Garland v. small businesses: Nominee a bad choice

Tony Gagliardi NFIB
Tony Gagliardi NFIB

President Barack Obama has nominated Merrick Garland, a judge on the U.S. Court of Appeals for the District of Columbia Circuit, to replace Justice Antonin Scalia on the U.S. Supreme Court. If confirmed, Garland could serve on the court for at least a decade and tip the balance in favor of the liberal block of justices who routinely side with government over employers.

The consequences for the economy and especially small businesses could be harsh and long lasting. That’s why the National Federation of Independent Business has been vetting Judge Garland’s record for weeks. Our legal experts have been pouring over his rulings and public statements related to hundreds of cases.

After studying his record, the NFIB found Garland has sided overwhelmingly with regulators, labor unions, trial lawyers and environmental activists. Small employers have almost always been on the losing end of his decisions.

In NAHB v. EPA, Judge Garland in 2011 rejected a Regulatory Flexibility Act (RFA) claim by the National Association of Home Builders against the Environmental Protection Agency. He did so despite the fact the RFA requires certain agencies to analyze the effects of their actions on small employers. That’s an important protection for small businesses who struggle with the costs of regulations. According to the U.S. Small Business Administration, the typical small business spends $12,000 per worker annually to comply with federal regulations. There’s little doubt Judge Garland would defer to regulators as a Supreme Court justice.

In Rancho Viejo LLC v. Norton in 2003, Garland argued the federal government can regulate private property in California under the Commerce Clause of the Constitution because of the presence of a unique species of toad. The Commerce Clause applies to interstate commerce. The toad wasn’t part of any interstate commercial activity. Nevertheless, Garland twisted the Commerce Clause into a pretzel to rationalize federal regulation. Would he be just as creative as a Supreme Court justice in giving regulators more power over private property? The NFIB believes that’s very likely.

On the Circuit Court, Judge Garland ruled in many cases involving the National Labor Relations Board (NLRB). The NLRB is supposed to be a neutral arbiter of labor disputes. Often, however, it acts more as an agent of labor unions. That’s been especially true under President Obama. Garland ruled in two cases that when employers are found guilty of violations, not only should their business assets be penalized, but also their personal assets. In other words, according to Garland, a business owner’s personal assets, like homes and retirement savings, are fair game for regulators.

In 16 major labor decisions, Garland ruled in favor of the NLRB in all but one case. In that case he voted with the union. That’s the pattern throughout his long tenure on the bench. He strongly favors government power over private enterprise. He has deep sympathies for labor unions over employers. He’s certain to bring those views to the Supreme Court, where big decisions affecting the economy are likely to be made.

The NFIB is a plaintiff in two very important cases that soon could land at the Supreme Court. The NFIB has challenged the EPA Waters of the United States rule requiring business owners to seek federal approval for even the smallest property improvements as long as there is water nearby. The applications will cost thousands of dollars, the delays will be endless and the threat of litigation will hang over every project.

The EPA Power Plan rule is just as potentially damaging. It forces states to switch from coal as a source of electricity to more expensive alternatives. Even the EPA predicts it will significantly increase the cost of electricity. That means higher fixed costs and lower profits for small businesses that are already struggling.

After examining his record, it’s a fair assumption Judge Garland would readily side with the government in both of these major cases. Small business knows where he stands. The NFIB is firmly opposed to this nominee.