Manufacturers in the Courts: 032913

The Manufacturers in the Courts is a monthly publication that highlights significant cases affecting manufacturers. The NAM's Manufacturing Law Center becomes involved in many of these cases to provide the judicial branch with an important perspective it might not otherwise hear. The NAM provides a voice for all manufacturers working to remain competitive amid the complexities of today's legal system.

 

A Publication of the National Association of Manufacturers
Manufacturers In The Courts

March 2013

This month, the Supreme Court is continuing to impose restrictions on class action plaintiffs.  In the Standard Fire Insurance Co. case, the Court agreed with NAM and struck down a clever attempt by class action plaintiffs to avoid federal court.  A few days later, in the Comcast case, the Court rejected efforts to certify a class that did not meet an important requirement that damages be measured for the class as a whole.  These are significant new developments of great benefit to manufacturers, who are often subject to class action litigation for a wide variety of claims.

While we had favorable results for class actions, the Court gave a significant victory to environmental groups in the Decker case by allowing citizen suits designed to require EPA permits under agency rules that do not require permits. EPA was right in this instance not to require a permit, but the Court now allows challenges to long-standing regulatory decisions, creating another opportunity for environmental groups to regulate by litigation.

Details on these and other cases affecting NAM members follow below.

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Decided Cases

Class Actions

High Court reins in attempt to avoid Class Action Fairness Act.  An important ruling from the Supreme Court on March 19 struck down an attempt by a class action plaintiff to avoid federal court under the Class Action Fairness Act of 2005. That law was designed to reduce abuse by having cases involving large numbers of parties or dollar claims over $5 million heard in federal rather than state court. In this case, the Supreme Court ruled that plaintiffs cannot promise to seek less than that amount to avoid federal court, when such a promise is not binding on the class as a whole. The NAM filed a brief last year urging the Court to reject this attempt to find a loophole in the class-action rules.  This ruling is a promising step in the process of affirming the elements of this legal reform initiative. Standard Fire Ins. Co. v. Knowles (S. Ct.).

Supreme Court overturns controversial class certification .  On March 27, the Supreme Court overturned a controversial lower court certification of a plaintiff class in an antitrust class action case against a cable television provider.  The Court explained that the plaintiff's expert failed to provide reliable evidence showing that the common issues of law and fact predominate over individual issues, which is a requirement for class certification. By requiring the judge to examine early in the case whether damages can be determined on a class-wide basis, the decision helps to prevent the oppressive burden of class actions that are certified prematurely. Comcast Corp v. Behrend (S. Ct.).

Environmental

Citizen suits are allowed, but Court upholds EPA's decision on forest roads. The Supreme Court ruled March 20 that an environmental group may challenge an EPA regulatory interpretation in court long after the regulation has been adopted, as long as the suit challenges not the rule itself, but seeks to enforce the rule with a proper interpretation. The NAM had argued against such citizen suits, but the Court allows them under these conditions. The Court went on to uphold EPA's judgment that water runoff from foresting operations was not covered by its Clean Water Act rules. Decker v. Northwest Envtl. Def. Ctr. (S. Ct.).

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Pending Cases

Conflict Minerals

NAM's challenge of SEC rule on conflict minerals moves forward. The NAM filed its main brief in January, 2013 and a reply brief this month in its court challenge to the conflict minerals rule issued by the Securities and Exchange Commission (SEC) last August.  The NAM argued that the final rule exceeds what Congress enacted, imposes unnecessary burdens, ignores lower-cost alternatives and violates the First Amendment. Ultimately, the system as it stands will undermine jobs and growth and will not achieve Congress's overall objectives. Oral arguments are scheduled for May 15. NAM v. SEC (D.C. Cir.).

Environmental

NAM Challenges EPA's standard for particulate matter. On March 15, the NAM asked a federal court of appeals to review the EPA's latest regulation of particulate matter. The regulation, published in January, 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 current 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." NAM v. EPA (D.C. Cir.).

Preemption

NAM supports challenge to OSHA's HazCom preemption provision. When OSHA proposed its latest version of the communication standard for hazardous chemicals in the workplace, it planned to give the standard full preemptive effect. But the final rule does not preempt litigation, allowing trial lawyers to file state failure-to-warn claims against manufacturers even though the companies are in compliance with the very restrictive federal requirements. This bait-and-switch prompted the NAM to file an amicus brief on March 15 arguing that manufacturers should have been afforded an opportunity to comment on the change. In addition, federal occupational safety regulations must preempt inconsistent state requirements to avoid duplicative and counterproductive regulation of manufacturing. If allowed to stand, OSHA's rule opens the door to further regulation by litigation. American Tort Reform Ass'n v. OSHA (D.C. Cir.).

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Questions or comments? Please contact Quentin Riegel at qriegel@nam.org .

           

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