Today, Aric Newhouse, senior vice president for policy and government relations at the NAM, joined several industry leaders to discuss with the media the negative impacts of the Environmental Protection Agency’s (EPA) proposed ozone standards on jobs and economic growth.

Newhouse participated along with Governor John Engler, president of the Business Roundtable (BRT); Jack Gerard, president and CEO of the American Petroleum Institute (API); Cal Dooley, president and CEO of the American Chemistry Council (ACC); and Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce.

Aric Newhouse and industry representatives discuss the EPA Ozone Standards

Newhouse explained that manufacturers in the U.S. start each day at an 18 percent disadvantage (excluding labor costs) compared to their competitors outside the U.S. Increasing the cost of manufacturing in the U.S. to comply with burdensome and costly regulations is unacceptable and will only continue to diminish our global competitiveness. Manufacturers are looking for a common-sense, balanced approach to regulatory policy. Unfortunately, these proposed ozone standards do not present such an approach.

He urged the EPA to hold off on current action until the next statutory review is required in 18 months, allowing for an appropriate review with new data and scientific studies on ozone regulations. By moving forward now, the Administration is using stale data gathered prior to 2008 to formulate these proposed ozone standards, ignoring the real-life effects their actions will have on a wide range of industry sectors.

The cost of nonattainment will make it difficult for manufacturers to grow and lead the economic recovery because these new ozone standards are excessive and unrealistic. These standards will affect a broad spectrum of industries and will freeze the economy, preventing future investment, expanded operations and job creation. The President must put the brakes on the EPA and use his authority to stop the Agency from continuing to impose new, irrational ozone regulations.

Additionally, last Friday, NAM President and CEO Jay Timmons, along with several other trade association representatives, met with EPA Administrator Lisa Jackson to discuss these proposed new ozone standards. Timmons conveyed the business community’s concern with the new proposal and told the Administrator that these standards would stifle economic growth and job creation.

The only thing worse than the Executive Branch replacing Congress in the setting of federal economic, environmental and energy policy would be the federal courts assuming that role. A case before the U.S. Supreme Court will determine whether the judiciary gains that authority.

The Supreme Court hears oral arguments Tuesday, April 19, in American Electric Power Company Inc. v. Connecticut, et al., the suit by several states and environmental groups against five electric utilities for creating a public nuisance by contributing to global warming. (Docket, questions presented)

If the Supreme Court upholds the Second Circuit Court of Appeal’s ruling against the utilities – which included the court setting emission limits as a remedy – the judicial branch will reaffirm its role as a super-legislature, determining political questions that Congress chooses not to address, and activist state attorneys general will be elevated yet again in the U.S. system of government. Speculative shakedown suits like Kivalina v. ExxonMobil would multiply, and energy costs would skyrocket.

The suit began with ueber-activist Connecticut Attorney General Richard Blumenthal, now U.S. Senator, and included state governments of California, Connecticut, Iowa, Rhode Island and Vermont, as well as New York City.  Named in the lawsuit are American Electric Power Co., Cinergy Corp., Southern Co., the Tennessee Valley Authority and Xcel Energy Inc. New Jersey and Wisconsin have dropped out of the lawsuit since the dispute started in 2004. Three land trusts, the Audubon Society of New Hampshire, Open Space Institute and Open Space Conservancy, also are suing the utilities. Justice Sonia Sotomayor is recused because she heard the case at the appellate level. The Scotusblog entry has the rulings and briefs. (continue reading…)

As noted below, the National Association of Manufactures and other business groups filed an an amicus briefing urging the U.S. Supreme Court to review a challenge by electric utilities’ to the Second Circuit Court of Appeals’ ruling in the key global warming case, Connecticut v. American Electric Power. The Supreme Court today granted that review.

The NAM’s friend-of-the-court brief (available here) was prepared by Gardere Wynne Sewell LLP in Texas. The firm issued a news release today in response to the Supreme Court’s announcement, “Gardere’s Faulk Praises U.S. Supreme Court for Agreeing to Hear AEP v. Connecticut Appeal“:

HOUSTON — The U.S. Supreme Court today agreed to hear an appeal in American Electric Power v. Connecticut, in which public authorities claim that public utilities’ greenhouse gas emissions contributed to climate change. Power companies argue that the universal issues of climate change cannot be solved by ad hoc lawsuits, but rather should be resolved by the political branches of government. 

Richard O. Faulk, chair of the Litigation Department of Gardere Wynne Sewell LLP in Texas, and Gardere partner John S. Gray, who recently filed a brief before the court in on behalf of several industry associations supporting the utilities’ arguments, praised the High Court for acting decisively in deciding to review the issue of whether private tort claims based on global warming are legitimate.

Mr. Faulk says the Supreme Court’s decision to hear the case is a “positive development that may foreshadow the demise of mass tort litigation based on global warming.  The use of isolated and ad hoc lawsuits against an arbitrarily selected group of emitters cannot possibly solve the global warming phenomenon.  The issue is best left to the international community, the Congress and the EPA, which have the resources and power to deal with this alleged problem. Hopefully, the Supreme Court will now recognize the primacy of those institutions.”

The NAM’s co-amici are the American Chemistry Council, American Coatings Association, National Petrochemical and Refiners Association, Property Casualty Insurers Association of America and the Public Nuisance Fairness Coalition.

As reported below, Virginia Attorney General Ken Cuccinelli is the latest attorney general to hire private-sector attorneys to sue a company on a contingency basis. Unfortunately, it’s not only state attorneys general who allow profit-seeking trial lawyers to undertake the government’s business. City and county officials have done the same thing.

The most prominent example comes from the oft-bizarre government of Santa Clara County and its running mates in California. In 2000,  Santa Clara and nine other cities and counties retained Motley Rice and three other law firms to bring a lead pigment public nuisance action against a group of manufacturers. The retainer agreement specified that the government would “retain final authority over all aspects” of the litigation, an arrangement that is difficult to maintain in practice — “How’s the case going?” “Oh, good. I’ll fill you in later” — and deeply suspect on policy grounds. Indeed, the trial court held that a previous ruling in the well-known Clancy case (People ex rel. Clancy v. Superior Court, 39 Cal.3d 740) precluded the government from hiring lawyers on a contingency-fee basis.

The California Court of Appeal concluded otherwise, holding that the “control” language in the retainer agreements means that the outside lawyers are merely “assisting” the government in a subordinate role and lack any decision-making authority or control over the case. This July, the California Supreme Court upheld the appellate court’s ruling.

The manufacturers are now appealing the California ruling to the U.S. Supreme Court, and the National Association of Manufacturers and other business groups last week joined in an amicus brief in support of the appeal in Atlantic Richfield et al. vs. Santa Clara County et al. The amicus brief, available here, frames the discussion:

The Supreme Court of California held that govern-mental plaintiffs pursuing civil public nuisance prosecutions brought “in the name of the People of the State of California” may do so under a contin-gency fee retainer agreement with outside plaintiffs’ law firms in which the government entities agree to compensate the law firms by paying them 17 percent of any recovery. This brief addresses the following question:

1. Whether contingency fee agreements that give private prosecutors a direct, personal, and substantial pecuniary interest in the outcome of governmental prosecutions seeking to vindicate the sovereign’s interests in public nuisance cases violate the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution.

Yes, yes they do.

Others joining the brief are the American Chemistry Council, American Coatings Association, National Petrochemical and Refiners Association, Property Casualty Insurers Association, and the Public Nuisance Fairness Coalition. Filing on our behalf is the Houston office of Gardere, Wynne, Sewell LLP. For more background, see the NAM’s Manufacturing Law Center’s entry. We’ve blogged previously on the issue here.

The House Homeland Security Committee continues its markup at 5:30 p.m. of H.R. 2868, the Chemical Facility Antiterrorism Act, a seemingly well-intentioned piece of legislation that will make U.S. production and storage of chemicals more expensive and burdensome with no appreciable benefit to public safety and national security. Extension of the current 2006 regulations would allow the increased safety measures known as the Chemical Facility Anti-Terrorism Standards, or CFATS, to be implemented fully in a logical, effective way. The Obama Administration supports such an extension.

We posted on the bill here and here, and have also noted the writing of E.F. Glynn, blogging at KansasMeadowlark, concerned about the impact of yet more government regulation on farmers and the ag economy. In a new post, “Homeland Security may impose new regulations on agriculture,” Glynn includes videos from last week’s committee meeting and expresses astonishment that the debate seems to be driven by a left-leaning think tank: “A Center for American Progress study that shows no economists or engineers on the project team, nor any economic or engineering analysis, is enough for Congress to decide national chemical security policy?”

Well, count up the usual suspects. The believers in regulations first and always at OMB Watch say, “Chemical Security Bill Withstanding Industry Assault“: “With luck and the continued hard work of the ‘Blue Green Coalition’ of labor, environmental, and public interest groups, the bill hopefully will emerge from this committee mostly unscathed.” See, obviously this coalition formed because of their mutual interest in fighting terrorism.

There’s also the U.S. PIRG news release, “U.S. PIRG Urges Passage of Chemical Facility Anti-Terrorism Act of 2009.”

Both groups support the “citizen suits” provisions which create a second regulatory system, that imposed by environmentalist lawsuits. Blogger P.J. Coyle also wonders about the impetus behind the newly added “citizen suits” provision at his blog, “Chemical Facility Security News.”

As committee members debate this legislation that will add costs to a major employer during a serious recession, we would remind them of these facts, courtesy the American Chemistry Council:

That’s 5.66 million jobs.

We’ve recently highlighted a new bill being pushed through the House, H.R. 2868, the Chemical Facility Antiterrorism Act, that promises to make U.S. production and storage of chemicals more expensive and burdensome. The chemical industry is one of strong foundations of the U.S. economy. As Marty Durbin of the American Chemistry Council (ACC) described it at Tuesday’s hearing on the legislation by the House Committee on Homeland Security:

The business of chemistry is an important part of our nation’s economy and employs more than 850,000 Americans, and produces 19 percent of the world’s chemicals. ACC member companies manufacture essential products critical to everyday items that keep the economy moving and are essential to developing the greener, cleaner, more competitive economy the nation seeks. More than 96 percent of all manufactured goods are directly touched by the business of chemistry. Our members provide the chemistry that is used to produce life saving medications and medical devices, body armor used by our military and law enforcement officers, light weight components for vehicles, energy saving insulation and windows, silicon for solar panels, wind turbine blades and so much more. 

Yet the legislation includes many provisions that will simply make it harder to do business in the United States with no real benefit in terms of safety or anti-terrorism security. Sure, environmental groups will appreciate the additional power to sue companies in tandem with federal regulatory enforcement, but that “citizen suit” provision only serves the activists, not security.

This legislation is also a major item of interest and concern in farm country, since modern agriculture involves fertilizers and other chemicals, to say the least. The Kansas Meadowlark blog has been covering the rural angle, with attention to the growing-power-of-government angle, too. From “Congress could give government bureaucrats more control of farms and industry:

The federal government continues its push for unprecedented control of more aspects of our lives while there is little public discussion of the changes and consequences.  The mainstream press is mostly ignoring changes being discussed now in Congress regarding chemical security, which could have a huge impact on most industries, including ones important to Kansas.

Shouldn’t Kansans speak up about more federal controls that may affect Kansas farms?  Don’t Kansas farmers know more about farming than federal bureaucrats?

The committee mark-up starts at 10 a.m. Go here for the streaming video.

From our Legal Beagle search engine:

On January 30, the NAM and other business groups filed an amicus brief urging the Rhode Island Supreme Court to reverse the verdict because the trial court improperly rewrote the law of public nuisance. Our brief argues that public nuisance law should never be used to replace product liability law. Traditional standards of public nuisance law require that there be an injury to a common public right, that there must be some conduct by the defendants that created a public nuisance, and not merely injury, and that the defendants must have some control over the nuisance, both for imposing liability and for providing a remedy of abatement. The lower court also ignored the need to show proximate cause between a particular manufacturer’s actions and an injury.

Allowing this suit would create unpredictable liability for manufacturers in situtations where they have no control over the ultimate use and/or maintenance of their products,a nd constitutes regulation by litigation. The NAM has been very active in opposing the attempted expansion of the public nuisance theory of liability by plaintiffs’ lawyers who are attempting to avoid the straightforward requirements of product liability law. Similar cases have been brought against manufacturers of firearms, cigarettes, automobiles, gasoline additives, chemicals and electricity. Many of these have been rejected.

Related Documents:
NAM brief (1/30/2008)
Press release (1/30/2008)

The other amici were the Coalition for Litigation Justice, Inc., the National Federation of Independent Business Legal Foundation, the American Chemistry Council, the American Insurance Association, National Association of Mutual Insurance Companies, and American Tort Reform Association.