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Supreme Court Decisions Are a Mixed Bag for Business Cases

Author: Joel N. Kreizman|August 3, 2015

Now that the U.S. Supreme Court has concluded its term, the experts are weighing in regarding how business interests fared before the Roberts Court. While the Court’s current composition has previously been characterized as “business friendly,” the general consensus based off of Supreme Court decisions is that corporate America lost as many high-profile cases as it won this term.

Supreme Court Decisions Are a Mixed Bag for Business Cases

Now that the U.S. Supreme Court has concluded its term, the experts are weighing in regarding how business interests fared before the Roberts Court. While the Court’s current composition has previously been characterized as “business friendly,” the general consensus based off of Supreme Court decisions is that corporate America lost as many high-profile cases as it won this term.

Below is a brief summary of several key Supreme Court decisions:

One of the most recent Supreme Court decisions was to legalize same-sex marriage throughout the United States. It’s good news for employers because it brings consistency to the issue. Marriages that were valid in one state but not recognized in another had been creating a logistical nightmare for many benefits administrators. Accordingly, many corporations had urged the Supreme Court to rule in favor of same-sex marriage.

King v. Burwell:

The Affordable Care Act (ACA) decision also provides clarity for businesses by establishing that their obligations under the healthcare reform law are here for the long haul. Businesses may also benefit from Chief Justice John Roberts’ rejection of Chevron deference to administrative agencies’ statutory interpretations in cases with significant political and economic implications. Under the analytic framework set forth in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) a court first looks to the “plain meaning” of the statute to determine if the regulation is ambiguous. If so, the court defers to the agency’s interpretation so long as it is based on a permissible construction of the statute.

Omnicare v. Laborers District Council Construction Industry Pension Fund:

In the biggest securities litigation of all the Supreme Court decisions this term, the Court addressed when statements of opinion are actionable under Section 11 of the Securities Act of 1933. The Court concluded that proof that the opinions were wrong is insufficient to sustain a claim; however, it also held that Section 11 liability may arise if a registration statement omits material facts about a statement of opinion, and those facts conflict with what a reasonable investor, reading the statement fairly and in context, would take from the statement. Accordingly, while the Court limited liability in one context, it may lead to an uptick in Section 11 “omissions” lawsuits.

Young v. UPS:

Another of the more recent Supreme Court  decisions, Young v. UPS, created a new standard for pregnancy discrimination cases that is largely considered “employee friendly.” It held that plaintiffs can establish a prima facie discrimination case under the Pregnancy Discrimination Act case by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers. Plaintiffs must also show that an employer’s ‘legitimate, nondiscriminatory’ reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination.

Texas Department of Housing v. Inclusive Communities Project:

Businesses will also have more difficulty defending suits under the Fair Housing Act. The Supreme Court held that disparate-impact claims are cognizable under the statute, meaning that plaintiffs can hold businesses liable without proving intentional discrimination.

Looking ahead, the Supreme Court has already added several cases to its docket that will impact U.S. businesses, including those involving class actions and arbitrations. We encourage our readers to check back here, as well as the Scarinci Hollenbeck Constitutional Law Reporter, for full coverage of the Supreme Court decisions on business matters.

Supreme Court Decisions Are a Mixed Bag for Business Cases

Author: Joel N. Kreizman

Below is a brief summary of several key Supreme Court decisions:

One of the most recent Supreme Court decisions was to legalize same-sex marriage throughout the United States. It’s good news for employers because it brings consistency to the issue. Marriages that were valid in one state but not recognized in another had been creating a logistical nightmare for many benefits administrators. Accordingly, many corporations had urged the Supreme Court to rule in favor of same-sex marriage.

King v. Burwell:

The Affordable Care Act (ACA) decision also provides clarity for businesses by establishing that their obligations under the healthcare reform law are here for the long haul. Businesses may also benefit from Chief Justice John Roberts’ rejection of Chevron deference to administrative agencies’ statutory interpretations in cases with significant political and economic implications. Under the analytic framework set forth in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) a court first looks to the “plain meaning” of the statute to determine if the regulation is ambiguous. If so, the court defers to the agency’s interpretation so long as it is based on a permissible construction of the statute.

Omnicare v. Laborers District Council Construction Industry Pension Fund:

In the biggest securities litigation of all the Supreme Court decisions this term, the Court addressed when statements of opinion are actionable under Section 11 of the Securities Act of 1933. The Court concluded that proof that the opinions were wrong is insufficient to sustain a claim; however, it also held that Section 11 liability may arise if a registration statement omits material facts about a statement of opinion, and those facts conflict with what a reasonable investor, reading the statement fairly and in context, would take from the statement. Accordingly, while the Court limited liability in one context, it may lead to an uptick in Section 11 “omissions” lawsuits.

Young v. UPS:

Another of the more recent Supreme Court  decisions, Young v. UPS, created a new standard for pregnancy discrimination cases that is largely considered “employee friendly.” It held that plaintiffs can establish a prima facie discrimination case under the Pregnancy Discrimination Act case by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers. Plaintiffs must also show that an employer’s ‘legitimate, nondiscriminatory’ reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination.

Texas Department of Housing v. Inclusive Communities Project:

Businesses will also have more difficulty defending suits under the Fair Housing Act. The Supreme Court held that disparate-impact claims are cognizable under the statute, meaning that plaintiffs can hold businesses liable without proving intentional discrimination.

Looking ahead, the Supreme Court has already added several cases to its docket that will impact U.S. businesses, including those involving class actions and arbitrations. We encourage our readers to check back here, as well as the Scarinci Hollenbeck Constitutional Law Reporter, for full coverage of the Supreme Court decisions on business matters.

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