Manufacturers In The Courts: July 2011

A Publication of the National Association of Manufacturers
July 2011

The NAM is greatly concerned about overregulation by the Environmental Protection Agency (EPA) and recent actions by the National Labor Relations Board (NLRB) that threaten the ability of manufacturers to create and retain jobs. Our litigation in these areas continues, and we expect rulings on many of the issues in the months ahead. For now, here are a few key decisions in other cases in which the NAM has participated.

Decided Cases


Employment Discrimination

EEOC's broad authority is upheld. The Eighth Circuit has affirmed a ruling that authorized the Equal Employment Opportunity Commission (EEOC) to enforce an administrative subpoena that was based on an unsubstantiated charge of discrimination. The NAM had argued that a single employee's complaint does not support the EEOC's broadening the case to a charge of class-wide discrimination, without a "clear and concise statement of the facts" constituting the alleged violation. Thus, the EEOC will be able to conduct a broad audit of the company's employment practices, despite statutory language designed to prevent the exercise of unconstrained investigative authority. EEOC v. Schwan's Home Service (8th Cir.).

Environmental Law

Federal court rejects EPA's ozone fee waiver program. The EPA published guidance in 2010 that allows states to waive fees under Section 185 of the Clean Air Act relating to compliance with ozone emissions regulations. Environmentalists sued, and the NAM intervened to support EPA, arguing that states should have the flexibility to design equivalent alternative programs that do not unfairly penalize well-controlled major stationary sources of ozone. The D.C. Circuit ruled that EPA must go through notice-and-comment rulemaking for this kind of program. Also, the program may not allow waivers for facilities that do not comply with a monitoring standard that has since been replaced. According to the Court, the Clean Air Act prevents the EPA from relaxing requirements even if they are too stringent and unnecessary to protect public health. Natural Resources Defense Council v. EPA (D.C. Cir.).

Foreign Lawsuits

Federal court allows foreign lawsuit under state law. Suits against American companies alleging human rights abuses abroad are now being brought in U.S. courts, and a federal appeals court recently allowed one to proceed, even though the trial judge had dismissed the case because non-resident aliens have no standing to sue in U.S. courts. The appeals court also recognized aiding-and-abetting liability as a legitimate claim under international law, an issue that divides the courts and is sure to gain Supreme Court review. The NAM opposed this lawsuit for interfering with U.S. foreign relations and impeding the policies designed to promote the very democratic and human-rights goals that the plaintiffs purport to advance. Doe v. ExxonMobil Corp. (D.C. Cir.).

Product Liability

Florida court rejects asbestos medical criteria law. On July 8, the Florida Supreme Court declared the state's Asbestos and Silica Compensation Fairness Act unconstitutional as applied to plaintiffs whose injury claims were pending when the statute went into effect. The law would have required individuals claiming injuries from exposure to asbestos to wait until there is evidence of actual harm before filing suit. The NAM had argued in an amicus brief that suits by individuals who have no signs of injury add to the asbestos litigation crisis, undermine claims by others and threaten largely peripheral defendants. American Optical Corp. v. Spiewak (Fla.).

Securities Law

Problems are unresolved from stock purchases without disclosure. Two hedge funds sought to take control of a company without making the required disclosures mandated by the Williams Act. The trial court felt it was not legally empowered to enjoin the hedge funds from voting the stock they had acquired, and an election of directors was held under the cloud of litigation. The NAM filed an amicus brief arguing that prohibiting the voting of shares in an ongoing proxy fight is an appropriate remedy. This month, the Second Circuit sent the case back to the trial court for further proceedings, including reconsideration of injunctive relief. The court also overturned the trial court's broad interpretation of groups that are subject to the Williams Act. CSX Corp. v. Ward (2nd Cir.).

Pending Cases

Environmental Law

Litigation against EPA greenhouse gas rules continues. The main cases brought by the NAM against EPA over its regulation of stationary sources of greenhouse gases have all been briefed, and a round of reply briefs are now in process. This month, we filed our reply in the "grounds arising after" suit. Our principal objections are that EPA's interpretations are unreasonable and create absurd results. Briefs in our other cases are due in the fall. American Chemistry Council v. EPA (D.C. Cir.).


Quentin Riegel
Vice President, Litigation & Deputy General Counsel
(202) 637-3058 • qriegel@nam.org

National Association of Manufacturers
1331 Pennsylvania Avenue, NW Suite 600
Washington, DC 20004-1790


Check out the NAM's Manufacturing Law Center at www.nam.org/law

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