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U.S. states set to gain billions in sales taxes after court ruling

FILE PHOTO: The U.S. Supreme Court is seen as the court nears the end of its term in Washington, U.S., June 11, 2018. REUTERS/Erin Schaff

By Hilary Russ

NEW YORK (Reuters) – U.S. states could reap billions in online sales tax revenue and buttress their budgets after the nation’s top court ruled on Thursday that e-commerce companies could be forced to collect the money, even if they have no physical presence in a state.

The Supreme Court’s ruling in favor of South Dakota and against Wayfair Inc and two other online retailers was a victory for state governments, and a boost for brick-and-mortar stores.

The effect is expected to be positive and widespread because 45 states impose sales taxes and until now were barred from requiring those companies to collect remote sales taxes.

That meant state and local governments lost as much as $13 billion of revenue in 2017, according to a federal report.

Now, states can push ahead with legislation requiring companies to collect and remit sales taxes for goods bought online elsewhere.

States that rely more heavily on sales tax – as opposed to personal income tax, for instance – “are the big winners here and could see real budget gains if they follow South Dakota’s example,” said Fitch Ratings analyst Stephen Walsh.

As many as 24 states and their local governments could see tax revenue gains of at least 1 percent, according to Fitch’s research.

For a large state like Texas, the combined state and local revenue growth could be as high as $1.2 billion per year and will likely grow over time, Walsh said.

Washington, Florida, South Dakota, Nevada and Tennessee get more than half of their total revenues from sales taxes, meaning big gains could be in store.

An analysis by Barclays found that Louisiana would get an estimated 3 percent bump in total tax receipts if it begins forcing out-of-state online retailers to collect sales taxes. Oklahoma could also see a sizeable 2.7 percent gain, Barclays found.

But the party does not extend to places that do not charge sales taxes: Alaska, Delaware, Montana, New Hampshire and Oregon.

“New Hampshire’s lack of a sales tax is a competitive advantage for our state, and this decision will unfairly punish small businesses that are the backbone of our economy,” U.S. Senator Maggie Hassan said in a statement.

STATE MOVES NOT CERTAIN

The decision “will remake the landscape for state tax collection in the U.S.,” said Harley Duncan of the auditing firm KPMG.

However, the path is not clear. The court left room for future legal challenges, so state legislation could still face delays and backlash from the e-commerce industry.

The ruling “definitely goes out of its way to suggest there may have to be future litigation to decide ultimately where things will shake out,” said lawyer Paul Clement, who filed a brief backing Wayfair.

“You will certainly see, absent congressional action, significant litigation as states try to push the envelope on this,” said Mike Dabbs, eBay’s senior director of government relations.

Even so, most states may look to pass bills similar to Washington state’s, said Max Behlke of the National Conference of State Legislatures.

Its law was effective even before the court ruling, Behlke said, by expanding sales tax collections to third-party marketplaces – a category that in most places has so far gone untaxed.

That led Amazon.com to start collecting taxes on its entire platform, including third-party merchants, in Washington starting in January.

Amazon then added Pennsylvania to that list after a similar law there went into effect April 1.

Even before that change, Pennsylvania got $202 million of online sales tax revenue in 2017 – 2-1/2 times as much as it did in 2014, when it received just $81.2 million, according to information the Pennsylvania Treasury provided to Reuters.

Minnesota and Rhode Island passed similar “marketplace laws” last year.

Ahead of the court ruling, Illinois enacted a budget that counts on $150 million in new tax revenue – to come from out-of-state internet retailers – for fiscal 2019, which begins July 1.

A new Connecticut law goes into effect at the end of this year to collect taxes from some online retailers. Now the legislature should consider going back into session to broaden that law and “eliminate the disadvantage retailers with physical locations in Connecticut have long struggled to overcome,” said Senate Republican President Pro Tempore Len Fasano.

In total, 38 states have considered and 15 enacted, measures aimed at collecting remote sales taxes since 2016.

“There has been pushback against these new laws but the new ruling gives states more support for these positions,” said Fitch’s Walsh. “I expect we will see both new legislation and additional legal challenges over the next few years.”

(Reporting by Hilary Russ in New York; Additional reporting by Karen Pierog in Chicago and Lawrence Hurly in Washington; Editing by Daniel Bases and Cynthia Osterman)

U.S. Supreme Court backs Christian baker who rebuffed gay couple

FILE PHOTO: Baker, Jack Phillips, decorates a cake in his Masterpiece Cakeshop in Lakewood, Colorado U.S., on September 21, 2017. REUTERS/Rick Wilking/File Photo

By Lawrence Hurley

WASHINGTON (Reuters) – The U.S. Supreme Court on Monday handed a victory on narrow grounds to a Colorado baker who refused based on his Christian beliefs to make a wedding cake for a gay couple, stopping short of setting a major precedent allowing people to claim religious exemptions from anti-discrimination laws.

The justices, in a 7-2 decision, said the Colorado Civil Rights Commission showed an impermissible hostility toward religion when it found that baker Jack Phillips violated the state’s anti-discrimination law by rebuffing gay couple David Mullins and Charlie Craig in 2012. The state law bars businesses from refusing service based on race, sex, marital status or sexual orientation.

The court concluded that the commission violated Phillips’ religious rights under the U.S. Constitution’s First Amendment.

But the justices did not issue a definitive ruling on the circumstances under which people can seek exemptions from anti-discrimination laws based on religion. The decision also did not address important claims raised in the case including whether baking a cake is a kind of expressive act protected by the Constitution’s free speech guarantee.

Two of the court’s four liberals, Stephen Breyer and Elena Kagan, joined the five conservative justices in the ruling authored by Justice Anthony Kennedy, who also wrote the landmark 2015 decision legalizing gay marriage nationwide.

The baker case became a cultural flashpoint in the United States, underscoring the tensions between gay rights proponents and conservative Christians.

Both sides claimed a measure of victory. The couple’s supporters noted that the ruling embraced the importance of gay rights and made it clear that businesses open to the public must serve everyone. The baker’s lawyers said the ruling emphasized that the government must respect religious beliefs.

“It’s hard to believe that the government punished me for operating my business consistent with my beliefs about marriage. That isn’t freedom or tolerance,” Phillips said in a statement.

“Today’s decision means our fight against discrimination and unfair treatment will continue,” Mullins and Charlie Craig said in a statement. “We have always believed that in America, you should not be turned away from a business open to the public because of who you are.”

Seventy-two percent of U.S. adults believe that businesses should not have the right on religious grounds to deny services to customers based on their sexual orientation, a Reuters/Ipsos opinion poll released on Monday showed.

“Our society has come to the recognition that gay persons and gay couples cannot be treated as social outcasts or as inferior in dignity and worth,” Kennedy wrote.

But Kennedy said the state commission’s hostility toward religion “was inconsistent with the First Amendment’s guarantee that our laws be applied in a manner that is neutral toward religion.”

In one exchange at a 2014 hearing before the commission cited by Kennedy, former commissioner Diann Rice said that “freedom of religion, and religion, has been used to justify all kinds of discrimination throughout history, whether it be slavery, whether it be the Holocaust.”

Kennedy said the commission ruled the opposite way in three cases brought against bakers in which the business owners refused to bake cakes containing messages that demeaned gay people or same-sex marriage.

SESSIONS HAILS RULING

Republican President Donald Trump’s administration, which intervened in the case in support of Phillips, welcomed the ruling. “The First Amendment prohibits governments from discriminating against citizens on the basis of religious beliefs,” Attorney General Jeff Sessions said in a statement.

The decision made it clear that even if the court ultimately rules in a future case that bakers or other businesses that sell creative products such as florists and wedding photographers can avoid punishment under anti-discrimination laws, most businesses open to the public would have no such defense.

Of the 50 states, 21 including Colorado have anti-discrimination laws protecting gay people.

The case marked a test for Kennedy, who has authored significant rulings that advanced gay rights but also is a strong advocate for free speech rights and religious freedom.

“The outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context of recognizing that these disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market,” Kennedy wrote.

In a written dissent, Justice Ruth Bader Ginsburg, joined by fellow liberal Sonia Sotomayor, said what mattered was that Phillips would not provide a good or service to a same-sex couple that he would provide to a heterosexual couple.

The litigation, along with similar cases around the country, was part of a conservative Christian backlash to the Supreme Court’s gay marriage ruling.

Mullins and Craig were planning their wedding in Massachusetts in 2012 and wanted the cake for a reception in Colorado, where gay marriage was not yet legal. During a brief encounter at Phillips’ Masterpiece Cakeshop in the Denver suburb of Lakewood, the baker politely but firmly refused, leaving the couple distraught.

They filed a successful complaint with the state commission and state courts sided with the couple, prompting Phillips to appeal to the top U.S. court.

Mullins and Craig said Phillips was using his Christian faith as pretext for unlawful discrimination based on sexual orientation. Phillips and others like him who believe that gay marriage is inconsistent with their Christian beliefs have said they should not be required to effectively endorse the practice.

“Government hostility toward people of faith has no place in our society, yet the state of Colorado was openly antagonistic toward Jack’s religious beliefs about marriage. The court was right to condemn that,” said lawyer Kristen Waggoner of the conservative Christian group Alliance Defending Freedom, which represented Phillips.

The court will soon have the opportunity to signal its approach to handling similar cases. The justices on Thursday will consider whether to hear an appeal by a Washington state flower shop owner who refused to create a floral arrangement to celebrate a gay wedding, based on her Christian beliefs.

(Reporting by Lawrence Hurley; Additional reporting by Andrew Chung; Editing by Will Dunham)

Supreme Court restricts deportations of immigrant felons

FILE PHOTO: Police officers stand in front of the U.S. Supreme Court in Washington, DC, U.S., January 19, 2018. REUTERS/Eric Thayer/File Photo

By Andrew Chung

WASHINGTON – The U.S. Supreme Court ruled on Tuesday that an immigration statute requiring the deportation of noncitizens who commit felonies is unlawfully vague in a decision that could limit the Trump administration’s ability to step up the removal of immigrants with criminal records.

The court, in a 5-4 ruling in which President Donald Trump’s conservative appointee Neil Gorsuch joined the court’s four liberal justices, sided with convicted California burglar James Garcia Dimaya, a legal immigrant from the Philippines.

The court upheld a 2015 lower court ruling that the Immigration and Nationality Act provision requiring Dimaya’s deportation created uncertainty over which crimes may be considered violent, risking arbitrary enforcement in violation of the U.S. Constitution.

The ruling helps clarify the criminal acts for which legal immigrants may be expelled at a time of intense focus on immigration issues in the United States as Trump seeks to increase deportations of immigrants who have committed crimes.

Liberal Justice Elena Kagan wrote the court’s ruling, delivering a setback to the Trump administration, which had defended the law at issue.

“Vague laws invite arbitrary power,” Gorsuch wrote in a concurring opinion, adding that the American colonies in the 18th century cited vague English law like the crime of treason as among the reasons for the American revolution.

“Today’s vague laws may not be as invidious, but they can invite the exercise of arbitrary power all the same – by leaving the people in the dark about what the law demands and allowing prosecutors and courts to make it up,” Gorsuch added.

Dimaya came to the United States from the Philippines as a legal permanent resident in 1992 at age 13. He lived in the San Francisco Bay area.

Federal authorities ordered Dimaya deported after he was convicted in two California home burglaries, in 2007 and 2009, though neither crime involved violence. He received a two-year prison sentence for each conviction.

In 2010, the government sought to deport Dimaya. The Justice Department’s Board of Immigration Appeals, an administrative body that applies immigration laws, refused to cancel his expulsion because the relevant law defined burglary as a “crime of violence.”

In the federal criminal code, a “crime of violence” includes offenses in which force either was used or carried a “substantial risk” that it would be used.

The San Francisco-based 9th U.S. Circuit Court of Appeals ruled in 2015 that the definition as applied to legal immigrants was so vague that it violated their rights to due process of law under the U.S. Constitution. The language of the law could lead arbitrary or discriminatory enforcement, that court said.

The appeals court relied on a decision that same year by the U.S. Supreme Court, which found that a similar provision in a federal criminal sentencing law was overly broad.

The federal government appealed to the Supreme Court, arguing that the U.S. Congress had reasonably identified a category of crimes that carry the risk of violence, and suggested that the justices should defer to the immigration authorities.

The Supreme Court heard arguments in the case on Oct. 2, the first day of its current nine-month term. It initially heard arguments in January 2017 when the nine-seat court was one justice short, but decided in June after Gorsuch brought the court to full strength to have the case re-argued.

(Reporting by Andrew Chung; Editing by Will Dunham)

U.S. visa applicants to be asked for social media history: State Department

By Brendan O’Brien

(Reuters) – The U.S. government plans to collect social media history from nearly everyone who seeks entry into the United States, State Department proposals showed on Friday as part of President Donald Trump’s policy of “extreme vetting.”

Most immigrant and non-immigrant visa applicants – about 14.7 million people – will be asked to list on a federal application form all of the social media identities that they have used in the past five years – information that will be used to vet and identify them, according to the proposals.

The State Department will publish the proposals in a notice in the Federal Register on Friday seeking approval from the Office of Management and Budget. The public has 60 days to comment on the requests.

The proposals support President Donald Trump’s campaign pledge in 2016 to crack down on illegal immigration for security reasons and his call for “extreme vetting” of foreigners entering the United States.

The department said it intends not to routinely ask most diplomatic and official visa applicants for the social media information.

If approved, applicants also will be required to submit five years of previously used telephone numbers, email addresses and their international travel history. They will be asked if they have been deported or removed from any country and whether family members have been involved in terrorist activities, the department said.

Courts have struck down the first two versions of Trump’s travel ban and the current one is narrower in scope than its predecessors. The Supreme Court will consider its legality this spring and a decision is expected in June.

(Editing by Bill Trott)

Supreme Court mulls California law on anti-abortion facilities

A view of the U.S. Supreme Court building is seen in Washington, DC, U.S., October 13, 2015. REUTERS/Jonathan Ernst/File Photo

By Andrew Chung

WASHINGTON (Reuters) – The U.S. Supreme Court on Tuesday tackles a dispute over whether a California law requiring Christian-based facilities that counsel pregnant women against abortion to post signs disclosing the availability of state-subsidized abortions and birth control violates their right to free speech.

The nine justices are set to hear an hour of arguments in an appeal by a group of non-profit facilities called crisis pregnancy centers of a lower court ruling upholding the Democratic-backed 2015 law.

The case represents a crossroads of two contentious issues: abortion and the breadth of the right to freedom of speech under the U.S. Constitution’s First Amendment. The Supreme Court legalized abortion in 1973, and the wider issue of abortion rights is not at issue in the case.

Crisis pregnancy centers say they offer legitimate health services but that it is their mission to steer women with unplanned pregnancies away from abortion. They accuse California of forcing them to advertise for abortion even though they oppose it.

California says some crisis pregnancy centers mislead women by presenting themselves as full-service reproductive healthcare facilities and the law helps ensure these clients are made aware of abortion services available elsewhere.

The San Francisco-based 9th U.S. Circuit Court of Appeals upheld the law in 2016 after it was challenged by some of these facilities, finding the statute did not discriminate based on viewpoint.

California’s Reproductive FACT Act, passed by a Democratic-led legislature and signed by Democratic Governor Jerry Brown, requires centers licensed as family planning facilities to post or distribute notices that the state has programs offering free or low-cost birth control and abortion services. The law requires unlicensed facilities with no medical provider on staff to disclose that fact.

Abortion rights advocates say the roughly 2,700 U.S. anti-abortion pregnancy centers, including around 200 in California, far outnumber facilities providing abortions.

The California challengers are the National Institute of Family and Life Advocates, an umbrella group for crisis pregnancy centers, and two such facilities in San Diego County. The plaintiffs had told the lower courts that they would not comply with the law.

A win for them could make it harder for Democratic-governed states to impose rules on crisis pregnancy centers, but also could help abortion rights advocates challenge laws in Republican-governed states that impose certain requirements on abortion clinics.

California said its law does not force crisis pregnancy centers to refer women for abortions, nor does it prevent them from voicing their views on abortion. The state told the justices in legal papers that some centers use incomplete or false medical advice to try to prevent women from having an abortion. Some resemble medical clinics, down to lab coats worn by staff, to try to confuse women into thinking they are at a center offering all options, the state added.

The facilities deny using deceptive tactics.

A ruling is due by the end of June.

(Reporting by Andrew Chung; Editing by Will Dunham)

Reflecting on President Trump’s First Year

Pastor Jim and Lori Bakker welcome historian and author of over 40 books Doctor William Forstchen as they discuss Donald Trump’s first year in the presidential office. Continue reading →

U.S. has begun fully implementing Trump travel ban: State Dept.

WASHINGTON (Reuters) – The U.S. State Department said it began fully implementing President Donald Trump’s travel ban targeting six Muslim-majority countries on Friday, four days after the Supreme Court ruled the order could be enforced while legal appeals continue.

Trump’s order, which calls for “enhancing vetting capabilities” at U.S. embassies and consulates overseas, directs the departments of State and Homeland Security to restrict the entry of people from six Muslim-majority countries – Chad, Iran, Libya, Syria, Somalia and Yemen – as well as from Venezuela and North Korea.

The State Department said in a statement on Friday that no visas would be revoked under the new vetting procedures. It said the restrictions were not intended to be permanent and could be lifted as “countries work with the U.S. government to ensure the safety of Americans.”

Trump promised as a candidate to impose “a total and complete shutdown of Muslims entering the United States” and his effort to implement a travel ban has run into repeated legal challenges since he first announced it a week after taking office.

The current ban is the third version from the administration. Lower courts allowed the provisions covering North Korea and Venezuela to go into effect.

Challenges continue for the six predominantly Muslim countries, charging that the ban discriminates on the basis of religion in violation of the U.S. Constitution and is not permissible under immigration laws.

The Supreme Court on Monday granted the administration’s request to lift two injunctions that partially blocked the ban. The decision allows the restrictions to go into force, even as legal challenges continue in lower courts. Two liberal justices dissented.

(Reporting by David Alexander)

Pivotal Justice Kennedy poses tough questions in gay wedding case

By Lawrence Hurley

WASHINGTON (Reuters) – The U.S. Supreme Court on Tuesday appeared closely divided with likely pivotal vote Justice Anthony Kennedy posing tough questions about a Christian baker’s refusal to make a wedding cake for a gay couple but also questioning whether a Colorado civil rights commission that ruled on the issue was biased against religion.

The nine justices heard an intense, extended 80-minute oral argument in the major case on whether certain businesses can refuse service to gay couples if they oppose same-sex marriage on religious grounds.

The case concerns an appeal by Jack Phillips, a baker who runs Masterpiece Cakeshop in the Denver suburb of Lakewood, of a state court ruling that his refusal to make a cake for gay couple David Mullins and Charlie Craig in 2012 on the basis of his religious beliefs violated a Colorado anti-discrimination law.

Kennedy, a conservative who sometimes sides with the court’s four liberals in major cases, raised concerns about issuing a ruling siding with the baker that would give a green light to discrimination against gay people.

The court’s four liberals would likely side with him on that point, with several justices citing a wide range of other creative professionals, including makeup artists and florists, who could deny service to gay customers if the baker wins.

In one of the biggest cases of the conservative-majority court’s nine-month term, the justices must decide whether the baker’s action was constitutionally protected.

Phillips, represented by the conservative Christian advocacy group Alliance Defending Freedom, contends that the Colorado law violated his rights to freedom of speech and free exercise of religion under the U.S. Constitution’s First Amendment. The Supreme Court arguments focused on his free speech claim, based on the idea that creating a custom cake is a form of free expression.

Mullins and Craig call the baker’s refusal a simple case of unlawful discrimination based on sexual orientation. Colorado law bars businesses from refusing service based on race, sex, marital status or sexual orientation.

Kennedy, a long-term champion of gay rights, mentioned the possibility of a baker putting a sign in his window saying he would not make cakes for gay weddings, wondering if that would be “an affront to the gay community.”

But citing comments made by a commissioner on the state civil rights panel that ruled against the baker, Kennedy said there was evidence of “hostility to religion” and questioned whether that panel’s decision should be allowed to stand.

“Tolerance is essential in a free society. Tolerance is most meaningful when it’s mutual,” Kennedy said. But the commission was not “tolerant or respectful” of Phillips, he added.

The commissioner, unnamed in court papers, said at a 2014 hearing that “freedom of religion, and religion, has been used to justify all kinds of discrimination throughout history.” The commissioner added that freedom of religion “is one of the most despicable pieces of rhetoric that people can use … to use their religion to hurt others.”

It was unclear to what extent Kennedy’s criticism of the commissioner would dictate how he votes in the case.

The Supreme Court legalized gay marriage in a landmark 2015 ruling written by the 81-year-old Kennedy, one of the court’s five conservatives. He has joined the court’s four liberals in major decisions on issues such as abortion and gay rights, but also is a strong proponent of free speech rights. [L2N1LU1W9]

Mullins and Craig are represented by the American Civil Liberties Union, which has argued that Phillips’ legal team is advocating for a “license to discriminate” that could have broad repercussions beyond gay rights.

Several of the justices asked questions that suggested they are concerned about how far a ruling in favor of the baker might extend. Liberal Justice Elena Kagan wondered about whether a hairstylist, chef or a makeup artist could refuse service, claiming their services are also speech protected by the Constitution. “Why is there no speech in creating a wonderful hairdo?” Kagan asked.

Kennedy asked U.S. Solicitor General Noel Francisco, the Trump administration lawyer supporting the baker, what would happen if the court rules for the baker and then bakers nationwide then started receiving requests to not bake cakes for gay weddings. “Would the government feel vindicated?” Kennedy asked.

Conservative members of the court, including Chief Justice John Roberts, appeared more sympathetic to the baker.

‘LOVE WINS’

Hundreds of demonstrators on both sides of the dispute rallied outside the white marble courthouse. Supporters of Phillips waved signs that read, “We got your back Jack.” As Mullins and Craig made their way into the courthouse, the two men led their supporters in chants of “Love Wins.”

After the arguments, Phillips told reporters that the backlash against his business after his refusal has included death threats and harassment, adding, “We are struggling just to make ends meet and keep the shop afloat.”

“It’s hard to believe that the government is forcing me choose between providing for my family and my employees, and violating my relationship with God,” Phillips said.

Mullins told reporters the couple’s snub by Phillips made them feel mortified and humiliated, like “second-class citizens in our society.”

The Colorado Civil Rights Commission found that Phillips had violated anti-discrimination law and ordered him to take remedial measures including staff training and the filing of quarterly compliance reports. The baker lost appeals in state courts before asking the U.S. Supreme Court to hear the case.

(Reporting by Lawrence Hurley; Additional reporting by Andrew Chung; Editing by Will Dunham)

Supreme Court lets Trump’s latest travel ban go into full effect

By Lawrence Hurley

WASHINGTON (Reuters) – The U.S. Supreme Court on Monday handed a victory to President Donald Trump by allowing his latest travel ban targeting people from six Muslim-majority countries to go into full effect even as legal challenges continue in lower courts.

The nine-member court, with two liberal justices dissenting, granted his administration’s request to lift two injunctions imposed by lower courts that had partially blocked the ban, which is the third version of a contentious policy that Trump first sought to implement a week after taking office in January.

The high court’s action means that the ban will now go fully into effect for people from Chad, Iran, Libya, Somalia, Syria and Yemen seeking to enter the United States. The Republican president has said the travel ban is needed to protect the United States from terrorism by Islamic militants.

In a statement, Attorney General Jeff Sessions called the Supreme Court’s action “a substantial victory for the safety and security of the American people.” Sessions said the Trump administration was heartened that a clear majority of the justices “allowed the president’s lawful proclamation protecting our country’s national security to go into full effect.”

The ban was challenged in separate lawsuits by the state of Hawaii and the American Civil Liberties Union. Both sets of challengers said the latest ban, like the earlier ones, discriminates against Muslims in violation of the U.S. Constitution and is not permissible under immigration laws.

Trump had promised as a candidate to impose “a total and complete shutdown of Muslims entering the United States.” Last week he shared on Twitter anti-Muslim videos posted by a far-right British party leader.

“President Trump’s anti-Muslim prejudice is no secret – he has repeatedly confirmed it, including just last week on Twitter,” ACLU lawyer Omar Jadwat said.

“It’s unfortunate that the full ban can move forward for now, but this order does not address the merits of our claims. We continue to stand for freedom, equality and for those who are unfairly being separated from their loved ones,” Jadwat added.

Lower courts had previously limited the scope of the ban to people without either certain family connections to the United States or formal relationships with U.S.-based entities such as universities and resettlement agencies.

Trump’s ban also covers people from North Korea and certain government officials from Venezuela, but the lower courts had already allowed those provisions to go into effect.

The high court said in two similar one-page orders that lower court rulings that partly blocked the latest ban should be put on hold while federal appeals courts in San Francisco and Richmond, Virginia weigh the cases. Both courts are due to hear arguments in those cases this week.

The Supreme Court said the ban will remain in effect regardless of what the appeals courts rule, at least until the justices ultimately decide whether to take up the issue on the merits, which they are highly likely to do. The court’s order said the appeals courts should decide the cases “with appropriate dispatch.”

“We agree a speedy resolution is needed for the sake of our universities, our businesses and most of all, for people marginalized by this unlawful order,” Hawaii Attorney General Douglas Chin said.

Justices Ruth Bader Ginsburg and Sonia Sotomayor said they would have denied the administration’s request.

STRONG SIGNAL

Monday’s action sent a strong signal that the court is likely to uphold the ban on the merits when the case likely returns to the justices in the coming months.

There are some exceptions to the ban. Certain people from each targeted country can still apply for a visa for tourism, business or education purposes, and any applicant can ask for an individual waiver.

The San Francisco-based 9th U.S. Circuit Court of Appeals will hear arguments on the merits of Hawaii’s challenge on Wednesday in Seattle. The 4th U.S. Circuit Court of Appeals will arguments on the merits of case spearheaded by the ACLU on Friday in Richmond.

Trump issued his first travel ban targeting several Muslim-majority countries in January, then issued a revised one in March after the first was blocked by federal courts. The second one expired in September after a long court fight and was replaced with the present version.

The Trump administration said the president put the latest restrictions in place after a worldwide review of the ability of each country in the world to issue reliable passports and share data with the United States.

The administration argues that a president has broad authority to decide who can come into the United States, but detractors say the expanded ban violates a law forbidding the government from discriminating based on nationality when issuing immigrant visas.

The administration has said the ban is not discriminatory and pointed out that many Muslim-majority countries are unaffected by it.

(Reporting by Lawrence Hurley; Additional reporting by Mica Rosenberg in New York, Roberta Rampton aboard Air Force One and Yasmeen Abutaleb in Washington; Editing by Will Dunham)

Top court weighs baker’s refusal to make cake for gay couple

By Lawrence Hurley

WASHINGTON (Reuters) – The U.S. Supreme Court on Tuesday began hearing arguments in a major case on whether certain businesses can refuse service to gay couples if they oppose same-sex marriage on religious grounds in a dispute involving a conservative Christian baker in Colorado who declined to make a wedding cake for two men.

The nine justices opened a scheduled hour of arguments in an appeal brought by Jack Phillips, a baker who runs Masterpiece Cakeshop in the Denver suburb of Lakewood, of a state court ruling that his refusal violated a Colorado anti-discrimination law.

In one of the biggest cases of the conservative-majority court’s nine-month term, the justices must decide whether the baker’s action was constitutionally protected, meaning he can avoid punishment under the Colorado law.

Phillips contends that law violated his rights to freedom of speech and free exercise of religion under the U.S. Constitution’s First Amendment. The Supreme Court arguments will focus on his free speech claim, based on the idea that creating a custom cake is a form of free expression.

The couple, David Mullins and Charlie Craig, call the baker’s refusal a simple case of unlawful discrimination based on sexual orientation.

The Supreme Court legalized gay marriage in a landmark 2015 ruling written by Justice Anthony Kennedy, one of the court’s five conservatives. The 81-year-old Kennedy, who has joined the court’s four liberals in major decisions on issues such as abortion and gay rights, could cast the deciding vote. Kennedy also is a strong proponent of free speech rights.

A ruling favoring Phillips could open the door for businesses that offer creative services to spurn gay couples by invoking religious beliefs, as some wedding photographers, florists and others already have done. Conservatives have filed other lawsuits also seeking to limit the reach of the 2015 gay marriage ruling.

The case highlights tensions between gay rights proponents and conservative Christians who oppose same-sex marriage, as illustrated in comments made by demonstrators on Tuesday.

‘NOT HARMING OTHERS’

“Religious liberty is the most important right we have been given in the Constitution, and this case exemplifies it,” said Paula Oas, 64, a Maryland resident. “I believe Jack is not harming others.”

Sherrill Fields, 67, a lesbian Virginia resident, said she feared that if the court sides with the baker, different types of businesses will turn away gay customers.

“This kind of thing will come out of the woodwork,” Fields said. “People and businesses of all sorts will deny us service. Restaurants, hairdressers, doctors, tow truck drivers, anybody that provides a service.”

The legal fight broke out in 2012 when Phillips told Mullins and Craig that due to his Christian beliefs he would not be able to make a cake to celebrate their wedding.

The two men married in Massachusetts but wanted to celebrate their nuptials with friends in Colorado. At the time, Colorado allowed civil unions but not marriage between same-sex couples.

The couple turned to the American Civil Liberties Union, which filed a complaint on their behalf, saying Phillips had violated Colorado state law barring businesses from refusing service based on race, sex, marital status or sexual orientation.

The Colorado Civil Rights Commission found that Phillips had violated the law and ordered him to take remedial measures including staff training and the filing of quarterly compliance reports. In August 2015, the Colorado Court of Appeals also ruled against Phillips.

The Colorado Supreme Court refused to hear the case, prompting Phillips to appeals to the U.S. Supreme Court.

The ACLU said Phillips’ legal team at the conservative Christian group Alliance Defending Freedom is advocating for a “license to discriminate” that could have broad repercussions beyond gay rights.

“I can’t emphasize enough how far sweeping the argument is both in terms of what it is saying about the Constitution and who will be affected,” ACLU lawyer Louise Melling said.

Phillips’ lawyers said creative professionals should not be forced to engage in expression that goes against their conscience.

“If the court were to say it could force someone like Jack … to be coerced, then it has the power to force anyone of us to speak those same messages and to violate our convictions,” Phillips’ attorney Kristen Waggoner said.

(Reporting by Lawrence Hurley; Additional reporting by Andrew Chung; Editing by Will Dunham)

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