April 29, 2013

Silence may be golden, but silencing Gold Dealers is not

By Silence may be golden, but silencing Gold Dealers is not

In Ohio, you are free to buy gold without having special government permission to do so…as long as you don’t talk about it.  Once you tell others that you buy precious metals, by placing advertisements in your store windows or handing out business cards to potential customers, the state may subject you to fines and even prison time.  But those who have the government’s blessing, in the form of an occupational license, are not subject to those punishments.

Ohio’s Precious Metals Dealers Act requires all “precious metals dealers” to obtain a license in order to buy gold.  But the Act defines a precious metals dealer not simply as someone who buys gold, but as a person who also “holds himself, herself, or itself out to the public as willing to purchase” precious metals, “in any manner, including any form of advertisement or solicitation.”

In other words, the Act licenses speech, not conduct.  Though most occupational licensing schemes revolve around what a person does, like practicing law or medicine, this one solely restricts what a person says.  That kind of restriction on entrepreneurs’ speech and economic liberty isn’t just bad policy, it violates the First Amendment.

After entrepreneur Michael Tomaso advertised his Ohio gold buying business, Liberty Coins, he received threatening notices that he violated the Act and owed major fines.  Represented by our friends at the 1851 Center for Constitutional Law, Mr. Tomaso filed suit and won in trial court.  The government appealed that decision to the Sixth Circuit Court of Appeals.

Today, PLF filed an amicus brief on behalf of current PLF client Leslie Young supporting Tomaso’s argument.  PLF’s brief argues that the Constitution requires courts to rigorously review such laws, ensuring that they are are appropriately crafted to achieve lawful government goals.

Ms. Young’s case is a perfect example of how licensing speech harms individuals.  Ms. Young operates a web-based business, Elist.me, where she uploads information about homes that are “for sale by owner.”  She does not represent herself as a real estate agent, communicate with potential buyers, offer advice, or receive commissions; she only speaks.  Nevertheless, state officials sent her “cease and desist” orders warning her that those simple expressive activities qualify her as a real estate broker under state law: a position that requires a government license that is expensive and time-consuming to obtain.

These are far from the only instances of governments abusing their licensing powers and limiting entrepreneurs’ speech.  Perversely, it is often done under the guise of protecting the public–a dubious assertion when the activity they’re speaking about is lawful and other established businesses stand to gain from keeping competitors out.

Hopefully, the Sixth Circuit will take this opportunity to stand up for the Constitution by striking down the Act.

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