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Shopfloor Legal

In Supreme Court Brief, MCLA Defends Manufacturers Against Overreaching Investigation

By | Briefly Legal, Environment, Manufacturers’ Center for Legal Action, Shopfloor Legal | No Comments

On Thursday, the National Association of Manufacturers (NAM) continued its fight against state attorneys general targeting manufacturers. The Manufacturers’ Center for Legal Action (MCLA) filed an amicus brief in the U.S. Supreme Court, arguing against the misguided efforts of Massachusetts Attorney General Maura Healey to silence energy manufacturers.

The NAM’s amicus brief asks the U.S. Supreme Court to consider and reverse a ruling by the Massachusetts Supreme Court that upheld the validity of the attorney general’s subpoena, which sought decades of ExxonMobil’s communications relating to climate change. ExxonMobil challenged the authority of Massachusetts courts to enforce the subpoena because ExxonMobil’s limited commercial activity in the state (licensing agreements with independent gas stations) is unrelated to the focus of the subpoena.

The Massachusetts Supreme Court upheld the subpoena despite the tenuous connection between the company’s advertising and the subpoena. That low bar threatens all manufacturers by massively expanding the range of venues through which plaintiffs or government officials may pursue claims against manufacturers. The NAM’s amicus brief argues that subpoenas like this are valid only when the nature of the company’s in-state conduct has a substantial relationship with the focus of the subpoena.

Healey’s investigation is just part of a larger effort nationwide to target energy manufacturers, purportedly over climate change. But as manufacturers have argued, and the Supreme Court has concluded, the courts are not the right venue for setting climate change policy. That work belongs in the legislative and executive branches, and the MCLA, as well as the Manufacturers’ Accountability Project, will continue to work to ensure that attorneys general, trial lawyers and activists do not succeed in their efforts to undermine our judicial system.

NAM Seeks Supreme Court Review of $1 Billion “Public Nuisance” Claim Against Manufacturers

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The NAM’s  Manufacturers’ Center for Legal Action (MCLA) filed a brief today that asks the U.S. Supreme Court to hear one of the most significant tort liability cases in a generation. In ConAgra Grocery Products v. California, 10 California counties sued companies that sold paint containing lead pigment more than 70 years ago. A California court held two companies liable for $1.15 billion in damages to remove this paint from private homes and buildings built prior to 1950 in several California counties and cities. California at the time even promoted the use of lead paint. The companies are now asking the U.S. Supreme Court to review the case, and the MCLA today filed an amicus brief in support.

Beyond the staggering and unwarranted judgment itself, the California court’s ruling threatens manufacturers by validating a new form of tort liability. In recent years, plaintiffs’ lawyers have sought to hold companies liable for selling legal and regulated products, claiming that their use creates a public nuisance. Courts have largely rejected these so-called “public nuisance” claims—until now.

If the U.S. Supreme Court does not reject these overbroad public nuisance claims, manufacturers could be hit with a flood of new lawsuits. Municipalities are already pursuing public nuisance claims seeking billions of dollars from energy manufacturers for alleged climate change impacts. Through the Manufacturers’ Accountability Project, the MCLA is already pushing back against these misguided efforts. Other governments are seeking to use public nuisance law to hold companies liable for harm allegedly caused by chemicals manufactured and used decades ago. It is just a matter of time before other legal and useful products will also be targeted.

The MCLA’s amicus brief in support of Supreme Court review argues that the California court’s holding violates the constitutional rights of the defendants. We highlight the sustained campaign to turn the public nuisance doctrine into a “catch-all” tort for social and environmental issues. We stress that such issues are ill-suited for courts and should remain a legislative and regulatory matter.

A Supreme Court Victory for Manufacturers’ Free Speech Rights

By | Shopfloor Legal, Shopfloor Main | No Comments

The U.S. Supreme Court last week struck down a Berkeley, California, city ordinance that required retailers to post misleading warnings in their stores about mobile phones. The ruling helps manufacturers by upholding their First Amendment right to choose how to speak about their own products.

The case—CTIA – The Wireless Association v. Berkeley, California—involved a Berkeley city ordinance that sought to require mobile phone retailers to post in-store signs that warn customers about the alleged dangers of radio wave emissions from mobile phones. A group of companies sued to challenge the requirement, arguing that it unconstitutionally compels speech in violation of the First Amendment to the U.S. Constitution.

The 9th Circuit Court of Appeals ruled against the companies, concluding that all compelled commercial speech is subject to the most deferential standard of judicial review (known as “rational basis” review). The plaintiffs asked the Supreme Court to review and reverse the judgment.

The National Association of Manufacturers’ Manufacturers’ Center for Legal Action (MCLA) filed an amicus brief in support of review because governments should not be able to dictate how manufacturers advertise, promote or describe their products unless there is a compelling public need for such disclosures. If such compelled disclosures are subject to merely rational basis review, then the federal, state and local governments would be empowered to force manufacturers to speak out against their own products—especially those that the government disfavors.

The Supreme Court granted review and summarily ordered the 9th Circuit to reconsider its ruling in light of another recent Supreme Court decision that reaffirmed strong protections against compelled speech. This ruling protects the right of manufacturers to speak—or not speak—about their products without unwarranted government intrusion. The MCLA is proud to have submitted a brief in support of this great result for manufacturers.

The Absent Amphibian That Could Cost Your Company Millions

By | General, Shopfloor Legal | No Comments

Since its enactment in 1973, the Endangered Species Act has helped endangered and threatened species recover and prosper. But the U.S. Fish and Wildlife Service (FWS) is now stretching the act to absurd lengths by restricting land use in the name of protecting a species that does not even inhabit the land.

The species in question is the dusky gopher frog. It lives only in Mississippi. In 2001, the FWS listed the species as endangered and declared 1,544 acres of private property 50 miles away in Louisiana as “critical habitat” for the frog—even though the frog does not live there and could not survive there under current conditions. The FWS defended the critical habitat designation on the basis that the frog could hypothetically survive on the Louisiana property if the landowner cuts down all the trees there, plants a different type of tree and then periodically burns the land to promote certain vegetation necessary for the frog’s survival.

A critical habitat designation broadly hampers the productive use of one’s land. Owners of land designated as critical habitat face immediate and significant restrictions on their otherwise lawful use of that land, as well as expensive and time-consuming new procedural requirements on ongoing and future projects, litigation risk and often a significant reduction in the property’s value.

Specifically, when a landowner applies for a federal permit to use or develop the property, a lengthy and expensive government consultation process is triggered. Based on that process, the government may substantially limit the scope of planned development and require burdensome mitigation measures. The FWS’s proposed mitigation measures for the dusky gopher frog on the Louisiana property, for example, would have destroyed $20.4 million of the land’s development value.

The broader consequences of the FWS’s position are frightening to imagine. With more than 1,500 different birds, mammals, amphibians, fish, plants and insects currently listed as either endangered or threatened, any land, infrastructure or factory site could be forced to comply with the onerous restrictions that accompany a critical habitat designation. The costs to individual businesses can easily reach into the millions of dollars. (Read more here.)

To fight this regulatory overreach, the Louisiana landowner sued in federal court to overturn the critical habitat designation. The case is now before the U.S. Supreme Court, where the NAM’s Manufacturers’ Center for Legal Action filed a brief this week in support of the landowner. Our brief argues that the FWS exceeded its statutory authority under the Endangered Species Act and highlights how these actions impose significant harm and business uncertainty on manufacturers and other businesses.

Where Can Manufacturers Be Sued? It’s Complicated, but Needn’t Be

By | Manufacturers’ Center for Legal Action, Shopfloor Legal | No Comments

As a manufacturer, the possibility of being sued is an unpleasant reality of doing business. But knowing when and where you might face litigation can at least help your company evaluate risk and inform business planning. Can a fabricator in Freeport, Maine, be sued in Fairbanks, Alaska? Must a manufacturer in Milwaukee, Wisconsin, face a civil trial in Maui, Hawaii? These questions have vexed courts—and manufacturers—for decades. The National Association of Manufacturers’ (NAM) Manufacturers’ Center for Legal Action (MCLA) is working to bring some needed clarity to these issues.

Generally, a business may only be sued in a state where it is headquartered, operates a factory or conducts other business. For some large corporations, that could mean being vulnerable to suit throughout the United States. But small and medium-sized manufacturers might only operate in one region of the country or even in a single state. Courts recognize there are situations where it would be unjust to force manufacturers to face lawsuits in far-flung states where the manufacturer has no operations.

A court has jurisdiction over a defendant if that defendant has “minimum contacts” with the plaintiff’s state. If a company has a physical presence in a state, the “minimum contacts” test is easily satisfied. But determining jurisdiction becomes more challenging when a manufacturer has no operations or other physical presence in a state, but its products are ultimately sold there.

A toy manufacturer is now asking the U.S. Supreme Court to provide some much-needed clarity on these issues. The case—Align Corporation v. Boustred—involves a Taiwan-based manufacturer of toy helicopters. The manufacturer has no operations, employees or other presence in the United States. It sells to U.S.-based distributors who then sell to retailers nationwide. A Colorado man bought one of the helicopters and then sued the manufacturer in Colorado after the helicopter allegedly injured him.

The manufacturer asked the court to dismiss the case because the manufacturer has no operations in Colorado. The Colorado Supreme Court ultimately rejected that argument, reasoning that the manufacturer had placed its product in the “stream of commerce” and did not prohibit distributors from selling to Colorado retailers.

Why should manufacturers in the United States care? This “stream of commerce” theory of minimum contacts means that any manufacturer in the United States, large or small, could be sued anywhere their products end up, regardless of whether the company has any operations or other activity in the state.

Is it fair for a family-run business in Vermont to be dragged into an Oregon court? Should a manufacturer in Pittsburgh be forced to fight a frivolous lawsuit in Alaska? The NAM’s MCLA doesn’t think so, and we filed a legal brief in this case for that very reason. We are asking the U.S. Supreme Court to take the case and reverse the Colorado court’s decision. A more constrained test would significantly narrow and clarify where manufacturers can be sued.

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