IJ Works Wonders: Threading A String of Economic Liberty Victories

Institute for Justice · August 26, 2021

 As part of the Institute for Justice’s 30th Anniversary celebration (1991-2021), our “IJ Works Wonders” series looks back on IJ cases that fundamentally transformed the law and the lives of our clients.

Even when something is hanging by a thread—whether it is the rights we’re supposed to enjoy or the viability of a business—it can have a long-term impact few could imagine. Such is the case with IJ’s landmark victory over arbitrary occupational licensing requirements in Patel v. Texas Department of Licensing & Regulation, which has transformed constitutional law in the Lone Star State, sparked 20 new economic liberty cases in under six years, and allowed one very happy entrepreneur to open salons and invest in other businesses across the state.

In Patel, the Texas Supreme Court held 6-3 that the state unconstitutionally licensed eyebrow threaders by making them learn a host of irrelevant cosmetology techniques for hundreds of hours. In a first-of-its-kind decision, the Court went on to adopt an exacting state constitutional standard for economic regulations. Five justices outright rejected the rational basis test often used in federal courts—the standard against which we have waged war for 30 years. (Rational basis often allows courts to rubberstamp laws and regulations so long as there is any conceivable rational basis, no matter how far-fetched, for what the government is doing.) A sixth justice believed the license failed even the government-friendly rational basis test. And Justice Don Willett (now a judge on the 5th U.S. Circuit Court of Appeals) wrote a tour-de-force concurrence extolling the freedom to earn an honest living.

We have since used our victory in Patel to file 20 new economic liberty cases in state court seeking to establish stronger constitutional protections for economic liberty. Already, the Pennsylvania Supreme Court has adopted the Patel standard and the Georgia Supreme Court has unanimously indicated that it, too, will adopt a similar standard, in an ongoing case in which we are challenging the state’s licensing of lactation consultants.

There is more to come. In late 2020, IJ launched our post-Patel project to widely export Texas’s liberty-friendly standard. For example, we have a case pending in neighboring Louisiana challenging that state’s continued regulation of African hair braiding. In February 2021, we launched a case in Oklahoma challenging that state’s threading regulations—and the state agreed to a preliminary injunction based on Patel. We are also very excited to be litigating an appeal in Texas in which the state high court will be asked to extend Patel to restrictions on the doctor/patient relationship.

The decision has been impactful outside the courtroom, too. When we began representing Ash Patel, he had recently immigrated from India, and was working at a hotel and dreaming of starting his own business. After the state agreed not to enforce the law, he was able to start his threading business and, when we won, he opened new locations in Austin and Houston. He no longer works at hotels; he owns several of them. And he employs dozens of recent South Asian immigrants who moved to Texas to pursue their American Dreams. All of this was made possible because IJ was able to stand up to the government officials who were trying to drive Ash out of business.

This kind of work is only possible at IJ. We put in a generation of work in the courts of law and in the court of public opinion just to get courts to take economic liberty seriously. And now, 30 years later, we are seeing the rewards. We now have our eyes squarely focused on the next 30 years, as more states break with the federal courts and provide meaningful protection for everyone’s right to work in the occupation of their choosing free of unreasonable restrictions. Ultimately, we will bring economic liberty back to the U.S. Supreme Court and when we do so, you will see a flourishing of economic opportunity that we haven’t seen nearly since the founding of our nation.

Wesley Hottot is an IJ senior attorney.

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