LEGAL ISSUES

Docket: Supreme Court Cases on Business

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Oct. 5, 2005--Small business issues are scheduled to go before the Supreme Court this fall, just as two new justices are expected to join the bench. A range of issues hang in the balance and are expected to have an impact on everything from the cost of doing business to the nationality of a corporation.

On the docket:

  • Compensation for preparation time. The court heard arguments Monday on IBP Inc. v. Alvarez, and Tum v. Barber Foods Inc. It may result in thousands of businesses being liable to their workers. The issue at the heart of the case was whether businesses should pay their workers for the time it takes them to walk to an equipment station and don protective clothing they are required to wear. While this may be only a few minutes a day, years of such routine multiplied by thousands of workers could mean a substantial cost to business owners.

  • Taxes applying to companies doing business with Native American entities. Also heard Monday was Wagnon v. Prarie Band Potawatomi Nation. The argument was whether a Kansas fuel tax applied to a non-Native American distributor that delivers motor fuel to an on-reservation service station. The case would likely affect other states' taxation laws on trade with Native American businesses.

  • Corporate citizenship. On October 11th, Lincoln Property Co. v. Roche will be heard. The legal issue is whether a limited partnership's citizenship is determined by the citizenship of its partners (including those unnamed in the lawsuit) or by the location of its activities. This may make it more difficult for businesses to have lawsuits brought up from the state level, to federal courts. The November 28th case of Wachovia Bank v. Schmidt is similar, the issue being whether a banking association is a citizen of every state that maintains a branch.

  • Price discrimination in competitive bidding. Volvo Turck v. Reeder-Simco GMC Inc. comes on October 31st. Reeder claims Volvo discriminated again them by repeatedly choosing larger dealers with higher bids over his dealership during rounds of competitive bidding. Can such bidding between a manufacturer and wholesalers be considered price discrimination to one of the wholesalers, when they never win bids? It may affect small businesses that deal with manufacturers via competitive bidding for products.

  • Personal injury under corporate law. Later in the year, on December 6th, Domino's Pizza v. McDonald will be argued. John W. McDonald claimed he faced racial discrimination when his real estate company, JWM Investments, in which he is the owner and only stockholder, was dealing with a negotiator for Domino's. After JWM Investment's bankruptcy, Domino's settled a breach of contract claim. The current consideration is whether someone can sue for personal injuries in business dealings when their company was under contract and not them directly. The decision could affect small business owner's ability to bring such allegations to court.




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