Occupational Licensing

Federal Court Allows State Government to Practice 'Naked Economic Protectionism'

Occupational licensing scheme upheld in Sensational Smiles, LLC v. Mullen.

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Last week the U.S. Court of Appeals for the 2nd Circuit upheld a Connecticut economic regulation "whose sole purpose is to shield a particular group from intrastate economic competition." In the words of that court, "Much of what states do is to favor certain groups over others on economic grounds. We call this politics."

At issue in the case of Sensational Smiles, LLC v. Mullen is a rule promulgated by the Connecticut Dental Commission forbidding non-dentists who offer teeth-whitening services from shining low-powered LED lights into the mouths of their customers. Predictably, the state claimed that this regulation was necessary to protect the oral health of the public. But that's pretty hard to swallow. After all, it's perfectly legal in Connecticut for members of the public to buy teeth-whitening kits, buy a low-powered LED light (which is the equivalent of a household flashlight), and then employ the two products together in hopes of achieving a brighter smile. The entrepreneurs behind Sensational Smiles, LLC, simply offered the same sort of harmless service to the public (at shopping mall kiosks and at beauty salons) that the public was already permitted to do for itself at home.

But the Connecticut Dental Commission said no. Why? Take a guess. Licensed dentists were not exactly happy about the arrival of upstart competitors. Thanks to the commission's actions, licensed dentists are now the only ones permitted to offer this popular form of teeth-whitening service to paying customers.

In other words, it's an act of naked economic protectionism. But that didn't trouble the 2nd Circuit, which said that "economic favoritism" is a legitimate justification for government regulation. In fact, according to the 2nd Circuit, "even if the only conceivable reason for the LED restriction was to shield licensed dentists from competition," the regulation would still pass muster in the court's eyes.

That's bad enough. But this unsavory decision is also in direct conflict with several other federal circuits. For example, in 2002 the U.S. Court of Appeals for the 6th Circuit rejected "economic protectionism" as a legitimate government interest when it struck down a Tennessee law that said only licensed funeral directors could sell caskets. "Tennessee's justifications," the 6th Circuit declared in Craigmiles v. Giles, "come close to striking us with 'the force of a five-week-old unrefrigerated dead fish.'" More recently, the U.S. Court of Appeals for the 5th Circuit likewise rejected "economic protectionism" in its 2013 decision in St. Joseph Abbey v. Castille, a case arising from Louisiana's efforts to prevent a group of Benedictine monks from selling traditional handmade wooden caskets without a funeral director's license.

In other words, the federal circuits are irrevocably split on the bedrock question of whether or not the states may enact economic regulations for the purpose of "favor[ing] certain groups over others on economic grounds," as the 2nd Circuit approvingly described it.

The U.S. Supreme Court should step in, address the split, and overturn the 2nd Circuit's unsound judgment.

Editor's Note: This post originally misidentified the proprietors of Sensational Smiles, LLC.

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  1. “Much of what states do is to favor certain groups over others on economic grounds. We call this politics.”

    Kurt Lash approves this message.

    1. Yeah, that’s a pretty disgusting statement coming from a judge. I don’t think those judges quite know what their job actually is…

      1. To maintain good relations with the legislators in the building across the street?

        1. Apparently.

        2. And get into contention for the next progressive appointment to the USSC.

      2. A FEDERAL judge is to apply FEDERAL laws, as in what the Constitution grants as powers to Congress.
        Anything, other than what powers the Constitution gives to Congress or doesn’t prohibit the states from doing, is placed in the hands of the States, or the people (Amendment 10).
        The 5th and 6th circuits were wrong in making their rulings since these are not federal issues.
        States’ laws are more easily changed by the voters, who should be the ones to alter what their legislature is doing.
        Get the feds out of State governmental decisions unless the Constitution is brought into it – the real Constitution, not the one with the ridiculous 14th amendment.
        For a hundred years that example of abject stupidity was ignored by the courts – it should be, again.

    2. Protectionism goes by many names. Politics? Sure. Corruption? Yep. Economic illiteracy? In spades.

  2. But that didn’t trouble the 2nd Circuit, which said that “economic favoritism” is a legitimate justification for government regulation.

    Some could argue it’s the only function of government regulation.

    1. Feature, not a bug.

  3. The U.S. Supreme Court should step in, address the split, and overturn the 2nd Circuit’s unsound judgment.

    They will absolutely overturn the 2nd Circuit’s judgment based on the reasoning provided.

    And then will suggest that instead, the CT legislature pass a 100% tax on the income of anyone who uses this method and is not a dentist. After all, one of the legitimate functions of government is to collect tax, and therefore, any tax they chose to pass, even if it’s to encourage or discourage certain behaviors, is automatically valid.

    1. Why is it so true, and yet still so unbelievable?!

    2. Then the next step is to consider jail to be a tax on your time, and we’ve reestablished the total state on more solid constitutional foundations.

      Whoever said that a judge’s job is to justify the unjustifiable had it right.

  4. “In the words of that court, “Much of what states do is to favor certain groups over others on economic grounds. We call this politics.”

    Fuck the U.S. Court of Appeal for the 2nd Circuit.

    1. And that is why people hate politics and politicians

    2. something something woodchipper something something

      DISCLAIMER: something something not a threat something something hyperbole

  5. The U.S. Supreme Court should step in, address the split, and overturn the 2nd Circuit’s unsound judgment.

    Be careful what you wish for. The U.S. Supreme Court could step in, address the split, affirm the 2nd Circuit, and overturn the Fifth and Sixth Circuits.

    1. +1 John Roberts “PenaLicense”

    2. As they should.

  6. How are stupid people able to hold positions of such power?

    1. Because they’re the ones who seek out power. They’re too stupid to produce or accomplish anything of value which they can use to better their lives, so they seek positions of power that allow them to take it by force.

      1. Yep, it’s a feature of governments everywhere. The only way to prevent it is to have a government of such limited power that it might as well not exist.

        You could rein it in somewhat with ordinary juries empowered to repeal government laws, or victim prosecution, but allowing government to define its own powers is a hallmark of government, and just as sailors and Marines will fight each other until the army or air force steps in, so will government judges and legislators protect each other in the face of people power.

    2. I don’t think it’s stupid, just acknowledging the fact. As long as you say “welfare” is a legitimate fx of any state entity, & acknowledge that it doesn’t have to be (indeed cannot be) equally for the welfare of everyone, then you have to allow that as long as a single person can be shown to be benefited to even the slightest degree, even at vast cost to everyone else, it’s legitimate for that state entity to so operate.

      When Canada’s Charter of Rights was being debated, the argument used by those who wanted economic (maybe other, I forgot) rights not to be included was that doing so didn’t leave enough scope for politics. The idea was that civic engagement is held to be a public virtue, and that therefore putting stakes?the ability to favor some at the expense of others?on the table would be good because it encouraged people to engage in politics.

      1. civic engagement is held to be a public virtue, and that therefore putting stakes?the ability to favor some at the expense of others?on the table would be good because it encouraged people to engage in politics.

        **head explodes**

  7. There needs to be a compelling government interest in economic regulation, right? Well, what could be more compelling for government than trading political favors for support come campaign time?

    1. The State doesn’t need a compelling state interest for a court to uphold an economic regulation, merely a rational basis. And under the rational basis test, if a court can come up with a rational basis for the regulation, even if the State doesn’t offer it and the actual purpose of the regulation is as clear as day, the court will uphold it.

      Evil and insane? Absolutely. Hopefully, one day, the federal courts can be shamed into abandoning this ridiculous reasoning.

  8. Predictably, the state claimed that this regulation was necessary to protect the oral health of the public.

    Is the oral health of the public in such dire straits? If the oral health of the public is such a primary concern, what other oral health related activities might be on the docket?

    1. Well, broccoli always cleans my teeth, so next up is a requirement to eat 2 servings of broccoli each day

      1. See, I always gets broccoli bits stuck in my teeth, which is clearly a hazard. So I’m-a have to lobby for a total ban on broccoli. For the children.

        1. And popcorn. Jesus, those kernel bits. Oi.

        2. For the children.#whiteteethmatter

          FIFY.

  9. “Much of what states do is to favor certain groups over others on economic grounds. We call this politics.”

    OR

    It’s OK when the government does it.

    I guess that anything that the government does is OK then because…politics!

    What a stupid justification. I expect this judge to be removed.

  10. “Much of what states do is to favor certain groups over others on economic grounds. We call this politics.”

    Interesting, it used to be called “corruption”.

    1. To-may-to, to-mah-to.

  11. Last week the U.S. Court of Appeals for the 2nd Circuit upheld a Connecticut economic regulation “whose sole purpose is to shield a particular group from intrastate economic competition.”

    Oh, all of a sudden there’s such a thing as “intra-state” economic activity. Good to know.

    Why is it that, when the feds want to control the economy, everything is interstate and under their jurisdiction, but when a state wants to control the economy, everything is intrastate and under THEIR jurisdiction?

    If I were Martinez, my appeal would include arguments that, since my business is apparently purely intra-state, I am asking for an exemption from all federal business regulations.

    1. Sorry, it also has some effect on interstate commerce as well. Because FYTW Wickard v. Filburn.

      1. Ah, but that’s the catch:

        If it has an effect on interstate commerce, it is interstate commerce, subject to the Dormant Commerce Clause.

        Basically, the Dormant Commerce Clause says that regulation that discriminates against or unduly burdens interstate commerce is an exclusive federal power.

        Per Wickard and its progeny, everything is interstate commerce. Her business, in particular, is interstate commerce because it undoubtedly has to comply with an assload of federal regulations.

        So, the only question is, does this regulation discriminate against or unduly burden interstate commerce? Indeed it does, as the Appeals Court admits: “whose sole purpose is to shield a particular group from intrastate economic competition.”

        But, where they go wrong is that there is no such thing anymore as purely intrastate economic anything, including competition. What this woman sells is undoubtedly shipped in from out of state. QE fucking D.

        1. You are making the mistake of applying logic and rational analysis. It’s really is just FYTW in the end.

    2. THey just killed the negative commerce clause.

  12. If you want the SCOTUS to look at this issue, you need to ask a couple of questions. First, how does this affect gays? Are gays being deprived of their right to dignity by not being allowed to have their teeth whitened by a state licensed technician? Second, is what you think is a license really just a tax?

    If the answer to either of those questions is yes, then you probably don’t want this going before the court.

  13. This will get overturned (*he said, mostly confidently).

    The IJ just got the Supreme Court to toss out “naked economic protectionism” in a case out of North Carolina.

    They’ve been fighting every one of these teeth-whitening boards on anti-trust grounds – and got the FTC to bite! (okay, okay, sorry.)

    http://www.ij.org/north-caroli…..-10-7-2014

    The Supremes actually got this right, but I suspect more because they were supporting another federal agency over the local yokels, rather than out of any libertarian or common sense understanding of how awful these fucking rent-seeking bitches are.

    See North Carolina Board of Dental Examiners v. FTC, U.S. Supreme Court, No. 13-534.

    1. I would really like to see the Court acknowledge a fundamental economic liberty right, personally.
      The anti-trust argument looks at it from the perspective of the consumer. The economic protectionism drives up prices and inhibits competition.
      But really, the people who are harmed the most are the small businesses who wish to offer these services in the market. They are being deprived of the right to earn a living in an occupation of their choice, purely to benefit established members of the trade.

      1. I agree completely. And I hate that someone has to convince the FTC to break these little state govt cartels. And I also hate that I honestly think it’s more likely to be won when it’s FedGov v. StateGov rather than Citizen/Constitution v. StateGov.

        But a win’s win, I guess.

  14. Burn it to the ground Woodchip it to a heap and start all over.

  15. I wonder if one could make an argument under the 14th amendment, equal protection clause.

    IMO, the non-dentists in question are clearly being denied the equal protection of the laws if they are deprived of the right to operate a business for no reason other than “economic protectionism”.

    I mean, if you’re literally saying that it’s okay for the laws to favor group A over group B, then you’re outright denying equal protection to group B. End of story.

    1. If the EP clause was used these days for anything other than assuring that politically favored groups got their special privileges, you’d have a point.

      1. If you’re talking about gay marriage, then that rulling said that if your going to give special provileges to Group A, then you have to give them to everyone equally. Which makes them no longer “special”.

        There aren’t any laws that say that only gay people get to open restaurants. There are laws that say that only dentists get to do teeth whitening.

  16. Seems a pretty obvious infringement under the 14th Amendment’s equal protection clause.

    Governments have shown a sad proclivity since the late 19th century to allow infringements upon the citizenry’s economic liberties…

  17. I welcome a battle using the EP argument. Maybe it could be used to overturn other ridiculously over bearing licensing regimes.

  18. What if the person performs the services for free and just solicits a donation?

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