Tag: Institute for Justice

Casket Case Shows Economic Liberty to Be Alive and Well

Last week, the Institute for Justice scored a resounding victory for the right to earn an honest living in an unlikely case that pitted woodworking monks against the Louisiana State Board of Embalmers and Funeral Directors.  The New Orleans-based U.S. Court of Appeals for the Fifth Circuit – where I clerked – ruled in a final, unanimous decision (including one Obama-appointed judge) that Louisiana violated the St. Joseph Abbey monks’ economic liberty when it forbade them from selling the caskets they make to support their religious order.

Significantly, the court ruled that the Constitution doesn’t allow the government to enact laws simply to shield industry cartels from honest competition.  Although IJ was already assured of victory, given that Fifth Circuit had issued a divided preliminary opinion in October, that ruling left open some tricky questions that this latest decision definitively settled.  

Last Wednesday’s ruling makes clear that laws having no purpose but to enrich certain protected interests are unconstitutional, using reasoning that should be a model for courts across the country.  

Louisiana now has 90 days to seek review in the U.S. Supreme Court – which supporters of economic liberty should welcome because IJ’s previous litigation created a split in the federal lower courts that can only be resolved, for the nation as a whole, by the Supreme Court. 

For more on St. Joseph Abbey v. Castille, see IJ’s case page and this Wall Street Journal op-ed by IJ’s Chip Mellor and Jeff Rowes. And if you’re a law student interested in using your legal skills to promote liberty this summer, you should apply to IJ’s epic public interest boot camp (of which I’m a graduate, though in my day there wasn’t any skydiving or aikido).

Food Trucks Unwelcome in Arlington, Virginia

Libertarian arguments about the importance of economic liberty so often fall on deaf ears, but then you come across government abuses in this area that are so ridiculous that maybe even progressives can see the folly.  Here’s an excerpt from an email I just got from the Institute for Justice:

For those of you who follow IJ’s National Street Vending Initiative, you most likely know that cities across the country pass arbitrary and anti-competitive laws that make it practically impossible for food trucks and other vendors to succeed.  An opportunity to fight against one such law has presented itself in Arlington, Virginia.

Arlington County has a law in place that prevents food trucks from operating in one place for more than 60 minutes.  A local food truck named Seoul Food received a notice for violating this rule.  According to the owner of the truck, he informed the police officer that he did move from one parking spot to another within the allotted time.  The police officer still cited Seoul Food, however, because in the officer’s view the truck had not moved “far enough.”  It is important to note that the County Code does not specify any minimum distance a truck must move; it states only that “the vehicle must remain stopped for … no longer than sixty (60) minutes.”  Arlington Code Section 30-9(B).

The penalty for violating Section 30-9 is severe.  The Arlington County Code classifies a violation of the sixty-minute rule as a Class 1 misdemeanor, which is punishable by “confinement in jail for not more than twelve months and a fine of not more than $2,500.”  Thus, Arlington considers selling food to willing customers from a legal parking space to be as serious as  Reckless Driving, DUI, and Assault & Battery.

You can’t make this stuff up!

I followed up with one of IJ’s lawyers, who also noted that every police officer who Seoul Food’s owners interacted with has given them a different distance that the food truck purportedly has to move.  One said they just needed to move to an adjacent spot, while another said they had to go around the block. 

Alas, because the case is in criminal proceedings (!), IJ can’t represent Seoul Food.  Any Virginia-licensed lawyers with experience in criminal defense work who might want to help out pro bono – or media/others seeking more information on the case – please contact Krissy Keys, kkeys -at- ij.org.

The Institute for Justice Exposes the Plague of Occupational Licensing

Today, the Institute for Justice released a 200-page, comprehensive study on occupational licensing in the United States. The report details the plague of occupational licensing that has swept the country over the past 60+ years. According to the study, “In the 1950s, only one in 20 U.S. workers needed the government’s permission to pursue their chosen occupation. Today, that figure stands at almost one in three.”

Fifty years ago, in Capitalism and Freedom, Milton Friedman warned against the dangers of professional licensing. At that time, Friedman quoted a previous study on licensure by Walter Gellhorn:

By 1952 more than 80 separate occupations exclusive of ‘owner-businesses,’ like restaurants and taxicab companies, had been licensed by state law; and in addition to the state laws there are municipal ordinances in abundance, not to mention the federal statutes that require the licensing of such diverse occupations as radio operators and stockyard commission agents. As long ago as 1938 a single state,North Carolina, had extended its law to 60 occupations. One may not be surprised to learn that pharmacists, accountants, and dentists have been reached by state law as have sanitarians and psychologists, assayers and architects, veterinarians and librarians. But with what joy of discovery does one learn about the licensing of threshing machine operators and dealers in scrap tobacco? What of egg graders and guide dog trainers, pest controllers and yacht salesmen, tree surgeons and well diggers, tile layers and potato growers? And what of the hypertrichologists who are licensed in Connecticut, where they remove excessive and unsightly hair with the solemnity appropriate to their high sounding title?

The Institute for Justice’s study found that licensing has only become more wide-spread and more absurd. But an increase in licensure is expected when interest groups are allowed to capture government and violate our economic liberties. Public choice theory predicts a growth in licensing if the anti-competitive interests of trades are not checked by constitutional rights. As Friedman observed,

In the absence of any general arrangements to offset the pressure of special interests, producer groups will invariably have a much stronger influence on legislative action and the power that be than will the diverse, widely spread consumer interest. Indeed from this point of view, the puzzle is not why we have so many silly licensure laws, but why we don’t have far more.

There are significant real-world effects to these laws. In a world of nine percent unemployment, barriers to work should be the last thing we want, particularly if those barriers do not make us safer or better off. The study found that the average license forces would-be workers to pay an average of $209 in fees, take one exam, and complete nine months of training. In the four places in which they are licensed (three states and DC), interior designers have the highest barriers to entry, apparently to save us from shag carpeting and misuses of the Pottery Barn. In the face of such requirements, particularly the months of training, it’s easy to see how someone can be discouraged from even looking for a job.

In addition, out-of-control licensing has other, more human costs, such as the monks of Saint Joseph Abbey, who were prohibited from building caskets in their monastery unless they obtained a funeral director license. The Institute for Justice won that case. Here’s hoping the new study gives IJ’s attorneys the data they may need to defeat other unconstitutional licensing regimes.

Below is the video announcing the study:

Citizens United at Two

The Supreme Court decided Citizens United two years ago this week. The complaints about the ruling that have emerged since are often bizarre and misrepresent much of the landmark ruling’s import. Here’s what the case was about.

Almost nowhere in the complaints about the Citizens United ruling will you hear that the case decided that certain books or Pay-per-View broadcasts could no longer be banned by the Federal Election Commission.

Former FEC commissioner Bradley A. Smith further detailed the breathtaking arguments made by the government during the initial oral argument.

(And here’s more from attorney James Bopp, Jr. on the ultimate ruling.)

Since Citizens United, complaints from Common Cause and occupiers of various parks across the United States tend to focus on corporate personhood, the scourge of SuperPACs and at least one group’s troubling idea to amend the Constitution so that—once and for all—“campaign spending is not a form of speech protected under the First Amendment.”

Ninth Circuit Gets It Right, Deregulates the Bone Marrow Market

This blogpost was coauthored by Cato legal associate Chaim Gordon.

Thanks to the Institute for Justice, those suffering from leukemia and various other ailments that require them to wait for a bone marrow match to miraculously appear have new hope. Yesterday’s unanimous opinion by the Ninth Circuit in Flynn v. Holder effectively deregulates the bone-marrow market—and may even encourage lawmakers to rethink the disastrous federal prohibition on compensating organ donors.  (I previously wrote about the case here and here, and you can watch Cato’s forum on it here.)

At issue here is the National Organ Transplant Act, which prohibits patients from compensating would-be donors of life sustaining organs. The Ninth Circuit ruled that NOTA does not apply to blood (or blood subparts), and so it is entirely legal to sell bone marrow stem cells if those cells are extracted from the blood—as they are in 70% of donations—instead of from the bone marrow itself.

Unfortunately, the Ninth Circuit rejected IJ’s argument that Congress has no legitimate authority to interfere with the right to participate in safe, accepted, lifesaving, and otherwise legal medical treatment. In rejecting this argument, the court effectively held that NOTA’s ban on the sale of actual bone marrow was constitutional because an unregulated market posed certain dangers (especially of the exploitation of desperate patients).

It is highly unlikely that such exploitation could occur under current market conditions, however, because donors and patients have no way of contacting each other without the National Registry system that matches them. And, of course, the choice is not between a prohibition on compensation and complete non-regulation; some regulation may be appropriate, whether by legislation or simple action of the common law akin to how it operates to prevent extortion in other contexts.

The good news is that, with the bone marrow market effectively deregulated, Congress may now be motivated to reexamine its misguided ban on compensating organ donors. One of the greatest obstacles to reforming the prohibition on organ sales is the fortunate fact that relatively few Americans require organ transplants in any given election cycle. According to government statistics, 112,546 Americans are currently on some kind of organ transplant waiting list. That means only around 1 in 3,000 Americans (and their families and friends) would be seriously motivated to demand organ transplant reform from Congress. Congress will now be forced to grapple with its policies regarding bone marrow transplants, which may be an opportune time for advocates to push for wider organ transplant reform.

The Ninth Circuit’s opinion also clears the way for Supreme Court review of NOTA. If this case reaches the high court, IJ can press its constitutional arguments more forcefully. And even if the Supreme Court merely affirms the Ninth Circuit’s opinion on statutory grounds, we will inevitably learn much about the justices’ views on the constitutionality of NOTA more broadly.

For the moment, Flynn v. Holder means that, for the first time in over 25 years, a spotlight has been shined on NOTA and its disastrous effects on Americans’ medical liberty. And that is why the Ninth Circuit’s narrow bone marrow opinion may actually be a significant step toward the rational regulation of organ markets.

For more of Cato’s work in this area, see, for example, this paper and this op-ed.

Monks Successfully Defend Their Right to Earn an Honest Living

Last week, a federal court in Louisiana ruled that a state law prohibiting sales of caskets by non-licensed merchants was unconstitutional.  A monastery that has made caskets for over a century sued the state to protect their modest casket business. It should come as no surprise that our friends at the Institute for Justice were leading the charge against the law:

Under Louisiana law, it was a crime for anyone but a government-licensed funeral director to sell “funeral merchandise,” which includes caskets.  To sell caskets legally, the monks would have had to abandon their calling for one full year to apprentice at a licensed funeral home and convert their monastery into a “funeral establishment” by, among other things, installing equipment for embalming.

The Honorable Stanwood Duval of U.S. District Court for the Eastern District of Louisiana ruled, “Simply put, there is nothing in the licensing procedures that bestows any benefit to the public in the context of the retail sale of caskets.  The license has no bearing on the manufacturing and sale of coffins.  It appears that the sole reason for these laws is the economic protection of the funeral industry which reason the Court has previously found not to be a valid government interest standing alone to provide a constitutionally valid reason for these provisions.”

Thus, even though merely economic liberty was at issue and therefore courts need apply only “rational basis” scrutiny to the regulation at issue, this regulation fails for being completely beyond any conceivable rational basis. And indeed, like so many regulations, this one was nothing more nor less than a barrier to entry for small businesses. Established funeral directors had used the power of the government to illegally control the market, eliminating competition and artificially driving up the prices of caskets. Not only was the funeral-director cartel denying the monks their right t earn an honest living, but they were taking advantage of the people they serve (ultimately, everyone in Louisiana) by extracting ill-gotten profit – often at the time of their customers’ greatest sorrow.

You can read the full opinion here and watch a video that tells the monastery’s story below. Congratulations to the monks of St. Joseph Abbey and the great attorneys at IJ!

Texas Court Rules For Eminent-Domain Critic

Good news from Texas, where a state appeals court has handed a major win to investigative journalist Carla Main, whose book Bulldozed: ‘Kelo,’ Eminent Domain, and the American Lust for Land took a critical look at the seizure of private land under eminent domain laws for purposes of urban redevelopment. Dallas developer H. Walker Royall didn’t like what Main wrote about his involvement in a Freeport, Texas marina project and proceeded to sue her, publisher Encounter Books (which I should note is also my own publisher on Schools for Misrule), and even liberty-minded law professor Richard Epstein over a dust jacket blurb Epstein had given for the book. (Earlier coverage of the suit here and here.)

A trial court had declined to dismiss Royall’s claims on summary judgment, but yesterday Judge Elizabeth Lang-Miers reversed in substantial part, ruling that Royall had failed to make the requisite showing that key passages in Bulldozed had in fact defamed him. The case is not yet over, but Institute for Justice senior attorney Dana Berliner, who argued for the defense, is understandably jubilant: “Walker Royall has failed in his attempt to use this frivolous defamation lawsuit as a weapon to silence his critics,” she said. Moreover, outrage at Royall’s suit contributed to Texas’s enactment this summer (joining 26 other states) of strong “anti-SLAPP” legislation aimed at curbing lawsuits intimidating speech. You can read the opinion here, and early coverage at Gideon Kanner’s blog, the Dallas Observer and D Magazine.