The Center News: February 19, 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  

February 19, 2014

Center Perspectives  

By Quentin Riegel, Vice President and Deputy General Counsel  

Greenhouse gases like carbon dioxide were never intended to be covered by the Clean Air Act, yet the Environmental Protection Agency (EPA) has plowed ahead with a series of regulatory decisions that will bring 6 million stationary sources of such gases under EPA permitting requirements. Manufacturers and power plants are the agency's primary targets, and the National Association of Manufacturers (NAM) pushed back with lawsuits questioning each step in the EPA's tortured regulatory process. After years of courtroom wrangling, all of the litigation has come down to one question in the U.S. Supreme Court: "Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases." In plain English, the Supreme Court will decide whether the EPA went too far in regulating power plants and factories just because it could regulate cars and trucks under a different part of the statute.

The NAM formed a national coalition of large and small associations to litigate this case in 2010. On February 24, Peter Keisler of Sidley Austin LLP will present oral arguments in American Chemistry Council v. EPA on behalf of our coalition and hundreds of other like-minded business organizations. Keisler is a former acting attorney general of the United States and one of the most persuasive appellate advocates in the country. The Supreme Court should issue its opinion before July.

This is one of the most complex and far-reaching challenges brought against a federal agency in the history of the NAM's litigation efforts. Although the courts give considerable deference to federal agencies, the Manufacturers' Center for Legal Action is ready to stand up for manufacturers when agencies like the EPA, the National Labor Relations Board or the Occupational Safety and Health Administration go too far. The bottom-line competitiveness of manufacturers and their ability to create and sustain jobs are the touchstones for our litigation priorities.

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MCLA in the Courts  

Class Actions
Appeals Court Gives a Pass to Overbroad Class Certification: Several companies challenged a California judge's certification of a class of 60,000 employees in 2,400 different jobs before confirming that there were common damages among class members and that individual damages could be calculated using a class-wide formula. The NAM filed a brief in the 9th Circuit, arguing that the judge should have undertaken a more rigorous analysis before certifying the class. On January 14, the court denied the appeal without significant explanation.
More Information:In re High-Tech Employee Antitrust Litigation

Product Liability
Future Damages Ruling Portends More Litigation: Even though a jury concluded that MTBE levels in an aquifer in Queens would never exceed safe drinking water standards, a trial court levied damages against ExxonMobil despite the fact that New York City is not using the aquifer. The NAM filed a brief urging the Supreme Court to review the case, arguing that the lower court allowed a suit based on a speculative chain of possibilities in violation of existing standing requirements that litigants have an injury in fact.
More Information:Exxon Mobil Corp. v. City of New York

More Plaintiffs Test "Any Exposure" Theory in Asbestos Suits: A plaintiff who developed mesothelioma sought to hold a manufacturer of dryer felts liable for exposure to asbestos even though exposure to asbestos fibers in the felts was minimal or nonexistent. Relying on the "any exposure" theory""that any occupational exposure to asbestos, no matter how slight, is sufficient to be a substantial contributing factor to the plaintiff's disease""the plaintiff won an $11 million verdict. The NAM filed a brief, arguing that the trial court wrongly accepted expert testimony that any occupational exposure above an ambient level was sufficient for causation. On appeal, the 9th Circuit ruled that the trial court committed reversible error by failing to use the Daubert standards before allowing expert testimony.
More Information:Barabin v. AstenJohnson

Another Attempt to Preempt Federal Air Standards: A group of plaintiffs in South Carolina filed a common law nuisance claim over emissions from a nearby landfill. The NAM filed a brief in the case, arguing that emissions from waste disposal facilities are regulated by Clean Air Act permitting requirements. Permitting such causes of action would impose more and different air emissions requirements on manufacturers or other facility operators already subject to state and federal regulation under the Clean Air Act.
More Information:Babb v. Lee County Landfill SC

Employee Benefits
Appeals Court Deals Setback to Employee Stock Ownership Plans: After the 6th Circuit broadened the circumstances in which plaintiffs can sue managers of employee stock ownership plans for breaching their fiduciary duties, the NAM sought Supreme Court review of the decision. The Supreme Court is asked to consider when managers (fiduciaries) of an employee stock ownership plan have a legal duty to stop investing in the company's own stock because of perceived risk. The NAM argues that investments in employer stock should enjoy a strong presumption in favor of prudence.
More Information:Fifth Third Bancorp v. Dudenhoeffer

Punitive Damages
NAM Pushes Back on Plaintiff's Court Shopping: The NAM joined a brief in an appeal by ExxonMobil involving damages leveled against the energy company for workplace exposure to naturally occurring radioactive material at a pipe yard. We argued that the trial court should have instructed the jury not to allow punitive damages for alleged harm to nonparties and that it should have dismissed the case because it duplicated an earlier trial involving the same plaintiff, the same defendant and the same alleged conduct.
More Information:Oleszkowicz v. Exxon Mobil Corp.

Other News
NAM Supports Proposed Improvements to Federal Discovery Rules: The federal Judicial Conference Advisory Committee on Civil Rules has proposed some amendments to the Federal Rules of Civil Procedure that would help to address some of the abuses of the discovery process that manufacturers have faced in litigation. Among the proposed rules changes are two that would address the burdens of over-preservation of potential evidence as well as discovery "fishing expeditions." The NAM comments on the proposed changes are accessible here .

California Cap and Trade Redux in Delaware: A battle is brewing in Delaware over changes to the state's cap-and-trade scheme, which critics say could increase the cost of electricity in the state by $50 million. New rules would raise the prices of emission permits""a move that could run afoul of the state constitution. Plaintiffs in the lawsuit against the state contend that "the real purpose of the new regulation is to raise money for state funds."

That line of argument is reminiscent of a California case in which the NAM intervened last year. In California Chamber of Commerce v. California Air Resources Board , we argued that the fees collected by the agency charged with administering the state's cap-and-trade program exceeded the agency's legal authority and constituted a new tax that ran afoul of the California constitution. In November, a California court upheld the agency's authority to collect the excess revenues.

Bankruptcy Judge Uncovers Asbestos Abuses: A bankruptcy case in North Carolina has uncovered widespread abuses in asbestos litigation. As TheWall Street Journal editorial board explains ,

Garlock [the manufacturer being sued] said it had evidence that plaintiffs were filing claims with trusts in which they blamed non-Garlock products for their diseases, even as they blamed Garlock in court. The judge allowed discovery in 15 cases Garlock had already settled, and as the judge wrote, "Garlock demonstrated that exposure evidence was withheld in each and every one of them." hasmore coverageof the developments in the case as does theAmerican Tort Reform Association .


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