9th Circuit Ferry Fight Has Potential To Free Entrepreneurs Nationwide, Turn Back Economic Protectionism

John Kramer
John Kramer · March 26, 2020

Pasadena, Calif.—On Monday, March 30, the 9th U.S. Circuit Court of Appeals will consider a case in which two entrepreneurs have spent 23 years trying to travel 55 miles by boat—and they have yet to reach their destination.

Jim and Cliff Courtney from Washington state have endured a 23-year ongoing legal battle for the right to use the nation’s waters in pursuit of a livelihood. But rather than allow Jim and Cliff to pursue a living on the 55-mile-long Lake Chelan in the remote northern Cascades, the government has instead used a century-old public ferry licensing law to prevent them from even shuttling customers of their own businesses at the far end of the lake. Since 1927, the government agency that oversees the granting of such licenses has used the law to block competition on the lake, granting only two ferry licenses in nearly a century.

Because of the outbreak of the COVID-19 virus, the court will consider the case based on the legal briefs filed by attorneys with no oral argument. The case had been scheduled to be argued in Seattle on March 30, but it will now be considered by a three-judge panel in Pasadena, California.

“This case is being closely watched by individuals who have carefully studied the Constitution,” said Institute for Justice (IJ) Senior Attorney Michael Bindas. IJ represents the Courtney brothers in their decades-long legal quest to provide boat service on Lake Chelan. “A favorable decision in this case can both protect the rights of the Courtneys and begin the process of restoring meaningful protection for fundamental rights—including economic rights—that the framers of the 14th Amendment sought to guarantee all Americans.”

Jim and Cliff’s case hinges on the court’s interpretation of a constitutional provision and a landmark precedent that are well-known to constitutional scholars:  the Privileges or Immunities Clause of the Constitution’s 14th Amendment and the Slaughter House Cases, in which the U.S. Supreme Court upheld the power of the government to create monopolies in certain industries. But, interestingly, in that case, the justices ruled that among the rights (known then as “privileges or immunities”) the government had to respect was the “right to use the navigable waters of the United States”—the very issue at heart in Jim and Cliff’s case with their private boat service.

When it first heard the brothers’ case in 2013, the 9th Circuit instructed them to secure a definitive ruling from the Washington state courts as to whether the so-called “public convenience and necessity requirement” applied to the limited service the brothers wished to provide. (The public convenience and necessity requirement is essentially a trial held by the state licensing board that allows existing service providers to veto potential competitors, saying no new service providers are “necessary”—the equivalent of allowing McDonald’s to veto the building of a Burger King in the same market.) After five years, the Washington courts held that it does, in fact, apply. The Courtneys accordingly returned to federal court in 2018 to litigate their Privileges or Immunities Clause claim, committed to beginning the process of restoring the clause to its proper role in protecting the right of all Americans to participate in the economic life of the nation.

Institute for Justice President and General Counsel Scott Bullock said, “Entrepreneurs across the country are fed up with fighting laws designed for no other purpose than to protect entrenched business from competition. That’s precisely what Jim and Cliff have been fighting against since day one in this case—and what they hope to end by a victory for their economic liberty rights here.”