IJ Scores Victory Against Interior Design Cartel

August 10, 2009

The Institute for Justice scored a decisive blow against the national interior design cartel in June when a federal judge in New Haven, Conn., struck down a Connecticut “titling law” that allowed anyone to perform interior design services, but dictated that only those with government-issued licenses could call themselves “interior designers.” The state says it will not appeal this free speech decision and we have already cited it in a preliminary injunction motion we filed just two weeks later in our Florida interior design case. The Connecticut victory is a dramatic example of strategic litigation in action.

IJ first learned about interior design regulations when we filed an amicus brief in support of a group of freedom-minded interior designers who were helping challenge an Alabama law that made it a crime to offer advice about such things as throw pillows and paint colors without first securing a license. We quickly realized that Alabama’s law was no isolated instance of rent-seeking—where existing businesses use government power to keep out newcomers—but was instead part of an aggressive nationwide lobbying campaign by industry insiders whose avowed goal was to legislate potential competitors out of business. Catching a cartel in its formation gave IJ a rare opportunity to showcase how anti-competitive regulations get on the books. We will apply the lessons learned in this fight to industry after industry nationwide for years to come in an effort to convince courts and legislatures to do away with laws that do nothing more than limit competition and guarantee that existing businesses can over-charge consumers.

Recognizing an opportunity for strategic economic liberty litigation to oppose the interior design cartel, IJ swung into action on all fronts. First, we devised a long-term litigation strategy that targeted the most vulnerable laws and used those precedents to go after the rest of the cartel’s handiwork. Next, we held an interior design summit in September 2007 to coordinate grassroots efforts among individuals, activists and industry members. We then followed up with successful media and strategic research campaigns that included an April Fool’s Day op-ed in The Wall Street Journal that poked fun at the laughable regulations, a withering column by George F. Will, and the publication of three separate strategic research studies systematically demolishing the other side’s arguments and documenting the true costs of interior design regulation.

New Mexico was the first state we sued, and it surrendered immediately by amending the law to eliminate the constitutional defect. Next came Texas, which put up a spirited fight until IJ’s one-two punch of relentless fact discovery and appellate litigation (which included persuading the Fifth Circuit to order a preliminary injunction) prompted another legislative capitulation. Oklahoma followed suit in spring 2009, leaving Connecticut as the last state with a law that regulated only the speech—but not the work—of interior designers.

After months of resistance, Connecticut’s Department of Consumer Protection (which enforces the interior design law) finally saw the handwriting on the wall and attempted a legislative fix. But it was too late: The session ended in June before the law could be changed, and the court handed down its ruling less than one month later, striking down Connecticut’s interior design law on free speech grounds. Our clients—three wonderfully spirited entrepreneurs who were not about to be muzzled by a bunch of bureaucrats—were ecstatic. As lead plaintiff Susan Roberts declared, “I am thrilled that I can now tell the world that I am what I have always been since I started doing this work—an interior designer.”

The interior design cartel is reeling from the combination of courtroom losses, grassroots opposition and media coverage. Liberty lovers should take a moment to enjoy this promising trend.

Clark Neily is an Institute senior attorney.

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