Goldwater to Supreme Court: It’s Time to Protect Economic Freedom, Too

The Goldwater Institute filed a brief in the U.S. Supreme Court today urging the justices to take up the issue of constitutional protections for economic freedom—a right that federal judges have time and time again relegated to second-class status. Our brief argues that the right to earn a living, which Justice William Douglas once called “the most precious liberty that man possesses,” is deeply rooted in this nation’s history and tradition, and that it’s time for the justices to protect innocent entrepreneurs against the wrongs done to them by regulators and crony businesses.

The case involves a Louisiana law that prohibits people from opening counseling centers without getting permission from a group of bureaucrats whose job is (supposedly) to determine whether there’s a “need” for a new counseling center. These kinds of laws—typically called CON laws, or “certificate-of-need” laws—restrict the availability of medical and psychological services in ways that harm patients, sometimes tragically so, as the Goldwater Institute explained in its 2018 report CON Job: State Certificate of Need Laws Are Limiting Mental Health Options.

It should be obvious that these laws are unconstitutional. The Supreme Court said as long ago as 1889—in the very first Supreme Court decision to decide on the constitutionality of medical licensing laws—that the government can restrict people from entering a business only in order to protect consumers against being defrauded, or lied to, or harmed in some way. It reiterated that point 1957, when it said states can only impose licensing restrictions if they ensure that practitioners are fit and able to practice the profession. But CON laws don’t consider such factors at all. They simply prohibit people from starting a business to protect existing businesses against competition. The Louisiana law, for example, makes it illegal to start a new clinic, not based on a person’s ability, but based on whether the existing clinics want to compete. (Guess what: they don’t.)

Yet the Fifth Circuit Court of Appeals upheld the law, on the theory that restricting the number of clinics enables the state to better regulate those clinics that do exist, because that way, the government doesn’t have to hire more inspectors. That is, frankly, absurd: by that rationale, the state could prohibit all but one clinic in the entire state, because doing so would make it really easy to inspect and regulate it.

Our colleagues at Pacific Legal Foundation have asked the Supreme Court to take the case, and we filed this brief today explaining why it’s well past time for the justices to resolve these issues. They’ve been asked to over and over again, by courts across the country, and they’ve chosen to pass each time. Yet the problems caused by CON laws aren’t going away. Not only do these laws violate the rights of entrepreneurs and competent businesspeople who simply want to earn a living by offering needed services to the public, but they also drive up health care costs and slow down innovation. And they violate a basic right that’s deeply rooted in our history and tradition: the right to earn a living.

Our brief explains the history of that right—tracing it back to the fourteenth century—and shows why it’s time to rectify the mistakes that have led the federal courts to turn their backs on this vital element of economic freedom.

You can read our brief here and learn more about CON laws in The Permission Society: How the Ruling Class Turns our Freedoms into Privileges and What We Can Do About It.

Timothy Sandefur is the Vice President for Legal Affairs at the Goldwater Institute.