Today, PLF urged the Florida’s Second District Court of Appeal to take up its duty to protect individual rights, and to enforce the state constitution’s protections for economic liberty.
Occupational licensing has run amok. As a White House Report recently detailed, nearly a third of Americans need a license to do their job legally. Though licensing laws are often explained as consumer health and safety measures—in reality, there is little evidence tying licensing to improved quality. Instead, by limiting competition, these laws drive up prices, and drive down the normal competitive pressures that lead businesses to innovate, to improve, or to otherwise respond to consumer demand. Not surprisingly, the White House Report found that the biggest factor in whether licensing exists in a given industry is not the degree of danger, or consumer demand for licensing laws, but instead the degree of influence of existing businesses. Incumbent businesses reap the benefits of depressed competition—and are therefore likely to lobby for licensing laws, at the expense of would-be entrepreneurs and the public at large.
PLF challenges restrictions on economic liberty—like anti-competitive licensing laws—in courts across the country. But as PLF knows all too well, it’s an uphill battle. Federal courts have become increasingly deferential to the legislature under what’s called the “rational basis” test, such that they will uphold restrictions on the right to earn a living if they can invent any possible reason why the legislature might have passed the law—even if such a guess is contradicted by evidence in the record.
The results can be ridiculous.
Take a lawsuit filed in federal court challenging Louisiana’s requirement that florists get a license and pass a two-part written and practical exam. It’s absurd to suggest that floristry is a threat to public safety that requires an extensive licensing procedure, and so the plaintiff argued that the state had adopted the law solely to protect established florists against competition. Nevertheless the court upheld that law on the grounds that members of the public might scratch their fingers on the wires florists use to hold their flower arrangements together—and the licensing requirement would prevent that by ensuring that florists knew how to properly use wire. The result was to exclude people—many destitute and with few other options—from entry-level jobs which might have allowed them to provide for themselves and their families. Indeed, the plaintiff in that case lost her job as a result of the licensing requirement, and, lacking the education and resources to find other employment, died in poverty shortly after the court rejected her challenge.
The targets of anti-competitive licensing laws will most often be minorities or other politically powerless groups—who lack the ability to lobby the legislature or administrative agencies to adopt rules that favor them. The results have been tragic—and transportation regulations have a particularly sordid history. As detailed here, in the 1960s regulations in the taxicab industry made it difficult for black leaders like Martin Luther King, Jr., to sustain boycotts protesting bus segregation. Today, the effects continue. Driving a cab or limousine is a common entry-level job for immigrants and unskilled members of the lower classes. In theory, such a job requires little capital and relatively little training, and thus the industry could provide an inexpensive and valuable way for unskilled people to gain employment. But in many states, that theoretically low barrier has been raised by burdensome regulations that prevent would-be entrepreneurs from doing business.
When the legislature enacts such laws to benefit interest groups, the excessive deference that federal courts give legislatures denies those excluded recourse from the courts. That’s why PLF filed this brief in the Florida Court of Appeal arguing that it should not interpret the state constitution’s protections for economic liberty as identical to the federal constitutional provisions. In this case, the owner of a limousine company and his potential customers challenged a law that requires limo companies to charge a minimum fare. The plaintiffs argued that this law serves no health or safety purpose—and instead exists solely to prevent limousines from competing with taxis. But the state court held that the state due process clause was identical to the federal clause, and upheld the law under that lax standard.
PLF argues in its brief that the federal Constitution provides merely a floor of protection for our liberty, which states are free to exceed. Many state courts have therefore interpreted their state constitutions as exceeding that federal floor.
The Supreme Court of Texas’ recent decision in Patel provides an excellent example. In that case, a group of eyebrow threaders argued that a law requiring them to obtain a cosmetologist’s license violated due process because it wasn’t related to health and safety. After declining to follow the federal due process standard, the court agreed and struck down the law.
In a concurring opinion, Justice Willet wrote that “[s]elf-ownership, the right to put your mind and body to productive enterprise, is not a mere luxury to be enjoyed at the sufferance of governmental grace, but is indispensable to human dignity and prosperity.” If courts are to protect that right, it cannot relegate it to the federal standard—which essentially acts as a “rubber stamp” for the government, and renders even the “most patently farcical and protectionist restrictions unchallengeable.”
To read more, you can find our brief here. But suffice it to say that the lax federal rational basis test has inflicted serious harm on entrepreneurs, property owners, and others who seek protection from the courts—only to be turned away due to the excessive deference accorded to the government under this test. Florida courts do not owe the legislature that same deference, they have not traditionally given such deference, and should not do so now.