October Term 2015 Administrative-Law Rulings Heighten Significance of Next Supreme Court Appointment

 

New Faulk photoFeatured Expert Column − Toxic Tort and Environmental Litigation

Richard O. Faulk, Esq., a Partner with Alexander Dubose Jefferson & Townsend LLP serving clients in Texas and Washington DC.

Since the United States Supreme Court’s Skidmore v. Swift & Co., and Bowles v. Seminole Rock & Sand Co. rulings, the role of judicial deference in administrative law has expanded exponentially.  For example, agencies now receive deference, under the Court’s Auer v. Robins decision, even if their own drafting creates the very vagaries and ambiguities that require interpretation.  Courts also defer to agencies’ interpretations of statutes they are charged to administer (Chevron U.S.A. Inc. v. NRDC) and to scientific conclusions reached in the course of the regulatory process (Baltimore Gas & Electric Co. v. NRDC).  By indulging these perspectives, the courts necessarily surrender their constitutional authority to “say what the law is,”1 and contribute to an arrogation of administrative power that threatens not only our constitutional separation of powers, but also their balance.2

Regulatory agencies have grown into what some call a “fourth branch” of our federal government.3 The threat posed by this de facto branch, also known as the “Administrative State”4 or, more colorfully, our “Junior Varsity Congress,”5 has attracted the growing attention of a number of Supreme Court justices.  Continue reading

Former SEC Commissioner Brings Shareholder-Proposal Reform Ideas Advanced in WLF Working Paper to Capitol Hill

U_S_SEC_logoFormer Securities and Exchange Commission (SEC) Commissioner Daniel Gallagher, co-author of a 2015 WLF Working Paper, “Shareholder Proposals: An Exit Strategy for SEC,” testified before a subcommittee of the House Committee on Financial Services on May 17. The hearing was entitled, “Legislative Proposals to Enhance Capital Formation, Transparency, and Regulatory Accountability.”

Mr. Gallagher’s written testimony referenced the January 10, 2014 comments WLF filed with SEC criticizing the current proxy voting regime.  Echoing his arguments in the 2015 WLF Working Paper, Mr. Gallagher urged the Committee to move beyond attempting to reform federal regulation of the proxy voting process and instead leave such oversight to the states. He wrote, “These proposals are meant to approximate the increasingly antiquated notion of an in-person annual shareholder meeting. It’s like listening to a cassette recording of a Victrola, while everyone else is on their iPhones.” He wryly added in a footnote to that statement, “I will now wait for the hipsters of the corporate governance community to tell me that my analogy is wrong because the analog nature of the record and cassette recordings makes them preferable to the digital content on an iPhone.”

EPA Poised to Attempt Fracking Ban Through Orchestrated Settlements?

white flagReturning to the topic of hydraulic fracturing (see Mark Chenoweth’s May 4 post below), we note the lawsuit that the Natural Resources Defense Council (NRDC) and other environmental activists filed on May 4 against EPA, alleging that the agency simply is not doing enough to regulate fracking. Just two days earlier, the Colorado Supreme Court held that state law preempts efforts by local governments to regulate fracking. Perhaps that outcome dictated the timing of NRDC’s action. Such local ordinances are part of NRDC’s three-pronged approach to attacking this oil and natural-gas extraction method. The coalition of plaintiffs includes Earthworks, which intervened to defend the local ordinance in one of the Colorado cases. Continue reading

Sixth Circuit Reins in False Claims Act Plaintiffs in First-of-its-Kind Health Information Case

6th CircuitThe US Court of Appeals for the Sixth Circuit recently dealt qui tam plaintiffs and their lawyers a setback in their campaign to expand federal False Claims Act (FCA) liability in the healthcare industry.  Addressing an issue of first impression, the court affirmed the dismissal of a relator’s claim that non-compliance with the Health Information Technology for Economic and Clinical Health Act (HITECH Act) gives rise to FCA liability.  U.S. ex rel. Sheldon v. Kettering Health Network not only found the relator’s complaint deficient on several grounds, but it also held that a dismissed state-court action that Ms. Sheldon filed subsequent to bringing the FCA suit precluded the federal action. Continue reading

Distracted-Driving Suit Asks Judiciary to Sharply Veer into Legislature’s Lane

windy roadA lawyer in California is leading a personal crusade against distracted driving—a noble cause, to be sure. But the Los Angeles Superior Court, in which he has recently filed a “public-interest” lawsuit, is not the proper forum (or venue) for this current debate.

In the lawsuit, the Coalition Against Distracted Driving and Stephen L. Joseph, as an individual, seek an injunction against Apple, Samsung, Google, and Microsoft, requiring those companies to pay $1 billion annually to fund an “effective and ongoing national public education campaign” to educate drivers on the dangers of using smart phones and smart watches while driving. Continue reading

Arizona Supreme Court Joins Overwhelming Majority in Recognizing the Learned Intermediary Doctrine

az s. ct.Last month, the Arizona Supreme Court became the most recent state high court to recognize the “learned intermediary doctrine” (LID). The LID provides a defense to drug companies in failure-to-warn products-liability cases so long as the manufacturers provided the prescribing doctor with all required safety information. In so doing, the court joined the 36 other state high courts that have expressly adopted the LID.

The case, Watts v. Medicis Pharmaceutical Corp., arose from the plaintiff’s use of the defendant’s acne medication. The plaintiff alleged that she was not properly warned about the possible side effects of taking the medication and developed lupus, she claimed, as a result of her usage of the drug. Importantly, the plaintiff did not allege that the defendant drug company failed to provide her prescribing doctor adequate warnings, just that the company did not warn her personally. The Arizona court of appeals reversed a dismissal of the claim, holding that the LID was no longer a viable legal theory and was abrogated by statute. Continue reading

Despite SCOTUS’s Daimler v. Bauman, Results Still Vary for One Defendant on General Jurisdiction

madison countyThe battle over general jurisdiction in a post-Daimler AG v. Bauman world continued as 2015 drew to a close, with lingering inconsistency. Two recent trial court decisions, Cahen v. Toyota Motor Corp. and Jeffs v. Anco Insulations, demonstrate how judges in different jurisdictions with different interests apply general jurisdiction differently, and in these cases, to the very same defendant. While a federal district court judge held that California could not exercise general jurisdiction over Ford Motor Co.—a company incorporated in Delaware and headquartered in Michigan—Circuit Judge Stephen Stobbs of Madison County, a perennial magnet jurisdiction for plaintiffs, found that his Illinois court could. Continue reading