Sometimes David really does beat Goliath. For 17 years, Deerfield, Florida pump manufacturer Moving Waters Industries (MWI) fought the federal government in a False Claims Act case. And recently they won—and scored a victory for all manufacturers. The Manufacturers’ Center for Legal Action was pleased to have provided amicus support in this case contributing to the positive and somewhat surprising outcome.
I’ve written previously about a fraud-ridden, extortionate case brought against Chevron in an Ecuadorean court and masterminded by an American plaintiffs’ lawyer. Readers of Shopfloor will remember that after years of legal drama, the Ecuadorean court ordered Chevron to pay damages of $19 billion, which was later reduced to $9.5 billion. But then a federal court in the United States prevented enforcement of the judgment because the case’s mastermind, attorney Steven Donziger, was found liable for racketeering for using fraudulent and corrupt means to win the case in the first place. Read More
Freedom of association is one of the bedrock American freedoms written into our Constitution in the First Amendment. As a business trade association proudly advocating on behalf of the manufacturing community, this freedom is foundational to our existence. Not only does association membership allow our individual members to be more effective through collective action, but the NAM umbrella helps to protect our members from retribution for taking positions that are essential to the economic health and vitality of manufacturers, but might be unpopular with political opponents.
A landmark U.S. Supreme Court case from 1958, NAACP v. Alabama, formally recognized and reinforced freedom of association as a right, and further held that an essential element of this right was the freedom to do so without public disclosure of association membership. The case concerned the state of Alabama’s efforts to oust the NAACP from the state through strong-arm intimidation tactics, including seeking disclosure of the NAACP’s membership list. The Supreme Court held that requiring disclosure of its member list violated the NAACP’s 14th amendment due process rights and that requiring disclosure of its member lists would suppress the members’ rights to freely associate. Read More
Tort claims and related litigation In the U.S. cost more than $250 billion per year, draining untold resources from the productive economy and resulting in lost jobs and missed growth opportunities for manufacturers. Pockets of jurisdictions have developed across the country that act as hotbeds for mass tort litigation because they are seen as plaintiff friendly and biased against out of state defendants. Last Friday, the NAM’s Manufacturers’ Legal Center (MLC) launched its “Restore Our Courts” initiative at a panel discussion on Capitol Hill. The effort will promote greater access to federal courts for mass tort cases by restoring the minimal diversity standard to the U.S. judicial system. More about Restore Our Courts can be found on its new webpage. Read More
The next chapter in the long-running legal drama involving a $19 billion damage award against Chevron (later reduced to a mere $9.5 billion) granted by an Ecuadorian court began today in New York. The mastermind of the case, plaintiff attorney Steven Donziger, is appealing a civil Racketeer and Corrupt Organizations Act (RICO) decision from the federal district court that prevents him from collecting the $9 billion because he used fraudulent and corrupt means to attain the award. RICO is the statute well known for bringing down mobsters and the use of the statute in civil cases such as these is rare, making this case even more notable than its Hollywood-worthy story line had already made it. If you missed any of the lead-up to this phase of the proceedings, this brief overview will fill you in on the backstory. Read More
The legal battle in the Gulf over the Deepwater Horizon accident has now shifted to the so-called penalty phase — five years after the disaster began. The legal action so far concerning the business settlement agreement has left us alarmed and dismayed to see the system allow people to reap payouts when they were not even remotely impacted by the accident. This terrible tragedy has impacted many lives — and certainly those at fault should be accountable for their actions. But the purpose of these legal proceedings should not be to vilify and bankrupt the companies. Manufacturers continue to watch this case closely as the results are important to all companies. Read More
In a disappointing decision, this week the U.S. Supreme Court decided it would not review the 5th Circuit’s handling of questionable claims to the BP business settlement agreement in the Deepwater Horizon oil spill case. The issue in the case was whether BP should be required to pay awards to claimants who could not show their harms were caused by the oil spill. Read More
The Supreme Court heard a case this week with a somewhat absurd set of facts, but involving issues that could have important ramifications for manufacturers. In Yates v. US, the U.S. Department of Justice engaged in a stunningly overbroad prosecution of a commercial fisherman, relying on the Sarbanes-Oxley Act to prosecute him for throwing back fish that were too small after enforcement officials had boarded his boat and cited him for the undersized fish. Read More
The IRS has announced it will revisit its proposed rule limiting the types of First Amendment activities in which nonprofit organizations may engage. Perhaps the more than 150,000 comments submitted to the agency from groups across the political spectrum or the bipartisan House vote to stop the IRS from modifying the rules helped them see their error.
The NAM filed comments on the rule outlining our concerns about the broad sweep of this rule which could end up eliminating that ability of nonprofit groups to engage in good government efforts such as nonpartisan get out the vote (GOTV) efforts and voter registration activities. We believe our nation remains strong when job creators exercise their Constitutional rights and speak out about public policies that impact growth and U.S. job creation.
Furthermore, an educated electorate is critical to a well-functioning democracy and nonprofit groups across the political spectrum play an important role in this endeavor. The Supreme Court repeatedly has recognized that voluntary associations are key participants in the public debate and that government’s attempt to stifle their voice violates the First Amendment.
The proposed IRS regulations offered to put us on a path to weakening those rights—we hope they will take a very different course in the next version of this rule. Regardless, the NAM stands ready to fight against any further attempt to use tax regulations to restrict political speech and activities that are protected by our Constitution.
In coverage of the ongoing dispute over payouts under the BP Deepwater Horizon business economic loss settlement fund, this week’s edition of 60 Minutes effectively highlighted the absurdity of the way in which the compensation fund has been administered, encouraging a slew of meritless claims.
As noted in an earlier post about this subject, the administrator of the fund has interpreted the settlement agreement to allow any business in the covered geographic area to be compensated if it can show economic loss in the wake of the spill—whether or not the loss was caused by the spill. This has led to a proliferation of claims from businesses whose losses had no connection whatsoever to the accident—some of them comically absurd.
A federal district court and later a Fifth Circuit panel have upheld the claims administrator’s interpretation of the settlement agreement. BP has argued that it never intended for the fund to compensate those whose losses were not caused by the spill and the NAM has weighed in to support further appellate review in this case.
Beyond the obviously enormous stakes for BP in the case, all manufacturers should be concerned when fraudulent claims are rationalized as simply the byproducts of a “bad deal.” For a great overview of the case, watch the segment here.