Why Scalia’s Death Puts Small Businesses in Legal Limbo
The selection of a new Supreme Court justice following the death of Antonin Scalia on Saturday is shaping up to be a protracted struggle. Until a new candidate is confirmed, the high court’s conservative and liberal members will remain pretty much deadlocked. And that means several cases important to small business–dealing with issues including health care, immigration, unions, and small business contracting–may leave lower court rulings standing for some time.
Here are five cases that affect business that could be deadlocked until a ninth justice is confirmed.
1. United States vs. Texas
In late 2014, President Obama signed an executive order that would give legal status to approximately 11 million undocumented immigrants who reside in the U.S. Texas and 25 other states immediately sued to overturn the order. Last May the U.S. Court of Appeals for the Fifth Circuit sided with the plaintiffs and issued an injunction against the order. A split decision would keep the injunction in place, and potentially send the case back to the lower courts for yet more legal wrangling. Businesses seeking an expanded pool of workers will continue to be in limbo.
2. Zubik vs. Burwell
This is the most recent salvo by religious organizations against the Affordable Care Act’s mandate for comprehensive health care coverage, which includes some forms of birth control. In 2014, in Burwell v. Hobb Storesy Lobby, the Supreme Court granted a strengthened religious exclusion for private companies that objected to the ACA’s coverage of birth control. An evenly split decision in Zubik is likely to leave the high court’s most recent ruling, which allows for a religious accommodation to the mandate, without taking it further.
3. Friedrichs vs. California Teachers Association
The case involves free speech issues related to whether public-sector unions can collect fees from non-union members. Lower courts let stand previous case law that allow public unions to do so. Scalia, in initial questioning in January, showed his antipathy to such protections. A split court would let the lower court judgments stand, which would be a win for unions. That could filter into the private sector, and affect small business labor relations, particularly in so-called right to work states.
4. Halo Electronics v. Pulse Electronics
It’s possible patent troll cases might not split the high court along ideological lines. In fact, in 2014 when the last major cases involving such infringements were decided, the court ruled unanimously against patent trolls. (Sometimes called non-practicing entities, patent trolls purchase rights to expired or soon-to-expire patents and then sue businesses for infringement, with no other goal than a quick monetary settlement.) But without a majority decision on Halo, it could be more difficult for district courts to award attorneys’ fees to prevailing parties in patent troll cases, which every year sap billions of dollars in such fees.
5. Kingdomware Technologies, Inc. v. United States
The U.S. government is the largest supplier to small businesses in the U.S., doling out hundreds of billions of dollars worth of contracts each year. Iin recent years, various agencies have strengthened efforts to award more contracts to economically disadvantaged businesses, including veteran-owned businesses. This case gets to the heart of what are often called set-asides in government contracting for small business. Kingdomware is a small, veteran-owned company based in Waldorf, Maryland, that sued the Department of Veteran Affairs in 2012 for awarding a contract to a non-veteran-owned business. A split court might leave unsettled questions of how contracts are offered.