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Fri, Sep 18, 2020 05:58
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Supreme Court census ruling a setback for R.R. Donnelley

WASHINGTON, D.C. (From news reports) -- The Supreme Court has blocked a citizenship question on the 2020 census for now. But the court opened a path that could still let the question be added.

The outcome of the case could affect the allocation of federal dollars and congressional districts. Illinois, California, Texas, Arizona, Florida, New York may each be at risk of losing at least one seat in the House of Representatives. The decision will also mean more delays for Chicago printer R.R. Donnelley, which prints the census.

The drawn-out litigation over the census plan had been hanging over a $115 million contract the Chicago printer scooped up in December after the government rescinded a deal with a rival.

Less time likely means higher costs when Donnelley finally starts printing 1.5 billion questionnaires, postcards, letters and inserts. In the printing world, a big job is 50 million pieces. To meet the census deadline, Donnelley will need more presses and may have to push other paying customers to the back of the line.

Acting today in the marquee case of its term, a splintered court said that Commerce Secretary Wilbur Ross's explanation--that it would help the Justice Department enforce the Voting Rights Act--couldn't be squared with the evidence about its motivations.

"If judicial review is to be more than an empty ritual, it must demand something better than the explanation offered for the action taken in this case," Chief Justice John Roberts wrote for himself and the court's four liberals, taking a slap at the Trump administration's decision-making process.

But a different majority said Ross was justified in rejecting the recommendation of the Census Bureau that the question not be included because it would cut responses by millions of people.

Ross "determined that reinstating a citizenship question was worth the risk of a potentially lower response rate," Roberts wrote for himself and the other four conservative justices. "That decision was reasonable and reasonably explained, particularly in light of the long history of the citizenship question on the census."

The high court ruling sends the matter back to the Commerce Department, which could try again to add the question with a better explanation. It's unclear how long that process would take, which is the key question for R.R. Donnelley.

"Clearly, the clock is ticking here," said James Clement, an analyst with Buckingham Research Group. "There are two versions of the document, and this is a question of when they hit the go button."

Officials from the Commerce Department told Supreme Court justices that June 30 was a hard deadline to finalize the census questionnaire, but the chief scientist from the U.S. Census said that could be pushed to Oct. 30 with "additional resources."

The delay will force R.R. Donnelley to navigate logistical hassles and possibly to pay overtime, Clement said. It's unlikely to affect the stock price.

"I don't think this is something that could wreck the company's earnings, but it is something that could cause some sleepless nights," he said.

President Donald Trump in an afternoon tweet said he is asking his lawyers if the census can be delayed, calling the decision on the citizenship question "totally ridiculous."

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