The U.S. Supreme Court is poised to lean further to the right, and with the recent nomination of Brett Kavanaugh as justice, if confirmed, businesses are likely to see more outcomes in their favor over the next several terms.
On Monday, President Trump announced Kavanaugh as his pick to replace retiring Justice Anthony Kennedy. A federal appeals judge and fixture in the Washington conservative establishment, Kavanaugh has a track record of swatting down government regulation and red tape. His confirmation would represent a boon to entrepreneurs worried about government interference, as the Supreme Court prepares to hear several cases with implications for businesses as soon as October.
"Working at the White House gives you the backbone and the fortitude to say no to the government when the stakes are high," Kavanaugh noted in a Heritage Foundation lecture last October, referring to years spent as a legal aide to former President George W. Bush. Certainly, Kavanaugh has said no to the government more than once throughout his tenure as a circuit judge: He has overruled federal regulators 75 times, according to a White House email sent to business trade groups late Monday, a copy of which was obtained by Politico.
Specifically, Kavanaugh has been skeptical of the so-called Chevron Doctrine, which gives federal agencies the benefit of the doubt when it comes to interpreting legislation in court. He further called the Consumer Financial Protection Bureau "unconstitutionally structured," in his 2016 ruling against the consumer watchdog. That ruling was ultimately reversed in January of this year, yet it remains a sign that the high court could soon warm to financial institutions and fintech startups.
Kavanaugh has also been critical of the Environmental Protection Agency, which oversees greenhouse gas restrictions on corporations. When the Supreme Court rejected the Obama administration's proposed rules requiring power plants to cut mercury emissions in 2015, justices drew heavily from previous comments made by Kavanaugh, for example.
The addition of any conservative justice was already likely to sway one upcoming Supreme Court case, Apple v. Pepper, according to analysts. At issue here is whether consumers can sue anyone who delivers goods to them (in this case, Apple) for antitrust damages, even as third parties (app developers) set the actual prices. Kavanaugh, with his history of siding against regulation, may be likely to vote for a ruling in Apple's favor. "The stance of a more conservative court will tend to be pro-business, and therefore try to minimize the power of class-action lawsuits, so it's likely that the court will rule in favor of Apple in this case," suggested Ari Ginsberg, a professor of management at New York University's Stern School of Business, in an interview with Inc. last month.
A Major Exception
To be sure, there are scenarios in which Kavanaugh's ideology could hurt entrepreneurs. The judge has been a vocal opponent of net neutrality, the set of Obama-era rules that required internet service providers to treat all web traffic equally. Last year, when the D.C. Circuit Court of Appeals ruled on the issue, Kavanaugh wrote the dissenting opinion that the Federal Communications Commission, or FCC, didn't have the authority to ban internet service providers from prioritizing some forms of traffic over others.
"Congress has never enacted net neutrality legislation or clearly authorized the FCC to impose common-carrier obligations on internet service providers," he stated. "The lack of clear, congressional authorization matters." Last December, the FCC voted to repeal net neutrality, a move that hundreds of small-business owners and entrepreneurs have lamented. "Net neutrality made it possible for upstarts like mine to compete," noted Zachary Sims, the co-founder and CEO of the coding boot camp Codecademy, in a previous conversation with Inc. Without these rules, he continued, "an ISP could effectively charge us a ransom just to access the same number of consumers."
Nevertheless, it would appear that several business groups are already on board. Earlier this month, the National Federation of Independent Business and the National Association of Home Builders told the White House that they preferred Kavanaugh when asked for input on Trump's nomination, according to Politico.