The Supreme Court Fails to Protect Economic Liberty, Again

Occupational licensing abuse gets a pass from the high court.

Does the Constitution protect the right to earn a living free from arbitrary and unnecessary government interference? James Madison, the document’s chief architect, thought it did. “That is not a just government,” Madison wrote, “where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties, and free choice of their occupations.” Rep. John Bingham (R-Ohio), the author of section one of the 14th Amendment, which forbids state governments from depriving any person of “life, liberty, or property, without due process of law,” thought so too. According to Bingham, the 14th Amendment secures the right “to work in an honest calling and contribute by your toil in some sort to the support of your fellowmen, and to be secure in the enjoyment of the fruits of your toil.”

So why does the Supreme Court keep refusing to protect economic liberty? On Monday, the Court declined to hear a powerful legal challenge filed by the Institute for Justice against the 11th Circuit Court of Appeals’ 2011 decision upholding Florida’s requirement that all interior designers carry an occupational license from the state. Not only do 47 other states currently permit unlicensed interior design without any accompanying risk to innocent civilians, Florida’s own attorney general’s office even admitted in a joint pretrial stipulation that “neither the defendants nor the state of Florida have any evidence that the unregulated practice of interior design presents any bona fide public welfare concerns.” This isn’t unlicensed brain surgery, after all. So why did the 11th Circuit let this blatantly unnecessary law stand? “A statute survives rational basis review even if it ‘seems unwise...or if the rationale for it seems tenuous,’” the 11th Circuit declared.

It gets worse. For the past seven decades, federal judges have largely followed the disastrous template set by the Supreme Court in the case of Nebbia v. New York (1934), which upheld the conviction of a New York shopkeeper for selling two quarts of milk and a loaf of bread for less money than the official minimum price set by the state’s Milk Control Board. Despite the fact that this price-fixing scheme did nothing to protect the health or safety of the milk-drinking public, and was instead simply a protectionist measure aimed at propping up the state’s dairy farmers during the Great Depression, the Supreme Court upheld the law. “A state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose," Justice Owen Roberts wrote for the 5-4 majority.

The Court expanded this unwarranted deference to state lawmakers two decades later in the case of Williamson v. Lee Optical (1955). At issue here was the longstanding practice among opticians of fitting old lenses into new eyeglass frames for customers without a prescription from an optometrist or ophthalmologist. Oklahoma made this practice illegal, a move that served the financial interests of the state’s prescription-writing eye doctors without doing anything to improve the health or safety of those citizens actually wearing the eyeglasses. And that was just fine according to the Supreme Court, which unanimously held, “It is enough...that it might be thought that the particular legislative measure was a rational way to correct it.”

Lawyers call this highly deferential approach the rational-basis test, but a better term for it would be the rubber stamp. Under the test, a law is presumed to be constitutional so long as the lawmakers say they were pursuing a legitimate government interest. As the 11th Circuit observed when it came to Florida’s bogus occupational licensing law for interior designers, “A statute survives rational basis review even if it ‘seems unwise...or if the rationale for it seems tenuous.’”

Keep in mind that the courts don’t apply this extremely deferential standard to laws regulating the First Amendment, voting rights, or privacy. Statutes infringing on those rights receive what’s called strict scrutiny, which means that the government must justify the law in question by demonstrating that it serves a compelling state interest. In other words, the rational-basis test takes the burden of proof off of the government and places it on the citizen. Only disfavored liberties such as the right to earn a living receive such second-class treatment.

Thankfully, the Florida case won’t be the Supreme Court’s last chance to correct its longstanding errors in Nebbia and Lee Optical. Next time around the justices should try following the Constitution instead of the Court's past mistakes.

Damon W. Root is a senior editor at Reason magazine.

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  • KDN||

    I think they snapped that picture as Ginsburg is falling off her chair.

    Either that or there's a severe case of microagression going on.

  • tarran||

    She's clearly othering the men.

  • ||

    Doesn't she lean way to the left anyway? lol

  • ||

    Statists foolishly believe that economic liberty can be separated from political liberty. For some bizarre reason, it never seems to occur to them that someone who controls your livelihood can use that as a stranglehold on the rest of your life.

  • annonymous commenter some guy||

    Or maybe it does occur to them and they see it as a feature, rather than a bug.

  • Kwanzaa Cake||

    That's because the statists fall into two groups: people wanting handouts, who stand to benefit to some degree through restribution, and control freak administrators who stand to benefit tremendously from the process of regulation and redistribution. Curtailing our economic freedom makes them richer and more powerful.

  • 16th amendment||

    So how do you explain China? They have economic liberty, but not so much political liberty.

  • ||

    They have marginally more economic liberty than they USED to have, but they do not have economic liberty in any absolute sense.
    http://www.cato.org/pubs/efw/e.....ummary.pdf

    I usually go to the heritage foundation's ranking but their site appears to be offline for the next 5 while they put up the 2012 rankings..

  • ||

    They have economic liberty?

  • ||

    No, not really.

  • cynical||

    They have more economic liberty than under communism. But then, they probably have a bit more political liberty than under communism too.

    Anyway, necessary but not sufficient.

  • annonymous commenter some guy||

    Licensing interior designers is even worse than outlawing self-serve gas pumps. At least gas can be hazardous in the hands of an idiot. Interior design can only be nauseating, at worst.

  • ||

    Gas pumps are very hazardous in the hands of idiots. I can remember at least 4 times I've come within inches of having to beat some minimum wage idiot to death with a fucking tire iron while visiting family in Oregon.

    One of them sat on my car wearing a wallet chain. You don't sit on another man's car.

  • Paul||

    I do my best to get gas in Vancouver, then slip quietly over the border into Oregon, do my business (ha!) and slip back, buying gas in Vancouver again if necessary.

  • Wit Like a Tire Iron ||

    Oregon is a death cult. Save yourselves! RUN! RUN! RUN FROM THE BLACK NIKE PEOPLE!!!

  • ||

    OR is actually rated pretty highly in other areas of freedom though.

  • Brian D||

    You must get great mileage. Vancouver to Oregon is almost 300 miles one way.

  • ||

    Vancouver, WA is almost 300 yards one way.

  • Legal Analist ||

    Occupational licenses are a bad idea -- just ask an Italian cab driver who owes on a 100,000 professional loan -- but the 10th Amendment says what the 10th Amendment says. Free state project is the only realistic option for those who dream of liberty in our times.

  • ||

    And the ninth amendment says what it says.

  • Helpful H-bomb Law Guy||

    Umm dood, the ninth amendment? You're kidding, right?

  • Live Free or Diet||

    Okay... So are you trying to say keeping people from making an honest living or pumping their own gas is an unenumerated right?

  • Ditch Digger with a JD||

    What I am saying is that the the ninth amendment is the stuff of unicorn sweat and fairey poop.

  • Cloudbuster||

    People who ridicule the ninth amendment are part of the problem. If our system were well-administered with respect to the Constitution as written, the ninth amendment would be one of the most important amendments.

  • Brett L||

    Italian? Is that what the Iranians are calling themselves in the cities these days?

  • Paul||

    It's like Americans calling themselves Canadian when they go overseas.

  • Helpful Froggy Bottom Guy||

    Italy not Iran. One of the reasons the Italian economy sucks so bad is that you have to have an occupational license to clean a douche out of a toilet bowl. now go back to your corn liquor and leave this to the rest of us.

  • Brett L||

    Ah. I thought you were talking about the guys who drive cabs in medallion cities in 'Murka.

  • Anton||

    Where I lived until recently, all the taxi drivers were Sikh.

  • ||

    The free state project grossly underestimates the ambition of federal regulators. :(

  • ||

    Also, I want to live in a big city--of which there are none in New Hampshire.

  • feng shui||

    When interior design is outlawed . . .

  • I, Kahn O'Clast||

    Some who comment here should be heartened that the court chose to back a state's rights / federalist point of view while others should simply be upset that any government at whatever level could be permitted such abuse as this.....

  • SouthernAnCap||

    Consider me part of the latter, but you may omit the "such abuse as this....." part, as it is redundant.

  • Rob||

    Stop making Andrew Sullivan look like a douche. Don't you know, we only like tyranny as long it's on the state level.

  • Mike M.||

    And yet, some of the black robe worshippers around here seriously expect me to believe that the Supreme Court is the greatest defender of our cherished freedoms.

  • ||

    Well, who's better? Congress? The President?

  • ||

    The Censor!

    And you thought I'd forgotten. Never!

  • H man||

    Pro Libertate for Censor.
    Question, can the Censor exile the offenders as well?

  • ||

    The powers of the office are still being developed, but exile should be one of the options. Old-school censors could strike names from the citizenship rolls, so there is precedent.

  • ||

    You. Me. Smith and Wesson.

  • ||

    Smith and Wesson tends to have shitty side-effects though. That's why it's a last resort that most people don't actually resort to.

  • Bright Bulb||

    "greatest defender" compared to the others. not necessarily a reliable defender.

  • James||

    Right. It's easily my favorite of the three branches, because it's the one that does something I like every five years or so.

  • Clevelandite||

    Which is a lot better than we can say for Congress and/or His Elected Majesty.

  • juris imprudent||

    Slaughterhouse for the win! C'mon Damon, you should know that. If that is ever going to get overturned it is going to take a better case than this to make it happen.

  • Bishop Love and the Boyz ||

    Slaughterhouse was about the 5th Amendment privileges and immunities clause, silly. This case has nothing to do with discrimination against out of staters. There is no case here because of the pesky 10th Amendment, which essentially gives states a free ride to make the lives of their citizens pure hell. Thankfully the 14th Amendment creates a fundamental right to trave l so you can just go on AND GET THE FUCK OUT OF THERE!

  • johnc||

    It's not the 10th Amendment that gives the states their own republican governments. The original Constitution does this. I don't know why people don't realize the 10th Amendment is expressly redundant.

  • juris imprudent||

    You're kind of an idiot, aren't you?

  • Tajik Man with Giant Mussels ||

    You talking to me, brother?

  • Giant Gooeyduck with JD ||

    hey, stupid, Slaughterhouse established that the 14th Amendment portected rights of national citizenship (i.e. the right to go to national parks and to interstate travel). This case has nothing to do with the rights of national citizenship, which means you don't knwo what the fuck your talking about, douchey mcdouchealot.

  • Giant Gooeyduck with JD ||

    So you're of the opinion the 14th Amendment was intended to limit state police powers rather than just protect the slaves? Very strange opinion. Do you have any basis for this view or are you just another crackpot high on dope?

  • ||

    You are trying way to hard to be 'edgy'. Tone it down a touch and you will sound a lot less like a douche yourself.

  • Brett L||

    So I guess I shouldn't hang that painting I won in the silent auction to pay for my friend's scrote-tearing bike wreck (all important equipment intact but exposed) without licensed help.

  • RedDragon6009||

    I'm pretty sure you can hang it in your own house. You just can't be paid to hang it in another person's home.

    As for your friend and his torn scrotum, my sympathies. If only Congress would pass a law requiring scrotal protection when riding bikes and motorcycles.

  • Brett L||

    Ah yes, okay, reading the statute it only applies when compensation is involved.

  • ||

    IIRC, One of the objections was that the law does not give an exemption for your own home.

  • Brett L||

    I read the statute. It doesn't give an exemption, but the statute on building codes spells out what a homeowner may do without obtaining a licensed contractor. I'll also note that interior decorators are now different by statute from interior designers. The essential difference is that if you want a built-in piece of furniture or make a non-structural, permanent change to your house done by someone else, you pretty much need a GC or interior designer. Persons who dabble only in paint, hangings, loose furniture and window treatments do not require licensing. Which does not reduce the stupidity of the law.

  • ||

    The law only applys to commercial not residential interior designers. Small distinction.

  • Raston Bot||

    I bet that's not as painful as testicular torsion.

    Good news: the testical can be saved 90% of the time with emergency surgery within six hours of onset. This rate drops precipitously with time.

  • Brett L||

    I have no desire to know. He's an excellent bartender and caterer, but his health insurance is shit and he (rightly) went to the emergency room. The bar he works at threw him a fundraiser and he raised several thousand dollars towards his ER bill. If you're ever in Tallahassee, (I don't know why you would be) Fermentation Lounge is the place for awesome beer and awesome bartenders.

  • Brett L||

    Poor little guy, he probably kept up for a mile or so...

  • ||

    how the Court’s past mistakes now prevent it from protecting economic liberty.

    That sums it up.

  • ||

    Like all past mistakes, they only matter when the wrong lesson was learned from them.

  • Federal Dog||

    "Not only do 47 other states currently permit unlicensed interior design without any accompanying risk to innocent civilians"

    This has got to be at least part of the problem. No Supreme Court -- including the federal one -- is an error-correcting court. There must be some serious disagreement among the lower courts about a specific legal principle before the Supreme Court will get involved.

    Here, Florida's abuse is unique. Since there is no circuit disagreement about relevant legal principles, the Court left correction to local political processes.

  • np||

    One of the biggest issues I think is that all the essays and writings like the Federalist papers forming the basis of the Constitution and providing necessary insight and intent, is left out of the Constitution proper (Madison could have referred to them something like in an appendix to have them carry official weight for future generations) and so are not considered along with it.

  • Too Short's Chief Counsel ||

    One of the great things about the federalism system is that iff you find yourself living in an hyper regulated crap hole infested with trustapharies and death cultists -- a place like Oregon, for example -- you can exercise your fundamental right to travel and get the hell out of there.

  • 16th amendment||

    But how to escape the federal income tax?

  • johnc||

    This is the theory. In practice, the federal government already controls everything and the state legislators have to exercise more and more obscure power just to defend to their constituents that they are doing "something, dammit!"

  • Crackpotariat Lament||

    They declined to hear me!

  • Feral Politician ||

    What we need in this country is more regulations, rules, and social mores so that you can spend your brief existence standing in line!

  • There is no "we"||

    I would delight in "constitutionalizing" my view of economics as much as any self-styled "Libertarian" would.

    I would like to say that every individual has a "natural" "unenumerated" right to draw a livelihood from the whole unbounded face of the Earth.

    I would like to say that any "infringment" or "taking" of this natural right by recognizing exclusionary private property has to be "justly compensated" by the government.

    And I would like to require that every person be afforded a minimum livelihood as such compensation.

    I would like to do all of this through judicial-constitutional fiat, so I could avoid the hard work of politics and campaigns and democracy.

    But I can't. The government gets to create, recognize, and hand out guarantees of private property as it sees fit -- from patents and copyrights to real estate boundaries and chattels to choses in action and enforceable contracts -- all the while picking and choosing amongst who and what gets the benefits.

    Why, if the government wants to, it can even set up a free-market-laissez-faire-caveat-emptor-employment-at-will economic system with a regressive tax system and not so much as a scintilla of social insurance or public welfare. Yes, the government could do exactly that if the Libertarians got their way in just one election cycle. The government could leave every orphan, every disabled person, and the family of every displaced worker to the tender mercies of private charity from the Like of Mitt Romney and Newt Gingrich, and no judge could do a damn thing about it.

    So if you want to "constitutionalize" economic policies, Friendo, think twice. Because once that door is open, you won't be the only one going through it. People like me will be in the constitutionalization game, too, and the policies that get "constitutionalized" might not square up exactly with your Atlas-Shrugged fantasyland.

  • ||

    Fragmented thinking is characteristic of schizophrenia...

  • no we||

    which is different from your mental illness: sociopath

  • 16th amendment||

    If we go the way of excessive regulation, we will end up in communism. Obamacare will likely cost 2 times as advertised. Already, the excise tax on indoor tanning has raised 25% of what was expected -- it was supposed to raise $200M this last fiscal year but instead raised about $55M. New fees on tax preparers ($63 annual registration and $116 for the exam, plus maybe another $50 to $300 to study for the test, and they want to create fingerprinting requirements as well) will cause many tax preparers to go out of business and the government will not collect the fees -- ie. the projected revenue will not materialize. Increased fees for late filing of S and C corps will just cause corporations to no longer be late with their filing, and the projected revenue will not materialize.

    It is true that if you're a deadbeat you won't fare well in a libertarian state. But most will do better than they do now, and super-rich will do worse. When people know there's no unemployment insurance, social security, medicare they will save more. This will cause the poor to become wealthier. At the same time, buy buying less junk the rich will see their stock wealth fall by billions.

    Also, the free market will create private unemployment insurance, etc. Many people would opt for these plans, just as they opt for annuities, life insurance, etc. Also, people would be more generous because: (1) they have more money to spend, (2) they know that society depends on them whereas now they can pass the buck off to someone else as in making the Koch brothers pay their fair share.

    Regulations are needed. If you create an oil spill you must pay a fine. Under current law the fine is too small -- a maximum of $75M. Make that more to deter irresponsible behavior.

    However, the idiocy of regulations like these, which are clearly a way to pay for state pensions and guaranteed 5% raises.

  • no we||

    so go win your argument in the political arena, and stop cry-babying to a Supreme Court that doesn't give a crap about you

    business interests can take care of themselves in the political arena; they are not a disadvantaged minority group like racial minorities or gays that can claim to be a "suspect class" in the courts

  • ||

    This isn't believable enough to fall under Poe's law.

  • no we||

    you wouldn't say that if you weren't sure

    this is just your way of using mockery defensively

    nobody's fooled

  • ||

    Even assuming we accept incorporation, the enumerated powers doctrine doesn't apply to state governments, so you have to show me something in the Bill of Rights that prohibits this law.

    I'm not seeing anything.

  • 16th amendment||

    The 14th amendment, which is the 4th addition to the bill of rights.

  • ||

    The 14th amendment (purportedly) applies the Bill of Rights to the states. I have serious issues with that interpretation, but it's standard so we'll assume it's true.

    But you still have to find someplace in the BoR that addresses economic liberty.

  • 16th amendment||

    Honestly I don't know where economic freedom is enumerated, but it is in the "pursuit of happiness" sentence of the declaration of independence.

  • ||

    Which has as much legal standing as Go, Dog. Go!

  • Father Jack||

    Thanks to the feckin' fetid dogs running this country....

  • cynical||

    What, like the right to privacy and abortion? (Not weighing in pro or con on those issue, FWIW). Non-textual rights can get 14th amendment protection.

  • Libertarian states righter||

    The federal government should put it's foot down and force states not to make such rules.

  • Father Jack||

    Feck! Drink! I hope Steve Smith rapes all of them.

  • ||

    These decisions are merely the sharp edge of federalism, aren't they? States' rights and all that? While libertarian sorts like me are all lathered up trying to bring our ideals to the national stage, in reality most of this effort is ultimately futile until we can change our own states similarly. The good thing is, so far, one can always move their business to a freer state, assuming there is such a place.

  • ||

    The problem of unwarranted or nominally unconstitutional state laws arises from one basic error. That error is the widely-held and seldom thought about assertion that the individual states have inherent powers, e.g., the so-called police powers over health, morality and safety, and that those powers are essentialy unlimited so long as there is some rationale for the law being challenged, no matter how specious the rationale might be.

    A moment's reflection reveals the source of this error and the cure. States are said to be sovereign, repeatedly, in political science and history. There are three definitions of sovereign and the one which applies here is that a sovereign is the self-sufficient source of political authority. Upon inspection, this is not true with regard to the states in the U.S. Why? None of them exist without a constitution, approved by the people who live there. The people are sovereign, in the relevant sense, not the state. So, a different analysis is required, which I won't go into here for reasons of space. But, that's the turd in the pudding: a misunderstand of the nature and characteristics of an American state.

  • Major Johnson||

    While I agree people shouldn't need a license to practice in far more professions than should need one I actually tend to side with the courts on this one. The Constitution states that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

    In this instance it seems to me to fall to the states respectively, or to the people. Because the constitution doesn't allow the fg to deny gum chewers the right to chew then each state gets to decide if that right will be allowed it's citizens, and if they don't then the people have the right to decide to chew or not. I didn't agree with Romney's solution to health care access problems, but he actually did it as it should be done. By doing it in Mass the other states could see a good way NOT to do it. If the people of the state of Florida don't want a certain profession to be licensed they need to convince their representatives the state should not do so.

  • ||

    This. I am vigorously opposed to these laws, but my understanding is that the constitution gives states (though NOT the federal government) the right to make basically whatever laws they feel like.

    At least there are 50 states, so if you don't like the laws in one you can go find another one to live in.

  • ||

    Finally, someone who understands. Just because a law is stupid unfair and counterproductive does not necessarily make it un-constitutional.

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