Guest Column

How recent Supreme Court rulings may affect your business

March 4, 2016
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Litigation has a way of disrupting a company like few other events. But it is not always the lawsuit your company files — or has filed against it — that has the most important implications.

Sometimes the change comes in the form of a Supreme Court ruling.

Here are several recent and upcoming decisions that may affect your business in 2016:

Michigan Supreme Court

Freedom to Work: In UAW v. Green, the Michigan Supreme Court upheld the portion of Michigan’s Freedom to Work law that prohibits a public employer from requiring its employees to join a union or pay union dues as a condition of employment. All public employees are now free to choose whether or not to participate in a union.

Personal-property tax exemptions: The Michigan Supreme Court in Detroit Edison Co. v. Department of Treasury held that when personal property is used simultaneously for both exempt and non-exempt purposes, the taxpayer is entitled to an exemption on a pro-rata basis based on the percentage of exempt use to total use. The Court invalidated Treasury’s rule that the sale of all tangible personal property used in the transmission of electricity is taxable.

Privilege for internal hospital investigations: In Krusac v. Covenant Medical Center Inc., the Michigan Supreme Court held that Michigan law bars discovery of reports created by peer-review committees for hospital investigations.

Shareholder oppression cases: There is no right to a jury trial for shareholder oppression claims brought under the Business Corporation Act, as the Michigan Supreme Court held in Madugula v. Taub.

Commercial non-compete covenants: In Innovation Ventures v. Liquid Manufacturing LLC, the Michigan Supreme Court will decide what standard applies when courts consider the validity of a non-compete agreement between business entities. The Court of Appeals applied the stringent standard applicable to employee-employer non-competes.

U. S. Supreme Court

Affordable Care Act: In King v. Burwell, the U.S. Supreme Court saved the Affordable Care Act, holding that a health-care exchange created by the federal government is eligible for the Act’s tax-credit subsidies. A contrary holding would have resulted in the collapse of dozens of state exchanges and the employer mandate in those states.

Class-action settlements: In Campbell-Ewald v. Gomez, the Supreme Court held that a defendant cannot “pick off” the lead plaintiff in a class action with an offer of settlement. Where an alternative lead plaintiff is not readily available, the decision has the effect of limiting a business’s ability to force an early end to class-action litigation.

Statutory standing: The Court will decide in Spokeo Inc. v. Robins whether Congress may confer standing on a plaintiff who suffers no concrete harm and would ordinarily be unable to sue, simply by authorizing a private right of action based on a bare violation of a federal statute, in this case, via the Fair Credit Reporting Act.

Affirmative Action: The U.S. Supreme Court previously upheld Michigan’s constitutional amendment prohibiting the use of race or sex in public-university admissions in Schuette v. BAMN. The Court will now decide in Fisher v. University of Texas whether all public universities are prohibited from doing so.

Compulsory public-employee union dues: Finally, in what may be the most important — and divisive — decision of the current term, the U.S. Supreme Court will decide in Friedrichs v. California Teachers Association whether compulsory public-employee union dues violate the First Amendment. If the answer is yes, all public employees will have the freedom to decline participating in a union as a condition of employment. Stay tuned.

John Bursch co-chairs the Warner Norcross & Judd LLP Appellate & Supreme Court Practice. He has argued 19 times in the Michigan Supreme Court and nine times in the U.S. Supreme Court, including wins in the UAW v. Green and Schuette v. BAMN cases noted above. He can be reached at jbursch@wnj.com.

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