The Trump administration will initiate the process of removing the United States from the Paris Climate Accord, a voluntary international agreement designed to curtail emissions of greenhouse gases and stem the rise in global temperatures through this century. The Accord details an exit process that will take at least four years. The news of the U.S. withdrawal from the Paris Climate Accord has drawn quick and contentious debate in geopolitical and scientific circles. Notwithstanding the President's announcement, mayors from U.S. cities vow to abide by the environmental terms of the Accord.
SEEKING ENERGY SECTOR TREASURE
The administration defended its decision to withdraw from the Accord by citing job growth and the expansion of the U.S. energy sector as primary motivating factors. Additionally, the administration was sharply critical of the "Draconian" costs to the United States that were built into the Accord as a means of providing aid to developing nations.
WALKING THE PLANKS
The decision to exit the Paris Accord was a key plank of President Trump's campaign platform and is reflected in his first budget proposal to Congress. The administration sent to Capitol Hill a budget that cuts or reduces a range of programs that were designed to reduce greenhouse gas emissions. Additionally, the President's budget eliminates funding to the Federal Emergency Management Agency's flood mapping program and cuts research funding to a similar program at the National Oceanic and Atmospheric Administration studying the coastal impact of rising sea-levels.
ROUGH WATERS AHEAD?
The world's climate and a proliferation of severe weather events remain very much top of mind for the insurance marketplace this year. The national weather agency in charge of tracking hurricanes says it could be "above normal." This announcement brings into sharp relief the expiration of the National Flood Insurance Program (NFIP) this September, although Congress continues to develop proposals to address this potential gap in flood coverage in areas of the county often hardest hit by storm damage. We're watching the horizon.
Jurisidiction Over National Employers
TIGHTENING UP INTERNATIONAL SHOE
The United States Supreme Court ruled this week in BNSF Railway Co. v. Tyrrell that the Federal Employers' Liability Act (FELA) does not address personal jurisdiction over railroads. The case involved two underlying lawsuits that were litigated in Montana state courts, even though the injured workers did not reside in Montana, they were not injured in Montana, and BNSF was not incorporated in Montana. Justice Ginsburg, writing for the majority, reversed the judgment of the Montana Supreme Court, stating that "the Fourteenth Amendment's Due Process Clause does not permit a State to haul an out-of-state corporation before its courts when the corporation is not 'at home' in the State and the episode-in-suit occurred elsewhere." The decision reflects a tightening of judicial jurisdictional reach famously detailed in a line of cases dating back to International Shoe. Fond memories, Professor Kaufman.
ANOTHER SHOE DROPS
Earlier this term, in TC Heartland LLC v. Kraft Foods Group Brands LLC, the Supreme Court further curtailed jurisdiction for suits against national companies. At issue was the determination of "a corporate residence" in the context of patent law. The court held that residence refers only to the state of incorporation, which limits where suit can be filed. We're tracking these developments, which may affect large-scale state law claims going forward, including several highly publicized claims against the pharmaceutical industry.
Making Our Way Around The Country
Ohio Attorney General, Mike DeWine, filed a lawsuit this week against several of the country's largest pharmaceutical companies, seeking to recover money the state and its residents spent on unnecessary opioid prescriptions, as well as costs associated with addiction treatment. This is largest public entity to file such a suit for damages. The state of Mississippi, several counties in New York and California, and the city of Chicago have filed similar lawsuits against the opioid manufacturers. Experts debate the legal sufficiency of these causes of action, given that the drugs are prescriptions-based, regulated by the United States Food and Drug Administration and are packaged with established warnings against misuse.
And in one more case on the docket this week. The Michigan Supreme Court held that a medical provider cannot sue a policyholder's no-fault carrier after a resolution of a car crash claim. The high court overruled a line of cases from the state's intermediate appeals court and determined that the language of the no-fault law provided no support for medical provider's direct action against the carrier.
Contrasting the payer complications evidenced in Michigan, the California Senate approved a measure this week that would establish a government-run universal health care system. This single-payer systemwould dramatically overhaul the health care market in California. The bill now moves to the California Assembly, which will be charged with developing a tax scheme to for pay for the $400-billion cost of the plan, in order for it to advance to the governor's desk.
Senator Mark Warner (D-VA) and Representative Suzan DelBene (D-WA) introduced legislation to create a pilot program to afford workers in the "gig economy" social security protections and health care benefits enjoyed by U.S. workers. The lawmakers assert that "gig economy" jobs are growing, but workers in these industries suffer from everything from no Social Security to safety and health standards. The Warner-DelBene bill would establish a $20 million pilot program inside the U.S. Labor Department to help federal policymakers analyze ways to help gig economy workers. The pilot would be run through grants to states, local governments and non-profit groups.
So what's in? As it turns out, insurance. The Bureau of Labor and Statistics reported that the insurance industry added more than 14,000 jobs in April, accounting for more than 74% of the total grown in the financial sector. According to the BLS April data, the insurance sector now employs 2.6 million Americans. And just this week, our team is proud to welcome, and challenge, a new class of talented interns to this rising trend. Here's to a productive, professional, and educational summer!
About The Way
The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.