Manufacturers in the Courts: April 2012

A Publication of the National Association of Manufacturers
Manufacturers In The Courts  

April, 2012


Once again this month, labor and environmental litigation dominate the NAM's legal docket. We have just won a significant victory in delaying the National Labor Relations Board's poster requirement, and we continue to challenge its efforts to provide more power to union organizing. In addition, briefing has resumed over the Environmental Protection Agency's ozone standard, and we await court rulings on the validity of EPA's greenhouse gas regulations and an environmental group's public nuisance suit to force further greenhouse gas reductions. These and other developments are summarized below.

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Decided Cases  

Labor Law  

Mandated lunch and rest breaks. A few years ago, the NAM and nine other groups filed an amicus brief urging the California Supreme Court to uphold a lower court ruling that an employer's duty to provide meal periods is a duty to make meal periods available, not to ensure they are actually taken. This California law has been the basis for thousands of class action suits, and this month the court generally upheld the lower court ruling. The result will help manufacturers with employees in California to understand the requirements and to establish compliant workplace policies. Brinker Rest. Corp. v. Superior Court (Calif.).

Product Liability  

The product-alteration defense. Over the past 2 years, the NAM has filed two amicus briefs with 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 said the defense was not available unless the alteration was done by a party to the litigation. The NAM argued that the "party" covered by the statute can be any party, not just one involved in the lawsuit, and that manufacturers should not be liable for harms caused by product misuse. On April 13, the court reversed the lower court, ruling that the product alteration defense is available to a manufacturer regardless of whether the person making the alteration is a party to the lawsuit. This is another example of plaintiffs trying to chip away at standard legal defenses available to manufacturers in product liability litigation. Stark v. Ford Motor Co. (N.C.).  

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Pending Cases  


EPA's existing regulation of greenhouse gas emissions was challenged several years ago by many business groups and states, and we are now awaiting a final ruling from the U.S. Court of Appeals for the D.C. Circuit to determine whether the agency's convoluted decisions implementing the controls were legal under the Clean Air Act. We expect a ruling within a few months. See the cases summarized here .

Meanwhile, an environmental group representing children continues to press its theory that EPA and other federal agencies have a duty under the theory of "public nuisance" to ratchet down greenhouse gas emissions around the country by 6% per year. This month, a federal court in Washington, D.C., granted the NAM's motion to intervene in this case.

We also filed a memorandum in support of our motion to dismiss the case, and a hearing is scheduled for May 11. In our papers, we offered compelling reasons for the court to dismiss the suit: 1) the case presents political questions that courts are not able to resolve; 2) the plaintiffs lack standing because their injuries are too speculative and not likely to be reduced by the relief sought; 3) the public trust doctrine under which the suit was brought does not exist under federal law and the claims have been displaced by federal regulation in this area; and 4) the doctrine does not apply to the atmosphere or impose a duty to regulate greenhouse gas emissions. Our motion highlights the dramatic and devastating effects that this kind of public trust litigation would have on manufacturing processes and investments, production and transportation costs, global competitiveness, domestic job creation and the U.S. economy. Alec L. v. Jackson (D.D.C.).

In a separate development, litigation by Native Americans challenging the federal government's issuance of exploratory drilling permits in Alaska continues in the Ninth Circuit. Early this month, we filed an amicus brief reiterating that the Outer Continental Shelf Lands Act was designed to encourage expeditious exploration and production activities, and that there are enormous economic benefits to the public, the State of Alaska and its workers, and to government and private financial and contractual interests.

Finally, our lawsuit challenging the validity of EPA's 2008 regulation of ozone has been revived after a long period during which EPA was considering lowering the standard even further. Now, briefing on the original challenge is under way in the D.C. Circuit, and the NAM's opening brief was filed on April 17. In it, we argued that (1) the EPA's finding that increased protection results from a lower standard is insufficient, as a matter of law, to establish that the revision is "requisite" under the statute, (2) new health evidence in 2008 does not materially differ from earlier evidence and does not support revising the standard, (3) the risks now are no greater than they were under the earlier standard, and (4) EPA misrepresented and used selective results from the latest clinical and epidemiological studies. Click here for further details and our brief.

Labor Law  

NAM challenges NLRB's micro-union policy. The NAM and other business groups joined together April 23 in a brief urging the Sixth Circuit to overturn a new NLRB policy, announced in the Specialty Healthcare case last August, that makes it easy for an exceedingly small group of employees to form a collective bargaining unit in the workplace. We argued that the Board's ruling, which puts an extremely difficult burden of proof on manufacturers to show that a larger unit is more appropriate, violates federal law and ignores the responsibility of the Board to include workers with similar interests in single units. We also argued that the Board improperly delegated its obligations to workers who want to unionize, undermining the rights of other workers to fully exercise their rights. The result of the Board's policy is piece-meal unionization, very inefficient collective bargaining, and conflicting workforce demands. This kind of fundamental policy change should be subject to the rigors of notice-of-comment rulemaking, not merely announcing the change through a case decision. Kindred Nursing Centers East, LLC v. NLRB (6th Cir.).

NLRB poster requirement on hold. When the NLRB issued a new regulation last August requiring employers to post a notice of employee rights in the workplace, the NAM sued. That case resulted in a split decision last month, with a federal judge upholding the posting requirement, but striking down some of the penalties that the NLRB wanted to impose. We appealed, and asked the D.C. Circuit to enjoin the poster requirement until our appeal is completed. On April 17, it agreed. It found that there is considerable uncertainty about the enforceability of the poster rule, and noted that another federal court found that the NLRB lacked the authority to issue the rule at all. Consequently, the poster rule has been enjoined pending this appeal, and the appeal has been expedited to conclude briefing by the end of July and to hear oral arguments in September. For further details, see NAM v. NLRB (D.C. Cir.).  

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To learn up-to-date information about any of the cases described above, search either for cases decided in 2012 or active cases in the NAM's Law Center Search Engine . Or, just let me know what you're interested in, and I'll direct you right to the information you need. Your comments and perspectives are encouraged.  

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Questions or comments? Please contact Quentin Riegel at .




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