The Center News: January 2017

Supreme Court to hear dispute over class waivers in arbitration clauses: The Supreme Court will decide whether an agreement that requires an employer and an employee to resolve employment-related disputes through individual arbitration rather than through class actions is valid under the Federal Arbitration Act. The NAM supports arbitration as faster and less expensive for resolving disputes.

Manufacturers push for fair discovery standards: The Georgia Supreme Court is examining the duty-of-care standard that applies to plaintiffs with respect to the preservation of evidence for a lawsuit. The MCLA filed a brief supporting review of this case and argued that objective spoliation standards should be applied equally to plaintiffs and defendants.

Supreme Court to review key procedural issue in “waters of the U.S.” case: The Supreme Court agreed to hear the MCLA’s appeal in the case challenging the EPA’s “waters of the United States” regulation. The Court will review a splintered appeals court decision to resolve whether challenges to the rule should be heard first in the district courts or in the appeals courts.

Court expands liability for Clean Water Act discharge permit holders: A federal appeals court ruled that a permit to discharge into streams incorporates into it general water quality standards that become enforceable effluent limits. The NAM argued that courts should not apply new conditions to an existing permit when the regulatory agency has already considered those conditions and did not require them in the permit. The ruling eliminates the permit shield and subjects manufacturers to numerous citizen suits under the Clean Water Act.

NAM files answer in public trust greenhouse gas case in Oregon: The NAM, American Petroleum Institute and American Fuel & Petrochemical Manufacturers joined together to intervene in a case brought by teenagers seeking further government action to reduce greenhouse gases. The judge has accepted the theory that the public trust may have been violated because of the impact of climate change, and the government will answer the complaint in January. Our answer raises many affirmative defenses to the litigation, which will be heard later this year.

Manufacturer prevaisl after 18-year nightmare: For 18 years, Moving Waters Industries Corp. (MWI), a family-owned manufacturer of heavy-duty water pumps, has fought a government charge over an alleged “false claim” on an Export-Import Bank document. The dispute centered on whether market-based commissions paid to agents in Nigeria were “regular” or not. Ultimately, an appeals court, supported by an MCLA brief, ruled that the ambiguous term “regular commission” has never been defined in regulations or guidance, and a jury verdict against the company was overturned. On January 9, the Supreme Court denied review of the case, marking the end of MWI’s long legal battle. The resolve of MWI’s leadership and legal team has yielded a great benefit to all in clarifying the law and protecting due process, and the MCLA was proud to play a role in securing this victory.

Supreme Court to hear appeal of Montana’s expansive view of jurisdiction: This case involves the power of a Montana court to exercise general jurisdiction over companies that are neither incorporated in the state nor have their principal place of business in the state. In a brief, the NAM urged the Supreme Court to apply its recent rulings on extraterritorial jurisdiction to state court disputes as well.

DOL persuader rule case put on hold: A federal judge in Texas issued a final summary judgment ruling after previously ordering a permanent injunction with nationwide application. In order to prevent any unfavorable rulings, we asked the judge in our challenge to this rule, which is pending in an Arkansas federal court, to put our case on hold pending the outcome of the Texas case. The Arkansas judge granted a motion staying further proceedings and directing the parties to file updates in March.

NAM supports GM bankruptcy appeal:The NAM filed a brief urging the Supreme Court to review a lower court’s ruling that makes a company that bought various GM assets liable for the liabilities that it did not agree to assume. The bankruptcy code allows the sale of assets “free and clear,” and the lower court upset fundamental expectations by holding the innocent purchaser liable for old product liability claims. Our brief argues that this ruling will make it harder for companies to get value for assets in bankruptcy, harm creditors and unfairly put the liability on parties that are not at fault.

Ohio issues favorable ruling on post-sale duty to warn: The Ohio Supreme Court ruled that manufacturers do not have a post-sale duty to warn about risks associated with a product that are not discovered until after the product has been sold and are unlikely to pose a risk. The outcome helps push back on claims that warnings are needed when manufacturers make improvements to their products. A different outcome would have resulted in a so-called “innovation tax.”

NAM opposes perpetual innovator liability:This case involves whether the brand-name manufacturer of a pharmaceutical that divested all ownership interest in that drug can be held liable for injuries caused years later by another manufacturer's generic version of that drug. The NAM filed a brief with the California Supreme Court opposing innovator liability and arguing that tort theories do not allow courts to circumvent fundamental principles of liability law against product manufacturers.

MCLA supports challenge to Michigan’s business tax law: The MCLA filed briefs in five cases on appeal to the Supreme Court challenging Michigan’s repeal of a tax provision that had allowed multistate companies to use a standard three-factor formula to compute taxes. The formula is part of a binding agreement under the Multistate Tax Compact and is a common structure designed to prevent double taxation and foster tax reliability. The cases also challenges Michigan’s retroactive changes to the tax law that cause multistate companies to owe more than $1 billion in extra taxes.