The Center News: August 2015

A Publication of the National Association of ManufacturerstheCenter for Legal Action

Center Perspectives
By Patrick Forrest, Vice President and Deputy General Counsel

The Internet has been seamlessly integrated into every aspect of our daily lives. The growth of wireless networks and broadband systems capable of transmitting tremendous amounts of data keeps us constantly connected while empowering new generations of makers and doers.

Government and industry must work together to develop a strategy that will preserve, sustain and expand the growth that we have seen as a result of the Internet. This strategy can only be achieved by protecting the free flow of data, services and ideas online while creating a climate that supports private investment in broadband networks.

Unfortunately, the recent decision by the Federal Communications Commission (FCC) to regulate the Internet using telecommunications laws enacted during the era of radio tubes and rotary telephones represents a big step backwards.

A lower court found that the Communications Act of 1934 gives the FCC authority to limit private companies from charging different amounts of money for different Internet speed types. The FCC order treats broadband Internet as a “telecommunications service,” subjecting providers to a host of new costs and fees for access to poles, conduits and rights of way; state and local taxes and fees; and related fees estimated at $11 billion per year.

The Manufacturers’ Center for Legal Action leads a business community coalition addressing the FCC’s Open Internet Order. Our coalition filed a brief supporting the telecommunications industry’s challenge arguing that the FCC’s decision must be set aside because it is contrary to the Communications Act of 1934 and was promulgated in violation of the Administrative Procedure Act.

Our brief articulates the broad cross-industry impact of the FCC’s decision on innovation and spectrum access and seeks a reversal of the lower court’s ruling. Specifically, the brief argues that the FCC’s order will subject thousands of broadband providers to broad and ambiguous standards regarding rates and practices and decrease the variety and quality of Internet services.

The FCC’s action endangers the innovation and creativity responsible for this unprecedented era of technical advancement. It adds to the ever-increasing regulatory state leaving manufacturers with further uncertainty.

MCLA in the Courts
Attorney Client Privilege

D.C. Circuit Upholds Attorney-Client Privilege for Internal Audit Documents: Manufacturers won an important victory on the issue of attorney-client privilege on August 11 concerning whether privilege protects documents generated during an internal investigation under supervision of in-house attorneys. The lower court had held that the materials were not privileged because they were “undertaken pursuant to regulatory law and corporate policy rather than for the purpose of obtaining legal advice” The appeals court disagreed, holding that the defendant did not need to turn over the documents. NAM supported this victory with amicus support in conjunction with a broad business coalition, arguing that the lower court’s ruling would severely undermine corporate compliance programs.

More Information: In re Kellogg Brown & Root, Inc. (U.S. Court of Appeals for the D.C. Circuit)
Conflict Minerals

Appeals Court Reaffirms NAM Victory in Challenge to Conflict Minerals Rule: A federal appeals court affirmed a previous decision finding that the Securities and Exchange Commission’s (SEC) conflict minerals rule mandates unconstitutional government-compelled speech. This latest ruling relieves manufacturers from the obligation to report that products containing gold, tantalum, tin or tungsten are “DRC (Democratic Republic of Congo) conflict free” or “DRC conflict undeterminable.” These statements would ethically taint products and stigmatize companies in violation of the First Amendment..

More Information: National Association of Manufacturers v. SEC (U.S. Court of Appeals for the D.C. Circuit)
Criminal Liability

NAM Pushes Back Against Dangerous Expansion of Responsible Corporate Officer Doctrine: The NAM filed a brief in a case that sent two corporate officers to jail for illegal activity of which they were unaware and had no control. Our brief argues that a prison sentence for an offense that requires no particular mental state or even participation in the underlying forbidden act violates the Fifth and Eighth amendments.

More Information: DeCoster v. United States (U.S. Court of Appeals for the Eighth Circuit)

NAM Seeks to Keep Clean Water Challenge in District Court: The NAM and our business community allies are challenging the Environmental Protection Agency’s (EPA) “waters of the United States” rule in district court. At the same time, our coalition has also intervened in a similar case at the appellate level to ensure that that case is dismissed and the issue is first addressed in a federal district court.

More Information: In re EPA and Dep’t of Defense Final Rule: Definition of “Waters of the United States” (U.S. Court of Appeals for the Sixth Circuit)

NAM Opposes Expanded Reach of Hazardous Waste Law: The NAM urged the reversal of a federal court ruling imposing liability for “disposal” of a hazardous substance into the air; traditionally, “disposal” refers to the discharge of material directly on land or in water. Because emissions can travel long distances by air, the court’s ruling would create unforeseeable and expansive liability and could create liability for those on whose land air emissions come to rest.

More Information: Pakootas v. Teck Cominco Metals, Ltd. (U.S. Court of Appeals for the Ninth Circuit)

NAM Takes on More EPA Overreach: The EPA issued a new rule in June that would nullify 36 state Clear Air Act implementation plans unless the states amend their plans to conform to the EPA’s view of how to handle situations involving startups, shutdowns or malfunctions of equipment leading to excess emissions. The NAM and its business community allies are moving forward with potential legal action challenging the rule.

More Information: SSM Litigation Coalition v. EPA (U.S. Court of Appeals for the D.C. Circuit)

Business Community Challenges Net Neutrality: A National Association of Manufacturers (NAM)-led coalition, which includes the Business Roundtable and the U.S. Chamber of Commerce, filed a brief challenging the FCC’s Open Internet Order.

More Information: U.S. Telecom Ass’n. v. FCC (U.S. Court of Appeals for the D.C. Circuit)
Other News

Are your company’s tort cases treated fairly in U.S. courts? Now is your chance to share your thoughts on troublesome jurisdictions with the American Tort Reform Association (ATRA), which is gathering information that will help shine a light on “Judicial Hellholes.”  Contact ATRA’s Darren McKinney (202-682-0084) about troubling (or promising) developments on tort issues in the courts.

Questions or Comments?

Contact Senior Vice President & General Counsel Linda Kelly at lkelly@nam.

Related Tags: