Death Grip: Loosening the Law's Stranglehold over Economic Liberty

Index

INTRODUCTION AND

ACKNOWLEDGMENTS

HERE’S A CIVICS STUMPER

for you: can you name the three protections provided by the Fourteenth Amendment?

Most Americans likely could not identify any of them without additional prompting. But even among people who are possessed of substantial civic knowledge, I’d wager the vast majority could name only two: due process of law and equal protection under the law. They’re pretty famous. Even those who don’t know they are part of the Fourteenth Amendment are likely to recognize the terms and know that they are important constitutional rights Americans possess.

It’s the Fourteenth Amendment’s remaining protection that would completely stump most Americans, even if it were listed among multiple-choice options: it’s the guarantee that states may not abridge the privileges or immunities of citizens of the United States. If you asked the typical person on the street—indeed, even the typical lawyer—where the provision comes from or what it means, most wouldn’t have a clue.

How could two of the three provisions of the Fourteenth Amendment be so well-known while the other is so obscure? Especially when they appear within the same sentence? Deepening the mystery, the privileges or immunities clause is listed first among the trilogy of Fourteenth Amendment protections, suggesting that those who wrote it intended that the provision meant something important. Moreover, among the three protections, it is the only one that on its face protects substantive rights—that is, privileges or immunities that states may not abridge. By contrast, the other provisions on their face do not impose substantive limits on government power, but rather instruct that states may not infringe upon life, liberty, or property without due process and that they are bound to provide all individuals with equal protection of the laws.

The reason why Americans are familiar with due process and equal protection is that scores of court decisions have struck down laws as violations of those guarantees—including some of the most-famous cases of all time, such as Brown v. Board of Education and Roe v. Wade. Law students spend months studying those two provisions, and they are a core focus of the Constitutional Law portion of the bar examination.

By contrast, cases involving the privileges or immunities clause are exceedingly rare and are almost never in the news. As a result, most law students spend a minute or two, if that, studying about the privileges or immunities clause. In fact, they are taught to forget it exists. Indeed, when I was studying for the California bar examination, the instructor told the students that there was only one thing they needed to know about the privileges or immunities clause: that it is never the correct answer to a bar exam question.

How did such a seminal constitutional provision plummet to such jurisprudential depths? Most legal questions have complex answers—or at least lawyers who charge by the hour want you to think that they do—but the answer to this one is easy. Only a few years after the Fourteenth Amendment was enacted following the close of the Civil War, the U.S. Supreme Court drained the privileges or immunities clause of nearly all its meaning in one of the worst decisions in the history of American law, the aptly named Slaughter-House Cases.[1]

In that 1873 decision, the Supreme Court by a 5–4 vote—highly unusual in those days—upheld a bribery-procured Louisiana slaughterhouse monopoly that had been challenged by a group of butchers whose businesses were jeopardized. In that decision, the court discovered a new way to amend the Constitution: by judicial fiat. The majority ruled that the privileges or immunities clause added almost nothing to the handful of rights protected against abuse by the states in the original Constitution. By that decision, one of the most important and beneficial products of the Civil War—a revolutionary constitutional provision intended to protect civil rights against oppression by state governments—was nullified. So while myriad cases since the Fourteenth Amendment was adopted have invoked the equal protection and due process clauses, until recently not a single U.S. Supreme Court decision invoked the privileges or immunities clause to strike down a law.

The Slaughter-House Cases produced many unfortunate consequences, several of which will be discussed in the pages that follow. But foremost among them was the evisceration of one of the most sacred and central rights of Americans: economic liberty, the right to pursue a business or occupation free from arbitrary or excessive government regulation. Now, nearly a century and a half later, this right that many Americans deem fundamental enjoys virtually no legal protection whatsoever. If the government tries to take away someone’s welfare check, a Legal Services Corporation lawyer (your taxpayer dollars at work) can tie the government up in knots. But if the government decides to regulate your business out of existence—even for the benefit of a competitor—you have virtually no constitutional recourse.

This state of affairs is particularly devastating for people at the bottom rungs of the economic ladder. The most pernicious regulatory barriers to opportunity are those that restrict entry into businesses and occupations that require little formal education or capital. Those regulations hinder meaningful participation in the mainstream economy, as well as upward economic mobility, to millions of economically disadvantaged Americans. At the same time, they limit market entry and inhibit competition at every level of the economy, as sophisticated business or labor interests manipulate government power to protect and enhance their economic positions to the detriment of others.

The privileges or immunities clause was intended to provide legal recourse to individuals affected by such laws. But the clause was killed in its infancy. That is a perversion of American law. The time has come to correct it—to restore economic liberty to its rightful place among the most fundamental civil rights.

The conditions for change may be ripe. Legal scholars on both sides of the philosophical spectrum have condemned the Slaughter-House Cases. Moreover, a majority of members of the current U.S. Supreme Court adhere to a philosophy of original intent, which opens them to arguments based on the intent of the Constitution’s framers.

But it is a difficult task to overturn a longstanding precedent, even if it is obviously wrong. In particular, some conservative judges and scholars fear that breathing life into the privileges or immunities clause would open a Pandora’s box of judicial adventurism. Yet that fear is nothing compared to the real-world harm inflicted upon Americans whose economic liberty is denied by government.

In 1984, Judge (now Justice) Antonin Scalia debated libertarian law professor Richard Epstein on this very topic at the Cato Institute. Scalia argued that it was premature to consider restoring judicial protection for economic liberty; important groundwork first must be laid. [T]he task of creating what I might call a constitutional ethos of economic liberty is no easy one, he warned. But it is the first task.[2]

I took Scalia’s words as a clarion call. As a young lawyer only a few years out of law school, I set myself on a goal so audaciously hopeful that it would make Barack Obama proud (if he liked free enterprise): to overturn the Slaughter-House Cases. With the encouragement of my boss and mentor—the chairman of the U.S. Equal Employment Opportunity Commission, Clarence Thomas, who would go on to become an associate justice of the United States Supreme Court—I wrote a book called Changing Course that sketched out the idea. Even though hardly anyone read the book, the idea was interesting enough to the Lynde and Harry Bradley Foundation to provide a seed grant to Landmark Legal Foundation to put me to work. And the quest to overturn Slaughter-House and restore economic liberty as a fundamental civil right began in earnest.

Since that time, I have had the great privilege and opportunity to litigate many economic liberty cases (several of them described in Part 4) at the Institute for Justice, which I co-founded in 1990, and since 2007 at the Goldwater Institute in Phoenix. It has been gratifying to see talented attorneys such as Clark Neily at the Institute for Justice and Timothy Sandefur at Pacific Legal Foundation take on this task as well. We still have a long way to go, but our successes so far in the courts of law and the court of public opinion suggest that we are doing something more than tilting at windmills. Ultimately, our goal is to convince the U.S. Supreme Court to revisit the Slaughter-House Cases and to invest the privileges or immunities clause with the meaning intended by its framers.

The four parts of this book proceed as follows. In part 1, I sketch the sorry state of economic liberty in the nation that stands as a beacon of opportunity to the rest of the world. In part 2, I examine the history and intent of the Fourteenth Amendment and the judicial nullification of the privileges or immunities clause in the Slaughter-House Cases. Part 3 examines the horrible aftermath of Slaughter-House, whose tragic consequences continue to manifest themselves today. For readers who slog through those three depressing sections, the payoff is part 4, which describes the campaign to restore economic liberty as a fundamental civil right, so far with limited but growing success.

I am enormously grateful to the