NFIB Fights for Small Business Rights in Court

Date: October 07, 2021

Three recent cases where NFIB filed briefs in defense of small business – including one landmark ruling.

From coast to coast, in both state and federal courts, the NFIB Small Business Legal Center (SBLC) serves as the voice of small businesses in the nation’s courts. A single court decision can make or break a small business’ livelihood, so we fight hard to defend your rights wherever they’re in danger. Here are three cases – including one major victory – where NFIB filed briefs to defend small business rights.

Kentucky v. Yellen

Kentucky v. Yellen. On September 24, a U.S. District Court ruled in favor of Tennessee and Kentucky in their challenge to a provision of the American Rescue Plan Act (ARPA). The provision prevents states from using federal funds to provide direct or indirect tax relief for small business owners.  

“Last year, Tennessee was able to use federal relief funds to help small businesses avoid higher taxes, in particular unemployment taxes,” said Jim Brown, NFIB State Director for Kentucky. “We’re pleased the court agreed that states should have the flexibility to establish tax policies that will help continue our post-pandemic economic recovery.” 

“The past 18 months have taken a tremendous toll on small businesses,” NFIB Kentucky State Director Tom Underwood said. “They can’t afford to pay high taxes. Kentucky needs the freedom to spend the money from the American Rescue Plan in a way that makes sense for Kentucky.” 

The SBLC filed an amicus brief supporting Tennessee and Kentucky’s challenge, arguing that the ARPA provision was unconstitutional and harmful to small businesses. 

See’s Candies, Inc. and See’s Candy Shops, Inc., v. Los Angeles Superior Court

See’s Candies, Inc. and See’s Candy Shops, Inc., v. Los Angeles Superior Court. On August 30, the SBLC filed an amicus brief supporting the plaintiff, See’s Candies, in their challenge against the Superior Court’s decision subjecting employers to unlimited tort liability for alleged workplace injuries that are intended to be addressed in the workers’ compensation system. The case is still pending. 

“The Workers’ Compensation Act was made to protect both the employee and the employer for all workplace injury claims,” explained SBLC Director Karen Harned “If the trial court’s decision stands, small businesses will be disproportionally harmed as employers generally don’t have the additional finances for protracted legal fights. The increased liability risk will be damaging to many small businesses in California, especially when their businesses are still recovering from the pandemic.”

Chan v. Heartland Energy Development Corporation (HEI)

Chan v. Heartland Energy Development Corporation (HEI). On September 8, the SBLC filed an amicus brief in a Colorado Supreme Court case, asking it to affirm the court of appeals’ decision finding that general partners can actively participate in businesses using their general business experience, even if they lack industry-specific experience.  

In a statement regarding the case, Harned said, “If the court finds that general business experience is not enough for a general partner to actively participate in Colorado businesses, many small businesses in the state will be subject to increased regulation under the Colorado Securities Act and exposed to increased compliance costs. We are hopeful the Colorado Supreme Court will affirm the lower court’s decision and legal precedent that appreciates the value of general business experience.” 

HEI successfully argued before the Court of Appeals that general partners who lack specific experience in a business’ particular industry can still actively and meaningfully participate in operating that business based on their general business experience. The Colorado Supreme Court is still deliberating. 

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s court. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court. 

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