The Slaughter-House Cases

Privileges or Immunities:  Academic Resources (NEW)

by Clint Bolick

IJ litigation director Clint Bolick presented this paper at the Institute's conference on Slaughter-House held December 1-3, 1995 in Monterey, California.

Overturning a 123-year-old Supreme Court precedent presents a daunting and audacious -- some would say hopeless -- challenge. Those assembled to consider this question at this conference all have more productive ways to spend their time than tilting at windmills. But for the reasons set forth below, the challenge presented in overturning the Slaughter-House Cases appears winnable and eminently worth taking on.

My colleagues at the Institute for Justice and I have launched a systemic campaign to overturn Slaughter-House as the best means of securing judicial protection for economic liberty. In this paper I outline the objectives, premises, and tactics underlying this endeavor. I open them up for critical evaluation.

I. The Forgotten Civil Right

Economic liberty is the right to earn an honest living in a chosen business or profession, free from arbitrary or excessive government regulation. It traces its origin to natural rights philosophy and was recognized in common law. The suppression of economic liberties by southern governments after the Civil War in the form of "black codes" provided a primary impetus for the Reconstruction Congress to pass first the Civil Rights Act of 1866 and then the Fourteenth Amendment. Slaughter-House itself is, of course, an economic liberty case: a challenge to a government-created monopoly by adversely affected competitors. The evisceration of the privileges or immunities clause by that ruling made it impossible to raise freedom of contract arguments against subsequent Jim Crow laws.

Of all the fundamental rights Americans believe they possess, economic liberty is today the least protected; indeed, the "right" to receive a welfare check receives substantially greater judicial protection than the right to earn an honest living. Though the Fourteenth Amendment's due process and equal protec-tion clauses have been used to protect economic liberties, the substantive component of those clauses currently has little vitality in the economic liberty context. Economic regulations, even those that preclude entry or competition in chosen enter-prises, are accorded almost complete judicial deference, no matter how arbitrary or oppressive or how impure the motivation. The extent of judicial abdication in this area is reflected by the U.S. Supreme Court's recent unanimous decision in F.C.C. v. Beach Communications, Inc.:

In areas of social and economic policy, a statutory classification that neither proceeds along suspect lines nor infringes fundamental constitutional rights must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification. . . . Moreover, because we never require a legislature to articulate its reasons for enacting a statute, it is entirely irrelevant for constitutional purposes whether the conceived distinction actually motivated the legislature. . . . [A] legislative choice is not subject to courtroom factfinding and may be based on rational speculation unsupported by evidence or empirical data.

The judicial abdication has widespread and pernicious real-world ramifications. Entry-level entrepreneurial and professional opportunities traditionally have provided the main means for socioeconomic advancement in our free enterprise economy. Yet barriers to economic entry proliferate at every level of government, from minimum wage laws to occupational licens-ing laws to government-conferred monopolies. Many of these regulations limit entry and competition in jobs and enterprises that require few skills and little capital. As a result they disproportionately affect people outside the economic mainstream. In many instances, the regulations are not reasonably tailored to legitimate public health or safety goals.

Our goal is to establish a rule of law whereby government must justify restraints on economic liberty. Of course, economic liberty is bounded by legitimate exercises of the police power. But instead of completely ceding to governmental discretion, the courts should demand some sort of connection between the regula-tions and the asserted public health and safety justifications.

For instance, in the taxicab industry a city might reason-ably fulfil public health and safety interests by means of requiring safety inspections, insurance, and driver testing. But artificially limiting the number of taxicab licenses would likely not survive this scrutiny. Such scrutiny does not necessarily entail classifying economic liberty as a "fundamental right," within the current equal protection framework, but could be achieved by applying meaningful "rational basis" scrutiny.

In pursuing this objective, we have used due process and equal protection arguments, as well as ancillary legal theories such as race discrimination and antitrust where these are applicable. However, the most direct way to secure judicial protec-tion for economic liberty is to restore the provision of the Constitution that was intended to do just that: the privileges or immunities clause.

II. Premises Underlying the Strategy

Our determination to challenge Slaughter-House is grounded in the following premises:

1. Other methods to secure economic liberty either are unavailing or of limited utility. As noted previously, although due process and equal protection sometimes are successfully invoked to strike down restraints on liberty, they are effective only rarely in the economic liberty context. As Beach Communiications demonstrates, there is little or no support on the current Supreme Court to apply these constitutional provisions to scrutinize economic regulations. Many liberals and conservatives share a disdain for the Lochner era, which presents a major impediment to protecting economic liberty in any event, but particularly by means of the due process or equal protection clauses.

Likewise, other legal theories -- the takings, contract, privileges and immunities (article IV, section 2), and interstate commerce clauses of the Constitution and the antitrust laws -- are applicable only in limited circumstances. And even though many barriers to entry impose a disproportionate impact on minorities, racial discrimination claims under the Fourteenth Amendment require proof of discriminatory intent, a difficult standard to meet. Hence, meaningful judicial protection for economic liberty can best, and perhaps only, be achieved by overturning Slaughter-House.

2. Slaughter-House is unusually vulnerable for a long-standing decision. Of the three guarantees embodied within the Fourteenth Amendment's first section, the privileges or immuni-ties clause is listed first, and it is the only one that on its face provides substan-tive protections. Yet it alone has been consigned to judicial oblivion.

Slaughter-House was a 5-4 decision, highly unusual in 1872. The dissenters were passionate and persuasive. Plentiful schol-arly research has demonstrated that the decision was wrongly decided on a variety of grounds.

Moreover, the policy considerations underlying stare decisis do not attend with strong force. Unlike statutory interpreta-tions, the Supreme Court's construction of constitutional provi-sions is not easily corrected. Overturning Slaughter-House would not infringe widely recognized liberties but instead would protect such liberties. The current rule has led to widespread hardship and is inequitable. Though certainly the precedent is supported by a century and a quarter of judicial inertia, strong equitable reasons exist to reconsider it.

3. Overturning Slaughter-House is not judicial activism. Concededly, to establish protection for economic liberty would require the courts to scrutinize legislation, which sometimes is reflexively described as judicial activism. In reality, Slaughter-House itself represents the worst kind of judicial activism, for it drains all meaning from a constitutional provision that plainly was intended to protect individual liberty against state interference. Moreover, economic liberty is grounded in common law.

Judicial restraint demands humility with respect to legislative enactments, but even greater humility before constitutional commands.

4. The task we are asking the judiciary to assume is manageable. Overturning Slaughter-House does not require the judiciary to second-guess or substitute its judgment for legislative enactments. It merely requires the courts to determine whether legislative objectives are constitutionally permissible and whether the means chosen are reasonably related to those objectives. This function the courts frequently perform in such areas as takings and speech.

5. In addition to protecting economic liberty, other sound exist to overturn Slaughter-House. The privileges or immunities clause was intended to protect a broad range of liberties against incursions by state governments. Michael Kent Curtis persuasively has argued, for instance, that the clause was intended to secure Bill of Rights protections against the states. These liberties are complementary to one another, and the effort to overturn Slaugh-ter-House should draw strong support from across the philosophical spec-trum.

For all these reasons, I conclude the effort to overturn Slaughter-House is not hopeless, but indeed that a well-devised strategy could prove successful. If so, its benefits will be great, particu-larly for those whose enjoyment of liberty has been denied.

III. Tactics

To achieve the objectives of securing judicial protection for economic liberty and overturning Slaughter-House, we are employing the following tactics:

1. In selecting cases, we try to find sympathetic plain-tiffs and outrageous facts. We have focused on barriers to entry-level economic opportunities, i.e., jobs or professions requiring few skills and little capital. We also pursue factually simple cases that can be argued on summary judgment, in the hope that precedents are based on rules of law rather than factual nuances.

2. We view each case (except cases against the federal government, where the Fourteenth Amendment does not apply), as a potential vehicle to overturn Slaughter-House. In each complaint, we allege a violation of the privileges or immuni-ties clause in order to preserve the issue for review by the U.S. Supreme Court, but concede at the trial and appellate court levels that Slaughter-House presently forecloses such claims. We have not yet presented to a trial court arguments that subsequent constitutional or statutory developments may have added to the federal privileges or immunities protected by the Fourteenth Amendment, but we consider that a fruitful area for scholarly inquiry and possible litigation.

All our cases so far have been filed in federal courts, primarily for greater precedential effect. But we are exploring the possibility of litigation in state courts where there are favorable constitutional precedents or jurisprudence. In such circumstances we would raise ancillary federal constitutional claims as well. Our plan is to raise the question of revisiting Slaughter-House in peti-tions for review in the U.S. Supreme Court from adverse decisions in federal courts of appeal or state supreme courts.

3. We have argued economic liberty cases so far mainly on equal protection and due process grounds, invoking a number of precedents that have applied a means/ends analysis under the rational basis test. Also, we have made antitrust and right to travel arguments. Our goal is to construct a body of case law to support economic liberty, with each case as a building block for the next, until the ultimate issues are decided by the Supreme Court.

4. In addition to arguing our cases in court, we also argue vigorously in the court of public opinion. We seek to draw attention to the plight of would-be entrepreneurs who are de-prived the right to earn their share of the American Dream, in order to build public support and foster an ethos of economic liberty.

So far our media strategy has proved remarkably successful, and has produced unexpected consequences: in two of our cases that were lost at the trial level (see section IV), media atten-tion induced previously recalcitrant legislatures to eliminate the regulatory barriers we were challenging. We are eager to secure victories for our clients and for economic liberty in any way possible, but ironically our successes both in court and in the court of public opinion thus far have deprived us of a vehicle by which to present the issue to the Supreme Court. As problems go, that is a happy one to have.

5. Finally, we work diligently to create non-traditional alliances cutting across racial, economic, and ideological lines. In our challenge to the Denver taxicab monopoly (see section IV), for example, we joined forces with the local chapter of the National Association for the Advancement of Colored Persons. Support for economic liberty, and for overturning Slaughter-House, is not bound by ideology. We believe our cause is streng-thened by creating common cause on these issues with people who do not always agree with us on other issues.

IV. Case Prototypes

To date, there have been four cases prosecuted in pursuit of the strategy outlined above :

Brown v. Barry. The quest to restore economic liberty started literally at the ground level, with streetcorner shoe-shine stands. Ego Brown had toiled for years as a government bureau-crat, and yearned to start his own business. He discovered a lucrative niche in the thousands of scuffed shoes pounding the streets of Washington, DC. Brown set up a streetcorner shoeshine stand and soon his business was thriving. So much that he began expanding, by leasing stands to enterprising homeless people for whom shining shoes was a second chance at life.

Unfortunately, the District of Columbia government shut down Brown's stands, citing a 1905 Jim Crow-era law forbidding shoe-shine stands on public streets. Other businesses, such as food vendors, were allowed to operate, but shoeshine stands were expressly prohibit-ed.

Brown filed suit in federal district court, arguing that the ban violated the 14th Amend-ment's equal protection guarantee, and the court ruled in his favor. The court "had no difficulty finding that bootblack prohibition fails to pass the rational basis test," declaring that "we would have to `strain our imagination' . . . to justify prohibiting boot-blacks from the use of public space while permitting access to virtually every other type of vendor."

The decision in Brown v. Barry, which the city did not appeal, provided the first building block in the jurisprudence of econom-ic liberty. Brown's case received favorable and wide-spread media coverage. ABC-TV made Brown its "Person of the Week," with anchor Peter Jennings declaring, "He's made us all a little bit freer."

Santos v. City of Houston. Like Ego Brown, Houston entre-preneur Alfredo Santos discovered an untapped market. A cab driver, Santos discerned a need for a third transportation alternative beyond expensive taxicabs and highly subsidized public buses. He discovered the solution in Mexico City: the "pesero," or in English, the "jitney."

Jitneys are a transportation mainstay in large cities around the globe. They run fixed routes and charge a flat fee, like buses. But they pick up and discharge passengers anywhere along the route, like taxis. They are smaller and more efficient than buses and less-expensive than taxis. They also are ideally suited to low-capital entrepreneurship.

Santos began using his cab during off-duty hours as a jitney, operating in low-income Houston neighborhoods. The business was successful, quickly attracting other jitney opera-tors. But the city quickly shut the industry down, invoking its "Anti-Jitney Law of 1924."

In the 1920s, jitneys were the main source of competition to subsidized streetcars. The streetcar companies lobbied in city halls across the country, all but exterminating jitneys. Seventy years later the streetcars are nearly all gone, but the anti-jitney laws remain. Today they are supported by the public transportation monopolies that replaced the streetcars.

Santos challenged the law in federal court, which struck it down as a violation of equal protection and federal antitrust laws. The city did not appeal the ruling, thereby allowing another favorable economic liberty precedent to stand.

Uqdah v. District of Columbia Board of Cosmetology. Perhaps the most ubiquitous regulatory restraint on entry into businesses and professions are occupational licensing laws, typically enforced at the state and local levels of government. Such laws restrict entry into hundreds of professions, from medicine and law to cosmetology and plumbing. The laws ostensi-bly are aimed at protecting health and safety, but often are enforced to limit competition from newcomers. The laws typically are enforced by appointed boards comprised of members of the regulated profes-sion, with the coercive power of government at their disposal.

When Taalib-din Uqdah and Pamela Ferrell opened Cornrows & Co. in Washington in the early 1980s, they provided a single highly specialized service: African hairbraiding. They paid taxes and trained their own braiders, hiring people off the unemployment rolls. Over ten years, there was not a single health or safety complaint.

But before long, the District of Columbia issued an order that Uqdah and Ferrell shut down their business or go to jail. The violation: failing to obtain a cosmetology license.

Cosmetology licensing in all 50 states and the District of Columbia requires extensive training and testing in various hair and skin care techniques. Many of these, such as the use of chemicals in the hair, the use of cosmetics, and care of finger-nails, are not used at all by braiders, who merely wash, heat, and twist hair. By contrast, hairbraiding is not tested on the exam. Thus the irony that in order to lawfully practice the specialized craft of hair-braiding, an individual must demon-strate proficiency in all manner of activities in which she will never engage -- but none whatsoever in the service she will offer to the public!

Uqdah and Ferrell tried for several years to have the law changed, even hiring a lobbyist to draft and push for regulations geared more specifically to the cosmetology profession, all to no avail. As with other entry-level regulations, powerful special interests (in this case the cosmetology profession) deploy massive resources to defend the protectionist status quo. Reform through ordinary political processes is almost never successful.

The Institute for Justice challenged in federal court the array of licensing requirements. The court was sympathetic, comparing the licensing regime to Soviet Russia; but under existing precedents, it felt compelled to uphold the law.

This case, however, demonstrates the efficacy of arguing in the court of public opinion. Favorable coverage in the Wall Street Journal and other media followed the case throughout, and Uqdah and Ferrell emerged as eloquent proponents of economic liberty. The crowning blow was an expose by John Stossel on the popular ABC television show, 20/20, entitled "Rules, Rules, Stupid Rules." The District of Columbia cosmetology bureaucrats were revealed as oppressive and incompetent.

The result was that while the case was pending on appeal, the District of Columbia became the first jurisdiction in the United States to deregulate entry into the cosmetology profes-sion. Instead of shutting down or going to jail, Uqdah and Ferrell today operate a thriving and lawful hairbraiding salon.

Jones v. Temmer. Ani Ebong, Rowland Nwankwo, and Girma Molalegne emigrated some years ago to the United States in search of opportunity. Each settled in Denver and pursued an employ-ment path common to recent immigrants: they became cab drivers. Before long, they discov-ered that the three taxicab companies in Denver were poorly run and offered inade-quate service in low-income areas. Sensing a market niche, the trio teamed up with another cab driver, a transplanted New Yorker named Leroy Jones. Together they launched Quick-Pick Cabs, a driver-owned taxicab co-op with plans to concentrate on low-income neighborhoods.

As required by state law, the new company had to obtain from the Colorado Public Utilities Commission a license to operate. When the men submitted their application, they were confronted with a barrage of opposition from the existing cab companies. When the process was over, Quick-Pick met the same fate that had befallen every other applicant for a new taxicab license since 1947: application denied.

This story is all too common: in most cities in the United States, taxicab licenses are restricted to an oligopoly, cutting off entry into a low-capital business that in a free market could provide opportunities to thousands of low-income entrepreneurs. In Washington, D.C., which has open entry into the taxicab market, nearly all the taxicabs are owned by their drivers, many of whom are immigrants and minorities. In New York, by contrast, which has not issued any new taxicab licenses since World War II, the market value of a taxicab "medallion" is over $150,000 -- effectively foreclosing opportunities to economic outsiders.

Jones and his partners filed suit in federal district court, which dismissed the lawsuit under the rational basis stan-dard. Again, the media came to the rescue, particularly a favorable CBS Evening News "Eye on America" segment. As a result of the lawsuit and publicity, the Colorado legislature deregulated entry into the Denver taxicab market. After aptly re-naming their company "Freedom Cabs," Jones and his partners are now in busi-ness.

V. Future Directions

To identify potential lawsuits and to further draw attention to the issue of economic liberty, the Institute has commissioned studies of barriers to economic opportunities in seven cities, including New York and San Diego. We will present the find-ings to the appropriate governmental agencies in hopes of foment-ing voluntary reform, and use them where feasible to launch new test cases. As always, we are actively investigating other potential cases in pursuit of our economic liberty strategy.

During this period, we also hope to develop and nurture an informal network of legal scholars committed to overturning Slaughter-House. We will consult this network with respect to case development and strategies, and ask its members to support our efforts to persuade the Supreme Court to reconsider and overturn Slaughter-House.

Though the task outlined in these pages is ambitious, its success is vitally important. Our nation's moral claim is staked in its doctrinal commitment to opportunity. We can make good on that promise by reinvigorating economic liberty as a basic civil right and by consigning the Slaughter-House Cases to the dusty annals of jurisprudential perfidy.

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