Are States Protecting Economic Liberty?

• Author: Berliner, Dana

A lot of people have referred to, and Justice Clint Bolick just talked about, the Patel case. (1) It is definitely true that much of the action right now in economic liberty is in state constitutions, state judicial decisions, and state legislation, and we do a lot of that at the Institute for Justice. I am going to talk about some of those developments. I have to respond to Professor Roderick Hills, even though he is not here, who said very strongly that we should pursue only state constitutional litigation, because there's no federal protection whatsoever for economic liberty.

I do not agree at all with the conclusion that there is no federal constitutional protection for economic liberty, but there is a lot of opportunity for state constitutional litigation now. First, it is important to realize that state constitutional texts are not little copies of the U.S. Constitution. Some of them were written even before the U.S. Constitution. (2) Some were written in the 1970s. (3) The rest were written in between. (4) Some are based on the Northwest Ordinance. (5) Some have due course of law provisions. (6) Some have anti-monopoly clauses. (7) Some have anti-gift clauses. (8) Some have anti-favoritism clauses. (9) They contain various provisions that are not in the U.S. Constitution, and Professor Steven Calabresi is someone who writes about that and catalogs different kinds of state constitutional provisions in his work. (10)

In addition, most states have at least two, and often as many as four, different lines of interpretation of the rational basis test, or the equivalent thereof. (11) So most states are a total mess on this. There will be one line of cases that strictly follows federal law under the state constitution. There will be one line of cases that uses, perhaps, the real and substantial test, which was an influential test that a lot of states used in the middle of the 1900s. (12) And that, like you might think, involves real evidence and a real and substantial relationship.

There are other states that have a line of reasonable relationship cases, which do not tend to be rational basis. (13) Then there are states that have things in between. As I said, most states have several of these different lines of cases going on at once that involve complicated tests with multiple factors. In Texas, the way that we were granted Supreme Court review was by saying, "You have three lines of cases that are all in conflict with each other and never cite each other. You should resolve that." And they did. (14)

But that is true of virtually every state court right now, which means there is a huge opportunity to develop economic liberty jurisprudence and unique state tests. I do want to talk for a second about what the Patel test is, because it is not the federal test. First, the court looks at legitimate government interest, but not just a conceivable government interest. (15) The court instead looks to what the government interest for the law actually was. Then the court looks at actual facts--real facts in the real world--to determine if there is a relationship between those facts and the actual purpose of the statute. (16) Then, even if there is a real relationship, the court looks to see whether the law is so oppressive or burdensome to the individual that it does not justify the achievement of its supposed public purpose. (17)

Patel is a completely different test. It is a three-part test. I do not think any other state has that exact formulation, but they could. So we are litigating in many different state high courts. We currently have one case at the Pennsylvania Supreme Court. (18) Pennsylvania is usually more protective of economic liberty than other states. We also had one recent case at the Illinois Supreme Court. (19) Illinois is usually not more protective of economic liberty than other states, and it rubber stamped the law in question. (20) Both of those cases are really about the...