Administrative Procedure -- active



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

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.


Related Documents:
NAM brief  (August 1, 2018)

 

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

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)

 


Alien Tort Statute -- active



Doe v. Nestle   (9th Circuit)

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.


Related Documents:
NAM brief  (December 7, 2018)

 


Arbitration -- active



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

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.


Related Documents:
NAM brief  (March 13, 2019)

 

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

Federal Arbitration Act preemption of California’s arbitration injunctive relief

On April 2, the NAM and the Chamber of Commerce filed an amicus brief in the 9th Circuit arguing that the Federal Arbitration Act (FAA) preempts California’s attempts to circumvent arbitration requirements by requiring class arbitration proceedings. Class arbitration, like class litigation, sacrifices the advantages of arbitration. Arbitration allows manufacturers to resolve disputes promptly and efficiently while avoiding the costs associated with traditional litigation. Arbitration is speedy, fair, inexpensive and less adversarial than litigation in court.

As way of background, in McArdle, the arbitrator issued an award denying all of McArdle’s claims on the merits. McArdle moved to vacate the award and for reconsideration of the initial order compelling arbitration in light of the California Supreme Court’s intervening decision in McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017), where the California Supreme Court held that the right to public injunctive relief is not waivable in any forum and, therefore, is not preempted by the FAA. AT&T appealed the district court’s denial of AT&T’s motion to confirm the award in McArdle on the grounds that the FAA preempts California’s prohibition of arbitration agreements that do not allow public injunctive relief.


Related Documents:
NAM brief  (April 2, 2018)

 


Class Actions -- active



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

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)

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)

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)

 

Nguyen v. Nissan North America   (9th Circuit)

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 excessive damages and explained why the district court properly denied class certification.


Related Documents:
NAM brief  (February 4, 2019)

 


Communications -- active



Mozilla Corp. v. FCC   (D.C. Circuit)

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)
NAM press release  (October 18, 2018)

 


Discovery -- active



BouSamra v. Excela Health   (Pennsylvania Supreme Court)

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.


Related Documents:
NAM brief  (March 12, 2018)

 


Environmental -- active



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

Risk Management Program litigation

The NAM joined with the American Chemistry Council, American Forest & Paper Association, American Fuel & Petrochemical Manufacturers, American Petroleum Institute and the Chamber of Commerce in asking a federal appeals court to review the EPA's new rule on Risk Management Programs under the Clean Air Act. The rule, published on Jan. 13, 2017, revises an existing rule that is designed to reduce chemical hazards and related accidental releases. The court will determine the validity of the new rule.

While the case is pending, the EPA will be considering the associations' Petition for Reconsideration of the rule. Our Feb. 28 petition and request for a 90-day stay argues that the final rule raises significant security concerns and compliance issues that will cause irreparable harm to manufacturers, requiring them to make available sensitive information that could expose plant vulnerabilities. The rule also imposes costly audit requirements for "each covered process" without justification, and the agency failed to conduct an adequate assessment of the costs and benefits.

The EPA delayed the effective date until Feb. 19, 2019, while it reconsiders the rule. This will give the agency time to review our concerns and will temporarily suspend the compliance burden.


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

 

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

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)

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 Motion  (March 1, 2018)
NAM Motion  (March 1, 2018)

 

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

Hazardous waste recycling

The NAM intervened in a lawsuit by environmental groups that seeks to constrain manufacturers' ability to recycle hazardous waste. The plaintiffs challenge a 2018 rule by the U.S. Environmental Protection Agency (EPA) that removed two 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 seeks to preserve the 2018 rule and to bring the voice of manufacturers to the litigation.


Related Documents:
NAM Motion  (July 12, 2018)

 

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

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 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 “once in, always in” 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 reduces regulatory burden 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.


Related Documents:
NAM brief  (January 14, 2019)

 

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

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 P.L.C.   (2nd Circuit)

Opposing misguided public nuisance lawsuits

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


Related Documents:
NAM brief  (February 14, 2019)

 

City of Oakland v. BP   (9th Circuit)

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)

Citizen suit interference with environmental regulation:

On 9/18/15, 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. We argued that citizen suits should not be used to second-guess regulatory systems with "gotcha" tactics, but have a limited role to fill in gaps that may occur. The company had been pro-active and cooperative dealing with the regulatory agencies, and courts should not interfere with that process.

On 5/27/16, the Fifth Circuit concluded that the district court erred in both its count of the correct number of “actionable” violations and its assessment of penalties in light of those violations. The Fifth Circuit determined that the district court analyzed alleged violations inconsistently, determining certain violations were “undisputed” in one part of the analysis but then requiring corroboration of those same violations in another section. The Fifth Circuit also held that the district court abused its discretion when it determined that, even if every alleged violation were actionable, a penalty would still not be warranted.

On remand, 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. The plaintiffs 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 amicus brief  (January 19, 2018)
NAM amicus brief  (September 17, 2015)

 

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

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

On June 12, 2015, the EPA published a rule entitled "State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Finding of Substantial Inadequacy; and SIP Calls for Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction." That is a complicated way of saying they responded to a Sierra Club petition by ordering state environmental enforcement plans to conform to their policies relating to excess emissions into the air when plant equipment is started up, shut down, or when it malfunctions (SSM events). The agency found that provisions in 36 state implementation plans (SIPs) are inadequate, in part because they contain provisions that provide an affirmative defense to emissions violations during SSM events.

The NAM is a member of the SSM Litigation Group, which filed a petition to review the EPA's final rule. 18 states filed similar challenges, as have various companies and business organizations. On March 16, 2016, the NAM and all the other industry petitioners joined in our main brief on the merits, arguing: (1) the EPA failed to justify its SIP call, (2) its prohibition on so-called "exemptions" from emission limitations are not supported, and (3) its prohibition of affirmative defenses by industry is not supported by the Clean Air Act or case law.

On March 25, 2017, proceedings in the case were suspended while the EPA reviews the rule. The agency will submit reports on the status of this review to the court every 90 days.


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

 

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

Air permitting streamlining

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

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


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

 

Georgia v. Wheeler   (S.D. Ga.)

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)

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)

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)

 

Juliana v. United States   (D. Ore.)

Regulation by litigation -- public trust theory for greenhouse gas regulation

A group of young people are the plaintiffs in this case demanding that various federal agencies do more to reduce greenhouse gas emissions in the United States, so that world levels will drop by at least 6% per year. The theory of their case is that the President and 9 federal agencies have a constitutional duty to under the "public trust doctrine" to hold the atmosphere and other public trust resources in trust for current and future generations.

A similar challenge was already heard and rejected by federal courts from 2011 to 2014. Alec L. v. McCarthy.. The courts ruled that the plaintiffs did not present a federal question, because the theory of public trust is entirely a state law issue.

The NAM and other business groups moved to intervene in this latest litigation on Nov. 12, 2015. At the same time, we filed a motion to dismiss the case, arguing not only that the litigation does not present a federal question, but also that it raises political questions that should be addressed through the legislative and executive branches of government, rather than through an undemocratic and judicially unmanageable proceeding based on an archaic legal principle.

After a lengthy oral argument, the judge granted our motion to intervene on 1/13/2016. Additional arguments on our motion to dismiss took place in March, but the magistrate judge issued a recommendation to the court that the motion be denied. We filed objections to this report on May 2, 2016, underscoring the serious problems of standing and justiciability that the plaintiffs face in this case. The federal government filed similar objections, and oral argument was held on Sept. 13.

On Nov. 10, Judge Ann Aiken upheld the magistrate's recommendation and denied the motions to dismiss. The case will now proceed to trial.

On March 7, the U.S. Department of Justice asked the court to certify an immediate appeal of the ruling denying dismissal of the case. The NAM and other intervenors filed a similar motion on March 10. Those motions are pending.

In late May, the NAM and other intervenors in the case filed motions to withdraw from this case. These motions were granted on June 28.


Related Documents:
Objections brief  (May 2, 2016)
Motion to dismiss  (November 12, 2015)
Motion to intervene  (November 12, 2015)

 

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

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. The court ruled that the company lacked standing to bring the case and would not prevail on the merits.


Related Documents:
NAM brief  (March 11, 2019)
NAM brief  (May 3, 2018)
Press release  (May 2, 2018)

 

Meritor, Inc. v. EPA   (D.C. Circuit)

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)

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 early 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)
Shopfloor blog  (December 23, 2015)

 

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

Applicability of "Waters of the United States" rule

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


Related Documents:
NAM brief  (June 29, 2018)

 

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

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 to intervene as a defendant on behalf of the EPA to help defend the interpretation and preserve regulatory clarity for manufacturers.


Related Documents:
NAM Motion  (February 13, 2019)

 

North Dakota v. EPA   (D.N.D.)

Challenge to "Waters of the United States" rule

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


Related Documents:
NAM brief  (June 8, 2018)

 

North Dakota v. EPA   (D.C. Circuit)

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

The Environmental Protection Agency issued a set of regulations in October 2015, governing greenhouse gas emissions from electric power plants. One covered existing units, and is the subject of separate litigation here. The other sets carbon pollution standards for new, modified and reconstructed power plants.

On December 18, the NAM and other associations in our coalition filed a petition for review in a federal appeals court. Our case was consolidated into 13 cases previously filed by North Dakota and other states and petitioners.

We are concerned that the EPA's new rules will eliminate coal-fired power plants from the mix of energy sources available to manufacturers, raising costs and threatening the reliability of the electric grid. As consumers of one-third of our nation's energy, manufacturers are put at a competitive disadvantage by this regulation.

The NAM and a variety of other industry groups, power companies and unions filed our main brief on the merits on Oct. 13, 2016. In our brief, we argue that the EPA exceeded its authority by determining that the best system of emission reduction for new coal-fired power plants is to require carbon capture and storage in deep underground saline formations. This process will require pipelines and the construction of deep new wells at locations with suitable geologic formations, involving costly and energy-intensive work. The EPA cannot establish that such formations are available throughout the country.

We also said that the EPA has not met the requirement that it show that the new emissions standard is achievable, because the technology required to achieve it is not demonstrated or available for full-scale application on a widespread scale. Instead, the regulation is based on Department of Energy engineering estimates of a hypothetical power plant.

The EPA’s analysis of the best system of emission reduction for modified and reconstructed steam generating units was minimal, and insufficient to satisfy the statutory requirements for imposing new regulatory requirements. It admitted that it did not have information regarding design factors and operation and maintenance practices that must form the basis for determining that a performance standard is achievable.

On March 28, 2017, the EPA moved to hold this case in abeyance pending EPA's review of the rule pursuant to an Executive Order from President Trump. Our coalition filed a brief in support, and on March 28, the court agreed. Status reports will be filed every 30 days, and the court ordered supplemental briefing by May 15 on whether the case should be remanded to the EPA rather than held in abeyance.


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

 

North Dakota v. EPA   (D.C. Circuit)

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

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


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

 

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

Local interference with energy exports

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


Related Documents:
NAM brief  (February 19, 2019)

 

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

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)

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)

 

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

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. The NAM is pursuing several appeal options.


Related Documents:
NAM brief  (July 6, 2018)

 

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

Applicability of "Waters of the United States" rule

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


Related Documents:
NAM brief  (June 28, 2018)

 

West Virginia v. EPA   (D.C. Circuit)

Challenging EPA's Clean Power Plan

On the day that the EPA's Clean Power Plan regulations were published in the Federal Register, twenty-six states filed suit. The suits are expected to repeat many of the arguments made in similar suits filed by various states and coal companies earlier this year. Those cases are summarized here, and were dismissed by the court as premature.

The NAM and a coalition of other national trade associations filed suit later that day, along with a motion asking the court to stay, or suspend implementation of, the rule until the legal issues are resolved in court.

The NAM filed extensive comments during the development of the rule, but they were largely ignored. Instead, the EPA came out with a rule that will lead to a tremendous change in the power industry and beyond, restricting fuel resources and reducing the reliability of the electric grid.

Manufacturers are committed to reducing greenhouse gases and have helped bring about a more than 10% reduction in them since 2005. the EPA's approach will drive up energy rates and make it increasingly difficult for manufacturers to make things and create jobs in the United States. We believe that we have a strong case that the regulation exceeds the EPA's authority under the Clean Air Act and that the courts will step in to restrain the agency.

On Jan. 21, 2016, the D.C. Circuit denied motions to stay the regulation pending the outcome of the litigation, but granted expedited briefing with oral arguments scheduled for June 2, 2016. West Virginia and 28 other states and state agencies filed an application for a stay in the U.S. Supreme Court on Jan. 26. In an unprecedented ruling, the Supreme Court granted the stay on Feb. 9. Click here for details.

All petitioners, including the NAM, numerous states, electric utilities and other business groups, filed a joint brief on Feb. 19 detailing the legal arguments against the EPA’s rule. First, we argued that the Clean Air Act does not authorize the EPA to restructure the power sector, invading a traditional state regulatory domain without clear congressional authorization. In addition, the regulation mandates emissions reductions that go beyond what any stationary source of emissions can achieve, and mandates that the owners and operators of those sources reduce or cease work and shift the generation of electricity to another power plant.

Second, the Clean Air Act expressly prohibits the EPA from imposing regulations under Sec. 111 on facilities that are already regulated under Sec. 112, which is the case here. This provision was designed to prevent duplicative or otherwise inefficient regulation.

Third, the regulation bars the authority granted to states to consider the remaining useful life of a source when establishing its standards, thus taking into account the tremendous costs associated with switching fuel sources away from fossil fuels.

Finally, we argued that the regulation violates states’ rights by commandeering their authority over intrastate generation and transmission of electricity and leaving them to bear the brunt of citizen complaints about increased costs and lost jobs.

We filed a reply brief on 4/22/16 reiterating and expanding on these arguments. Oral arguments, originally scheduled before a 3-judge panel for June 2, were held on September 27 before the entire (en banc) court (10 judges). This is a sign of the importance of the case to the D.C. Circuit judges, and of the need for a quicker resolution of this case than most. The arguments, scheduled to last under 4 hours, turned out to take 6 hours and 45 minutes because of the many issues and active questioning from the judges.

In the March, 2017, EPA moved to hold this case in abeyance in light of its announcement that it had started a review of the rule pursuant to an order from President Trump. Our coalition filed a supporting response brief, and the court agreed, suspending the case on March 28, 2017. Periodic reports from EPA will be filed, and the parties filed briefs on whether the case should be sent back to the agency rather than held in abeyance. Our coalition supported holding the case in abeyance, preserving our legal rights in the challenge and keeping the nationwide stay in effect.


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)
NAM press release  (October 23, 2015)

 


ERISA -- active



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

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)

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)

 


Expert Testimony -- active



Walsh v. BASF   (Pennsylvania Supreme Court)

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)

 


Free Speech -- active



ExxonMobil v. Healey   (2nd Circuit)

Government investigations to chill corporate speech

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


Related Documents:
NAM brief  (August 10, 2018)

 


Government Regulation -- active



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

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)

 


Insurance coverage -- active



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

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)

 


International -- active



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

Customs valuation issue in Thailand

The NAM led a group of associations in filing 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)

 


Labor Law -- active



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

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)

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)

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)

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)

Restriction on use of email in employee handbooks

The case arises from a recent 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)

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)

 

Marathon v. AFL-CIO   (6th Circuit)

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.


Related Documents:
NAM brief  (December 26, 2018)

 

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

NLRB preclusion standards

On August 28, 2018, the NAM, along with other trade groups, 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)

 

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

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.


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

 

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

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)

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)

 

Taylor v. Burlington Northern Railroad Holdings   (Washington State Supreme Court)

Whether obesity is an impairment

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.


Related Documents:
NAM brief  (January 14, 2019)

 

United Nurses & Allied Professionals   (NLRB)

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)

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)

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.)

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.


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

 


OSHA -- active



NAHB v. Acosta   (W.D. Okla.)

Safety incentive programs and post-incident drug testing

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


Related Documents:
NAM brief  (May 24, 2019)

 


Preemption -- active



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

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)

Challenging restrictions on goods shipped by rail

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


Related Documents:
NAM brief  (November 21, 2018)

 


Product Liability -- active



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

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)

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)

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)

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.)

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)

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)

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)

 

Torres v. BNSF   (New Mexico Court of Appeals)

Asbestos take-home exposure

The NAM along with other groups, 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.


Related Documents:
NAM brief  (February 12, 2018)

 


Punitive Damages -- active



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

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)

 


Taxation and State Taxation -- active



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

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 brief  (April 17, 2019)

 

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

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)

 


Antitrust -- 2019



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

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. Fortunately, the DC Circuit rejected the government's challenge.


Related Documents:
NAM brief  (September 27, 2018)

 


Class Actions -- 2019



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

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)

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)

 

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

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)

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)

 


Environmental -- 2019



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

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:
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)
Press release  (July 2, 2015)

 

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

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)

 

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

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 coverts 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)

TSCA inventory reset intervention

The NAM and a group of other associations intervened in the Toxic Substances Control Act (TSCA) lawsuit filed by the Environmental Defense Fund. The “Inventory Reset Rule” at issue here, sorts the master list of chemicals, called the TSCA Chemical Substances Inventory “TSCA Inventory,” based on whether the chemicals are active or inactive in commerce. If a chemical is not identified as active, it will be listed as “inactive.” After the Reset, it will be illegal to manufacture, import, or process chemicals designated on the Inventory as inactive. An adverse decision in this litigation could have significantly impacted companies that manufacture or use chemicals that are classified, prioritized and evaluated under TSCA. On April 26, 2019, the NAM received a mostly favorable judgment.


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)

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)

 

Otsego 2000 v. FERC   (D.C. Circuit)

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)

 


False Claims Act -- 2019



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

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)

 


Free Speech -- 2019



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

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)

 


Government Regulation -- 2019



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

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)

 


Jurisdiction -- 2019



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

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)

 


Labor Law -- 2019



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

Employment liability on the outer continental shelf

In October of 2018, 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)

 

Zino v. Whirlpool Corp.   (6th Circuit)

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)

 


Product Liability -- 2019



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

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)

 


Punitive Damages -- 2019



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

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)

 


Securities Regulation -- 2019



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

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)

 


Antitrust -- 2018



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

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)

 


Arbitration -- 2018



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

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)

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)

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)

 


Benefits -- 2018



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

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)

 


Civil Procedure -- 2018



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

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)

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 amicus brief  (October 10, 2017)

 


Class Actions -- 2018



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

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)

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)

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)

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)

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.)

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)

 


Discovery -- 2018



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

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)

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)

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)

 


Environmental -- 2018



Airborn, Inc. v. OSHA   (8th Circuit)

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)

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)

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)

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)

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)

"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)

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)

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)
  (January 1, 1900)

 

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

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

On January 22, 2018, the United States Supreme Court reversed a splintered federal appeals court decision concerning where the NAM's lawsuit against the Environmental Protection Agency and the U.S. Army Corps of Engineers should be heard. 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. Those few types are limited in scope, and we argued that they do not include the NAM’s challenge to the agencies' new rule defining how far their authority goes in regulating the "waters of the United States" (WOTUS).

Our petition asked the Supreme Court to review a decision from the U.S. Court of Appeals for the Sixth Circuit, where many suits challenging the WOTUS rule had been consolidated. The Sixth Circuit had previously ruled that the various challenges to the WOTUS rule belonged in the Sixth Circuit rather than the district courts. The Sixth Circuit was divided in its reasoning for that conclusion, however, and its holding conflicts with similar cases decided by other appellate courts.

In our briefs before the Supreme Court, we explained why legal challenges such as this belong in the federal district courts. The Sixth Circuit's decision put challengers to the WOTUS rule in an untenable position -- if that court does not actually have jurisdiction to hear the case, any action it takes could thereafter be overturned on appeal, without even considering the merits of the challenge, and we would have to start the case over at the trial court level. This is a tremendous waste of resources for manufacturers and other parties affected by the rule, the Administration, and the courts. Delaying review of the jurisdictional question, which must ultimately be resolved in any case, makes no sense.

In March of 2017, the agencies asked the Supreme Court to hold briefing in abeyance pending the agencies’ reconsideration of the WOTUS rule, but the Court declined. We therefore filed our opening brief on the merits on April 27, 2017, and gave oral argument on October 11. Our merits brief argued that the Sixth Circuit did not have statutory authority to review the rule under a statutory provision that applies only when an agency "issues or denies" a permit, which it has not done. The court also did not have judicial authority because the rule is not a "limitation" under a separate statutory provision, since it does not by its terms limit any action. Legislative history and policy considerations also bolster these text-based conclusions.

On September 11, 2017, we filed our reply brief arguing that the plain statutory language support district court jurisdiction, and policy considerations favor interpreting the statute according to its textual language.

On January 22, 2018, the Supreme Court issued a unanimous decision holding that the Sixth Circuit lacked jurisdiction to hear the various challenges to the WOTUS rule and that jurisdiction properly belongs in the federal district courts. The Court concluded that the plain text of the Clean Water Act supports jurisdiction in the district courts. This ruling will provide needed clarity on where legal challenges to future WOTUS rulemakings (and other rulemakings arising under the Clean Water Act) should proceed, saving manufacturers significant uncertainty, delay, and expense.


Related Documents:
NAM press release  (January 22, 2018)
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)

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)

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)

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)

"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)

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)

 


Expert Testimony -- 2018



Bradford v. CITGO Petroleum   (Louisiana Supreme Court)

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)

 


Free Speech -- 2018



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

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. In a significant win for manufacturers, the Supreme Court summarily reversed the Ninth Circuit and ordered it to reconsider its decision.


Related Documents:
NAM brief  (February 9, 2018)

 

In re Murphy-Brown LLC   (4th Circuit)

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)

 


Government Regulation -- 2018



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

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)

 

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

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)

 


International -- 2018



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

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 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 Application for Leave to Intervene  (April 18, 2014)

 

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

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)

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)

 


Jurisdiction -- 2018



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

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)

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)

 


Labor Law -- 2018



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

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.)

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)

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)

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)
NAM brief  (September 6, 2016)

 

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

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)

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)

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)

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)

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)

 


Patents, Copyrights and Trademarks -- 2018



Australia - Certain Measures Concerning Trademarks   (World Trade Organization)

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)

 


Product Liability -- 2018



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

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)

"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)

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.)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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.)

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 amicus brief  (December 15, 2017)

 


Taxation and State Taxation -- 2018



Altera v. Commissioner of IRS   (9th Circuit)

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.


Related Documents:
NAM brief  (September 23, 2016)

 

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

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)

 


Class Actions -- 2017



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

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)

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)

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)

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)

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)

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)

 


Criminal Liability -- 2017



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

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)

 


Discovery -- 2017



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

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)

 


Environmental -- 2017



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

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)

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)

 

California Chamber of Commerce v. California Air Resources Board   (Cal. Ct. App.)

Challenging CARB cap-and-trade auction allowance revenues


Related Documents:
NAM supplemental brief  (May 23, 2016)
NAM reply brief  (May 4, 2015)
NAM's opening brief  (October 20, 2014)

 

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

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)

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)

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)

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)

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)

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.)

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)

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)

 


Expert Testimony -- 2017



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

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)

 


False Claims Act -- 2017



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

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)

 


Free Speech -- 2017



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

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)

 


Government Contracting -- 2017



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

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)

 


Government Regulation -- 2017



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

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)

 


Jurisdiction -- 2017



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

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)
NAM amicus brief  (February 28, 2017)

 

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

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)

 


Labor Law -- 2017



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

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.)

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)

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.)

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)

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)

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.)

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)
Press Release  (September 20, 2016)

 

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

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)

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)

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)

 


OSHA -- 2017



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

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)
NAM press release  (April 4, 2016)

 

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

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 memorandum  (July 12, 2016)
NAM preliminary injunction  (July 12, 2016)
NAM complaint  (July 8, 2016)
Press release  (July 8, 2016)

 


Patents, Copyrights and Trademarks -- 2017



In re Wellbutrin XL Antitrust Litigation   (3rd Circuit)

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)

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 press release  (February 24, 2016)
NAM brief  (February 12, 2016)

 


Product Liability -- 2017



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

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)

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)

Reasonable alternative design test for liability involving complex products


Related Documents:
NAM brief  (November 19, 2015)

 

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

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)

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)

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)

 


RICO Act -- 2017



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

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)

 


Securities Regulation -- 2017



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

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)

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)

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.’”

 


Settlement Agreements and Consent Decrees -- 2017



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

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)

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)

 


Taxation and State Taxation -- 2017



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

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)

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)

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)

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)

 


Alien Tort Statute -- 2016



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

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)

 


Antitrust -- 2016



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

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)

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)

 


Civil Procedure -- 2016



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

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)

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)

 


Class Actions -- 2016



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

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)

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)

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)

 


Communications -- 2016



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

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)

 


Environmental -- 2016



Alaska Wilderness League v. Jewell   (9th Circuit)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

Challenging EPA regulation of CISWI


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

 

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

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)

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)
Press Release  (February 23, 2011)

 

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

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:
Press release after stay granted  (February 9, 2016)
Coalition Reply Supporting Stay  (February 4, 2016)
Coalition Application for Stay  (January 27, 2016)

 


Expert Testimony -- 2016



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

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)

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)

 


False Claims Act -- 2016



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

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)

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)

 


Free Speech -- 2016



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

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)
Press Release  (June 13, 2014)
NAM Complaint  (June 12, 2014)

 

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

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)

 


Government Regulation -- 2016



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

Expansion of protectionist state legislation to equipment dealers


Related Documents:
NAM brief  (May 19, 2016)

 

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

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)

 


International -- 2016



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

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)

 


Jurisdiction -- 2016



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

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.)

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)

 


Labor Law -- 2016



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

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)

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)

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)

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)

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)

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.)

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)

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.)

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)

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)

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)

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)

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)

 


Patents, Copyrights and Trademarks -- 2016



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

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)

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)

 


Preemption -- 2016



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

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)

 


Product Liability -- 2016



Amato v. Crane Co.   (Pennsylvania Supreme Court)

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)

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)

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)

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)

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:
Shopfloor blog  (December 20, 2016)
NAM brief  (March 11, 2015)

 

Kesner v. Superior Court   (California Supreme Court)

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.


Related Documents:
Shopfloor blog  (December 20, 2016)

 

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

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)

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)

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)

"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)

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)

 


Punitive Damages -- 2016



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

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)

 

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

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)

 

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

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)

 


RICO Act -- 2016



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

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)

 


Settlement Agreements and Consent Decrees -- 2016



Elliott v. General Motors LLC   (2nd Circuit)

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)

 


Taxation and State Taxation -- 2016



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

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)

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)

 


Administrative Procedure -- 2015



Perez v. Mortgage Bankers Association   (U.S. Supreme Court)

Administrative law

The NAM and coalition associations filed a Supreme Court brief in Perez v. Mortgage Bankers Association. On March 9, 2015 the Court issued a decision in this case with a wide ranging impact on administrative law by significantly expanding the authority of regulatory agencies. The case concerned whether a federal government agency must get the public’s reaction before it changes a rule that interprets one of its own existing regulations. As a general rule a federal agency must engage in notice-and-comment rulemaking pursuant to the Administrative Procedure Act (APA) before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation.

Unfortunately, agencies are able to take advantage of a variety of exceptions to this rule and avoid meaningful public participation by promulgating vague legislative rules and then interpreting those rules to reach the potentially controversial regulatory outcomes that the agencies seek. This strategy is purposefully designed to avoid public input. Further, agencies know they are shielded from legal challenges because the court must accept an agency interpretation as long as they are not patently incompatible with the statutory or regulatory text. The result of this process is ambiguity and uncertainty on how to comply with the law by public. This opinion from the Court allows agencies to reverse their definitive, relied-upon interpretations without notice and comment making the situation even worse.

The NAM brief argued that agencies should be required to follow the requirements of notice and comment before reversing their definitive, relied-upon interpretations because in such situations the agency has effectively amended a legislative rule. Business should be allowed to rely upon the interpretive rules that increasingly affect its day-to-day operations but this decision adds further ambiguity.


Related Documents:
NAM brief  (October 16, 2014)

 


Alien Tort Statute -- 2015



Doe v. Nestle USA, Inc.   (9th Circuit)

Corporate liability for aiding and abetting under Alien Tort Statute

The Alien Tort Statute continues to be a source of substantial concern for manufacturers that do business abroad and that are alleged to assist regimes accused of various human rights violations. The ATS allows federal courts in the U.S. to hear cases by foreign nationals who allege violations of international law. This case involves allegations that various companies assisted the government of the Ivory Coast to force children to work on cocoa plantations.

The NAM and 4 international law professors joined together in an amicus brief urging the Ninth Circuit to reject opening up the statute to broad claims. We argued not only that the Supreme Court has very narrowly interpreted the kind of conduct that violates international law, but also that the plaintiffs' claims in this case are based on a standard for aiding and abetting liability that does not reflect a well-established, specifically defined and universally agreed-upon rule of customary international law. In addition, settled customary international law does not recognize corporate entity liability, and the ATS should not be extended to imply private rights of action that have a significant potential for interference with the conduct of foreign affairs by the political branches of government.

On December 19, 2013, the Ninth Circuit vacated the district court’s opinion and remanded the case to the trial level for further proceedings. The circuit court concluded that corporations can be held liable under the ATS. The court also determined that a corporation does not need to purposefully act to be liable for aiding and abetting. Rather, any assistance that has a substantial effect, even if the corporation did not specifically intend to aid and abet the crime, is grounds for liability.

However, this decision has been appealed to the full Ninth Circuit for further review, and on Oct. 27, 2014, the NAM filed an amicus brief supporting review. The 3-judge panel announced a standard of criminal intent for an accessory to a crime that infers the defendant has a purpose of facilitating a crime if it has a profit-seeking motive. Our amicus brief argued that this ruling conflicts with the decisions of other federal courts and has no support in international law. Unless corrected, this standard “exposes businesses to the risk of liability for any commercial relationship in countries alleged to have engaged in human rights violations, even when that relationship is entirely lawful as a matter of American foreign economic policy.”

We also argued that the recent Supreme Court decision in Kiobel limits the power of U.S. courts to hear cases arising from activities occurring abroad. That decision recognized a presumption against applying U.S. law extraterritorially to claims arising under the Alien Tort Statute, and there must be claims that “touch and concern the territory of the United States” which are of “sufficient force” to displace the presumption. The Ninth Circuit misapprehended this ruling, claiming that the presumption against extraterritoriality does not apply to ATS claims.

Both of these issues are of exceptional importance and affect many companies that have been caught up in ATS allegations. The Ninth Circuit declined to rehear this case on 5/6/15, with 8 judges dissenting.


Related Documents:
NAM amicus brief in support of rehearing  (October 27, 2014)
NAM amicus brief  (October 7, 2011)

 


Antitrust -- 2015



Motorola Mobility LLC v. AU Optronics Corp.   (U.S. Supreme Court)

Extraterritorial reach of U.S. antitrust law

This case involves a private antitrust suit against foreign manufacturers of LCD display screens for mobile phones. The Seventh Circuit rejected a claim by Motorola Mobility for against foreign manufacturers alleged to have fixed the prices of the screens before selling them to Motorola through its foreign subsidiaries, who then included the components in the phones destined for the U.S. market. The court thought that because the subsidiaries were incorporated abroad and the work was done abroad, there was an insufficient connection to U.S. commerce under the provisions of the Foreign Trade Antitrust Improvement Act of 1982.

The NAM filed an amicus brief supporting an appeal of this decision to the Supreme Court. Our brief simply calls for clarification from the Court on the extent to which U.S. antitrust law allows a right of action against price fixing in this kind of situation, which for many reasons is not an uncommon way for U.S. manufacturers to structure their manufacturing operations when buying from foreign suppliers. A similar case in the Ninth Circuit, involving criminal charges for the same conspiracy, resulted in that court allowing U.S. jurisdiction because of the significant effects on U.S. commerce.

On June 15, 2015, the U.S. Supreme Court denied cert in this case.


Related Documents:
NAM amicus brief  (April 16, 2015)

 


Civil Procedure -- 2015



In re Deepwater Horizon   (5th Circuit)

Standards of impartiality for disqualification of claims administrator

The NAM and other business groups filed an amicus brief supporting a challenge to the impartiality of the administrator of claims arising from the Deepwater Horizon oil spill in the Gulf of Mexico. Administrators in cases like this are endowed with substantial power to make qualitative judgments about the validity of claims and quantitative judgments about the amount of damages properly to be awarded, and must avoid even the appearance of partiality. Biases or apparent biases of administrators must be disclosed in advance, or parties will avoid such alternative dispute resolution procedures and head for court, imposing greater costs on the court system and the public at large.

The case arose because it was discovered that the administrator appointed to handle the claims had served as an advocate for Louisiana on behalf of claimants against BP, and also participated in drafting pleadings against BP that led to the settlement that he presides over. Our brief called for the application of the same impartiality requirements for claims administrators as apply to judges, magistrates and judicially-appointed masters. This is particularly important where the administrator has significant discretion in exercising his authority, and he should disclose in advance any dealings that might create an impression of possible bias, erring on the side of disclosure. Without such disclosure, the parties should be able to move to disqualify the administrator.

No decision was reached on the merits, as the parties dismissed the appeal pursuant to a settlement agreement on March 6, 2015.


Related Documents:
NAM amicus brief  (December 26, 2014)

 


Class Actions -- 2015



Carpenter Co. v. ACE Foam, Inc.   (U.S. Supreme Court)

Class certification

The NAM and Chamber filed a brief in support this appeal to the Supreme Court. Our brief argued that the Sixth Circuit improperly relaxed the requirements for class certification in at least two respects. First, the Sixth Circuit affirmed the district court’s certification decision, even though the certified class included a non-de minimis number of individuals who were not injured by any defendant’s conduct and, therefore, did not have standing under Article III of the U.S. Constitution. Second, the Sixth Circuit approved class certification on the theory that an aggregate damages model—one that calculates average damages for the class as a whole—satisfies Rule 23’s predominance requirement.

The lower courts' decisions in this case not only violate this Court’s precedents, including its recent decision in Comcast, but they also deepen entrenched divisions in lower court authority over the requirements for class certification. The class certification requirements of Federal Rule of Civil Procedure 23 are not mere conveniences for streamlining litigation, but crucial safeguards grounded in fundamental notions of due process, and U.S. manufacturing needs reliable and transparent application of this legal principle.

Unfortunately, the Supreme Court declined to hear this appeal on 3/2/2015.


Related Documents:
NAM brief  (December 19, 2014)

 

DIRECTV, Inc. v. Imburgia   (U.S. Supreme Court)

State law preempted by the Federal Arbitration Act

On June 5th, the NAM filed a joint amicus brief with the Chamber of Commerce of the U.S. and the Retail Litigation Center in the Supreme Court in DIRECTV, Inc. v. Imburgia. The issue is whether the California Court of Appeal erred by holding, in direct conflict with the Ninth Circuit, that a reference to state law in an arbitration agreement governed by the Federal Arbitration Act (FAA) requires the application of a state law preempted by the FAA.

This is a class action suit against DIRECTV under the Consumers Legal Remedies Act (CLRA) in California. The trial court and Court of Appeal refused to compel arbitration by applying state law. The agreement prohibits arbitration on a classwide basis and provides that the entire section on arbitration will be void if state law nullifies such a prohibition. The CLRA expressly prevents waiver of the right to bring a CLRA class action. The FAA requires that state law must not discriminate against arbitration or be applied in a manner that disfavors arbitration agreements. States are not allowed to single out arbitration agreements for suspect status. Additionally, the FAA mandates, and the Supreme Court has routinely held, that any ambiguity in the terms of an arbitration agreement must be resolved in favor of arbitration. Under the Court of Appeal’s reading, the arbitration agreement in this case actually favors class action litigation over arbitration.

The NAM brief argued that the California Court of Appeal’s decision impermissibly discriminates against arbitration and that the decision violates the rule of deciding ambiguities in arbitration provisions in favor of arbitration. The court found that the provision could be interpreted two different ways, yet it decided the alleged ambiguity in a way that disfavored arbitration by applying common law contract principles rather than the explicit direction of the FAA. The NAM asked the Court to reverse the California Court of Appeal’s decision.

The U.S. Supreme Court ruled on December 14, 2015 that an arbitration clause containing a class action waiver was valid even when the contract incorporated state law standards that might have voided the waiver. The decision reflects the Court’s continued adherence to enforcing arbitration clauses. It’s also a significant victory for arbitration advocates and shows the Court’s willingness to police attempts by lower courts to try to sidestep the force of its prior pro-arbitration rulings.


Related Documents:
NAM brief  (June 5, 2015)

 


Corporate Governance/Shareholder Activism -- 2015



Trinity Wall Street v. Wal-Mart Stores, Inc.   (3rd Circuit)

Shareholder activists expand "ordinary business operations" exception

On January 21, 2015 the NAM filed an amicus brief in this case asking the Court to reverse the lower court’s ruling. As way of background, SEC Rule 14a-8, the shareholder proposal rule, requires a public company to include a shareholder proposal in its proxy statement for action at the company’s annual meeting if the shareholder proponent satisfies various procedural and substantive requirements. Although the rule gives shareholders wide latitude to make proposals, their rights are not unlimited when seeking to access the company’s proxy statement. Of critical importance here, a shareholder proposal under Rule 14a-8 cannot relate to the “ordinary business” operations of the company.

In this case, Trinity’s proposal targeted products for exclusion from Wal-Mart that Trinity claims will have the “substantial potential to impair the reputation of the Company and/or would reasonably be considered by many offensive to the family and community values integral to the Company’s promotion of its brand.”

The NAM brief argued that this subject matter is inherently subjective and open-ended, particularly for retailers selling a wide variety of products to an array of consumers. It should be assumed that many products may be offensive to the views or values of one of countless constituencies in the domestic or even global marketplace. The shareholder proposal rules were not intended to allow a shareholder referendum on how a retailer selects its inventory. If the mix of products a retailer chooses to stock and sell is not subject to the ordinary business exception, that exception is rendered a nullity. The District Court erred because a proposal attempting to influence the types of products a retailer may sell clearly relates to an “ordinary business” matter.

The District Court’s analysis has troubling ramifications for public companies and manufacturers because it opens the door to the possibility that any lawful product that could draw some social objection is ripe for shareholder consideration.

On April 14, 2015 the 3rd Circuit Court of Appeals affirmed the NAM position ruling that the District Court order entered on December 8, 2014 granting Appellee’s motion for summary judgment with respect to Count I of the Verified Amended Complaint is reversed and the permanent injunction it entered is vacated.


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

 


Discovery -- 2015



Antero Resources Corp. v. Strudley   (Colorado Supreme Court)

Legality of "Lone Pine" Rulings before discovery

This case is about whether Colorado trial courts may use discretionary case management tools to limit the duration and cost of litigation by requiring plaintiffs to produce evidence essential to their claims after initial disclosures but before further discovery. Plaintiffs alleged that a hydraulically fractured natural gas well near their property contaminated their drinking water. The trial court in this case issued what is often referred to as a “Lone Pine” Order, requiring the plaintiff to identify the chemical that caused the injury; specify the disease, illness, or injury caused by the substance; and explain a causal link between exposure and the injury. Because plaintiffs could not articulate an injury caused by a particular chemical, the trial court dismissed the claim without requiring discovery. The Court of Appeals reversed the trial court, holding that the court lacked authority to issue the order under the Colorado Rules of Civil Procedure and identifying a policy that all conflicts should be resolved in favor of discovery.

The NAM’s brief provided a historical perspective on judicial case management and the growth of trial court discretion in Colorado. The case management tool at issue here serves to promptly resolve disputes by avoiding the very expensive and time consuming discovery process. The NAM argued that the “Lone Pine” ruling was entirely consistent with the history of active case management, the procedural underpinnings of Colorado law, and a host of decisions from other jurisdictions that have embraced similar goals.

On April 20, 2015, the Colorado Supreme Court ruled, over 1 dissent, that the state's rules of civil procedure do not allow a case management order that requires a plaintiff to present prima facie evidence in support of a claim before a plaintiff can demand full discovery about every issue in the case. The court found that the Colorado rules of procedure differ significantly from the federal rules, which provide a justification for Lone Pine orders to handle potentially difficult or protracted suits that may involve complex issues, multiple parties, difficult legal questions, or unusual proof problems. By contrast, the Colorado rules are generally for basic scheduling matters. It cited other parts of the rules that imnpose sanctions for non-meritorious claims, that allow for motions for summary judgment before trial, and that limit the breadth of discovery within clearly defined limits.


Related Documents:
NAM brief  (June 18, 2014)

 

In re Allied Chemical Corp.   (Texas Supreme Court)

Whether discovery should be compelled to prevent abuse of the legal system

This case involves discovery abuse in South Texas. The trial judge refused to require that the plaintiffs answer discovery demands in a mass tort case involving alleged exposure to hazardous materials. The case has been pending for over a decade, and the product defendants have been unable to get even the most basic discovery identifying the products involved, claimed exposures, and basic causation.

On February 12, 2010, the NAM joined with the American Chemistry Council, the Texas Chemical Council and the U.S. Chamber of Commerce in an amicus brief that highlighted the mass tort problem in Texas, and particularly in South Texas, where plaintiffs delay discovery and raise litigation costs in order to pressure settlements.

We argued that, "A true adversary justice system must require a claimant to shoulder the burden of proof, determine whether the claimant’s burden has been satisfied, and then subject the determination to review. Cases such as this one appear to follow different rules that require correction."

By not requiring plaintiffs to answer discovery requests, "in large part cases are seldom tried. When they are tried, judgment is seldom reached because the goal is not a judgment, but an ambush, by which “the parties are ‘deprived of any just defense . . . .’"

Our brief urged the Texas Supreme Court both to order the lower court to act and to change the rules of procedure to prevent other courts from continuing to behave this way in the future. "Society cannot tolerate a system of justice in which the value of a claim is based upon the ability to drive up risk and avoid resolution on the merits rather than on the defendant’s fault for the plaintiff’s injury." Failure to resolve this problem undermines public confidence in the courts, violates constitutional rights, and prevents a defendant from clearing his name in court. We offered the court a variety of solutions.

This case was held in abatement for several years while the parties worked out a settlement of the claims. It was dismissed in 2015.


Related Documents:
NAM brief  (February 12, 2010)

 


Environmental -- 2015



Alabama v. EPA   (D.C. Circuit)

State challenge to greenhouse gas tailoring rule

Various states sued EPA over its tailoring rule, by which the agency rolled out enforcement of greenhouse gas regulations to the largest facilities first, followed by smaller ones later. States must comply with EPA's new regulations. The NAM and 14 other business associations in our coalition filed a motion to intervene in litigation filed by representatives of 8 states challenging EPA's authority. Their lawsuit sought judicial review of EPA's plan to retroactively limit its previous approval of pollution thresholds in State Implementation Plans (SIPs). The states are likely to argue that EPA violated the Clean Air Act by its reinterpretation of existing regulations, which would result in significant additional costs to manufacturers regulated under state programs.

The NAM's intervention in this case is designed to assist the court in understanding the interaction between EPA's requirements, state implementation programs, and emissions permit requirements affecting manufacturers.

The NAM and other organizations also filed a separate petition to review the EPA's tailoring rule. On March 10, 2015, the D.C. Circuit ruled that EPA's rules are vacated in part, consistent with the Supreme Court's ruling in Utility Air Regulatory Grop v. EPA.


Related Documents:
NAM motion to intervene  (August 30, 2010)

 

Anadarko Petroleum Corp. v. United States   (U.S. Supreme Court)

Definition of "discharge" under Clean Water Act

This case involves the allocation of responsibility under the Clean Water Act's civil penalties provision between various parties related to the Deepwater Horizon accident in the Gulf of Mexico in 2010. Two defendant companies have asked the Supreme Court to review the Fifth Circuit's interpretation of the term "discharge" in the context of interconnected vessels and facilities through which the discharged oil passed. They argue that the Supreme Court has interpreted the word as "flowing or issuing out," but that the Fifth Circuit adopted a new interpretation of discharge as a "loss" or "absence" of controlled confinement. A petition for rehearing by the full court was denied by a vote of 7 to 6.

The NAM and other groups filed an amicus brief urging the Supreme Court to review this case. We argued that the appeals court ruling was confusing, overbroad, and internally inconsistent, and that ambiguous statutory terms should be interpreted leniently to defendants. Billions of dollars of potential penalties in this case depend on a proper interpretation of the statutory term.

The NAM brief was filed in both the Anadarko case and a similar appeal by BP Exploration and Production Inc. On 6/29/15, the Court declined to hear these appeals.


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

 

Coalition for Responsible Regulation, Inc. v. EPA   (D.C. Circuit)

Greenhouse gas case after decision from Supreme Court

The NAM's successful challenge to EPA's authority to regulate virtually all manufacturers that emit greenhouse gases was sent back from the Supreme Court to the U.S. Court of Appeals for the D.C. Circuit to determine what to do with regulations that are still printed in the Code of Federal Regulations, but that exceed EPA's regulatory authority. All of the parties that challenged EPA's authority, including state governments, industry associations, and public interest groups, filed a motion with the court, as has EPA, recommending what to do next.

EPA's motion proposed that the court declare the "regulations under review are vacated to the extent they require a stationary source to obtain a PSD [or Title V] permit if greenhouse gases are the only pollutant [that would trigger construction or modification review." It also says the court should direct it to rescind or revise the regulations to reflect the Supreme Court's decision. The agency does not believe it should establish a de minimis threshold for greenhouse gas regulation, but instead wants to rely on the 75,000 tons per year threshold currently on the books.

Industry's motion, by contrast, argued that the Court invalidated EPA's regulations to the extent they "treat greenhouse gases as a pollutant for purposes of defining" PSD and Title V applicability. As a result, EPA must vacate those rules, namely the Tailoring Rule, the Timing/Triggering Rule (to the extent EPA relied on it), and other challenged rules it relied on. EPA's interpretation of its authority was neither compelled nor allowed by law, so in effect it must start over. It should also decide on a de minimis threshold for regulation.

Final briefs in response to each motion were filed November 21, 2014.

On April 10, 2015, the court issued an amended order that:

"(1) the regulations under review (including 40 C.F.R. §§ 51.166(b)(48)(v) and 52.21(b)(49)(v)) be vacated to the extent they require a stationary source to obtain a PSD permit if greenhouse gases are the only pollutant (i) that the source emits or has the potential to emit above the applicable major source thresholds, or (ii) for which there is a significant emissions increase from a modification; (2) the regulations under review be vacated to the extent they require a stationary source to obtain a title V permit solely because the source emits or has the potential to emit greenhouse gases above the applicable major source thresholds; and (3) the regulations under review (in particular 40 C.F.R. § 52.22 and 40 C.F.R. §§ 70.12, 71.13) be vacated to the extent they require EPA to consider further phasing-in the requirements identified in (1) and (2) above, at lower greenhouse gas emission thresholds."

The court also ordered EPA to rescind or revise the applicable rules "as expeditiously as practicable," and to "consider whether any further revisions to its regulations are appropriate in light of UARG v. EPA . . . and if so, undertake to make such revisions."


Related Documents:
Industry response to motions to govern future proceedings  (November 21, 2014)
Industry motion to govern future proceedings  (October 21, 2014)

 

In re Deepwater Horizon   (Texas Supreme Court)

Insurance coverage dispute for BP's pollution-related liability

In an insurance coverage case, a federal court asked the Texas Supreme Court to tell it whether Texas law compels a finding that BP is covered for damages arising from the Deepwater Horizon accident in the Gulf of Mexico. The case involves whether language in an umbrella insurance policy alone determines the extent of BP's coverage as an additional insured.

The NAM filed an amicus brief asking the court to apply traditional contract principles: (1) that the scope of insurance coverage should be determined by the contract and not from external documents unless they are clearly intended to be incorporated into the agreement, and (2) that ambiguous terms should be construed in favor of the insured. Courts should not create a subjective "sophisticated insured" exception to insurance law that has been recognized and applied for more than 125 years. Such an exception would make legal rules change depending on the identity of the party invoking them, would introduce the difficult question of determining who is a sophisticated insured, and would disincentivize insurance companies from making their policies as clear as possible.

The court held in an 8-1 decision that BP was not entitled to this coverage, relying on terms from the drilling contract that were not explicitly incorporated into the insurance policy.

The NAM filed an amicus brief on 4/22/15 supporting BP’s motion for rehearing by the Texas Supreme Court. The NAM’s brief supports BP’s argument that the court should revisit this issue as it has introduced tremendous uncertainty into state insurance law by departing from several long-held principles on insurance law. These principles include: 1) that external terms should only be incorporated into an insurance policy by explicit reference; 2) limitations on insurance coverage must be expressed in clear and unambiguous policy language; 3) the scope of additional insured coverage is determined by the policy and not the underlying contract; and 4) certificates of insurance are informational only and do not confer or abrogate rights.

BP dropped its motion for rehearing on May 27, 2015 after reaching a confidential settlement.


Related Documents:
NAM brief  (April 22, 2015)
NAM brief  (March 13, 2014)

 

Little v. Louisville Gas & Elec. Co.   (6th Circuit)

Whether common law air pollution claims are preempted by EPA regulation of power plant emissions

Neighbors of a power plant in Louisville sued the company for emitting dust and coal ash from its power generating and sludge processing plants. The suit raised claims under the federal Clean Air Act and Resource Conservation and Recovery Act (RCRA), as well as state-law claims of nuisance, trespass and negligence. The trial judge dismissed most of the claims, but allowed the common-law tort claims to proceed. That decision was appealed.

The NAM and other business groups filed an amicus brief supporting the utility, arguing that state common law air pollution claims are preempted by the Clean Air Act. Such claims directly conflict with the structure and purpose of the Act, and the Supreme Court has already held that similar claims under federal common law are displaced and unavailable. The purpose of the Clean Air Act is to ensure some level of uniformity, certainty and predictability in the application of air emissions standards throughout the United States. Piecemeal litigation that asks a judge to decide what is reasonable directly damages the interests of uniformity and predictability, subjecting companies in full compliance with their operating permits to significant and ongoing risk that they may be sued and held liable for their emissions. Moreover, nuisance law is notoriously vague and amorphous, leaving companies unable to predict whether their operations will be subject to potentially crushing damages liability.

This is another in a series of cases in which plaintiffs are trying to expand legal remedies beyond what Congress has legislated. Regulatory agencies like EPA take into account statutory requirements and consider the views of all affected parties when they impose regulations and permit requirements, and allowing individual judges or juries around the country to come up with their own views of what is a nuisance would seriously interfere with the ability of manufacturers and utilities to provide goods and electricity to their customers.

On November 2, 2015, the Sixth Circuit affirmed the district court’s order and held that such state common law air pollution claims are not preempted by the Clean Air Act. For more information, see the companion Sixth Circuit appeal in Merrick, et al. v. Diageo Americas Supply, Inc.


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

 

Merrick v. Diageo Americas Supply, Inc.   (6th Circuit)

Whether public nuisance claim is preempted by EPA regulation of factory emissions

This case presents another opportunity for the courts to resolve whether public nuisance claims under state law are preempted by the Clean Air Act. There are serious conflicts between the federal courts of appeals and within state courts concerning this preemption issue.

The case arose when private property owners brought claims of nuisance, negligence and trespass based on ethanol emissions from Diageo's whiskey production facilities in Louisville, Kentucky. They allege that ethanol emitted from the facilities cause a fungus to germinate and grow on their property, and they seek damages and emissions controls that exceed those required under the company's Clean Air Act operating permits.

The issue is important because public nuisance litigation threatens one of the Clean Air Act's most important methods of pollution control -- permitting. Permits specify clear standards that guarantee certainty, predictability, and evenhandedness to the regulated community, and allowing public nuisance litigation threatens to substitute ad hoc decisions for considered regulatory policy, a result completely at odds with the goals and purposes of the Clean Air Act.

The NAM and two other business groups filed an amicus brief urging the Sixth Circuit to reject the claims, arguing that they directly conflict with and are preempted by the Clean Air Act. In addition, a provision in the Clean Air Act that allows states to adopt standards for air pollution control allows such controls only when they are established through statute or regulation, not claims under state common law. The goals and policies of the Clean Air Act were intended to establish and enforce uniform standards for air quality, developed by EPA through an extensive regulatory scheme that is fundamentally inconsistent with common law adjudication that would allow for the imposition of liability based on standards developed by a judge or jury and retroactively applied against a facility.

On November 2, 2015, the Sixth Circuit affirmed the district court’s order that such state common law air pollution claims are not preempted by the Clean Air Act. Though it acknowledged the suggestion that it is unduly burdensome for industries to be subject to both federal law and state common law, the court left that concern to Congress.


Related Documents:
NAM amicus brief  (December 3, 2014)

 

Michigan v. EPA   (U.S. Supreme Court)

Consideration of costs in Utility MATS rule

The NAM filed an amicus brief in the Supreme Court supporting a challenge to EPA’s decision not to consider costs in determining whether regulation of hazardous air pollutant (HAP) emissions from electric generating units was appropriate and necessary under Sec. 112 of the Clean Air Act. EPA’s regulation, known as the Utility MATS Rule, will cost more than $9.6 billion annually, according to EPA’s own analysis, and is one of the most expensive regulations ever for power plants. (The NAM’s estimate is $12 billion annually). These costs are passed on to manufacturers and other consumers of electricity, and could endanger the reliability of electricity.

We argued that the regulatory record compiled by EPA reflects little or no public health benefit from the reduction in HAP emissions. A federal appeals court ruled that EPA was allowed to refuse to consider the costs of the rule, despite a statutory requirement that the regulation be “appropriate.” Our brief argues that a rulemaking procedure that does not consider the rule’s substantial cost burden on the regulated community violates the express and intended meaning of this statute, particularly because energy regulation affects all sectors of society and the economy. “A determination of whether regulation is ‘appropriate’ inherently involves a balancing of costs and benefits,” we argued.

We also argued that the regulation is not necessary because other EPA regulations already impose restrictions on hazardous air pollutants, and EPA improperly tried to justify its new HAP regulation by touting the potential for reduction in emissions not regulated under the HAP rules, namely further reductions in particulate matter emissions that EPA would be unable to require directly.

On 6/29/15, by a vote of 5 to 4, the Court rejected EPA's failure to consider costs when determining whether the regulation was "appropriate and necessary." Even though EPA is entitled to considerable deference in its rulemaking powers under the Chevron case, the Court found that the agency's interpretation was not reasonable or even rational. According to the majority, "an agency may not 'entirely fai[l] to consider an important aspect of the problem' when deciding whether regulation is appropriate." The phrase is very broad, and a natural reading of it requires some attention to cost. Considering costs avoids the problem of spending too much on one problem and not having enough to spend on other -- perhaps more serious -- problems. The majority also rejected EPA's argument that it could consider costs when deciding how much to regulate power plants, rather than as a threshold issue in deciding whether to regulate them. The statute requires cost considerations at the first step. But it left it to EPA to decide how to account for cost in making its initial determination, without requiring "a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value." The Court did not address EPA's claim that the regulation provides ancillary benefits that make it cost-effective.


Related Documents:
Press release  (June 29, 2015)
ShopFloor blog post  (January 28, 2015)
NAM amicus brief  (January 27, 2015)

 

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

Challenge to EPA's proposed existing power plant GHG regulation

The NAM and 8 other business associations filed an amicus brief supporting Murray Energy's challenge to EPA's proposed rule to substantially regulate greenhouse gas emissions from existing power plants. According to the EPA, the rule's annual compliance costs will reach at least $7.3 billion by 2030, and manufacturers will see dramatic electricity cost increases and less reliable service as a result.

The NAM amicus brief argued that Section 111(d)(1) of the Clean Air Act prohibits EPA from setting performance standards for sources that are already regulated under Section 112. EPA's interpretation would create double regulation, making power plant operation more expensive and conflicting with the purpose of Section 111(d). The statutory language is not ambiguous, and EPA's interpretation should not be given deference by the courts.

On June 9, 2015, the Court dismissed the challenge because the EPA has not taken final agency action that would allow a court to review it. The criteria under the All Writs Act for issuing an order against EPA's plans are not met, and the fact that some companies may be incurring costs in anticipation of the final rule does not justify court intervention.


Related Documents:
NAM amicus brief  (December 22, 2014)

 

National Association for Surface Finishing v. EPA   (D.C. Circuit)

EPA recalculation of MACT standards

This case involves the statutory obligations of the EPA to set maximum achievable control technology (MACT) standards for emissions under Clean Air Act Sec. 112(d)(6), specifically for chromium electroplating and anodizing operations. EPA is in the early stages of implementing that section, which applies when EPA reviews standards every 8 years. Because this review process applies to many other substances regulated by EPA, the decision in this case will extend far beyond chromium use.

At issue is what the statute requires of EPA when determining whether to tighten an existing standard. The NAM filed an amicus brief arguing that the statute specifically requires EPA to revise a standard, when conducting a technology review, only when "necessary (taking into account developments in practices, processes, and control technologies)." In this case, EPA's approach did not square with the plain statutory requirements, because it identified no "development" in emissions control measures that necessitates the new, more stringent standards it adopted.

We also oppose an effort by environmental groups to have EPA recalculate existing standards using procedures in Sec. 112(d)(2) and (3) for initial MACT standard-setting. Those procedures for new standards are not constrained in the same way that 8-year reviews are. As a result, EPA will lower emissions limits because companies complying with new standards try to build in a compliance margin when they buy new equipment, and that commendable over-performance raises the bar and leads EPA to lower the limits when the standard is reviewed. EPA's longstanding position is that it is not required to re-set the existing MACT standards each time it conducts a Sec. 112(d)(6) review, and that it is not required to use procedures under Sec. 112(d)(2) and (3) for periodic reviews, yet it did so in this case.

On July 21, 2015, a 3-judge panel rejected both industry and environmental group challenges to the review. It declined to require EPA to determine a new MACT floor each time it reviews a MACT rule, as environmental groups had wanted. But it also rejected industry arguments challenging the extent of technological developments that have occurred since the first rule was issued. It found that developments include improvements in performance of some technologies, which EPA found.


Related Documents:
NAM amicus brief  (June 9, 2014)

 

National Association of Clean Water Agencies v. EPA   (D.C. Circuit)

Challenging EPA's Non-Hazardous Secondary Materials Rule

The NAM and other industry organizations filed a petition with a federal appeals court to review a final rule on non-hazardous secondary materials (NHSM) issued by the EPA on February 7, 2013, entitled “Commercial and Industrial Solid Waste Incineration Units: Reconsideration and Final Amendments; Non-Hazardous Secondary Materials That Are Solid Waste, Final Rule”. The rule was written to identify whether NHSMs are solid waste under the Resource Conservation and Recovery Act when used as fuels or ingredients in combustion units. Further details about the legal claims in this litigation will be filed with the court shortly.

This case was consolidated on June 7, 2013. For more information click here.


Related Documents:
Petition for Review  (May 7, 2013)

 

National Association of Manufacturers v. SEC   (D.C. Circuit)

Appeal of NAM's challenge to SEC rule on Conflict Minerals

This is the appeal of an adverse ruling from the district court judge in our suit challenging the SEC's conflict minerals rule. Click here for details on that ruling.

Our appeal was expedited, and focused on largely the same issues that were before the trial judge. Review was de novo, which means that the appeals court looks at the case fresh, without any presumption that the trial court's ruling is binding on them.

The NAM, joined by the Business Roundtable and the U.S. Chamber of Commerce, argued that the SEC incorrectly interpreted the statute, which requires 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. It also failed to recognize and use its power to establish a reasonable de minimis exception for small amounts of minerals, which could provide substantial relief from the burdensome requirements of the rule for thousands of manufacturers. We also raised an important First Amendment objection to the requirement that companies make misleading and stigmatizing public statements unfairly linking their products to terrible human rights abuses.

We filed our main brief on the merits on Sept. 11, and our reply Nov. 13, 2013. Oral argument was held on Jan. 7, 2014, during which counsel for the SEC faced difficult questioning about the SEC's rule and the First Amendment objections.

On April 14, the court deferred to the SEC on its interpretations of the substantive provisions included in the rule, but overturned the requirement that companies disclose that their products are not "DRC conflict free." The First Amendment prohibits the requirement that companies report to the SEC and post on company web sites the fact that certain manufactured products are not “conflict free”. This constitutes government-compelled speech. It is now up to the SEC to determine what reporting requirement to impose and what to do while it is making that decision, since the first reports under the regulation must be filed by June 2, 2014. If it tries to formulate alternative reporting requirements, it may need to revist the whole public reporting aspect of the rule through a new round of notice-and-comment rulemaking.

On April 29, the NAM, Chamber and Roundtable filed a motion with the SEC to stay the rule or at least filing deadline. The whole point of the rule and the statute was to try to effect social change by shaming companies who cannot label their products as "DRC conflict free," and since the shaming mechanism has been struck down, the remainder of the rule has questionable benefits. Moreover, there are a host of questions without easy answers that must be considered before imposing enormous costs on industry. The SEC will have to determine what type of disclosure should replace the unconstitutional requirement, whether that would require changes to other provisions of the rule, re-analyze the costs and benefits of the rule, and provide for notice-and-comment rulemaking. Finally, requiring some type of truncated report is an approach that will not serve the law's intended purpose and will worsen the massive uncertainty and confusion among those who are subject to the rule.

The same day, Keith Higgins, director of the SEC's Division of Corporation Finance, issued a statement saying that companies will still need to file their first reports by the due date and address those portion of the rule that the court upheld. He added that "No company is required to describe its products as 'DRC conflict free,' having 'not been found to be ‘DRC conflict free,’' or 'DRC conflict undeterminable.' If a company voluntarily elects to describe any of its products as 'DRC conflict free' in its Conflict Minerals Report, it would be permitted to do so provided it had obtained an independent private sector audit (IPSA) as required by the rule. Pending further action, an IPSA will not be required unless a company voluntarily elects to describe a product as 'DRC conflict free' in its Conflict Minerals Report.

We also released a statement April 30 saying in part that "Congress and the SEC need time to evaluate how to amend the statute and/or the rule in light of the court's decision. Given the significant issues involved, we believe that it is in everyone's interest to stay the rule until these issues can be fully analyzed and addressed. Accordingly, we will ask the DC Circuit to grant a full stay of the rule until the implications of the decision are clear to all parties."

On May 2, 2014, the SEC issued a partial stay of the portion of the rule that requires issuers to disclose that any of their products have "not been found to be “DRC conflict free.'" It denied our request that the entire rule be stayed. The Commission did not, however, stay the effective date (June 2) for complying with all the other requirements of the rule. Companies are struggling to determine the meaning of the SEC’s action and what to do. The D.C. Circuit’s decision in our challenge to the rule means that the case will be sent back to the trial judge to determine whether to vacate the rule in its entirety or provide some other remedy.

Because this litigation was ongoing and the SEC had not voluntarily stayed the implementation of the rule, the NAM and other business organizations went back to the D.C. Circuit on May 5 and filed an emergency motion for stay of the rule in its entirety until the trial court has addressed the unresolved questions.

We argued that the rule’s compelled confessions, which have been declared unconstitutional, constitute the entire basis for the rule, imposing astronomical costs on affected companies. It makes no sense to enforce a rule that no longer achieves its goals and that likely will be vacated, and a stay would avoid “forcing companies to implement interim procedures for filing truncated reports under unilateral staff guidance that is subject to change at any time.”

On May 14, the court denied our motion for a stay. Companies must now comply with the modified filing requirements by June 2.

On May 29, both the SEC and Amnesty International asked the D.C. Circuit to hold any further appeals until after it ruled in the American Meat Institute v. USDA case, which it did on July 29. On Aug. 15, Amnesty International supplemented its brief in support of a petition for rehearing en banc, and on Aug. 28, the Court ordered us to file a response. We filed it on Sept. 12, arguing that the standards for rehearing this case have not been met, and that the court's decision in the American Meat Institute case was limited to "purely factual and uncontroversial" disclosures, not disclosures like the ones required by the conflict minerals regulation. The disclosures in this case, according to the judges who ruled on them, require an issuer "to tell consumers that its products are ethically tainted, even if they only indirectly finance armed groups," or even if the issuer is merely unable to determine their origin.

On Nov. 18, the 3-judge panel agreed to rehear this case, and asked for further briefing on the impact of the decision in American Meat Institute v. USDA, as well as the meaning of "purely factual and uncontroversial information" and whether that determination is a question of fact for the court. The SEC filed its brief on December 8, and ours was filed December 29. Oral arguments were not held.

The 3-judge panel finally ruled on Aug. 18, 2015, that the compelled disclosures are unconstitutional. It ruled that the looser standard of review under the Zauderer case does not apply here, because that case involved only voluntary commercial advertising, not government-compelled statements about products. But even if this looser standard of review applied, the government must have a sufficient interest in mandating disclosures, and the rule must be effective in achieving its objectives. Instead, whether the law will decrease the revenue of armed groups in the DRC and diminish the humanitarian crisis there "is entirely unproven and rests on pure speculation." No hearings were held on the impact of the law prior to enactment, and later hearings were inconclusive. This is an insufficient justification to compel speech under the First Amendment.

The majority also analyzed the part of the ruling in the American Meat Institute case and found that determining whether compelled speech is about "purely factual and uncontroversial information" is a puzzling exercise, but that the SEC's requirement to label products as "conflict free" or not is hardly factual and non-ideological. Instead, it ethically taints products and stigmatizes companies in violation of the First Amendment. The SEC and Amnesty International petitioned for rehearing before the full D.C. Circuit court, but that request was denied, and the case was not appealed to the Supreme Court.


Related Documents:
DC Circuit's opinion  (August 18, 2015)
NAM's supplemental brief  (December 29, 2014)
NAM Response to petition for rehearing en banc  (September 12, 2014)
NAM Emergency Motion for D.C. Cir. stay  (May 5, 2014)
NAM Motion to SEC for stay  (April 29, 2014)
NAM Reply Brief  (November 13, 2013)
NAM Opening Brief  (September 11, 2013)

 

Solvay USA Inc. v. EPA   (D.C. Circuit)

Challenging EPA's Non-Hazardous Secondary Materials rule

On June 16, 2011, the NAM filed a petition for review of the EPA’s Non-Hazardous Secondary Materials (NHSM) rule under the suite of Boiler MACT rules. The NHSM rule will classify as solid waste certain “secondary” materials that are currently used as a source of energy, such as coal ash or biomass residues from lumber. Solid waste must be burned in boilers regulated under more onerous rules than apply to fuels. The NAM is concerned with several aspects of the rule, including its effect on the use of non-hazardous materials, its presumption that all non-hazardous secondary materials are solid waste, and other provisions.

A list of legal issues in the case was filed, including challenging EPA's presumption that all non-hazardous secondary materials are solid waste, and its definition of "contaminants," "traditional fuels," and "contained gaseous material." Also at issue, among other things, is whether EPA violated the Regulatory Flexibility Act by failing to consider the economic impacts of the rule on small businesses.

In 2013, National Ass'n of Clean Water Agencies v. EPA was consolidated with the NAM suit into Solvay USA Inc. v. EPA. Our main brief on the merits, filed 4/28/2014, raised 4 key challenges to EPA's rule: (1) that EPA improperly decided that transferring alternative fuels to third parties for combustion is a discard and therefore such fuels are solid wastes, (2) that EPA improperly classified as solid waste alternative fuels such as those made from construction and demolition wood, railroad ties, and other treated woods that have heating value, are managed as valuable fuel, and are processed to create new fuel products, (3) that EPA improperly classified as solid waste alternative fuels such as paper recycling residuals, even though the record demonstrates no discard has occurred and the combustion is an integral part of an industrial process or functionally equivalent to a traditional fuel, and (4) that EPA improperly classified as solid waste sewage sludge when combusted even though the Resource Conservation and Recovery Act (RCRA) prohibits such a classification.

The practical effect of EPA's rule is that alternative fuel that could have been productively combusted will be managed as a waste and can only be combusted in a solid waste incinerator under much more expensive rules, leading to an enormous increase in landfill disposal, which has its own set of environmental harms.

Our brief as intervenors was filed Aug. 29, 2014, and emphasized that EPA could find under RCRA that discarded material could be recovered and processed into a non-waste fuel product, and that it could properly classify as non-wastes scrap tires, used oil, pulp and paper residuals, construction and demolition debris and other traditional fuels.

On June 3, 2015, the Court of Appeals denied Solvay’s petition for review as well as those of the environmental groups that challenged the rule. The court reasoned that the argument regarding sewage sludge is foreclosed by RCRA’s plain language and that EPA’s distinction between material burned by the generator and material transferred to a third party is consistent with RCRA and reasonable. It allowed EPA to place the burden on regulated entities to show that its material should not be regulated, because Congress wanted EPA "to err on the side of caution."

The court also rejected an environmental challenge to EPA's treating materials that are indistinguishable from virgin materials as non-waste fuel.


Related Documents:
Joint Reply Brief of Industry Petitioners  (September 29, 2014)
Joint Brief of Industry Intervenor-Respondents (incl. NAM)  (August 29, 2014)
NAM brief on the merits  (April 28, 2014)
Statement of Issues  (July 8, 2011)
NAM petition  (June 16, 2011)

 

West Virginia v. EPA   (D.C. Circuit)

Challenging EPA's new round of greenhouse gas regulations for utilities

The NAM and 9 other groups filed an amicus brief in a case brought by a coalition of 12 states seeking to hold unlawful a 2011 settlement agreement between the EPA and some environmental groups which committed the agency to propose rules to regulate greenhouse gases from power plants. EPA proposed the rules in 2014, and this challenge began in July. Although the agency has not finalized its rules, this suit challenges the underlying settlement agreement.

The EPA rules impose new compliance costs on utilities that already must bear $9.6 billion per year in costs under the 2012 rule on hazardous air pollutants. Manufacturers of energy inputs will see sales decline precipitously as power plants cut costs or shut down. Manufacturers of all kinds, as purchasers of electricity, will see dramatic cost increases and electric service will become less reliable.

In our amicus brief, we argued that EPA may not regulate power plants under Section 111(d) of the Clean Air Act because power plants are already regulated under Section 112, and the law specifically prohibits dual regulation under both sections. EPA tried to manufacture ambiguity by relying on an acknowledged congressional drafting error. EPA should not be entitled to judicial deference when the statutory language itself is clear.

A similar case, Murray Energy Corp. v. EPA, is also pending in the D.C. Circuit, involving the same questions but challenging the proposed rules directly. We filed an amicus brief in that case on December 22. Oral arguments in both cases were held on April 16, 2015.

On June 9, 2015, the D.C. Circuit rejected West Virginia’s argument concerning the underlying settlement agreement and ruled for the EPA. The court held that West Virginia lacked standing to sue because the settlement agreement only set a timeline for the EPA to decide whether or not to issue a final rule and therefore did not create an injury in fact. Additionally, a suit to challenge such a settlement agreement must be filed within 60 days of the agreement’s publication in the Federal Register rather than more than two years later, as was the case here.


Related Documents:
NAM amicus brief  (December 10, 2014)

 


ERISA -- 2015



Tibble v. Edison International   (U.S. Supreme Court)

Time limit on suit against ERISA fiduciary investment decisions

The issue in the case focused on whether retirement plan participants can challenge investment decisions by plan fiduciaries made more than six years before the suit was filed, if the decisions could have been reconsidered during the six-year window.

The petitioners, former and current participants in an Employee Retirement Income Security Act (ERISA) 401(k) plan sponsored by Edison International, brought suit in 2007 to challenge the prudence of three investment options that had initially been selected in 1999. Both of the lower courts said that such a claim was time-barred by ERISA for being brought more than six years after the fiduciary act occurred.

The petitioners argue that the fiduciaries' decision to not remove the three plans constitutes an on-going breach of duty and is thus not time-barred. This argument undermines the intent of ERISA Section 413(1) and could subject plan fiduciaries to the never-ending threat of litigation.

The NAM, along with other business and trade groups, filed an amicus brief in the case. We argued that the purpose of imposing a time-bar on claims against fiduciaries of ERISA plans was to give them closure and reduce the burden of litigation. ERISA specifically cuts off liability for breaches of fiduciary duty six years after they occur in an effort to cut down on the volume of litigation faced by ERISA plan sponsors. ERISA is designed to encourage employers to offer employee benefit plans by easing their regulatory burden. To accept the petitioner’s argument would mean to transform the statute of repose into a rolling statute of limitations, effectively undermining congressional efforts to lift some of the threat of litigation off of fiduciaries.

On May 18, 2015, the Supreme Court issued a 9-0 opinion in the case. They held that because a fiduciary normally has a continuing duty to monitor investments and remove imprudent ones, a plaintiff may allege that a fiduciary breached a duty of prudence by failing to properly monitor investments and remove imprudent ones. Such a claim is timely as long as it is filed within six years of the alleged breach of continuing duty.


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

 


Expert Testimony -- 2015



Cooper v. Takeda   (California Supreme Court)

California Daubert application

On 10/14/15 the NAM filed an amicus letter with the California Supreme Court in Cooper v. Takeda. This amicus follows the Fifth Circuit Court appeal dismissal of Takeda v. Allen pursuant to the broader settlement of the Actos litigation. There remained another Actos case still on appeal in California raising the question of how the Daubert test is to be applied in California courts following the California Supreme Court's adoption of Daubert in Sargon Enterprises Inc. v. University of Southern California.

Takeda succeeded at the trial court in having plaintiff’s specific causation expert excluded, but the California court of appeals reversed. Takeda is now seeking review from the California Supreme Court, and NAM’s amicus letter urges that review. NAM’s amicus letter argues two points. First, that California appellate courts are divided on whether, under Sargon, the question of admissibility is distinct from that of liability. Second, California courts are divided on whether epidemiology can be used to prove specific causation.


Related Documents:
NAM brief  (October 14, 2015)

 


False Claims Act -- 2015



Kellogg, Brown and Root Services v. United States ex rel. Carter   (U.S. Supreme Court)

Applicability of the Wartime Statute of Limitations Act to qui tam claims

This is an appeal to the Supreme Court of a 4th Circuit decision concerning the applicability of the Wartime Statute of Limitations Act (WSLA), The WSLA is a 72-year-old criminal code provision that suspends the statute of limitations for “any offense” involving fraud or attempted fraud against the government when the United States is at war. The Department of Justice has argued, and some courts have agreed, that the statute now applies to civil violations as well, including qui tam claims brought by private relators. In addition to the impact on defense contractors, this expansive theory is increasingly being applied to other industries subject to qui tam claims. This expansive reading of the statute paired with the argument that the U.S. has been at war since September 11, 2001, leads to a tremendous expansion of potential liability for never-ending claims about which evidence may be long gone. This case presented the opportunity for the Supreme Court to prevent an unwarranted judicial expansion of the WSLA far beyond the plain text of the statute and contrary to congressional intent.

In its joint amicus brief with the National Defense Industrial Association and the Coalition for Government Procurement, the NAM argued that ample legislative history demonstrates that Congress never intended the WSLA to apply outside of the criminal context. To the contrary, the lack of direct language including civil claims in the WSLA – a Title 18 Criminal Code provision with suspension periods that mirror the length of the criminal statute of limitations – is evidence that Congress did not intend it to apply in the civil context.

In a May 26, 2015, decision (9-0), the Supreme Court agreed that the WSLA applies only to criminal offenses. The Court held that the WSLA’s text, structure and history are clear that the Act does not apply to civil claims. The earliest version of the WSLA was explicitly applicable only to criminal charges, and each subsequent iteration has been consistent with that original scope. Any ambiguity regarding the Act’s use of the term “offense” must be resolved in favor of the more narrow definition.

On May 26, 2015, the Supreme Court rendered its opinion. As shown by the Wartime Suspension of Limitations Act’s text, structure, and history, the Act applies only to criminal offenses, not to civil claims like those in this case. Moreover, the False Claims Act’s “first to file” bar keeps new claims out of court only while related claims are still alive, not in perpetuity.


Related Documents:
NAM brief  (September 5, 2014)

 

U.S. ex rel. Purcell v. MWI Corp.   (D.C. Circuit)

False Claims Act to enforce contract terms or regulations

For 17 years Moving Waters Industries (MWI) fought the federal government in a False Claims Act (FCA) case. MWI is a small, family-owned manufacturer of water pumps used for irrigation and sanitation systems. The particular sale at issue in the case involved sale of pumps to Nigeria. Financing documents in the transaction required the disclosure of any commissions that were not “regular.” There was not an existing regulatory definition or guidance about what the term “regular” meant, so MWI applied what it thought was a reasonable interpretation—that a normal, longstanding, market rate commission was regular. Based on a complaint asserting that the commission was in fact “irregular,” the government pursued a civil FCA case.

The NAM filed this brief in support of MWI’s appeal of the lower court's finding of liability against MWI under the False Claims Act (FCA). The brief argued that FCA “falsity” cannot be established where the violation at issue stems from an ambiguous contract term and the defendant’s actions are consistent with a reasonable interpretation of that term. The FCA is intended to protect the government’s financial resources from fraudulent conduct. It is not meant to be a tool for resolving disputes between contractors and the government over the proper interpretation of unclear contract terms. In addition, a defendant cannot be found to have acted "knowingly" under the FCA, which can include acting in "reckless disregard" of truth or falsity, if the defendant employed a reasonable interpretation of an ambiguous term.

In an opinion that will have far-reaching implications for all industries subject to potential FCA claims, on November 24, 2015, the DC Circuit found that the FCA was not intended to impose liability for an innocent, good faith mistake about the meaning of an applicable regulation. This outcome is an important victory for due process, and highlighted the fundamental unfairness of subjecting parties to liability for violating a rule without first providing notice of what the rule requires.


Related Documents:
NAM amicus brief  (March 2, 2015)

 


Government Regulation -- 2015



Yates v. United States   (U.S. Supreme Court)

Expansion of Sarbanes-Oxley Act

The NAM together with the U.S. Chamber filed an amicus brief urging the Supreme Court to review an Eleventh Circuit decision that broadly construed the Sarbanes-Oxley Act. In this case, the petitioner, Yates, was a commercial fishing boat captain who was convicted of destroying business records in a government investigation. After suspecting that Yates was catching undersized fish, federal officers instructed Yates to retain 72 fish. When the officers boarded the boat, they discovered that several of the fish had been thrown overboard. Yates was prosecuted under the Sarbanes-Oxley Act, which imposes criminal penalties against a person who knowingly destroys records, documents or tangible objects with intent to impede or obstruct and investigation. The Eleventh Circuit upheld the conviction, holding that the Sarbanes-Oxley Act applied to all forms of tangible evidence in any government investigation.

The NAM challenged the lower court’s ruling by explaining that Congress never intended the Sarbanes-Oxley act to apply to cases like this. Congress passed the act in response to an outbreak in corporate investment scandals such as Enron and WorldCom, hoping to prevent the destruction of corporate financial records during a government investigation. This objective arose from a compelling and narrow intention to protect investors. The NAM brief argues that a basic understanding of statutory interpretation indicates that the phrase “tangible object” refers in context to corporate record keeping devices such as papers, hard drives, or discs. The statute itself and Congress’ intent both illustrate that the Sarbanes-Oxley act was never intended to apply to activities beyond corporate record keeping.

Expanding the application of the Sarbanes-Oxley Act to cases like this will greatly broaden the reach of the Act beyond the intent of Congress. Further, it would potentially criminalize innocent and routine practices such as inventory management. Therefore, the consequences of the Eleventh Circuit’s ruling are far-reaching and potentially impact manufacturers of all kinds.

The Supreme agreed to hear the appeal, and on Feb. 25, 2015, overturned the lower court ruling 5-4. In a divided decision, a majority thought that the law should not be read to so broadly by prosecutors. Instead, it should be interpreted to criminalize only tangible objects that are used to record or store information, and not all tangible objects in the world.


Related Documents:
NAM brief  (July 3, 2014)

 


International -- 2015



Shell Oil Co. v. Writt   (Texas Supreme Court)

Absolute privilege for communications to Foreign Corrupt Practices Act investigators

On October 31, 2014, the NAM and coalition associations filed an amicus brief with the Texas Supreme Court. The Foreign Corrupt Practices Act (“FCPA”) has played a very significant role in the federal regulation of multinational corporations. By punishing bribery and other illicit influence of foreign officials by U.S. companies, the statute seeks to improve the integrity of American businesses, promote market efficiency, and maintain the reputation of American democracy abroad. If a company’s employees violate the FCPA they can temper the consequences of their employees’ action only if they liberally cooperate with federal authorities, disclosing all relevant information. However, the Texas appeals court decision undermines this regime of corporate cooperation by denying absolute privilege for company’s confidential voluntary disclosure of potential FCPA violations to government investigators. The NAM brief argues t05hat if left intact, the decision may force employers to make the difficult decision not to disclose all of the details in relation to potential FCPA violations as soon as they are aware of them. In doing so, it impedes the government’s investigation of FCPA violations and negatively impacts American businesses. Accordingly, the decision of the court of appeals should be reversed.

On May 15, 2015, the Texas Supreme Court held that Shell Oil Company was entitled to an absolute privilege against a defamation lawsuit brought by a former Shell employee. The suit was based on statements made by Shell in its internal investigation and report to the U.S. Department of Justice regarding alleged violations of the Foreign Corrupt Practices Act. The Court’s opinion relied heavily on various statistics and other information provided in the amicus brief, including the Firm’s 2013 Year-End FCPA Update, which the Court cited.


Related Documents:
NAM brief  (October 31, 2014)

 


Labor Law -- 2015



Baker DC, LLC v. NLRB   (U.S. District Court for the District of Columbia)

Employers harmed by ambush rule

The NAM and coalition associations filed an amicus brief supporting three construction employees from Baker LLC which joined a federal lawsuit challenging the National Labor Relations Board’s (NLRB) Ambush Rule. Baker requested a Temporary Restraining Order (TRO) against implementation of the Rule due to suffering irreparable harm on a variety of grounds including a strong objection to the Rule’s requirement mandating employer’s turn over employees personal information over to organizing officials. However, the court found no showing of irreparable harm on the notice posting requirement, a failure to show that the disclosure requirements caused certain and irreparable harm, and a failure to demonstrate that Baker’s due process rights will be irreparably injured. The judge distinguished the prior notice posting rule and states that the NAM case does not signal a substantial likelihood of success on the merits in this case. The Baker case has been consolidated with NAM’s challenge to the Rule in D.C. District court with a hearing scheduled for May 15.


Related Documents:
NAM brief  (April 21, 2015)

 

In re Browning-Ferris   (NLRB)

What constitutes a "joint-employer"

On April 30, 2014, the Board issued an order granting review of the Acting Regional Director’s Decision and Direction of Election of the current joint-employer standard as articulated in the Board’s decisions in TLI, Inc., 271 NLRB 798 (1984), enfd. mem. 772 F.2d 894 (3d Cir. 1985), and Laerco Transportation, 269 NLRB 324 (1984). “To establish joint employer status there must be a showing that the employer meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.” In June 2014, the NAM’s Manufacturers’ Center for Legal Action (MCLA) submitted an amicus brief outlining key concerns of manufacturers in changing the definition of joint employer.

On August 27, 2015 in a 3-2 decision, the Board loosened the standard for determining joint employment under the National Labor Relations Act. For the past 30 years, the relevant joint employer inquiry was whether or not an entity exerts a direct and immediate degree of control over another business's employees and their essential terms and conditions of employment. Under the new standard, the Board evaluates whether an entity exercises indirect control over the means or manner of the employees' work and terms of employment, or whether the entity has the potential to exercise such control. This requires a very fact-specific case-by-case inquiry.

The NLRB’s actions challenge the way manufacturers are able to work in the United States, and the NAM continues to advocate and fight for manufacturers on this issue.

Browning-Ferris has appealed the Board's decision to the D.C. Circuit Court of Appeals. The NAM has joined that fight, which can be found here.


Related Documents:
NAM brief  (June 26, 2014)

 

Case New Holland, Inc. v. EEOC   (D.D.C.)

EEOC's authority to send blast emails to company employees

On June 5, 2013, without any finding of discrimination or advance notice to Case New Holland (CNH), the EEOC delivered an email blast to the business email inboxes of 1,169 CNH employees. The blast email advised the employees, well over a hundred of whom were managers, that the EEOC was investigating CNH for age discrimination. It then directed the employees to provide to the government, through a secure Internet site, evidence of discrimination and personal contact information. The EEOC actually admitted, in later correspondence, that its blast email was trolling for class action plaintiffs to sue CNH.

CNH asked for a declaratory judgment finding that the EEOC had overreached its authority under its governing statutes and the United States Constitution. There were five counts in the complaint. The First Count asserted an Administrative Procedure Act (APA) violation because no authorizing rule or regulation permitted the blast email. The Second Count asserted that the blast email was neither “necessary [n]or appropriate,” and thus exceeded the permissible scope of the EEOC’s authority under Section 7(a) of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 626(a). The Third Count alleged that the EEOC failed to comply with its own Compliance Manual’s provisions on the conduct of investigations, again in violation of the APA. The Fourth Count asserted an unreasonable invasion of the CNH computer network and of the privacy interests of CNH employees, in violation of the Fourth Amendment to the Constitution. Lastly, the Fifth Count asserted that the EEOC trespassed on the CNH computer network and, by so doing, effected a taking without compensation in violation of the Fifth Amendment to the Constitution.

The EEOC moved to dismiss the complaint, and on Nov 14, 2013, the NAM filed an amicus brief opposing the motion. Our brief argued that the extensive CNH employee time and property used to complete the EEOC evaluations and interviews constitutes a violation of the Fifth Amendment’s takings clause.

The EEOC took the highly unusual step of filing a reply brief to the NAM amicus brief calling it "unprecedented" and asked for an extension to file their full reply. The substance of the full EEOC reply demonstrates the significance of the NAM argument. On 1/6/14, we responded (see brief below).

On 9/24/14, the judge dismissed the case for lack of jurisdiction based on standing. CNH amended its complaint and filed an appeal, and the judge reinstated the case. CNH voluntarily dismissed the case on 10/28/2015.


Related Documents:
NAM reply brief  (January 6, 2014)
NAM amicus brief  (November 14, 2013)

 

Chamber of Commerce v. NLRB   (U.S. District Court for the District of Columbia)

Ambush Election Rule

On January 5, 2015 the NAM sued the NLRB in D.C. District Court to stop the agency’s overreach on its “ambush elections” rule issued on December 12, 2014. The coalition brief argues that the Final Rule violates the statutory requirement for an “appropriate hearing” prior to the election, by giving Regional Directors authority to defer litigation of voter eligibility and inclusion issues until after the election. The brief also argues that the Rule is arbitrary and irrational. Specifically, it promotes speed over all other statutory goals, including employer free speech rights and the opportunity for a full and informed debate before the election; requires employers to give out employees’ private phone numbers and personal email addresses. The Board acknowledges that “the privacy, identity theft, and other risks may be greater than the Board has estimated” but nonetheless concludes that these “risks are worth taking.” Finally, the brief argues that the Rule will result in more election-related litigation, not less, even though the stated purpose of the Final Rule is to reduce such litigation.

On February 4, 2015, the NAM filed a motion for summary judgment.

On July 28, 2015, the Court ruled against the NAM's motion.


Related Documents:
NAM Reply to Motion for Summary Judgment  (March 25, 2015)
NAM Opposition to Motion to Dismiss  (March 25, 2015)
NAM Motion for Summary Judgment  (February 24, 2015)
NAM complaint  (January 5, 2015)

 

In re Constellation Brands   (NLRB)

Unlawful application of bargaining unit determination

The NAM filed a letter with the National Labor Relations Board affirming support for Constellation Brands. The NAM’s letter asserted that the Regional Director ignored important factors which influenced unit determinations including the departmental lines drawn by Constellation. NAM members have a vital interest in the Board’s application of Specialty Healthcare in the manufacturing setting. The standard for bargaining-unit determinations applied by the Regional Director in this case, which is an inaccurate application of the already unlawful standard established by the Board in Specialty Healthcare is problematic in all industries covered by the National Labor Relations Act (“Act” or “NLRA”), 29 U.S.C. §§ 151-169 including manufacturing. The NAM letter further asked that the Board grant Constellation’s Request for Review and invite NAM and other interested parties to brief these issues as they relate to manufacturing/production facilities.


Related Documents:
NAM letter  (February 12, 2015)

 

M&G Polymers USA, LLC v. Tackett   (U.S. Supreme Court)

Retiree health-care benefits

On July 24, 2014, the NAM filed an amicus brief urging the Supreme Court to reverse a Sixth Circuit decision ruling that retiree health-care benefits, resulting from silence in collective bargaining agreements, are presumed to be indefinite. This decision undermines Congress’ intent regarding employee retirement health benefits and disrupts judicial precedent in other circuits. NAM’s brief clarified that when Congress passed the Employee Retirement Income Security Act (ERISA), it in no way intended retiree health care benefits to be indefinite. Furthermore, other federal circuits have effectuated Congress’ intent by requiring clear and express language in order for retiree health benefits to be provided indefinitely. Accordingly, the NAM encouraged the Supreme Court to adopt a clear and express rule affirming ERISA and precluding a presumption of indefinite health-care benefits.

On January 26th, 2015, the Supreme Court rendered its opinion in this case holding that to determine whether retiree health-care benefits survive the expiration of a collective bargaining agreement, courts should apply ordinary contract principles. Those principles do not include the Sixth Circuit’s inference that parties to collective bargaining would intend retiree benefits to vest for life.


Related Documents:
NAM brief  (July 24, 2014)

 

National Association of Manufacturers v. Perez   (D.D.C.)

NAM sues OFCCP over its labor rights poster requirement

Continuing the fight against forced speech and aggressive overreach by federal agencies, the NAM and the Virginia Manufacturers Association (VMA) filed a lawsuit 12/18/13 to stop the Office of Federal Contract Compliance Programs (OFCCP) from enforcing its “posting requirement” rule. The OFCCP, an agency within the Department of Labor, enforces rules and regulations imposed on federal contractors.

The OFCCP rule adversely affects thousands of federal contractors and subcontractors by forcing them to promote unionization of their workforces or risk being debarred from federal contracts. Our lawsuit asked the court to strike down the rule on the grounds that poster is compelled speech and violates the First Amendment.

A similar rule put forth by the National Labor Relations Board (NLRB) was struck down earlier in 2013 by a federal appeals court due to a successful lawsuit from the NAM. In that case, the court ruled that similar posters amount to compelled speech and extend beyond the intent of the National Labor Relations Act. Federal contractors deserve the same protection from this aggressive overreach.

The NAM and VMA filed a joint Motion for Summary Judgment in D.C. District Court on 5/1/14. This case arises from a facial challenge brought by Plaintiffs against Defendant’s Final Rule, at 29 CFR Part 471, 75 F.R. 28368 implementing Executive Order 13496 which forces all federal contractors to post a “Notification of Employee Rights Under Federal Labor Laws”, prominently and conspicuously in places of employment. NAM and VMA argue that the Rule must be vacated as it constitutes compelled speech in violation of the First Amendment of the United States Constitution, has been promulgated in excess of Defendants’ statutory authority, is arbitrary and capricious, and is preempted by the NLRA.

On May 7, 2015, the D.C. District Court denied the NAM’s motion for summary judgment and entered judgment for the DOL. The DOL rule requiring contractor posting of NLRA rights statement was upheld by the Court and does not violate the constitutional rights of covered employers.


Related Documents:
NAM Motion  (May 1, 2014)
NAM brief  (May 1, 2014)
NAM & VMA complaint  (December 18, 2013)

 

Roundy's Inc.   (NLRB)

Right to exclude nonemployee union handbillers from company property

The NAM and 194 other national, state and local business organizations filed a brief at the NLRB as part of the Coalition for a Democratic Workplace in a case involving access by nonemployee union members to private property for purposes of handbilling. The case arose when union agents engaged in handbilling in front of 26 of the company's stores. The NLRB allowed the picketing where the company did not have a sufficient property interest, but asked for input from the public about 2 other stores where Roundy's property rights were arguably stronger.

The NAM/industry amicus brief argues that the company may allow some handbillers, such as charitable solicitors, but may exclude others from its property. The company should have the right to exclude individuals whose handbilling advocates a boycott or otherwise is detrimental to the company. A company must have some degree of control over the messages it conveys to its customers on its private property, and the courts have upheld this principle. Our brief urged the Board to stop requiring employers to allow nonemployee union agents to trespass on private property for the purpose of harming the employer's business under any circumstances. If any limitation on a company's right to exclude handbillers is allowed, it should recognize the difference between handbillers that are engaged in beneficent activities and those that are engaged in harmful activities.


Related Documents:
NAM amicus brief  (January 7, 2011)

 

Walgreen Co. v. Hinchy   (Indiana Supreme Court)

Indiana court allows for vicarious employer liability for personal employee misconduct

On February 18, 2015 the NAM filed an amicus brief with the Indiana Supreme Court in Hinchy v. Walgreen Co. An appeals court in Indiana adopted a “strict liability” respondeat superior theory, holding businesses liable for the actions of their employees, regardless of whether the employee was acting within what is traditionally considered the “scope of employment,” and regardless of whether the employee had been trained not to engage in the behavior.

The NAM brief sought clarification from the Indiana Supreme Court on when an employer can be held liable for the unlawful actions of an employee, where the employee knowingly violated company policy. Although this particular case arose in the health care context, and could have very significant implications for health care companies, the issue is of interest to all Indiana employers.

Unfortunately, the Court declined to take the case.


Related Documents:
NAM brief  (February 18, 2015)

 


Patents, Copyrights and Trademarks -- 2015



In re Lamictal Direct Purchaser Antitrust Litigation   (3rd Circuit)

Antitrust scrutiny of patent litigation settlements

On June 3, 2014 the NAM filed an amicus brief in the US Court of Appeals for the Third Circuit in a case challenging the legality of a pharmaceutical patent litigation settlement under the antitrust laws. Here, a brand and generic pharmaceutical manufacturer settled an all-too-common type of lengthy and costly patent litigation using a procompetitive licensing arrangement. Plaintiffs' (downstream purchasers) challenge to the licensing arrangement under Sections 1 and 2 of the Sherman Act was dismissed by the district court judge both initially and again on remand in light of the Supreme Court’s decision in FTC v. Actavis, Inc. Plaintiffs appealed to the Third Circuit.

Our amicus brief argued that patent settlement negotiations must include more than mere early entry, which is a zero-sum game in which a marginal gain for one party means a marginal loss for the other. However, as more variables are introduced, the opportunity to reach a settlement improves. To effectively settle litigation, something of value must be exchanged, ideally something each party values differently.

Licensing agreements are commonly used means of settling litigation. Here, the parties agreed to a license agreement allowing a generic to enter during the term of a patent holder’s exclusive rights, while also allowing the patent holder to compete with the generic by continuing to market and sell its branded drug. This settlement is procompetitive or, at worst, competitively neutral. We argued that merely alleging that a settlement agreement contains this type of licensing arrangement, without more, does not constitute a “plausible” theory of competitive harm sufficient to survive a motion to dismiss.

Plaintiffs in this case present a no-win proposition where patent holders and patent challengers would face an impossible choice between expensive, burdensome patent litigation, and expensive, burdensome antitrust litigation. This is not what the law requires, nor should it. This case is important to manufacturers across the economy that rely on settlements to avoid unnecessary litigation.

The appeals court vacated the district court’s decision, denied a petition for a full court rehearing and remanded to the district court for further proceedings because the appeals court believed that Actavis's holding applies here and the settlement should be subject to antitrust scrutiny under the rule of reason.


Related Documents:
NAM brief  (June 3, 2014)

 


Product Liability -- 2015



American Cyanamid Co. v. Gibson   (U.S. Supreme Court)

Challenging collective liability without proof of causation

172 plaintiffs in Wisconsin sued a variety of companies that at one time or another produced while lead carbonate pigments for paint. The plaintiffs cannot prove which company produced the pigments that are alleged to have injured them, but a federal appeals court allowed them to use a novel tort theory called "risk contribution," which holds a manufacturer liable if it "may have provided the product which caused the injury" and therefore "contributed to the risk of injury." The lower court's decision makes companies subject to severe, retroactive, unanticipated and disproportionate liability. For one defendant, liability may reach back to its activities between 1917 and 1924.

The NAM filed an amicus brief 2/13/15 supporting Supreme Court review of this ruling. We argued to keep in place fundamental liberty and property rights, along with the due process guarantee encompassed by the bedrock principle that proof of causation is required for tort liability. We emphasized that the collective liability theory endorsed in this case is only one example of a broader attack against the requirement of proving causation. These theories include market share liability, alternative liability, enterprise liability, commingled product liability, and risk contribution, all holding a defendant individually liable for injuries that may have been caused by other defendants who sold similar products or engaged in similar operations. Public nuisance claims have also been raised to avoid traditional product liability proof.

We urged the Court to review and overturn the Seventh Circuit's decision, which is a stark example of how far the courts can depart from settled causation requirements.

On May 18, 2015, the Court declined to review this appeal, so the Seventh Circuit's decision stands.


Related Documents:
NAM amicus brief  (February 13, 2015)

 

Johnson v. U.S. Steel Corp.   (California Supreme Court)

Liability of raw material supplier for end product injuries

In California, those who supply raw materials for use in a manufacturing process and integration into an end product cannot be held liable for injuries caused by the end product when (1) the raw material is not defective; (2) the raw material is sold in bulk to a sophisticated manufacturer; (3) the manufacturer employs a manufacturing process that substantially changes the raw material; and (4) the supplier does not participate substantially in the design of the end product. Liability for the decision to use potentially dangerous raw materials is placed on the maker of the end products and not on the suppliers who are selling materials that may be dangerous but can also be integrated safely into end products.

On November 23, 2015, the NAM sent an amicus letter the California Supreme Court urging it to review the decision of a lower court that departed from settled principles of liability. The lower court failed to apply the established legal framework to evaluate the alleged liability of U.S. Steel as a supplier of a raw material that was incorporated into the end product the allegedly caused plaintiffs’ injuries. The court also assumed that the “consumer” expectations test should be used to evaluate whether the raw material is defective. U.S. Steel acted solely as a bulk supplier of a raw material to a sophisticated purchaser, the raw material was not defective, and U.S. Steel was not involved in the design, manufacture, or distribution of the end product.

On December 14, 2015, the California Supreme Court left standing this ruling, which will have serious adverse consequences for manufacturing and commerce. The NAM has a strong interest in the development of tort law and the application of doctrines that place reasonable limits on strict product liability claims.


Related Documents:
NAM brief  (November 23, 2015)

 

May v. Air & Liquid Systems, Inc.   (Maryland)

Duty to warn about hazards in products made by other manufacturers

The NAM joined with 6 other organizations urging Maryland's highest court to affirm a lower court ruling that refused to hold a manufacturer liable for failing to disclose the hazards that arose from products made, sold or installed by another manufacturer. Under common law, manufacturers are only liable for hazards in their own products. We opposed the creation of a new duty to warn about hazards a manufacturer does not produce or put in its products.

Product liability law generally attaches to entities which participate in the chain of distribution of a product that causes harm because of a defect in that product but does not hold them liable for products made by others. Allowing for the reverse of this decision is unsound public policy. Such logic would require the manufacturers of staplers to be legally responsible every time a person is hurt due to a paper cut. Courts nationwide have almost uniformly held that a manufacturer has no duty to warn about hazards in a third-party’s asbestos-containing product. Consumer safety could be undermined by the potential for over-warning and through conflicting information that may be provided by manufacturers of different components and by makers of finished products.

This case specifically addresses a company’s liability due to another manufacturer creating products with asbestos. Roughly 100 companies have entered bankruptcy to address their asbestos liabilities. The bankruptcies established a privately funded personal injury compensation system of over 60 multi-billion dollar trusts. This system operates parallel to, but independent of, the civil tort system and provides substantial compensation to plaintiffs for harms caused by companies that were the largest asbestos defendants. Currently, the lack of coordination between the asbestos bankruptcy trust claim and civil tort systems can lead to “double dipping” as plaintiffs obtain tort recoveries for their injuries and then bring additional claims against asbestos trusts for the same injury.

Our amicus brief supported well-established law that a manufacturer of one product has no duty to warn about the alleged hazards of another's product. This is true even where the supplier knew its product may be integrated into another product that could cause harm.

Unfortunately, on Dec. 18, 2015, the court ruled 7-2 that "a manufacturer will have a duty to warn under negligence and strict liability when (1) its product contains asbestos components, and no safer material is available; (2) asbestos is a critical part of the pump sold by the manufacturer; (3) periodic maintenance involving handling asbestos gaskets and packing is required; and (4) the manufacturer knows or should know the risks from exposure to asbestos.” The court placed its principal justification on whether the injury was foreseeable. It also thought the burden on the manufacturer was negligible because the instruction manuals for the pumps "could easily have included in those manuals a warning that asbestos dust was dangerous, and a directive to wear protective gear. . . ." The duty on manufacturers announced in this case is intended to be "a narrow and limited duty." Presumably if asbestos were not the only product required for use with the pumps, the manufacturer would not have had to warm. It expressly declined to "extend the duty to warn to all instances when a manufacturer can foresee that a defective component may be used with its product."


Related Documents:
NAM amicus brief  (June 4, 2015)

 

Mobil Corporation v. Johnson   (Florida Court of Appeals)

Dose-specific evidence in asbestos case

This appeal involves the intersection of science and law with respect to what is believed to be the first case to be tried of the thousands of asbestos cases that have been pending in the Florida courts for over a decade and that involve plaintiffs with little or no present physical impairment. The case involves a claim for damages arising from latent injuries caused by exposure to chrysotile asbestos included in a joint sealant and caulking product called Dum Dum. The plaintiff claimed that exposure to Dum Dum was a substantial contributing cause of his benign (non-cancerous) pleural plaque condition. However, the plaintiff provided no evidence of his level of exposure to the product or whether his exposure was sufficient to cause the damages alleged. Nonetheless, the trial court ruled in favor of the plaintiff. This case is an appeal in Florida’s intermediate appellate court.

The NAM argued in its brief that, if courts permit liability to be imposed without requiring plaintiffs to show that they have received a sufficient dose of a defendant's product to develop the condition alleged, then there is a substantial risk that defendants in the countless pending Florida asbestos cases - as well as defendants in other latent injury cases - could be held liable for harms that are the fault of others. Dose-specific evidence is especially important in asbestos injury cases because courts have acknowledged that asbestos-containing products are not uniformly dangerous.

The parties settled the case in late 2015.


Related Documents:
NAM brief  (October 17, 2014)

 


Punitive Damages -- 2015



Grigg v. Owens-Illinois, Inc.   (Cal. Ct. App.)

Punitive damages for unforeseeable asbestos claims

Asbestos litigation has flooded American courtrooms. Most courts have ruled that corporations did not have a duty to warn about take-home or spousal exposure to asbestos that occurred in the 1950’s because science and medical experts at the time were not aware of the risks associated with asbestos. Modern understanding of the danger of asbestos exposure did not emerge until the mid-1960’s. Despite this prevailing trend in the courts, a California jury awarded the plaintiff in this case $11 million in punitive damages for take-home and spousal exposure to asbestos that occurred during the 1950’s.

On appeal, the NAM filed an amicus brief arguing that the company should not be liable for punitive damages since the harm of asbestos exposure was unforeseeable at that time. Absent the scientific and medical awareness of the risk, the company did not have a duty to warn its employees or their spouses of asbestos exposure. Courts usually do not award punitive damage unless the defendant intentionally or maliciously disregarded a known risk. As stated in the brief, holding the company liable in such a case “would be to effectively punish a defendant for failing to predict the future.”

The NAM also argued that awarding punitive damages in cases like this depletes financial resources and prevents current and future plaintiffs from getting appropriate damage awards. Furthermore, the risk of punitive damages discourages practical settlement negotiations and slows down the asbestos docket. California’s practice of awarding punitive damages in asbestos cases has caused an explosion of asbestos litigation in the state. To curtail this trend, California should follow most other states and either limit punitive damages in such cases or do away with them all together.

The case was settled in October, 2015, so no decision was issued by the court.


Related Documents:
NAM brief  (July 1, 2014)

 


Settlement Agreements and Consent Decrees -- 2015



Volvo Powertrain Corp. v. United States   (U.S. Supreme Court)

Court's power to liberally construe consent decrees

A company negotiated a consent decree with EPA over Clean Air Act requirements applicable to diesel engines, and later a subsidiary not involved in the consent decree sought and received EPA approval to import diesel engines. A few years later, EPA sued that company, claiming the engines, most of which were never imported into the United States, violated the consent decree.

A federal judge ordered $72 million in penalties, even though it imposed a penalty beyond what the Clean Air Act authorizes, and the D.C. Circuit affirmed.

The NAM filed an amicus brief arguing that courts should not be able to broaden the terms of the settlement to impose penalties beyond those in the consent decree for actions not subject to the EPA regulations at issue. Our brief and the appeals court decision are summarized here.

This case is now on appeal to the Supreme Court. The NAM, along with the American Petroleum Institute, the American Coatings Association, the Organizatio for International Investment, and the Metals Service Center Institute, filed another brief 3/9/15 urging the Court to review the decision. The brief, submitted by our counsel, Laurence H. Tribe of Harvard, argued that the case presents an important question whether an agency may reinterpret a consent decree to expand its authority beyond its statutory limits and beyond the territorial jurisdiction of the United States. Federal agencies are parties to thousands of consent decrees, and regulated parties often have little choice but to resolve a matter this way rather than to contest it on the merits. Agencies like EPA should not be allowed to operate beyond statutory limits imposed by Congress.

On June 15, 2015, the U.S. Supreme Court denied cert in this case.


Related Documents:
NAM brief  (March 9, 2015)

 


Administrative Procedure -- 2014



NLRB v. Noel Canning   (U.S. Supreme Court)

Defining the President's recess-appointment power

This case presents the fundamental question whether the President’s recess-appointment power may be exercised during a recess that occurs within a session of the Senate, or is instead limited to recesses that occur between enumerated sessions of the Senate. A second question involves when a vacancy occurs that may be filled by a recess appointment -- must the vacancy first arise during a recess, or may it be filled if it exists at any time during a recess? Closely related to these questions is whether the President's recess-appointment power may be exercised when the Senate is convening every three days in pro forma sessions.

These issues are critical to the validity of dozens of recess appointments that have been made by recent presidents. This case involves appointees to the National Labor Relations Board.

On May 23, 2013, the Coalition for a Democratic Workplace, of which the NAM is a member, filed an amicus brief urging the Court to settle the rules for recess appointments. The Court agreed to hear the case, and on June 26, 2014, invalidated the appointments. It held that the Recess Appointment Clause only empowers the President to fill existing vacancies during a recess of sufficient length. Furthermore, the recess appointment power applies to both pre-existing vacancies that continue to exist during the recess period and vacancies that occur during a recess period. Several hundred cases decided by the improperly appointed NLRB were affected and could be revisited.


Related Documents:
CDW amicus brief in support of certiorari  (May 23, 2013)

 


Antitrust -- 2014



Dean Foods Co. v. Food Lion, LLC   (U.S. Supreme Court)

Usefulness of summary judgment in antitrust and other complex civil cases

The NAM filed an amicus brief petitioning the Supreme Court to review the Sixth Circuit Court of Appeals' decision in Dean Foods Co. v. Food Lion, LLC. The decision, if left to stand, could substantially limit the usefulness of summary judgment as a tool to dispose of meritless claims in antitrust and other complex civil cases. This would as a consequence significantly raise the likelihood and risk of unnecessary trials. The Sixth Circuit held that this putative class action challenging petitioners’ conduct under Section 1 of the Sherman Act could proceed to trial even though respondents offered no evidence that the alleged conspiracy actually caused any injury to them.

For “proof” of causation, respondents relied solely on their expert, who admitted that he could not say whether the price increase he observed was caused by conspiracy, by effects of an unchallenged merger-related shift in the structure of the market, or by other lawful, unilateral conduct. In the absence of any evidence showing the requisite causal link, the court of appeals merely presumed causation.

Summary judgment’s utility as a mechanism for the efficient resolution of disputes would be undermined seriously if unsubstantiated assertions were sufficient to compel a trial merely because they were factually or legally complex. Yet, that is what the Sixth Circuit found and that is the inevitable result of failing to stem the flow of cases that treat summary judgment as a disfavored procedure in antitrust cases.

The petition for certiorari was denied on November 14, 2014 by the Supreme Court.


Related Documents:
NAM brief  (September 3, 2014)

 


Arbitration -- 2014



Babcock & Wilcox Constr. Co.   (NLRB)

Presumption against the validity of arbitral decisions

Pursuant to the Notice and Invitation to File Briefs issued by the National Labor Relations Board on February 7, 2014, the NAM submitted an amicus brief in Babcock & Wilcox Constr. Co.. The Board asked that parties and interested amici to address whether the Board should adhere to, modify, or abandon its long-established standards for post-arbitral, pre-arbitral, and post-grievance settlement deferral for charges that raise claims under Sections 8(a)(1) and (3) of the National Labor Relations Act, but which are also susceptible to resolution through the employer’s and union’s grievance arbitration process.

On 3/25/2014 the NAM filed its brief arguing that the well-established, court-approved deferral standards that the Board has long used should remain in place without modification. Existing Board standards accommodate the clear preference under the Act for arbitral and other private resolution of disputes, while also protecting employee statutory rights. Further, current standards allow for the fair and efficient resolution of workplace disputes where existing collective bargaining relationships provide for a working arbitral mechanism, and conserve increasingly scarce public and private resources.


Related Documents:
NAM amicus brief  (March 25, 2014)

 


Civil Procedure -- 2014



California ex rel. Wilson v. Superior Court   (California Supreme Court)

NAM opposes unreasonable standard

In a case concerning whether the California Insurance Fraud Prevention Act (IFPA) permits a finding of fault absent a showing of causation, the NAM filed an amicus letter on 8/26/2014 with the California Supreme Court in support of a Petition for Review. The plaintiffs before the trial court were former employees of the member and alleged that their employer engaged in illegal and fraudulent conduct aimed at doctors, pharmacists and insurance companies to induce the use of their products. The trial court found that the IFPA permits penalties only if the prescriptions would not have been written but for the unlawful conduct; that the prescriptions must be assessed on a case-by-case basis to have been a quid pro quo; and the claim itself must be independently fraudulent and contain an express misstatement of fact.

However, the Court of Appeals reversed the trial court in almost every aspect. It concluded that the proper test for damages under the IFPA was not the “but for” test, but instead the less rigorous “substantial factor” test. Under this test, a company could be subject to penalties when a doctor prescribes one of its products even when the prescription was perfectly medically sound. Additionally, prescriptions need not be assessed on a case-by-case basis; instead, use of statistical modeling and data to show trends can be sufficient. This ruling would make the threshold for penalties under the IFPA very low, and could criminalize a great deal of the legal activity that pharmaceutical and medical device manufacturers engage in.

In its amicus curiae letter with the California Supreme Court in support of the Petition for Review, the NAM argued that the Court of Appeals erred in its analysis of the IFPA and incorrectly applied the “substantial factor” test. Since this allows for aggregate proof of causation based on statistical evidence, it effectively places the burden on defendants to prove that their marketing practices were not the substantial cause of allegedly fraudulent insurance claims. Additionally, since manufacturers do not themselves file the insurance claims, they could be penalized for the actions of third-parties over which they have no control. This will broaden manufacturers' potential liability and increase the risk of litigation. We asked that the California Supreme Court grant the Petition for Review and seek reversal of the findings of the Court of Appeals.

Canifornia Supreme Court denied petition on the Insurance Fraud Prevention Act issue.


Related Documents:
NAM letter  (August 26, 2014)

 


Class Actions -- 2014



Halliburton Co. v. Erica P. John Fund, Inc.   (U.S. Supreme Court)

Whether to reconsider the presumption of reliance in the fraud-on-the-market theory for class action securities litigation

Although this suit involves investor claims against a company for losses allegedly suffered from company statements about asbestos litigation, this kind of suit arises in a variety of contexts where investors feel a stock price may have been affected by statements from company management. The issue on appeal is whether the Supreme Court's 1988 holding in Basic Inv. v. Levinson should be revisited (and reversed). The decision in that case established the fraud-on-the-market theory of reliance, whereby plaintiffs such as the investors in this case need not show that they individually relied on alleged misrepresentations by the company, but that the entire investor community relied on the misstatements, even if no one plaintiff in this case actually did. It's an easy way for plaintiffs to avoid having to show they were misled in any way.

The NAM filed an amicus brief supporting Supreme Court review of a 5th Circuit decision that applied the fraud-on-the-market presumption of reliance. We asked the Court to reconsider the theory, and also to prevent a case from being prosecuted as a class action when the alleged misrepresentation did not impact the market price of the stock at issue. The presumption in the Basic case has generated confusion in the courts, led to easy class certification, excessive litigation, and unfair settlement pressures. As a result, U.S. public companies and their investors have paid high litigation and settlement costs, resulting in merely a shifting of money from one set of investors to another, and their lawyers.

On Nov. 15, 2013, the Court agreed to hear this appeal.

On January 6, 2014, the NAM and other groups filed an amicus brief on the merits of the issue, arguing that the Court should overrule or modify the presumption of reliance, since the presumption undermines the requirement that plaintiffs prove actual reliance. It is based on an erroneous premise that investors rely on the integrity of market prices, while "many (if not most) investors buy or sell a security precisely because they believe the market price is wrong -- buying when they assess the market has undervalued the stock and selling when the stock is overvalued in their estimation." Such value investing is a recognized strategy. In addition, we argued that eliminating the presumption of reliance will not undermine fraud deterrence or investor compensation in cases of actual fraud.

On June 23, 2014, the Court rejected NAM’s argument and decided to uphold the Basic presumption of reliance, stating that requiring each plaintiff to prove direct reliance “would place an unnecessarily unrealistic evidentiary burden on the . . . Plaintiff who has traded on an impersonal market.” The Court reiterated that the plaintiff need only prove that the misrepresentation applied to “stock traded in a generally efficient market” and that the plaintiff purchased the stock at market price during the relevant period. Satisfying these two elements also enables the plaintiffs to proceed in a class action suit, instead of demonstrating individual reliance. The Court did reverse the circuit court’s ruling that prevented the company from raising a defense during the class certification stage. The company may defend against the presumption of reliance by demonstrating that the misrepresentation did not impact the stock price. This decision gives a company another way to prevent the certification of class action shareholder litigation.


Related Documents:
NAM amicus brief on the merits  (January 6, 2014)
NAM amicus brief  (October 11, 2013)

 

In re High-Tech Employee Antitrust Litigation   (9th Circuit)

Class action certification standards

To certify a group of people that can sue under federal class action rules, a judge must find questions of law or fact that are common to everyone in the group. Often judges have been lax in certifying large classes, and then sorting out the details during the course of the litigation. Unfortunately, the certification order imposes tremendous unfair settlement pressure on the defendants, because the stakes of the litigation are raised dramatically by the sheer number of plaintiffs allowed.

The Supreme Court has recently clamped down on overbroad certification orders, and this case involves an appeal by several companies who claim that a class was improperly certified. The class includes 60,000 employees in 2,400 diverse jobs at seven companies who claim that companies cause wage suppression that is alleged to violate antitrust laws when they agree not to cold call employees at other companies to recruit them away. The companies asked the Ninth Circuit to examine the judge's decision, arguing that each employee's compensation is determined by highly individualized factors that are inappropriate for classwide adjudication. There not only must be common questions among class members, but also commmon answers. Moreover, any injury that might have happened to one employee may not have happened to others, with some having no injury at all.

The NAM filed an amicus brief in support of this appeal, arguing that the judge should have undertaken a more rigorous analysis before certifying the class action. She should not have based her order on the average impact and a few anecdotal experiences regarding the alleged antitrust violations, but instead should have first confirmed that there were common damages among class members and that individual damages could be calculated using a class-wide formula.

On Jan. 14, 2014, the court denied the appeal, without significant explanation.


Related Documents:
NAM amicus brief  (November 14, 2013)

 

Mississippi v. AU Optronics Corp.   (U.S. Supreme Court)

Removal jurisdiction under CAFA

The Attorney General of Mississippi brought a parens patriae action in state court on behalf of numerous citizens of the state against 22 out-of-state companies for alleged price-fixing in the LCD screen industry. The appeals court ruled that this suit was in effect a mass action, like a class action, that is removable under the provisions of the federal Class Action Fairness Act (CAFA), and that the case should be heard in federal court. CAFA was enacted to allow large cases involving numerous plaintiffs against out-of-state defendants to be transferred, or removed, to a federal court. Federal courts are often viewed as a more neutral judicial forum than some state courts.

The NAM joined with the Access to Courts Initiative, Inc. in an amicus brief urging the Court to recognize that the Constitution established federal courts in part to hear cases between one state and citizens of another (including companies located in other states). There should be no presumption against transferring a mass action case out of state court, and in fact, there should be a presumption in favor of removal under the constitutional structure. An unduly constrained view of federal jurisdiction has helped fuel the litigation explosion of the last fifty years, contributing to the imposition of billions of dollars of costs on American consumers and the loss of hundreds of thousands of American jobs.

The Supreme Court ruled unanimously 1/14/14 that a case like this cannot be removed to federal court because Mississippi was the only plaintiff and the case was therefore not a mass action under CAFA. CAFA allows removal of cases with 100 or more persons, but a state filing suit in a representative capacity is only one plaintiff, even through it represents hundreds of unidentified persons with an interest in the outcome. The Court refused to look behind the pleadings by the state to find out if it was gaming the system, because Congress did not intend for such an inquiry in mass action cases.


Related Documents:
NAM amicus brief  (September 10, 2013)

 


Communications -- 2014



Verizon v. FCC   (D.C. Circuit)

Appeal of FCC decision to force net neutrality on Internet providers

On July 23, 2012, the NAM filed a brief in support of Verizon’s fight against net neutrality, which constitutes rate regulation, requiring Internet Service Providers to carry the internet traffic of "edge" providers free of charge and effectively prohibiting paid prioritization of certain traffic streams. This is the second time the FCC has had to defend its attempt to impose net neutrality, with the first attempt ending in the court's finding in Comcast Corp. v. FCC that the Commission did not have legal authority to enforce such principles.

The brief in this case argued that rules for net neutrality were again not within the authority of the FCC. The Commission apparently found that the Telecommunications Act of 1996 endowed it with sweeping authority to regulate the internet, despite the fact that Congress never actually did so. Even if the FCC has the authority to regulate broadband Internet access, the provisions for regulation only allow it to take steps to make the markets more competitive. Numerous economists, including one that was formerly with the FCC, declared that net neutrality will not help make markets more competitive. In addition, the agency relied on unsupported speculation that regulation would lead to increased deployment of the internet, while the evidence before it overwhelmingly demonstrated that net neutrality regulations would inhibit deployment, interfering with business operations.

The NAM supports increased deployment of broadband internet services without unnecessary and burdensome regulations and efficient spectrum management issues. Policymakers should remove barriers to entry, remove regulations that dampen investment incentives, rely on industry practices that promote transparency and enhance consumer and business choices, and ensure technology-neutral competition for all providers.

On Jan. 14, 2014, the court sent back to the FCC its non-discrimination and no-blocking requirements on the basis that they improperly constitute common carriage regulation of broadband services. It found that the agency had the authority to regulate broadband internet service, and upheld the Commission's authority to adopt Open Internet rules. But the FCC improperly applied non-discrimination and no-blocking requirements to Internet Service Providers, which are not common carriers subject to such provisions.


Related Documents:
NAM Shopfloor blog post  (January 15, 2014)
NAM amicus brief  (July 23, 2012)

 


Environmental -- 2014



Alec L. v. McCarthy   (D.C. Circuit)

Litigation seeking to impose 6% annual reductions in greenhouse gases under "public trust" theory

This is an appeal of a decision dismissing claims by an environmental group that would force the government to impose further greenhouse gas emissions reduction policies under a "public trust" theory. The NAM intervened in the case in the trial court and helped obtain the favorable ruling there.

For a full summary of our arguments in the district court, click here.

In our appeals court brief, joined by various trucking and construction companies and associations, we argue that the public trust doctrine is a state law doctrine and does not implicate a federal question subject to jurisdiction in the federal courts. The case also presents a political question that is not for the courts to decide, putting the courts in the position of adopting air emission standards of general applicability and monitoring compliance. No court has ever used the public trust doctrine to compel a regulatory action by the federal government, much less a sweeping new regulatory agenda of the type sought here. In addition, the parties bringing suit do not have standing, because their alleged injuries are not imminent and particularized, nor are they fairly traceable to the defendants or likely to be lessened by any court order.

The court decided not to hear oral arguments in the case, and on June 5, 2014, affirmed the district court's dismissal of the claims. It found that the plaintiffs did not present a federal question, and that the court therefore did not have jurisdiction to hear the case. There was no federal question because the claims were based on the legal theory of public trust, which is entirely a state law issue.

The NAM intervened in this case to help block this attempt to use the courts to do an end run around the legislative and regulatory processes that govern regulation of emissions from manufacturing plants. This result is an important development in reining in these kinds of aggressive legal theories and litigation tactics.

The plaintiffs appealed to the Supreme Court, which declined to hear the case on 12/8/2014.


Related Documents:
NAM Opening Brief  (December 23, 2013)

 

American Chemistry Council v. EPA   (U.S. Supreme Court)

Whether EPA greenhouse gas regulation for motor vehicles triggers limits on stationary sources of GHG emissions

On April 18, 2013, the NAM and 23 other business organizations appealed to the Supreme Court to review an adverse decision on greenhouse gas regulation from the D.C. Circuit. We asked the Court to review EPA's first-ever regulations of greenhouse gases emitted by stationary sources, such as power plants and factories. The lower court rejected lawsuits from hundreds of organizations who question EPA's authority to issue the rules under the Clean Air Act, as well as the procedures it used in doing so. Our petition was granted and consolidated into Utility Air Regulatory Group v. EPA. On June 23, 2014, the Supreme Court agreed with the NAM and ruled that EPA's regulation went too far. Click here for a more detailed summary of this case.

 

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

Challenging EPA greenhouse gas regulation (light-duty vehicles and CAFÉ standards)

The NAM and other organizations filed another petition to review an EPA action that is part of its suite of regulations of greenhouse gases from stationary sources. One of our initial suits in this series challenged the EPA's effort to regulate light-duty vehicles, because the agency used that rule as a predicate for further regulation of manufacturing facilities. We challenged this latest rule, published Oct. 15, 2012, as well. The case was consolidated with Plant Oil Powered Diesel Fuel Systems, Inc. v. EPA (No. 12-1428, D.C. Cir.), but that case was voluntarily dismissed, and our challenge was severed and held in abeyance pending a decision from the Supreme Court in UARG v. EPA. After that ruling, we stipulated a dismissal of this case.


Related Documents:
NAM Petition for Review  (December 14, 2012)

 

Babb v. Lee County Landfill SC, LLC   (D.S. Car.)

Whether common law nuisance claim is preempted by EPA regulation of air emissions

Landowners near a county landfill in South Carolina sued the landfill claiming that odors from the area caused them damage. The landfill argued that the law suit should be dismissed, because emissions from waste disposal facilities are regulated by Clean Air Act permitting requirements.

The NAM and the National Waste & Recycling Association filed an amicus brief supporting this argument. Congress adopted a comprehensive regulatory process that allows federal and state regulators to set emissions requirements for major stationary sources of pollutants, and the facility at issue in this case is so regulated. Court orders that set different emissions requirements would conflict with the Clean Air Act's system, but would also dramatically alter the cooperative federal-state framework established by Congress to address air quality issues. Different court rulings around the country would create a patchwork of standards under the common law of each state, and regulated entities would face a daunting challenge of predicting what standards their facilities must meet. Instead, we argued, the court should find that this kind of state nuisance claim is preempted by the Clean Air Act.

This is another example of a law suit that attempts to use state common law claims to impose more and different air emission requirements on manufacturers or other facility operators already subject to state and federal regulation under the Clean Air Act. The NAM filed a brief in a similar case in 2013 involving emissions from a plant in Iowa.

The case was


Related Documents:
NAM amicus brief  (January 31, 2014)

 

Center for Biological Diversity v. EPA   (D.C. Circuit)

When greenhouse gases become subject to regulation under the Clean Air Act

The NAM and 17 other business associations moved to intervene in a lawsuit brought by the Center for Biological Diversity (CBD) against the EPA over the agency's interpretation of when greenhouse gases become "subject to regulation" (STR) under the Clean Air Act. CBD is expected to argue that greenhouse gases were already subject to regulation before EPA issued the "Johnson memo" in 2008 and a subsequent STR rule in April, 2010. If such a claim is accepted by a federal court, thousands of members of the business associations could be forced to obtain permits for new or existing facilities and to install costly control technology to try to reduce greenhouse gas emissions.

On July 18, 2014, after the Supreme Court's decision in Utility Air Regulatory Group v. EPA, this case was voluntarily dismissed.


Related Documents:
NAM motion to intervene  (June 28, 2010)

 

CTS Corp. v. Waldburger   (U.S. Supreme Court)

Whether CERCLA preempts state statutes of repose

This case involves the deadline for filing damage suits under CERCLA, the Comprehensive Environmental Response, Compensation, and Liability Act. The Supreme Court agreed to review a decision from the Fourth Circuit involving a suit for alleged contamination of the ground and water near an old North Carolina manufacturing plant site once owned by CTS Corporation. The site is subject to clean-up obligations under CERCLA, but this case involves a private suit alleging nuisance under state law. CTS argued that the nuisance claim was barred by North Carolina’s 10-year statute of repose.

CERCLA provides liberal deadlines for filing suit that supersede state statutes of limitations, but says nothing about statutes of repose.

The NAM filed an amicus brief focusing on the history of statutes of repose and the beneficial purposes they serve—particularly in the efforts of states to create, enhance, and protect economic opportunities for their citizens through job growth. We stressed that states across the country have enacted statutes of repose as part of broader efforts to strengthen their economies—an effort that in the current economic environment is all the more important. These statutes simply put an end to perpetual liability that can remain unknown for years and years, after witnesses are gone and memories fade. They provide certainty and finality in commercial transactions, promote judicial economy, and help keep insurance rates down.

On 6/9/2014, the Court ruled 7 to 2 that CERCLA does not preempt state statutes of repose. Such statutes differ from statutes of limitations in that they are designed to put an absolute time limit on a defendant's liability, while statutes of limitations are designed to require plaintiffs to file suit promptly when their claims accrue. Courts may grant exceptions when plaintiffs miss statute of limitations deadlines for various reasons, but not for statutes of repose. Because Congress knew of the differences and did not include statutes of repose in the law at issue, it did not intend to preempt them.

The decision limits long-term liability under CERCLA for pollution that occurred many years ago.


Related Documents:
NAM amicus brief  (March 3, 2014)

 

Freeman v. Grain Processing Corp.   (Iowa Supreme Court)

Whether public nuisance claim is preempted by EPA regulation of factory emissions

Eight residents of Muscatine, Iowa, sued a local corn milling plant alleging trespass, nuisance and negligence from pollutants and odors from the plant. The trial court dismissed the claims as being preempted by the Clean Air Act (CAA), Iowa law, and the political question doctrine. That decision was appealed to the Iowa Supreme Court.

The NAM, along with 5 other manufacturing associations, filed an amicus brief supporting the trial court's decision on preemption and political question. Manufacturers are already subject to a complex system of state and federal regulations, and adding common-law tort liability on top of that will further undermine the ability to create jobs and compete. We argued that courts are not equipped to properly handle cases like this, because they require clear and manageable standards for imposing liability, and such standards involve policy judgments that can only properly be developed by legislative and regulatory bodies with the investigative resources and technical and scientific expertise necessary. In addition, the executive and legislative branches of government are authorized to set and adjust standards and rules to guide the regulated community, and they are much better able to consider the views of many more affected parties, including a variety of scientific and economic experts, to revisit their policy choices on a regular basis, and to develop a consistent policy for everyone, not a piece-meal policy that depends on the court or state in which the case occurs.

On June 13, 2014, the Iowa Supreme Court reversed the trial court decision and found that the CAA does not either expressly or impliedly preempt state emissions laws nor preclude a right of action brought under those laws. The Court also stated that several clauses in the CAA reserve for private citizens the power to bring public nuisance claims. Unless a state law or common law right of action is expressly preempted by federal statute, courts are reluctant to apply the preemption doctrine to state causes of action. The Court also found that the Iowa environmental statute did not preempt the plaintiffs’ claims because it too reserved the right to bring a public nuisance claim. Rejecting the political question argument, the court found that no constitutional controversy existed, tort claims are typically not precluded under the political question doctrine, and resolution of the controversy did not require a policy decision by another branch of government.

Claims based on nuisance theories of liability continue to be somewhat of a wild card for the regulation of plant emissions. Manufacturers continue to seek a rational regulatory system where the rules are clear and the potential liabilities are predictable and manageable.


Related Documents:
NAM amicus brief  (October 10, 2013)

 

GenOn Power Midwest, L.P. v. Bell   (U.S. Supreme Court)

Validity of state tort suits for damages from permitted emissions under Clean Air Act

This is a Clean Air Act preemption case. Some private property owners sued a power company under common law tort claiming damages for nuisance, trespass, negligence and strict liability arising from emissions and particulates from the operation of a coal-fired power plant in Allegheny County, Pennsylvania. The plant had permits from EPA for the emissions, and the lawsuit did not allege any violations of the Clean Air Act. The trial court threw the case out, finding it preempted by the Clean Air Act, but the Third Circuit Court of Appeals reversed, holding that a provision of the Act saves this kind of state lawsuit. The company sought Supreme Court review.

The NAM led a group of 11 other industry associations in filing an amicus brief supporting review. We argued that state common law remedies such as those sought here are irreconcilably inconsistent with the comprehensive system of air pollution control provided by the Clean Air Act. Permits, which are subject to public notice and comment, specify clear emission and operating standards that guarantee certainty, predictability, and evenhandedness to the regulated community. They provide an informed assessment of competing interests. By contrast, common law suits view the issues from a narrower perspective, using vague standards of liability, uneven application between states or even within states, with no guarantee of consistent results even between similar facilities.

Companies must be able to rely on permits for stable business operations, and these kinds of suits are a growing concern. Their effect is to add additional liability for activities that fully comply with federal permit obligations, raising the cost of doing business and threatening jobs and competitiveness.

The Supreme Court denied our appeal on June 2, 2014.


Related Documents:
NAM amicus brief  (March 26, 2014)

 

Grain Processing Corp. v. Freeman   (U.S. Supreme Court)

Whether public nuisance claim is preempted by EPA regulation of factory emissions

The Iowa Supreme Court ruled that a group of Iowa residents could sue a local corn milling plant for trespass, nuisance and negligence from pollutants and odors emanating from the plant, in spite of the fact that the emissions are regulated by the EPA and the company is in full compliance with its permits. That decision was appealed to the U.S. Supreme Court. This case represents a serious emerging problem for manufacturers. The appeal in a similar case was declined by the Court earlier this year.

Our brief, joined by 6 other national associations, urged the Supreme Court to hear this appeal. We argued that this case presents an ideal opportunity to resolve whether public nuisance claims under state law are preempted by the Clean Air Act. There are serious conflicts between the federal courts of appeals and within state courts concerning this preemption issue. The issue is important because public nuisance litigation threatens one of the Clean Air Act's most important methods of pollution control -- permitting. Permits specify clear standards that guarantee certainty, predictability, and evenhandedness to the regulated community, and allowing public nuisance litigation threatens to substitute ad hoc decisions for considered regulatory policy, a result completely at odds with the goals and purposes of the Clean Air Act.

On December 1, 2014, the Court declined to review this appeal.


Related Documents:
NAM amicus brief  (October 14, 2014)

 

Mingo Logan Coal Co. v. EPA   (U.S. Supreme Court)

EPA interference with Clean Water Act permits

The NAM and a group of 18 other national business organizations filed an amicus brief urging the Supreme Court to review a ruling that would give EPA the power to revoke a valid discharge permit issued under the Clean Water Act. The ruling, reversing a trial judge's decision that struck down EPA's attempt to interfere with valid permits, prompted widespread concern in the business community that EPA was arrogating to itself the power to upset long-settled reliance on thousands of permits issued by the U.S. Army Corps of Engineers.

The NAM hoped to convince the Supreme Court of the importance of this case. Our brief focused on the impact of the decision on investment expectations and infrastructure projects. About 60,000 discharge permits are issued every year, representing $220 billion of investment in the U.S. economy, and a 2% risk that EPA could revoke a permit decreases the benefit-cost ratio of a project by 30%. We highlighted a study by Professor David Sunding that even small changes in the possibility of such EPA action "can lead to dramatic redutions in private investment." EPA's move also threatens public sector projects for water, transportation, energy and public infrastructure.

The issue is also critical to state governments, with 27 states filing their own amicus brief supporting Supreme Court review of the case.

Here are links for our summaries of action in this case in the trial court and the appeals court.

On March 25, 2014, the Court declined to hear this appeal.


Related Documents:
NAM amicus brief  (December 16, 2013)
NAM press statement  (December 16, 2013)

 

National Association of Manufacturers v. EPA   (D.C. Circuit)

Challenging EPA's NAAQS for particulate matter

On March 15, 2013, the NAM filed a petition for the U.S. Court of Appeals to review the EPA's latest regulation of particulate matter. The regulation, published on Jan. 15, lowered the primary annual National Ambient Air Quality Standard for particulate matter from 15 to 12 micrograms per cubic meter. The NAM had urged EPA to retain the existing standard, but the agency opted to move forward with a more aggressive and damaging regulation.

NAM's President and CEO Jay Timmons said that the "new standard will crush manufacturers' plans for growth by restricting counties' ability to issue permits for new facilities, which makes them less attractive for new business. Essentially, existing facilities will have to be shuttered for new facilities to be built in these areas. This is not a conducive way to create jobs."

Our opening brief, filed 8/19/13, focused on whether EPA prejudged the need for the rule and the range of outcomes from the rulemaking process, whether it ignored a substantial body of contrary scientific evidence that does not support lowering the standard, whether its decision to require monitoring devices along roadways was unlawful because it will record maximum rather than ambient particulate matter concentrations, and whether the rule is invalid because EPA failed to provide implementation rules needed to address the legal consequences that flow from it.

The brief recounts the history of EPA's regulation of particulate matter. It notes that promulgation of the rule triggered immediate implementation obligations and started the clock on numerous others, yet many key implementation issues are unresolved. First, EPA has not approved a computer model to demonstrate compliance with the standard, which is typically how companies demonstrate compliance. Second, there are technical problems with the two methods approved by EPA for testing particulate matter emissions that have led EPA to recognize their limitations, indicating that reliable test methods are several years away. Third, EPA has not provided full guidance to the states about how to designate the boundaries of nonattainment areas, which could lead to improper designations and further burdens on manufacturers. Other issues are also highlighted.

On May 9, 2014, the Circuit Court denied NAM’s petitions. On each issue, the court deferred to EPA’s process and decisions. Although we challenged EPA’s lowering of the threshold for particulate matter, the court decided that EPA provided reasonable scientific explanations to justify making the standards more stringent. We also challenged EPA’s elimination of the “spatial averaging” test to determine particulate matter standards. Spatial averaging entails gathering data from several sites within a specified area and then averaging the results to determine the level of emissions in that area. EPA reasoned that spatial averaging would cause certain specific areas within a larger area to be out of compliance. Lastly, the court determined that EPA has the authority to protect air quality, and therefore it may place monitors in all areas, including along heavily traveled metropolitan roads, to accurately determine air quality.

In sum, this decision shows that courts continue to be reluctant to second-guess EPA regulations. Lowering the particulate matter levels will increase costs and harm competitiveness. The court’s unilateral deference to EPA’s justifications for lowering the levels underscores the importance of participation in the rulemaking process to combat future EPA regulations.


Related Documents:
NAM brief  (August 19, 2013)
NAM Statement of Issues  (April 17, 2013)

 

National Mining Ass'n v. McCarthy   (D.C. Circuit)

Whether EPA guidance document constitutes regulation that must go through notice-and-comment rulemaking

There’s a law that prevents agencies from charging ahead with regulatory changes without seeking input from the public and the regulated community. It’s called the Administrative Procedure Act (APA), and it was designed to require agencies that want to make significant changes to their regulations to publish the proposed changes and answer criticisms on the record.

In 2009, the Environmental Protection Agency announced -- through a series of memoranda and letters -- a new system of review for certain Clean Water Act permits. These permits, called Section 404 permits, are needed by anyone that wants to build or modify a facility or undertake some other construction project that might have an effect on waters subject to federal jurisdiction. EPA later issued lengthy guidance making substantive changes to the requirements for permits for surface coal mining, also without going through notice-and-comment rulemaking.

The National Mining Association sued, and a federal district judge ruled that EPA had overstepped its authority and violated the APA. That ruling has been appealed to the D.C. Circuit, and the NAM and other business organizations filed an amicus brief supporting the trial judge’s decision. The brief described numerous instances where EPA and other regulatory agencies have issued regulatory requirements -- posing as guidance – that should be adopted by notice-and-comment procedures.

On July 11, 2014, the D.C. Circuit reversed, finding that the "Enhanced Coordination Process" and Final Guidance were procedural, not legislative rules, and therefore not subject to the APA. It also ruled that a court challenge was premature because the Final Guidance was not actually final agency action subject to litigation, because it did not subject regulated parties or state enforcement agencies to any requirements or liabilities. The Guidance can be legally ignored. If it is actually used to grant or deny a permit in the future, a law suit might then be appropriate.

The upshot of this ruling is that EPA can create guidance documents that regulated parties can legally ignore, but they do so at the risk of having to litigate over EPA's use of such guidance documents after a permit is denied. Changing regulatory requirements with guidance documents casts American businesses adrift in uncharted territory in terms of regulatory risk and stymies investment and economic growth. Agencies that fail to use proper rulemaking procedures make decisions without the insight, data and information of the regulated public, including the practical implications of alternative policy choices.


Related Documents:
NAM brief  (July 22, 2013)

 

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

Portland Cement NESHAP litigation

Several environmental groups sued EPA over its emission standards for hazardous air pollutants from cement plants. They argued that amendments to the standards weaken and delay compliance with an earlier rule, and that the agency must not allow an affirmative defense for manufacturers when malfunctions of industrial equipment occur. The NAM is part of the SSM Coalition, which filed an amicus brief supporting the affirmative defense. The environmental groups wanted a standard that regulated sources, including the best-performing sources, will be unable to meet at times despite their proper design, operation, and maintenance. As a result, manufacturers will face civil penalties for events beyond their control.

EPA took the position that malfunctions must be accounted for in standards which require maximum achievable control technology (MACT). To be achievable, MACT standards must be capable of being met on a regular basis, including under most adverse circumstances which can reasonably be expected to recur, including periods of startup, shutdown, and malfunction. EPA may set different requirements during malfunction events than apply to normal operations of plant equipment.

Our brief argued that an affirmative defense to civil penalties that might arise from a malfunction is required by the Clean Air Act and was properly promulgated by EPA. Without the defense, companies would be subjected to citizen suits, as well as administrative penalties, for events beyond their control.

We also argued that EPA has the authority to adjust the compliance deadline when it modifies a MACT standard. Not allowing this authority would be hugely unfair to regulated sources and would ignore the reality that it can take up to three years or more to design, acquire, install and start up pollution control equipment or modified processes.

On April 18, 2014, the court unanimously ruled that EPA properly adopted the emissions-related provisions in the rule, but that it did not have the statutory authority to create an affirmative defense in civil suits against cement manufacturers where an unavoidable malfunction results in impermissible levels of emissions. It found that EPA reasonably read the statute to allow an increase in the emissions limits for particulate matter from cement-making kilns. It also found that EPA reasonably considered costs to industry with a comparative analysis of cost-effectiveness, rather than, as the environmental groups wanted, consider only whether a standard would be "too expensive for industry to achieve", that is, one that would essentially bankrupt the industry.

The court rejected environmental arguments that the compliance date for emissions of mercury, hydrochloric acid and hydrocarbons should be 2013. Because the standard for particulate matter changed in the new regulation, the court found that it would be irrational and even absurd to have different compliance dates for the different pollutants because of the technology involved. The new compliance date is September 2015.

Finally, it agreed with the environmental groups that EPA did not have the authority to establish an affirmative defense for companies whose emissions exceed the regulatory limits because of unavoidable malfunctions. Instead, private civil suits may be filed by those affected by the emissions, and it is up to the courts to decide whether to award damages. During court proceedings, EPA may seek to intervene, or file an amicus brief, stating its views about whether a company should be liable for such emissions. It is up to the courts to determine the scope of remedies available to plaintiffs, taking into consideration the company's compliance history and good faith efforts to comply, the duration of the violation, and other factors.


Related Documents:
SSM Coalition brief  (July 30, 2013)

 

Oklahoma v. EPA   (U.S. Supreme Court)

EPA power to take over state enforcement on regional haze

The NAM and other groups asked the Supreme Court to review a lower court decision that allows the EPA to take over 14 state enforcement plans under the Clean Air Act with respect to regional haze, and impose Federal Implementation Plans (FIPs). Oklahoma and North Dakota objected to this EPA action, saying that the agency overstepped its statutory authority and the result will be billions of dollars in power plant upgrades that will needlessly boost electric rates by as much as 20 percent.

Our amicus brief supports review, focusing on the fact that the Clean Air Act limits EPA's authority with respect to state implementation plans, instead giving the states primary responsibility for making air quality decisions and limiting EPA's role to the secondary function of determining whether those state plans are "based on a reasoned analysis." This is particularly important regarding state regional haze decisions, which involve aesthetic concerns such as visibility in parks. EPA wanted to impose a control technology that is too costly, and conducted a visibility analysis differently. However, Congress gave the states significant latitute by allowing them to choose the mix of sources that must install controls to attain the national standards.

This litigation reflects a growing pattern of disregard by EPA for the statutory limits on its authority, undermining the balance in the Clean Air Act between federal and state enforcement. Allowing this will only make matters worse -- empowering EPA to take unilateral action without engaging with states to help craft workable standards.

On May 27, 2014, the Court declined to hear this appeal.


Related Documents:
NAM amicus brief  (March 5, 2014)

 

Sierra Club v. EPA   (D.C. Circuit)

Whether carbon dioxide must be considered in EPA PSD permits

In the Deseret Power decision in 2008, the EPA Environmental Appeals Board rejected the Sierra Club's contention that preconstruction permits for new power plants must include "best available control technology" (BACT) for carbon dioxide, but sent the case back to the EPA to reconsider whether to impose the requirement under its discretionary authority, and to develop an adequate record for its decision. It encouraged the EPA to consider whether the issue in this case should be resolved "in the context of an action of nationwide scope, rather than through this specific permitting proceeding."

On Sept. 14, 2010, the court ordered the case held in abeyance pending the outcome of other greenhouse gas cases. Former EPA Administrator Stephen Johnson issued an interpretative guidance memorandum on Dec. 18, 2008, that concluded that PSD permits (for the Prevention of Significant Deterioration of air quality) do not need to include BACT limits for greenhouse gases. The Sierra Club challenged that guidance, while the NAM and other business organizations supported it.

Our motion to intervene, filed 2/13/09, outlined why this case will have a substantial impact on many manufacturers, and why the EPA, which represents the general public interest, will not adequately represent the interests of the business community.

On Feb. 17, 2009, EPA Administrator Lisa Jackson granted a Sierra Club petition for reconsideration of the Johnson memo, and permitted public comment on the matter. The D.C. Circuit stayed the litigation.

On April 2, 2010, EPA completed its reconsideration of the Johnson memo and published a new "Subject to Regulation" notice that made January 2, 2011 the date on which greenhouse gas emissions were regulated. On June 9, EPA asked the court to hold the case in abeyance while other litigation over its GHG regulation was resolved. The NAM opposed this motion, saying that the issues in this case are being addressed in other greenhouse gas cases, and the environmental groups here should not be allowed to have a second chance to litigate should they lose in those other cases. We also opposed an effort to allow the Center for Biological Diversity to switch its challenge from those cases into this one, as that could create competing panels of judges reviewing the same issues. Ultimately, the case was held in abeyance and finally dismissed in 2014 after the Supreme Court ruled in Utility Air Regulatory Group v. EPA, partially upholding EPA regulation of greenhouse gases, but limited its scope under the PSD program.


Related Documents:
NAM Opposition to EPA's Procedural Motion  (June 22, 2010)
NAM Motion to Intervene  (February 13, 2009)

 

Utility Air Regulatory Group v. EPA   (U.S. Supreme Court)

Whether EPA greenhouse gas regulation for motor vehicles triggers limits on stationary sources of GHG emissions

On April 18, 2013, the NAM and 23 other business organizations appealed to the Supreme Court to review an adverse decision on greenhouse gas regulation from the D.C. Circuit. We asked the Supreme Court to review EPA's first-ever regulations of greenhouse gases emitted by stationary sources, such as power plants and factories. The lower court rejected lawsuits from hundreds of organizations who questioned EPA's authority to issue the rules under the Clean Air Act, as well as the procedures it used in doing so.

Greenhouse gas regulation is one of the most costly, complex and encompassing energy regulatory issues facing manufacturers and damaging our global competitiveness. EPA’s regulations could eventually force new permitting requirements for more than 6 million stationary sources, including 200,000 manufacturing facilities, 37,000 farms and millions of other sources, such as universities, schools and hospitals – impacting every aspect of our economy.

EPA’s regulatory decisions produced what it concedes were absurd results. We argued that this was not Congress’s intent when it enacted the Clean Air Act, and that courts must avoid agency interpretations that undermine the purpose of the law.

Moreover, EPA tried to avoid these absurd results by modifying the express statutory thresholds defining who is regulated. Only Congress can make those kinds of changes, and had the agency properly interpreted the statutory requirements from the beginning, it would not be in the position of having to alter the statutory requirements.

The effects of this regulation are immediate, concrete and massive, and will require the installation of “best available control technology”, with total costs estimated by EPA to increase to more than $50 billion per year. This case is of critical importance to manufacturers and our economy.

The Supreme Court agreed to hear our appeal, along with petitions from 5 other groups, limited to the following question: "Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases."

On June 23, 2014, the Court decided that EPA's regulation went too far. A majority concluded that, while greenhouse gases are within the class of emissions that are included within the broad reach of the Clean Air Act, specific sections of that law limit the EPA's regulatory power. Five Justices found that EPA neither was compelled nor permitted to require PSD (Prevention of Significant Deterioration) permits of companies solely because of their greenhouse gas emissions. They also ruled that EPA did not have the statutory authority to rewrite the unambiguous statutory thresholds, and even if EPA would not enforce its greenhouse gas requirements on smaller emitters, those companies would have remained subject to citizen suits to enjoin construction, modification or operation and to impose civil penalties of up to $37,500 per day of violation.

Seven Justices agreed with the NAM's argument that only companies already subject to permitting under the PSD program will be subject to any permitting requirements relating to greenhouse gases. They agreed that the PSD program was intended for the largest emitters that are already subject to PSD permitting. By limiting EPA's authority in this way, the decision provides substantial regulatory relief for the owners of millions of buildings and plants across the country.


Related Documents:
NAM press release  (June 23, 2014)
NAM Reply Brief  (February 14, 2014)
NAM Brief on the Merits  (December 9, 2013)
NAM Petition  (April 18, 2013)

 

White Stallion Energy Center, LLC v. EPA   (D.C. Circuit)

Challenging EPA Maximum Achievable Control Technology regulation

This case is about how the EPA establishes standards for maximum achievable control technology (MACT) which is used to minimize the emission of pollutants into the air. It arose in the context of a new regulation on emissions of hazardous air pollutants from electric utilities, as well as industrial-commercial-institutional steam generating units. The 2012 "Utility MACT" regulation adopts a methodology that has broad implications for industries subject to existing MACT standards that may be revised, or new standards yet to be developed.

The NAM filed an amicus brief arguing that the EPA erred in adopting a "pollutant-by-pollutant" approach. Under that approach, the EPA cherry-picks emissions data from multiple sources and sets a MACT floor based on whatever source is deemed the "best" for each individual pollutant. This often means there is a different best performer for each pollutant, and no single source of emissions will be able to achieve the regulatory requirement. The NAM believes that these measurements need to be made from producers operating under practical conditions -- not individually measuring pollutants and not from sources ideally positioned to limit their pollution, as the EPA argues. The EPA's approach is like asking a decathlon champion to be able to win not only the overall decathlon, but all of the individual events as well.

In addition, we argued that the EPA must give meaningful consideration to costs in determining whether a particular standard is achievable. The Clean Air Act requires that the level of pollution reduction that the EPA specifies be achievable, and its methodology will severely curtail or eliminate operations. Some vendors are unwilling to offer guarantees that their pollution control technology will meet the new standards, and financing of new projects is jeopardized.

On 9/12/2012, the court ordered this case to be held in abeyance pending reconsideration of the new source standards now under way at the EPA. The agency stated that it intends to complete the reconsideration by March 2013. It said it would reconsider "measurement issues related to mercury and the data set to which the variability calculation was applied when establishing the new source standards for particulate matter and hydrochloric acid." See 77 Fed. Reg. 45968 (Aug. 2, 2012).

The case was settled in 2014 by stipulated agreement.


Related Documents:
NAM amicus brief  (August 3, 2012)

 


ERISA -- 2014



Fifth Third Bancorp v. Dudenhoeffer   (U.S. Supreme Court)

Fiduciary duties of Employee Stock Ownership Plan managers

The NAM and other coalition associations filed an amicus brief on February 3, 2014, in a case on appeal from the Sixth Circuit. We asked the Supreme Court to consider when the managers (fiduciaries) of an Employee Stock Ownership Plan (ESOP) have a legal duty to stop investing in the company’s own stock as it relates to perceived risk. Our brief explains that ESOPs are unique vehicles designed to invest primarily in company stock, and are unable to go through the same evaluation standards utilized by managers of other types of investments. Therefore, investments in employer stock should be presumed to be prudent, and should only be deemed imprudent when the company is at risk of financial collapse.

Seven circuit courts have held that fiduciaries that offer employer stock funds are entitled to a “presumption of prudence” since the typical tools available to fiduciaries to evaluate investment options are not applicable in the case of Employee Stock Ownership Plans. Nearly every circuit to address the question has ruled that this presumption— which, in substance, is a standard for adjudicating a fiduciary’s liability—can be rebutted only upon a showing of dire financial circumstances that would undermine the congressional purpose in encouraging employer stock ownership.

The Sixth Circuit diverged from the “dire circumstances” test, holding that the presumption of prudence can be overcome whenever a plaintiff proves that “a prudent fiduciary acting under similar circumstances would have made a different investment decision.” The Sixth Circuit also held that the presumption of prudence is an evidentiary, rather than a substantive, standard and therefore refused to apply it on a motion to dismiss.

The NAM believes that attempts to weaken the presumption of prudence will deter manufacturers from offering employer stock funds in the future.

The Supreme Court ruling removed the presumption of prudence for employer managers offering company stock as a retirement option. The decision leaves employers stuck “between a rock and a hard place”, the Court acknowledged, in a unanimous decision penned by Justice Stephen Breyer. If an employer offers company stock and the price dips they might be sued for violating the duty of prudence under the federal Employee Retirement Income Security Act. But if they dump the stock on behalf of their employees because they know the company’s in trouble, they might violate insider-trading laws. These questions were left to the lower courts to decide.


Related Documents:
NAM amicus brief  (February 3, 2014)

 


Expert Testimony -- 2014



Accenture, LLP v. Wellogix, Inc.   (U.S. Supreme Court)

Admissibility of expert witness testimony based on assessing the weight of scientific evidence

The National Association of Manufacturers filed an amicus curiae brief on April 21, 2014 encouraging the United States Supreme Court to review an important decision by the Fifth Circuit admitting unreliable testimony from an expert witness without adequately assessing its admissibility based upon reliability and factual basis.

The Federal Rules of Evidence were revised in 2000 to reflect recent Supreme Court decisions imposing a gatekeeper duty on trial courts to assess the reliability and helpfulness of proffered expert testimony. However, some federal circuits have still not changed their practices. Courts are required to scrutinize the factual underpinnings of any expert’s testimony before it is allowed before the jury. Unlike ordinary witnesses, experts are permitted wide latitude to offer opinions, which have an outsized influence on juries, based upon an assumption that the expert’s opinion will have a reliable basis in the knowledge and experience of his discipline. Once admitted, faulty testimony is incurable.

In this case, a software expert testified on issues far beyond his expertise, including corporate valuations and whether a trade secret existed. Some of the testimony was based upon a review of the wrong software. The testimony was the sole basis for a $100 million jury award. The Fifth Circuit upheld the trial court's abdication of its gatekeeper role, improperly relying on cross-examination and presentation of contrary evidence to cure the effects of the defective testimony. This deviation weakens the Court’s protection against factually unfounded expert testimony and we urged the Supreme Court to review the case. Unfortunately, on 6/9/14, it declined.


Related Documents:
NAM brief  (April 21, 2014)

 

SQM North America Corporation v. City of Pomona   (U.S. Supreme Court)

Exclusion of unreliable expert testimony

The National Association of Manufacturers, along with a coalition of industry groups, submitted an amicus brief supporting U.S. Supreme Court review in the case, focusing on a court’s responsibility to act as a “gatekeeper” and properly exclude unreliable expert testimony under the standard articulated by the U.S. Supreme Court in Daubert v. Merrell Dow Pharmaceuticals. The issue represents a split among the federal Circuit courts, which subjects litigants in different jurisdictions to unequal standards of justice.

In the years since the Daubert test was enunciated in a series of cases, courts have strayed from the original interpretation to a far more permissive and open standard. Under the Supreme Court’s holding in Daubert, the trial judge is to act as the “gatekeeper” in weighing whether evidence is sufficiently reliable to be admitted into evidence. However, as is evidenced in cases such as SQM North America, judges have increasingly allowed for ever more unfounded expert testimony on the premise that “vigorous expert testimony” at trial will sort the good from the bad. We argued that the Ninth Circuit’s “methodology-only” approach is an irresponsible abdication of the judge’s responsibility and contradicts the approach taken by other Circuits. Indeed, in the original Daubert case the Court said that the federal rules require close scrutiny of the factual foundation of expert testimony.

Unfortunately, on December 15, 2014, the Court declined to review this appeal.


Related Documents:
NAM brief  (October 14, 2014)

 


Free Speech -- 2014



American Meat Institute v. USDA   (D.C. Circuit)

First Amendment limits on government-compelled disclosures

The American Meat Institute and others challenged a regulation from the U.S. Department of Agriculture (USDA) that requires country-of-origin labeling of meat, including where production of the meat (born, raised, or slaughtered) occurred. A primary issue in the case is whether the government-compelled disclosure violates the First Amendment by forcing companies to provide such detail about their products without advancing a sufficient governmental interest. The trial court rejected this claim, as did a 3-judge panel of the appeals court, and the full appellate court affirmed.

The issue in the case is "Whether, under the First Amendment, judicial review of mandatory disclosure of 'purely factual and uncontroversial' commercial information, compelled for reasons other than preventing deception, can properly proceed under Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985), or whether such compelled disclosure is subject to review under Central Hudson Gas & Electric v. PSC of New York, 447 U.S. 56 (1980)."

This case is all about the standard of court review for compelled speech about commercial products. The NAM filed an amicus brief arguing that Zauderer review, which makes it easier for the government to justify compelled speech, should be limited to situations involving consumer deception. Applying a stricter standard of review would not undermine disclosures aimed at protecting the public's health and safety, and the government can disseminate other relevant factual information itself without requiring companies to do so. Indeed, using a product's label to carry government messages could drown out a company's own messages about the product.

We also argued that even if the more deferential Zauderer-type review is accepted, the government must still show that the compelled disclosure is "purely factual and uncontroversial". Some compelled disclosures strongly imply that the product at issue is inferior or morally tainted, forcing companies to denounce themselves. It is critical that the government be held to a stricter standard of review under such conditions.

On July 29, the court ruled 9 to 2 to uphold the regulation. The majority found that First Amendment interests are much weaker for disclosure laws than for laws suppressing speech, and that the government had a substantial interest in requiring labels so that consumers can choose American products, long-standing labeling requirements can be extended to food items, and so that consumers can react in the event of a food-borne illness outbreak. It found the labeling purely factual and uncontroversial, and that the requirement did not restrict or chill commercial speech.

Two judges strongly dissented, saying the majority had decided to "bust the mainspring of commercial speech jurisprudence." These dissenters said that the First Amendment's protection from government coercion "has now been reduced to an eerie echo of a supermarket tabloid’s vacuous motto: the government may compel citizens to provide, against their will, whatever information '[i]nquiring minds want to know!'"


Related Documents:
NAM amicus brief  (April 23, 2014)

 


Government Contracting -- 2014



BP Exploration & Prod. Inc. v. McCarthy   (S.D. Texas)

Validity of broad debarment order for EPA violation

The NAM and other associations joined together in an amicus brief in a federal district court in Texas challenging an EPA order debarring all worldwide affiliates of BP from government contracts and leases. The case arose out of the Deepwater Horizon blowout in the Gulf of Mexico, which resulted in a plea agreement with BP Exploration and Development Company. After that company reached the plea agreement, EPA suspended the company, as well as its parent company and 19 other BP affiliates, preventing all of those companies from entering into any new federal procurement contracts and other transactions with the government. It also suspended the corporate headquarters from federal contracting by designating the headquarters a “violating facility” under the Clean Water Act (CWA).

BP sued EPA, arguing that the suspension orders exceeded EPA’s statutory authority. Our amicus brief supported this view, arguing that the statute clearly provides for mandatory disqualification from federal contracts “if the contract is to be performed at any facility at which the violation which gave rise to such conviction occurred, and if such facility is owned, leased, or supervised” by the convicted person. It was improper for EPA to designate the corporate headquarters as the violating facility because there was no CWA violation at that location. All of the conduct charged by EPA and agreed to in the plea agreement occurred on the rig, not at the headquarters.

This is another is a series of cases challenging EPA’s efforts to grant itself more power by broadening the language of one of its authorizing statutes. The automatic disqualification provision of the Clean Water Act was intended to exclude a facility from eligibility for contracts until the violating condition of the facility is corrected – at that point the facility again becomes eligible for contracts. EPA’s actions in this case punish the company as a whole under a statutory provision that does not allow that.

Moreover, EPA expanded its disqualification order to include all BP “affiliates,” including those in Singapore and Oman. This action was not supported by any justification grounded in the public interest, and the punishment threatens to undermine government contracting. The punishment was intended to send a message, but it was an unlawful abuse of EPA’s discretion to do so without any public interest justification.

In March, 2014, BP and EPA reached an administrative agreement under which EPA agreed to end the suspension and debarment of BP and its worldwide affiliates from federal contracting.


Related Documents:
Press statement  (December 3, 2013)
NAM amicus brief  (December 2, 2013)

 


Government Regulation -- 2014



New York Statewide Coalition of Hispanic Chambers of Commerce v. New York City Dept. of Health and Mental Hygiene   (New York Court of Appeals)

Challenging New York City's portion cap on certain drinks

When New York's Board of Health lost in the appeals court in a case challenging the city's portion cap rule that bans certain sales of large sugary drinks, it appealed to the Court of Appeals, New York's highest court. The NAM participated as an amicus in the lower courts, summarized here.

The NAM filed another amicus brief in this final appeal, arguing that the Board failed to consider superior options to its top-down regulation, namely industry-led solutions and public-private partnerships. We also challenged the authority of the Board to engage in the cost-benefit analysis that this kind of regulation requires, and that the solution it came up with is not sufficiently connected to its objective. The process was also not open and transparent, and the regulation draws arbitrary lines and creates nonsensical loopholes that undercut its value.

On June 26, 2014, the high court ruled that the NY City Board of Health exceeded its regulatory authority, engaging in law-making without any legislative delegation or guidance from the City Council. It found that the Board of Health has no inherent legislative authority, but may only adopt rules necessary to carry out authority delegated to it by federal, state or local law. By deciding to reduce sugary beverage consumption by limiting container size, the Board made value judgments balancing public health, economic consequences, tax implications for small business, and personal autonomy -- choices reserved for the legislative branch.

This is yet another example of a government agency assuming power without the authority to do so. Whether at the city or local level, or at the federal level from agencies like the Environmental Protection Agency or the Department of Labor, the NAM will continue to challenge such overreach and make sure that the courts step in to keep the executive branch within its constitutional bounds.


Related Documents:
NAM amicus brief  (April 25, 2014)

 


International -- 2014



Republic of Argentina v. NML Capital, Ltd.   (U.S. Supreme Court)

Contract enforcement with sovereign nations

On April 3, 2014, the NAM filed an amicus brief in the Supreme Court advocating the necessity of contract enforcement with sovereign nations in emerging markets. On April 21, the Supreme Court heard oral arguments over whether post-judgment discovery in aid of enforcing a judgment against a foreign state can be ordered with respect to all assets of a foreign state regardless of their location or use, as held by the Second Circuit, or is limited to assets located in the United States that are potentially subject to execution under the Foreign Sovereign Immunities Act of 1976 (FSIA). The NAM brief argues that limiting discovery against foreign states would undermine the enforcement of valid commercial contracts. Further, extending FSIA immunity to post-judgment discovery against foreign states would necessarily impede discovery against state-run companies. This would hurt all U.S. manufacturers attempting to enforce contracts with foreign sovereign nations.

The Court ruled that no provision of the FSIA immunizes a foreign-sovereign judgment debtor from post-judgment discovery or information concerning its extraterritorial assets. The FSIA only provides two types of immunity: the first is jurisdictional immunity, which Argentina waived, and the second prohibits the seizure of assets, but says nothing about discovering what they are. The Court clearly stated that there is no prohibition of post-judgment discovery. Although Argentina and the United States raised concerns that affirming the discovery order would strain foreign relations, the Court determined that such concerns should be addressed by the legislative branch and not the judicial branch.


Related Documents:
NAM brief  (April 3, 2014)

 


Labor Law -- 2014



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

Challenging NLRB decision undermining confidentiality of investigatory interviews

This case involves an employer who asked employees not to discuss their complaints about co-workers with others while an investigation was ongoing. The NLRB ruled that an employer violates employee union-organizing rights when it has such a blanket policy, and that employers must “first determine whether in any given investigation witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.”

The NAM and other business groups submitted an amicus brief in support of the employer, stating that the NLRB was incorrect in its decision because the Board failed to take into account the challenges employers will now face when conducting an investigation. For example, with the Board’s decision an employer may not be able to uncover the entire story because employees will not come forward if they know the investigation is not confidential. Additionally, the amicus brief pointed out the Board ignored its previous decisions on investigations and overturned decades of its own precedent on the matter. The Board’s decision places an enormous burden on employers to justify the confidentiality of their investigations prior to interviewing all the witnesses or even assessing the situation.

The D.C. Circuit sent the case back to the NLRB. In June 2015, the NLRB again ruled the employer’s confidentially policy violated the NLRA, and Banner again appealed to the D.C. Circuit. The NAM also filed an amicus brief in the second appeal.


Related Documents:
NAM amicus brief  (January 14, 2013)

 

Cochran v. Schwan's Home Service Inc.   (California Supreme Court)

Employee reimbursement for a personal item used for work purposes

On September 29th the NAM submitted an amicus letter to the Supreme Court of California supporting Schwan’s Home Service’s Petition for Review in the case of Colin Cochran v. Schwan’s Home Service. The case asks if an employee is owed reimbursement for a personal item used for work purposes even if the employee incurred no additional costs. California Labor Code Section 2802 requires that employers reimburse employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” The trial court ruled that calculating compensation for use of personal item at no cost would be too hard to calculate. However, the Court of Appeals (CoA) held that “The answer is that reimbursement is always required.” Nothing in the language of the decision limits the analysis to cell phones, and thus employees could be owed compensation for any number of mundane personal items utilized in a work context, even if the employee suffered no loss or expenditure. We argued that this ruling is so broad as to be completely unworkable, as well as completely unreasonable. Additionally, the Private Attorney General Act allows for civil fines to be levied against an employer for any violation of the Labor Code, thus compounding innocent failures to reimburse into disproportionate and frivolous fines. Thus, the NAM argued that the Supreme Court of California should take the decision up for review.


Related Documents:
NAM brief  (September 29, 2014)

 

In re Purple Communications, Inc.   (NLRB)

Protecting employer email systems

The NAM and our association allies filed an amicus brief with the NLRB arguing that the Board should not create an exception for employer owned email from the longstanding rule that employees generally have no right to use employer-owned property, equipment, or materials for purposes of Section 7 organizing activities, as long as the employer’s restrictions on such usage are not discriminatory. There is no discrimination in keeping the use of employer email systems restricted to legitimate business purposes and there are many alternatives available for these communications.

On December 11, 2014 the NLRB issued a decision the Purple Communications, Inc case. The 3-2 decision overturns the 2007 Register Guard case, and holds that employees now may use email for union-related communications during nonworking time. The NAM filed a brief with the NLRB arguing against this possible outcome.


Related Documents:
NAM brief  (June 16, 2014)

 

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

Whether security screening time is compensable work

On June 4th the NAM filed an amicus brief in the Supreme Court in Integrity Staffing v. Busk. This case presents the question of whether routine post shift security screenings of employees are compensable under the FLSA. Such screenings are conducted by many employers, as in this case, to help prevent theft. The resolution of this case could also have an effect on the compensability of the entire broad range of pre and post-shift screenings, conducted by employers to ensure the security of employers’ property and the safety of employees and the public. Until the 9th Circuit’s decision, employers have been able to rely on a uniform body of case law holding that security screenings are not compensable under the Portal-to-Portal Act of 1947, 29 U.S.C. §§ 251-262, as applied by this Court and regulations adopted by the Department of Labor.

The Ninth Circuit’s decision undermines the decades-old understanding of the Portal-to-Portal Act as interpreted by the Supreme Court in Steiner and Alvarez and by the Department of Labor. In holding time spent in post-shift security screenings to be compensable, the Ninth Circuit incorrectly applied the well-established “integral and indispensable” test and instead developed a new approach based on its view that the screenings were compulsory and done for the employer’s benefit. In so ruling, the court did away with the requirement under the Portal-to-Portal Act of a close and intertwined relationship between the productive work for which an employee is hired and the activity for which the employee seeks additional compensation. The court’s rule would disrupt established workplace practices imposing an unwieldy test that has already increased litigation. The Solicitor General has also filed an amicus brief in the case supporting the legal arguments raised by Petitioner and the NAM brief.

On December 9, 2014 the U.S. Supreme Court ruled unanimously that the Fair Labor Standards Act (FLSA) does not require employers to compensate employees for the time spent in security checks before and after the work day. The ruling reversed a decision by the U.S. Court of Appeals for the Ninth Circuit and reinforces arguments asserted in the amicus brief filed by the NAM and a coalition of industry groups.


Related Documents:
NAM brief  (June 4, 2014)
NAM brief  (November 7, 2013)

 

Macy's, Inc.   (NLRB)

Challenge to micro-unions

The NLRB’s Specialty Healthcare decision favoring micro-unions has led to numerous cases involving the definition of a bargaining unit. In Macy’s Inc., the Board’s regional director decided that employees of the fragrance and cosmetic departments at Macy’s could form their own union. The regional director found that the small group of employees was an appropriate unit because they were readily identifiable as a group and shared a community of interest. Moreover, the burden to show that the small unit is inappropriate is on the employer, who would have to demonstrate that a larger unit shares an overwhelming community of interest with the smaller unit. Interestingly, the previous year, the union unsuccessfully tried to organize a wall-to-wall unit in the entire store.

The NAM filed an amicus brief urging the Board to overturn the regional director’s decision. The Board’s policy conflicts with the rights of employees who do not want to form a union by allowing them to be gerrymandered out of the bargaining unit. In effect, if the majority of employees in a facility do not favor forming a bargaining unit, they can be relegated to a minority status when a union selects a gerrymandered unit where it has majority support. The NAM argued that the burden should be shifted to the union to initially demonstrate that the a proposed smaller bargaining unit is constituted on factors other than union support and that the employees are readily identifiable as a group.

Manufacturers are starting to face a multitude of small unionized bargaining units, making management of the workplace much more difficult and harming their ability to compete. This is the fifth case since Specialty Healthcare in which the NAM has sought to change the Board’s policy and encourage the proper definition of bargaining units in manufacturing facilities.


Related Documents:
NAM amicus brief  (February 27, 2013)

 

Neiman Marcus Group, Inc.   (NLRB)

Challenging NLRB's policy promoting micro-unions

A small group of women’s shoe salespeople were handed a decision by an NLRB regional director that allowed them to hold a vote to unionize. The employer appealed, arguing that their group should include many more store employees that have common workplace interests.

The NAM and other business groups filed a brief 6/13/12 arguing that the NLRB’s recent decision in the Specialty Healthcare case improperly allows this kind of micro-union to be formed, and puts an unreasonable burden on employers to show that a large group is more appropriate. The regional director had ruled that the employees at the store may serve different functions and thus vary in skills to the point that they qualify to form multiple unions. The NAM argued that Congress intended that each case be determined on its own, rather than having the NLRB impose a blanket determination for all cases that a proposed group is valid unless the employer can show otherwise.

The brief noted that all employees have a statutorily protected “right to refrain from” unionizing activities, and micro-unions prevent those employees from exercising the right to reject a union.

Furthermore, the Board abused its power by adopting its new standard in the Specialty Healthcare case when it should have gone through formal notice-and-comment rulemaking procedures.

Finally, it is bad policy to favor micro-unions, because they prevent employees from performing varying job functions, thus inhibiting employee skill development. They also lead to “endless multiple negotiations, conflicting union demands and contract obligations, and burdensome administrative duties.” Micro-unions may foster disruptive employee and union rivalry, as well as situations where one small group of employees could shut down an entire location.


Related Documents:
NAM brief  (June 13, 2012)

 

Nestle Dreyer's Ice Cream Co. v. NLRB   (4th Circuit)

Forming micro-unions under a community of interest standard

The NAM filed an amicus brief on July 10, 2012, arguing that the ruling in Specialty Healthcare, which allows very small numbers of employees to form a union, should be overruled because it violates provisions of the National Labor Relations Act (NLRA). That decision creates policy implications that will upset and reduce American investments and competitiveness. We argued that Specialty Healthcare prevents all of the employees from fully controlling the creation of the union. This violation allows micro-unions of as little as 2 employees to circumvent employees who do not wish to unionize. Further, by its ruling in Specialty Healthcare, the NLRB does not determine bargaining units “in each case,” and gives nearly all the control of determining who will be in the union to a very small group. The labor uncertainty from this precedent endangers investment in manufacturing, as employers would be required to deal with multiple and often conflicting unions.

In 2014, the court vacated and remanded the case to the NLRB. The original decision had been made by a Board that was ruled unconstitutional by the Supreme Court in the Noel Canning case. In 2016, the 4th Circuit denied Nestle Dryer’s petition for review, stating the NLRB was correct in allowing a maintenance-only bargaining unit, holding that the maintenance workers shared a community of interest distinct enough from the production workers for them to have their own bargaining unit.


Related Documents:
NAM brief  (July 10, 2012)

 

Thyssenkrupp Waupaca, Inc. v. DeKeyser   (U.S. Supreme Court)

"Nature of the work" requires employees to don, doff and shower on-site

On 8/27/14 the NAM supported review of this case in the Supreme Court. The issue presented revolved around whether the “nature of the work” at Waupaca’s foundries required employees to don, doff and shower on-site. Plaintiffs contended that foundry dust containing silica and other chemicals made the work so hazardous that on-site clothes changing and showering was required by the nature of the work. The district court disagreed and granted summary judgment. The Seventh Circuit reversed, finding that there was a factual dispute over whether the nature of the work required on-site donning, doffing and showering.

This case is very important to manufacturers. The Seventh Circuit’s position takes the determination of health and safety out of the hands of the legislature and places it in the hands of each district court judge across the country. This is not the role the courts should play, and such a perspective creates instability and unpredictability, and increases costs on business and ultimately harms the employees.

The NAM’s brief argued that OSHA had promulgated standards for foundries which do not require on-site clothes changing and showering after work. This bright-line rule has been referenced in the donning and doffing space since roughly 1968. It provides a clear and easily administrable criterion for determining whether time spent changing clothes and showering is compensable under the Fair Labor Standards Act (FLSA). If these activities can be performed offsite, at home or elsewhere, they are not compensable. If courts are going to be allowed to order them to pay for time spent changing clothes and showering when, as here, no federal or state agency requires that this conduct be performed on-site, and no rule of the employer requires that these activities be performed on-site, the impact of such a finding could be devastating. A flood of lawsuits would be filed in the foundry and other manufacturing industries, exposing these employers to huge potential payouts from overtime and require payment for additional hours of work at time and one-half. It is further likely that two to three years of back-pay would be in issue in every case, and all employees during this time period would potentially have a claim under the FLSA or Rule 23, the financial consequences would be staggering.

On November 3, 2014, the Court declined to hear this appeal.


Related Documents:
NAM brief  (August 27, 2014)

 


Product Liability -- 2014



Anthony v. Georgia Gulf Lake Charles LLC   (Louisiana Supreme Court)

Need for proof of causation in toxic tort cases

The NAM and five other associations filed an amicus brief in the Louisiana Supreme Court to underscore the need for proof causation in toxic tort cases. In this case, we argued that the lower courts allowed a case to proceed without proof of actual exposure and specific causation on injury. The courts' misapplication of the standard of causation in toxic tort cases has significant and far-reaching ramifications for manufacturers. In addition, the lower court's deviation from standard principles of causation is a decision that should be made by the legislature, not by the courts. Loosening the legal rules applicable to specific causation will increase costs for manufacturers doing business in Louisiana.

On Nov. 28, 2014, the Louisiana Supreme Court declined to hear this appeal.


Related Documents:
NAM amicus brief  (October 10, 2014)

 

Barabin v. AstenJohnson, Inc.   (9th Circuit)

Use of "any exposure" theory of causation in asbestos suit

This is another case that illustrates a major battleground in asbestos litigation today. The issue involves attempts by plaintiffs to hold manufacturers liable for increasingly trivial exposures to hazardous substances. In this case, a worker was exposed to amphibole insulation products sufficient to cause his mesothelioma, but he sued the manufacturer of dryer felts -- used in his workplace -- because they contain chrysotile asbestos fibers. Exposure to those fibers was minimal (if any), but the plaintiff relied on the “any exposure” theory, i.e., that any occupational exposure to asbestos, no matter how slight, is sufficient to be a substantial contributing factor to the plaintiff’s disease.

The NAM filed an amicus brief opposing the $11 million verdict. The trial court accepted expert testimony that any occupational exposure above ambient level was sufficient for causation. We opposed this theory because it is a litigation construct that is not found in any published and peer-reviewed article or textbook. It does not satisfy normal standards for expert testimony and is irreconcilable with the fundamental toxicology principle relating to dosage.

On Nov. 16, 2012, the Ninth Circuit reversed the verdict and told the trial court to have a new trial. It found that the court failed to conduct a Daubert hearing to determine the relevance and reliability of the expert testimony allowed in the first trial. It concluded that the trial judge must assess the scientific methodologies, reasoning, or principles that proposed expert witnesses will apply. It also recognized that the decision to admit or exclude expert testimony is often the difference between winning or losing a case, underscoring the importance of the role of a trial judge as a gatekeeper for such evidence.

However, on March 25, 2013 the Ninth Circuit voted to rehear the case en banc following a petition for rehearing by Barabin. Barabin’s petition argued that the remand to the trial court should be limited to liability, and therefore that the $11 million verdict should stand if the court finds AstenJohnson, Inc. liable. In addition, the petition argued that the failure to conduct a Daubert hearing was harmless error and the Ninth Circuit rule requiring a new trial where a violation of the Daubert rule cannot be said to be harmless should be reversed. Under the en banc procedure, the Ninth Circuit convened an eleven (as opposed to the normal three) judge panel to decide the case anew.

On Jan. 15, 2014, the en banc panel ruled that the trial court committed reversible error by failing to use the Daubert standards before allowing expert testimony. It also ruled that an appeals court can determine whether the expert's testimony was indispensable to the case, and if so, grant judgment for the defendant if the testimony should not have been admitted into the trial. This decision is an important affirmation of the important role of trial judges to thoroughly vet expert testimony to ensure its relevance and reliability. It also bolsters the importance of proceedings before the appeals court, which can itself reverse judgments based on faulty "expert" testimony.


Related Documents:
NAM amicus brief  (May 26, 2011)

 

Bostic v. Georgia-Pacific Corp.   (Texas Supreme Court)

Opposing "any exposure" theory of causation

How much exposure to asbestos is enough to prove that the exposure caused mesothelioma? Texas has adopted a reasonable rule requiring that there be some demonstration that the dose must be sufficient to cause disease according to epidemiology studies of similarly exposed populations. This case involved an effort to say that any exposure is a substantial contributing factor to the ultimate disease, regardless of dose.

The NAM and others filed an amicus brief 8/21/13 urging the Texas Supreme Court to reaffirm its rule that any exposure is not enough to prove causation. There is no reason to depart from this rule just because the exposure is to asbestos. This rule is not harsh, nor is it an impossible standard, but simply allows plaintiffs with consequential expsoures that are consistent with the epidemiological literature showing disease to have their day in court.

On 7/11/14, the court affirmed the lower court, ruling that merely some exposure is not sufficient to establish causation. Dose matters, including in mesothelioma cases. It found that a less demanding standard would essentially result in absolute liability against any company whose asbestos-containing product crossed paths with the plaintiff throughout his entire lifetime.

However, the court also ruled that plaintiff was not required to prove that but for [the plaintiff's] exposure to [defendant's] asbestos-containing joint compound, [he] would not have contracted mesothelioma." This means that even if the plaintiff had been exposed to asbestos elsewhere, he still might have been able to prove causation from exposure to a sufficiently high dose of the defendant's product.

The final ruling means that the initial trial court award of $6.8 million in compensatory damages and $4.8 million in punitive damages was nullified.


Related Documents:
NAM brief  (August 21, 2013)

 

Company Doe v. Public Citizen   (4th Circuit)

Confidentiality of company subject to improper complaint on CPSC website

This case involves an attempt by the Consumer Product Safety Commission (CSPC) to post a materially inaccurate report submitted to its new online database of allegedly unsafe products, saferproducts.gov. Before a criticism of a company's product is posted on the website, the CPSC must give the affected company an opportunity to respond. Here, the affected company sued to prevent publication of a materially inadequate report, and the trial court agreed, on 3 separate appeals. The CPSC’s own experts found a lack of association between the risk of harm alleged in the report and the product at issue, which its epidemiological investigation confirmed. After repeated attempts to prevent the CPSC from posing the inaccurate information, the company sued.

The trial court agreed, enjoining the Commission from posting the report, and redacting the company name from public display in the court proceedings. Three consumer groups intervened and appealed, arguing that the company name should be disclosed as public court documents, even though the challenged reports were inaccurate. Media organizations, the AARP, and the ACLU raised similar arguments.

The NAM led a group of associations in filing an amicus brief supporting the court's decisions that the report was inaccurate and should not be posted, and that the company name must continue to be confidential. Disclosure of the name would sacrifice the right the company sought to safeguard by filing suit. The NAM, joined by the American Coatings Association, Association of Home Appliance Manufacturers, Manufacturers Alliance for Productivity and Innovation, Recreational Off-Highway Vehicle Association, and Specialty Vehicle Institute of America explained how certain aspects of the database, as implemented by the CPSC, provide a high risk of submission of erroneous information and allow the potential for misuse. It is important that businesses have a means of addressing false reports before publication without being disclosed, or else their remedy would be useless. If saferproducts.gov includes materially inaccurate reports, it may lose any potential value as a reliable source of product safety information for the public.

We have long fought to prevent the CPSC from providing inaccurate information on its website. Having to disclose the name of a company falsely accused of product safety issues unfairly punishes the company and does nothing to further consumer safety.

On 4/16/14, the Fourth Circuit overturned the trial judge's ruling, holding that it violated the public's "right of access" under the First Amendment. Ordering the case unsealed in its entirety, the appeals court found that the consumer groups had standing to pursue the appeal even though the CPSC did not itself appeal, on the grounds that consumer groups have a public right of access to court proceedings and they advocate on issues relating to the CPSC. That right of access outweighs the desire of a corporation to protect its corporate image, "notwithstanding the negative publicity those documents may shower upon a company." It found no credible evidence supporting the company's fear of reputational or economic injury, particularly since the trial court vindicated the company and its product. One of the judges wrote separately that publication of false and misleading reports could be catastrophic to the company, and the result might be different if it could prove that publication would cause substantial and irreparable economic harm.


Related Documents:
NAM amicus brief  (April 29, 2013)

 

ExxonMobil Corp. v. City of New York   (U.S. Supreme Court)

Liability for MTBE in NYC water

New York City sued various companies for alleged low-level ground-water contamination from MTBE, a gasoline additive mandated by federal law and for which there was no safer, feasible alternative. The trial court awarded a judgment of more than $100 million, which was affirmed by the U.S. Court of Appeals for the Second Circuit. ExxonMobil appealed to the Supreme Court, asking the Court to decide (1) whether a claim is ripe when it is predicated on a potential future injury and a mere good faith intent to use the water in 15 to 20 years, and (2) wheth