The Center News: October 2014

A Publication of the National Association of ManufacturerstheCenter for Legal Action

Center Perspectives

By Patrick Forrest, Vice President and Deputy General Counsel

On October 16, the National Association of Manufacturers (NAM) and our association allies filed a brief in Perez v. Mortgage Bankers Association, which the Supreme Court will hear in December. The outcome of this case will have a wide-ranging impact on administrative law by significantly expanding or limiting the authority of regulatory agencies. 

The case concerns whether a federal agency must get the public’s input before it changes a rule interpreting one of its own existing regulations. In general, an agency must engage in notice-and-comment rulemaking pursuant to the Administrative Procedure Act (APA) before it can significantly alter a rule that articulates an interpretation of an agency regulation.

There are a variety of exceptions to precedent designed to accommodate a basic tension between agency flexibility and the public’s right of participation in administrative law. Unfortunately, agencies can take advantage of these exceptions and avoid meaningful public participation by promulgating vague legislative rules and then interpreting those rules to reach their sought-after regulatory outcomes. This strategy is purposefully designed to avoid public input. Further, agencies know they are shielded from legal challenges because a court must accept an agency interpretation as long as it is not patently incompatible with the statutory or regulatory text. The result of this process is uncertainty about how to comply with the law.

Manufacturers want to play by the rules, but they must know what the rules are. When agencies provide vague guidance to ease their administrative burden and increase their own flexibility, they do so at the expense of the public good. The current process complicates compliance and provides no opportunity for groups affected by a rule to provide input. Allowing agencies to reverse their definitive, relied-upon interpretations without notice and comment would make this situation even worse. 

The NAM has asked the Supreme Court to interpret the APA with an eye toward the need for fairness and predictability. Agencies should be required to follow the requirements of notice and comment before reversing their definitive, relied-upon interpretations. Manufacturers need to know that they can rely upon the interpretive rules that increasingly affect their day-to-day operations. By requiring agencies to ask for and respond to public feedback before changing their interpretations, the Court can protect those reliance interests and foster the APA’s goal of increasing the effectiveness and legitimacy of agency decision-making.

MCLA in the Courts

Civil Procedure

Manufacturers Push Back Against Long-Arm of California Courts. The NAM and other business groups weighed in in support of Bristol-Myers Squibb’s petition for review in Bristol-Myers Squibb v. Superior Court for the County of San Francisco. A lower court concluded that California could extend its jurisdiction to a situation where both the corporate defendant and the class of plaintiffs are non-residents. The NAM and its allies oppose this conclusion, which will greatly increase businesses’ exposure to liability in California.

More Information:
Bristol-Myers Squibb Company
v. Superior Court

(California Supreme Court)

NAM Seeks to Ensure Exclusion of Unreliable Expert Testimony: The NAM and other groups submitted a brief asking the Supreme Court to review a case focusing on a court’s responsibility to act as a “gatekeeper” and properly exclude unreliable expert testimony.

More Information:

SQM North America Corporation
v. City of Pomona

(U.S. Supreme Court)


NAM Urges High Court to Hear Public Nuisance Case: The NAM filed a brief urging the Supreme Court to take up a case in which the Iowa Supreme Court ruled that a group of Iowa residents could sue a local corn milling plant for emissions emanating from the plant even though the emissions are regulated by the Environmental Protection Agency and the company is in full compliance with its permits. This case presents an ideal opportunity to resolve whether the Clean Air Act preempts public nuisance claims under state law.

More Information:
Grain Processing Corp. v. Freeman
(U.S. Supreme Court)

California Court Opens Door to Frivolous Claims Against Employers: In a case involving an employee’s use of a personal cell phone for work purposes, a California court
concluded that an employee’s work-related use of a personal phone, regardless of whether charges were incurred by the employee, is reimbursable. This decision could have far-reaching implications for businesses in California. Under the court’s decision, personal but work-appropriate clothing, reading glasses, watches, and any other mundane but work-related item will be subject to reimbursement.

More Information:
Cochran v. Schwan’s Home Service, Inc.
(California Supreme Court)
Product Liability

Louisiana Court Loosens Toxic Tort Rules: After a lower court allowed a case to proceed without proof of actual exposure and specific causation of injury, the NAM and five other associations filed an brief in the Louisiana Supreme Court to underscore the need for proof of causation in toxic tort cases. 

More Information:
Anthony v. Georgia Gulf Lake Charles, LLC
(Louisiana Supreme Court)

NAM Seeks to Uphold Precedent Protecting Innocent Manufacturers: Since 1992, New York law has not imposed liability on a manufacturer of a product that itself causes no injury when used in conjunction with another product that does. The courts, however, have revised that proposition in the context of asbestos litigation. Those revisions are the subject of this appeal in which the NAM and other business groups argue that New York law does not extend a duty to warn about hazards in other manufacturers’ products.

More Information:

Dummitt v. A. W. Chesterton
(New York Court of Appeals)


NAM Pushes Back Against Frivolous Asbestos Suits: The NAM filed a brief in a case involving a claim for damages arising from latent injuries caused by exposure to chrysotile asbestos. The plaintiff claimed that exposure was a substantial contributing cause of his benign pleural plaque condition but provided no evidence of his level of exposure.

More Information:
Mobil Corporation v. Johnson
(Florida District Court of Appeal)
State Regulation of Interstate Commerce

NAM Seeks Expedited Relief from Vermont’s GMO Labeling Law: A Vermont law requires manufacturers to disclose when food has been produced with genetically engineered ingredients. In order to prevent an undue burden on manufacturers, the NAM and allied associations have asked a federal court to delay implementation of the statute.

More Information:
Grocery Manufacturers Ass’n v. Sorrell
(U.S. District Court for the District of Vermont)

Other News

World Trade Organization Rebukes U.S. Government Over Meat Rule
The Washington Legal Foundation highlights a recent decision from the World Trade Organization that U.S. country-of-origin labeling requirements for meat products run afoul of international trade agreements. Those requirements are also the subject of a case before the U.S. courts, American Meat Institute v. USDA. The NAM filed a brief in that case questioning the constitutionality of the requirements.

Questions or Comments?

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

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