How the 9th Circuit Made a Terrible Supreme Court Ruling Even Worse

The U.S. Supreme Court receives around 10,000 petitions each year from various parties seeking review of their cases. Among the current crop of contenders, one case in particular stands out as worthy of the Court's attention: Courtney v. Danner.

At issue is a Washington state law granting de facto monopoly privileges to companies providing commercial ferry service. According to the state, entrepreneurs hoping to break into that line of work must first obtain a government-issued certificate of "public convenience and necessity." Among other requirements, applicants must show that an existing certificate holder "has not objected to the issuance of the certificate as prayed for." In other words, established ferry businesses get to veto the applications of their would-be competitors.

The results are just what you would expect. For example, at Lake Chelan, a 55-mile long stretch of water popular with outdoor enthusiasts, the Lake Chelan Boat Company has been the sole certificate holder since 1929, and has repeatedly convinced the state to keep new competitors at bay. In effect, the company enjoys a state-sanctioned monopoly that comes at the expense of both other businesses and the recreation-seeking public.

In 2011, the entrepreneurs James and Clifford Courtney, represented by the Institute for Justice, challenged the monopolistic law in federal court, arguing it violated the 14th Amendment, which reads: "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States." As support for their argument, the Courtneys cited the Supreme Court's 1873 decision in The Slaughter-House Cases, which recognized the "right to use the navigable waters of the United States" among the privileges or immunities of national citizenship. To be clear, the Courtneys take no issue with any health or safety regulations; they seek only to invalidate the monopoly law.

Yet the U.S. Court of Appeals for the 9th Circuit ruled against them, arguing that because the Courtneys sought to engage in "an activity driven by economic concerns," they deserved no judicial protection. In fact, the 9th Circuit ruled, neither Slaughter-House nor the Privileges or Immunities Clause should offer any meaningful shield for economic liberty. "A reasonable interpretation of the right to 'use the navigable waters of the United States,' and the one we adopt," the 9th Circuit declared, "is that it is a right to navigate the waters of the United States."

That ruling transformed Slaughter-House from one of the Supreme Court's most regrettable opinions into something even worse. Let me explain.

The issue before the Supreme Court back in 1873 was whether a Louisiana law granting a private corporation an exclusive slaughter-house monopoly for the city of New Orleans violated the recently ratified 14th Amendment. In its five-to-four opinion, the Court not only upheld the monopoly, it gutted the Privileges or Immunities Clause in the process, holding that the clause placed no limit whatsoever on the power of the states to control the lives and liberties of their residents. To rule otherwise, argued the majority opinion of Justice Samuel F. Miller, would "fetter and degrade the State governments."

That decision turned the text and history of the 14th Amendment on its head. As Justice Stephen Field remarked in his Slaughter-House dissent, the Privileges or Immunities Clause was designed to protect a broad range of fundamental rights from state infringement, including "the right of free labor." As Field stressed, "the fourteenth amendment does afford such protection, and was so intended by the Congress which framed and the states which adopted it."

Field got it right and the majority got it wrong. The 14th Amendment was drafted in 1866 and ratified in 1868 in direct response to the widespread injustices occurring throughout the former Confederacy in the aftermath of the Civil War. Among those injustices were the Black Codes, a web of regulations and ordinances designed to rob the recently freed slaves of their rights to own property, possess guns for self-defense, make contracts, file lawsuits, earn a living, and move freely in search of better opportunities. In Opelousas, Louisiana, for example, the local government declared, "No negro or freedman shall be permitted to rent or keep a house within the limits of the town under any circumstance," nor shall any freedman "sell, barter, or exchange any articles of merchandise" without written permission from white officials. Similar laws restricted the rights of the freedmen's white unionist allies.

All such laws plainly violated the principles of free labor and economic liberty, and the Privileges or Immunities Clause was designed to put a stop to the violations. Indeed, as the clause's author, Republican Congressman John Bingham of Ohio, once explained, among the privileges or immunities protected by the 14th Amendment from state infringement was "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."

The Slaughter-House majority ignored that historical evidence, ruling instead that the Privileges or Immunities Clause protected only a narrow set of rights stemming from national citizenship, such as the right to "free access to [the nation's] seaports, through which all operations of foreign commerce are conducted," and the aforementioned "right to use the navigable waters of the United States."

That outcome was more than bad enough. But in the Lake Chelan case now before the Supreme Court, the 9th Circuit sunk even further by effectively rewriting Slaughter-House to recognize only a non-economic right to "navigate" U.S. waters. This deficient interpretation not only runs counter to the original meaning of the 14th Amendment; it violates the clear meaning of the (abysmal) Slaughter-House precedent.

That is too much. The Supreme Court should take the case, overrule the 9th Circuit, and restore a small bit of sanity to America's Privileges or Immunities Clause jurisprudence.