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To get federal aid, auto industry would surrender right to sue

From page 16 the draft legislation presented by Congressional Democratic leadership to the White House, the ''Auto Industry Financing and Restructuring Act":

(g) WITHDRAWAL FROM CERTAIN ACTIONS.--The terms of any financial assistance under this Act shall prohibit the eligible automobile manufacturer from participating in, pursuing, funding, or supporting in any way, any legal challenge (existing or contemplated) to State laws concerning greenhouse gas emission standards.

Senator Republican Leader Mitch McConnell (R-KY) addressed that provision in floor remarks this morning:

This proposal does not go nearly far enough. It holds neither management nor labor truly accountable. And in areas where one side is held accountable, the other side isn't. One example is a provision that requires automakers to drop all legal challenges to state fuel economy standards that are inconsistent with the federal standard.

Where is the offer from our friends on the other side to call on environmental groups to drop their lawsuits? Democrats say they want to solve this problem as much as we do. Yet they seem all too eager to tip the scales to the detriment of the manufacturers.

By banning litigation on a key issue, the legislation would help ensure a patchwork of different emissions standards in different states, a regulatory regime the industry could not afford to meet.

UPDATE (11:30 a.m. Wednesday): Eugene Volokh finds good arguments and case law suggesting that the no-litigation clause may violate the First Amendment rights of those receiving the federal aid. But it's certainly not cut and dried.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.