Neil Gorsuch: the Supreme Court and the Recycling Industry

This may seem like “old news” to some given the intense media coverage, but keep reading. While it is now common knowledge that Judge Neil Gorsuch is Trump’s pick for the Supreme Court, ISRI offers a little more insight as to what this nominee – if confirmed by the U.S. Senate – might mean for the recycling industry.

Clearly, any addition to the U.S. Supreme Court will have national implications as well as state and local impacts that ISRI members may be interested in following. For instance, as the Supreme Court hears more cases on state vs. federal authority on environmental matters, the newest member of the Supreme Court could sway the balance of power and administrative regulatory authority over matters impacting recycling. So, just who is Neil Gorsuch and why should ISRI members care?

Being careful so as to not rehash what has invariably been covered tirelessly by the media since his nomination was announced, here is a short background of the man who could be the next Supreme Court Justice. Neil Gorsuch was announced as President Trump’s choice to replace Scalia during a televised event on January 31, 2017. Gorsuch was confirmed for the United States Court of Appeals for the Tenth Circuit under President George W. Bush in 2006. Gorsuch has long been a favorite of legal thinkers at conservative think tanks such as the Federalist Society and the Heritage Foundation, though he has also been recognized as a great legal mind by scholars across the political spectrum. He attended Harvard Law with former President Obama, whose acting solicitor general gave Gorsuch a robust endorsement saying he “brings a sense of fairness and decency to the job.” Prior to rising to the bench himself, Gorsuch was a U.S. Supreme Court clerk for Justices Byron White and Anthony Kennedy from 1993 to 1994.

As for the Court’s impact on the recycling industry, it is generally accepted that government authority and fundamental constitutional protections are likely to be matters of keen interest to the business community. For instance, ISRI members have challenged both state and federal statutes on grounds that they violate constitutional protections against infringement on interstate commerce. The legitimacy of federal regulations are often challenged on grounds that the issuing agency exceeded its constitutional authority within the executive branch by, in fact, legislating rules on business. And, more recently, the validity of administrative warrantless searches of business records has come under review in light of the protections afforded by the Fourth Amendment of the Constitution. 

Any number of these protections could be either expanded or restricted as a result of the ideology of whomever is appointed next to fill the seat of Scalia. Authors of a recent legal analysis entitled "Searching for Scalia" concluded that Gorsuch was the most likely of those on President Trump’s list of potential nominees to be most like Scalia—who was known as an originalist, textualist, and a conservative.[i] However, as these authors note, measuring (or operationalizing) what made Justice Scalia who he was as a jurist is no easy task.

ISRI members may want to pay particular attention as it relates to the issue of warrantless business record searches. Many of Gorsuch’s more prominent rulings involve the Fourth Amendment indicating that his instincts may be similar to Scalia. Last year, ISRI reported on a case before the Supreme Court known as City of Los Angeles v. Patel,[ii] in which the court addressed the matter of whether police could inspect business records without notice or warrant under the Fourth Amendment of the U.S. Constitution. In that case, Justice Sotomayor seemed to hint at the need for possibly re-opening the precedent setting New York v. Burger ruling that said “junkyard” operations are “closely regulated” so police do not need a warrant to search business records.[iii] The implications of this case on state metals theft laws could be far-reaching – if it weren’t for the Burger ruling against “junkyards” which Justice Scalia found no reason to revisit – so perhaps the chances of re-opening the Burger case per Sotomayor’s comments might be strengthened if Scalia’s replacement were to take a different approach.

The industry may find interest in the fact that there are various examples in which Judge Gorsuch is not a carbon copy of Justice Scalia and may give the industry reason to be optimistic. For instance, one area of the law where the views of Gorsuch and Scalia differ concern that of federal agency deference. Less than six months ago, Gorsuch called for the end of Chevron deference, named after the precedent-setting case of Chevron v. NRDC.[iv] Gorsuch has been a stern critic of this idea that, where a federal agency is enforcing an ambiguous statute, courts should defer to how the agency understands the statute even if the courts read it differently. This deference has evolved into a legal standard that makes it extremely difficult to challenge a federal rulemaking. 

If Gorsuch is confirmed, his views on agency deference could be very important if the court rules on the legality of one or more of the several federal rulemakings that are currently under challenge. If he were to form part of a majority to scale back this principle, it would be a major sea change in the relationship between the executive branch and the courts, and one that would likely impose significant new constraints on the scope of federal regulatory authority on all topics -- from immigration and criminal law enforcement to environmental protection, consumer product safety, and labor laws. This could play to the advantage of ISRI members, for instance, who have concerns with the new overtime rules promulgated at the end of last year under the Fair Labor Standards Act.       

The business community may also find that this nomination could also have direct impacts on daily operations when it comes down to taxes. ISRI members who remotely sell or broker materials across state lines in which they have no physical operations or nexus should be following current events involving sales taxes. (See related article in this edition of SPAN). State and local governments are aggressively seeking new ways to get their hands on sales taxes from buyers outside their jurisdictions. While just one case is too few to judge any Supreme Court nominee, there is a case that sheds light on how Gorsuch could cause a seismic shift in tax law. Last year Gorsuch strongly implied that given the opportunity, the U.S. Supreme Court should overrule Quill Corp. v. North Dakota (1992). In Quill, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales taxes. States and groups such as the National Conference of State Legislatures are eagerly planning for the next earliest opportunity to challenge and overturn Quill, going so far as to enact legislation for the specific purpose of creating the “case and controversy” needed for a court challenge.

So what is next?  Now that we know who the nominee is, two questions remain: Will the Senate Democrats filibuster Gorsuch, as many have promised to do? If they do, will Senate Republicans exercise the “nuclear option,” meaning only a simple majority of senators will be needed to confirm Gorsuch’s nomination? ISRI will be following developments and will report on factors of relevance to the industry.

Stay tuned…

[1] Jeremy Kidd, Riddhi Sohan Dasgupta, Ryan Walters & James Phillips, “Searching for Justice Scalia: Measuring the ‘Scalia-Ness’ of the Next Potential Member of the U.S. Supreme Court,” (January 27, 2017), Available at SSRN: https://ssrn.com/abstract=2874794.

[1] Los Angeles v. Patel, 576 U.S. ____ (2015).  In oral arguments on June 13, 2015, Justices Kennedy, Alito, Scalia and Roberts seemed to accept the “closely-regulated” rule as applied in this case which leaves significant question as to whether the Court has any desire or intent to narrow the Burger exception.

[1] See ISRI Leadership Update newsletter, (June 23, 2015). It is plausible that the Supreme Court could re-open the Burger case following its ruling in June 2016 that the Fourth Amendment does require a warrant for the inspection of hotel records.  In that ruling, Justice Sotomayor indicated she was reluctant to embrace the “closely regulated” exception to the Fourth Amendment warrant requirement and Justices Kennedy, Ginsburg, Breyer, and Kagan agreed.  Justice Scalia wrote the dissenting opinion in which Justices Roberts, Thomas, and Alito, Jr. joined.

[1] In Chevron v. NRDC, 46 U.S. 837 (1984), the Supreme Court held that courts should defer to reasonable agency interpretations of ambiguous statutes.

SPAN Main