Civitas Review

Challenging Occupational Licensure


Yesterday, the Civitas Institute filed a joint amicus brief with the Cato Institute at the United States Supreme Court. In the brief, we ask the Court to grant certiorari (take up the case) in Vong v. Aune. Should the Court grant cert, the ramifications could be felt in North Carolina, which has one of the most expansive and complex licensing regimes in the nation. In this post, I'll explain the background of the case, why we filed an amicus brief, and why an Arizona entrepreneur's legal battle is relevant to the lives of North Carolinians.

The Vong v. Aune Saga

The story of this case begins a long time ago in a land far, far away – Arizona. I'll let the Goldwater Institute sum up the background:

Cindy Vong has operated a nail salon in Gilbert, Arizona since 2006. In 2008, she began providing a foot therapy popular in the Middle East and Asia which uses small Garra Rufa fish to exfoliate dead skin from the feet. Ms. Vong remodeled her salon to create a separate area where the foot treatment would be offered. She wrote an extensive policy on customer safety for her staff and legally imported the fish from China to launch the service. A number of Ms. Vong’s customers enjoyed the treatment and none lodged any complaints about it with her business or any state agency.

…In January 2009, Ms. Vong received an undated letter from [Arizona Board of Cosmetology] Executive Director Sue Sansom that accused her of violating the agency’s safety standards and said Ms. Vong could face criminal charges.

…Ms. Vong asked the board to use her spa as a six-month test project so the state agency could write new rules that covered this practice. The board ignored Ms. Vong’s request.

In February 2009, the cosmetology board formally notified Ms. Vong that the state was considering possible civil or criminal penalties for offering the service. Ms. Vong signed an agreement with the cosmetology board in September 2009 and closed the fish spa as the board requested…[S]he was forced to lay off three workers and lost a substantial amount of income.

In November 2009, the Goldwater Institute filed a lawsuit against the Board of Cosmetology on Ms. Vong’s behalf. The board exceeded its statutory authority by unconstitutionally applying regulations to her spa fish business that, in this context, are not rationally related to a legitimate government purpose. The board violated Ms. Vong’s constitutional rights to due process, equal protection and the privileges and immunities afforded to everyone to make a living.

The Arizona courts ultimately sided with the Board of Cosmetology, leading attorneys Clint Bolick and Christina Sandefur to petition the United States Supreme Court.

Why file an amicus brief?

An amicus brief, or "friend of the court" brief, is a brief filed by someone who is not a party to the case. Such a brief presents the court with additional legal or policy reasons to rule a certain way. The goal in our brief was to show the Court that this case is a chance to clarify several unclear points of law surrounding occupational licensing. While we certainly hope that the ultimate ruling will favor entrepreneurs and small businesses, the goal at this stage is simply to show that there are important questions that need answering.

Under current law, an economic regulation is upheld as constitutional if it is rationally related to a legitimate government interest. This test is extremely deferential to government, and therefore most constitutional challenges fail. But the more ridiculous government regulations become, the harder it is for courts to accept their actions as "rational." Our goal is to show the Court that Ms. Vong is not alone in her fight against excessive government regulation, and that her case involves questions that affect millions of working Americans, from Arizona to North Carolina.

The Arguments

In our brief, we present the Court with three important reasons to take up Ms. Vong's case.

First, the case gives the Court the chance to clarify whether and to what extent lower courts can consider the motivations of economic regulators. All too often, licensing schemes are enacted to protect industry profits rather than truly serve the interest of public safety. Lower courts have disagreed on whether such illegitimate motivations matter, and hence it would be appropriate for the Supreme Court to weigh in.

Second, we point out that lower courts are split on whether complete economic prohibitions should be treated differently than mere regulations. Since licensing boards by their very nature prohibit all kinds of economic activities all over the country, we ask the Court to clarify how such total prohibitions should be treated by lower courts.

Third, we note that occupational licensure laws pose an often insurmountable barrier into more professions than ever before, and are therefore worthy of treatment by the Court. We ask the Court to consider the question of "whether occupational licensing boards comprised of members of the very profession being regulated constitute the exact sort of deficiency in our democratic system that [past cases have] targeted."

Impact for North Carolinians

Were the Court to take up Ms. Vong's case, the impact could ultimately be felt in North Carolina. Citizens of the Old North State currently live under one of the most expansive and intrusive licensing regimes in the nation. Further, many such licensing boards have made no secret of the fact that they serve themselves first and the taxpayers second. Just last week the US Supreme Court reprimanded the North Carolina State Board of Dental Examiners for using its power to box out competition, and therefore keep dental fees high. The North Carolina Board of Dietetics even tried to shut down a blogger just for talking about the "paleo diet."

One of my personal favorite examples is the North Carolina Locksmith Licensing Board:

A particularly egregious case arose when the NC Locksmith Licensing Board spent tens of thousands of dollars to hire a private investigator to find and pursue unlicensed locksmiths, even though no complaints were received from the public. The investigator opened 55 cases, all of which were for operating without a license or hiring unlicensed people, while the board took no disciplinary action against licensed practitioners of any sort. At the same time the Board was actively lobbying to increase penalties for unlicensed work and to close exemptions for towing and lockout services, as well as to raise license fees in order to pay for the investigations, which helped to put the board in the hole by almost $64,000.

Today, we have the North Carolina Locksmith Licensing Act, which ostensibly operates to "protect public health, safety, and welfare." How convenient that the Act, which was heavily lobbied for by North Carolina locksmiths, also increases fees for locksmiths while boxing out their potential competition.

We hope that the Court will take up Ms. Vong's case in order to clarify whether such self-serving motives on the parts of licensing boards are relevant to constitutional challenges. Such would be a big first step towards a freer economy not just for the peoples of Arizona and North Carolina, but for all Americans.

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