I'd have countered the AC by pointing out that the US courts ruled that following a regulation is not indemnifying. You have the option to cease operations, rather than make an unsafe item, if the regulations require the item be unsafe (first ruled for airbags, that I saw, but no idea if it was based on older case law, nor any cites to the cases, as I followed them pre-Internet).
Given the AC's premise is wrong, that following regulations itself is indemnifying, then how would one expect anything else in the post to be true?