The Center News: August 2016

A Publication of the National Association of ManufacturerstheCenter for Legal Action

Center Perspectives

Administration Shoehorns Modern Problems into Antiquated Laws
By Patrick Forrest, Vice President and Deputy General Counsel

The federal government is now routinely using laws passed before the invention of the fax machine to control dynamic information systems like cloud computing and broadband access. These efforts to regulate and police the innovation economy will loosen constitutional privacy protections and chill technological innovation.

For example, relying on the Electronic Communications Privacy Act of 1986, the Department of Justice has recently sought to search Microsoft customers’ emails. Microsoft has pushed back, alleging that the Justice Department’s orders violate its customers’ privacy and infringe on its right to free speech. Many of these demands prohibit Microsoft from informing customers that their information is being investigated.

Most laws governing government searches were written before the widespread use of digital communications. At that time, if the government wanted to execute a search warrant to look through one’s files, notice was necessary since a search would require entering a home or office to access documents. Now that many Internet users store their information in the cloud, rather than locally on their computers, the government can bypass notification of the customer by directly contacting providers such as Microsoft. Therefore, simply because the location of information has changed, users now experience different legal protections. Microsoft argues this is unconstitutional because Fourth Amendment protections on the reasonableness of searches should not discriminate based on how a citizen stores his or her information.

The privacy and free speech implications of the government’s actions have significant consequences for the greater business community and the innovation economy. When the government treats those who store their information at home differently than those who use the cloud, individuals are less inclined to use this potentially transformative new technology to protect their privacy. When individuals forgo cloud computing services, innovative manufacturers will lose customers.

The National Association of Manufacturers (NAM) will continue its fight to uphold proper constitutional protections and promote balanced and reasonable resolution through the courts.

MCLA in the Courts

NAM urges FERC approval of pipelines: The NAM filed a brief supporting a pipeline project proposed by Constitution Pipeline. After extensive environmental, safety and economic review, the Federal Energy Regulatory Commission (FERC) approved the critical energy infrastructure project; however, New York attempted to block the project by denying a Clean Water Act permit. States should not be allowed to use their permitting processes, including the issuance of water quality certificates, to unreasonably delay, exact concessions from, or scuttle federally approved projects.

More Information: Constitution Pipeline Co. v. New York State Dep’t of Envtl. Conservation (U.S. Court of Appeals for the Second Circuit)

Court rejects expanded reach of hazardous waste law: A federal appeals court reversed a lower court’s ruling imposing liability for “disposal” of a hazardous substance into the air; traditionally, “disposal” refers to the discharge of material directly onto land or into water. Because emissions can travel long distances by air, the court’s ruling prevents unforeseeable and expansive liability.

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

D.C Circuit rejects industry challenges to boiler and incinerator regulations: A federal appeals court rejected all industry arguments challenging various aspects of the Environmental Protection Agency’s (EPA) rules on boilers and incinerators, finding that the EPA’s approach was reasonable. The decision ends a five-year court challenge to these regulations and subsequent revisions.

More Information: JELD-WEN, Inc. v. EPA, U.S. Sugar Corp. v. EPA, Portland Cement Ass’n. v. EPA, American Chemistry Council v. EPA, American Forest & Paper Ass’n. v. EPA, Sierra Club v. EPA (U.S. Court of Appeals for the D.C. Circuit

NAM moves forward in ozone litigation: The NAM filed an intervenor brief in litigation reviewing the EPA’s final rule lowering the ozone standard from 75 to 70 parts per billion. Environmental groups are trying to force the EPA to make the ozone standard more stringent. We argue that the EPA’s action not to lower the standard further represents a reasonable exercise of its discretion to interpret the law.

More Information: Murray Energy Corp. v. EPA (U.S. Court of Appeals for the D.C. Circuit)
Free Speech

Federal action preempts Green Mountain State GMO law: Because President Obama signed legislation that preempts Vermont's law requiring genetically modified organism (GMO) labeling, the NAM and other business groups are standing down on efforts to enjoin the law. Similar efforts are under way to wrap up the case at the trial court.

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

NAM pushes back on sweeping jurisdictional ruling:A judge in Louisiana ruled that Hunt Refining Company could be sued in that state by an out-of-state plaintiff for exposure to benzene in Mississippi because the company is registered to do business in Louisiana. This theory was rejected by the U.S. Supreme Court two years ago. This case was ultimately dismissed, but the NAM will continue to push back against states that impose general jurisdiction on companies simply because they register to do business there.

More Information: Merritt v. Texaco Inc. (Louisiana Court of Appeals)
Product Liability

NAM responds to challenge to our brief in New York asbestos case:The plaintiff in this case filed an unusual challenge to our brief, and we responded with scientific evidence and expert testimony to rebut the unsupported claims of the plaintiff. We again urged the court to uphold the lower court's rejection of questionable expert testimony.

More Information: In re Wellbutrin XL Antitrust Litigation (U.S. Court of Appeals for the Third Circuit)

NAM supports New GM in bankruptcy case: The NAM filed a brief supporting an appeal by General Motors, asking that a federal appeals court reconsider its decision to hold the company responsible for ignition switch claims. Those claims were extinguished when “Old GM” sold its assets to a new government-owned company “free and clear.” The ruling being challenged holds an innocent purchaser (“New GM”) liable for the acts of the old company.

More Information: Elliott v. General Motors, LLC (U.S. Court of Appeals for the Second Circuit)
State Taxation

NAM supports challenge to California rail fee on hazardous materials: BNSF and Union Pacific Railroads sued the state of California over a new fee imposed on railroad cars containing any of 25 hazardous materials. The NAM’s Robyn Boerstling submitted a declaration explaining the negative impact of this fee on shippers, railroads and customers.

More Information: BNSF Ry. Co. v. California State Board of Equalization (U.S. District Court for the Northern District of California)
Questions or Comments?

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

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