VISION & VALUES: Economic Liberties: The Lost Civil Right

EDITOR’S NOTE: The following lecture was presented at Grove City College on February 6, 2001.

Introduction
A course in Constitutional Law helped me decide that I wanted to become a lawyer. I had no previous interest in being a lawyer whatsoever. In fact, I thought that what they did, in general, was on the boring side and very mercenary. I determined that I would be a teacher or a politician. But when I took a course in Constitutional Law and read cases like Brown v. The Board of Education, I realized that in order to change the world, the law was really the perfect profession. Why?

No matter who the adversary is, one has a level playing field in the courtroom. All of our cases at The Institute for Justice are David versus Goliath battles. Despite the odds against us, so far David has slain Goliath more often than not. That’s because of the unique nature of the courtroom, where it doesn’t matter how rich or powerful the opponent is. You have the same number of pages in your brief; you have the same number of minutes of oral argument time. Furthermore, you either win or you lose; there are very few mixed verdicts. Trying to correct an injustice working through the political system can often be very, very frustrating, but in law it often can be black and white. That is why I propose that in this day and age, to be a revolutionary, to make a difference, the best occupation is to be a lawyer.

At The Institute for Justice I think we have the best job of all. We get to choose our cases as well as our clients. We don’t charge our clients anything for representation, and, best of all, the people whom we sue are bureaucrats. Even if we don’t win the case, just making them realize that there are limits to what they can do to citizens is worth the effort!

Hair Braiding and Licensing
I’d like to illustrate what I’ve just said by telling you the story of two very courageous men who made a mark in the United States, although they never intended to do that. All they each intended to do was to open a business, serve their community and make a little money. But that’s where their problems began. The first fellow was Taalib-Din Abdul Uqdah. He and his wife, Pamela, decided to open a beauty salon in Washington, D.C., called Cornrows and Company. The employees of Cornrows and Company did one thing and one thing only ¾ African hair braiding. It’s a centuries-old art, tracing back to Africa. It’s very intricate, beautiful and specialized. Pamela learned it as a girl and spent time in Africa perfecting the technique. She did braiding for her friends who thought it was such beautiful work that they were willing to pay her for it. So Taalib-Din and Pamela opened up their salon. Business was so good that they started hiring other people, oftentimes people who were unemployed, training them in this specialized technique as well.

Before long they were paying taxes, they were taking people off the unemployment rolls and they were making a prosperous living for themselves. One day a D.C. policeman appeared at their shop and said he had an order that Pamela must either close her salon or go to jail. Taalib-Din was dumbfounded as to what law they had broken. They were informed that braiding hair without a cosmetology license was illegal. It turned out that in order to do anything with hair, one had to first obtain a cosmetology license. This is true in all 50 states and the District of Columbia.

What is the process to obtain a cosmetology license? First of all, 1,600 hours of prescribed training are required, more than it takes to become a police officer and an emergency medical technician combined! This many hours of training in a certified school can cost nearly $8,000. The training would be in mainstream cosmetology, but one would learn nothing about African hair styling. Then a test would be taken, administered by the Board of Cosmetology, during which a person must demonstrate proficiency in the use of chemicals in the hair. African braiders don’t use chemicals in the hair. Also, one would have to demonstrate proficiency in creating white hairstyles, as well as a knowledge of painting fingernails and applying cosmetics ¾ neither of which were part of Cornrows and Company’s business. In fact, in taking the examination, one of the few items in which one didn’t have to demonstrate any proficiency whatsoever in order to obtain a cosmetology license was African hair braiding!

In order to prepare for and take this examination, Pamela would have to spend basically a year in time and approximately $8,000 in financial outlay to pass an examination for the privilege of demonstrating no proficiency whatsoever in the only thing she intends to do ¾ African hair braiding! Taalib-Din and Pamela’s mistake was to operate in the open. Almost all of the braiders in Washington, D.C. were operating underground, outside the scope of government regulation.

To make matters worse, who sits on this board of cosmetology? It is a board comprised of members of the regulated profession itself with the coercive power of government at its disposal to limit entrance into the profession. Though such boards claim to be protecting health and safety, such is not the case. In fact, Cornrows and Company had not had a single health or safety complaint in their entire operation. Rather, the Board’s incentive is to limit competition from new companies.

The Freedom to Compete
Around the same time as this was happening to Taalib-Din in Washington, D.C., a similar plight was facing a man named Leroy Jones in Denver, Colo. Leroy was driving a cab for Yellow Cab Co. Like many people who work for other people, he thought that he would eventually like to go into business for himself. He noticed, not surprisingly, that the poorer parts of Denver were not well served by Yellow Cab. If a person was in the Five Points neighborhood of Denver, particularly at night, and tried to find a cab, it was very unlikely that one could be secured. So Leroy Jones decided that he wanted to open up his own company to fill this need.

Jones and three partners, immigrants from Africa who had been driving cabs for a long time, decided that they were going to open a company called Quick Pick Cabs. They had everything that they needed. They had a market niche, they had experience driving taxicabs and they had a little bit of capital, enough to buy a few cars and purchase insurance. There was only one thing more they needed: a little piece of paper called a “Certificate of Public Convenience and Necessity” from the Public Utilities Commission in the state of Colorado. The partners filled out an application saying there was a market need ¾ a necessity ¾ and that their new service would further public convenience. They had a petition signed by hundreds of people in the Five Points neighborhood in Denver requesting the service. When the Public Utilities Commission gave them its answer, it was the same answer it had given to every applicant for a taxicab permit since World War II! Application denied. Why?

There were already three companies serving Denver, and Leroy Jones had failed to prove that the existing companies were incapable of meeting the needs of Denver riders. Jones was incredulous. He said, “How can I prove that they can’t serve the need? I can prove that they are not serving the need and that there is a need, but I can’t possibly prove that metaphysically they can’t service the need.” That was the standard that was required, a standard, of course, designed to protect the people who had the current taxicab licenses. So Leroy Jones, instead of operating his own business, was forced to continue to operate as an employee, his American dream denied.

Historical Context
These two gentlemen, Taalib-Din Abdul Uqdah and Leroy Jones, felt that they had lost their rights on the day that the government told them “no.” In reality, they lost their rights long before they were even born. After the Civil War, a lot of the newly freed slaves possessed talents and skills that they had learned during their servitude. After emancipation, they wanted to use those skills for their own benefit by opening businesses. This was absolutely intolerable to the southern aristocracy, which had recently seen these slaves become free men. Not only were they losing a labor supply that had been available at low cost to them in the past, they were now going to have to pay for the services of the free men and women.

They went to their state legislatures and had certain laws enacted called the Black Codes. These Black Codes were the forerunners of the Jim Crow laws that would later exist. What they did was to deny the most basic rights of the newly freed slaves ¾ freedom of contract, freedom of enterprise and property ownership. They imposed all sorts of licensing requirements for jobs, in effect prohibiting blacks from freely contracting for their labor with other individuals.

To counter the Black Codes, Congress passed the Civil Rights Act of 1866, which later became the Fourteenth Amendment of the U. S. Constitution. The first provision of the Amendment says that states may not pass any law that violates the “privileges or immunities” of citizens. Probably very few of you have ever heard those words ¾ privileges or immunities ¾ but you have heard other words that appear later in the Fourteenth Amendment ¾ “due process” and “equal protection.”

Why do we hear those words all the time? Because the courts are constantly using them to strike down oppressive government laws. In the recent Bush v. Gore case, equal protection was the linchpin that Bush used to strike down the recount in Florida. Why don’t we hear about “privileges or immunities,” which is quite strange, because the phrase privileges or immunities constitutes the first protection that is established in the Fourteenth Amendment.

The reason is that shortly after the Fourteenth Amendment was passed, a case went to the United States Supreme Court. The State of Louisiana had decided that there would be a single monopoly for slaughtering animals for meat. Essentially, a certain group of butchers bribed the legislators to put their competitors out of business and create this monopoly. The butchers who had been put out of business said that this violated their privileges or immunities of citizenship. They argued that the legislative monopoly put them out of business not for a health or safety regulation, but in a blatant effort to benefit one group of people to the disadvantage of another. This series of cases, called the Slaughterhouse Cases, went all the way to the United States Supreme Court.

Although in those days most decisions were unanimous by that Court, this time it was a five to four decision. The majority said that the privileges or immunities clause really didn’t add anything to the Constitution but protected certain rights that were already there, such as “access to ports.” The dissenters argued that the Civil War was not fought over access to ports but to establish certain basic, universal civil rights, and that this was a preposterous decision. Nevertheless, since that decision in 1873, no court has ever struck down a law as a violation of the privileges or immunities clause. Rather, the “due process” and “equal protection” clauses of the Fourteenth Amendment became the work horses with courts routinely striking things down under those sections.

The Institute for Justice Responds
When we started The Institute for Justice 10 years ago, one of our goals was to reverse the Slaughterhouse Cases and to restore economic liberty as a civil right. To put it mildly, this is an audacious undertaking on our part. Law professors all over the country applaud what we are doing but say that we have absolutely no chance of winning. In fact, when we opened our doors in 1991, no court had struck down an economic regulation under the Fourteenth Amendment in nearly 50 years. The whole idea of privileges or immunities was hardly talked about at all. How does one go about restoring a right that has been completely lost? There are no cases to cite ¾ none. The other side can cite page after page of cases. The Institute looked at what some of the liberal groups had done over the years to win cases that looked impossible and came up with a number of strategies. The first was to find sympathetic cases and outrageous facts, to make the judge want to rule in our favor. With an appealing case, the Institute lawyers then do their very best to find some sort of legal theory to make it possible for the judge to rule in the client’s favor.

As we were contemplating The Institute for Justice enterprise, I was looking through the Washington Post Sunday Magazine and read the story about a man named Ego Brown. Ego was shining shoes on the streets of Washington, D.C. and hiring homeless people to work for him as well. He was so successful, social workers were referring homeless people to Ego Brown to get clothes, a shower and training in his shoeshine business. Ego’s business was eventually shut down by the District of Columbia police. A person can get away with selling almost anything on the streets of D.C., but apparently the one thing that can’t be done is to shine someone’s shoes. Why? There was a 1905 Jim Crow law that forbade shoeshine stands on the public streets, one of those laws designed to prevent blacks from economically emancipating themselves, even with shoeshine stands. I took his case and went to Federal District Court in Washington, D.C. The Court ruled in our favor that there was no rational basis for the District of Columbia to forbid shoeshine stands on the public street, particularly when so many other economic activities are allowed. That case was the first building block in our effort to restore economic liberty as a civil right.

The Court of Public Opinion
When we got to court in the cases of Taalib-Din Abdul Uqdah and Leroy Jones, our success in court was not the same. We lost both of those cases in the Federal District Court; however, the judges were sympathetic in both instances. But the law in both cases was not on our side, and the judges had no choice but to deny our claims. That is when we resorted to the other tactic we had learned from liberal groups. The Institute learned that it had to make its arguments not only in the courts, but also in the “courts of public opinion.” We took to the airwaves; we took to the newspapers. Television journalist John Stossel decided to take an interest in the Uqdah case. His work is always very dispassionate and objective. He put together an exposé of the D.C. cosmetology licensing process called “Rules, Rules, Stupid Rules.”

Meanwhile, CBS’s “Eye on America” took an interest in Leroy Jones’s case. By this time Leroy and his fellow cab drivers had lost their regular jobs at Yellow Cab since they had been interested in competing with the company. Instead of pursuing his dream to have his own taxi company, Leroy was now selling soda at Mile High Stadium. “Eye on America” followed him with its camera as he sold soda. When the national anthem was sung, he turned, took off his hat and shed a tear. That poignant moment truly illustrated what was at stake. This fellow was not asking for a handout but for an opportunity to earn his share of the American dream.

What happened after that was a phenomenon that I have never seen before. While these cases were pending on appeal, and after the government had won both of them, the public pressure was so great that the government capitulated in both cases. The District of Columbia became the first jurisdiction in the United States to deregulate cosmetology. In fact, Pamela, Uqdah’s wife, was appointed to the Board of Cosmetology to implement the new deregulation regime. As a result, today there are 75 hair braiding salons operating lawfully in Washington, D.C.

In Denver, the taxicab monopoly was abolished and taxicabs were deregulated. Leroy Jones and his partners opened a cab company and currently have 75 cabs. Along the way to this victory, Leroy Jones realized something. We got a call one day, one of the most remarkable calls we have ever received. Leroy said he realized that what was at stake was much bigger than four fellows and Quick Pick Cabs. Jones continued that the partners agreed the name of their cab company was all wrong. They had decided to rename their company “Freedom Cabs.” These men are no longer working for others; they are employing people themselves and providing jobs to others. Economic liberty is central to freedom.

Since these cases, we have prevailed in challenges to a ban on jitney commuter vans in Houston and to cosmetology regulations in California. Most recently we took a case challenging the monopoly on funeral caskets. In many states the only persons allowed to sell funeral caskets are funeral homes, and they often mark the prices way up. In this case we represent a black minister from Tennessee who did not like the price gouging on caskets. He opened a casket store in his own community, and that legitimate business was opposed as unlawful. We defended the minister and took this casket monopoly to court. Those favoring the monopoly said there were two compelling justifications for it.

First of all, there could be environmental hazards from the caskets our minister was selling, even though they were identical to the ones sold at funeral homes. Also ignored was the fact that Tennessee allows bodies to be buried without any casket at all! The second justification concerned grief counseling, which they felt only funeral directors were prepared to perform. However, there is no requirement that a funeral director learn grief counseling. The court did not feel that these justifications were adequate to maintain the monopoly, and we won that case as well. In the first three cases we convinced the government not to appeal the decisions, but in this most recent case, the State of Tennessee is appealing the decision. We feel strongly that we are going to prevail. In taking this case, it could be the first opportunity for the U.S. Supreme Court to say they are going to correct the wrong that was done in the 1872 decision of the Slaughterhouse Cases.

Conclusion
Step by step we are building a jurisprudence of economic liberty and showing that there is an alternative to dependency, which is opportunity. One of the things that separates the lawyers at The Institute for Justice from other lawyers is that we cannot bear to lose because we are the last hope for the people we represent. If we can’t win for them, they cannot achieve their dreams. And the odds are always against us. We are always up against government. We are always up against unions. We are often up against powerful corporate interests, who use the coercive power of government to protect their own turf rather than allow free competition. The law is almost always against us as well.

Putting all of those things together, the odds are frequently very long. Sometimes my colleagues and I despair of ever winning. But when we do despair, we often remember the words of an earlier great revolutionary in The Institute of Justice tradition named Tom Paine, who faced far greater odds in securing the blessings of liberty. What Tom Paine said is inspiration to us all: “Tyranny, like hell, is not easily conquered, but we have this consolation. The harder the conflict, the more glorious the triumph.”

Clint Bolick

Clint Bolick

Clint Bolick is vice president and director of litigation for The Institute for Justice in Washington, D.C. Described by The Wall Street Journal as "the new civil rights activists," The Institute for Justice is a public interest civil liberties law firm dedicated to pursuing economic freedom for individuals through the courts. The Institute and Clint Bolick have defended school vouchers, resisted city government's use of eminent domain and fought for freedom for business owners against intrusive governmental licensing requirements. Bolick is the author of several books, including Transformation: The Promise of Politics and Empowerment. Contact the Institute at 1717 Pennsylvania Ave. N.W.; Suite 200; Washington, D.C. 20006 or www.ij.org.

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