Manufacturers In The Courts: October 2010

A Publication of the National Association of Manufacturers
October 2010

Manufacturers continued to press the courts this month for relief from excessive regulation by EPA and from law suits by environmentalists. Our greenhouse gas litigation efforts gained a boost from a favorable procedural ruling in the D.C. Circuit, and we asked the Ninth Circuit to permit manufacturers to participate in environmental challenges to major federal projects. Product liability, employment discrimination and trade secrets cases also drew NAM's involvement.

Decided Cases

Product Liability

Constitutionality of Texas tort reform. A Texas statute limits the total asbestos liability of companies that purchase troubled assets from other companies. Despite NAM arguments to the contrary, the Texas Supreme Court ruled that the statute unconstitutionally limited liability retroactively when applied to pending lawsuits. Robinson v. Crown Cork & Seal Co. (Tex.).

Pending Cases

Class Actions

NAM Seeks Fairness in Class Action Certification Decisions . A judge's decision to certify a product liability case as a class action puts tremendous pressure on manufacturers to settle even though they have legitimate defenses. The NAM filed an amicus brief Oct. 14 urging the Supreme Court to review a ruling that certified some but not all issues in the case for class action treatment, impairing the defendant's defenses relating to proof of reliance, causation and injury. In this case, for example, product defect claims relating to windows depend in part on how they were installed, a factor often out of the control of the manufacturer. Judging defect claims as single issues without considering defenses has far-reaching implications for many manufacturers. Pella Corp. v. Saltzman (S. Ct.).

Employment Discrimination

Supreme Court Considers Broadening Anti-Retaliation Remedies. Title VII of the Civil Rights Act of 1964 protects employees from retaliation by their employers after complaining about discrimination in the workplace. This case involves not the employee who complained, but her fiancé, who was terminated from his job. The Supreme Court will decide whether to broaden the anti-retaliation provision to include "friends and family" of the complaining worker. On Oct. 29, the NAM filed an amicus brief arguing that the statute is clear on its face and protects only those who personally "opposed" a discriminatory employment practice or personally "made a charge, testified, assisted, or participated" in a Title VII proceeding. A rule that permits third-party retaliation claims would put employers in the untenable position of having to speculate about possible relationships an employee may have that could give rise to potential liability each time they contemplate disciplinary action against that employee. Thompson v. North American Stainless, LP (S. Ct.).


NAM Coalition Gets Favorable Order in Greenhouse Gas Litigation . The NAM coalition suing EPA over its greenhouse gas regulations as they apply to stationary sources won a preliminary skirmish in the U.S. Court of Appeals for the D.C. Circuit this month. Over strenuous objections from EPA and environmental groups, the court allowed our motion for a partial stay (suspension) of the rules to be filed. Our motion comprehensively addresses three of EPA's regulatory decisions that begin the regulation of greenhouse gas emissions from stationary sources on January 2, 2011. The court's order recognized the interrelatedness of EPA's four-rule process. The principal NAM greenhouse gas suits are described here .

Manufacturers Seek Right to Participate in Project Challenges by Environmental Groups . For many government projects involving manufacturers, the National Environmental Policy Act (NEPA) requires federal agencies to evaluate the environmental impact of their actions, and these evaluations are increasingly challenged in court by environmental groups. In an amicus brief filed Oct. 21, the NAM asked the Ninth Circuit to abandon its "federal defendant rule", which generally bars the participation of manufacturers in NEPA litigation. We cited many examples where private parties clearly have huge investments at stake and a substantial interest in defending agency actions under NEPA, including development projects that involve work in wetlands, the construction of natural gas pipelines or nuclear power plants, and the development of genetically engineered crops. We are also concerned that the federal defendant rule has been extended to other statutes, including the Endangered Species Act, the National Forest Management Act, and the Plant Protection Act. Wilderness Society v. U.S. Forest Service (9th Cir.).

Trade Secrets

NAM Supports Protective Order Request. The NAM asked the Arkansas Supreme Court to review a state court order that requires a manufacturer to give valuable trade secrets and commercially sensitive information to a plaintiff's lawyer without a protective order. Disclosure would cause irreparable harm to the company's competitive position. The NAM argued that the trial court should first consider the content of the documents to determine if they are needed by the plaintiffs, and if so, issue an appropriate protective order. American companies sustain billions of dollars in losses from the theft of their proprietary information, and American courts should not make this situation worse by allowing the improper disclosure of know-how and trade secrets. The court has agreed to hear the appeal. Cooper Tire Co. v. Neal (Ark.).

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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