The Supreme Court is starting 2025 with a blockbuster case that will have dramatic implications for one of China’s most valuable technology companies, millions of American smartphone users, and some of the biggest social media companies in the US.
TikTok is making an emergency appeal before the highest court, asking it to block enforcement of a federal law signed by President Joe Biden in April that effectively bans the app on Jan. 19, unless it is sold to an owner not controlled by a foreign adversary.
The company's arguments that the law should be overturned in the name of free speech will be aired at a hearing on Jan. 10, just 10 days before Donald Trump is sworn in as president.
Trump, who on the campaign trail suggested in a social media post that he would "save TikTok," is asking the court to suspend the divestment deadline and consider his preference for a “negotiated resolution" — given that as president, he will be responsible for national security.
Late on Friday, the Department of Justice asked the Supreme Court to reject Trump's request, saying no one was disputing that China "seeks to undermine U.S. interests by amassing sensitive data about Americans and engaging in covert and malign influence operations."
A ruling from the Supreme Court to uphold the ban could be a long-term boon for TikTok's social media rivals by redistributing advertising dollars to platforms like Meta (META), according to Mark Lightner, head of special situations legal research for CreditSights, an independent credit research firm.
TikTok is arguing that a law passed by Congress that could result in a ban of the app violates the First Amendment. (Photo by Anna Barclay/Getty Images) ·Anna Barclay via Getty Images
Other US tech companies that supply microchips and cloud computing services to TikTok could see a dent in revenue.
The court may have tipped its hand about how it may rule, Lightner said, when it decided to hold arguments on Jan. 10 rather than first grant TikTok’s request to pause the new law and then hear arguments later in the court’s 2025 term.
One possible outcome in the coming weeks is that the court will find the law constitutional and let it stand, leaving Congress to deal with it if lawmakers and Trump want to reverse it.
"It’s possible there were not enough votes to grant a stay a couple weeks ago," Lightner said, noting that it takes five justices to implement a stay and just four to take up the dispute.
The TikTok case will likely be the most prominent corporate case to be argued before the Supreme Court in 2025.
But there are others the business world will surely be watching, with widespread implications for other key industries.
'Junior-varsity EPA'
One that could have major repercussions for the auto and fuel industries centers on longstanding opposition to how California sets vehicle emission standards, which are tougher than those imposed by the Environmental Protection Agency (EPA).
California can do this because of an exclusive waiver it was allowed to request from the EPA's Clean Air Act. The EPA allowed the waiver so the state could more aggressively address its smog issues.
Valero Energy Corp's Diamond Alternative Energy and other plaintiffs said the EPA's grant of this waiver let the state act as a "junior-varsity EPA" and quasi-federal regulator on global climate change.
California Gov. Gavin Newsom. REUTERS/Tingshu Wang ·REUTERS / Reuters
The plaintiffs in Diamond Alternative Energy v. Environmental Protection Agency include petroleum and biomass-derived fuel refiners and producers, along with a fuel trade association and 17 states. Automakers Ford (F), Volkswagen (VWAGY), Honda (HMC), BMW (BMW.DE), and Volvo also intervened in the case.
The case will be closely watched for its potential to impact the shift from fossil fuels to electric vehicles.
The Court will address whether the petitioners have standing to bring their case, given that the D.C. Circuit Court ruled they were not directly injured by the waiver, and whether the waiver is unlawful.
When is it OK not to pay?
Another key question to be considered by the Supreme Court could impact how much companies must pay for labor.
The case that surfaced this issue, EMD v. Carrera, started with work done by sales representatives at a company (EMD) that distributes food brands.
These reps said they didn’t receive overtime pay despite working more hours than a normal week. They filed a lawsuit under the Fair Labor Standards Act (FLSA) and found a lower court willing to rule in their favor.
The Supreme Court in Washington. (AP Photo/J. Scott Applewhite) ·ASSOCIATED PRESS
The court said EMD followed the wrong standard in classifying the representatives as exempt from minimum wage and overtime pay.
Although Congress passed the FLSA, allowing employers to exempt certain workers from overtime pay, including those who work as outside sales reps, the lower court said that a company must show "clear and convincing evidence" that a worker is exempt.
EMD has argued that such a bar is too high.
'Forum shopping'
Whether companies can file cases with courts that may be more inclined to favor their views is the subject of another case that will be argued this month before the Supreme Court.
It made the challenge in a New Orleans-based federal appeals court known as the Fifth Circuit, which covers Texas and nearby states and is known for its conservative opinions.
Vuse e-cigarette packages in 2021 in New York City, after the FDA approved authorization for the sale of an e-cigarette product from the R.J. Reynolds company for the first time. (Michael M. Santiago/Getty Images) ·Michael M. Santiago via Getty Images
A case against the FDA would normally be filed in Washington or in the area where R.J. is based, which would be the Fourth Circuit. But R.J. joined with sellers of vapes in Texas to file in the Fifth Circuit.
The Fifth Circuit ruled in R.J.’s favor last year, prompting the FDA to ask for a Supreme Court review.
The Biden administration's Justice Department argued the ruling from the Fifth Circuit "facilitates blatant forum shopping" and "undermines the precedents of other courts."
Wire fraud and wrongdoing
Another Supreme Court case that will come before the high court in 2025 could expand or limit the Justice Department's reach to go after financial wrongdoing.
The government argues that federal wire fraud and mail fraud statutes should be interpreted broadly to permit prosecution, even when the government did not suffer financial harm.
Daniel Ahn, a white-collar defense attorney and former federal prosecutor, said if the government's broader interpretation is accepted, it could lead to a larger swath of investigations into corporate conduct and to an increase in criminal and civil prosecutions.
"If the wire fraud statute is defined very broadly to encompass no financial loss schemes, then that really expands the universe of material that plaintiffs lawyers ... can bring against businesses," Ahn said.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
