What Supreme Court Nominee Neil Gorsuch Will Mean for U.S. Business

Feb 01, 2017

Neil Gorsuch, a conservative tapped by President Donald Trump for the Supreme Court, is likely to take his seat before the end of the court's current term in early summer. For business interests, his appointment means little in the short term. But in the long run Gorsuch, who models himself after the late Justice Antonin Scalia, could shape laws on labor and regulation for decades to come.

In his time on the bench, the 49-year-old Gorsuch has not left a big footprint on business law, and is instead best known for his writing on subjects like religious liberty and euthanasia. This is in part because the Denver appeals court on which he sat does not attract many high-profile commercial cases. But based on Gorsuch's legal philosophy, and the business cases he has ruled on, it's no stretch to predict he will generally take the side of companies before the Supreme Court.

As Adam Liptak of the New York Times suggests, unions will likely be among the first to be affected by Gorsuch's arrival. That's because the Supreme Court was expected last year to rule certain union dues violated the First Amendment—until Scalia's sudden death resulted in a 4-4 deadlock in the case and preserved the status quo.

Now, pending Gorsuch's confirmation, there will be nine Justices again. And it's likely the court, which is still adding cases to its spring docket, will be on the lookout for a fresh legal challenge to the dues. If successful, such a challenge would weaken organized labor.

But while Gorsuch probably shares Scalia's hostility to forced dues payments, his track record on labor and employment cases is not doctrinaire. As a summary of Gorsuch's rulings shows, he is not inclined to automatically side with employers in cases over discrimination or wages.

Meanwhile, corporations will see Gorsuch as an ally in their push to rein in class actions over alleged violations of securities law. As the Wall Street Journal notes, Gorsuch has railed about such suits as an opportunistic shakedown by lawyers. Companies, based on Gorsuch's previous rulings, can also expect he will support them in an ongoing push to force consumers to resolve disputes through arbitration instead of the courts.

On environmental matters, Gorsuch is almost certain to be part of a conservative majority, including in a closely-watch case about greenhouse gases. But that case, and other ones involving the environment and the EPA, are likely to become less significant for business given Trump's vow to curtail regulations of the sort that gave rise to such lawsuits in the first place.

Deferent No More?

In predicting the impact Gorsuch will have on the Supreme Court's business docket, it's reasonable to assume the new judge will mostly rule as Scalia would have done. But in one important field—the law of federal agencies—Gorsuch could break new ground.

In a detailed profile of Gorsuch last month, SCOTUSblog explained the judge had "made real waves" in 2016 by going further than Scalia, and questioning a longtime cornerstone of administrative law known as "Chevron deference." In plain English, this is the idea that courts should defer to agencies when a given law or rule is unclear. The assumption is the decision makers at the agencies are experts, and Congress wants courts to back off and let them do their thing.

Critics of Chevron deference, which takes its name from a 1984 case involving the oil company and the EPA, argue the idea gives too much power to agencies like the FCC, EPA, or the National Labor Relations Board. The critics feel it shields agencies from proper oversight from the judicial branch, and can let regulators run amok. (Defenders of the doctrine would say it's a commonsense and efficient way for agencies to operate, and point out courts can still step in if an agency goes off the rails).

Gorsuch is among the critics and, as SCOTUSblog explained, he wants to apply his legal philosophy of originalism—which involves strictly interpreting words by their ordinary meaning—to the laws that govern agencies:

He believes even these broadly worded enforcement statutes have objective meanings that can be understood from their texts; that it is the job of the courts to say what those laws mean and to tell agencies when they do not have the best reading; and that if the agency disagrees, the only proper recourse is for Congress to change the law or the Supreme Court to correct the error.

If Gorsuch's views in this field gain traction on the Supreme Court, the result would diminish the power of regulators, who would proceed more cautiously since they would have a greater fear of being sued. Many businesses, which have complained of a growing regulatory burden, would welcome this outcome. Consumer advocates, however, would likely fear any attempts Gorsuch and the Supreme Court to undercut Chevron because agencies are often on the front line of protecting the public.

For now, though, it's still early days as Gorsuch must still clear his confirmation hearing. If he is confirmed, which is likely, he probably won't start to make his mark on the court until late in the year.

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