September 2014

Today, entrepreneurship and the free market are under unprecedented assault nationwide. Economic protectionism has gone unchecked. “Occupational licensing” has skyrocketed.

The Assault on Economic Liberty

                                   Legal Precedents for Economic Liberty

While these laws have been going unchecked by our judicial system for over a century, the tide is slowly turning as courts are starting to meaningfully consider the facts in economic liberty cases.

Here are three recent important decisions handed down from federal circuit courts of appeal:

Craigmiles v. Giles, 312 F.3d 220, 224 (6th Cir. 2002): IJ challenged a government-imposed monopoly on the sale of caskets in Tennessee. In response, the U.S. Court of Appeals for the Sixth Circuit flatly ruled that “protecting a discrete interest group from economic competition is not a legitimate government purpose.” The court ruled that the government cannot impose protectionist regulations that restrict individuals’ right to earn an honest living.

Merrifield v. Lockyer, 547 F.3d 978, 992 n.15 (9th Cir. 2008): The Ninth Circuit held that “mere economic protectionism for the sake of economic protectionism is irrational.” When considering adoption of Senate Bill 568 in 1995, the California legislature found that the proposed law posed no threat to the public's health or safety. In 2008, the 9th Circuit Court concurred, ruling that the non-pesticide control of vertebrate pests in structures does not endanger the public's health or safety in any way.

St. Joseph Abbey, et. al. v. Castille,, 712 F.3d 215 (5th Cir. 2013): IJ challenged Louisiana’s law that prohibited monks from making caskets. This law protected established casket-making businesses from competition. In response to the lawsuit, the 5th U.S. Circuit Court of Appeals unanimously ruled that economic protectionism is not a legitimate governmental interest: Laws amounting to “naked transfers of wealth” to politically favored insiders are unconstitutional.

The Court of Appeals squarely rejected Louisiana’s argument that it was constitutional to enact a law forbidding anyone but a government-licensed funeral director from selling caskets, especially if the only purpose of the law is to make funeral directors wealthier by limiting competition.