February 25, 2019 9:26AM

Judicial Sanity on Occupational Licensing and the First Amendment

States often impose costly licensing restrictions on professionals who want to engage in certain businesses. Mississippi, however, has taken this practice to an absurd level in an attempt to regulate not only a profession, but also the definition of a commonly used word. A Magnolia State statute prevents anyone from using the term “engineer” commercially unless licensed by the state as an engineer.

Express Oil Change and Tire Engineers, a business that provides tire repair, maintenance, and replacement services, has a long-standing trademark on the term “Tire Engineers.” Express has refused to change the term, arguing that the First Amendment protects its use. Much is at stake for Express: the penalties for violating the statute include severe punishments like imprisonment, all for "misusing" a phrase that it had trademarked. Mississippi sued Express and won in district court, before losing last week before the U.S. Court of Appeals for the Fifth Circuit. The case is Express Oil Change v. Mississippi Board of Licensure for Professional Engineers & Surveyors.

The First Amendment guarantees that speech—even when done for money—is constitutionally protected. But such speech is subject to government regulation, the contours of which were defined by the U.S. Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission (1980). First, the speech itself “must concern lawful activity and not be misleading” to receive protection. To justify regulating the speech, a court asks if “the asserted governmental interest is substantial.” Finally, a court must establish “whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.”

The Fifth Circuit correctly noted that the term “Tire Engineers” passes the Central Hudson test with flying colors. First, it is not, as Mississippi argues, “inherently misleading.” The word engineer means different things in different contexts. “Tire Engineers,” trademarked in 1948, is not the same as the Mississippi statute definition but, as the Fifth Circuit explains, that surely does not make it misleading. Next, the court upheld the district court’s finding that the state has a substantial interest in “ensuring the accuracy of commercial information in the marketplace,” an assertion unchallenged by both parties. Certainly, states can step in to ensure that consumers get what they pay for and know what they’re buying. But Mississippi’s statute took it too far; a total ban on a challenged term is a highly restrictive means of achieving the state’s goal. This is far from a narrowly tailored solution.

The Fifth Circuit has recognized when states go too far in similar contexts. For instance, in Byrum v. Landreth (2009), the court noted that it is unconstitutional for states to simply define and then ban common terms from being used in the market. A state could thus avoid constitutional challenge by “allowing only [interior] designers who satisfy its licensing qualifications to represent themselves as ‘licensed’ interior designers.” Such a solution would be far more narrowly tailored; all it asks is that unlicensed businesses not misrepresent themselves as licensed. Although state licensing schemes are often far too restrictive and present their own constitutional problems, this solution comports with the First Amendment.

When states try to establish only one definition for a common word, they create monopolies on language and severely encumber an individual’s ability to speak. Surely nobody believes that the act of repairing or changing a tire requires an advanced degree in mechanical engineering. The use of "tire engineer" in this context is thus neither misleading nor in need of regulation. Instead, the Mississippi statute serves as an example of states going too far in establishing protectionist licensing schemes and inhibiting commercial speech as a result.

In sum, a state does not get to corner the market on a word and crowd out all other possible uses. The Fifth Circuit acknowledged the speech-inhibiting nature of Mississippi’s statute and stood for the principle that speech -- even for money -- deserves First Amendment protection.

The Supreme Court is highly unlikely to take up this case even if the Mississippi Board deigns to appeal, so at least liberty is safe in this little corner of our world.