The Center News: March 2016

A Publication of the National Association of ManufacturerstheCenter for Legal Action

Center Perspectives
By Leland Frost, Associate General Counsel

Plaintiffs continue to push for expansion of jurisdiction despite decades of U.S. Supreme Court rulings to the contrary. Jurisdiction involves which courts have the power to make legal decisions in a case, and improper jurisdiction can be very costly for defendants. The National Association of Manufacturers (NAM) is very concerned about potential significant deviations in the law regarding jurisdiction, and the Manufacturers’ Center for Legal Action (MCLA) is particularly troubled by the impact those changes could have on companies that do business in multiple states.

Recently, in Bristol-Myers Squibb Company v. Superior Court (Anderson), a California court decided that it did not have general jurisdiction over a non-resident defendant due to the U.S. Supreme Court decision in Daimler AG v. Bauman, but it nevertheless found the state had specific jurisdiction under an older case. The court held that because Bristol-Myers Squibb did business in California, and the claims of the non-residents were similar to the claims of a separate group of resident plaintiffs, jurisdiction was appropriate.

The California decision has broad implications for entities doing business in multiple states. It will dramatically increase their exposure to liability, opening them up to legal actions in California from classes of non-resident plaintiffs. The case is on appeal to the California Supreme Court, and the NAM argued in an amicus brief that this ruling would place a great burden on manufacturers and any other businesses with connections to California. It is unlawful to extend jurisdiction when neither the plaintiffs nor defendants are residents of the state. The ruling also goes against the notion of jurisdictional fairness and is unreasonable to defendant corporations.

Late last year, the Montana Supreme Court heard similar arguments in Tyrrell v. BNSF, which involves claims by non-resident plaintiffs against an out-of-state defendant regarding events that also occurred out-of-state. Two lower courts reached opposite conclusions as to whether Montana courts had jurisdiction, prompting the Montana Supreme Court to take up the issue. Montana’s highest court will decide whether Montana courts can hear lawsuits involving non-resident parties and events that happened completely outside of the state.

An expansion of jurisdiction would greatly impede Montana’s efforts to attract new capital, and few companies would willingly invest there if doing so made the state a forum for any claim anyone in the world might wish to assert. The California and Montana supreme courts should follow the decades of U.S. Supreme Court precedent and overturn the harmful lower court decisions.

MCLA in the Courts
Civil Procedure

NAM opposes consolidation of asbestos cases in New York: The NAM along with other groups filed a brief urging New York’s highest court to substantially curb the use of trial consolidations in asbestos cases. When individual cases are not legally and factually similar, combining them is unlikely to increase efficiency and is highly prejudicial to the defendants.

More Information: Konstantin v. 630 Third Avenue Assocs. (New York Court of Appeals)
Class Actions

Trial by formula is unconstitutional: The NAM and our trade association allies filed a brief urging the Supreme Court to review a decision that wrongly upheld a significant damage award against ExxonMobil. The brief addresses the unconstitutionality of “trial by formula” in state court parens patriae lawsuits for money damages.

More Information: ExxonMobil Corp. v. New Hampshire (U.S. Supreme Court)

Manufacturers file main brief in greenhouse gas litigation: The NAM filed our main brief on the merits of our challenge to the Environmental Protection Agency’s (EPA) Clean Power Plan. Our key arguments involve the EPA’s unauthorized requirements that electric generating facilities shift to other fuels to generate electricity; its misguided use of authority under Section 111 of the Clean Air Act; and its violation of states’ rights.

More Information: West Virginia v. EPA (U.S. Court of Appeals for the D.C. Circuit)

NAM asks full appeals court to review “Waters of the United States” issue: The Sixth Circuit ruled in a 1-1-1 opinion that the appeals courts are the proper forum to hear the “Waters of the United States” cases. That splintered opinion failed to provide certainty regarding proper jurisdiction, so the NAM asked all members of the Sixth Circuit to review the ruling. It is important to resolve the jurisdictional question before considering the merits of the case to prevent potentially duplicative and costly litigation.

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 weighs in on the potential reach of the Clean Water Act: The NAM filed a brief highlighting the importance of manufacturers and other regulated entities being afforded a way to respond to overly aggressive jurisdictional determinations at a definitive but still early point in the decision-making process. In the case of the Clean Water Act, any determination that a property contains “waters of the United States” significantly impacts the use of the land and dramatically raises the cost, and often reduces the feasibility, of constructing critical infrastructure.

More Information: U.S. Army Corps of Engineers v. Hawkes Co. (U.S. Supreme Court)

U.S. Supreme Court rejects appeal of Chesapeake Bay rule: The Supreme Court declined to review a decision upholding the EPA's power to dictate details of state water permitting decisions relating to the Chesapeake Bay. The NAM urged the Supreme Court to hear the case, arguing that the rule will impede manufacturing development.

More Information: American Farm Bureau Federation v. EPA (U.S. Supreme Court)

NAM pushes back against environmental activists’ attempt to make regulations worse: The NAM and other groups filed an unopposed motion to intervene in support of the EPA in a lawsuit filed by the Sierra Club over parts of the agency's rule on industrial boilers. We are concerned about the extra regulatory burdens and compliance costs that manufacturers would bear if the Sierra Club prevails.

More Information: Sierra Club v. EPA (U.S. Court of Appeals for the D.C. Circuit)

High court won’t review protectionist state law: A Connecticut law protects automobile dealers in the state by prohibiting manufacturers from raising prices to account for added costs imposed by the state. While this case presented an opportunity for the Supreme Court to ensure that state laws burdening interstate commerce are meaningfully reviewed to assess the merits against the harms, the court declined to hear the case.

More Information: Alliance of Automobile Manufacturers, Inc. v. Currey (U.S. Supreme Court)
Product Liability

Asbestos duty to warn: The NAM filed an amicus brief opposing an effort in Georgia to impose a legal duty to warn against very remote risks. The suit is by the daughter of a worker who was exposed to asbestos on the job. The daughter seeks damages from a manufacturer for a failure to warn her about the risks of take-home exposure. Most courts find no duty by an employer to warn family members of asbestos risks, and we urged the court here to reject such a duty for manufacturers, which are even more distantly remote from the family members.

More Information: CertainTeed Corp. v. Fletcher (Georgia Supreme Court)

Remote liability for failure to warn: The NAM filed an amicus brief urging the Pennsylvania Supreme Court to update its approach to liability failure-to-warn cases involving asbestos. Juries should balance the risks and benefits of a product when determining whether a product is unreasonably dangerous.

More Information: Amato v. Crane Co. (Pennsylvania Supreme Court)

NAM continues its fight against lawsuit abuse: The NAM urged the Supreme Court to review a case involving claims made under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Third-party payors sought reimbursement of monies spent for prescriptions of Avandia even though the product worked and caused no physical injuries. They claimed that because certain risks were not disclosed, they should have paid less for the drug. Our brief asks the court to clarify whether these allegations are sufficient to constitute an injury under RICO. The courts are divided on this, but the lower court concluded that the allegations were sufficient, which would incentivize abusive, speculative and burdensome litigation against manufacturers.

More Information: In re Avandia Marketing (U.S. Supreme Court)
Other News

Represent immigrant victims of domestic violence and other crimes: On March 23, 2016, the NAM’s legal team will host pro bono training to equip participants to represent immigrant victims of domestic violence and other crimes. Our NAM neighbors, Catholic Charities Immigration Legal Services will conduct the program, which will take place from noon to 2 p.m. at NAM headquarters. Lunch and training materials will be provided. To register, please RSVP to Space is limited.

The training will cover eligibility criteria for relief under the Violence Against Women Act (VAWA), how to demonstrate battery or extreme cruelty for VAWA relief, and how to adjust status to lawful permanent residence through VAWA. Other topics include eligibility criteria for U Visa relief and U Visa adjustment to lawful permanent residence. In addition, the program will review ways to obtain law enforcement certification for immigrant victims of crime and cooperate with a law enforcement investigation or prosecution.

Questions or Comments?

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