Industrials Regulatory News and Trends - July 12, 2024
Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal, and regulatory landscape.
Biden Administration urged to intervene to prevent maritime labor strike. On June 28, the National Association of Manufacturers and other industry groups urged the Biden Administration to help restart stalled talks between port operators and East and Gulf Coast dockworkers. The current contract between the International Longshoremen’s Association and the US Maritime Alliance, a coalition of port operators and ocean carriers, covers about 45,000 dockworkers at facilities including six of the 10 busiest US ports; it expires on September 30. Contract negotiations broke down in early June. The National Association of Manufacturers called on the White House to “immediately work with both parties to resume contract negotiations and ensure there is no disruption to port operations and cargo fluidity.”
And in Canada, a planned 72-hour strike by LWU Ship & Dock Foremen Local 514 against DP World was averted when the Industrial Relations Board ruled on July 7 that the action went against the country’s labor code. And stakeholders are also watching the Teamsters Canada Rail Conference, whose locomotive engineers, conductors, rail traffic controllers, and yard workers overwhelmingly voted on June 30 to reauthorize strikes against Canadian Pacific Kansas City Limited and CN Rail unless they get a new contract. The workers have been without a contract since December 31, 2023.
Supreme Court accepts case concerning approval of new rail line to carry crude oil in Utah. On June 24, the US Supreme Court agreed to hear a challenge to a court of appeals decision rejecting a railroad project that would carry crude oil and boost fossil fuel production in eastern Utah. The Court agreed to review a lower court ruling that overturned Surface Transportation Board approval of construction of the Uinta Basin Railway, an 88-mile railroad line. Supreme Court oral arguments will take place in the fall. The rail line would connect oil and gas producers in rural Utah to the broader national rail network, allowing them to access larger markets and to refineries near the Gulf of Mexico. Producers that now ship only on tanker trucks would be able to ship an additional 350,000 barrels of crude daily on trains traversing the proposed new line.
Administration will fund major projects to stop methane leaks. On June 21, the Biden Administration set forth plans for $850 million in funding through the EPA and the Department of Energy for projects to help track and stop methane leaks tied to oil and gas production. The grants, allocated through the 2022 Inflation Reduction Act, will be released in three tranches, according to Deputy Energy Secretary David Turk. The first will offer three awards for projects focused on reducing emissions from existing oil wells and infrastructure. The second will include up to 26 awards for addressing leaks in equipment that is prone to methane leaks, including engines and compressors. The third will support projects to enhance methane leak monitoring in communities near oil and gas facilities, especially those that are in lower-income areas or communities of color. It will also fund partnerships aimed at tracking methane emissions in specific oil and gas basins.
Call to revive Bureau of Mines. On July 5, Reuters reported that trade groups representing the mining industry plan to lobby both major political parties to revive and expand the US Bureau of Mines, an agency that was abolished in 1996. The purpose of the effort would be to streamline the way the federal government regulates and supports the production of critical metals and minerals. The campaign intends to contrast the scattered nature of present-day US mining oversight with the situation in Australia and other countries, where mining-related agencies report directly to heads of government. Supporters point out the supply of minerals like lithium and copper is becoming a matter of national security and that already powerful demand is expected to surge further in coming years as the energy transition increases demand for electric-vehicle batteries. Leading the initiative is the National Mining Association, joined by the American Exploration & Mining Association and the Society for Mining, Metallurgy & Exploration.
Texas high court reverses liability verdict against Honda based on seat belt defect. On June 28, the Texas Supreme Court nullified a $26 million verdict against Honda in the case of Sarah Milburn, who was left a quadriplegic in an accident involving a 2011 Honda Odyssey minivan. The verdict turned on allegations of faulty seat belt design. In reversing the award, the Texas Supreme Court found that the “2011 Odyssey’s design complied with mandatory federal safety standards that were applicable to the Odyssey at the time of manufacture and governed the product risk that allegedly caused harm, entitling Honda to a presumption of nonliability.”
NLRB files complaint against Honda over labor-related actions at an Indiana factory. On June 18, the National Labor Relations Board (NLRB) accused Honda of violating the rights of workers at a Greensburg, Indiana factory by illegally cracking down on union organizing. According to an NLRB spokesperson, the complaint claims that Honda required workers to remove United Auto Workers stickers from their safety helmets, unlawfully surveilled employees, and threatened to discipline union supporters. If the claims are not settled, an administrative judge will hold a hearing in October. A Honda spokesperson in a statement said that the claims lack merit and that the company “looks forward to a hearing.”
Baltimore sues companies over plastic pollution. On June 20, the City of Baltimore filed a state-court lawsuit against PepsiCo and Coca-Cola, as well as six other companies, alleging that the companies used deceptive business practices and created a public nuisance by packaging their products in single-use plastic. The lawsuit, perhaps the first such case to be filed by a US city, centers on alleged harm to people’s health and to the environment from plastic packaging and wrapping. It claims that the companies knew that discarded plastic would litter streets and contaminate waterways but instead left the cleanup responsibility and costs, in the tens of millions of dollars annually, to local government. An editorial writer for Plastics Today wrote, “Relying on overly simplistic research to devise an overly simplistic list of culprits is bad science and will make bad law.” The lawsuit was filed in the Circuit Court for Baltimore City.
Growing economic ties between Georgia and South Korea. On June 21, Georgia Governor Brian Kemp said that a set of “futuristic” hydrogen-fuel developments could soon become a key part of Georgia’s growing economic ties with South Korea. Companies headquartered in that country have invested billions of dollars in electric vehicle, battery, and other projects in the state. The governor’s statement comes shortly after he and a delegation of the state’s political and business leaders visited South Korea on a trade mission, which included. a tour of the Hyundai Motor Group’s test track and the opportunity to ride in hydrogen-powered vehicles. Officials from Georgia and South Korea agreed that emerging technologies, including hydrogen power, could reshape the automotive industry.
API says new government CAFE standards will be impossible to meet. On June 26, the American Petroleum Institute (API), joined by several agriculture and automobile dealership groups, filed a lawsuit challenging the National Highway Traffic Safety Administration’s recently finalized MYs 2027-2031 Corporate Average Fuel Economy (CAFE) Standards and MYs 2030-2035 Heavy-Duty Pickup Trucks and Vans (HDPUV) Fuel Efficiency Standards. The API, an industry association composed of nearly 600 oil and gas companies, said that the agency’s regulations, finalized in June, would impose stringent fuel economy standards that favor electric-powered vehicles. NHTSA’s final rule sets ambitious standards that would require a fleet average of approximately 50.4mpg in MY 2031 for passenger cars and light trucks, and a fleet average for HDPUVs of roughly 2.851 gallons per 100 miles in MY 2035. An API representative asserted that these new regulations are designed to phase out liquid fuel powered vehicles and would restrict consumer choice and raise vehicle prices.
