Supreme Court Wrap-Up: Mostly Good News for Small Business

Date: June 28, 2019

The United States Supreme Court always saves its biggest decisions for the end of June. This year was no exception, with three major decisions in the final week. And, while the Court could have gone further to protect small business rights, there is much to celebrate. We helped secure positive outcomes in four cases, with only two losses.

Weyerhaeuser v. U.S. Fish & Wildlife Service

We scored a win for small business landowners in Weyerhaeuser v. U.S. Fish & Wildlife Service. The decision affirmed that owners have a right to contest “critical habitat” restrictions under the Endangered Species Act. That’s important because, in many cases, the government imposes unreasonable restrictions, with little or no benefit to the public. This is just latest in a series of decisions making clear that the government must seriously consider whether the benefits of regulation justify the burden imposed on the economy.

Knick v. Township of Scott

The Supreme Court’s 1985 decision in Williamson County Regional Planning Commission v. Hamilton City barred small business landowners from vindicating their constitutional rights in federal court. Williamson County said that owners had to pursue claims for just compensation for a taking of private property in state court. That was problematic because state court judges may be more hostile to property rights, and more deferential to state and local authorities. But, in Knick v. Township of Scott the Supreme Court sided with us—holding that there was no basis for the supposed “state litigation rule.” The decision opens the federal courthouse doors once and for all.

Food Marketing Institute v. Argus Leader

We helped score another victory for the small business community in Food Marketing Institute v. Argus Leader—a case concerning the Freedom of Information Act. Generally, the Freedom of Information Act is an important tool for holding government accountable. We often need access to public records to know whether the government is abiding by the law. But this case asked whether the Freedom of Information Act can be used to collect information on private businesses?

We argued that the courts should protect the privacy of small business owners in previous cases where we saw activists trying to obtain sensitive information on ranchers and farmers—including home phone numbers and email addresses. And, in Food Marketing Institute, we continued to argue that confidential business information should be withheld from disclosure. Ultimately, the Supreme Court agreed in 6-3 decision.

Kisor v. Wilkie

Kisor v. Wilkie was the biggest decision of the term for those concerned with the power of the federal bureaucracy. The Supreme Court considered overturning Auer v. Robbins, which directs the lower courts to defer to federal agencies on questions pertaining to their regulations. For example, the lower courts would cite Auer in rubber-stamping the Department of Labor’s interpretation of its regulations if there were any ambiguities.

We argued in our amicus brief that the Court should take the opportunity to overturn Auer because it is the role of the courts to say what the law is, not government bureaucrats. Moreover, agencies would have a stronger incentive to write clear rules if the Court adopted our position. We were disappointed to see Justice Kagan deliver a decision upholding Auer.

While the Court was unwilling to go as far as we would have liked, this was still a victory because we succeeded in getting the Court to impose firm limitations on Auer. This decision makes it clear that judges should use every tool in their chest to decide upon the best interpretation for ambiguous regulatory language. Courts may only defer to an agency’s interpretation under extremely limited circumstances.

Fort Bend, Texas v. Davis

Federal law generally requires an employee to file a complaint and pursue relief with the Equal Employment Opportunity Commission before filing a lawsuit for discrimination under Title VII. We argued in Fort Bend, Texas v. Davis that this requirement was an absolute jurisdictional bar to suit. Unfortunately, the Supreme Court disagreed, holding that a Title VII lawsuit may proceed under limited circumstances without meeting these requirements.

Air Liquid Systems v. DeVries

Air Liquid Systems v. DeVries was an asbestos case. The NFIB Small Business Legal Center argued that there should not be any liability for a company that neither manufactured, nor sold, nor installed asbestos. Unfortunately, the Supreme Court disagreed. In a 6-3 decision the Court ruled that a manufacturer might be liable because its products were used in conjunction with asbestos materials by the U.S. Navy.

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