December 6, 2023
NFIB Files Amicus Briefs in Five Small Business Court Cases
NFIB filed five amicus briefs in November at the U.S. Supreme Court, the Fifth Circuit Court, and the California Supreme Court. These new cases involve many issues from the DOL’s tip credit rule (also known as the 80/20 rule) to whether a person whose property is taken without compensation may seek redress under the self-executing Takings Clause of the Fifth Amendment.
Restaurant Law Center v. DOL
NFIB filed an amicus brief in the case Restaurant Law Center v. DOL at the U.S. Court of Appeals for the Fifth Circuit. The case considers the Department of Labor’s (DOL) tip credit rule and the?Fair Labor Standards Act (FLSA).
“The DOL’s final rule disproportionately impacts small businesses and restaurants,”?said Elizabeth Milito, Executive Director of the NFIB Small Business Legal Center. “Requiring small business owners to split a job into sub-tasks and record the minutes and seconds devoted to each task will lead to confusion and difficulty in complying. Ultimately, the 80/20 rule will result in a decrease in higher-paying jobs for tipped employees in the hospitality industry. We ask the Court to reverse the district court’s decision.”
The brief argues four main points:
- The FLSA ensures employees receive the minimum wage,
- Compliance with the final rule is practically impossible,
- Consideration of a 15-minute portion of a shift further highlights the significant compliance issues raised by the 80/20 Rule, and
- The final rule fails to provide guidance for the ever-evolving nature of the hospitality industry in a post-pandemic world.
Ghost Golf Inc. et al. v. Gavin Newsom
NFIB?filed an?amicus brief?in the case?Ghost Golf Inc. et al. v. Gavin Newsom?at the California Court of Appeals, Fifth Appellate District. The case concerns Governor Newsom’s?Blueprint for a Safer Economy, the government shutdown of businesses ordered during the COVID-19 pandemic, and the separation of powers.
“The?Blueprint?was a statewide one-size-fits-all mandate, which harmed small businesses in the state,” said?Milito. “California’s Constitution does not permit such power in the hands of the Governor and California Department of Public Health (CDPH), and we ask the court to serve as a meaningful check on their actions.”
NFIB’s brief argues two main points:
- Actions taken by the governor and the CDPH to address the COVID-19 pandemic violated California’s separation of powers, eroding the liberty of Californians and the State’s small businesses, and
- Those actions to address the COVID-19 pandemic destroyed small businesses during the pandemic and continue to have a lasting negative impact on businesses post-pandemic.
Sheetz v. County of El Dorado, California
NFIB?filed an?amicus brief?in the case?Sheetz v. County of El Dorado, California?at the U.S. Supreme Court. The case considers whether the conditions doctrine applies to imposed building permit exactions. NFIB’s brief argues the Fifth Amendment’s Takings Clause does not distinguish between unconstitutional conditions imposed by administrative personnel and those imposed by legislative bodies.
“Small business property owners are aware of the various regulations and compliance issues associated with building permits and their property,” said Milito. “NFIB asks the Court to clarify that the unconstitutional conditions doctrine protects citizens from uncompensated takings, regardless of what branch of government makes them.”
In this case, a California property owner sought to build a manufactured house on his land and obtain the necessary permit. In exchange for the permit, the County imposed a monetary exaction over $23,000 to finance road improvements in the county. NFIB joined The Buckeye Institute in filing the amicus brief.
Corner Post, Inc. v. Board of Governors of the Federal Reserve System
NFIB filed an amicus brief in the case Corner Post, Inc. v. Board of Governors of the Federal Reserve System at the U.S. Supreme Court. The case concerns when the six-year statute of limitations challenges an agency rule under the Administrative Procedure Act (APA) begins.
“The current rule under the APA leaves existing and would-be small business owners in an impossible situation,” said Milito. “Businesses are denied the right to challenge agency regulations that are more than six years old, even if the regulation predates the business itself. However, there is no way to challenge a regulation until you have a business to be affected by it.”
The brief argues four main points:
- The majority rule wrongfully runs the statute of limitations for APA claims from the date of final agency action, instead of when the legal injury is suffered,
- Enforcement proceedings are not always a viable option for judicial review of agency regulations, such as when governing agencies target middle entities in the supply chain,
- The majority rule prevents businesses from challenging the validity of a crushing regulation if more than six years passed between the final rule and the opening of the business, and
- A favorable outcome for Corner Post would not require courts to do anything outside of their established duties nor is their evidence to support it would lead to litigation abuse.
NFIB filed the brief with the Restaurant Law Center, The Buckeye Institute, and the Manhattan Institute.
Devillier v. Texas
NFIB filed an amicus brief in the case Devillier v. Texas at the United States Supreme Court. The case questions whether a person whose property is taken without compensation may contest or sue under the self-executing Takings Clause of the Fifth Amendment, even if the legislature has not affirmatively provided them with a cause of action. NFIB’s brief argues that the Takings Clause itself provides the right to just compensation when the government takes private property, and because of this, no legislation providing an avenue to sue is necessary. ?
“The Fifth Amendment makes it clear that property owners are owed compensation when the government takes any property,” said Milito. “Specifically, small business owners depend on that compensation for business purposes. We ask the Court to hold that the Takings Clause is self-executing, and states may not immunize themselves from the constitutional mandate to pay just compensation.”
The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and the U.S. Supreme Court.
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