A Texas-Sized VICTORY For Economic Liberty

August 13, 2015

In a sweeping decision with major implications for entrepreneurs in Texas and across the nation, the Texas Supreme Court ruled that economic regulations will no longer be rubber-stamped. Indeed, the court, and most notably a resounding concurring opinion by Justice Don Willett, expressly rejected the passive judicial deference that too many other courts follow when reviewing economic regulations. The opinion is now the law in one of the nation’s largest and most economically vibrant states and will be used by IJ lawyers to urge other courts to protect economic liberty vigorously.

In 2009, IJ teamed up with a group of Texas eyebrow threaders, including Ash Patel and Anver Satani, to challenge a law that forced them to obtain useless and burdensome cosmetology training. Eyebrow threading is a safe and traditional South Asian practice involving the use of a single strand of cotton thread to remove unwanted hair. The state required aspiring threaders to take 750 hours of instruction in a cosmetology school that does not even teach threading. And then the state issued $2,000 fines to unlicensed threaders and ordered them to shut down their businesses until they completed the required classes.

After losses in the trial court and the court of appeals, IJ brought the case to the Texas Supreme Court in February 2014. In June of this year, the court ruled 6–3 that the state violated the Texas Constitution’s due process clause.

The decision ranks as one of IJ’s most important economic liberty victories. The court ruled that:

[T]he admittedly unrelated 320 required training hours, combined with the fact that threader trainees have to pay for the training and at the same time lose the opportunity to make money actively practicing their trade, leads us to conclude that the Threaders have met their high burden of proving that, as applied to them, the requirement of 750 hours of training to become licensed is not just unreasonable or harsh, but it is so oppressive that it violates Article I, § 19 of the Texas Constitution.

The court held that the Texas Constitution provides greater protection for economic liberty than does the U.S. Constitution. Under the Texas Constitution, courts must weigh both the government’s justification for a law (which federal courts do) and the burden the law imposes upon those individuals who are being regulated (which federal courts typically ignore). In other words, a regulation violates the Texas Constitution if the burdens it places on entrepreneurs are too harsh relative to the purpose of the law.

In essence, the court held that Texas’ cosmetology license requirements for threaders is unconstitutional because it forces threaders to learn other people’s jobs in order to continue practicing their job. Even the three dissenting justices agreed that the state’s threading regulations are “obviously too much.”

Justice Don Willett summed it up best in his concurring opinion:

This case concerns the timeless struggle between personal freedom and government power. Do Texans live under a presumption of liberty or a presumption of restraint? The Texas Constitution confers power—but even more critically, it constrains power. What are the outer-boundary limits on government actions that trample Texans’ constitutional right to earn an honest living for themselves and their families? Some observers liken judges to baseball umpires, calling legal balls and strikes, but when it comes to restrictive licensing laws, just how generous is the constitutional strike zone? Must courts rubber-stamp even the most nonsensical encroachments on occupational freedom? Are the most patently farcical and protectionist restrictions nigh unchallengeable, or are there, in fact, judicially enforceable limits?

Justice Willett continued:

This case raises constitutional eyebrows because it asks building-block questions about constitutional architecture—about how we as Texans govern ourselves and about the relationship of the citizen to the State. This case concerns far more than whether Ashish Patel can pluck unwanted hair with a strand of thread. This case is fundamentally about the American Dream and the unalienable human right to pursue happiness without curtsying to government on bended knee. It is about whether government can connive with rent-seeking factions to ration liberty unrestrained, and whether judges must submissively uphold even the most risible encroachments.

The most immediate impact of the court’s ruling is this: After years of uncertainty, our clients can go back to work. Ash and Anver can reopen the statewide threading business they were forced to shutter in 2010. And all other threaders in Texas can now practice his or her trade without obtaining a useless license.

But the long-term impact of this case will be far wider. Many occupational licenses in Texas are now vulnerable to challenge, and we will select new targets. We will incorporate this victory into our growing array of cases that provide persuasive reasoning that can be adopted by other courts nationwide as we pursue strategic litigation to protect economic liberty. The problems created by occupational licensing are receiving national attention like never before, and this victory will serve as a provocative call to action to state legislatures looking to reform their laws.

As we always do, we will use our victory to build momentum for future success. Of course, we don’t do it alone. We are grateful to have clients like Ash and Anver who stand with us in securing economic liberty and the American Dream.

Wesley Hottot is an IJ attorney.

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