Another Blow to Gay Rights Likely

This would be the first time in the Court's history correct that it would say that a business opened to the public, a commercial business open to the public serving the public, that it could refuse to serve a customer based on race, sex, religion, or sexual orientation. But several of the conservative justices focused on the designers stated intention to create customized wedding sites and the difference between businesses engaged in expression and one simply selling products. Here's Justice

Brett Kavanaugh, how do you characterize website designers? Are they more like the restaurants and the jewelers and the tailors, or they more like, uh, you know, the publishing houses and the other free speech analogs. My guest is constitutional law expert Michael Dorff, a professor at Cornell Law School. Under Colorado law, a business may not refuse to serve individuals because of their sexual orientation. How is freedom of

speech involved? So, the petitioner argues that her web design business is inherently expressive because when clients come to her and say they want her to design a wedding website, she puts various creative efforts into it to fashion a bespoke website, and in so doing she is creating speech thus speaking, and if the government tells her she must create same sex wedding websites, it is forcing her to espouse a message the tacit approval of same sex marriage

that is inconsistent with her beliefs tell us now. The justices responded to this claim. Some of them were skeptical of whether there really was any expression at all here. I think Justice Sonia Sotomayor was the most skeptical. She wanted to know how this is speech by Laurie Smith, the owner of the web design company, given that it's essentially for the couple. Right, part of the point is that it's not speech endorsing same sex marriage at all.

It's simply saying things like, here's the date of the wedding, here's the venue. Here direct and here's a registry, here's how we met, etcetera. So there's skepticism that it's the web designers speech at all, and then there's a question of whether it's speech that endorses this particular message. So

that's at one end. At the other end of the spectrum, you had Justice Alito and some of the other justices who seem to just accept that, of course this is expressive, and they gave some hypothetical examples where you pretty clearly would have expression. For example, you know, if you had to put on the website, I the web designer, believe that God blesses this marriage, or even just God blesses

this marriage. I think some of the justice has had the view that there certainly is expression here and it could be understood as expression endorsing same sex marriage. And then the question is does the state get to override that because they have a public accommodations law And what about the argument they're making about expressive works. Oh, this is hardly new. So a very similar case was before

the Supreme Court in seventeen, also from Colorado. That case involved a baker, the so called Masterpiece Cake Shop case, and there too, the business owner objected to providing services for a same sex wedding on the ground that he opposed same sex marriage. In that case, the court had before it the same argument that has here, but it also had a claim of religious discrimination, and a majority of the court decided the case on that ground without

addressing the free speech issue. But I should say that these arguments go back as far as the nineteen sixties when Congress enacted the nineteen sixty four Civil Rights Act that includes titled two with the Public Accommodations Provision, and some business owners during the tail end of the Jim Crow era said that it would be inconsistent with either their religious or speech views to serve African American customers either at all or in an integraded setting. And the

claims then were pretty quickly rejected by the courts. The justices are considering only her free speech arguments, not her religious rights arguments. Did the justices jettison the religious rights part of the case so they'll be able to say, the conservative justices, well, this is free speech, not free exercise.

Of religion against same sex marriage. Well, I'm not sure why they decided not to take the religion question, but it was apparent throughout the argument that even though as a technical matter they're not going to decide and can't decide the case on religious freedom grounds, this is understood

to be religiously motivated speech. And of course everybody understands that part of what sets this up in a conservative liberal ideological space, so that the conservatives come in sympathetic to the claimant and liberals come in sympathetic to the state. That might not necessarily be the political valence if we imagined a very different law, and they're very different circumstances

with different speakers. But the religious dimension of it, I think is below the surface, if not expressly part of the case. There is a lot of discussion about race discrimination here. The liberal justices express concern that this argument would open the door to discrimination on the basis of race or disability. Justice Soda Mayor said, how about people who don't believe in interracial marriage, or about people who don't believe that disabled people should get married? Where is

the line? That is a question? Where is the line here? Yeah, so that's right there were a whole series of hypothetical examples.

One that Justice Jackson gave, which I think was intriguing, was she imagined a Santa Clause in a mall who takes photos with and the Santa Claus takes photographs with children of all races, but says that there's a certain kind of photograph sort of it's a wonderful life kind of photograph that he only takes with white children because it's got a sort of nostalgic element and that's part

of his artistic expression. So it's not that he doesn't serve African American children, but he excludes him from that. And presumably a Colorado style public accommodations law would say, well, you can't do that. And the argument of the petitioner here would say, well, that Santa Claus gets to exclude the African American children from that kind of photograph, which seems problematic. Justice Alito countered with his own Santa Claus example.

So he imagined an African American Santa Claus at the other end of the mall and a child who wants to be photographed in a ku Klux Klan outfit. And the point of his example, I think was to generate the intuition that the African American Santa Claus shouldn't have to do that. And I thought there was a good response to that that got kind of washed over pretty ically, which was that there is no public accommodations law saying you have to serve people even if they're in clan outfits,

at least not in Colorado, not at the federal level. Now, it's true that there are some state laws that say you can't discriminate in your business on the basis of the politics or ideology of your customers. And so maybe in one of those states that law would mean that the African American Santa Claus would have to take the

photo with the child in the clan outfit. But you might say, and I would be inclined to say, that the state doesn't have the same compelling interest in forbidding discrimination on the basis of political viewpoints that it does in preventing the discrimination on the basis of an identity characteristic such as ray sex, sexual orientation, gender identity, or disability.

After all, you can always go into the store and you know, take off your Maga hat or your A C l U pin if you're worried it about viewpoint discrimination. You can't you know, change who you are in these other settings, nor should you have to even if you can, you know, be closeted for purposes of getting service. Yeah, I mean there were so many hypotheticals and some for example, what happens if an architect whose work is expressive refuses to work for black customers? I mean, none of those

were answered sufficiently. I think that's right. So I think it's very tempting to want to go where David Cole, the National legal director of the a c L. You went in a brief at the a c L you filed and in a New York Times op ed that he published under his own name, which is to say that none of these claims really should get off the ground.

Of course, you have a right to free speech, but when you go out into the marketplace and offer your services, you're going to have to take some lumps, because otherwise everybody in virtually any trade or craft is going to

say that there's some expressive element. Right. Think about a bart Sure bartender just provides drinks, but we know that part of being a bartender is talking to the patrons at the bar and you might not want to engage in certain conversations with certain people because you'll have to express views that are polite and therefore could be taken

as endorsing their lifestyle or whatever it is. So if the Court goes down this road and wants to say, well, there's some occupations, some services, some goods that are more inherently expressive than others, it's going to have a lot of cases for a long time trying to draw those lines. Why do you think that Justices took this case over the rights of same sex couples at a time when there's so much concern that the Court will reverse the right to same sex marriage, just as it reversed the

right to abortion. I mean, that's the reason for the same sex marriage bill. I think they took it for at least two sorts of reasons. One is that the timing is somewhat accidental. This was an issue that they did want to address in twenties mainteen. They punted then,

and it's sort of been around since then. And that was from before the Court's decision overruling rob Wade and thus raising the possibility of the overruling of other cases, including a Burger Fell against HADJ is the case recognizing a right to same sex marriage. The second reason, though, I think, is that especially the conservative justices on this court want to limit the scope of lgbt Q plus equality, at least insofar as they see it infringing on conservative

religious lifestyles. There's a line in Justice Kennedy's majority opinion in the Burger Filt case in which he says that many people oppose same sex marriage based on honorable and decent religious or philosophical principles. Now, when Justice Kennedy wrote that, just the leado in dissent mocked it is saying, well, sure, you're saying that they're entitled to have these principles, are

just not entitled to act on them. But since then he and some of the other conservative justices have sort of taken that up as a banner to say, well, if it's decent and honorable, then people should be able to opt out. That wanting to oppose same sex marriage is not the same thing. It's not morally equivalent to race discrimination, and so they want to sort of carve

a hole in anti discrimination law. Indeed, you might even look at just as Gorsuch, who after all wrote the court's opinion in the case, finding that discrimination on the basis of sexual orientation and gender identity are forbidden by

the Federal employment anti discrimination law. That having sort of established his bona fides as not a homophob or transphobe in those cases, he now wants to say, but don't worry, I'm going to give something to the other side by giving this carve out or religiously motivated expression or opposition your said ruling for the web designer here would be the first time in Supreme Court history to allow a business open to the general public to refuse to serve

a customer based on race, sex, religion, or sexual orientation. So how do the conservatives make a carve out that doesn't characterize this as inviting business to be exempt from civil rights laws? Well, so, I mean, she's right, but

only because we defined you know, that narrowly. After all, in the hobby lobby case, and I believe it was the Court gave a carve out from statute and regulations requiring the provision of health insurance that covers contraception to religiously motivated business owners, and that was in the context of employment rather than public accommodations, but it's also a carve out from antidiscrimination law, also based in sort of

conservative religious principles. Part of the reason the Court would be doing this for the first time, I think, is because it's the first time they're addressing it in this specific context. Although I do think Justice of my Aora is right herketing back to those cases from the nineties and seventies in which they dismiss the proposed exceptions with

respect to race. But I think the answer to the question of how does the Court prevent people from perceiving this as them, you know, taking sides, you know, against anti discrimination law, is that they can't. They can't control how their decisions are perceived. I actually would share that perception. I'm you know, I'm sympathetic to the position articulated by Justice so to Mayor, but I think this Court has shown that they're not all that attuned to or concerned

about how the public perceives them. Chief Justice Roberts seemed more concerned about that early in his career, and maybe still is, but he's lost control of this court. I know you can't get everything from these oral arguments, but what do you see as the result here, I think it's likely that three to three creative and MS Smith,

the owner of the web design company, will win. I think that at chief Justice Roberts will either write the opinion himself or try to assign it to one of his colleagues, likely Justice Barrett or Justice Kavanaugh, who he thinks will write a somewhat narrow opinion that doesn't open the door to the complete gutting of anti discrimination law, at least not initially. But exactly what distinctions they draw is hard to predict at this point. You know, depending

on how they write it. This becomes a question that's going to be litigated over and over, isn't it. It's it's opening the door. Yes, sure, for the most part, claims like this have lost in the lower courts. But if the web designer wins in the Supreme Court, even in a relatively narrow way, there will then be a large number of cases of this sort, posing all sorts

of difficult questions. Right, one will be about you know, our florist like web designers if they're not, what about Baker's What about you know, the difference between a bespoke website and one off the rack? Right? So there are very many questions that will be left open, and as alexis to Toakville pointed out in the early nineteenth century when he visited America. In America, the open questions become

legal questions and they're all going to be litigated. So then, if this decision comes out as you expected to, what does this mean for lgbt Q rights, It's open season on lgbt Q rights. I No, I don't think so. I think I think it's still going to be true that the vast majority of let's say, same sex couples looking for wedding services will find them, especially because people

tend to clump geographically in places that are sympathetic. So you know, the people who will be most hurt by this are same sex couples and lgbt Q plus individuals living outside of major metropolitan areas in places that are not sympathetic to their rights, and they will face discrimination there. Although the truth is that they might face discrimination they're already because the law is hardly perfect at changing people's attitudes.

This um struck me. The web designer hasn't even tried to start wedding website business yet, so why does she have standing and it seems like it's one of those cases being brought to bring this issue to the court. Yeah, that that was a threshold question. It does seem like it's sort of made up, both because she hasn't entered the business yet. It was done on stipulated facts, just as Thomas asked that question at the beginning of the case. And there is sort of a technical way around it.

But it does it does have that kind of air of unreality. It seems unreal to me in another way, which is, I don't see how she's going to make any money on this website anyway. If you just if you just go online and google wedding websites, you'll find half a dozen services that allow you to create your own website in about fifteen minutes for free, and they look very professional. Um so, why someone is going to go to this person to, you know, to have her

services for a fee is a mystery to me. Thanks so much, Mike. That's Professor Michael Dorff of Cornell Law School. The fate of grocery store workers seems to be a pivotal factor in the Federal Trade Commission's decision on whether to sue to block Kroger's twenty four point six billion

dollar acquisition of Albertson's. The labor concerns surrounding the merger were underscore at a Senate hearing this week, where Kroger's CEO made promises not to lay off quote frontline workers, joining me as Bloomberg Law reporter Dan Paskin, Dan tell us a little about this proposed merger. So Kroger and Albertson's, which are two of the largest grocery companies in the US. They're the second and fourth largest in the country in

terms of where Americans buy their groceries. So walmartt is also Mozon is competing with them program I was a couple of months ago. It's going to buy Albertson's um for almost twenty five billion dollars, and regulators and some of the public and advocacy groups are concerned that the deal could basically concentrate the market for the groceries in certain parts of the country where there aren't that many stores and where Kroger and Albertson's stores like Safeway and

Harris Teeter are the only ones in town. Has Albertson's promised that stores won't be closed, that they'll be sold. Is that part of the deal. Yes, So, as part of the proposed deal, Kroger and Albertson's are offering to spin off up to about six hundred, six hundred fifty stores, probably around three hundred right now, basically to a suage concerns that it would concentrate the market, and it's basically a move to forestall a Federal Trade Commission challenge to

the deal. And yes, in a kind of hearing last week, the CEO Kroger committed to not close stores, distribution centers, or manufacturing facilities as a result of the merger. We've seen antitrust regulators focus recently on concerns about labor with mergers or acquisition. So tell us what the concern is here about labor. Yeah, So the last few years, labor has become a much more significant part of murder review and anti trust in general. It's not just about product

markets anymore. It's also about you know, where you and I work, and so here there's a concern that if you have several stores in a town or a city where grocery workers work, and the merger goes through, all of the stores could be owned by the new Kroger Albertson's company, the merged company, and so workers. Typically when when mergers go through, stores are closed, there are layoffs because we can save money by laying off like extra workers.

And so lawmakers and specifically the union that represents over a hundred thousand Roger and Albertson's workers, are concerned that despite kind of what the CEO said is hearing last week, there could still be layoffs. There could still be um

decreasing circumstances for promotions. Pay could be suppressed because when you think about it, um, if I work at at a Kroger store, and UM, I want to get a raise, maybe the best way for me to get a raised isn't keep working at the Kroger store, but it's to get hired at an Albigeon store or somewhere else where they'll pay me more and go. When you don't have that kind of threat of losing your employees to a competitor, you're much less incentivized to raise their wages every so

often give them a raise. At the Senate hearing, the Kroger CEO promised to refrain from laying off quote frontline workers. So what did he mean by frontline take a good question. Um, he was referring to kind of the frontline workers that we've talked about all pandemic, and he was pressed on it by a couple of different editors to kind of say, will you not layoff any workers? And he wouldn't say that, which the implication being that kind of more staffing and

managerial roles could be affected, or people at headquarters. But it's hard to say exactly, like we don't know exactly what human He didn't offer a kind of a clear definition of frontline, so it's it's hard to say. And the union, like I said, is concerned that even that

isn't a guarantee. This focus of the FTC does it come from the Biden administration's supportive unions, Yes and no. Um in the DJ and the FTC came out with new guidance that they would be going after what are called noppoach cases and treating them as criminal cases, which is basically agreements between employers not to hire each other's workers. So there there's evidence that like this overall interest in

labor goes beyond the Biden administration. That was at the end of the Obama administration into the Trump administration when that happens. But yes, this kind of specific focus on workers is very much under FTC chair Lena Kahn and d o J and Star's division as an Attorney General Jonathan canter Um, they both said it's a big priority for them, and it's very much in line with the

overall bid administration focus on labor and on competition. So the Justice Department was successful recently in blocking Penguin Random Houses two point one eight billion dollar acquisition of Simon and Schuster, and the focus there was on the authors who might lose lucrative contracts and advances because of a deal. Is that different from trying to focus on supermarket workers.

It's actually pretty similar, and that's a really good comparison. So, I mean, yes, they are at opposite ends of the economic spectrum in terms of income and the kind of form of labor, but they're both cases that kind of could indicate a focus on labor um. The publisher's case is actually the first big murder challenge we've seen, or at least the first one in a while that has focused primarily on labor. There were other arguments there, but d o J really leaned on kind of the effect

on authors. So yeah, they're they're similar, and there I mean, you can't compare them perfectly. That the group of authors who make kind of the amount of money and the books um that would have been affected by the Penguin Random House deal are nowhere in the economic bracket of grocery store workers. And grocery store workers can work in other places. They're not limited to just banking groceries at Kroger, for example. But now there are absolutely comparison and the

overall focus is similar. Could the FTC decide to go after this merger just based on its effect on labor markets? That's pretty unlikely, um, And it's we probably won't see a challenge really with any specific allegations about labor markets. We won't see a kind of a Sherman Act or Clayton Act charge saying this would concentrate the labor market and in Los Angeles or in Washington. Um. What it

will do is uh. The sources told me it's likely to kind of influence how the FTC analyzes the deal right now before it actually files the challenge and during these because of the merger of view process before an agency decides to sue or not um their meeting with the lawyers or um both companies, and it's likely influencing the FTC to kind of not take company promises that like they won't close stores for granted and often kind of those are the sorts of things companies will point

out as reasons to let the deal go through, like these are kind of shavings that are good for the economy and that we can um, we translate the savings to customers right that you won't pay as much at the cash register. And it basically means, uh, the SEC's focused on whatever. Basically means the companies probably can't make those commitments to the FTC because the FTC won't see them as a good thing. So they're kind of forcedalled

in those defenses what we call in efficiencies defense. It definitely means the FEC is scrutinizing as harder than it would be other ones. How does Albertson's acquisition in safe Way affect the thinking here or you know, the thinking of those who are opposing this. Yeah, so in Albertson's purchased safe Way, which is a pretty significant, pretty large brand, and as part of the deal, the FTC let it

go through and required that alberton has been off. I believe it was a hundred and sixty nine hundred sixty eight stores. Most of those went to a regional grocery chain called Higgins, which I believe is in the Pacific Northwest and UM within a year, Higgins declared bankruptcy and sold thirty three of the stores back to Albertson's at a massive discount. So Alberton's actually made money on the stores that that has then bought back. They purchased them

for so little. One of my sources called it like a poster child for bad murder of you because the FTC, according to is advocate and now chair Lena Coln, made a mistake in letting Mattieod go through at least with the divester that it required, because Higgins can handle the

additional stores, and albertson has benefited. At the end of the day, UM and we talked to several union members who had friends who are laid off for co workers, and there was a union press conference where members talked about like going through layoffs as a result of as well. So the ACTUALC is definitely aware of what went wrong. Seven years ago Um, and that's going to make both them and Oversight way more interested in longer push back. Here.

Thanks Dan. That's Bloomberg Law reporter Dan Paskin, and that's it for this edition of The Bloomberg Law Show. Remember you can always get the latest legal news on our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, and at www dot Bloomberg dot com slash podcast slash Law, And remember to tune into The Bloomberg Law Show every week. I'd attend B M. Wall Street Time. I'm June Grossow, and you're listening to Bloomberg