The Center Legal News: May 21, 2014

The Center News is a monthly publication that highlights significant cases affecting manufacturers. The NAM's Manufacturers' Center for Legal Action 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.


Council of Manufacturing Associations  

May 21, 2014

Center Perspectives  

By Quentin Riegel, Vice President and Deputy General Counsel  

Like invading hordes, plaintiffs have been seeking new ways to seize your assets""only they do it in court. The Manufacturers' Center for Legal Action is seeing a rash of lawsuits alleging damages from activities that various government agencies have already approved under statutes enacted with bipartisan support and regulations that have balanced the interests of individuals, manufacturers and the public at large. These claims seek money from normal business activities that are fully permitted and regulated.

The latest iterations of this emerging threat are cases in which landowners claim damages from particulate matter or other pollution from manufacturing facilities that operate under emissions permits issued by a state or the Environmental Protection Agency (EPA). The Clean Air Act allows suits for violations of permits, but these new suits do not allege any violations of existing permits. For example, a suit in Iowa against a corn milling plant was dismissed at trial because the activity was already subject to federal regulation, but that ruling is now being reconsidered in the Iowa Supreme Court. The National Association of Manufacturers (NAM) filed a brief supporting the plant.

A suit in Pennsylvania against a power plant for emitting multiple pollutants already regulated under the Clean Air Act was dismissed by the trial court, but an appeals court reversed that decision, and the company is seeking review in the Supreme Court. We filed a brief in that case as well.

Another suit alleging ground contamination near a North Carolina manufacturing plant site seeks to impose damages above and beyond the cleanup obligations already required under the Superfund law. The NAM weighed in with an amicus brief in this case, and the Supreme Court will decide in the next few months whether to authorize this expanded liability.

Finally, we urged the Supreme Court to review a decision holding a company liable for MTBE pollution-related injuries""injuries that have not yet happened and that may never happen""in the groundwater of Queens, N.Y. The alleged contamination arose from using the safest feasible means of satisfying the federal oxygenation requirement for gasoline; yet, a lower court imposed retroactive liability on a company doing just that. Unfortunately, the Supreme Court declined to hear the case.

It's enough to make you put up the barricades and call in the lawyers.

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MCLA in the Courts  

Environmental Law
Court Blesses Revised Emission Limits, but Strikes Affirmative Defenses for Manufacturers: In April, a federal appeals court upheld the EPA's emissions rules for hazardous air pollutants from cement plants, but struck down the rules' creation of an affirmative defense in civil suits. As a result, private civil suits may be filed by those affected by the emissions, leaving it for the courts to decide whether to award damages.
More Information:Natural Resources Defense Council v. EPA  

Court Imposes Liability for Following Federal Law: A federal appeals court upheld a $100 million judgment against companies for alleged low-level groundwater contamination from MTBE, a gasoline additive mandated by federal law and for which there was no safer, feasible alternative. The NAM and other business groups asked the Supreme Court to review the decision, noting our concern about holding a company liable under state tort law for complying with a federal mandate with the safest feasible means available. The Supreme Court declined to review this appeal.
More Information:ExxonMobil Corp. v. City of New York  

Court Orders EPA to Revise Ozone Regulation: In response to a lawsuit brought by environmental activists, a federal judge in California ordered the EPA to propose a new ozone regulation by December 1 of this year and finalize it by October 1, 2015.
More Information:Sierra Club v. EPA  

Deference to EPA on NAAQS Rule: The NAM sought to challenge the EPA's fine particulate matter rule (PM2.5), but a federal appeals court rejected our petition, deferring to the EPA's process and decisions. The decision shows that courts are reluctant to second-guess EPA regulations, underscoring the agency's power and the importance of participation in the rulemaking process.
More Information:National Association of Manufacturers v. EPA  

More Time for the EPA to Justify MACT Rules: The D.C. Circuit gave the EPA additional time to explain how its use of a questionable statistical methodology for setting emissions standards for boilers and incinerators satisfies the express requirements of the Clean Air Act. The NAM sought to have the rules vacated during this time, but the court denied our request.
More Information:U.S. Sugar Corp. v. EPA  

First Amendment
Company Must Reveal Name to Challenge Inaccurate Consumer Complaints: A company sought to prohibit the Consumer Product Safety Commission from publishing an erroneous report and publicly identifying the company. A lower court agreed with the company and ordered its name sealed; the NAM led a coalition of manufacturing associations in filing a brief supporting this decision. A federal appeals court, however, overturned that ruling, holding that it violated the public's "right of access" under the First Amendment.
More Information:Company Doe v. Public Citizen  

NAM Pushes Back Against Compelled Speech in Meat Labeling Case: The NAM filed a brief supporting the American Meat Institute in its litigation concerning government-mandated country-of-origin labeling for meat products. Our brief argues for restraint when the government compels companies to make statements about their products.
More Information:American Meat Institute v. USDA  

Punitive Damages
New York Judge Opens Door to Punitive Damages in Asbestos Cases: New York state courts hadn't ruled on punitive damages in asbestos cases since 1996, but a judge issued a ruling in April lifting this "deferral" of punitive damages. The NAM filed a brief in a case in 2013 supporting the deferral to encourage settlements, prevent longer and more complex trials and discourage delays for further appeals.
More Information:In re New York City Asbestos Litigation  

Trial Court Gives Plaintiff a Mulligan: The Louisiana Supreme Court will hear an appeal of a damages verdict in a case that duplicated an earlier trial involving the same plaintiff, the same defendant and the same alleged conduct. Moreover, the trial court failed to instruct the jury not to allow punitive damages for alleged harm to nonparties. The NAM joined other business groups in a brief challenging this verdict.
More Information:Oleszkowicz v. ExxonMobil Corp.  

Conflict Minerals
Stay of Conflict Minerals Rule Denied: The NAM filed an emergency motion to stay the conflict minerals rule in its entirety until the trial court has addressed the unresolved questions relating to the unconstitutional compelled speech portion of the rule. The court denied the motion, and companies must now comply with the modified requirements. We are evaluating what further legal steps may be taken to further lessen the onerous reporting requirements.
More Information:National Association of Manufacturers v. SEC  

Government Regulation
NAM Seeks to Protect Businesses' Internal Investigations: The D.C. Circuit recently heard an appeal challenging a judge's ruling that documents prepared as part of an internal company law department investigation of potential fraud are not protected by attorney-client privilege. The NAM filed a brief in the case arguing that the trial judge's ruling would make internal investigations much more difficult.
More Information:In re Kellogg Brown & Root, Inc.

European Court Threatens Manufacturers' Intellectual Property: The NAM and our association allies filed a motion to intervene in a matter before the European Court of Justice that could set dangerous precedent for intellectual property protection. The case is an appeal of the European General Court's ruling in favor of plaintiffs who requested the public disclosure of a massive amount of confidential business information relating to certain pesticides used both in the United States and Europe. Disclosure of such information would undermine the intellectual property rights of manufacturers and have broad international ramifications on trade.
More Information:European Comm'n v. Stichting Greenpeace Nederland  

NAM Seeks Summary Judgment in Contractor Poster Rule: The NAM and Virginia Manufacturers Association filed a Motion for Summary Judgment in our challenge to a Department of Labor Rule that forces all federal contractors to post a notice informing their employees of their right to organize and strike.
More Information:National Association of Manufacturers v. Perez  

NAM Fights for Food and Beverage Freedom: The NAM filed a brief in the New York Board of Health's appeal to the state's highest court over the board's proposed ban on large sodas. A lower court struck down the ban; the NAM filed briefs in the lower courts as well.
More Information:New York Statewide Coalition of Hispanic Chambers of Commerce v. New York City Dept. of Health and Mental Hygiene  

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Other News  

" 60 Minutes" Shines Light on Gulf Settlement Abuses : Earlier this month, the long-running CBS news magazine highlighted the dubious and often fraudulent claims being made in the aftermath of the Deepwater Horizon oil spill. Unscrupulous lawyers and others are trying to cash in off BP's settlement agreement, thanks to an overly broad interpretation by settlement administrators.

Delaware Court Approves Loser Pays Bylaw: The Delaware Supreme Court recently issued a ruling that could have broad implications for shareholder class actions when it blessed a corporate bylaw requiring an investor who loses his case to pay the corporation's legal costs.

The State of Arbitration Today : "Three years after Concepcion , the landscape of arbitration has been transformed. Arbitration challenges lawyers to do something that does not come naturally in a profession trained to cling to precedent: recognize and accept change," writes attorney Andrew Pincus of Mayer Brown. "Rather than fighting arbitration, give it a chance."

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