The Center News: July 2015

A Publication of the National Association of ManufacturerstheCenter for Legal Action

Center Perspectives
By Quentin Riegel, Vice President and Deputy General Counsel

Now that the U.S. Supreme Court has issued its final decisions of the term, how did manufacturers fare? There’s reason for hope, and the Manufacturers’ Center for Legal Action (MCLA) played a role in several favorable rulings.

The most dramatic development for manufacturers comes from two challenges to Obama Administration initiatives—the Affordable Care Act and an Environmental Protection Agency (EPA) rule on mercury emissions from power plants—and one Court ruling involving the Sarbanes-Oxley Act. The Court’s decisions all involve how to interpret statutory language that Congress—as is often the case—failed to express clearly.

Since its landmark decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. in 1984, the Supreme Court—and all the federal courts that must follow this precedent-setting ruling—have generally deferred to the views of Executive Branch agencies in interpreting how much power they have under unclear laws, on the theory that the agencies have great expertise in how to administer those powers. In these latest cases, however, that deference is beginning to change. The majority in King v. Burwell refused to defer to the Internal Revenue Service on its interpretation of the provisions of the Affordable Care Act. The Court also provided a narrowing interpretation of “tangible objects” under the Sarbanes-Oxley Act to ensure that the law applies only to the destruction of items used to record or store information, and not all tangible objects. And in Michigan v. EPA, a majority refused to defer to the EPA’s decision that “appropriate” regulation of mercury from power plants does not require consideration of costs.

A majority of Justices in these cases focused on the intent and context of each statute as much as on the literal meaning of the statute’s words. This important development may benefit the challenges we expect to bring against the EPA and other agencies in the future.

In other cases, the Court provided clarity to fiduciaries regarding their obligations to monitor investments in ERISA retirement plans. It also ruled that security screening time before or after work is not compensable.

The Court refused to accept our arguments to further restrain administrative agencies in only one case in which the MCLA participated. There, the Court allowed agencies to change their interpretations of their own regulations without asking for input from the public.

All in all, the views of manufacturers matched the ultimate decisions of the Supreme Court in four of the five key cases in which full opinions were announced.

MCLA in the Courts
Class Actions

NAM Weighs in on Dubious Class Action Certification: In a case involving front-loading washing machines, the National Association of Manufacturers (NAM) filed a brief urging the reversal of a lower court’s decision certifying a class in which some members did not suffer any injury.

More Information: Brown v. Electrolux Home Prods., Inc. (U.S. Court of Appeals for the 11th Circuit)

Manufacturers Seek to Curtail Abusive Class Actions: The NAM and its association allies filed a brief before the Supreme Court urging it to undo a lower court decision contrary to Supreme Court jurisprudence on Article III standing. To abandon precedent and uphold the appeals court decision would invite abusive class-action litigation by allowing class members who have suffered no actual harm to pursue nuisance suits against manufacturers.

More Information: Spokeo v. Robins (U.S. Supreme Court)

Top Court Won’t Reopen Clean Water Act Civil Penalties Case: The NAM filed a brief supporting Anadarko’s and BP’s appeals of adverse decisions involving the civil penalty provisions of the Clean Water Act arising from the Deepwater Horizon accident. We argued that the lower court’s decision was confusing, overbroad and inconsistent, and the penalty provision involving the definition of a “discharge” should have been construed more leniently. The Supreme Court declined to hear the case.

More Information: Anadarko and BP v. United States (U.S. Supreme Court)

NAM Again Challenges EPA Overreach: The NAM joined 13 organizations in a challenge against the EPA’s attempt to expand its jurisdiction over land owned or used by manufacturers. We argued that the EPA acted outside its Clean Water Act authority and violated the Administrative Procedure Act by failing to properly handle comments and economic considerations.

More Information: American Farm Bureau Federation v. EPA (U.S. District Court for the Southern District of Texas)
Free Speech

NAM Pushes Back Against Vermont Food-Labeling Law: The NAM argued for a preliminary injunction against enforcement of Vermont’s new labeling requirements for genetically engineered foods. This case is important for all food manufacturers and has broad implications for other products.

More Information: Grocery Manufacturers Ass’n. v. Sorrell (U.S. Court of Appeals for the 2nd Circuit)
Product Liability

NAM Looks to Rein in Abusive Asbestos Lawsuits: While New York law does not impose liability on a manufacturer of a product that causes no injury when used in conjunction with another product that does, the state’s courts have revised that proposition in the context of asbestos litigation. The NAM and other business groups argue that those changes represent bad policy and would spur abusive lawsuits.

More Information: Suttner v. Crane Co. (New York Court of Appeals)
Upcoming Events

MCLA’s Energy & Environment Legal Issue Advisory Group will meet by conference call on July 22 at 2:00 p.m. In-house counsel for NAM manufacturing members are invited to hear an update on our litigation priorities and recent developments.

More Information: Quentin Riegel, (202) 637-3058

In Case You Missed It

NAM Senior Vice President and General Counsel Linda Kelly recently authored and op-ed that ran in the Washington Examiner on the need for reform of the federal minimal diversity jurisdiction rules.

The NAM recently cohosted a webinar on Understanding the Power and Enforcement Efforts of State Attorneys General with the law firm of Reed Smith LLC.  The webinar is now available on demand.

Questions or Comments?

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

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