government affairs blog
AAPEX is just over a week away and the excitement is building. I know everyone is busy during the show, but I would like to highlight some of the seminars, taking place as part of the AAPEX Learning Forum, that will address timely regulatory issues that could impact your company’s bottom line. These seminars include:
- The Affordable Care Act, otherwise known as ObamaCare will be discussed at Tuesday, November 5 seminar entitled “Confused About Healthcare Reform? What Employers Need to Know”. At this seminar, Speaker Kelly Davis, employee benefit specialist at CliftonLarsonAllen, will provide an overview of the law and focus on key issues that will impact companies and their employees. The session also will cover what employers need to do to comply with the new law. This session begins at 7:30am.
- On Wednesday, November 6, both AAIA and the Automotive Aftermarket Supply Association will sponsor a seminar on California’s Chemical Management Rules. Anyone who sells products in the State of California should be interested in actions that are taking place there to manage how toxic substances are managed. The seminar will feature former Director of the California Department of Toxic Substance Control, Maureen Gorsen, who will discuss newly finalized rules to implement the State’s Green Chemistry Initiative. This initiative could eventually force many companies to reformulate their products as the State seeks to eliminate the use of substances that are considered a threat to human health. The seminar also will include guidance from California legal experts on issues related to Prop 65, a law requiring companies to disclose the use of chemicals that are harmful to human health. The seminar begins at 11am.
- Thursday, November 7 will feature a seminar entitled “Wallet Flushing”, a term used by regulators to categorize automotive services or products that provide little or no benefit to the consumer and is sold without disclosing the facts. In this session, the Motorist Assurance Program provides information and guidance on how repair shops can better communicate with their customers about proper fluid exchange intervals and suggested maintenance services for their vehicles. Specifically, this seminar will attempt to help shops and companies that market these products to learn how to inspect and communicate in a manner that helps consumers understand and appreciate the benefits of your service offerings. This session begins at 7:30 am.
There is no fee to attend the seminars and they will all take place at the Venetian Hotel, Marco Polo Rooms 701-707. For additional information on all education offerings during AAPEX, go to:http://www.aapexshow.com/2013/public/Content.aspx?ID=2931&sortMenu=106001
In early October, California Governor, Jerry Brown, finally reacted to the pressure from companies doing business in the state that were asking him to alleviate the ridiculous burden of frivolous lawsuits based on the state’s Proposition 65 (Prop 65). This seems to be a trend from certain political figures that are taking strong stances on behalf of industry in the face of several state and federal reforms of toxic substance programs.
Prop 65 was conceived in 1986 as a response to cleaning up drinking water in the state, but almost immediately created a honeypot for trial lawyers looking to catch businesses off guard. The original law required labeling notifications to employees and customers for possible exposures to chemicals named on a list created specifically for the new law. The law contained a provision that has been called the “bounty-hunter provision” which permitted private citizens to bring citizens lawsuits against companies that were alleged to have violated the law. The lawsuits are relatively inexpensive to bring by a citizens group and the law further provided that the group bringing the suit could also collect attorney’s fees. Companies were under pressure to settle the lawsuits even if they did no wrong in order to avoid a costly and publicly damaging legal battle. The citizens lawsuits were so easy and the profits to lawyers so plentiful, that the bounty provision created law firms that specialized in finding companies to target and then putting together front groups to file the lawsuit for the law firm.
For decades, businesses from across the spectrum demanded changes to the law, but no relief ever came. Suddenly in May 2013, Governor Brown issued a statement asking for many of the changes to be pushed through the California legislature this year. In essence, the changes adopted by the legislature would permit companies the chance to correct any non-compliance within 14 days and avoid any civil litigation, thus putting a damper on law firms targeting companies for quick hit lawsuits. It should be noted, that the business-friendly shift was made at lightning speed compared to the typical pace of moving a bill through any legislature indicating that even a normally liberal legislature could not tolerate the abuses that were occurring under the Prop 65 bounty provision.
While we may celebrate the major victory in the California Legislature, the industry must also be aware that there is a wave of chemical control program reform occurring around the country with some other elected officials attempting to support the interests of the business community at this same level. One of the major examples is the federal effort to reform the Toxic Substance Control Act (TSCA) overseen by the US Environmental Protection Agency (EPA).
In an effort to revamp a program that is more than 30-years old, Senator David Vitter (R-LA) has been strongly in favor of asking for confidential business information protections for chemical manufacturers and processors while also seeking a pre-emption standard that would create a uniform chemicals program, rather than a state-by-state patchwork mess. While Vitter is faced with powerful opposition from environmental groups and some colleagues in Congress, he continues to fight for a balance between the maximum public health level and healthy business-related laws and regulations.
These types of chemical program reviews are happening from California to Washington, DC and will only grow in number over the next few years. It is critical that businesses across the aftermarket remain vigilant in voicing their opinions and business needs to their elected officials in order to maintain a fair fight between us and environmental groups.
The changes to Prop 65 are a big win for chemical-intensive industries, like the automotive care and maintenance community, but that took nearly 30-years to achieve. TSCA reform and green chemistry legislation is happening now with potentially dire consequences for maintaining things like a competitive advantage through trade secrets.
An active role in the legislative and regulatory process through the AAIA is central to identifying and developing aftermarket-friendly elected officials so our industry can sustain itself through massive changes and make wins like the one on Prop 65 happen sooner rather than later.
Several resources are available through the AAIA, including personal contact with your government affairs department and the website. I encourage everyone, no matter your role in your company or your company’s position along the supply chain, to help move the entire industry forward on toxic substance legislation and other issues, by staying involved and staying active with your aftermarket trade association.
With November quickly approaching, many of you are busy making final arrangements for AAPEX. In addition to finalizing booth details, travel itineraries and meeting times, you should also consider how you will protect your intellectual property (IP) during AAPEX.
IP protection is critical to the auto care industry and is therefore an important part of AAPEX itself. The organizers of AAPEX have a zero tolerance policy toward IP violations and will work with exhibitors to resolve legitimate claims of IP infringement. To provide a mechanism for exhibitors to lodge complaints about potential infringement of an exhibitor’s IP by another exhibitor at AAPEX, AAIA and its partners provide IP attorneys during the show. IP counsel will be available in the AAPEX IP Office in the Sands Expo Center Room 401 from 9 a.m. to 5 p.m., Monday, Nov. 4 – Thursday, Nov. 7 to receive and investigate complaints of IP infringement. AAPEX welcomes any exhibitor concerned about potential infringement to make use of this exhibitor service.
The key to adequately protecting your IP during the show is being able to support a complaint with adequate documentation explaining the ownership of the disputed or applicable rights. Thus, it is important to plan to bring copies or have access to registrations for IP, such as patents and trademarks, as well as any relevant marketing materials, contracts and other supporting documentation.
Upon receiving a complaint, IP counsel will conduct an initial review to determine whether a complaint is adequately documented and demonstrates a violation of the AAPEX IP Policy. When necessary, IP counsel may also conduct an investigation into the specific facts or circumstances to whatever extent is necessary in order to clarify, expand or corroborate the information provided by the complainant. This may include review of an exhibitor’s display and products, as well as documentation of the evidence through the taking of photographs, as well as contacting other individuals who may have knowledge of the facts and circumstances surrounding the complaint.
In circumstances where the evidence presented by the complaining party indicates a violation of the IP Policy or otherwise may be disruptive to the AAPEX show, IP counsel, in coordination with AAPEX management, may order the respondent exhibitor to remove products during the pendency of the investigation. Violating exhibitors face potentially severe consequences, which may include closing an exhibitor’s booth and a ban from future AAPEX shows, as well as the loss of seniority privileges.
AAIA urges all AAPEX exhibitors to develop year-round protection and enforcement programs for their IP and to utilize the IP Review Process to protect their intellectual property during AAPEX. AAIA also recommends that exhibitors consult with an attorney experienced in the field of preserving and protecting IP. More information on the AAPEX IP Policy is available here: http://www.aapexshow.com/2013/public/Content.aspx?ID=3089&sortMenu=103007.
There is a surreal feeling in the nation’s capital this week as Congress decided last week to shut the federal government down due to the continued strong opposition to the Affordable Care Act (ACA). The newspapers and television news are focused on the closing of many of our tourist sites and national parks; and of course, the furlough of many federal workers. For many of my neighbors, it was a day off to enjoy the great fall weather we are experiencing in Washington, although most federal employees I talked to found the entire situation frustrating. For AAIA, the traffic was a little lighter for the staff (although not as light as we thought it would be), and we acknowledged the fact that meetings and phone calls with federal officials were not going to occur any time soon.
The truth is that short term, the shutdown of the federal government is not going to be the end of the world. If a Continuing Resolution is enacted soon, life will be back to “normal” here relatively quickly. The problem is that there appears to be no end in sight to the funding issue and the long-term impact on the economy of a closing could be huge. While initially the furloughing of the nearly 800,000 federal workers (less now with the Department of Defense calling back a large number of its workers late last week) and the closing of offices, parks and museums may cost the U.S. about $300 million a day in lost economic output, according to IHS Inc., a market research firm, that cost will multiply over time as consumers and businesses defer spending. IHS further estimates that predicted 2.2 percent annualized growth in the fourth quarter will be reduced to .2 percentage point in a weeklong shutdown. Further, although the last shutdown in 1995 did not have a huge negative impact on the economy, our current economy is not even close to being as solid as it was back then, making us more vulnerable to the economic costs of the shutdown.
As bad as a shutdown is for the economy, failure to raise the debt ceiling before the Treasury runs out of borrowing authority could be much worse. While no one really knows the full impact of the federal government defaulting on its loan obligations, the last time we almost got there in 2011 was a disaster for the stock market. The Dow Jones Industrial Average dropped more than 700 points in the month preceding the approval by Congress of a bill to increase the debt ceiling. Such a drop right now, not only could wipe out the tepid recovery, but possibly send us into another recession or worse.
AAIA has joined most of the major business groups in Washington, including the U.S. Chamber and the National Association of Manufacturers, in calling for Congress to resolve the current budget crisis. We strongly believe that efforts need to be made to bring the budget deficits under control and it is important to address problems with ACA; but that it is critical that such action be done in a responsible manner, which means not shutting down the federal government and certainly not preventing an increase in the debt ceiling.
Clearly, the nation faces some major fiscal issues that need to be addressed. However, if the economy goes into another tailspin as a result of efforts attempting to solve those issues, than we will have new and bigger issues to contend with. Our leaders in Washington need to look at the bigger picture and find a way to resolve their differences. Our members and their customers’ economic future are clearly on the line if they don’t.