) -- 2016

Scope of Davis-Bacon Act coverage when government property is involved

The NAM filed an amicus brief supporting Space X in its challenge against an extension of the scope of Davis-Bacon Act coverage. The Department of Labor (DOL) alleged that because the lessor, SpaceX, was located on government property, Space X was therefore subject to the prevailing wage requirements of the Davis-Bacon Act. If left unchecked, the DOL’s attempt to apply the Davis Bacon Act to the private construction industry would have had a significant and potentially negative impact on private industry, the government and the economy. The NAM’s brief argued that the DOL’s application of the rule to a private construction project is contrary to the language of the act and that the DOL’s interpretation was an improper attempt to expand the scope of the Davis-Bacon Act into the private construction industry. The National Labor Relations Board remanded this case to the DOL’s Wage and Hour Division for further proceedings.


Related Documents:
NAM amicus brief  (February 18, 2014)

 

In re The Boeing Company (NLRB) -- 2016

Camera-enabled devices in non-restricted areas

The NAM filed an amicus brief with the National Labor Relations Board (NLRB) supporting an employer’s right to properly manage its workforce during employee demonstrations and to adequately safeguard its manufacturing processes. The plaintiffs alleged that Boeing violated the National Labor Relations Act (the Act) by videotaping employee marches within production facilities on four separate occasions and that Boeing violated the Act when it promulgated and maintained a procedure prohibiting use of employees’ personal camera-enabled devices on site without a valid camera permit approved by security. If upheld, this decision would have significantly infringed on an employer’s ability to safeguard proprietary materials and monitor employee safety. The NAM’s brief argued that 1) photographing or videotaping employees on company premises did not violate the Act because Boeing maintained legitimate reasons to observe the marches; and 2) similarly, the restriction of camera enabled devices on company property did not violate the Act because Boeing had a legitimate business need to protect its manufacturing process. The NLRB concluded that Boeing violated the Act by videotaping employee marches but lawfully maintained a no-camera rule that prohibited employees from using camera-enabled devices.


Related Documents:
NAM brief  (June 12, 2014)

 

International Union of Painters v. Great Wash Park LLC (Nevada S. Ct.) -- 2016

Trespass is not protected union activity

The NAM filed an amicus brief supporting the rights of property owners to access state courts in a dispute regarding third-party trespassers. The owner sought relief from trespass, under state law in a Nevada trial court after the defendants, a labor organization, used projection bombing to beam giant images onto the owner’s property. Effective trespass laws are necessary to protect property owners from trespass. The NAM’s brief argued that 1) the “photobombers” effectively took control of the physical space on which the image was displayed; 2) that state law property claims are not preempted by federal labor laws; 3) labor speech is not privileged over other types of speech; and 4) projection onto private property not only constitutes trespass but also takes property owners’ fundamental ownership rights. Unfortunately, the Nevada Supreme Court declined to hear this appeal.


Related Documents:
NAM brief  (September 2, 2015)

 

Macy's, Inc. v. NLRB (5th Circuit) -- 2016

Fifth Circuit case to reverse micro-unit determination

The NAM filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit supporting Macy’s, Inc., in a collective bargaining dispute. In this case, the National Labor Relations Board applied the Specialty Healthcare standard to conclude that sales employees in the fragrance and cosmetic departments at a Macy’s location were an appropriate bargaining unit. This litigation is important to manufacturers because smaller bargaining units will render it virtually impossible for an employer to oppose the organizing effect and make it more difficult to address employee concerns. The NAM’s brief argued that the application of the Specialty Healthcare doctrine, which reversed 70 years of precedent and instated a new standard for determining a collective bargaining unit, should not apply because the standard is inconsistent with the National Labor Relations Statue and the legislative history. Unfortunately, the court upheld the Specialty Healthcare standard.


Related Documents:
NAM brief  (April 27, 2015)

 

Nestle Dreyer's Ice Cream Co. v. National Labor Relations Board (4th Circuit) -- 2016

Overturning the NLRB's "overwhelming community of interest" test for bargaining units

The NAM filed an amicus brief in the U.S. Court of Appeals for the Fourth Circuit supporting Nestle Dreyer's Ice Cream Co. (Dreyer) in a collective bargaining dispute after the lower court held that Dreyer’s technical refusal to bargain violated the National Labor Relations Act (the Act). The litigation followed Dreyer’s refusal to bargain after the National Labor Relations Board’s (NLRB) certification of the petitioned-for unit, which consisted solely of maintenance employees. This case is important because to simply allow the instant certification of a maintenance-only unit would be a disservice to employers, employees and orderly collective bargaining. The NAM’s brief argued that the court should reverse the NLRB’s decision because the NLRB1) erroneously failed to give proper consideration to the bargaining history that included a broader unit of maintenance and production employees; 2) relied on the “overwhelming community of interest” test announced in Specialty Healthcare, which was inconsistent with prior doctrine; and 3) Incorrectly made the extent of organization a controlling factor in unit determination. The court denied Nestle Dryer’s petition for review.


Related Documents:
NAM brief  (January 13, 2015)

 

Tyson Foods, Inc. v. Bouaphakeo (U.S. Supreme Court) -- 2016

Uninjured class members should be excluded

The NAM filed an amicus brief with the U.S. Supreme Court in a class action litigation urging the Court to determine whether a certified class may include uninjured claimants. The plaintiffs sued Tyson foods alleging injury and damages under the Fair Labor Standards Act (FLSA) and seeking overtime wages for time spent dressing and removing protective gear; however, the plaintiffs used statistical modeling to create a fictional plaintiff as the basis of class certification. The rise of no injury class plaintiffs is troublesome to manufacturers because it subjects them to increased litigation from plaintiffs who can hide the deficiencies of individual class member claims. The NAM’s brief urged the Supreme Court to set a bright-line rule against the inclusion of uninjured class members and argued that individuals without injuries do not have a claim. The Supreme Court affirmed the lower court’s ruling but did so on narrow grounds and did not reach the issue that was central to the NAM’s amicus brief.


Related Documents:
NAM amicus brief  (August 14, 2015)
NAM amicus brief  (April 20, 2015)

 

Volkswagen Group of Am., Inc. v. United Auto Workers, Local 42 (NLRB) -- 2016

Application of Specialty Healthcare to maintenance employee micro unit

The NAM filed an amicus brief with the National Labor Relations Board supporting Volkswagen in a collective bargaining dispute with the United Auto Workers (UAW). The UAW brought the complaint after Volkswagen opposed the creation of a micro-bargaining unit exclusively for maintenance employees. UAW argued that because maintenance employees “share a unique function” they are readily identifiable and therefore should be recognized as a bargaining unit. This litigation is important to manufacturers because multiple bargaining agreements make it difficult to address employee concerns. The NAM’s brief argued that the application of the Specialty Healthcare doctrine, which reversed 70 years of precedent and instated a new standard for determining a collective bargain unit should not apply because the standard is inconsistent with the statute and the legislative history and that the decision in this case fails to even comply with the standard as set forth in Specialty Healthcare. The NLRB rejected Volkswagen’s request for review, but the case was appealed to the U.S. Court of Appeals for the D.C. Circuit, which remanded the case for reconsideration.


Related Documents:
NAM brief  (December 23, 2015)

 

In re Loestrin 24 FE Antitrust Litigation (1st Circuit) -- 2016

Supporting patent dispute settlements as pro-competitive

The NAM filed an amicus brief in a pharmaceutical patent litigation settlement dispute to urge the appellate court to affirm a district court ruling allowing a patent litigation settlement agreement between a brand manufacturer and two generic pharmaceutical manufacturers. The plaintiffs alleged that the settlement agreement violated antitrust laws, although the agreement allowed the generic manufacturers to enter the market before the patent expired. This case is important to manufacturers across the economy that rely on flexibility in settling patent disputes to avoid expensive and unnecessary litigation. The NAM’s brief argued that courts must ensure that a challenge to a settlement agreement is actually plausible before allowing the case to proceed and that plaintiffs must allege enough facts to make an overall anticompetitive effect plausible. The appeals court, however, vacated the district court's decision and remanded the case for the district court to decide the issue of the application of the plausibility standard.


Related Documents:
NAM amicus brief  (August 27, 2015)

 

SmithKline Beecham Corp. v. King Drug Co. (U.S. Supreme Court) -- 2016

Antitrust scrutiny of patent litigation settlements

The NAM filed an amicus brief in a pharmaceutical patent litigation settlement dispute urging the U.S. Supreme Court to resolve uncertainty regarding the kinds of settlements that can trigger lawsuits. The plaintiffs appealed a settlement between a brand pharmaceutical manufacturer and a generic pharmaceutical manufacturer after the parties settled patent litigation using a procompetitive licensing arrangement. This case is important because manufacturers rely on settlements to avoid unnecessary litigation. The NAM’s brief argued that 1) patent owners should be allowed to reach reasonable agreements with competitors to settle their disputes; 2) third parties should not be allowed to appeal the settlement by merely alleging that the settlement contains a specific licensing arrangement; and 3) parties must not be forced to choose between lengthy and expensive patent litigation if they do not settle a patent challenge and lengthy and expensive antitrust litigation if they do. The Court declined to hear this appeal.


Related Documents:
NAM brief  (March 31, 2016)

 

Alliance of Automobile Manufacturers, Inc. v. Currey (U.S. Supreme Court) -- 2016

Prohibition on recovering state-imposed dealer costs

The NAM filed an amicus brief urging the U.S. Supreme Court to reverse the U.S. Court of Appeals for the Second Circuit’s affirmation of the dismissal of claims against Connecticut’s protectionist automobile dealer state legislation. The issue in this litigation is whether Connecticut’s prohibition on manufacturers from raising prices in Connecticut to account for added costs imposed by the state violates the Dormant Commerce Clause. This litigation is important because protectionism is anticompetitive, inconsistent with innovation and advancement, and harmful to consumers. The NAM’s brief argued that Connecticut’s legislation is protectionist and therefore anticompetitive, harms consumers and is implemented solely for the benefit of in-state dealers. Unfortunately, the Supreme Court declined review.


Related Documents:
NAM brief  (November 9, 2015)

 

Amato v. Crane Co. (Pennsylvania Supreme Court) -- 2016

Standard of liability in failure-to-warn asbestos case

The NAM filed an amicus brief urging the Pennsylvania Supreme Court to adopt modern product liability standards already followed by most other state courts. The issue was what legal standard applies to determine liability in failure to warn cases and whether juries in design defect cases should be allowed to consider whether a product was “unreasonably dangerous.” This litigation increases uncertainty for Pennsylvania manufacturers as to their obligations to warn consumers when products are not unreasonably dangerous. The NAM’s brief argued that juries should be permitted to consider what a manufacturer knew about a particular danger in strict liability failure to warn cases as is allowed in modern product liability standards followed by a majority of state courts. Unfortunately, the court dismissed the appeal and did not reach a decision.


Related Documents:
NAM brief  (March 14, 2016)

 

CertainTeed Corp. v. Fletcher (Georgia Supreme Court) -- 2016

Liability of manufacturers for take-home occupational exposure of customer's employee to asbestos

The NAM filed an amicus brief in the Georgia Supreme Court opposing the expansion of product liability law and the assertion of a duty to warn household members of workers who may come into contact with asbestos. The plaintiffs in this case sought to hold manufacturers liable for failing to warn third party household members of workers at companies that use their products about asbestos risks. If successful, the litigation would have set adverse precedent and expose manufacturers to unlimited liability in asbestos litigation. The NAM’s brief argued that product manufacturers owe no duty of care to third party household members of employees exposed to asbestos through contact with occupationally exposed workers or contact with their clothes. In a win for manufacturers, the court properly denied what would have been a dramatic expansion of product liability law.


Related Documents:
NAM brief  (March 14, 2016)

 

Davis v. Honeywell Int'l, Inc. (California Supreme Court) -- 2016

Any exposure theory of asbestos liability

The NAM filed an amicus brief urging the California Supreme Court to ensure that rules applied to asbestos and other toxic tort cases are consistent with well-established tort law, sound science and good policy. This case is an appeal from a lower court decision that violated these principles by permitting liability based on questionable causation testimony, which is rejected by an increasing number of courts. This case is important because manufacturers should receive fair trials, based in sound legal rules that are consistent with well-established tort law. The NAM’s brief urged the court to clarify the evidence needed to satisfy the “substantial factor” in causing the plaintiff’s injury and reject the “any exposure” theory as a basis for asbestos causation because that theory does not meet the legal requirements for exposure liability, is unfair to defendants, and encourages excessive lawsuits. Unfortunately, the court denied the petition for review.


Related Documents:
NAM brief  (April 29, 2016)

 

Dummitt v. A. W. Chesterton (New York Court of Appeals) -- 2016

Duty to warn about hazards in products made by other manufacturers

The NAM filed an amicus brief in an asbestos litigation suit to oppose imposing manufacturer liability for failure to warn purchasers about potential harms from exposure to asbestos-containing products created by others when used in conjunction with the manufacturer’s product. A ship worker claimed exposure to asbestos from repairing valves and secured a judgment against a manufacturer of metal parts on the theory that the manufacturer should have warned that asbestos was hazardous, although the company neither installed the asbestos components, nor required the use of asbestos to properly operate the valves. This case could open the door for a new round of legal cases that would hold manufacturers who did not manufacture a product containing asbestos liable. The NAM’s brief argued that the litigation runs contrary to well settled law that manufacturers are not liable for failure to warn about hazards from other products except in very limited circumstances and that the court should follow other courts which have held that manufacturers are not liable for harms caused by post sale addition of asbestos containing replacement parts. Unfortunately, the court did not agree with NAM’s arguments.


Related Documents:
NAM amicus brief  (October 8, 2014)

 

Haver v. BNSF Ry. Co. (California Supreme Court) -- 2016

Liability for take-home exposure to asbestos

The NAM filed an amicus brief urging the court to reject an extension of the duty of care to remote third parties in a California asbestos lawsuit. This was the second case before the California Supreme Court where the plaintiffs alleged that a duty of care extended to off-site contact by immediate family members, visitors, guests or others with whom an employee who was exposed to a hazardous substance may come into contact. Any imposition of a duty of care to third parties permit potentially limitless and indefinite liability. The NAM’s brief argued that there is no need to stretch tort law to provide a remedy to remote third parties and explained the impact of bankruptcies on tort defendants. The court held that it is reasonably foreseeable that workers exposed to asbestos fibers at work may act as carriers that could harm household members; therefore, employers or the owner of the property where the employee worked are liable for any injuries caused by asbestos.


Related Documents:
NAM brief  (March 11, 2015)

 

Kesner v. Superior Court (California Supreme Court) -- 2016

Liability for take-home exposure to asbestos

The NAM filed an amicus brief urging the court to reject an extension of the duty of care to remote third parties in a California asbestos lawsuit where the plaintiffs alleged that a duty of care extended to off-site contact by immediate family members, visitors, guests, or others with whom an employee who was exposed to a hazardous substance may come into contact. Any imposition of a duty of care to third parties imposes potentially limitless and indefinite liability. The NAM’s brief argued that there is no need to stretch tort law to provide a remedy to remote third parties and explained the impact of bankruptcies on tort defendants. The court held that it is reasonably foreseeable that workers exposed to asbestos fibers at work may act as carriers that could harm household members; therefore, employers or the owner of the property where the employee worked are liable for any injuries caused by asbestos.

 

Linert v. Ford Motor Co. (Ohio Supreme Court) -- 2016

Post-sale duty to warn

The NAM filed an amicus brief urging the Ohio Supreme Court to reverse a lower court decision that imposed a post-marketing duty to warn consumers based on post-sale safety improvements. This is an appeal of a lower court decision requiring a manufacturer to warn consumers, post-sale, of any known risk in using a product, including instances where the product is not defective, the risk of harm is unlikely and insubstantial, and the risk asserted is the difference between the product and a newer improved product. If upheld, this decision could disincentivize product improvements. The NAM’s brief argued that a post-marketing duty to warn requires consideration of the likelihood and seriousness of potential harm, not merely that there is any known risk, and that the decision to penalize manufacturers with mandatory warnings for product improvements also amounts to a court-crafted “innovation tax.” In a win for manufacturers, the court held that manufacturers do not have a post-sale duty to warn about risks associated with a product that are not discovered until after the product has been sold and that are not likely to pose a serious risk.


Related Documents:
NAM amicus brief  (August 17, 2015)

 

Occidental Chemical Corporation v. Jenkins (Texas Supreme Court) -- 2016

Forever liability for improvements to real estate

The NAM filed two amicus briefs rejecting an expansion of the duty of care and urging the Texas Supreme Court to reject “perpetual liability” after a lower court imposed that liability on a former owner of real property. This is an appeal from a lower court decision imposing liability on the former owner of a chemical manufacturing plant, Occidental Chemical Corporation, for plaintiff’s injury while operating plant machinery, even though the injury occurred after Occidental sold the plant. If upheld, the decision would have caused Texas business and property owners significant uncertainty and introduced an unprecedented expansion of litigation risk for “negligence,” even if a personal injury occurred long after the owner relinquished control of the property. The NAM’s briefs argued that the lower court’s decision broke from clearly established Texas law and set a dangerous precedent that weakened Texas’s robust manufacturing economy. In a win for manufacturers, the Texas Supreme Court ruled that Occidental breached no duty of care to Jenkins.


Related Documents:
NAM brief  (February 13, 2015)
NAM amicus letter  (April 24, 2014)

 

Rost v. Ford Motor Co. (Pennsylvania Supreme Court) -- 2016

Challenging "any exposure" theory in asbestos case

The NAM filed an amicus brief urging the Pennsylvania Supreme Court to reverse a trial court judgment that allowed expert testimony on asbestos causation without requiring an assessment of the dose required to cause injury or identifying how much exposure occurred. The plaintiff, a maintenance worker doing non-asbestos work thirty feet from brake repair work involving asbestos, alleged that his proximity to the brake repair work was sufficient evidence of causation. His expert witness also testified that such proximity is sufficient to prove causation. The NAM’s amicus brief argued that experts should not be allowed to speculate that any exposure is enough to find liability and that the plaintiffs experts failed both steps of a causation assessment: identifying how much exposure occurred and citing to competent studies. Unfortunately, the court upheld the trial court’s judgment.


Related Documents:
NAM amicus brief  (January 20, 2015)

 

Scapa Dryer Fabrics, Inc. v. Knight (Georgia Supreme Court) -- 2016

"Any exposure" liability

The NAM filed an amicus brief challenging attempts by the trial bar to reduce or eliminate the legal requirement that a plaintiff prove a defendant actually caused his or her injury and urging the court to ensure that legal rules applied to asbestos and other toxic tort cases are consistent with well-established tort law, sound science and good policy. This case is an appeal of a trial court decision which permitted a witness to testify that any exposure to a hazardous substance in excess of background levels is a substantial contributing factor in the development of mesothelioma. This litigation is important to manufacturers because loose expert testimony standards often result in jury verdicts that are out of touch with sound science and tort principles. The NAM’s brief argued that a plaintiff’s experts must demonstrate, through a competent scientific assessment, that the plaintiff received a dose sufficient to cause the disease at issue and that a trial judge should not perform the role of experts, including assisting the jury in determining how much exposure from a particular workplace event is enough. In a win for manufacturers, the court held that any exposure to a hazardous material like asbestos is insufficient to prove that the exposure caused an injury.


Related Documents:
NAM amicus brief on the merits  (October 21, 2015)
NAM amicus brief supporting review  (May 19, 2015)

 

Suttner v. Crane Co. (New York Court of Appeals) -- 2016

Duty to warn about hazards in products made by other manufacturers

The NAM filed an amicus brief in an asbestos litigation suit to oppose imposing manufacturer liability for failure to warn purchasers about potential harms from exposure to asbestos-containing products created by others when used in conjunction with the manufacturer’s product. A former employee of an automobile component manufacturer claimed exposure to asbestos from repairing valves and secured a judgment against a manufacturer on the theory that the manufacturer should have warned that asbestos was hazardous, although the company neither installed the asbestos components, nor required the use of asbestos to properly operate the valves. This case could open the door for a new round of legal cases that would hold manufacturers who did not manufacture a product containing asbestos liable. The NAM’s brief argued that the litigation runs contrary to well settled law that manufacturers are not liable for failure to warn about hazards from other products except in very limited circumstances and that the court should follow other courts which have held that manufacturers are not liable for harms caused by post sale addition of asbestos containing replacement parts. Unfortunately, the court did not agree with NAM’s arguments.


Related Documents:
NAM brief  (June 19, 2015)

 

Lindenberg v. Jackson Nat'l Life Ins. Co. (W.D. Tenn.) -- 2016

Limiting excessive punitive damages awards

The NAM filed an amicus brief supporting manufacturers’ rights and urging a Tennessee court to uphold a state statutory limit on excessive punitive damages. This litigation arises from a 2011 Tennessee General Assembly decision to adopt reasonable limits on punitive damage awards. Without a statutory limit on punitive damages, businesses are at a risk of significant and unwarranted liability exposure. The NAM’s brief argued that the statutory enactment is within the legislature’s authority to render public policy decisions and that the legislature’s decision furthers the legislative interest in facilitating a balanced and fair civil justice system. On remand, the district court found that the law is consistent with the right to jury trial and separation of powers under the Tennessee Constitution.


Related Documents:
NAM brief  (July 5, 2016)

 

Lindenberg v. Jackson Nat'l Life Ins. Co. (Tennessee Supreme Court) -- 2016

Limiting excessive punitive damages awards

The NAM filed an amicus brief urging the Tennessee Supreme Court to uphold a statutory limit on excessive punitive damages awards. The policy was implemented as a result of the expanding availability, size and unpredictability of those awards. Businesses are at a risk of significant and unwarranted liability exposure without a statutory limit on punitive damages. The NAM’s brief argued that statutory limits are needed to temper the expansion of punitive damages awards and that not only is the statutory limit on punitive damages constitutional, but it also promotes public confidence in the civil justice system and promotes sound economic policy. The Tennessee Supreme Court did not decide the constitutionality of the statute but remanded the case back to the lower court, which found that the law is consistent with the right to jury trial and separation of powers under the Tennessee Constitution.


Related Documents:
NAM amicus brief  (April 15, 2016)

 

Lompe v. Sunridge Partners, LLC (10th Circuit) -- 2016

Considerations of wealth of defendant when assessing punitive damages

The NAM filed an amicus brief arguing against consideration of a defendant’s wealth when determining whether punitive damages exceed constitutional limits. A lower court assessed punitive damages of $22.5 million, a sum above U.S. Supreme Court precedent, against an apartment owner and manager for injuries resulting from carbon monoxide poisoning from a faulty furnace. Caps on punitive damages are necessary to safeguard against excessive jury awards that negatively impact shareholders, customers and employees. The NAM’s brief argued that 1) courts should not use evidence of wealth to increase the constitutional limit of a jury’s punitive damages award; 2) evidence of wealth does not provide a consistent or meaningful measure for evaluating the constitutionality of a punitive damages award; and 3) if wealth is relevant, it is a mitigating factor or limited to cases where the defendant’s wealth stems from the conduct that harmed the plaintiff. The U.S. Court of Appeals for the Tenth Circuit reduced the size of the punitive damages award using the factors outlined by the U.S. Supreme Court.


Related Documents:
NAM amicus brief  (April 17, 2015)

 

In re Avandia Mktg. (U.S. Supreme Court) -- 2016

What constitutes an injury under RICO

The NAM filed a brief urging the U.S. Supreme Court to review a case involving Racketeer Influenced and Corrupt Organizations Act (RICO) claims by third-party payors seeking damages reimbursement of monies spent for prescriptions. The plaintiffs’ lawsuit sought damages, even though the product worked and no physical injuries occurred, and argued that they overpaid for the drug in comparison to other alternatives because certain risks were not disclosed. If courts allow RICO claims against pharmaceutical manufacturers, the potential liability could chill the development of new medications and cause manufacturers uncertainty about the proper standard for causation under RICO. The NAM’s brief argued that further guidance is needed because of the uncertainty about the proper standard for causation under RICO, which incentivizes abusive, speculative and burdensome litigation against manufacturers of all kinds. Unfortunately, the Supreme Court declined to review the case.


Related Documents:
NAM brief  (March 10, 2016)

 

Elliott v. General Motors LLC (2nd Circuit) -- 2016

Validity of bankruptcy sale of assets "free and clear"

The NAM filed an amicus brief urging the U.S. Court of Appeals for the Second Circuit to review an adverse bankruptcy ruling, which held that the new General Motors (GM) may be responsible for claims from the old GM if the claimants did not receive adequate notice of the sale order in the bankruptcy proceeding. This litigation queries whether the new GM is still responsible, five years later, for accident claims and economic loss claims arising from an ignition switch defect. The bankruptcy ruling undermines the price companies reorganized in bankruptcy can obtain when selling their assets and discourages potential buyers from purchasing the assets of such companies. The NAM’s brief argued that the ruling undermines the “free and clear nature” of the bankruptcy code and imposed liability on a good faith purchaser for the debtor’s violations. Unfortunately, the Second Circuit held that the new GM may be responsible for claims that did not receive adequate notice of the sale order in the bankruptcy proceeding.


Related Documents:
NAM amicus brief  (August 10, 2016)

 

Gillette Co. v. California Franchise Tax Board (U.S. Supreme Court) -- 2016

Challenging California's partial withdrawal from Multistate Tax Compact

The NAM filed an amicus brief urging the U.S. Supreme Court to review the state of California’s decision to partially withdraw from the Multistate Tax Compact. The Compact creates a uniform system of taxation for companies with business in multiple states. The decision to withdraw from the pact harms manufacturers who chose to expand into California based on the predictable and uniform system of taxation by states that have agreed to the Multistate Tax Compact. The NAM’s brief argued that the Compact does not allow partial withdrawal from the Compact’s obligations and that manufacturers have relied on the Compact as a source of predictable taxation rules. Unfortunately, the Court declined to hear the review.


Related Documents:
NAM amicus brief  (June 30, 2016)

 

Kimberly-Clark Corp. v. Minnesota Comm'r of Rev. (U.S. Supreme Court) -- 2016

Challenging Minnesota's partial withdrawal from Multistate Tax Compact

The NAM filed an amicus brief urging the U.S. Supreme Court to review the state of Minnesota’s decision to repudiate some of the Multistate Tax Compact’s provisions. That decision is at odds with the Compact’s language, which sets forth that a state may withdraw only by repealing the Compact in its entirety. The lower court held that Minnesota’s decision to repudiate some of the Compact’s provisions was permissible because when a state becomes a member of the Compact, it makes no “unmistakable promise” to abide by all of the Compact’s terms. That decision seriously undermines the predictability and uniformity of state taxation. The NAM’s brief argued that 1) long-term tax predictability is of immense business importance; 2) the Multistate Tax Compact offers such predictability and uniformity; and 3) that Minnesota should honor the agreement it joined. Unfortunately, the Court declined to hear the case.


Related Documents:
NAM amicus brief  (November 28, 2016)

 


Young v. Bryco Arms, Inc. (Illinois Supreme Court) -- 2004

Public Nuisance

The Illinois Supreme Court ruled 11/18/04 that a public nuisance theory of liability cannot be used against a company that lawfully manufactures and non-negligently sells products -- here, handguns – when there is an intervening transfer of the product to a third party and that person criminally misuses the product. The case had threatened to undermine the ability of any manufacturer to produce and sell products that are lawful and non-defective, simply because they may be criminally misused by some remote possessor of the product, even many years after the original sale by the manufacturer. Most courts have rejected the public nuisance theory in such cases, but a few troubling jurisdictions that are allowing these cases to proceed could wreak havoc on manufacturers.

The Court based its ruling on the legal definition of public nuisance. The claim requires proof of a public right, the defendant’s substantial and unreasonable interference with that right, evidence that such interference proximately caused an injury, and the fact of an injury. Examining only the proximate causation issue, it ruled that the acts of the manufacturers do not constitute a legal cause of injury because the causation between their acts (manufacturing the products and selling them to dealers) and the ultimate injury was broken by the intervening criminal acts of third parties not under their control. Those criminal acts are not reasonably foreseeable, just as it is not reasonably foreseeable that an automobile owner who lends his car to another would reasonably expect that person to lend it to a third person who will use it to commit a crime. Any other rule would make the manufacturer of a car liable for the acts of anyone who drove the car, a strict liability rule that is goes beyond reasonable foreseeability. In this case, some of the guns used in the crimes went through six or eight sets of hands before reaching the ultimate criminal users.

The court recognized the highly regulated nature of the firearms industry, and concluded that legal liability for the misuse of guns is a legislative decision and is not within the province of the judicial branch to create.

The NAM filed an amicus brief 3/26/03 urging the Illinois Supreme Court to rule the way it did.

 

Alliant Energy Corp. v. Bridge (U.S. Supreme Court) -- 2004

Wisconsin regulation of out-of-state acts by utility holding companies

The NAM, the Edison Electric Institute, the American Gas Assn., and the National Assn. of Water Companies filed a joint amicus brief supporting review and reversal of a Seventh Circuit decision that allows state regulation of out-of-state investments and transactions of public utility holding companies. The law prohibits investors from buying stock without state approval and blocks the company from owning 25% or more of non-utility assets. The Court declined to review this case on 1/12/04.

 

SEC v. Edwards (U.S. Supreme Court) -- 2004

Definition of securities

The Supreme Court 1/13/04 held unanimously that “an investment scheme promising a fixed rate of return can be an ‘investment contract’ and thus a ‘security’ subject to the federal securities laws.” In the case before the Court, investors had purchased payphones from a promoter’s subsidiary and had leased them back to the promoter in exchange for promises of fixed monthly payments. The Court reaffirmed that a contract is an “investment contract” if it “involves an investment of money in a common enterprise with profits to come solely from the efforts of others.” This definition encompasses “the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” The appropriate focus is the promise of “profits” in the form of a financial return – whether fixed or variable – to the investor. The profits to the investor can be expected “to come solely from the efforts of others” even if the promised return is guaranteed by contract and does not depend upon the profitability of the investment scheme as a whole. This decision is important to all businesses engaged in activities that are, or could be, subject to SEC oversight.

 

Florida Power & Light Co. v. United States (Federal Circuit) -- 2004

Highway excise tax

The NAM is a member of the Mobile Machinery Coalition, which, along with the Edison Electric Institute, the National Rural Electric Cooperative Association and the American Gas Association, filed an amicus brief 10/24/03 supporting a challenge to a lower court interpretation that certain very heavy mobile equipment (with attached pintle hooks) is subject to substantial highway excise taxes. On 7/8/04, the Court ruled that there is no exemption from excise taxes for heavy mobile equipment with pintle hooks. Many pieces of mobile equipment are affected, including electric utility maintenance equipment, digger derricks, concrete pumpers and well-servicing equipment. The ruling affects not only annual excise taxes, but also federal fuel excise taxes, a twelve percent retail excise tax, and an excise tax on replacement tires, with a combined annual cost of hundreds of millions of dollars to industry. The Mobile Machinery Coalition is working on a legislative solution to this problem.

 

Lippe v. Bairnco Corp. (2nd Circuit) -- 2004

Unpublished opinions

The NAM sent a letter to the U.S. Court of Appeals for the Second Circuit saying that its decision in this asbestos bankruptcy case is important and should be published, so that it can be cited as precedent for other cases. The decision involved the point at which a company becomes insolvent, which occurs when its assets are less than its "probable liability" on existing debts as they become absolute and matured. According to the court, the future claims of persons exposed to asbestos -- but not yet symptomatic -- are not accrued tort claims and do not give rise to a debtor-creditor relationship under New York law. Thus, a company with numerous suits by asymptomatic asbestos claimants can continue to carry on its business without considering such claims as debts and without risking having payments made to others subject to challenge as "fraudulent" under the bankruptcy laws.

 

Smith v. City of Jackson (U.S. Supreme Court) -- 2005

Age discrimination includes disparate impact claims

The Supreme Court held 3/30/05 that the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. §§ 621-634, authorizes recovery on a so-called “disparate impact” theory, but that the scope of disparate impact liability under the ADEA is narrower than under Title VII of the Civil Rights Act of 1964. Four Justices interpreted the ADEA to authorize disparate impact claims, and Justice Scalia concluded that this interpretation has been adopted by the EEOC and is entitled to deference. Three Justices concluded that disparate impact claims are not cognizable under the ADEA, and the Chief Justice did not participate. In holding that the standards under the ADEA and Title VII are different, the Court concluded that its prior holding in Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989), which narrowly construed employers’ exposure to liability on a disparate impact theory under Title VII, applies to ADEA claims even though Title VII has been amended to supersede Wards Cove. The Court also emphasized the ADEA’s express provision that it is not unlawful for an employer to make a decision based on “reasonable factors other than age.” The Court explained that this reasonableness test does not include a “business necessity” test, which asks whether there are other ways for the employer to achieve its goals. In her concurring opinion, Justice O’Connor agreed that disparate impact claims, if allowed under the ADEA, are strictly limited to circumstances where the challenged employment practice is not rationally related to some legitimate business objective. Applying the ADEA standards to the case before it, the Court determined that the employee petitioners did not have an ADEA disparate impact claim against the respondent, the City of Jackson, which was represented by Jones Day. This case is important to any employer that may be sued under the ADEA.

Decision Below: 351 F.3d 153 (5th Cir. 2003).

 

National Association of Manufacturers v. FCC (D.C. Court of Appeals) -- 2005

Facsimile Advertisement Rules Petition for Reconsideration

The NAM and 7 other business associations petitioned the Federal Communications Commission 8/25/03 to reconsider the new "do not fax" rules. Business objections helped convince the FCC to begin a limited reconsideration of the review on 8/18, and to extend the effective date of the fax provisions until Jan. 1, 2005. Our petition pointed out that affected parties were not given adequate notice of the proposed rule change, that the record was inadequate to support the change, that there would be dramatic effects on our associations and our members, that the rule did not properly address potential costs as required by the Regulatory Flexibility Act of 1980, that the FCC exceeded its statutory authority to require written consent to send faxes and that the rule violated First Amendment free speech rights. The FCC failed to act on this petition, but passage of the Junk Fax Prevention Act of 2005 solved many of the compliance problems identified in our petition.

 

Petition for Reconsideration of Facsimile Advertisement Rules (FCC) -- 2005

"Do not fax" rules

The NAM and 7 other business associations petitioned the Federal Communications Commission 8/25/03 to reconsider the new "do not fax" rules. Business objections helped convince the FCC to begin a limited reconsideration of the review on 8/18, and to extend the effective date of the fax provisions until Jan. 1, 2005. Our petition pointed out that affected parties were not given adequate notice of the proposed rule change, that the record was inadequate to support the change, that there would be dramatic effects on our associations and our members, that the rule did not properly address potential costs as required by the Regulatory Flexibility Act of 1980, that the FCC exceeded its statutory authority to require written consent to send faxes and that the rule violated First Amendment free speech rights. Petition. The FCC failed to act on this petition, but passage of the Junk Fax Prevention Act of 2005 solved many of the compliance problems identified in our petition.

 

United States v. Olson (U.S. Supreme Court) -- 2005

Federal Tort Claims Act, liability of government for mine inspection

The Supreme Court held 11/8/05 that the Federal Tort Claims Act’s authorization of private tort actions against the United States “under circumstances where the United States, if a private person, would be liable to the claimant,” 28 U.S.C. § 1346(b)(1) (emphasis added), does not extend to situations in which a state or municipal entity would instead be liable. The Court rejected the Ninth Circuit’s conclusion to the contrary in cases where “unique governmental functions” such as mine inspections are at issue. Because the Ninth Circuit also erred in concluding that no private-sector analogies exist for mine inspections, the Court remanded the case for consideration of whether under state law a private person in like circumstances would be liable. This case is important to all businesses subject to federal agencies’ inspections similar to those at issue here.

Decision Below: 362 F.3d 1236 (9th Cir. 2004)

 

Martin v. Franklin Capital Corp. (U.S. Supreme Court) -- 2005

Attorney’s fees

The Supreme Court, in the first opinion authored by Chief Justice Roberts since he joined the Court, held 12/7/05 that when a federal district court remands a case to state court despite the defendant’s objectively reasonable basis for seeking removal, the district court should not award attorney’s fees absent unusual circumstances. Under 28 U.S.C. § 1441, a defendant may generally remove a civil case commenced in state court to federal district court if the case could have been brought in federal court originally. But if the federal court subsequently determines that it lacks jurisdiction, the case must be remanded, and the remand order “may require payment” of attorney’s fees “incurred as a result of the removal.” 28 U.S.C. § 1447(c). In determining when attorney’s fees should be awarded under this provision, the Supreme Court stressed Congress’ twin desires to (1) afford defendants a right to remove when the statutory criteria are satisfied; while (2) deterring improper removals sought merely to delay litigation and impose costs on the plaintiff. Thus, the Court held that, absent unusual circumstances—such as a plaintiff’s delay in seeking remand or failure to disclose facts necessary to determine jurisdiction—a district court may award attorney’s fees under § 1447(c) only where the removing party had no objectively reasonable basis for seeking removal. This case is important to businesses involved in litigation that may be subject to removal.

Decision Below: 393 F.3d 1143 (10th Cir. 2004)

 

FCC v. Brand X Internet Services (U.S. Supreme Court) -- 2005

Deference to agency determinations

The Supreme Court decided 6/27/05 that the Federal Communications Commission acted lawfully when it classified cable modem service as an “information service,” subject to minimal regulation under the Communications Act of 1934, and not also as a “telecommunications service.” In the decision under review, the Ninth Circuit declined to defer to the FCC’s interpretation of the Act, because that interpretation conflicted with circuit precedent. The Supreme Court held, however, that a court’s prior interpretation of a statute does not trump an agency construction otherwise entitled to Chevron deference. The only exception is when the earlier court decision holds that a statute is clear and no room is left for agency discretion. Here, the FCC’s interpretation of “telecommunications service” as not encompassing cable broadband is entitled to deference, because the Act is ambiguous as to what it means to “offer” telecommunications and the FCC made a reasonable policy choice. This decision is important to any business regulated under the Communications Act, and to all businesses affected by agency interpretations of statutes.

Decision Below: 345 F.3d 1120 (9th Cir. 2004). Case # 04-277, National Cable & Telecom Association v. Brand X Internet Services.

 

National Cable & Telecom Association v. Brand X Internet Services (U.S. Supreme Court) -- 2005

Deference to agency determinations

The Supreme Court decided 6/27/05 that the Federal Communications Commission acted lawfully when it classified cable modem service as an “information service,” subject to minimal regulation under the Communications Act of 1934, and not also as a “telecommunications service.” In the decision under review, the Ninth Circuit declined to defer to the FCC’s interpretation of the Act, because that interpretation conflicted with circuit precedent. The Supreme Court held, however, that a court’s prior interpretation of a statute does not trump an agency construction otherwise entitled to Chevron deference. The only exception is when the earlier court decision holds that a statute is clear and no room is left for agency discretion. Here, the FCC’s interpretation of “telecommunications service” as not encompassing cable broadband is entitled to deference, because the Act is ambiguous as to what it means to “offer” telecommunications and the FCC made a reasonable policy choice. This decision is important to any business regulated under the Communications Act, and to all businesses affected by agency interpretations of statutes.

Decision Below: 345 F.3d 1120 (9th Cir. 2004). See also, Case # 04-281, FCC v. Brand X Internet Services

 

Arthur Andersen LLP v. United States (U.S. Supreme Court) -- 2005

Obstruction of a proceeding through use of document retention policy

The Supreme Court 5/31/05 held that 18 U.S.C. § 1512(b)(2)(A) and (B), an obstruction of justice statute, is not violated unless the defendant is conscious of his wrongdoing and has in mind a “particular official proceeding” that his conduct will obstruct. The Court held that flawed instructions were given to the jury that convicted Arthur Anderson of violating the statute, which prohibits “knowingly . . . corruptly persuad[ing]” another person “with intent to . . . cause” that person to “withhold” documents from, or “alter” documents for use in, an “official proceeding.” The Court noted that it is “not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.” Focusing on the statute’s “knowingly . . . corruptly persuades” language, the Court held that the government was required to prove that Andersen was conscious of its wrongdoing. The Court rejected jury instructions that excluded a need to show “dishonesty” and that permitted a conviction if Andersen intended simply to “impede” the government’s fact-finding ability by enforcing a document retention policy. Finally, the Court held that the district court erred in leading the jury to believe that a conviction did not require a finding of any nexus between the “persuasion” to destroy documents and any particular proceeding. The Court reasoned that a “knowingly . . . corrup[t] persuade[r]” cannot be someone who persuades another to shred documents under a document retention policy without having in mind any particular official proceeding in which those documents might be material. This case is important to any business with a document retention policy that may face a government investigation and any business that must comply with the document retention requirements imposed by federal law following enactment of the Sarbanes-Oxley Act. Decision Below: 374 F.3d 281 (5th Cir. 2004).

 

Pasquantino v. United States (U.S. Supreme Court) -- 2005

Use of fraud statutes to enforce foreign tax claims

The Supreme Court held 4/26/05 that a scheme to defraud a foreign government of tax revenue violates the federal wire fraud statute, 18 U.S.C. § 1343. Petitioners, who were based in New York, carried out a scheme to avoid paying Canadian excise taxes by placing telephone orders for liquor with discount package stores in Maryland and then, after receiving the liquor, smuggling it into Canada. The Court held that petitioners' conduct fell within literal terms of the wire fraud statute, which prohibits the use of interstate wires to carry out "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises." First, Canada's right to the uncollected excise taxes, the Court concluded, was property, and petitioners' scheme was aimed at depriving Canada of this property. Second, the petitioners' failure to declare the liquor concealed in their cars was plainly a scheme designed to defraud the Canadian customs officials through misrepresentations. The Court also rejected the petitioners' alternative argument that the common-law "revenue rule" barred this prosecution. The "revenue rule" precludes one nation from enforcing the collection of tax obligations of other nations. The Court held that the present case did not fall within the ambit of the "revenue rule," because petitioners were not prosecuted to recover a foreign tax liability. Rather, this was a criminal prosecution brought by the United States in its sovereign capacity to punish domestic criminal conduct. This decision is important to any business that may be subject to foreign tax laws.

The NAM joined with the National Association of Criminal Defense Lawyers in two amicus briefs opposing the outcome. We argued that the mail and wire fraud statutes protect against crimes against property that is already in the hands of the victim, and that they should not be expanded to apply to the right of a foreign government to collect allegedly accrued but unassessed and uncollected taxes. This is another attempt by federal prosecutors to expand criminal law in the business context. Brief in support of petition (2/27/14); brief on the merits (6/29/04).

Decision Below: 336 F.3d 321 (4th Cir. 2003)

 

Aviall Services, Inc. v. Cooper Industries, Inc. (U.S. Supreme Court) -- 2005

Voluntary cleanup

The Supreme Court held 12/13/04 that a private party who has not been sued under Section 106 or 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9606 or 9607, may not obtain contribution under CERCLA Section 113(f)(1), 42 U.S.C. § 9613(f)(1), to recover amounts spent voluntarily remediating contaminated properties. The Court reasoned that Section 113(f)(1) limits a private party to seeking contribution “during or following any civil action” and that reading this provision to allow for contribution in the absence of a civil action to determine liability would render this limitation superfluous. Justice Ginsburg, joined by Justice Stevens, dissented on the ground that Section 107, which provides that persons responsible for cleanup costs under CERCLA “shall be liable for . . . necessary costs of response incurred by any other person,” should be read to create an implied right of action for contribution which is not limited by Section 113(f)(1) .

This case is important for any business that owns properties containing hazardous substances, or that has sold properties in the past to companies that might voluntarily undertake remediation.

Decision below: 312 F.3d 677 (5th Cir. 2002) (en banc).

 

Bates v. Dow Agrosciences LLC (U.S. Supreme Court) -- 2005

FIFRA preemption

The Supreme Court 4/27/05 clarified the extent of federal preemption stemming from the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. § 136. FIFRA, which regulates the use, sale and labeling of pesticides, provides that States "shall not impose or continue in effect any requirements for labeling of packaging in addition to or different from those required under this [Act]." The Court held that "[r]ules that require manufacturers to design reasonably safe products, to use due care in conducting appropriate testing of their products, to market products free of manufacturing defects, and to honor their express warranties or other contractual commitments plainly do not qualify as requirements for "labeling or packaging," even if those rules might induce manufacturers to alter product lables. Thus, FIFRA does not pre-empt a group of Texas peanut farmers' state law claims against a pesticide manufacturer for defective design, defective manufacture, negligent testing, and breach of express warranty. In contrast, the Court also concluded that "petitioners' fraud and negligent failure-to-warn claims are premised on common-law rules that qualify as "requirements for labeling or packaging." FIFRA therefore pre-empts those claims unless the corresponding requirements are equivalent to, and fully consistent with, FIFRA's labeling standards - a question to be resolved on remand. This decision is important to any business that is subject to FIFRA.

Decision Below: 332 F.3d 323 (5th Cir. 2003).

 

Massachusetts v. EPA (D.C. Circuit) -- 2005

EPA upheld in not regulating greenhouse gases as a pollutant

These cases were filed in 2003 by 12 states and various environmental and other organizations to force the Environmental Protection Agency to regulate greenhouse gases (carbon dioxide, methane, nitrous oxide and hydrofluorocarbons) from new motor vehicles as pollutants. The EPA and 10 other states opposed the suits, and the CO2 Litigation Group, of which the NAM is a member, intervened. On 7/15/05, the D.C. Circuit issued a splintered decision allowing the EPA to continue to decline to regulate greenhouse gases. Judge Randolph ruled that the EPA had discretion and a scientific justification not to regulate greenhouse gases, and, although Judge Sentelle refused to reach this issue, he ruled that the petitioners did not have standing to bring the case. Thus, the EPA’s decision stands. Judge Tatel dissented, arguing that the EPA does have the authority and has failed to give an adequate explanation for not regulating greenhouse gases. Whether the EPA is mandated by statute to regulate greenhouse gases is unresolved. It has declined to do so at this point. The NAM does not believe the EPA has this authority, nor is there sufficient evidence that emissions of greenhouse gases from domestic automobiles endanger public health or welfare.

 

New York v. EPA (D.C. Circuit) -- 2005

New Source Review regulations

The NAM is one member of a coalition of associations known as the NSR Manufacturers Roundtable which filed a motion 1/15/03 to intervene in a suit brought by NY, CT, ME, MD, MA, NH, NJ, RI and VT against the EPA's final regulation governing the procedures for companies to install stringent emission controls at their facilities under the Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR) provisions of the Clean Air Act. These states challenged the legality of EPA's rule, and the NSR Manufacturers Roundtable intervened to insure that the court considers the views of manufacturers and the effects of the rule on industry. The Roundtable includes the Alliance of Automobile Mfrs., the American Chemistry Council, the American Forest & Paper Assn., the American Iron and Steel Institute, American Petroleum Institute, the Council of Industrial Boiler Owners, National Mining Assn., the National Petrochemical & Refiners Assn., the Portland Cement Assn. and the NAM.

The NSR Manufacturers Roundtable’s first brief (filed 5/11/04) challenged EPA language in the rule’s preamble and argued that the statutory language, as well as the history of its enforcement, makes clear that the first step of the analysis of whether there is a change to an existing emissions unit at a stationary source is the requirement that the emitting capacity of the existing unit must be increased (i.e., that “new pollution” be created) by the change.

An 8/30/04 brief supported the EPA’s methodology for determining whether annual emissions have significantly increased.

The D.C. Circuit issued a mixed ruling on 6/24/05. It upheld some of the EPA’s decisions, vacated others, and rejected as not ripe industry’s challenge to the rule’s preamble language on the “actual-to-potential” methodology. The court’s main rulings are:

  • EPA may use past emissions and projected future actual emissions, rather than potential emissions, in measuring emissions increases;
  • EPA may use a 10-year lookback period in selecting the 2-year baseline period for measuring past actual emissions from sources other than utilities;
  • EPA may use a 5-year lookback period in certain circumstances for electric utilities;
  • EPA may abandon a provision authorizing states to use source-specific allowable emissions in measuring baseline emissions;
  • EPA may exclude increases due to unrelated demand growth from the measurement of projected future actual emissions;
  • EPA may implement the Plantwide Applicability Limitations (“PAL”) program;
  • EPA may not use the Clean Unit applicability test, which measures emissions increases by looking to whether “emissions limitations” have changed;
  • EPA may not exempt certain pollution control projects that decrease emissions of some pollutants but that cause collateral increases of others;
  • EPA may not waive recordkeeping requirements for sources making changes. EPA will have to justify or revise this waiver.
  •  

    United States v. Duke Energy Corp. (4th Circuit) -- 2005

    Permits for power plant repairs

    This case is about whether permits are required when power plant repairs are made to allow boilers to continue in service and operate for more hours than before the renovations. The EPA argued that these repairs were modifications that allowed the boilers to produce more emissions (albeit at the same rate per hour) than authorized by existing permits. Duke Energy argued that the definition of a modification that would necessitate a new permit includes only changes that increase the hourly emission rate, since that is the definition the EPA uses under its New Source Performance Standards (NSPS). The Fourth Circuit ruled 6/15/05 that the EPA cannot interpret the word “modification” two different ways when the statutes in which the word appears define it identically. Consequently, since the definition of modification under the NSPS only applies to changes that increase the hourly emission rate, no permit is required.

    This is a significant victory for any business that generates emissions regulated by the Clean Air Act. American industry would grind to a halt if it were required to scrutinize for potential permits thousands of renovation activities each year. For instance, if the activity is a necessary repair or replacement project, the result could be an extended shutdown of the facility until it could be undertaken.

    The NAM and other business organizations filed a brief 10/15/04 supporting this result. The joint brief argued that New Source Review permit requirements are only triggered when facilities are physically changed or modified to create an increase in emissions over the level approved in the original permit process.

    This case on appeal to the Supreme Court is Environmental Defense v. Duke Energy Corp.

     

    United States v. E.I. DuPont de Nemours and Co. (3rd Circuit) -- 2005

    EPA’s power to recover oversight costs at Superfund sites (en banc)

    The Environmental Protection Agency charges companies for remedial planning and remedial action monitoring costs that the EPA incurs, either themselves or through government contractors, while monitoring clean-up activities at Superfund hazardous waste sites. Since its 1993 Rohm and Haas decision, the U.S. Court of Appeals for the Third Circuit (covering Pennsylvania, New Jersey and Delaware) has not allowed such cost shifting from the EPA to manufacturers. That favorable ruling has now been overruled. It held that Congress conferred power on the EPA with an intelligible principle governing the exercise of such power, namely, that the remedial action be “not inconsistent” with the National Contingency Plan, which sets forth methods and criteria for determining the appropriate extent of removal, remedy and other measures. Other provisions also guide and constrain the EPA in its ability to impose oversight costs on responsible parties.

    The NAM joined with the American Chemistry Council, the American Petroleum Institute, the Chamber of Commerce, the Corporate Environmental Enforcement Council, the National Petrochemical and Refiners Association and the Superfund Settlements Project in an amicus brief 7/13/05 in support of DuPont. We argued that Congress never intended for EPA to finance its oversight activities by assessing the costs against those whom it regulates. Such a scheme must be authorized by a “clear statement” from Congress, particularly to avoid the many serious problems with the administration of the program. Our brief provided a detailed look at the history of (1) EPA performing more oversight than necessary, (2) EPA relying too heavily on contractors, (3) EPA not managing its contractors effectively, (4) EPA not negotiating effectively with its contractors, (5) contractors charging for excessive support costs, (6) and contractors having incentives to operate inefficiently.

    In addition, we warned that (1) EPA’s poor documentation and billing practices further reduce accountability, (2) the money collected is placed into special accounts with little accountability to Congress, and (3) an adverse ruling in this case could allow the EPA to assess similar costs under the Clean Air Act and the Clean Water Act. The EPA has been able to reduce its program support costs on an aggregate basis recently.

     

    CSX Transportation, Inc. v. Miller (Maryland Court of Appeals) -- 2005

    Admissibility of expert testimony

    TThe NAM joined with Maryland Defense Counsel, Inc. supporting CSX's appeal concerning the admissibility of testimony by witnesses who claim to be experts. Our brief argues that Maryland courts should apply more stringent criteria than simply whether an expert's methods have gained "general acceptance." Rather, the more recent Maryland Rules of Evidence require that expert testimony be both relevant and reliable, and the Supreme Court's decision in Daubert provides guidance to help courts apply these criteria. The case involves whether witnesses may testify about whether an employee's arthritis was caused by his job. The court did not reach the issue and dismissed the appeal as improvidently granted.

     

    Graham County Soil & Water Conservation District v. United States ex rel. Wilson (U.S. Supreme Court) -- 2005

    False Claims Act statute of limitations

    The Supreme Court held 6/20/05 that the six-year statute of limitations in the False Claims Act (FCA) does not govern civil actions for retaliation under the FCA. The False Claims Act creates a “qui tam” cause of action for a private person to sue, on the Government’s behalf, an entity for making false claims to the Government for payment. The FCA also provides a cause of action to a whistleblower who has been wrongfully discharged for bringing a qui tam action. Both the qui tam and the retaliatory discharge causes of action are codified at 31 U.S.C. § 3730, but the prohibition on making false claims to the government is set forth at 31 U.S.C. § 3729. The FCA’s limitations provision states in pertinent part that “[a] civil action under section 3730 may not be brought—(1) more than 6 years after the date on which the violation of section 3729 is committed.” 31 U.S.C. § 3731(b). The Court, in a 7-2 decision authored by Justice Thomas, reasoned that the FCA’s limitations provision was ambiguous as to whether it applies to retaliatory discharge actions, because the six-year period does not begin to run until a false claim is made and a retaliatory discharge plaintiff is not required to prove that a false claim was actually made. The Court ruled that the best way to resolve this ambiguity is to construe the reference to “section 3730” in the limitations provision to mean only false claims actions by the Government, § 3730(a), or a private individual, § 3730(b), but not to actions for retaliatory discharge, § 3730(h). The Court then held that retaliatory discharge claims under the FCA are governed by the most closely analogous state statute of limitations. In dissent, Justice Breyer, joined by Justice Ginsburg, argued that the FCA expressly sets forth the limitations period applicable to a “civil action under section 3730,” including a cause of action for retaliatory discharge, and that this period should be deemed triggered by any alleged or suspected violation of federal false claims law. This case is important to any business that is subject to suit under the False Claims Act.

     

    In re Hammond (Texas Supreme Court) -- 2005

    First Amendment protection for issue advocacy

    An unsuccessful candidate for election to the Texas state legislature sued the Texas Association of Business (TAB), alleging it violated state election laws when it distributed material about the candidates to voters prior to the 2002 election. A judge ordered TAB to answer the plaintiff's discovery questions, and TAB appealed. The NAM and 58 other organizations filed an amicus brief 5/19/04 supporting TAB, arguing that a state may not restrict free speech rights protected by the First Amendment except in clearly defined and limited circumstances, and the judge must find that TAB expressly advocated the election or defeat of a particular candidate before ordering discovery. Suits like this one by losing candidates against businesses that engage in issue advocacy threaten to cut off or restrict open debate of issues of public importance.

     

    Johanns v. Livestock Marketing Association (U.S. Supreme Court) -- 2005

    Statutory assessments for advertising

    The Supreme Court held 5/23/05 that the Beef Promotion and Research Act of 1985 does not violate the First Amendment by imposing a mandatory assessment on all sales and importation of cattle to fund promotional campaigns designed by a government-appointed board and approved by the government. Because the assessment funds the government’s own speech—and not private speech—it is not susceptible to a First Amendment compelled-subsidy challenge. Justice Scalia’s opinion for the Court reasoned that where the government “sets the overall message to be communicated and approves every word that is disseminated, it is not precluded from relying upon the government speech doctrine merely because it solicits assistance from non-governmental sources in developing specific messages.” This analysis, moreover, is unaffected by whether the funds for the promotions are raised by general taxes or through a targeted assessment. Because the issue was not presented by the facts of this case, the Court expressed no view on the constitutionality of a compelled-subsidy program that attributes the government speech to private actors. This case is important to businesses subject to government compelled-subsidy programs.

    Decision Below: 335 F.3d 711 (8th Cir. 2003).See also Case #03-1165, Nebraska Cattlemen, Inc. v. Livestock Marketing Association

     

    Nebraska Cattlemen, Inc. v. Livestock Marketing Association (U.S. Supreme Court) -- 2005

    Statutory assessments for advertising

    The Supreme Court held 5/23/05 that the Beef Promotion and Research Act of 1985 does not violate the First Amendment by imposing a mandatory assessment on all sales and importation of cattle to fund promotional campaigns designed by a government-appointed board and approved by the government. Because the assessment funds the government’s own speech—and not private speech—it is not susceptible to a First Amendment compelled-subsidy challenge. Justice Scalia’s opinion for the Court reasoned that where the government “sets the overall message to be communicated and approves every word that is disseminated, it is not precluded from relying upon the government speech doctrine merely because it solicits assistance from non-governmental sources in developing specific messages.” This analysis, moreover, is unaffected by whether the funds for the promotions are raised by general taxes or through a targeted assessment. Because the issue was not presented by the facts of this case, the Court expressed no view on the constitutionality of a compelled-subsidy program that attributes the government speech to private actors. This case is important to businesses subject to government compelled-subsidy programs.

    Decision Below: 335 F.3d 711 (8th Cir. 2003). See also Case #03-1164, Johanns v. Livestock Marketing Association

     

    American Trucking Associations, Inc. v. Michigan Public Service Commission (U.S. Supreme Court) -- 2005

    $100 interstate truck fee

    The Supreme Court 6/20/05 held that a flat fee imposed by Michigan on trucks engaged in intrastate hauling does not unconstitutionally discriminate against interstate hauling. The American Trucking Associations had argued that the fee violates the dormant Commerce Clause because trucks engaged in interstate hauling generally engage in much less intrastate hauling—and, accordingly, bear a much higher burden per mile of intrastate hauling—than trucks devoted solely to intrastate hauling. The Supreme Court disagreed, noting that the flat fee applies equally “to all carriers that make domestic journeys,” and approving generally of “such neutral, locally-focused” fees and taxes. The Court emphasized the absence of record evidence showing that the fee significantly deters interstate trade. The Court also rejected the contention that Michigan’s fee structure violates the “internal consistency” test, which asks what the cumulative effect would be if “all States did the same.” It reasoned that even if an interstate carrier paid similar fees to every state where it also engaged in intrastate hauling, the dormant Commerce Clause would not be violated because the fees would be assessed as a consequence of intrastate activity. This decision is important to any business subject to regulatory fees or taxes on activity wholly within a given state.

    Decision Below: 673 N.W.2d 752 (Mich. 2003).

     

    Granholm v. Heald (U.S. Supreme Court) -- 2005

    Restricting interstate wine shipments

    The Supreme Court held 5/16/05 that two state laws that discriminate against out-of-state wineries violate the Commerce Clause and are neither authorized nor permitted by the Twenty-First Amendment. The Michigan and New York laws at issue allow in-state wineries to sell directly to consumers while requiring out-of-state wineries to distribute their wine through wholesalers - a requirement that, in many cases, has in practice foreclosed access to these States' domestic markets by small out-of-state wineries. State laws that "mandate differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter" are subject to a "virtually per se rule of invalidity," under which the law is unconstitutional absent "a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives." The Court held that discrimination against out-of-state economic interests is not saved by the States' power to regulate the distribution of alcohol as granted by Section 2 of the Twenty-First Amendment. Section 2 was written "to allow States to maintain an effective and uniform system for controlling liquor by regulating its transportation, importation and use[,] ... not to [grant] the authority to pass nonuniform laws in order to discriminate against out-of-state goods." This decision is important to any business that distributes products across state lines, and especially important for producers and distributors of alcoholic beverages. Case numbers: Nos. 03-1116, 03-1120, 03-1274

    Decisions below: 342 F.3d 517 (6th Cir. 2003); 358 F.3d 223 (2d Cir. 2003).

     

    Norfolk Southern Railway Co. v. James Kirby Pty Ltd. (U.S. Supreme Court) -- 2005

    International trade by sea

    The Supreme Court unanimously held 11/9/04 that, under federal law, (1) a bill of lading’s so-called “Himalaya Clause,” which extends liability limitations to “downstream” parties whose services are used to perform the contract, is to be construed according to ordinary rules of contract interpretation; and (2) as a default rule, “when an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and the carrier agreed.” In this case, a cargo owner hired International Cargo Control (ICC) to arrange for delivery from Australia to Huntsville, Alabama. ICC in turn hired Hamburg Süd, which in turn hired Norfolk Southern Railway for the land leg of the journey, during which the cargo was damaged. Reversing the judgment of the Eleventh Circuit, the Supreme Court held that Norfolk was entitled to the protection of the liability limitations in two bills of lading. The broad language of the bill issued by ICC to the cargo owner extended the limitation of liability to subcontractors like Norfolk, despite the absence of a contract directly between ICC and Norfolk. In addition, the cargo owner was bound by the clause in the bill issued by Hamburg Süd to ICC, because an intermediary such as ICC acts as the cargo owner’s agent for the limited purpose of contracting with subsequent carriers, such as Hamburg Süd, for limitations on liability. This decision is important to any business that engages in international trade by sea.

    Decision Below: 300 F.3d 1300 (11th Cir. 2002).

     

    Lincoln Property Company v. Roche (U.S. Supreme Court) -- 2005

    Diversity jurisdiction

    The Supreme Court unanimously held 11/29/05 that a defendant may remove an action from state court to federal court on the basis of diversity of citizenship even if a potential but unnamed defendant would not be diverse. The Fourth Circuit remanded this case to state court, despite complete diversity between all named defendants and all named plaintiffs, because it suspected that an entity not named as a party (a limited partnership affiliated with a defendant and operating in the same state as the plaintiffs) was the real party in interest. The Supreme Court reversed, holding that 28 U.S.C. §§ 1332 and 1441 permit removal on the basis of diversity as long as all named defendants are citizens of different states than all named plaintiffs and no named defendant is a citizen of the forum state. The Court explained that a properly joined defendant seeking removal has no obligation to negate the existence of a potential codefendant that the plaintiff permissively might have joined and whose presence in the action would destroy diversity. The Court did not reach the second question presented by the petitioners, concerning the standards for determining the citizenship of a limited partnership, because no limited partnership was a party to the case. This case is important to all businesses that operate in multiple states. Decision Below: 373 F.3d 610 (4th Cir. 2004)

    Decision Below: 373 F.3d 610 (4th Cir. 2004),

     

    IBP, Inc. v. Alvarez (U.S. Supreme Court) -- 2005

    Pay for changing clothes

    The Supreme Court 11/8/05 held that under the Fair Labor Standards Act (“FLSA”) and Portal-to-Portal Act, employers must compensate their employees for pre- and post-shift time spent donning or doffing employer-required clothing or equipment and time spent walking between such clothing and equipment stations and the employees’ work areas; compensation for time spent waiting at clothing and equipment stations is not required, however. Regulations promulgated under the Portal-to-Portal Act adopted the “continuous workday rule,” which provides that an employee’s compensable “workday” includes all time from commencement to completion of the employee’s “principal activity or activities.” The Portal-to-Portal Act nevertheless excepts from the FLSA’s coverage time spent on activities “preliminary or postliminary” to the employee’s principal activity. Justice Stevens, writing for a unanimous Court, reiterated the Court’s earlier holding that donning or doffing required equipment constitutes an “integral and indispensable part of the [employee’s] principal activities” and therefore is a compensable part of the workday. Moreover, under the continuous workday rule, time then spent walking between the clothing or equipment station and the employee’s work area also necessarily constitutes part of the compensable workday. Time spent simply waiting to don the first piece of clothing or equipment does not qualify as an “integral or indispensable part of the principal activity,” however, and therefore is not required to be compensated. The decision in these consolidated cases is important to any business whose employees must pick up and/or wear certain clothing or equipment in order to perform their jobs.

    The NAM, the American Chicken Council and the American Meat Institute filed an amicus brief urging the Supreme Court to review the IBP case.

    On 8/1/05, the NAM joined with the U.S. Chamber of Commerce, the Society for Human Resources Management and the Association of International Automobile Manufacturers in a brief on the merits.

    See also Case #04-66, Tum v. Barber Foods.

     

    Tum v. Barber Foods, Inc. (U.S. Supreme Court) -- 2005

    Pay for changing clothes

    The Supreme Court 11/8/05 held that under the Fair Labor Standards Act (“FLSA”) and Portal-to-Portal Act, employers must compensate their employees for pre- and post-shift time spent donning or doffing employer-required clothing or equipment and time spent walking between such clothing and equipment stations and the employees’ work areas; compensation for time spent waiting at clothing and equipment stations is not required, however. Regulations promulgated under the Portal-to-Portal Act adopted the “continuous workday rule,” which provides that an employee’s compensable “workday” includes all time from commencement to completion of the employee’s “principal activity or activities.” The Portal-to-Portal Act nevertheless excepts from the FLSA’s coverage time spent on activities “preliminary or postliminary” to the employee’s principal activity. Justice Stevens, writing for a unanimous Court, reiterated the Court’s earlier holding that donning or doffing required equipment constitutes an “integral and indispensable part of the [employee’s] principal activities” and therefore is a compensable part of the workday. Moreover, under the continuous workday rule, time then spent walking between the clothing or equipment station and the employee’s work area also necessarily constitutes part of the compensable workday. Time spent simply waiting to don the first piece of clothing or equipment does not qualify as an “integral or indispensable part of the principal activity,” however, and therefore is not required to be compensated. The decision in these consolidated cases is important to any business whose employees must pick up and/or wear certain clothing or equipment in order to perform their jobs.

    The NAM, the American Chicken Council and the American Meat Institute filed an amicus brief urging the Supreme Court to review the IBP case.

    On 8/1/05, the NAM joined with the U.S. Chamber of Commerce, the Society for Human Resources Management and the Association of International Automobile Manufacturers in a brief on the merits.

    See also Case #03-1238, IBP v. Alvarez

     

    KP Permanent Make-Up, Inc. v. Lasting Impression, Inc (U.S. Supreme Court) -- 2005

    Trademark protection

    The Supreme Court unanimously held 12/8/04 that the possibility of consumer confusion does not preclude the fair-use defense to a claim of trademark infringement, and a party who raises this defense does not have the burden of negating the likelihood of confusion. In an opinion by Justice Souter, the Court reasoned that the Lanham Act places the burden of proving infringement (including the likelihood of confusion) on the trademark holder. See 15 U.S.C. §§ 1114(1), 1115(b). The elements of the fair-use defense, by contrast, do not refer to likelihood of confusion. See id. § 1115(b)(4). Because a party asserting this defense has no independent duty to show that confusion is unlikely, the Court concluded that some possibility of confusion must be compatible with fair use. Although “mere risk” of confusion will not foreclose the fair-use defense, the Court declined to decide whether the extent of likely confusion is relevant to the availability of the defense. Thus, this decision does not resolve the split between the First and Second Circuits, on the one hand, which have held that the fair-use defense can stand regardless of any underlying likelihood of confusion, and the Fourth and Seventh Circuits, on the other hand, which consider the extent of actual or likely confusion. This decision is important to all businesses that could become involved in trademark disputes.

    Decision Below: 328 F.3d 1061 (9th Cir. 2003).

     

    Merck KGaA v. Integra Lifesciences I, Ltd. (U.S. Supreme Court) -- 2005

    Patent exception for drug research

    The Supreme Court unanimously held 6/13/05 that the use of a patented compound “in research that, if successful, would be appropriate to include in a submission to the FDA” does not infringe a patent if the user “has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect,” even if the results are not ultimately submitted to the FDA. Integra LifeSciences, a holder of several patents related to biological compounds used by Merck KGaA in research on anti-cancer drugs, brought an infringement action against Merck. The case turned on the application of 35 U.S.C. § 271(e)(1), which states that “uses [of patents] reasonably related to the development and submission of information under a Federal law which regulates the . . . use . . . of drugs” are not acts of infringement. The Court rejected Integra’s contention that § 271(e)(1) does not apply to uses of patented compounds in “experimentation of drugs that are not ultimately the subject of an FDA submission or . . . in experiments that are not ultimately submitted to the FDA,” noting that § 271(e)(1) leaves “adequate space for experimentation and failure on the road to regulatory approval.” This decision will be of great interest to any company that either holds patents commonly used in pharmaceutical research or uses such patents in the course of conducting such research.

    Decision Below: 331 F. 3d 860 (Fed. Cir. 2003).

     

    Metro-Goldwin-Mayer Studios Inc. v. Grokster, Ltd. (U.S. Supreme Court) -- 2005

    Copyright on the Internet

    The Supreme Court held 6/27/05 that one who distributes a device with the object of promoting its use to infringe copyrights, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. Although the devices in question (peer-to-peer file sharing computer networking software) may have some lawful uses, the Court noted that the recipients of the software use them primarily to share copyrighted music and video files without authorization. The Court held that the distributors of the software may be held indirectly liable for their users’ copyright infringement under a theory of contributory or vicarious infringement, if the distributors took affirmative steps to encourage direct infringement (e.g., advertising an infringing use or instructing the users how to engage in an infringing use). The Court found ample evidence in this case that the distributors intended to and did profit from third-party acts of copyright infringement, and therefore, the distributors’ activities went beyond mere distribution of the software. The Court based its analysis on the fact that the distributors advertised their software as an alternative to Napster, they failed to develop filtering tools to diminish the infringing activity, and they made money by selling advertising space. This decision is important to businesses that own or control copyrighted motion pictures or sound recordings, or distribute devices that allow peer-to-peer file sharing computer networking software.

    Decision Below: 380 F.3d 1154 (9th Cir. 2004)

     

    Mid-Con Freight Systems, Inc. v. Michigan Public Service Commission (U.S. Supreme Court) -- 2005

    $100 interstate truck fee

    In Mid-Con, the Supreme Court also held that a state law that imposes an annual fee of $100 upon each truck licensed in that state is not preempted by a provision of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) that precludes states from imposing a “State registration requirement” in excess of $10 per truck. 49 U.S.C. § 14504(b). In a 6-3 decision authored by Justice Souter, the Court reasoned that the “State registration requirement” in this provision of ISTEA refers only to state law procedures for complying with the federal Single State Registration System (SSRS) codified in 49 U.S.C. § 14504. The SSRS, in turn, regulates state law procedures for evidencing proof of insurance and a federal trucking permit and identifying an agent for service of process. The Court concluded that the Michigan statute at issue was not a “State registration requirement” within the meaning of the ISTEA because it made no reference to any of the items regulated by the SSRS, and Michigan had imposed a separate fee on trucks license-plated in Michigan well before the SSRS was enacted. In dissent, Justice Kennedy, joined by Chief Justice Rehnquist and Justice O’Connor, argued that the words “State registration requirement” cannot be limited to only those requirements governed by the SSRS. Rather, “State registration requirement” should be construed to mean any state requirement imposed on an interstate motor carrier in a State, including Michigan’s $100 per-truck fee. This case is important to any business involved in interstate motor carriage and, more generally, to any business that operates in an area where a federal statute defines the scope of federal preemption of state regulation.

    Decision Below: 662 N.W.2d 784 (Mich. 2003)

     

    Beretta U.S.A. Corp. v. District of Columbia (U.S. Supreme Court) -- 2005

    Liability without fault

    The NAM joined with the U.S. Chamber of Commerce in an amicus brief 8/22/05 urging the Supreme Court to review a decision of the District of Columbia Court of Appeals upholding D.C.’s automatic liability statute. The law provides that a manufacturer (of certain guns) is strictly liable, “without regard to fault or proof of defect, for all direct and consequential damages that arise from bodily injury or death” if the injury results from use of the product in the District. Our brief argued that this law is unconstitutional because it interferes with interstate commerce. It imposes liability without fault, and it necessarily applies only to out-of-state products that are illegally transported into the District and used in the commission of a crime. The only way for a manufacturer to avoid this virtually unlimited liability is not to make the product. The D.C. law would allow one state to make it unprofitable to conduct business in another state, or could create a complex patchwork of state regulations that would inhibit the ability to conduct business nationwide.

    On 10/3/05, the Supreme Court refused to hear this appeal. Subsequently, the President signed on 10/26/05 the Protection of Lawful Commerce in Arms Act, which protects gun manufacturers from liability for the criminal misuse of their products. The new law resulted in dismissal of this case in the Superior Court, and affirmance of that dismissal by the D.C. Court of Appeals on 1/10/2008.

     

    Craft v. Philip Morris Inc. (Missouri Supreme Court) -- 2005

    Fraud allegation

    The NAM filed an amicus brief 11/18/04 arguing that this Missouri class action suit involving the advertising and pricing of Marlboro Light cigarettes should not have been certified as a class action. The suit alleges that consumers were defrauded by the company's claim that Light cigarettes have lower tar and nicotine, and the price of the cigarettes would have been higher had they actually worked as promised. Rather than bring a contract claim for failure to deliver the product advertised, the plaintiffs accused the company of fraud, and alleged that the cigarettes would have cost more if they worked as promised. Thus, their theory is that they should have paid more, and are entitled to the difference between what they paid and what they would have paid without the alleged fraud. This benefit-of-the-bargain approach (1) would convert every product defect claim into a class action in Missouri, (2) disregarded many other factors that affect price, and (3) provided an improper cause of action for plaintiffs that have actually suffered no injury.

    Unfortunately, on 8/16/05, the court ruled that the class was properly certified. The plaintiff alleged that she asserted claims that are typical of the claims of the entire class, that she had no interests antagonistic to those of the class, and that she would fairly and adequately represent and protect the class. The court found that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members. It found that the allegations “go to the condition and labeling of the product at the time it was sold; they do not make defendant’s liability dependent on each consumer’s individual smoking behavior.

    The court also found that the law suit was very carefully worded so as not to specifically allege that consumers relied on advertising representations. Rather, the suit was over a violation of the Merchandising Practices Act and consequent losses. It may be that reliance is an element of the claim, but that should be resolved in another motion, not in a challenge to the class certification analysis. The court also found issues relating to the measure of damages to be irrelevant to the class action analysis.

     

    District of Columbia v. Beretta U.S.A. Corp. (D.C. Court of Appeals) -- 2005

    Public nuisance action against gun manufacturers

    The NAM opposed the District of Columbia's law suit that attempted to hold gun manufacturers liable for damages resulting from the criminal misuse of guns. The District is one of several governments that have tried to use aggressive theories of "negligent marketing" and "public nuisance" to garner jury verdicts against manufacturers of legal products that are later misused.

    Our brief argued that DC legal precedents clearly do not allow such suits for negligence, and there can be no public nuisance claim when the manufacturer does not control the property at the time it is alleged to be creating the nuisance.

    On 4/29/04, the Court of Appeals ruled that individual common-law negligence and DC's public nuisance claims must be dismissed. It allowed individual strict liability claims to proceed under DC's medical costs arising from such claims. Plaintiffs will still have to prove on remand that a particular manufacturer's weapon was responsible for their injuries. The court rejected a Commerce Clause challenge to the impact of DC's law on the legal manufacture and sale of firearms in other states.

    The case was reheard by the full complement of judges on the D.C. Court of Appeals. The NAM's last brief was filed on 11/8/04.

    On 4/21/05, the full court again ruled that the negligent marketing and public nuisance claims must be dismissed. The court found it unreasonable and not well circumscribed to impose a general duty on an indeterminate class of manufacturers to make marketing changes that might serve to protect an indeterminate class of potential plaintiffs. The court also rejected a public nuisance claim since it is unreasonable to hold a manufacturer liable for the illegal acts of many parties over whom it has no control. Instead there must be a clear duty, foreseeability and direct causation to impose liability.

     

    Henry v. Dow Chemical Co. (Michigan Supreme Court) -- 2005

    Medical monitoring

    The Michigan Supreme Court ruled 7/13/05 that medical monitoring is not a recognized legal claim in Michigan. Nevada, Kentucky and Alabama have also rejected such claims. The NAM joined with the U.S. Chamber, the American Tort Reform Association, the American Chemistry Council, the Coalition for Justice and the Property Casualty Insurers Association of America on 8/3/04 in arguing that individuals who may be merely exposed to hazardous substances but do not suffer actual adverse effects should not be able to demand payment for medical monitoring. Allowing such claims will clog the courts with litigation, impair justice for the truly injured, and provide an undeserved windfall to healthy plaintiffs. Whether such a claim should be recognized is a legislative judgment that courts should not be making.

    The Michigan court agreed with these arguments. It said that the legislature should decide whether to allow medical monitoring claims would “drain resources needed to compensate those with manifest physical injuries and a more immediate need for medical care. . . . actual harm – an injury that is manifest in the preset – is required in order to state a viable claim.”

    We also filed a similar brief on 12/15/03 urging the court to review the case.

     

    Price v. Philip Morris Inc. (Illinois Supreme Court) -- 2005

    Fraud in advertising

    The Illinois Supreme Court 12/15/05 threw out a $10.1 billion judgment against Philip Morris in a consumer class action. This claim alleged fraud in the advertising of "light" cigarettes. The Court ruled 4 to 2 that § 10(b)(1) of the Illinois Consumer Fraud Act barred the suit.

    That section provides that the fraud statute does not apply to company actions that are specifically authorized by laws administered by state or federal officials. However, merely complying with federal labeling and advertising rules, according to the court, is not enough to trigger this exemption. Instead, the court found that the Federal Trade Commission has specifically authorized the use of the terms “lights” and “lowered tar and nicotine” in labeling and advertising. The only condition in the FTC’s authorization was that the descriptive terms be accompanied by a clear and conspicuous disclosure of the tar and nicotine content.

    The history of low tar and nicotine cigarette regulation is a classic example of regulation by litigation. The court described how the FCC communicated to the cigarette industry the circumstances under which they may use “low tar” descriptors in their advertising and packaging. The FCC did this by bringing an enforcement action against one company, then negotiating a consent decree that announced to the entire industry what behavior is and is not authorized. This “regulation by consent decree” constitutes specific federal authorization sufficient to fall within Illinois’ exemption from fraud liability.

    There were a number of other issues in the case that the court declined to address, except to say that they raised serious issues about which court had grave reservations. Justice Karmeier wrote that the case should be dismissed because the plaintiffs failed to show that they sustained any actual damages.

    The NAM and the Illinois Manufacturers' Association urged the court in 2003 to overturn the judgment. Our brief focused on the lack of evidence that any consumer suffered economic damages given that cigarette prices were unaffected once the company changed its product advertisements, and the excessive $3 billion punitive damages award that was not proportional to the degree of reprehensibility shown, out of line with comparable state laws and improper in that it took into account the wealth of the defendant

     

    Simon II Litigation v. Philip Morris USA Inc. (2nd Circuit) -- 2005

    Limited fund punitive damages class action recertification

    The U.S. Court of Appeals for the Second Circuit ruled 5/6/05 that Judge Jack Weinstein improperly certified a class of plaintiffs for purposes of awarding punitive damages, without any finding of actual liability. The NAM joined with the Washington Legal Foundation 6/4/03 urging an appeals court to overturn the certification of this class action by smokers against cigarette manufacturers. The judge had found that because there is a constitutional limit on the amount of punitive damages that can ultimately be awarded, the case could be certified under the rule governing "limited fund" cases. We argued that this class should not be certified under that rationale since the court did not quantify the amount in the limited fund. Second, the court's nebulous standard would allow virtually any mass tort case to be certified as a class action. Third, the manufacturers' due process rights were violated by an order (1) that prohibits certain plaintiffs from withdrawing from the litigation and (2) that applies New York law to the claims of all class members.

    The appeals court unanimously overturned the class certification because it didn't fit into the limited fund category. Said the court, "[T]here is no evidence by which the district court could ascertain the limits of either the fund or the aggregate value of punitive claims against it, such that the postulated fund could be deemed inadequate to pay all legitimate claims."

     

    Smith v. Lead Industries Ass'n, Inc. (Maryland Court of Appeals) -- 2005

    Reliance as an element of fraud

    A suit was filed by a Baltimore mother on behalf of her three small children who were allegedly injured by lead paint in their house. A key issue in this appeal is whether they can prove fraud under Maryland law. The paint industry, supported by an amicus brief on 12/7/04 from the NAM and other business organizations, argued that a long-standing and necessary element in a fraud claim is proving that the injured party relied on misrepresentations made by the manufacturer. Reliance is only present when the misrepresentation substantially induced the plaintiff to act. We also argued that "fraud in the air," or statements made to the world at large, can not be the basis for liability. If it were, any consumer could sue for misstatements by manufacturers whether or not they heard the statements or acted on them. This would broadly expand liability and free it from the commonsense bounds developed over centuries. Instead, the government should enforce consumer protection statutes that apply to the public at large.

    The Maryland Court of Appeals sent the case back to the lower court in April because of procedural problems with the appeal. The court did not address the substantive issues covered in our amicus brief.

    This case is another in a growing trend of cases in which plaintiffs are trying to convert product liability and negligence claims into claims for fraud. Courts must be extremely wary of expanding legal theories when plaintiffs confuse the elements of their claims and suggest that traditional legal duties are shifting under the law. We urged the Maryland Court of Appeals, its highest court, to reject such attempts.

     

    United States v. Philip Morris USA Inc. (D.C. Circuit) -- 2005

    Disgorgement not a civil RICO remedy

    The NAM and the U.S. Chamber filed a joint brief on 8/3/04 in this $280 billion government suit against the tobacco industry opposing the theory that disgorgement is a remedy available under the Racketeer Influenced and Corrupt Organizations Act (RICO). Such a claim improperly avoids the procedural safeguards in the criminal forfeiture provisions of RICO and conflicts with precedent under comparable provisions of another statute on which it was patterned -- the Clayton Act. We do not believe RICO was intended to provide disgorgement of profits as a remedy. The government is trying to do an end-run around the strict procedural requirements under RICO when it attempts to seize assets alleged to be the ill-gotten gains of racketeering activity.

    On 2/4/05, the D.C. Circuit ruled that disgorgement is not a remedy in civil suits under RICO. The law is limited to forward-looking remedies that are aimed at future violations. These include divestment, injunctions and dissolution, but not disgorgement of past gains.

     

    White-Rodgers v. Bitler (U.S. Supreme Court) -- 2005

    Testimony of expert witnesses

    The NAM and the American Tort Reform Association filed an amicus brief 6/9/05 supporting this appeal to the U.S. Supreme Court in this case involving the testimony of expert witnesses. A judge’s role in deciding whether to allow a so-called expert to testify is often critical to the outcome of a case. Expert witnesses are allowed by testify by the judge because they have specialized knowledge on subjects that the jury doesn’t really know enough about. They are given much more leeway in testifying about their opinions on what happened, and even on the ultimate issue in the case. It is crucial that whatever basis they have for giving their opinions be grounded in sound science that can either be verified by testing or that has been vetted through peer review. Juries are not expected to sort out a legitimate expert witness from a junk scientist.

    Our brief argues that the Supreme Court’s Daubert ruling in 1993 requires that judges act as gatekeepers and keep out testimony that is not properly supported by science. A court must make sure that an expert’s conclusions flow from his or her methodology. An expert on one product design should not be allowed to opine on products designed another way. If an expert’s opinion can be easily tested, it should be. Reliable expert testimony should not require a leap of faith.

    The Court declined to review the appeal on 10/3/05.

     

    Simon v. San Paolo U.S. Holding Co. (California Supreme Court) -- 2005

    Punitive damages

    The California Supreme Court ruled 6/16/05 that a $1.7 million punitive damages award was unconstitutionally excessive when compared with the underlying compensatory damages award of $5,000 (the amount spent by the plaintiff to hire a lawyer). This issue arose in the context of a real estate transaction gone bad, and the jury awarded $5,000 for promissory fraud.

    The central issue was whether the punitive damages should be based on the plaintiff’s actual damages or the $400,000 in profit he claims he lost when the deal fell through. Because that loss was not proven and damages were not awarded for it, the court refused to use it as a basis for calculating punitive damages. Using the $5,000 loss as the base number, the court reduced the punitive damages award to just $50,000, 10 times the actual loss. It held that the claim for lost profits was not caused by the fraudulent conduct at issue and that the plaintiff would not have received the property even if no fraudulent statements had been made. In an appropriate case, however, punitive damages may be based on harm that was likely to occur, even if it did not actually occur. The fraud in this case was a single instance, resulting in only a small financial loss. But the court took into consideration the financial condition (i.e., the size) of the defendant, so that the amount of the punitive damages could serve as a deterrent against further fraudulent conduct. It decided that $50,000 in punitive damages was the maximum that could be considered constitutional given all the facts and circumstances of this case.

    The NAM, the California Chamber of Commerce, the American Chemistry Council, Unocal Corp. and the American International Group, Inc. had filed an amicus brief 10/13/04 supporting this result. Our brief argued that the lower court misapplied the Supreme Court’s recent guidance in the State Farm case, and ignored the state legislature when it failed to reasonably limit the punitive damages award. We also argued that the lower courts allowed punitive damages far in excess of comparable civil penalties under state law, a factor the U.S. Supreme Court has also required to be taken into account.

     

    Bank of China v. NBM L.L.C. (U.S. Supreme Court) -- 2005

    Reliance as an element of a RICO case

    The Court granted certiorari 6/27/05 in a case that presents the questions whether a civil RICO plaintiff, who seeks to establish liability based on the predicate offenses of mail fraud, wire fraud, and bank fraud, must establish “reasonable reliance.”  The case stems from alleged fraud spanning a number of years, allegedly committed by the defendants (including a former employee) against the Bank of China.  Specifically, the Bank alleged a scheme whereby various defendants borrowed funds from the Bank under false pretenses, converted them into different currencies, and ultimately pocketed them.  At trial, the district court instructed the jury that the Bank could prove the RICO frauds even if its agents or employees permitted or participated in the fraud.  The jury ultimately found liability, and awarded the Bank over $35 million.  The Second Circuit, however, reversed, holding - in accord with the Fourth, Fifth, Sixth, Eighth, and Eleventh Circuits, but in conflict with the First, Third, Seventh, and Ninth Circuits - that the Bank was required to demonstrate “reasonable reliance” for the mail and wire fraud counts.  The Second Circuit also held, as a matter of first impression, that “reasonable reliance” must also be established for bank fraud.  The case is of significant potential import to any company victimized in a manner compensable under civil RICO.

    The Court initially agreed to hear the appeal, but dismissed the case without opinion on 11/15/05.

    Decision Below:  359 F.3d 171 (2d Cir. 2004)

     

    Dura Pharmaceuticals, Inc. v. Broudo (U.S. Supreme Court) -- 2005

    Loss causation in fraud-on-the-market 10b-5 litigation

    The Supreme Court held 4/19/05 that allegation and proof of an inflated stock price at the time of the stock purchase are insufficient to plead and prove loss causation in a securities fraud action. Rather, plaintiffs must allege and show that they suffered an actual loss and that the defendant's misrepresentations caused that loss. After purchasing stock in Dura Pharmaceuticals, Respondents brought a class-action suit against Dura for securities fraud. In their complaint, Respondents alleged that they had suffered economic loss due to payment of artificially inflated prices for Dura securities. The district court dismissed the complaint for failure to allege loss causation adequately, but the Ninth Circuit reversed. Justice Breyer's opinion for the court explains that payment of an inflated purchase price does not itself result in a loss to the buyer because, at the time of purchase, the buyer possesses a stock equal in value to the inflated price. Furthermore, even if the buyer later sells the stock at a lower price, his loss may result from factors other than the earlier misrepresenation. The Court also held that mere allegation that a plaintiff purchased stock at an inflated price is insufficient to plead economic loss or loss causation. Although "ordinary pleading rules are not meant to impose a great burden upon a plaintiff," a complaint must "provide a defendant with some indication of the loss and the causal connection that the plaintiff has in mind."

    This case is important to individuals and businesses subject to private securities litigation alleging a violation of Rule 10b-5 (17 C.F.R. § 240.10b-5).

     

    Kelo v. City of New London (U.S. Supreme Court) -- 2005

    Taking of property for economic development

    The Supreme Court held 6/23/05 that the public use requirement in the Takings Clause of the Fifth Amendment is not violated when private property is condemned for the sole purpose of “economic development” that may increase tax revenues and improve the local economy. The Court concluded that, although the power of eminent domain may not be used to take one person’s land simply to confer a private benefit on a particular private party, the takings at issue here were part of a “carefully formulated . . . economic development plan” that the City believed would provide “appreciable benefits to the community.” The Court emphasized that the public use component of the Takings Clause does not require condemned lands to be open for use by the general public. Rather, the Court stated, it long ago adopted a broad understanding of “public use” to mean “public purpose.” Finally, the Court rejected petitioners’ urgings for heightened judicial scrutiny of the government’s determination that a public purpose will be served by a taking. The Court reasoned that absent an evident basis for suspicion, such determinations are entitled to significant deference. This decision is important to any business that pursues or participates in a development project with the assistance of the state’s eminent domain power; this decision is equally important to any business that may be subject to a taking aimed solely at economic development.

    Decision Below: 843 A.2d 500 (Conn. 2004)

     

    Lingle v. Chevron U.S.A., Inc. (U.S. Supreme Court) -- 2005

    Taking of property via rent control

    The Supreme Court 5/23/05 unanimously repudiated its prior statements that government regulation of private property effects a taking if it does not substantially advance legitimate state interests. The Court held that the standards set forth in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), govern regulatory takings challenges unless the regulation requires an owner to suffer a permanent physical invasion of her property, deprives an owner of all economically viable use of her property, or is connected to a land-use exaction. Under Penn Central, the Court emphasized, the existence of taking "turns in large part, albeit not exclusively, upon the magnitude of a regulation's economic impact and the degree to which it interferes with legitimate property interests," and the "character of the governmental action" also "may be relevant." The Court held that the "substantially advances" formula is not "a stand-alone regulatory takings test that is wholly independent of Penn Central." The "substantially advances" test, the Court reasoned, "suggests a means-ends" test that "has some logic in the context of a due process challenge" but "does not help to identify those regulations whose effects are functionally comparable to government appropriation or invasion of private property." This case is important to any business that is subject to a regulation that might be deemed a compensable taking of property.

    Decision below: 363 F.3d 846 (9th Cir. 2004).

     

    Rancho Palos Verdes v. Abrams (U.S. Supreme Court) -- 2005

    No right to sue for denial of cell tower permit

    The Supreme Court held 3/22/05 that an individual may not enforce the limitations on local zoning authority set forth in § 332(c)(7) of the Communications Act of 1934 through an action for money damages under 42 U.S.C. § 1983. After Petitioner, the City of Rancho Palos Verdes, denied Respondent's application to construct a radio tower on his property, Respondent filed an action seeking, among other things, injunctive relief under the Communications Act and money damages under § 1983. The district court held that the Communications Act provided the exclusive remedy for the City's actions and that Respondent could not obtain damages under § 1983, but the Ninth Circuit reversed. Justice Scalia's opinion for the Court explained that authorizing a § 1983 action to remedy violations of the Communications Act would distort the scheme of expedited judicial review and limited remedies expressly created by the Act. Because Congress intended the judicial remedy expressly authorized by the Communications Act to be exclusive, foreclosing an alternative remedy under § 1983, the Court reversed the Ninth Circuit's judgment. This case is important to business in the telecommunications field.

    Decision below: 354 F.3d 1094 (9th Cir. 2004).

     

    San Remo Hotel L.P. v. San Francisco (U.S. Supreme Court) -- 2005

    Procedure for takings claims

    The Supreme Court 6/20/05 held that a federal takings claim may not be litigated in federal court after state court litigation that is preclusive under state law, even where the claim was not ripe for litigation in federal court before the state court litigation. The Court has previously held that a property owner who alleges that his property was taken by the state without fair compensation generally must seek relief in the state court system prior to litigating his claim in the federal courts. At the same time, the full faith and credit statute, 28 U.S.C. § 1738, mandates that if a state court decides a particular issue, that decision precludes subsequent litigation in federal courts to the same extent that it precludes subsequent litigation in state court. The Supreme Court held that it could not carve out an exception to this statute to ensure that a litigant receives a day in federal court, after already having his day in state court. The Court clarified, however, that a facial takings challenge is ripe for federal court litigation without prior resort to state court. If a plaintiff asserts both a facial challenge and an as-applied challenge, the ability to pursue the facial claim in federal court can be preserved if the federal court invokes Pullman abstention and the plaintiff does not voluntarily litigate the facial challenge while litigating the as-applied challenge in state court. This decision is important to all businesses that may be subject to an uncompensated taking of property.

    Decision Below: 362 F.3d 1088 (9th Cir. 2004)

     

    Commissioner v. Banks (U.S. Supreme Court) -- 2005

    Taxation of contingent fees

    The Supreme Court held 1/24/05 that when a litigant’s recovery constitutes taxable income, any portion of the recovery paid to his attorney pursuant to a contingent-fee agreement is taxable. The Court reasoned that the Internal Revenue Code defines “gross income” as “all income from whatever source derived,” 26 U.S.C. § 61(a), and a taxpayer cannot exclude economic gain from his gross income by assigning it to his attorney in advance. This decision resolves a split between the Circuits on the tax treatment of contingent fees. Because contingent-fee arrangements are a standard feature in tort and other types of litigation, this case resolves an important and often-recurring issue for litigants.

     

    Cuno v. DaimlerChrysler Corp. (6th Circuit) -- 2005

    State investment tax credit program

    The U.S. Court of Appeals for the Sixth Circuit 1/18/05 denied DaimlerChrysler's petition for rehearing of an adverse ruling on state investment tax credits for business. The NAM and the U.S. Chamber filed a joint brief 9/20/04 urging the full court to overrule a panel decision declaring Ohio's 1995 investment tax credit program to be unconstitutional as violating the commerce clause. The decision threatens hundreds of similar state tax laws in which a state offers a business a tax break to invest in their state. The plaintiffs, financed by Ralph Nader, are using this decision as a test case to challenge state pro-business tax incentives across the country. However, the NAM argued that invalidating state tax credit programs would have devastating effects upon both manufacturers and states. States would no longer be able to bargain with businesses by trading tax relief for more jobs, worker training, research and development, environmental remediation or other important state goals. We argued that the Supreme Court has already approved tax laws that allow a state to bestow benefits on its citizens, and that this local assistance does not burden interstate commerce.

     

    McNeilus Truck & Manufacturing, Inc. v. County of Dodge (Minnesota Supreme Court) -- 2005

    Tax assessment of manufacturing property

    The NAM joined with the Minnesota Chamber of Commerce in urging the Minnesota Supreme Court to allow manufacturing plants to be assessed for tax purposes using reasonable comparable properties that may include out-of-state facilities. The nature and extent of the market within which to determine a property's market value depends on the type of property involved, and artificial distinctions based on state boundaries should not be dispositive. Even if there are differences in the value of property arising from the state in which it is located, the assessments can be adjusted to reflect those differences. Minnesota's Tax Court adopted a rule that potentially distorts the valuation of all manufacturing property in Minnesota, burdens the ability of Minnesota manufacturers to compete on fair and equal terms with competitors in other states, and ignores relevant and probative evidence of true market value.

    On November 10, the Minnesota Supreme Court ruled that the tax court’s application of a de facto evidentiary ruling barring consideration of all comparable sales outside Minnesota violates that court’s duty to assess property as market value and utilize its independent judgment. It is appropriate to consider land values outside of the state because buyers may well be looking outside the state for comparable property. As long as the properties are in “economic proximity,” they are comparable. The case was sent back to the tax court to evaluate the discrepancies between the county expert’s valuation of the property at $9 million and the taxpayer expert’s valuation of it at $2.8 million.

     

    Coca-Cola Co. v. Harmar Bottling (Texas Supreme Court) -- 2006

    Calendar Marketing Agreements

    The NAM and the Grocery Manufacturers of America filed a brief urging the Texas Supreme Court to review a lower court decision relating to calendar marketing agreements (special product promotions) that manufacturers offer to retailers. The lower court ruled that a manufacturer with a large market share violated the Texas Free Enterprise and Antitrust Act by using these special promotional programs solely because of the adverse impact on competitors. Our brief argued that the antitrust laws are designed to protect competition, not competitors, and that Coca-Cola's competitors were free to display their products and offer special promotions of their own. We also argued that the Texas law illegally reaches conduct in markets outside that state, adversely affecting interstate commerce.

    On October 20, 2006, the Texas Supreme Court overturned the lower court’s decision. It held that plaintiffs, who were bottlers of competing products, had failed to prove an effect on overall competition in any relevant market since consumers could avoid higher prices at one store by simply “going down the street” to another store. Although “consumers may have paid more on occasion in a particular store,” there was no evidence that the calendar marketing agreements “caused consumers to pay higher prices generally.”

    The court also held that the Texas Free Enterprise and Antitrust Act does not apply to competitive injury alleged to have occurred outside the state.

     

    Eddins v. Redstone (California Supreme Court) -- 2006

    Defenses to price discrimination

    The NAM joined with 5 other organizations in an amicus letter to the California Supreme Court asking it to hear an appeal of a ruling that effectively eliminated summary judgment on four important defenses to price discrimination claims under the Unfair Practices Act (“UPA”), Cal. Bus. & Prof. Code § 17045. This lower court ruling could have serious negative effects on all suppliers in California, as it greatly broadens the conduct that can subject suppliers to liability for “price discrimination” under the UPA, including conduct that is indisputably pro-competitive, innovative and business-justified. The Court declined to hear the appeal.

    Our amicus letter argued that companies must have pricing flexibility, and the California statute would outlaw all strongly competitive discounting practices pricing without the four primary defenses that are the subject of this litigation. We support recognition of (1) the meeting competition defense, (2) a functional classification defense, (3) the defense that a discount is not secret if it is generally known and available to competitors, and (4) that the complaining party was buying on like terms and conditions. We were concerned that the lower court’s decision eviscerated these safe harbor defenses.

    Joining in the amicus letter were the California Retailers Association, Estee Lauder Companies, Inc., ExxonMobil Corporation, Pfizer, Inc. and Shell Oil Company.

    The case arose when video distributors and retailers brought an antitrust conspiracy case against Blockbuster and the major Hollywood movie studios based on innovative revenue-sharing deals that Blockbuster negotiated with each of the studios. Plaintiffs are smaller, independent distributors and retailers, and they were unable to obtain the same discounts as Blockbuster because they were either unwilling or unable to agree to the same terms.

     

    Illinois Tool Works Inc. v. Independent Ink, Inc. (U.S. Supreme Court) -- 2006

    Antitrust case involving tying of patented item

    The Supreme Court held 3/1/06 that, because a patent does not necessarily confer market power on the patentee, a plaintiff challenging a tying arrangement under Section 1 of the Sherman Act must prove that the defendant has economic power in the market for the tying product. In his opinion for the Court, Justice Stevens noted that the Court’s past disapproval of tying arrangements was based on a now-discredited belief that such arrangements “serve hardly any purpose beyond the suppression of competition,” and that the Court had more recently moved from relying on presumptions to requiring a showing of actual economic power in the market for the tying product. The Court explained that Congress, antitrust enforcement agencies, and most economists had all rejected the conclusion that a patent necessarily confers market power. Indeed, the presumption that holding a patent creates market power arose in “patent misuse” cases but was rejected in that context by Congress in the 1988 amendments to the patent laws. The Court today likewise eliminated any presumption in the antitrust context that a patent necessarily confers market power on the patent holder. Jones Day lawyers drafted amicus curiae briefs on behalf of the American Bar Association at the petition and merits stages. This case has important implications for any business buying or selling a product that arguably is tied to a patented or copyrighted product.

    Decision Below: 396 F.3d 1342 (Fed. Cir. 2005)

     

    Shell Oil Co. v. Dagher (U.S. Supreme Court) -- 2006

    Joint venture price fixing

    The Supreme Court held 2/28/06 that it is not per se illegal under Section 1 of the Sherman Act, 15 U.S.C. § 1, for a lawful, economically integrated joint venture to set the prices at which the joint venture sells its products. The joint venture’s formation, which was not challenged, effectively merged Texaco’s and Shell’s domestic gasoline refining and marketing operations, thereby ending competition between the two companies in these lines of business. The Court concluded that although the joint venture’s “pricing policy may be price fixing in a literal sense, it is not price fixing in the antitrust sense,” because the policy was “little more than price setting by a single entity—albeit within the context of a joint venture—and not a pricing agreement between competing entities with respect to their competing products.” This decision is important to any business that is or may become part of a joint venture. Jones Day filed briefs on behalf of Texaco and presented oral argument on behalf of both successful petitioners.

    The NAM and the U.S. Chamber of Commerce filed a joint brief 1/14/05 supporting review of this case. We urged the Supreme Court to rule that joint venture pricing is not per se illegal, but rather that it should be analyzed under the rule of reason, which takes into account efficiencies and other valid justifications for the joint venture. The Ninth Circuit’s strict rule would have had a severe chilling effect on the creation and operation of joint ventures, and is at odds with the purpose of the antitrust laws to promote pro-competitive economic activity.

    Decision Below: 369 F.3d 1108 (9th Cir. 2004). See also case # 04-805, Texaco Inc. v. Dagher.

     

    Texaco Inc. v. Dagher (U.S. Supreme Court) -- 2006

    joint venture price fixing

    The Supreme Court held 2/28/06 that it is not per se illegal under Section 1 of the Sherman Act, 15 U.S.C. § 1, for a lawful, economically integrated joint venture to set the prices at which the joint venture sells its products. The joint venture’s formation, which was not challenged, effectively merged Texaco’s and Shell’s domestic gasoline refining and marketing operations, thereby ending competition between the two companies in these lines of business. The Court concluded that although the joint venture’s “pricing policy may be price fixing in a literal sense, it is not price fixing in the antitrust sense,” because the policy was “little more than price setting by a single entity—albeit within the context of a joint venture—and not a pricing agreement between competing entities with respect to their competing products.” This decision is important to any business that is or may become part of a joint venture. Jones Day filed briefs on behalf of Texaco and presented oral argument on behalf of both successful petitioners.

    The NAM and the U.S. Chamber of Commerce filed a joint brief 1/14/05 supporting review of this case. We urged the Supreme Court to rule that joint venture pricing is not per se illegal, but rather that it should be analyzed under the rule of reason, which takes into account efficiencies and other valid justifications for the joint venture. The Ninth Circuit’s strict rule would have had a severe chilling effect on the creation and operation of joint ventures, and is at odds with the purpose of the antitrust laws to promote pro-competitive economic activity.

    Decision Below: 369 F.3d 1108 (9th Cir. 2004). See also case # 04-814, Shell Oil Co. v. Dagher.

     

    Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc. (U.S. Supreme Court) -- 2006

    Robinson-Patman Act application to price quotes

    The Supreme Court held 1/10/06 that a manufacturer that offers its dealers different wholesale prices may not be held liable for price discrimination under the Robinson-Patman Act, absent any evidence that the manufacturer offered differing prices to dealers that were competing to resell to the same retail customer at the same time. In this case, manufacturer Volvo Trucks North America gave Reeder-Simco GMC and other Volvo dealerships “concessions” that the dealers used in bidding for sales to retail customers. Reeder presented evidence that the concessions from Volvo that other dealers used in successful bids for certain sales were more favorable than (1) the concessions that Volvo gave Reeder for use in successful bids for other sales (“purchase-to-purchase comparisons”), and (2) the concessions that Volvo offered Reeder for use in several unsuccessful bids for other sales (“offer-to-purchase comparisons”).

    Reversing the Eighth Circuit, the Supreme Court held that the purchase-to-purchase and offer-to-purchase comparisons could not form the basis for liability under the Robinson-Patman Act because in none of these instances did Reeder compete with other Volvo dealers for a sale to the same customer. In the rare instances that Reeder did compete head-to-head with other Volvo dealerships for the same sale, the Court held that if any price discrimination existed between the concessions offered the dealerships, it was not of sufficient magnitude so as to substantially affect competition between them. The Court emphasized that its interpretation of the statute was more consistent with the broader policies of the antitrust laws, which are geared more to the stimulation of interbrand competition than to the protection of existing competitors. The disposition of this case is relevant to businesses whose decisions are affected by the Robinson-Patman Act.

    NAM comment: The NAM 2/2/05 joined with the Truck Manufacturers Association, the Farm Equipment Manufacturers Association, the Association of Equipment Manufacturers and the Business and Institutional Furniture Manufacturer’s Association in an amicus brief urging the Supreme Court to review this decision. On May 20, we filed a second brief, this time on the merits of the issue on appeal.

    The Supreme Court’s ruling recognizes the need for flexibility of manufacturers’ pricing decisions when offering quotes on custom purchases like large trucks and farm equipment. Our brief argued that, in the context where dealers are responding to request for bids from potential purchasers, manufacturers may offer their products at prices that vary depending on a variety of competitive factors, all of which can be taken into account to promote interbrand competition. It is normal for manufacturers to choose a price level for made-to-order products on a case-by-case basis that depends on many factors, including the volume the customer is buying or has bought, whether the customer has historically purchased another brand, how busy the assembly plant is, and how high current demand is.

     

    Buckeye Check Cashing, Inc. v. Cardegna (U.S. Supreme Court) -- 2006

    Arbitration

    The Supreme Court 2/21/06 reaffirmed that a challenge to the validity of a contract as a whole, and not specifically to an arbitration provision within the contract, must be decided by the arbitrator. Respondents sued Petitioner, a provider of check-cashing services, in state court, alleging that the interest rate charged by Petitioner is usurious under Florida law. Petitioner moved to enforce the arbitration clause in its contracts with Respondents, and the Florida Supreme Court held that state contract law and public policy precluded enforcement of an arbitration agreement in a contract challenged as unlawful. In an opinion by Justice Scalia, the Supreme Court reversed. Stressing its prior holdings in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), and Southland Corp. v. Keating, 465 U.S. 1 (1984), the Supreme Court explained that: (1) as a matter of federal arbitration law, an arbitration provision is severable from the remainder of the contract; (2) unless the challenge is to the arbitration clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance; and (3) these principles apply in state as well as federal courts. This case is important to any individual or business that may be a party to a contract containing an arbitration clause. Decision below: 894 So. 2d 860 (Fla. 2005)

    Decision Below: 894 So. 2d 860 (Fla. 2005)

     

    Moores v. Friese (U.S. Supreme Court) -- 2006

    State regulation of out-of-state corporation's internal affairs

    The NAM and other business groups filed an amicus brief urging the U.S. Supreme Court to review an adverse decision from the California Supreme Court on an issue involving the internal affairs of a corporation. Normally internal affairs, such as the requirements that apply when a shareholder wants to bring a derivative suit on behalf of the corporation against the officers or directors, are governed by the state in which the company is incorporated. In this case, the lower court ruled that a California statute applies to the relationship between the corporation and its directors and officers, including a provision for treble damages liability. The corporation is incorporated in Delaware, which does not allow a treble damages remedy.

    The issue on appeal is whether the Commerce Clause and Due Process Clause prohibit one state from substituting its own substantive law for that of the state of incorporation. Our brief argues that only one state should have the authority to regulate a corporation's internal affairs, to avoid conflicting demands. Directors must be able to understand the rules and not have to guess as to which states might assert authority. Our free market system depends on uniform and predictable legal requirements. In addition, due process requires that directors be able to know in advance what law applies to their activities.

    This conflict can also arise in cases involving whether a former stockholder has standing to bring suit, whether corporate restructuring must be voted on by shareholders as a single class, whether cumulative voting is allowed, whether shareholders may inspect corporate records, and other internal corporate issues. The issue is important because both California and New York, two of the nation's most important economic powerhouses, purport to regulate out-of-state corporations' internal affairs. Since half of all U.S. publicly traded corporations are incorporated in Delaware, conflicts are bound to arise, and the Supreme Court must resolve this dilemma.

    The NAM joined with Technology Network, the Chamber of Commerce, the California Chamber of Commerce, the California Manufacturers and Technology Assn., and the California Business Roundtable in this brief. The Court declined to hear the appeal on October 2, 2006.

     

    Coker v. DaimlerChrysler Corp. (North Carolina Supreme Court) -- 2006

    No injury class action

    The NAM joined with the American Tort Reform Association in an amicus brief urging the North Carolina Supreme Court to reject a “no-injury” class action brought by purchasers of mini-vans in the mid 1990’s. The plaintiffs claimed that the mini-vans were touted as the “safest mini-van in the world”, but the vans did not have a new brake-shift interlock to prevent a vehicle from accidentally being shifted into gear without depressing the brake. The company argued that the vans performed as promised, and that the plaintiffs cannot sue when there has been no malfunction or injury. The lower courts agreed, ruling that the vans were not warranted to have the interlock, there was no allegation the vehicles were defective without it, the plaintiffs did not contract for, or even know about, the interlock, and no plaintiff sold a van at a diminished value.

    Our amicus brief argued that there is no right to sue claiming that a product has a chance to cause future injury. Instead, there must be an actual injury. Adopting the plaintiffs’ theory would allow any product owner to allege harm that may never arise, merely because they are dissatisfied with the product. It would also make North Carolina a magnet jurisdiction for these kinds of claims, raising the cost of doing business and usurping the role of the legislature.

    In addition, the plaintiffs are essentially advancing a fraud-on-the-market theory that has never been accepted in North Carolina. That theory applies in some federal securities cases, and has been the subject of significant criticism. There must be proof of causation, i.e., that the statement actually caused the plaintiffs to rely on it and to pay a higher price than they would have otherwise.

    On April 7, 2006, the North Carolina Supreme Court affirmed the order dismissing plaintiffs' amended complaint.

     

    Stolt-Nielsen S.A. v. United States (U.S. Supreme Court) -- 2006

    Court power to scrutinize agreement not to prosecute cooperating company

    The issue in this case is whether federal courts have the authority, under the Separation of Powers doctrine, to enjoin federal prosecutors from breaching a binding contractual obligation "not to bring any criminal prosecution" against a company and its executives. It is important for companies that give up their constitutional rights in return for immunity, particularly in the context of the Antitrust Division’s Corporate Leniency Policy. The lower court found that the company had complied with its agreement, yet the Court of Appeals said courts cannot interfere with prosecutorial discretion to indict.

    The NAM joined with the Washington Legal Foundation in an amicus brief urging the Supreme Court to hear this case on appeal. On Oct. 30, the Court declined to hear this appeal.

     

    Air Conditioning and Refrigeration Institute v. Energy Resources Conservation and Development Commission (U.S. Supreme Court) -- 2006

    Preemption of California energy regulations

    The NAM and five other associations filed an amicus brief 10/14/05 supporting an appeal of a Ninth Circuit ruling that allows California to demand detailed information from manufacturers about energy efficiency.  We argue that the California regulations are preempted by the Energy Policy and Conservation Act of 1975, which sets energy and water-use efficiency standards for appliances and expressly preempts any state regulation that “provides at any time for the disclosure of information with respect to any measure of energy consumption or water use” that differ from federal requirements.  California argues that the law only applies to disclosure of information to consumers and not to the state government itself.  Our brief argues that there is a split in the circuit courts, that there should be no presumption against preemption here, and that the issue is an important and recurring one appropriate for the Supreme Court to resolve.

    On 6/19/06, the Court declined to hear this appeal.

     

    American Lung Ass'n v. EPA (D.C. Circuit) -- 2006

    8-hour ozone Phase I Implementation Rule

    The NAM, the American Chemistry Council, the American Forest and Paper Association and the American Petroleum Institute filed joint motions to intervene to help defend the EPA against two suits brought by the ALA and 3 environmental groups over some of its Clean Air Act rules. The rules relate to issues that were reconsidered by the EPA as a result of earlier litigation, and are entitled, “Nonattainment Major New Source Review Implementation Under 8-Hour Ozone National Ambient Air Quality Standard: Reconsideration,” and “Implementation of the 8-Hour Ozone National Ambient Air Quality Standard – Phase 1: Reconsideration.”

    Industry supports the new rules because they provide reasonable answers to questions relating to the implementation of tougher clean air requirements. First, since the old system of measuring emissions has been revoked, the new rules do not mandate certain contingency measures if an area of the country does not meet those old standards. Second, even though the old standard has been revoked, portions of it remain in place and there are new ways to demonstrate compliance with the standard. Third, new source review permitting requirements will be triggered based on the new 8-hour standard, which generally will apply to fewer facilities.

    For further details, see South Coast Air Quality Management District v. EPA.

     

    Carabell v. U.S. Army Corps. of Engineers (U.S. Supreme Court) -- 2006

    Clean Water Act jurisdiction

    A divided Supreme Court ruled 6/19/06 that the Army Corps of Engineers may have impermissibly exercised jurisdiction under the Clean Water Act over wetlands connected to tributaries of “navigable waters” only by man-made drains and ditches. To constitute a “navigable water” under the Act, a water or wetland must have a “significant nexus” to waters that are or were navigable in fact or that could reasonably be made so. The Sixth Circuit ruled that even a transitory “hydrological connection” to a tributary of a “navigable water” constituted a “significant nexus,” a test satisfied by the drains and ditches. The Supreme Court reversed and remanded, but no opinion garnered a majority “on precisely how to read Congress’ limits on the reach of the Clean Water Act.”

    In the plurality opinion joined by Chief Justice Roberts and Justices Thomas and Alito, Justice Scalia set forth a two-part test for whether wetlands are subject to the Act: “First, that the adjacent channel contains a ‘water of the United States,’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” The plurality concluded that “ecological considerations” warrant treating a wetland as part of an adjacent navigable water only where there is a continuous surface connection—and, thus, a “boundary-drawing problem”—between the wetland and the adjacent navigable water. The plurality remanded the case for consideration of whether the drains and ditches contained a permanent flow of water, and whether they possessed a surface connection sufficient to sustain the Corps’ jurisdiction.

    Justice Kennedy, concurring only in the judgment, took issue primarily with the plurality’s rejection of “ecological considerations.” Noting that the “absence of an interchange of waters [may make] protection of the wetlands critical to the statutory scheme,” Justice Kennedy concluded that “wetlands possess the requisite nexus … if the wetlands … significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’” The concurrence also contested the plurality’s permanence requirement. Justice Kennedy did recognize, however, that the wetlands’ proximity to navigable-in-fact waters should be considered “on a case-by-case basis” to avoid “the potential overbreadth of the Corps’ regulations[.]” Justice Kennedy concurred in the remand because the lower courts had not adequately considered “whether the specific wetlands at issue possess a significant nexus with navigable waters.”

    This decision is significant to any business involved in the development of property in or around wetlands.

     

    In re Final Rule to Implement the 8-Hour Ozone NAAQS -- Phase 1 (EPA) -- 2006

    Ozone regulations

    The National Petrochemical & Refiners Association (NPRA) and the NAM 6/29/04 submitted to the EPA a Petition for Reconsideration of the final rule to implement the 8-hour ozone national ambient air quality standard (NAAQS) and the designations and classifications for the ozone standard. Industry is concerned that the timetable for certain facilities in nonattainment areas to come into compliance is too short. At least 15 regions of the country will need more time to come into compliance than is provided by the EPA.

    Due in part to our efforts, the EPA reconsidered the issues before publishing its final rule. Industry supports the new rule because it provides reasonable answers to questions relating to the implementation of tougher clean air requirements.

    For further details, see American Lung Association v. EPA.

     

    New Mexico v. General Electric Co. (10th Circuit) -- 2006

    Money damages; double recovery

    The NAM joined with the American Chemistry Council, American Petroleum Institute, National Mining Association, the U.S. Chamber of Commerce, the U.S. Council for International Business and 5 other associations in an amicus brief 5/27/05 in the U.S. Court of Appeals for the 10th Circuit. We argued that the state of New Mexico may not seek money damages from companies involved in the clean-up of hazardous materials in the South Valley Superfund Site. The lower court had ruled that New Mexico did not prove that it would have used the water under the Superfund site, and therefore could not prove damages.

    The NAM brief informed the court that New Mexico’s claim seeks double recovery. The companies worked together for nearly 15 years with the U.S. Environmental Protection Agency and the New Mexico Environmental Department to return water at the site to drinking water standards, yet were being sued to replace the resource that they cleaned up. Allowing such double recovery is a direct threat to the federal and state cleanup programs. To be successful, such cleanup efforts must have the maximum voluntary participation by the companies involved. It is unfair to allow the state with one hand agree to the clean-up plan and implementation at the site, and then have it turn around and sue for damages because it thinks the clean-up should have done more.

    In addition, CERCLA (the Superfund law) provides a limited number of ways in which an EPA remediation remedy may be challenged in court. This is to help prevent time-consuming litigation that would hinder the prompt clean-up of Superfund sites. Furthermore, we argued that the state cannot claim damages for the lost use of the water if no one in fact ever suffered damages from not having the water available. Now that the water has been cleaned, it is available for future use. The state admits that the more than $1 billion in damages it seeks will not be used for water quality remediation.

    The industrial community and natural resource trustees have been working toward increased cooperation and trust in the resolution of natural resource damage cases at individual sites, as well as to increase mutual understanding and certainty in the process as a whole. Claims like the one brought by the State of New Mexico have the potential to gravely set back this progress.

    Attorneys general from 13 other states filed an amicus brief in support of New Mexico.

    On October 31, 2006, the Tenth Circuit rejected New Mexico's challenge. It ruled that the state could not challenge CERCLA remediation efforts until they are completed, and seeking money damages does just that. It ruled that CERCLA preempts "any state remedy designed to achieve something other than the restoration, replacement or acquisition of the equivalent of a contaminated natural resource."

    The state also has no claim for damages from the loss of water, since New Mexico is part of the Middle Rio Grande Administrative Area, which controls the use of water and substituted another well's water for the water temporarily lost to the clean-up effort. Thus, there was no net loss of water to Albuquerque.

     

    New York v. EPA (D.C. Circuit) -- 2006

    Equipment Replacement Rule case

    The NAM is a member of the Equipment Replacement Rule Coalition, which filed a brief 12/9/05 in a suit brought by the State of New York against the EPA over the agency's 10/27/03 final rule titled "Prevention of Significant Deterioration (PSD) and Non-Attainment New Source Review (NSR): Equipment Replacement Provision of the Routine Maintenance, Repair and Replacement Exclusion." This rule governs the factors that determine whether companies must obtain EPA permits before replacing broken or deteriorating equipment at their industrial facilities. New York challenged the rule as too lenient. The Equipment Replacement Rule Coalition, comprising various trade associations, manufacturers and utilities, generally support the EPA's new rule.

    Our brief on the merits argued that EPA has discretion under the Clean Air Act to issue the rule, and that major modifications are not any physical plant changes, but only those that increase an existing unit’s design capacity to emit.

    On 3/17/06, the Court vacated the rule. It decided that the Clean Air Act’s permit requirements for “any physical change” do not allow the EPA to expand the category of projects that it views as “routine replacement.” The only exceptions are projects that do not result in emissions increases or that are de minimis. The decision leaves the existing Routine Maintenance, Repair and Replacement Exclusion in place.

     

    Pakootas v. Teck Cominco Metals, Ltd. (9th Circuit) -- 2006

    CERCLA

    After the Environmental Protection Agency issued a Unilateral Administrative Order to a Canadian company to conduct a study on contamination of the Columbia River in this country from its smelter in Canada, an Indian tribe sued to enforce the order. The company argued that the EPA does not have jurisdiction under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but the U.S. federal district court ruled otherwise. The company appealed, and the Ninth Circuit affirmed, ruling 7/3/06 that the EPA’s order only applied to a “facility,” as it’s defined in CERCLA, within the territorial boundaries of the United States. Even though the smelter was located in Canada, the definition of a facility under CERCLA is an area where a hazardous substance has been deposited or otherwise comes to be located. This is a very broad definition of facility that subjects foreign companies to liability for pollution in the United States.

    The court also ruled that the slag located in the United States was leaching hazardous substances, thus satisfying the legal requirement for liability that there be a “release” from the facility into the environment. EPA’s jurisdiction did not extend to the smelter across the border, but does cover the underwater facility and hazardous releases in the United States.

    The NAM joined with the National Mining Association supporting Teck Cominco’s appeal. In an amicus brief filed 6/13/05, we argued that CERCLA applies only within this country unless Congress clearly expresses an intent to apply it extraterritorially, which it did not. These kinds of disputes are quintessentially an international concern, not for unilateral action by one country's EPA. Private litigation upsets the resolution of such disputes through diplomatic means, or through the long-standing model of an arbitration group that was specifically established for the smelter in the 1930s. Allowing such litigation in U.S. courts opens them up to worldwide claims, particularly as environmental science improves, and could subject U.S. firms to retaliatory litigation abroad, imposing multiple and conflicting standards on environmental behavior.

    Teck Cominco appealed for rehearing. On 7/24/2006, the NAM and the National Mining Association filed a brief in support of this appeal, arguing that the site of the release is irrelevant for resolving the question whether the United States is improperly applying its law to an entity based in another country. The decision ignores the history of negotiated international disputes and transforms CERCLA into a global environmental statute. Rehearing was denied on Oct. 30, 2006.

     

    Rapanos v. United States (U.S. Supreme Court) -- 2006

    Clean Water Act jurisdiction

    A divided Supreme Court ruled 6/19/06 that the Army Corps of Engineers may have impermissibly exercised jurisdiction under the Clean Water Act over wetlands connected to tributaries of “navigable waters” only by man-made drains and ditches. To constitute a “navigable water” under the Act, a water or wetland must have a “significant nexus” to waters that are or were navigable in fact or that could reasonably be made so. The Sixth Circuit ruled that even a transitory “hydrological connection” to a tributary of a “navigable water” constituted a “significant nexus,” a test satisfied by the drains and ditches. The Supreme Court reversed and remanded, but no opinion garnered a majority “on precisely how to read Congress’ limits on the reach of the Clean Water Act.”

    In the plurality opinion joined by Chief Justice Roberts and Justices Thomas and Alito, Justice Scalia set forth a two-part test for whether wetlands are subject to the Act: “First, that the adjacent channel contains a ‘water of the United States,’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” The plurality concluded that “ecological considerations” warrant treating a wetland as part of an adjacent navigable water only where there is a continuous surface connection—and, thus, a “boundary-drawing problem”—between the wetland and the adjacent navigable water. The plurality remanded the case for consideration of whether the drains and ditches contained a permanent flow of water, and whether they possessed a surface connection sufficient to sustain the Corps’ jurisdiction.

    Justice Kennedy, concurring only in the judgment, took issue primarily with the plurality’s rejection of “ecological considerations.” Noting that the “absence of an interchange of waters [may make] protection of the wetlands critical to the statutory scheme,” Justice Kennedy concluded that “wetlands possess the requisite nexus … if the wetlands … significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’” The concurrence also contested the plurality’s permanence requirement. Justice Kennedy did recognize, however, that the wetlands’ proximity to navigable-in-fact waters should be considered “on a case-by-case basis” to avoid “the potential overbreadth of the Corps’ regulations[.]” Justice Kennedy concurred in the remand because the lower courts had not adequately considered “whether the specific wetlands at issue possess a significant nexus with navigable waters.” This decision is significant to any business involved in the development of property in or around wetlands.

     

    S.D. Warren Co. v. Maine Board of Environmental Protection (U.S. Supreme Court) -- 2006

    Clean Water Act jurisdiction

    The Supreme Court 5/15/06 decided that river water utilized by private dams is “discharge” within the meaning of Section 401 of the Clean Water Act, 33 U.S.C. § 1341 (a)(1), after the water’s hydroelectric use in the dam. Section 401 requires that if an activity “may result in any discharge into the [Nation’s] navigable water[s],” an applicant for a federal license or permit must obtain a certification that the activity will not violate state water quality standards. The Act does not define the term “discharge,” apart from providing that “[t]he term ‘discharge’ when used without qualification includes a discharge of a pollutant, and a discharge of pollutants.” 33 U.S.C. § 1362(16). The Court unanimously concluded that because the term is not further defined in the statute and is not a term of art, it is to be construed “in accordance with its ordinary and natural meaning”—a “flowing or issuing out.” The Court rejected arguments that a different meaning is dictated by the surrounding language of Section 401, by the meaning of Section 402 of the Act, or by legislative history. This decision is important to any business that may be subject to regulation under the Clean Water Act.

    Decision Below: 868 A.2d 210 (Me. 2005)

     

    South Coast Air Quality Management District v. EPA (D.C. Circuit) -- 2006

    8-hour ozone Phase I Implementation Rule (Consolidated with American Lung Assn. v. EPA)

    The NAM is part of a joint industry effort to support the Environmental Protection Agency’s 8-Hour Ozone Phase I Implementation Rule. Since enactment of the Clean Air Act in 1990, EPA has been working to implement provisions that establish ozone control requirements and deadlines for compliance. First it established a standard based on a 1-hour measurement system, with 5 classifications of violations (marginal, moderate, serious, severe or extreme). In 1997, EPA replaced the 1-hour standard with a more stringent standard with an 8-hour averaging time, and, after court challenges that went to the Supreme Court, again modified the regulation to provide different compliance timetables depending on the levels of ozone in a particular area.

    The State of Ohio sued to delay the 8-hour standard and to force EPA to adopt more reasonable deadlines. It feared that implementation will require the “depopulation strategy,” whereby all local industry must shut down and all local vehicle traffic must be stopped in the Cleveland-Akron area. The Baton Rouge Chamber of Commerce sued to eliminate enforcement under the old 1-hour standard. The American Lung Association, the Natural Resources Defense Council and others, sued to force the use of specific timetables for implementation and to prevent companies from backsliding from the old standard. The NAM and other industry groups intervened in these suits to generally support the EPA’s latest efforts.

    Our brief argued that the EPA’s balance of compliance requirements involving either the old 1-hour standard or the tougher 8-hour standard is valid. Nothing in the Clean Air Act requires old standards to remain in effect in perpetuity. Since the old standard was revoked, penalties should not continue to be assessed under that system. We supported EPA’s determination that an area subject to the 8-hour measuring standard should be subject only that the new classification system that goes with it.

    On December 22, 2006, the D.C. Circuit vacated the rule and remanded the matter to EPA for further proceedings. The court upheld EPA's decision to revoke the 1-hour ozone standard, but imposed substantial restraints. It struck down EPA's decision classifying nonattainment areas under the generally less demanding Subpart 1 (of Part D of Title I), instead ruling that areas with 8-hour "design values" (the measured concentration of ground-level ozone) above .09 ppm must be classified under Subpart 2. It called EPA's decision to apply only Subpart 1 requirements to areas with 8-hour design values between .08 ppm and .09 ppm unreasonable. In addition, EPA's rules were designed to prevent "backsliding" by regulated industries, and the D.C. Circuit ruled that several requirements continue to apply (such as New Source Review requirements, section 185 emission fees, contingency plans for failure to improve, and local transportation planning restraints).

    Until further word from EPA, the new 8-hour designation/classification system was vacated, but the designations/classifications themselves were in a separate rule that was not vacated. Thus, those designations and classifications apparently remain in effect, with State Implementation Plans due in June. In addition, the anti-backsliding provisions under the 1-hour rule are still in effect.

    On March 22, 2007, the NAM joined with other organizations in a petition for rehearing. We argued that the court's decision expands EPA's Section 172(e) authority to prevent companies from backsliding on ozone pollution limits. We argued that the backsliding provision applies only if air quality standards are relaxed, and the EPA in fact issued revised standards that are more stringent. In addition, existing case precedent requires that courts defer to EPA interpretations that are reasonable. The court's decision second-guessed the EPA's interpretation, and conflicts with that of another federal appeals court. The petition for rehearing was denied 6/8/2007.

     

    El Paso Tennessee Pipeline Co. v. Yolton (U.S. Supreme Court) -- 2006

    Lifetime vesting of retirement health care benefits

    The trial court and the Sixth Circuit ruled that retirees and surviving spouses were entitled to lifetime health care coverage pursuant to contracts negotiated between their employer and the UAW. The court recognized that there is no statutory right to lifetime health care benefits, but that life and health insurance benefits carry with them an inference that the parties intended them to continue for life. The NAM filed an amicus brief urging the Court to review the case and describing how different federal court rulings frustrate the efforts of companies to adopt consistent national retiree health benefit programs. The lower court's inference that health benefits vest for life imposes an immense and unexpected burden on employers while providing retirees with an unbargained-for windfall. The Supreme Court declined to review this case.

     

    Yolton v. El Paso Tennessee Pipeline Co. (6th Circuit) -- 2006

    Lifetime vesting of retirement health care benefits

    The NAM sent a letter 3/13/06 to the Sixth Circuit supporting the petition for rehearing en banc in this case involving whether retirement health care benefits vested for life. The trial court and the Sixth Circuit ruled that retirees and surviving spouses were entitled to lifetime health care coverage pursuant to contracts negotiated between their employer and the UAW. The court recognized that there is no statutory right to lifetime health care benefits, but that life and health insurance benefits carry with them an inference that the parties intended them to continue for life. The NAM’s letter endorses an amicus brief filed by the U.S. Chamber of Commerce that calls on the court to recognize that an employer’s commitment to vest welfare benefits must be stated in clear and express language and should not be inferred lightly. Otherwise, courts will rewrite collective bargaining agreements, undermining federal labor policy promoting such agreements. Medical costs are unpredictable and have been rising rapidly for years, and a presumption that health benefits vest for life creates uncertainty when companies are struggling to survive. The Sixth Circuit will become a magnet jurisdiction for this kind of litigation if retiree benefits are liberally interpreted to survive contract expiration.

    The Sixth Circuit declined to rehear the case, and the Supreme Court denied review.

     

    Fisher Scientific Co. v. Superior Court (California Supreme Court) -- 2006

    Forum non conveniens in asbestos case

    The NAM and 8 other organizations filed an amicus letter urging the California Supreme Court to hear an appeal of a decision that allowed a non-resident plaintiff to sue a company in California even though his only contact with the state was a one-year fellowship 30 years ago. Our letter objects to the growing trend of nonresident plaintiffs flocking to California to file law suits. Other jurisdictions that have become notorious litigation magnets have started to adopt reasonable requirements to help relieve unnecessary congestion in the courts and burdens on jurors and prospective jurors. Six case examples are provided to show how lax the California courts have been.

    Also on the brief are the Coalition for Litigation Justice, Inc, National Federation of Independent Business Legal Foundation, Property Casualty Insurers Assn. of America, American Tort Reform Assn., Chamber of Commerce, American Insurance Assn., American Chemistry Council and National Assn. of Mutual Insurance Companies.

    On 8/30/06, the California Supreme Court denied our petition.

     

    Wisconsin Right To Life, Inc. v. Federal Election Commission (U.S. Supreme Court) -- 2006

    Corporate political speech

    The Supreme Court unanimously held 1/24/06 in a per curiam opinion that McConnell v. Federal Election Commission, 540 U.S. 93 (2003), does not foreclose as-applied challenges to the constitutionality of section 203 of the Bipartisan Campaign Reform Act. Section 203 bars corporations from using general corporate treasury funds to fund targeted broadcast communications that reference a federal candidate for thirty days before a primary election or sixty days before a general election. The district court had interpreted McConnell as foreclosing Petitioner Wisconsin Right to Life, Inc.’s First Amendment challenge to section 203 as applied to three particular communications and to grassroots lobbying communications generally. The Supreme Court disagreed, stating that, in its decision in McConnell “upholding § 203 against a facial challenge, we did not purport to resolve future as-applied challenges.” The Court therefore vacated the judgment and remanded for the district court to consider the merits of the as-applied challenge in the first instance. This case is important for any business that is engaged in activity subject to section 203 of the Bipartisan Campaign Reform Act.

    Decision Below: 2005 U.S. Dist. LEXIS 17226 (D.D.C. May 9, 2005) (unreported)

     

    BP American Production Co. v. Burton (U.S. Supreme Court) -- 2006

    Statute of limitations for administrative proceedings

    The Supreme Court granted certiorari 4/17/06 to determine the statute of limitations governing administrative proceedings brought by the Government for money damages for breach of contract. A federal statute, 28 U.S.C. § 2415(a), bars any “action” by the United States seeking “money damages” for breach of contract unless the “complaint” is filed within six years of when the right of action accrues or within one year of a final decision in an administrative proceeding, whichever is later. In an opinion authored by then-Judge Roberts, the D.C. Circuit, consistent with an unpublished opinion of the Fifth Circuit, concluded that this limitations period does not apply to an administrative order demanding payment of money owed to the Government (here, royalties due under the Mineral Leasing Act). The D.C. Circuit reasoned that such an order is neither an “action” for “money damages” nor a “complaint” within the meaning of section 2415(a) because those terms refer exclusively to actions filed in court. In contrast, the Ninth and Federal Circuits have held, in other contexts, that the six-year limitations period of section 2415(a) applies both to agency enforcement proceedings and to in-court lawsuits seeking damages for breach of contract. Chief Justice Roberts and Justice Breyer recused themselves from this case.

    On 12/11/06, the Supreme Court uunanimously affirmed, holding that the six-year statute of limitations for government contract actions does not apply to administrative payment orders. This case is important to any individual or business that may be subject to a statute, like the Mineral Leasing Act, under which an agency may initiate proceedings to recover money pursuant to an agreement.

     

    Arbaugh v. Y & H Corp. (U.S. Supreme Court) -- 2006

    Definition of an employer

    The Supreme Court unanimously held 2/22/06 that satisfaction of the numerosity component of Title VII’s definition of “employer” is an element of a plaintiff’s claim for relief, not a prerequisite to federal subject-matter jurisdiction. Section 701(b) of the Civil Rights Act of 1964, 42 U.S.C. § 2000e(b), limits the definition of “employer” to those having “fifteen or more employees.” The lower courts in this case held that the numerosity requirement is jurisdictional and thus required dismissal even though it had not been raised by the defendant until after a jury verdict for the plaintiff. Reversing, the Supreme Court analyzed the text and structure of Title VII’s jurisdictional provision, 42 U.S.C. § 2000e-5(f)(3), together with 28 U.S.C. § 1331, the general statute that confers federal-question jurisdiction. The Court concluded that the numerosity requirement contained in Title VII’s definition of “employer” is not a threshold jurisdictional requirement akin to the monetary floor clearly specified for diversity actions in 28 U.S.C. § 1332. In doing so, the Court articulated a bright-line rule: if Congress does not definitively state that a threshold limitation on the scope of a statute is jurisdictional in nature, the courts must treat the restriction as nonjurisdictional. The Court’s decision is important to employers with fewer than fifteen employees and to any business that may be involved in litigation under federal statutes with specifically limited scope.

    Decision Below: 380 F.3d 219 (5th Cir. 2004)

     

    Burlington N. and Santa Fe R.R. Co. v. United States (U.S. Supreme Court) -- 2006

    Employment discrimination

    The Supreme Court 6/22/06 decided that the anti-retaliation provision in Title VII of the Civil Rights Act of 1964 is not limited to protecting employees from retaliatory action taken by employers that relates to employment or occurs in the workplace. Rather, the provision covers any material action taken by the employer that would likely discourage a reasonable worker from making or supporting a charge of employment discrimination. The Court determined that a plain reading of Title VII indicated that Congress intended to provide employees broad protection from employer retaliation. Specifically, the Court pointed out that unlike the language of the substantive anti-discrimination provision, which limits its scope to actions that affect employment or alter the conditions of the workplace, the wording of the anti-retaliation provision contains no such qualifiers. Congress’s unqualified prohibition against retaliation was a recognition, the Court stated, that employers can effectively retaliate against employees outside of the workplace and in ways that do not relate directly to employment. But the Court was also careful to emphasize that the anti-retaliation provision does not cover petty slights or minor annoyances experienced by an employee who reports discriminatory behavior, but only materially adverse actions. Furthermore, the Court held that a finding of materiality must be based on the perspective of a reasonable worker, rather than on a particular employee’s subjective feelings. This case is of importance to every business covered by Title VII.

    Decision Below: 364 F.3d 789 (6th Cir. 2004) (en banc)

     

    Domino’s Pizza v. McDonald (U.S. Supreme Court) -- 2006

    Race discrimination in contracts

    The Supreme Court decided 2/22/06 that a shareholder of a corporation cannot bring a claim under Section 1 of the Civil Rights Act of 1866, 42 U.S.C. § 1981, which prohibits discrimination in the making and enforcement of contracts, if the shareholder has no rights under the contract that he claims the defendant’s discrimination impaired. In this case, the plaintiff was the president and sole shareholder of a corporation that entered into a set of contracts with the defendant for the construction of four restaurants. The plaintiff sued, claiming violation of Section 1981, when the defendant terminated these contracts allegedly because the plaintiff is African American. In an opinion authored by Justice Scalia, the Supreme Court today held, based on the language of Section 1981, that a claimant can sue only for discrimination that impairs a contractual relationship if the claimant actually has rights under the contract at issue. In this case, the Court indicated, the plaintiff has no claim because the shareholder of a corporation has no rights and is exposed to no liability under a corporation’s contracts. This case is of interest to any business that forms contractual relationships because it limits the class of plaintiffs who can claim racial discrimination in the making and enforcement of contracts.

    Decision Below: 107 Fed. App. 18 (9th Cir. 2004)

     

    Olivo v. ExxonMobil Corp. (New Jersey Supreme Court) -- 2006

    Liability for second-hand exposure

    The NAM joined with six other groups in an amicus brief 12/12/05 urging the New Jersey Supreme Court to reject a theory of liability that would hold a company liable for second-hand exposure to a hazard in the workplace. The court, however, ruled 4/24/06 that the company owed a duty to protect against foreseeable harm to an employee’s wife (who laundered his work clothes). The court sent the case back for further proceedings on the extent of the duty owed to the worker and whether the company had satisfied the duty. It also left open the possibility that the company could be exonerated if the hazard-incident-to-work exception applies.

    The wife of a contractor allegedly was harmed by asbestos brought home by her husband from work.  Her husband worked as a union pipe welder at over fifty worksites during his 37-year career, sometimes being exposed to asbestos insulation and carrying it home on his clothing.  Sixteen years after his retirement, she was diagnosed with mesothelioma.  Her husband sued 30 companies over her illness.  Whether a landowner or employer is liable to third parties for second-hand exposure to hazardous substances brought home from work is an aggressive new position that plaintiffs are pressing in the courts.  Two state courts have recently refused to create this new liability.  Our brief highlighted the fact that liability to remote parties is a policy issue for the legislature, and that extending it in a case like this is not appropriate because of difficult questions relating to causation, control and limitless liability.

     

    Sereboff v. Mid Atlantic Medical Services, Inc. (U.S. Supreme Court) -- 2006

    Recovering health care expenses advanced to employees

    The Supreme Court held 5/15/06 that section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), authorizes an action by a plan fiduciary against a beneficiary to recover specifically identified funds where the beneficiary has recovered for its injuries from a third party. According to the terms of the ERISA plan administered by Respondent, Mid Atlantic Medical Services, a plan beneficiary is required to reimburse Mid Atlantic for benefits paid by the plan if the beneficiary subsequently recovers from a third-party tortfeasor, as Petitioners, the Sereboffs, did. After Mid Atlantic had claimed a lien on the expected proceeds from the Sereboffs’ tort suit, it brought an action under section 502(a)(3) of ERISA to recover approximately $75,000 in medical expenses that it had paid on the Sereboffs’ behalf. The district court approved a stipulation by the parties creating a separate account to segregate the amount sought by Mid Atlantic from the remainder of the Sereboffs’ recovery. Rejecting the Sereboffs’ argument that Mid Atlantic’s claim was really a legal claim for damages, the Supreme Court held that Mid Atlantic’s claim was “equitable” within the meaning of section 502(a)(3) because Mid Atlantic “sought its recovery through a constructive trust or equitable lien on a specifically identified trust, not from the Sereboffs’ assets generally.” In so holding, the Court relied on precedent “from the days of the divided bench” to determine “those categories of relief that were typically available in equity.” This decision is important to any business that maintains an ERISA plan.

    Decision Below: 407 F.3d 212 (4th Cir. 2005)

     

    Secretary of Labor v. Cagle's Inc. (OSHA Review Commission) -- 2006

    Chemical-specific training under HazComm standard

    On 4/19/00, the NAM filed a brief urging the Secretary of Labor to hold that the Hazard Communication Standard, 29 C.F.R. § 1910.1200, does not require chemical-specific training. At present, the standard does not require that employers tell employees the name of each hazardous chemical, the hazard it poses and the precautions it requires. OSHA has now instructed its compliance officers that employers must make employees "specifically aware" which hazard category a chemical "falls within" -- which is chemical-specific training. That is an infeasible, if not impossible, burden to carry, for many of the Nation's workplaces contain hundreds or thousands of chemicals. Chemical-specific tra