SCOTUS 2023 Review
SCOTUS 2023 Review
By Keith W. Carlson and Nima A. Jalali
We don’t plan to write often on Supreme Court goings-on; few SCOTUS cases directly impact the employment or healthcare sectors on a day-to-day basis. But when they do, they really do. Plus, everyone’s got a natural interest in the Highest Court in the Land. So, in the midst of the 2023 fall term, we wanted to provide you with a summary of a few cases we are watching, and the reasons why. Beyond those, there’s still plenty of interesting cases before the Court this term—involving criminal statutes, bankruptcy, immigration, maritime contracts, firearms regulations, banking rules, government takings of property, internet-content-moderation issues, electoral-district lines, plus the FBI and the No-Fly list.
We, however, will focus on questions that will, or may, hit closer to home.
Regulatory Agencies & Chevron
The biggest bunch of cases for the entire term seem to involve a usually, relatively, boring topic: administrative agencies, regulation, and “Chevron deference”—topics most people will want to talk about at their upcoming holiday parties. Why, you ask, does that matter to those in healthcare or to employers? The answer: the alphabet soup groups you deal with on a regular basis. OSHA, NLRB, EEOC, DOL, CMS, INS… (and, maybe) CRD (formerly DFEH), DLSE, CDPH, MBoC, BCE, etc. Essentially, these cases may fundamentally alter administrative agencies’ processes for making and enforcing regulations and how courts review the agencies’ enforcement of businesses, hospitals, and physicians. And there are a lot of cases that could impact the agencies in a lot of ways.
The 1984 Supreme Court decision in Chevron USA v. Natural Resources Defense Council created “Chevron deference,” an interpretative approach to statutes that 1) looks at the statute’s clarity and 2) defers to the agency to execute the law, as it sees fit, when the statute is unclear. If the statute is clear, Congress controls and there’s no agency discretion. But where there’s ambiguity, courts, following Chevron, should not overrule an agency’s interpretation and enforcement. This has led to concerns of unaccountable bureaucracies—keep in mind, in administrative proceedings, the judge is not from the judicial branch, and is usually an unelected employee of the executive branch. As a result, Chevron deference has come under scrutiny. Many attorneys have anticipated the current flurry of cases challenging it—as well as noting the SCOTUS’s apparent willingness to revisit the issue. If Chevron is overturned, courts will no longer defer to an agency’s own interpretation of the statute(s) it is charged with enforcing—courts will apply their own judgment.
There are a lot of constitutional considerations in play here, including separation of powers. Generally, Congress legislates, the President—via the Executive-branch agencies—enforce the laws, and the courts decide if the laws are constitutional and properly executed. With administrative agencies having the power to set the rules andenforcement on their own—including an administrative-law judge—all three branches are, arguably, merged into one. If Chevron is overturned, the judicial branch will no longer defer to the agencies on deciding how to apply ambiguous laws, or laws silent on certain topics. This could impact the interpretation and enforcement of just about any federal regulation. And, it should encourage Congress to write more precise statutes where it wants a certain result—thus reducing “Congressional deference” to agency actions as well. If future cases apply such a decision to the states, then California’s regulatory framework would also be revisited. Two cases, yet to be argued, are linked in this challenge: Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce. The issue for both is the same: should Chevron be overruled?
If it is, those facing unfavorable agency enforcement actions will have better options to challenge them.
Corner Post v. Board of Governors of the Federal Reserve System, also not yet argued, will impact when one can challenge an action by a federal agency. Does the statute of limitations begin running when the agency makes the rule, or is it when you suffer an injury from the agency?
Consumer Financial Protection Bureau v. Community Financial Services Association of America, Limited, is another regulation-affecting case. This one may allow regulations to be overturned if they were passed when an agency was receiving funds in a manner disallowed by the Constitution. Essentially, if the funding to an agency was out of compliance for a time, then what the agency did in that time was also out of compliance—thus reducing regulatory threats to regulated parties.
Wilkinson v. Garland will be argued at the end of the month. This case involves whether a court can consider agency determinations of “established facts.” While it applies to federal matters, it is of interest in California as we have a possibly related issue. Here, the doctrines of collateral estoppel and res judicata often apply to prior agency decisions (such as a Medical Board finding) in later civil trials. Thus, an administrative proceeding ruling on certain facts cannot later be challenged in a separate case, even involving different causes of action—if an agency determines a fact, it is determined for good. This makes a non-jury, non-judicial-branch proceeding essentially take fact questions out of the jury’s hands—seemingly the exact opposite of what the system was designed to allow juries to do.
All in all, this will be an important term for those impacted by administrative agencies, including their regulations, investigations, enforcement, and administrative-law cases. Long term, it should promote better legislative drafting. Short term, it should provide defendants in agency actions several new ways to challenge an enforcement action. We offer no prediction on the exact outcome of any of these cases, but it is likely a safe bet that administrative law and enforcement actions, at some level, will be changing after this term.
Murray v. UBS Securities, LLC was argued in October. It addresses whistleblower-retaliation cases with public companies where an employee reported financial improprieties. The plaintiff claims UBS fired him in retaliation for his reporting fraud. He sued under the Sarbanes-Oxley Act—which, according to the 2nd Circuit’s ruling, requires a plaintiff to prove the employer intended to retaliate. Murray is arguing he only needed to show the whistleblowing was “a contributing factor” to his firing. If Murray wins, UBS would have to prove it would’ve fired him anyhow. The case directly impacts public companies’ ability to defend whistleblower-retaliation cases. It will remain to be seen how much the ruling could indirectly impact the interpretation of similar statutes at the state and federal levels—but there are numerous laws in both employment and healthcare covering whistleblower retaliation. From oral arguments, it seems there were several justices questioning the UBS position—which could point to a win for employee plaintiffs.
On the surface, Muldrow v. City of St. Louis, Missouri, to be argued in December, looks at whether an employee’s transfer was discrimination based on sex. The plaintiff’s transfer resulted in different hours, job duties, and potential loss in overtime pay—but she kept her compensation and rank. The appellate court found no proof of “materially adverse” harm. The Supreme Court will decide: without a court finding that a transfer caused significant disadvantage, does Title VII prohibit discrimination in transfer decisions?
But the case has a potential impact deeper than just that issue if the Court decides plaintiffs in Title VII cases don’t need to show a “materially adverse” harm. This could cut both ways for various employer/employee concerns by impacting the overall approach to bringing Title VII claims. A plaintiff win would make for a broader reading of Title VII—and, likely, parallel state statutes, like FEHA. But if it does broaden the reading, it would also, potentially, make reverse-discrimination claims easier to make. Thus, a pro-employee ruling could have an anti-DEI impact on companies.
There are a couple cases that could impact arbitration agreements this term. First, in Coinbase v. Suski, originating in California, the 9th Circuit ruled that the matter should not be compelled to arbitration—despite an arbitration agreement in the original contract. The arbitration clause at issue was arguably superseded by a later agreement. The later agreement did not state that forum selection was delegated to an arbitrator, thus the 9th Circuit found a court should decide the issue.
Next, in Bissonnette v. LePage Bakeries Park St., LLC, the Court will consider exemption from the Federal Arbitration Act. It is a class-action case involving wage issues. Baked-goods deliverers sued the baked-goods manufacturer. The deliverers note the FAA exempts those involved in transportation work. The lower courts found the plaintiffs were not “transportation workers” as they were actually in the bakery industry, though they drove trucks for a bakery.
One final case to watch is Acheson Hotels, LLC v. Laufer, argued in October. It involves an ADA “tester” plaintiff who is suing a hotel for disability-access issues on its website—but she does not actually intend to visit the hotel. This could impact all businesses that provide public accommodations (hotels, restaurants, etc.). The plaintiff looked at a hotel’s website and found it did not provide required-accessibility information. She sued, even though she didn’t plan to stay there. The lower court said she did not have standing to sue. The Supreme Court’s ruling could, then, significantly impact who can sue businesses under the ADA going forward.
There’s a lot going on that will directly and, ultimately, indirectly impact California employers and those in healthcare. For starters, almost everyone is regulated by some agency. Considering possible changes to Title VII, ADA, whistleblower-retaliation cases, and arbitration clauses, this is shaping up to be another impactful term for the Supreme Court.
Should you need a closer analysis of any of the cases discussed—or the numerous cases we did not review, please send us a note at firstname.lastname@example.org and we will do a deep dive for you. Also, if you know of others that would like our updates, they may subscribe here: https://cjattorneys.com/news/. If you do not want to receive these client updates, simply click the “Unsubscribe” link at the bottom of this newsletter.
Keith W. Carlson and Nima A. Jalali