Manufacturers In The Courts: August 2010

A Publication of the National Association of Manufacturers
August 2010

Outlined below are this month's developments in litigation in which the NAM is involved.

Decided Cases

Product Liability

Federal appeals court accepts NAM arguments against medical monitoring claims . Plaintiffs are continuing their efforts to convince state judges to create new rights to demand that manufacturers pay for long-term medical monitoring expenses relating to exposure to hazardous materials or manufactured products. The U.S. Court of Appeals for the Third Circuit is the latest court to reject such claims, doing so on August 24 in a case involving an implanted stent. The court, agreeing with arguments made by the NAM in March, ruled that it would not extend medical monitoring requirements beyond situations where there is exposure to a toxic or hazardous substance with a significantly increased risk of contracting a serious latent disease. The NAM argued, among other things, that changes in the law should be made by the legislature, not the courts. M.G. v. A.I. DuPont Hospital for Children (3d Cir.).

Reopening Discovery

Settlement agreements should end a case. The Texas Supreme Court on August 27 turned down an NAM-supported request from Toyota to halt the reopening of a personal-injury lawsuit settled in April of 2007. Settlements usually end a case and cause the court to lose jurisdiction over it. Here, however, the plaintiff sought to reopen the case two and a half years later, to get monetary sanctions for an alleged violation of a discovery order. The NAM supported the argument that settled cases deserve finality, and reopening them undermines settlement agreements when there are other remedies available. In re Toyota Motor Corp. (Tex.).


Pending Cases


NAM challenges EPA's tailoring rule for greenhouse gas regulation . On August 2, the NAM and 16 other business associations filed a petition for review in the D.C. Circuit challenging the EPA's final regulation that sets out its schedule for enforcing regulatory controls on greenhouse gas (GHG) emissions from stationary sources. This is the last of eight petitions filed by the NAM coalition. Extensive efforts are now underway to efficiently coordinate the litigation, and we will provide regular updates of significant developments in this publication. Briefing schedules have yet to be determined. National Association of Manufacturers v. EPA (D.C. Cir.).

The Endangered Species Act is not a vehicle to regulate greenhouse gases. On August 16, the NAM filed a brief in support of the Department of the Interior's position not to regulate greenhouse gases emitted outside of the range of polar bears. Environmental groups have challenged the discretionary authority of the Department not to require special permits for companies that emit greenhouse gases. Such emissions are part of a worldwide phenomenon, but environmental groups want the Department to expand its power to protect the threatened polar bear by imposing emissions limits on manufacturing plants and other facilities throughout the country. See Center for Biological Diversity v. Salazar (D.D.C.).


NAM cautions against expansion of FLSA anti-retaliation provision. The Supreme Court hears arguments this fall in a case that will decide whether employees who are terminated or otherwise disciplined can sue their employer for retaliation by reason of oral complaints the employees made on the job. The Fair Labor Standards Act provides protection for employees who have "filed any complaint" under the Act, and most courts agree that this covers only written complaints. The NAM and other business groups filed an amicus brief on August 23 arguing that the Act is clear and narrower than similar provisions in other civil rights laws. Requiring written complaints facilitates the swift resolution of disputes, and discourages wasting time and resources on false or frivolous complaints. When poor performance and disciplinary problems exist, protected status for oral complaints would make management much more difficult. Kasten v. Saint-Gobain Performance Plastics Corp. (S. Ct.).

Manufacturing Representatives' Contracts in California

NAM opposes ruling that creates remedy for sales representatives. California law prescribes various formalities for contracts with sales representatives, including disclosing the rate and method of calculating commissions. Willful violations are subject to treble damages, but the legislature said nothing about non-willful violations. One California court has supplemented this legislative oversight with a remedy for single damages. In an amicus letter filed August 20, the NAM supports review of this decision by the California Supreme Court, arguing that courts should not be making up remedies the legislature did not provide, particularly since normal breach-of-contract remedies are available. We also object to the lower court's adopting a loose standard of willfulness that could make these suits subject to treble damages and attorneys' fees. The decision creates a trap for unwary manufacturers who do not know about the technical requirements of the law. Baker v. American Horticulture Supply, Inc. (Cal.).

Product Liability

Product-alteration defense. On August 3, the NAM filed an amicus brief in the North Carolina Supreme Court challenging a ruling that removed a standard product alteration defense in a product liability case. The defense protects manufacturers against liability when their products are altered by someone else, but the lower court in this case said the defense is not available unless the alteration was done by a party to the litigation. The NAM argued that the "party" can be any party, not just one involved in the lawsuit. Otherwise, North Carolina plaintiffs can game the system and the state's courts will become inefficient and unfair jurisdictions for manufacturers. Stark v. Ford Motor Co. (N.C.).

Quentin Riegel
Vice President, Litigation & Deputy General Counsel
(202) 637-3058 •

National Association of Manufacturers
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Washington, DC 20004-1790

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