The Center News: November 2016

A Publication of the National Association of ManufacturerstheCenter for Legal Action

Center Perspectives

Obama’s Regulations in a Trump Presidency
By Patrick Forrest, Vice President and Deputy General Counsel

President Obama has relied on, and expanded, the power of the administrative state by making substantial use of both executive orders and presidential memoranda to achieve policy objectives. Executive orders are appealing to any president because they can be quietly and quickly implemented without hearings, votes or substantive public feedback. President Obama has been direct in favoring this approach, stating, “We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need. I’ve got a pen and I’ve got a phone.”

The National Association of Manufacturers (NAM) ramped up its litigation in response to the tsunami of regulations coming out of the White House. In this final year of the president’s term, the regulatory spigot has only been turned up. The NAM is currently suing the federal government in 16 cases for overregulation.

The Manufacturers’ Center for Legal Action has argued in the courts that the president overstepped his constitutional power in issuing many memoranda and executive orders affecting labor and environmental law. However, a presidential legacy implemented by the pen can be destroyed by the pen. First, an executive order can be revoked by another executive order, and it is common for presidents to revoke some of their predecessors’ executive orders. Second, Congress can revoke an executive order through legislation. Third, an executive order can be revoked by a federal appeals court or the Supreme Court.

This year’s election will have a profound impact on future NAM litigation efforts to limit executive overregulation through the courts. President-elect Trump will fill the Supreme Court vacancy created by Justice Antonin Scalia’s death and potentially two or more additional seats as justices retire. If multiple vacancies occur, the Court will shift from its previous makeup of five conservative and four liberal justices that shaped some of the nation’s most significant issues on social norms, individual rights, the balance of government powers and business and workplace matters. Several if not all of the cases in which the NAM is suing the government for executive overreach may end up in a newly configured Supreme Court, and the outcome of President Obama’s regulatory legacy will largely rest on the Supreme Court nominees of President-elect Trump.

The morning after the election brought with it discussion of whether Democrats will filibuster the Trump administration’s Supreme Court nominees. The Senate confirmation process will offer a critical view into the Supreme Court’s future and the legacy of President Obama’s executive orders.

MCLA in the Courts
Class Actions

NAM opposes duplicative state antitrust suit against pharmaceutical manufacturer. The NAM filed a brief in a federal appeals court opposing Louisiana's attempt to file a lawsuit against GlaxoSmithKline. The state had already received benefits from a separate class action in which it was a class member, and this second suit addresses the same issues. Our brief argued that the Eleventh Amendment sovereign immunity protection is limited to actions filed against the state. Moreover, even if Louisiana had a constitutional right to object to federal jurisdiction as a plaintiff, the state waived it.

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

NAM files main brief in new source greenhouse gas case: The NAM, along with industry associations, power companies and the boilermakers and mine workers unions, filed our main brief challenging the Environmental Protection Agency’s (EPA) new source performance standards for greenhouse gas emissions from electric power plants. We are concerned that EPA's new rules will eliminate coal-fired power plants from the mix of energy sources available to manufacturers, raising costs and threatening the reliability of the electric grid. We argued that EPA exceeded its authority by determining that the best system of emission reduction for new coal-fired power plants is to require carbon capture and storage in deep underground saline formations, a costly and energy-intensive process with insufficient storage locations. We also argued that the EPA has not met the requirement to show that the new emissions standard is achievable.

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

Judge allows public trust greenhouse gas case to proceed in Oregon: A federal judge in Oregon rejected NAM and Obama administration arguments opposing a lawsuit filed by a group of young people seeking further government action to reduce greenhouse gases. Unless appealed, the case will now proceed to trial in an attempt to prove that the government helped cause climate change by inadequate regulation.

More Information: Juliana v. United States (U.S. District Court for the District of Oregon)
Expert Testimony

D.C. court adopts better standard for expert testimony: The District of Columbia’s highest court agreed with manufacturers’ arguments and adopted a stricter test for the admissibility of expert testimony in product liability cases. The court adopted a standard that requires not only that an expert use reliable scientific principles and methods but also that those principles and methods be properly applied to the particular facts of each case. This is a significant victory for all defendants that want decisions to be made on credible and reliable evidence.

More Information: Motorola, Inc. v. Murray (D.C. Court of Appeals)
Free Speech

NAM files brief protecting employer free speech: The NAM filed a brief in a case concerning claims filed by the Equal Employment Opportunity Commission (EEOC) against an employer for retaliation and interference based on a letter the employer sent to employees regarding employees’ rights during an investigation. The NAM believes employers have a First Amendment right to communicate with employees, and the EEOC’s interpretation would negatively impact the employer/employee relationship and make it harder for manufacturers to provide information to their employees.

More Information: EEOC v. Day & Zimmerman NPS, Inc. (U.S. District Court for the District of Connecticut)
Jurisdiction

NAM seeks to curtail expansive jurisdiction by state courts: The NAM filed a brief countering the Montana Supreme Court’s application of the “at home” provision for jurisdiction. The U.S. Supreme Court should clarify that the “at home” provision applies to all litigation and not just to litigation involving companies located outside the United States. If the Court does not address this issue, state courts around the country could expand their jurisdiction and subject manufacturers to additional lawsuits in states without a significant connection to the case.

More Information: BNSF Railway Co. v. Tyrrell (U.S. Supreme Court)
Labor

NAM pushes back against new overtime rule: The NAM asked a federal court to stop the Department of Labor’s new overtime rule before it takes effect on December 1. The rule would impair employers’ rights to treat as exempt from overtime millions of formerly exempt executive, administrative, professional and computer employees.

More Information: Plano Chamber of Commerce v. Perez (U.S. District Court for the Eastern District of Texas)
OSHA

NAM seeks to stop injury and illness rule: The NAM filed a brief supporting a nationwide preliminary injunction of the Occupational Safety and Health Administration’s (OSHA) injury and illness rule, which places prohibitions and limits on employer safety incentive programs and drug testing programs. In response to the NAM’s aggressive litigation tactics, OSHA delayed the effective date of the rule to December 1.

More Information: Texo ABC/AGC, Inc. v. Perez (U.S. District Court for the Northern District of Texas)
Taxation and State Taxation

NAM challenges IRS inversion limitations: The NAM filed a brief urging a federal court to review the Internal Revenue Service’s (IRS) rule limiting so-called inversions. Specifically, we argued that the United States cannot insulate itself from a pre-enforcement review of a manifestly unlawful rule by claiming that the Anti-Injunction Act bars a pre-enforcement challenge. The proposed rule exceeds the scope of the Treasury Department’s regulatory authority, exacerbates uncertainty in the tax system and undermines the ability of American manufacturers to compete and succeed in the global marketplace.

More Information: Chamber of Commerce v. Internal Revenue Service (U.S. District Court for the Western District of Texas)
Waters of the United States

Manufacturers move forward with “waters of the United States” case: The business coalition challenging the proposed “"waters of the United States” jurisdictional rule filed its main brief earlier this month. The brief raises a variety of procedural, statutory and constitutional arguments against the rule.

More Information: Murray Energy Corp. v. EPA (U.S. Court of Appeals for the Sixth Circuit)
Questions or Comments?

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

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