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.