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Texas Supreme Court (somewhat) reinvigorates “substantive due process” protection for economic liberty

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Under the federal Due Process Clause, as interpreted in recent decades, economic regulations are constitutional (so long as no fundamental right is involved) if they are “rationally related” to a “legitimate government interest.” This so-called “rational basis” test is extremely deferential to the government. It basically keeps courts out of second-guessing the factual basis for the regulation, and of ferreting out the actual reason why the regulation was enacted. Moreover, even if an economic regulation is sharply overinclusive, and much more burdensome than seems necessary, it is still constitutional.

But in today’s 5-4 decision in Patel v. Texas Department of Licensing & Reg., the Texas Supreme Court held that the Texas Constitution imposes an extra element as part of the rational basis test: if “the statute’s effect as a whole is so unreasonably burdensome that it becomes oppressive in relation to the underlying governmental interest” — focusing on its “actual, real-world effect” — the law is unconstitutional.

To be sure, legislators (and administrative agencies, acting within their delegated powers) still have broad powers to impose economic regulations, and I expert courts will defer to most legislative judgment calls. But under this test, courts would indeed second-guess the degree to which the law actually serves the asserted interest, and the degree to which a less burdensome law would serve the law just as well.

Here’s what happened in this case: The plaintiffs practice “eyebrow threading,” which is apparently a technique for shaping eyebrows and removing eyebrow hair using a cotton thread. Since 2011, Texas has required them to get a cosmetology license, just as it requires for other cosmetologists; and that requires 750 hours of training, of which at least 320 hours — by the state’s own concession — “are not related to activities threaders actually perform.” “[T]he large number of hours not arguably related to the actual practice of threading, the associated costs of those hours in out-of-pocket expenses, and the delayed employment opportunities while taking the hours makes the number highly relevant to whether the licensing requirements as a whole reach the level of being so burdensome that they are oppressive.” As a result, the majority held,

[T]he 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 also noted (though “in passing”) that,

[P]ersons licensed to apply eyelash extensions — a specialty involving the use of chemicals and a high rate of adverse reactions — are required to undergo only 320 hours of training. We also note that when the Threaders filed suit, hair braiders were required to undergo only 35 hours of training, 16 of which were in health and safety. Hair braiding, however, has since been deregulated by the Legislature.

Justice Don Willett wrote a concurrence, for three Justices, defending the propriety of courts’ protecting economic liberty this way, especially as to occupational licensing organizations. It’s a long (though eminently readable) opinion; it cites our own Ilya Somin (including both a law review article of his and a post on this very blog) and David Bernstein, but it begins with this quote from Frederick Douglass:

To understand the emotion which swelled my heart as I clasped this money, realizing that I had no master who could take it from me — that it was mine — that my hands were my own, and could earn more of the precious coin …. I was not only a freeman but a free-working man, and no master Hugh stood ready at the end of the week to seize my hard earnings.

It also confronts in some detail the tensions between liberty and democracy, and the debate about judicial activism, though of course readers may agree or disagree with the concurrence’s position.

Four Justices voted to reject the extra “so unreasonably burdensome that it becomes oppressive in relation to the underlying governmental interest” test. Justice Jeffrey Boyd rejected the court’s substantive due process test, and would have asked only whether the regulation was “arbitrary and unreasonable” under the highly deferential rational basis test — but would have said the answer was yes. “[T]he bar [set for challengers by the rational basis test] cannot be insurmountable, and if the application of any regulatory licensing scheme were ever constitutionally invalid, this one is.” Chief Justice Nathan Hecht dissented, writing on behalf of three Justices, and condemning the extra scrutiny for economic regulations; Justice Eva Guzman dissented as well.

Other state courts in recent decades have also experimented with this sort of additional protection for economic liberty, and I suspect that the detailed Texas Supreme Court opinions in the majority may lead still more states to consider this as well.

UPDATE: For some thoughts on whether we should view state courts’ “activist”/”engaged”/”creative” state constitutional decisions the same way that we view federal courts’ “activist”/”engaged”/”creative” federal constitutional decisions, see here.

Thanks to Howard Bashman (How Appealing) for the pointer.