Nikolai Morse '24
Managing Editor
Last Thursday, the Federalist Society at UVA Law hosted a discussion entitled “New Lochner Era? Economic Liberty in the 21st Century.” Andrew Ward, an attorney for the Institute for Justice, and Professor Julia D. Mahoney spoke. The participants discussed the reputation of the infamous Supreme Court case Lochner v. New York[1] and assessed the chances of a reemergence of economic liberty interests in the twenty-first century.
Mr. Ward spoke first, offering his insights into the legal recognition of economic liberty generally, based on his litigation experience. He offered a hypothetical in which someone who wants to open a hamburger restaurant must apply to a government panel for a permit, which then conducts an analysis to see whether there are already enough hamburger restaurants in the region.[2] If the state decided there were, you could not open your burger shop. Mr. Ward said that this hypothetical illustrated the basic operation of Kentucky’s Certificate-of-Need (CON) law, which he challenged in Tiwari v. Friedlander.[3]
Mr. Ward’s clients, Dipendra Tiwari and Kishor Sapkota, were prevented from opening a healthcare agency they had designed to provide home healthcare services to the large community of Nepali-speaking refugees and immigrants in Louisville, Kentucky. His clients intended to help an underserved population, many of whom receive ineffective services because they don’t speak English. Ward said that because the local branch of a large healthcare services company told the state department in charge of issuing CONs that it was able to serve these patients—though Ward noted they were not doing so—his clients were not issued a CON.
Before the Sixth Circuit, Mr. Ward argued that Kentucky’s law violated the Fourteenth Amendment because it restricted his clients’ rights to engage in a common occupation. In response, Kentucky argued its CON law was necessary to lower competitive pressure so that companies could pass their savings on through lower prices. Ward noted that this law arguably resulted in a system of entrenched incumbents. While his firm ultimately lost the appeal, he stated his optimism that the Supreme Court’s embrace of the “history and tradition” test for defining rights under substantive due process would result in recognition that people’s right to engage in a common occupation is deeply rooted in our nation’s history and tradition.
Mr. Ward concluded by noting how many laws which are facially protectionist prevent people from entering into professions on the basis of arbitrary requirements. He said these laws disproportionately affect individuals with criminal records, who are often barred by vague “good moral character” requirements—even in fields whose workplaces are seemingly unrelated to any criminal past, including cosmetology and skincare. Yet even if these laws could be challenged as violating economic liberty interests under the Fourteenth Amendment, Ward said it would likely be insufficient if government actions continued to receive only rational basis review. Noting the prevalence of protectionist laws, he said, “There are far too many of them, and the constitutional standards are far too low.”
Professor Mahoney spoke next and began by noting the hostility towards Lochner, which has translated to reluctance to recognize economic liberty as being protected under substantive due process. Mahoney noted Lochner was seen as reflecting the high-water mark of a time when the Court regularly struck down legislative acts and was seen as being too judicially unrestrained.[4] But in the following decades, this changed. “Put simply, by the end of the New Deal era, there is language in judicial opinions suggesting—with some notable limitations, such as the First Amendment—that the Supreme Court is just going to be out of the business of scrutinizing legislative actions for constitutionality,” said Mahoney.
Mahoney noted, however, that after World War II, the Supreme Court returned to the field in famous cases such as Brown v. Board of Education, Williamson v. Lee Optical, and Ferguson v. Skrupa. However, in the last two cases, the Court applied a “toothless” rational basis review to economic legislation. Mahoney said that while people will occasionally suggest applying a higher standard of review for economic legislation, the response is often a concern about returning to something like the Lochner Court. Noting the specific scorn which Lochner receives, Mahoney stated that when she attended law school, Lochner was regularly cited as being the worst Supreme Court decision ever—notwithstanding infamous cases such as Dred Scott, Plessy v. Ferguson, Buck v. Bell, and Korematsu v. United States. Mahoney pointed out that, while there was plenty of criticism about Lochner, there was not much consensus as to why it was so bad.[5]
Professor Mahoney closed by suggesting that the picture for both Lochner’s reputation and its economic liberties might be changing. Pointing to work by Richard Epstein, David Bernstein, and Rebecca Brown, Mahoney said that the view of Lochner as an example of reactionary judicial overreach is being reconsidered. Yet still, she said, going forward, there is a generalized resistance to Lochner and, relatedly, to unenumerated economic rights. Mahoney said that a number of opportunities were available to address the current situation, including judicial recognition of the Privileges and Immunities Clause and the use of the Equal Protection Clause to protect the disparate treatment of similarly situated people’s unenumerated economic rights.
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cpg9jy@virginia.edu
[1] 198 U.S. 45 (1905). For all you 1Ls, this is the case where the Court famously invalidated a New York law which prescribed the maximum working hours for bakers, on the theory that the law violated the “liberty of contract” protected by the Due Process Clause of the Fourteenth Amendment.
[2] The idea itself is blasphemy. #RonSwanson2024
[3] 26 F.4th 355 (6th Cir. 2022). The Sixth Circuit upheld the law as non-violative of the Fourteenth Amendment, and the Supreme Court denied certiorari in November 2022.
[4] Though as Professor Mahoney noted, there were a number of other legislative acts, such as the one in Muller v. Oregon, which the Supreme Court upheld.
[5] Mahoney referenced an article making this point. See generally David A. Strauss, Why Was Lochner Wrong, 70 U. Chi. L. Rev. 373 (2003).