The Yale Law Journal Forum has a mini-symposium on "Occupational Licensing," with substantial originalist overtones. Here are the contributions and opening paragraphs (footnotes omitted):
The Due Process Right To Pursue a Lawful Occupation: A Brighter Future Ahead?, by David E. Bernstein (George Mason), 126 Yale L.J. F. 287 (2016).
For decades, the Supreme Court has rejected arguments that the Fourteenth Amendment’s Due Process Clause protects a general right to liberty of contract worthy of more than cursory judicial attention. Instead, the Court, along with most state courts, has reviewed economic regulations that do not implicate the Bill of Rights under a very forgiving version of the rational basis test that leaves little room for successful challenges. Despite remonstrations from libertarian enthusiasts inside and outside of the academy, there is no realistic prospect that judicial protection of liberty of contract will be reasserted anytime soon.
Recent precedent, however, suggests that courts are becoming more protective of what has traditionally been considered a subset of liberty of contract: the right to pursue an occupation. The Texas Supreme Court’s opinion in Patel v. Texas Department of Licensing & Regulation is a dramatic example of a court reconsidering decades of judicial deference to all manner of occupational regulations. Patel invalidated a law that required individuals who make their living by threading eyebrows to obtain a cosmetology license, which requires costly, time-consuming training that is almost entirely irrelevant to eyebrow threading. Instead of applying the usual flaccid version of the rational basis test, the court concluded that, under the Texas Constitution, the government cannot meet the test if “the statute’s actual, real-world effect as applied to the challenging party . . . is so burdensome as to be oppressive in light of[] the governmental interest.”
Meanwhile, a series of federal court opinions has held that mere economic protectionism favoring incumbents does not count as a rational basis that can sustain occupational regulations under the Fourteenth Amendment.4 These decisions are consistent with ancient Anglo-American constitutional tradition opposed to governmental grants of monopoly power to aid favored businesspeople and exclude others. However, they clash with the widespread understanding that economic “substantive due process” is entirely dead, buried at least since West Coast Hotel Co. v. Parrish,7 and also clash with the decisions of other federal courts that economic protectionism is a valid rational basis for upholding occupational restrictions.
Beating Rubber-Stamps into Gavels: A Fresh Look at Occupational Freedom, by Clark Neily (Institute for Justice), 126 Yale L.J. F. 304 (2016).
The number of Americans who must obtain government permission to work in their chosen vocation has been steadily rising. A recent White House report observed that “[o]ccupational licensing has grown rapidly over the past few decades” and has come to include many harmless vocations such as interior design, hair braiding, and even floristry. Today, about one quarter of American workers must obtain a government-issued license to do their job, up from less than five percent in the 1950s.
Experience shows that licensing is subject to abuse. For example, one of the Supreme Court’s first occupational-licensing cases, in 1873, involved an aspiring attorney named Myra Bradwell who was denied admission to the Illinois bar simply because she was a woman. One hundred thirty-five years later, Kim Powers saw her dreams of running an online casket emporium dashed by an Oklahoma law that gives state-licensed funeral directors the exclusive right to sell caskets.
The Tenth Circuit’s decision upholding Oklahoma’s casket-sales monopoly underscores the incoherence of modern occupational-licensing doctrine. The court explicitly approved naked favoritism as a valid basis for restricting a person’s livelihood, and noted that “while baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.” The Second Circuit recently embraced that proposition despite acknowledging conflict with the Fifth, Sixth, and Ninth Circuits.
A jurisprudence that has drifted so far from the principles of fairness, regularity, and equality, such that rank favoritism may be a permissible basis for restricting a person’s livelihood, seems both problematic and unsustainable. Nevertheless, many judges remain skeptical of occupational freedom, because of both its association with the notorious case Lochner v. New York and the broader concerns it raises about judicial activism. Thus, to avoid repeating the supposed mistakes of Lochner, most courts have refused to seriously scrutinize laws that restrict people’s livelihoods, instead applying what often amounts to little more than a judicial rubber-stamp.
But several trends in constitutional scholarship and doctrine suggest that a transformation of that jurisprudence may be closer at hand than many would suppose.
Business Licensing and Constitutional Liberty, by Amanda Shanor (Ph.D. candidate, Yale), 126 Yale L.J. F. 314 (2016).
Claims that the Constitution prohibits business licensing requirements have proliferated in recent years. The U.S. Court of Appeals for the District of Columbia Circuit recently concluded that a District requirement that tour guides obtain business licenses violated the First Amendment. The Sixth Circuit likewise held that a licensing scheme for funeral directors violated due process and equal protection under the Fourteenth Amendment. These cases mark a sea change in the treatment of economic liberty claims both by the courts and in U.S. legal culture.
In this Essay, I situate debates over the constitutional treatment of business licensing schemes in larger historical context. Doing so reveals the changing treatment of these schemes to be part of a trend that goes far beyond the regulation of licensing: the Constitution is increasingly being invoked as a trump against certain types of economic regulation. My thesis is that the central arguments currently marshaled in favor of extending stringent judicial review to business licensing regulations are untenable. These lines of reasoning have no logical endpoint. Individual rights, on this view, could trump any manner of governmental regulation in favor of free-market ordering.
These business licensing cases raise deep and pressing questions about the purpose and scope of rights and constitutional judicial review more broadly today. Underlying these debates are competing conceptions of constitutional liberty. One view, perhaps the ascendant one, reflects free-market libertarian values, whereas others understand the First and Fourteenth Amendments to reflect ideals such as democratic self-governance, anti-subordination, or civic republicanism. Resolving disputes about the constitutional status of business licensing requires that we grapple with those deeper questions.
Posted at 6:19 AM