Supreme Court

5 Ways Scalia's Death Will Affect U.S. Business

5 Ways Scalia's Death Will Affect U.S. Business

U.S. Supreme Court Justice Antonin Scalia.

The unexpected passing over the weekend of U.S. Supreme Court Justice Antonin Scalia has touched off a political scramble in Washington D.C., and produced numerous tributes to Scalia’s towering presence among conservative intellectuals and in U.S. jurisprudence.

Scalia’s passing also has immediate consequences for U.S. business. His death scrambles the expected outcome in key cases before the court and, in the longer term, removes the passionate pen Scalia often deployed on the side of business.

Here are five ways the death of Scalia, one of five conservatives on the nine-member court, will affect U.S. business (keep in mind that, under Supreme Court practice, a 4-4 tie means the ruling from the lower-instance court stands).

1. Class action lawsuits

The Supreme Court, led by Scalia, has made it harder in recent years for lawyers to use class action cases to sue companies. Experts predicted that the court would use three current cases to make it harder still. Now, Scalia’s death means these cases will likely result in a tie (a negative outcome for the companies here) or a loss.

The most important case, called Spokeo, involves data privacy, and turns on what type of harm consumers must show to bring a lawsuit. If the court doesn’t overturn the lower ruling, expect more class actions over technical violations of privacy -- and in similar situations where a company has broken a law -- but where no one is obviously harmed.

The second case involves Microsoft, which is challenging a procedural maneuver that lets lawyers have a second crack at filing as a class when their first attempt comes up short. The third case, involving Tyson Foods, is about workers using formulas, rather than actual damages, to show harm. Once again, the outlook for the companies looks much worse than it did a week ago.

2. Pollution regulations/climate change

The Supreme Court in early February delivered a major blow to President Obama’s plan to use an executive order to cut carbon emissions. In a 5-4 ruling, the court imposed a stay on the proposal until an appeals court can rule -- a victory for utilities and mining companies that say Obama’s plan is illegal and too expensive.

The companies won a stay thanks to Scalia’s vote, and it looked like they would win if the case returned to the Supreme Court for a final ruling. Now, all bets are off. The appeals court is expected to side with Obama, and Scalia’s absence means it will be hard for the industry to block the plan (unless a Republican wins this year’s presidential election).

3. Immigration

The single biggest case of this Supreme Court term is probably Texas vs. United States, in which the state is challenging an order by President Obama to let 4 million undocumented people avoid deportation and find work. While companies have not weighed in too loudly on the case, the outcome has enormous implications for industries like agriculture and construction, which draw on undocumented workers for labor.

What happens next? A lower court ordered a stop to the plan, but the final outcome is unclear. The White House will need a majority of the votes (a 4-4 tie means the lower order stays in place), and that result became more likely in the absence of the arch-conservative Scalia.

4. Intellectual property

The Supreme Court in recent years has repeatedly stepped in to fix the country’s troubled patent system, and has also handed down important copyright rulings. By his own admission, these intellectual property issues were a rare topic on which Scalia did not see himself as an authority (although he was the first to introduce “patent troll” to the Supreme Court’s lexicon). In 2014, however, he did issue a sharp dissent in a high-profile case that favored TV broadcasters, accusing the majority of using a “crude “looks-like-cable-TV” solution.”

As Stanford law professor Lisa Ouellette observes, Scalia’s IP legacy represents a balance between the defense of property rights on one hand and, on the other, a desire to ensure companies don’t use intellectual property to grab undeserved monopolies. His absence could make it easier in the future for IP-intensive industries, like pharma and entertainment, to persuade the court to grant them expanded rights.

5. Unions

The big labor case this term turns on whether public employees at a California union can refuse, on First Amendment grounds, to pay fees for collective bargaining. Until last week, many thought the Supreme Court would side with the employee plaintiffs. This week, people are predicting the opposite.

While the case involves public unions, not private sector ones, it carries considerable significance for business too. A Supreme Court decision knocking down mandatory fee collection would deal a big blow to the overall power of organized labor. That outcome now looks less likely.

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