October 3, 2014

States should not be able to limit speech by defining it as a business

By States should not be able to limit speech by defining it as a business

One of the bedrock principles of free speech is that the government cannot require a person to get a license before speaking. Although the government can punish certain abuses of speech—libel, for example, or threats—it’s almost never constitutional for the government to ban you from speaking without a license. Free speech is one of the constitutional rights that gets the highest level of judicial protection—so called “strict scrutiny.”

Unfortunately, government restrictions on economic liberty are subject to the lowest form of judicial scrutiny, so called “rational basis” review. Just as the government may almost never restrict your free speech rights under the “strict scrutiny” test, it can almost always get away with violating your right to earn a living, thanks to the “rational basis” test.

So what happens when the two collide? What happens when the government defines a trade solely in terms of speech acts—that is, what if it says that “any person who says X is practicing a business and must get a license”? Can states restrict speech by calling it “conduct”?

That’s the question presented in PLF’s latest petition to the U.S. Supreme Court. In the case of Liberty Coins v. Goodman, we’ve joined forces with the 1851 Center for Constitutional Law to represent Ohio businessman John Tomaso and his business, Liberty Coins, LLC. He’s challenging the constitutionality of a law that requires you to get a license to practice the trade of “precious metals dealer”—but defines a “precious metals dealer” as anyone who advertises that he’s in the business of dealing in precious metals. To be clear, the law does not require you to get a license to actually deal in precious metals—only if you also express the message that you do. Speech is therefore the trigger for the licensing requirement. If you deal in precious metals, no matter how much, you don’t need a license. But if you inform the public that you deal in precious metals, you do.

That’s a restriction on free speech. Several courts have said that while the government can regulate a business, and those regulations are subject only to the “rational basis” test, it cannot regulate speech—and if it tries to, the more serious “strict scrutiny” test applies.

Unfortunately, the Sixth Circuit Court of Appeals ignored that rule in Mr. Tomaso’s case. It held that because the “primary purpose” of Ohio’s precious metals dealer law was to regulate a business, it didn’t matter that it only applies to people who engage in free speech. It said that only rational basis review applied, because the licensing requirement is “first and foremost” about a business rather than about speech.

As we explain in our Supreme Court petition, this “primary purpose” test has never been the rule. Instead, courts have held since at least the 1970s that if the government imposes a burden that is triggered by a person engaging in communication, then that burden should be reviewed under the stringent protections for freedom of speech, and not under the lax rules that courts apply to economic matters. The Supreme Court has long acknowledged that there can come a point at which “a measure is no longer a regulation of a profession but a regulation of speech or of the press; beyond that point, the statute must survive the level of scrutiny demanded by the First Amendment.” Yet the Sixth Circuit in this case—in conflict with other circuits—brushed away those concerns and held that when a law is “first and foremost” about regulating a profession, the burdens that the law imposes on speech can be safely ignored.

We’re asking the justices to take this case to make clear that government cannot simply define a business in terms of speech and then impose a license that results in a restriction on free speech. Our brief was filed today; the state has a month to respond, and we can then answer that. The justices will then meet to discuss the petition and they have no deadline for deciding when to issue their order about whether they will hear the case.

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