Manufacturers like the law to be clear. The rules about organizational structure, taxation, employee rights and benefits, importing and exporting, permits and financing, to name a few, are critical to investing in, building and operating a business that will provide steady jobs for workers and a reasonable return for investors.
The federal government is now routinely using laws passed before the invention of the fax machine to control dynamic information systems like cloud computing and broadband access. These efforts to regulate and police the innovation economy will loosen constitutional privacy protections and chill technological innovation.
For example, relying on the Electronic Communications Privacy Act of 1986, the Department of Justice has recently sought to search Microsoft customers’ e-mails. Microsoft has pushed back, alleging that the Justice Department’s orders violate its customers’ privacy and infringe on its right to free speech. Many of these demands prohibit Microsoft from informing customers that their information is being investigated.
Most laws governing government searches were written before the widespread use of digital communications. At that time, if the government wanted to execute a search warrant to look through one’s files, notice was necessary since a search would require entering a home or office to access documents. Now that many Internet users store their information in the cloud, rather than locally on their computers, the government can bypass notification of the customer by directly contacting providers such as Microsoft. Therefore, simply because the location of information has changed, users now experience different legal protections. Microsoft argues this is unconstitutional because Fourth Amendment protections on the reasonableness of searches should not discriminate based on how a citizen stores his or her information.
The privacy and free speech implications of the government’s actions have significant consequences for the greater business community and the innovation economy. When the government treats those who store their information at home differently than those who use the cloud, individuals are less inclined to use this potentially transformative new technology to protect their privacy. When individuals forgo cloud-computing services, innovative manufacturers will lose customers.
The National Association of Manufacturers will continue its fight to uphold proper constitutional protections and promote balanced and reasonable resolution through the courts.
Today, the Manufacturers’ Center for Legal Action filed a second lawsuit as part of our fight against the EPA’s overreaching regulations on energy. Earlier this year, we filed suit against the portion of the Obama Administration’s “Clean Power Plan” that would impose restrictions on existing power plants. Now, we’re arguing against the regulation on new power plants, which will limit access to new energy sources for manufacturers and for all Americans.
As we’ve noted before on Shopfloor, manufacturers have long demonstrated their commitment to environmental sustainability and reducing greenhouse gas (GHG) emissions. Since 2005, manufacturers’ annual GHG emissions have fallen by more than 10 percent while our value added to the economy has increased by 26 percent. We are producing more, while emitting less. In addition, manufacturers’ technological innovations and ingenuity have been integral in U.S. annual emissions falling by 700 million tons since 2005, which is a reduction greater than any other nation in the world. Read More
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.
Today, the U.S. Supreme Court decided in a 6-3 opinion by Justice Breyer, that DirecTV’s service agreement barring mass arbitration by its customers must be enforced by California courts. Though the Federal Arbitration Act (FAA) allows parties to choose what law governs some or all of the provisions of an arbitration agreement, invalid California law on contracts of adhesion does not pre-empt the federal law, Breyer said in the decision. Read More
Today in the D.C. Circuit, three judges heard arguments in United States Telecom Ass’n. v. Federal Communications Commission (FCC), which involves the FCC’s Open Internet Order also known as the net neutrality rules. The arguments were held in the Court’s sixth floor ceremonial courtroom, but because of the overwhelming interest in a case that could shape the future of the Internet economy, a second overflow courtroom was made available to accommodate all the participants.
The rules are broadly written and provide vague, catch-all authority to the FCC, which increases policy risk for broadband companies through FCC exercise of enforcement discretion. This regulatory uncertainty is why Congress needs to step in with legislation and create certainty. A decision is expected from the Court in early 2016. Read More
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
Foreign Claims Against Manufacturers Deserve Supreme Court Scrutiny
After a federal appeals court unearthed one provision of the Judiciary Act of 1789 in 1980, foreign nations have used the Alien Tort Statute (ATS) to claim violations of the “Law of Nations” by a variety of manufacturers for activities involving allegations of human rights abuses taking place in foreign countries. The statute was intended to allow federal courts to hear a few limited claims involving such matters as acts of piracy, violations of safe-conducts or interference with the rights of ambassadors. Read More
Individual cases before the National Labor Relations Board (NLRB) rarely get noticed by anyone other than labor or employment lawyers, but that doesn’t mean they aren’t worth watching. These decisions have broad implications for all employers, not just the one involved directly in the case.
Recently, an NLRB administrative law judge (ALJ) issued a decision that, if allowed to stand, would have significant implications for manufacturers and their intellectual property. The judge concluded that Boeing’s prohibition of cameras—a policy that has been in place for 35 years—constitutes an unfair labor practice because Boeing has no credible business need to protect its manufacturing process. Of course, as technology has developed, the rule has captured additional devices, and today smartphones fall under the ban.
Boeing has good reason to be cautious about allowing unfettered photographic access to its shop floor. For one, its competitors and some foreign governments would love to get their hands on Boeing’s proprietary information. The ALJ would make that easy for corporate spies—just go to an employee’s Facebook page and study photos from inside Boeing. In addition, many of Boeing’s products are subject to strict export controls. Making photos of these products or processes public could violate federal law.
The NLRB’s decision puts Boeing in a tough spot, creating a problem where none existed. And, besides, NLRB lawyers shouldn’t be in the business of creating new rights for employees in the first place.
Because of the dangerous precedent this case could set for future disputes before the NLRB, the NAM filed a brief highlighting this overreach and the impact it would have on businesses, particularly manufacturers. For more information about the case, click here.
Texas Governor Rick Perry has signed legislation intended to deter frivolous lawsuits–so-called loser pays legislation.
Usually, this kind of thing gets trial lawyers riled up, and this occasion was no different. The Wall Street Journal‘s Law Blog reports,
Texans for Lawsuit Reform, a pro-business group, hailed the measure, saying in a statement that it was “bitterly opposed by the Texas Trial Lawyer Association until the last minutes of deliberation.”
But what about those last minutes of deliberation? It turns out that the final bill received the support of both the legal reform group and the trial lawyers. The Texas Lawyer explains,
Groups that previously fought on opposing sides — Texans for Lawsuit Reform and the Texas Trial Lawyers Association, among others — lined up in support of Committee Substitute House Bill 274….
Speaking in interviews before the Senate passed the bill, Mike Gallagher, past president of Texas Trial Lawyers Association and Alan Waldrop, outside counsel for Texans for Lawsuit Reform, shared their views on the committee substitute.
“It’s obviously much better than the House version,” said Gallagher, who said he participated in “heated negotiations” over the substitute bill. He said he thought the Senate would not pass loser pays without trial lawyers’ input.
It’s not often you see those two groups joining hands. Nevertheless, tort reformers seem optimistic. See here for example. And here’s a more tempered view of an earlier, less watered down version of the bill.