Other Notable Developments

TNFD Sector Guidance: On June 28, the Taskforce on Nature-related Financial Disclosures (“TNFD”) published additional guidance for financial institutions and eight economic sectors (aquaculture, biotechnology and pharmaceuticals, chemicals, electric utilities and power generators, food and agriculture, forestry and paper, metals and mining, and oil and gas). The TNFD also announced that their recommendations have been adopted by more than 400 organizations from over 50 jurisdictions.

U.S.: Supreme Court Strikes Down Chevron

On June 28, 2024, the United States Supreme Court, in Loper Bright Enters. v. Raimondo, overturned a 40-year-old precedent that had guided judicial review of agency interpretations of federal statutes. The doctrine set out in Chevron v. Natural Resources Defense Council, also known as “Chevron deference,” set out a two-part test when considering challenges to an agency’s rulemaking where the relevant statute was ambiguous. Applying Chevron, a federal court would defer to an agency’s interpretation if (i) the interpretation was not unreasonable and (ii) Congress had not addressed the issue directly.

Writing for the 6-3 majority in Loper, Chief Justice John Roberts found that “courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” The Court further reasoned that “courts need not and under the [Administrative Procedure Act] may not defer to an agency interpretation of the law simply because a statute is ambiguous.” 

The decision marks a significant shift towards greater judicial scrutiny of agency interpretations of federal statutes. 

Link: 
Loper Bright Enters. v. Raimondo – Opinion

On June 27, 2024, Germany’s Federal Supreme Court ruled that companies must define the term “climate-neutral” in their advertising. Where advertising claims lack such substantiation, they may be found in breach of the German Unfair Commercial Practices Act.

The decision, issued in case number I ZR 98/23, found that a German manufacturer’s advertisement was misleading. The advertisement was published in a newspaper, stating that “[s]ince 2021, [the company] has been producing all products in a climate-neutral manner” and linked to the website of a climate partner. In fact, the manufacturing process was not carbon-neutral, but the company supported climate protection projects through its climate partner.

The court’s judgment has not yet been published. According to a press release issued by the court, the advertisement was ambiguous because the term “climate-neutral” may be understood as reducing CO2 emissions but also as providing compensation for CO2 emissions. The court held that these were not equivalent measures, finding that reducing emissions is more favorable to climate protection. To avoid misleading the public, the court held that a company must specify the meaning in the advertisement itself and linking to an external platform was not sufficient.

Links:
Press Release (in German)
Unfair Commercial Practices Act

On June 27, 2024, a former inmate at Chishan Prison in Hunan Province, China filed a lawsuit in the United States District Court for the Eastern District of Wisconsin.

Under the pseudonym Xu Lun, adopted due to safety concerns, the former inmate alleged that he was forced to produce Milwaukee Tool-branded gloves during his time in prison for activism. He further claimed that all prisoners capable of work were forced to work up to 13 hours per day and that the prison applied corporal punishment, including beatings and electric shocks, for those who did not meet quotas or refused to work.

Xu Lun seeks unpaid wages and other damages of an unspecified amount under the Trafficking Victims Protection Act, which authorizes victims of forced labor to sue those who knowingly benefited from the labor.

Milwaukee Tool has commented that it has not found forced labor in its supply chain and considers the claim without merit.

Link:
Lawsuit