October Issues Preview

Amy Coney Barrett’s nomination to the Supreme Court was on the fast track in the Senate until a coronavirus outbreak hit key senators. But regardless of when she gets a confirmation vote, it’s clear that having a sixth conservative on the high court would have far-ranging implications on everything from health care to technology policy to environmental regulations.

POLITICO’s policy teams cast a wide net to see how Barrett would influence the nine-member high court, should she be confirmed by the Senate. Here’s what we found:

QUICK FIX

— The biggest and most politically volatile case of the new Supreme Court term is the challenge to the Affordable Care Act brought by the Trump administration that will be argued on Nov. 10. And the vacancy left by Ginsburg’s death increases the chances the court could undercut Obamacare’s popular insurance protections for preexisting conditions.

— The fate of the president’s latest attempt to exclude undocumented immigrants from the census count could land before the Supreme Court later this year, and Barrett could weigh in if she's on the bench.

— The high court also has amble room to consider hot-button questions about transgender rights in American schools.

Welcome to the October edition of the CEO Report, POLITICO Pro’s high-level outlook on the policy issues driving the month … and beyond.

AGRICULTURE

Ag hopes for an environmental break: Agriculture industry leaders are hopeful that a Barrett confirmation would create a solid conservative majority that could help beat back environmental rules they dislike and protect some of the Trump administration’s deregulatory reforms that have been challenged.

Barrett doesn’t have much of a record on environmental decisions, but green groups are very concerned about how she might rule on issues related to the Endangered Species Act, Clean Water Act and Clean Air Act.

The court is scheduled to hear arguments in December on a combined case involving Nestlé USA, Cargill Inc. and a group of Malian citizens who claim they were subjected to child slavery on cocoa farms in Ivory Coast.

A U.S. District Court in California previously ruled that the companies couldn’t be held liable, but an appellate court overturned the ruling, prompting Nestlé and Cargill to appeal to the Supreme Court. — Helena Bottemiller Evich

HEALTH CARE

Obamacare, abortion cases add drama: Health care is looming over the Supreme Court’s new term even before Barrett’s nomination moves through the Senate as justices are set to quickly weigh the future of Obamacare in a marquee case shortly after Election Day.

The Justice Department is asking the high court for an emergency stay that would restore federal rules restricting access to medication abortions after they had been halted for the coronavirus pandemic. The decision — which would mark the first time the court weighs reproductive rights since the death of Ginsburg — could come this week.

On Tuesday, the eight justices will also weigh whether states can regulate pharmacy benefit managers — key middlemen in the health supply chain who administer drug benefits for employers and insurers — in a case held over from last term's pandemic shortened docket.

The biggest lobby for PBMs is fighting Arkansas’ effort to set rates on the companies in arguments that take up if ERISA preempts state oversight of the firms' pricing practices.

The biggest and most politically volatile case of the term, however, is California v. Texas — a challenge to the Affordable Care Act’s constitutionality brought by the Trump administration and a group of conservative-led states that will be argued on Nov. 10.

While the case pivots around the individual mandate, it raises questions about the entire law’s survival. And the vacancy left by Ginsburg’s death increases the chances the court could undercut Obamacare’s popular insurance protections for preexisting conditions, especially if the president can quickly install Barrett, or just drag out the legal fight.

The way the case could jeopardize access to health coverage during the coronavirus pandemic has made it a leading Democratic talking point, with Joe Biden and congressional candidates assailing the GOP for trying to strike the law during a public health crisis without having a backup plan.

Even if the law survives, the addition of another conservative justice would make it more likely the court could rule on other key issues surrounding the health law, including whether states can impose work requirements on Medicaid recipients.

Abortion could also reappear on the high court’s agenda if justices decide to consider any of a series of restrictions that would effectively eliminate access to the procedure for most of the country.

Several cases in the legal pipeline could allow the justices to effectively cut back access to the procedure without having to directly confront the landmark Roe v. Wade decision that legalized the procedure.

The court could also soon consider bans on a common second-trimester abortion procedure, known as dilation and evacuation, that at least 10 states have sought to outlaw. — Adriel Bettelheim

EMPLOYMENT AND IMMIGRATION

Census countdown: The fate of Trump’s latest attempt to exclude undocumented immigrants from the census count could land before the Supreme Court later, with Barrett weighing in if she's confirmed by the Senate.

After the high court in 2019 blocked the administration’s attempt to add a citizenship question to the 2020 census, the president instructed the Commerce Department to exclude undocumented immigrants from the census count for the purpose of congressional reapportionment, by using government data.

In September, a federal court halted that effort, finding that excluding the immigrants would violate the 14th Amendment, which requires the number of House seats each state is allotted to be based on “counting the whole number of persons in each State,“ and federal law, which permits the commerce secretary to include only census figures in his report to the president.

The Trump administration has since appealed the ruling in New York Immigration Coalition v. Trump to the Supreme Court and requested it decide the case before Dec. 31., when the Commerce Department is required by statute to deliver the census count to the president.

The Supreme Court has issued a mixed bag of decisions on Trump’s immigration actions. Last year, it gave his administration permission to implement a sweeping ban on asylum seekers who pass through another country en route to the U.S. while challenges to the policy played out. In June, however, Chief Justice John Roberts sided with the court’s liberals in rejecting Trump’s decision to end the Obama program protecting so-called Dreamers, those who were brought to the U.S. as children without documentation.

Barrett, though, voted to uphold Trump’s immigration policies during her tenure as a federal appellate court judge, a sign that she could tip the high court in the president’s favor on the issue.

In June, she was the lone judge to dissent in a decision blocking Trump’s public charge rule, which was written to make it harder for immigrants who rely on Medicaid, food stamps and other programs to get green cards and visas. — Rebecca Rainey and Eleanor Mueller

EDUCATION

Transgender student rights: The court’s recent Bostock v. Clayton County decision leaves ample room for justices to consider hot-button questions about transgender rights in American schools.

Infuriated social conservatives fumed this summer after Trump’s first Supreme Court nominee, Justice Neil Gorsuch, wrote the majority opinion that protects LGBTQ Americans from workplace discrimination.

Employers feared the Bostock decision would sweep away “sex-segregated bathrooms, locker rooms, and dress codes,” Gorsuch wrote. But he stressed the majority opinion does not “purport to address bathrooms, locker rooms, or anything else of the kind”.

Ginsburg played a key role in the June ruling — just one example of how she swayed the court toward expanding LGBTQ rights and narrowing religious exemptions.

But with a new 6-3 conservative majority, the scale may tip back the other way, leading the court to rule more frequently in favor of religious exemptions and, thus, diluting the impact of Bostock.

In November, the justices are slated to hear the case of Fulton v. City of Philadelphia , in which a Catholic adoption agency is suing the city over its exclusion from the public foster-care system.

Because the agency doesn’t accept same-sex parents, Philadelphia said, it was in violation of the city's anti-discrimination policy. The agency contends that this is a violation of its freedom of religion.

Should a newly conservative court rule in favor of the agency, it could have widespread implications in weakening the newly imposed protections for LGBTQ workers because it would strengthen employers’ case for religious exemptions.

This summer, the 4th Circuit Court of Appeals said barring students from using the bathroom that matches their gender identity is unconstitutional and a violation of education anti-sex discrimination laws. The 11th Circuit Court of Appeals ruled in favor of a transgender teen who sued to force his Florida high school to allow him to use the boys restroom. A federal judge in Idaho blocked a state law that barred transgender women from participating in women’s sports.

Meanwhile, the Education Department threatened Connecticut's high school sports authority and a half dozen local school boards with legal action or a loss of funding after concluding their adherence to a state transgender athlete policy violated federal sexual discrimination laws. The Bostock decision, government attorneys argued last month, “does not control” the department’s interpretation of Title IX rules. — Juan Perez, Jr.

TECHNOLOGY

Tech industry readies for Google v. Oracle: Google and Oracle will finally argue their decade-long copyright battle before the Supreme Court on Wednesday — a case that could fundamentally alter how intellectual property law applies to software.

The hearing was scheduled for this past spring but delayed due to the coronavirus pandemic. At issue is whether Google violated copyright law when it lifted Oracle-owned code to create its Android mobile operating system. Google says the code is not subject to copyright, and, if it is, that it qualifies as fair use.

The tech rivals have each argued they must win or the industry standard for sharing code will be forever changed. Some have already speculated that Ginsburg’s absence on the high court could shift the balance in Google's favor. She was among the court's most ardent supporters of intellectual property protections and may have been sympathetic to Oracle's argument that it should have been compensated when Google used its code. — Steven Overly

FINANCIAL SERVICES

Fintech fight: Barrett’s ascendance to the high court could create new complications for technology-driven financial startups seeking federal banking licenses that could provide a major breakthrough for the emerging industry.

At issue is a legal fight over an attempt by the Office of the Comptroller of the Currency, a top banking regulator, to establish a so-called fintech charter that would provide a new regulatory pathway for online lenders and other financial technology firms to operate across the country without complying with state-by-state rules.

As a “textualist” who clerked for the late Justice Antonin Scalia, Barrett may not be willing to give the OCC deference to proceed with the charter based on a strict reading of the National Bank Act.

No deference?: More generally, Barrett's presence on the court could jeopardize a legal doctrine that many conservatives believe unconstitutionally empowers regulators, known as Chevron Deference. Named after a 1984 ruling, that doctrine holds that when a statute about a regulator’s power is ambiguous, judges should defer to the agency’s reasonable interpretation of the law.

Any number of cases could potentially lead the justices to revisit Chevron, with Trump’s two other appointees to the high court eager to rein in the doctrine. But Barrett’s views are by no means certain, Indeed, her mentor, Scalia, long championed Chevron Deference, writing that “broad delegation to the Executive is a hallmark of the modern administrative state.”

Barrett has advocated that the Supreme Court be more willing to overturn precedents. Last year, the court narrowly upheld a similar precedent, the Auer deference, which holds that courts should defer to an agency’s own interpretation of its regulations when the regulations themselves are ambiguous. Conservatives are also gunning for that precedent.

Who’s in charge?: The Supreme Court is set to hear a case on the constitutionality of the Federal Housing Finance Agency in a challenge brought by shareholders of Fannie Mae and Freddie Mac, the government-controlled companies that stand behind about half the country’s mortgages.

The case is the culmination of a long-running legal dispute over changes that Treasury and the FHFA made to a shareholder agreement in 2012 requiring Fannie and Freddie to pass all their profits to the government's coffers.

The companies have since been permitted to start retaining capital again, as the Trump administration prepares to release them from conservatorship.

The justices combined that case with a related shareholder challenge to the FHFA’s leadership structure. The agency, like the Consumer Financial Protection Bureau, is headed by a director appointed to a five-year term who can only be fired for cause.

The high court this year ruled 5-4 in a similar case that a law stipulating that the consumer bureau’s director could only be dismissed for cause is unconstitutional.

All the court’s conservative appointees backed eliminating restrictions on the president’s ability to fire an agency head, and Barrett would likely join them if confirmed.

An eight-member court would probably produce a 5-3 decision similar to the ruling in the consumer bureau case. — Zachary Warmbrodt, Victoria Guida and Katy O’Donnell

TAX

Regulation precedents in the crosshairs: A case on the Supreme Court’s docket for December could have major ramifications for the IRS’s regulatory and tax collection authority.

The justices have been asked to decide between two laws that affect the agency’s freedom to maneuver in those areas. The case was brought by CIC Services, which challenged IRS reporting requirements for “micro-captive” insurance transactions, a complex procedure that some taxpayers use to reduce their taxable income.

The IRS says the requirements are protected by the Anti-Injunction Act, a law that prohibits legal challenges to a tax before it is collected, since there are potential tax penalties for failing to report such transactions. CIC, a company that provides advisory services for micro-captive deals, argues the reporting rules are more like regulations. So, the company says, the IRS should have followed the Administrative Procedure Act, which spells out procedures required for creating new regulations, including hearings.

Businesses, tax experts and others will be watching to see whether the court narrows the Anti-Injunction Act or puts more limits on the agency’s rule-making authority. Oral arguments in the case, CIC Services, LLC v. Internal Revenue Service, are scheduled for Dec. 1. — Toby Eckert

DEFENSE

Border wall fight: Defense and national security issues haven't been high on the Supreme Court's docket lately, but the justices have already dealt Trump a win on his diversion of Pentagon money to help construct his border wall with Mexico.

The Supreme Court has twice voted 5-4, along ideological lines, to let border wall construction continue as lawsuits play out in the lower courts. Replacing the liberal Ginsburg the conservative Barrett is unlikely to change that outcome.

Several groups, including 19 states, are challenging the legality of Trump's diversion of Pentagon funds that were appropriated by Congress. And the D.C. Circuit Court of Appeals has ruled that House Democrats have standing to pursue a lawsuit over Trump's border wall spending.

Transgender troops: Barrett could also bolster the Trump administration’s defense of his transgender troop ban if the case heads to the Supreme Court. Several lawsuits are challenging the constitutionality of restrictions on transgender troops, which overturned the Obama-era policy allowing transgender people to serve openly.

Without ruling on its legality, the Supreme Court voted 5-4 in January 2019 to allow the new policy to take effect while it is argued in lower courts. The new policy formally went into effect in April 2019.

Challenges to both border wall spending and the transgender troop ban would likely be moot, however, if Trump loses reelection. Biden, the Democratic presidential nominee, has pledged to overturn both policies if he prevails. — Connor O’Brien

CANNABIS

The high court may hear marijuana lawsuit: It’s been 15 years since the Supreme Court last took up a marijuana case — Gonzalez v. Raich — when a majority of the justices ruled against California medical marijuana patients and growers who got raided by the DEA.

On Friday, the Supreme Court is scheduled to consider whether to take up Washington v. Barr, a case challenging the constitutionality of marijuana’s federal illegality.

Lower courts have ruled the plaintiffs have yet to exhaust their administrative remedies. But they’re asking the high court to hear their case, arguing administrative remedies are not a sufficient solution.

If the court’s past record on marijuana cases is any indication, it seems unlikely that the plaintiffs would see any success before the high court . But attorneys for the plaintiffs say times have changed, with a majority of Americans now living in a state that has legalized medical or recreational marijuana, the current federal-state conflict is untenable. — Mona Zhang

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