Tiwari v. Friedlander: Which Rational Basis Test is it Anyway?

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In Tiwari v. Friedlander, the Petitioners ask the Supreme Court to grant certiorari to address whether the Fourteenth Amendment requires meaningful review of restrictions on the right to engage in a common occupation. The petition argues that the right to engage in a common occupation is deeply rooted in the nation’s history and tradition, but its protection has been inconsistent, sometimes leading to conflicting results across the lower courts.  The petition also contends this inconsistency is caused by the standard under which courts review economic-liberty challenges— the rational basis test.

The Petitioners, Dipendra Tiwari and Kishor Sapkota, challenge Kentucky’s Certificate-of-Need (CON) Law as an unconstitutional infringement on their right to earn an honest living.  The CON law prevents them from opening a healthcare agency they designed to provide home services to the large community of Nepali-speaking refugees and immigrants in Louisville. By contrast, Kentucky contends that the CON law is necessary for lowering competitive pressure and increasing profits for incumbents who can pass their gains to the public.

The petition raises questions about the proper articulation of the rational basis test and whether the right to engage in a common occupation is deeply rooted in history and tradition under the Court’s recent landmark decision Dobbs v. Jackson Women’s Health Organization.  

Which Rational Basis Test is it anyway?  Is the Right to Engage in a Common Occupation Deeply Rooted in History and Tradition and does the Fourteenth Amendment Guarantee Meaningful Protection for that Right? 

To discuss the petition and these questions, please join the lead attorney for the Petitioners, Andrew H. Ward, attorney at the Institute for Justice, and Professor David Upham, Director of Legal Studies and Associate Professor at the University of Dallas.

Featuring: 

Andrew Ward, Attorney, Institute for Justice

Prof. David Upham, Director of Legal Studies & Associate Professor, University of Dallas

Moderator: Adam Griffin, Law Clerk, US District Courts

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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

Event Transcript

[Music]

 

Jack Capizzi:  Hello, and welcome to today’s The Federalist Society’s virtual event. Today, November 3, 2022, we are excited to present "Tiwari v. Friedlander: Which Rational Basis Test is it Anyway?" My name is Jack Capizzi, and I’m an Assistant Director of Practice Groups here at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today’s call.

 

      After our speakers have given their remarks, we will turn to you, the audience, for any questions you may have. If you do have a question, please type it into the Q&A feature at the bottom of your screen, and we will handle those questions as we can as the event progresses. With that, thank you for being with us. I’ll hand it over to our moderator for today’s event, Adam Griffin. Adam, the floor is yours.

 

Adam Griffin:  Thank you, Jack, and thank you to our speakers, our audience on the call today, and to The Federalist Society. We are here today to discuss Tiwari v. Friedlander. A cert petition is pending in that case before the United States Supreme Court that asks whether the Fourteenth Amendment provides meaningful protection for the right to earn an honest living under -- whether it’s deeply rooted in history and tradition and what the proper test is for protecting that right under the Fourteenth Amendment. The Petitioners, Dipendra Tiwari and Kishor Sapkota, challenge Kentucky’s Certificate-of-Need Law, which prevents them from opening their home health agency in Louisville, Kentucky.

 

The petition discusses different applications of the rational basis test, which is the current standard for protecting economic liberty under the Fourteenth Amendment, and surveys lower courts’ disagreements over the proper application of that standard. And the petition asks the Supreme Court to clarify the standard that should be used to protect economic liberty and argues that it’s deeply rooted in history and -- that right is deeply rooted in history and tradition under the Court’s recent landmark decision in Dobbs v. Jackson’s Women’s Health Organization and Glucksberg.

 

Here to discuss this case is Andrew Ward, the lead attorney for the Petitioners. Mr. Ward is an attorney at the Institute -- excuse me. Mr. Ward is an attorney at the Institute for Justice and the Petitioners’ lead attorney, where his practice focuses on protecting American’s economic freedom from arbitrary government infringement. He is the leader in IJ’s new Fresh Start practice. In that practice, he defends individuals who have been denied their economic liberty due to prior criminal convictions. In that practice, he has led clients to victory in a Pennsylvania Supreme Court case on behalf of cosmetologists eliminating the good character requirement under Pennsylvania law for cosmetologists trying to enter the field. Before coming to the Institute for Justice, Andrew clerked for Judge Edward Korman in the Eastern District of North Carolina and Judge Raymond Gruender in the United States Court of Appeals for the Eighth Circuit.

 

Commenting on Mr. Ward’s cert petition and presentation is Professor David Upham, a director of legal studies and associate professor in the politics department at the University of Dallas, where he focuses on constitutional law, history, and political and legal theory. Professor Upham is among the nation’s leading scholars on the history and original meaning of the Fourteenth Amendment. One of my personal favorites among his articles and many contributions to the literature is “Interracial Marriage and the Original Understanding of the Privileges or Immunities Clause” published in the Hastings Law Quarterly, where he surveyed the original understanding and argues that the right to marry is fundamentally deeply rooted in history and tradition, a civil right of citizens protected under the Privileges or Immunities Clause, and that race discrimination in relation to the right to marry is prohibited under the Fourteenth Amendment. Therefore, Loving v. Virginia was correctly decided on original meaning grounds. Professor Upham is currently working on a book project on the original meaning of the Fourteenth Amendment. He received his JD from the University of Texas School of Law and a PhD from the University of Dallas.

 

Thank you both so much for being here. Mr. Ward, the floor is yours.

 

Andrew Ward:  Hey. Thank you. It is, of course, good to talk to you again, Adam. We know each other, and I am happy to be here. Thanks to FedSoc for the invitation. So I’m hoping to start off here just by talking a little bit about the facts of what’s actually going on in this case and what’s happened and then a maybe a little bit about the substance of our cert petition. So what is going on here is you have two immigrants who are really trying to live the American dream. My clients, Dipendra Tiwari and Kishor Sapkota, both emigrated from Nepal and made their way to Louisville, Kentucky. They both have experience in home health. Dipendra’s an accountant. She worked at a home health agency. Kishor is a home health aide. And when they met, this lightbulb turned on, and they thought they really could do something good and useful and start a great business starting a home health agency to cater to other Nepali speakers in Louisville.

 

Now, you might not think there are so many Nepali speakers in Louisville, Kentucky, but there are actually a fair number of refugees there from Bhutan. There’s a long history there. But in the early 2000s, tens of thousands of Nepali speakers left that area, went all around the world, and several thousand now live in Louisville, Kentucky. They don’t all speak English, particularly the older ones. There are different cultures than people who have lived in the Louisville for hundreds of years, and so my clients wanted to be able to start a business catering to that. Home health is not brain surgery. It is not building a hospital with a billion dollars of investment. It’s sending nurses and occupational therapists to people’s homes. A normal visit is an hour, an hour and a half. You apply basic therapies. Sometimes, it’s just helping with ambulation, taking a shower, going to the bathroom, things like that.

 

So they decided to open up this agency Grace Home Care. And that’s when they ran into the law that we’re challenging, Kentucky’s Certificate-of-Need Law. And what that law says is you cannot open a new certain kind of healthcare business—and home health is among those—unless it’s needed. That’s a strange thing to think of. It’s hard to imagine somebody saying, “Oh, I want to open up a lemonade stand,” and then the government saying, “Whoa, we need delicious drinks on a hot sunny day.” But that’s how it works in this field. And the way need is determined, it goes in two parts.

 

So the first is just this mechanical calculation. The state of Kentucky assumes that every specific county will use home healthcare at the same rate as the state overall. And, if it does, new home health agencies are not allowed to open. Or if it’s using it at less than the statewide rate, there’s some tweaks for demographics and little adjustments. All of this is literally sixth-grade arithmetic. And, under that formula, in 95 percent of the state, new home aide health agencies are just flatly banned. They cannot open. The counties have changed a little since we filed suit, but when we filed this case, it was 6 counties out of all of the 120 Kentucky where new home health agencies were allowed. In every other one, they were banned. They’ve been banned in Louisville for at least 15 years. The record indicates it was probably longer. The last time any sort of CON application was granted in Louisville was 1995. That’s 95 percent of the state, and it’s where my clients end at stage one.

 

Now, if there’s a mathematical under this arithmetic, then you have to litigate against all the existing home health agencies who try to disprove that there’s a need for your business because they can fill that need themselves. So, if you’re in one of those handful of counties where a new agency is even theoretically possible, you go into what is essentially administrative litigation. You hire a law firm. You go into discovery. You put on witnesses. You put on dozens of exhibits. Maybe you get references from local politicians. You put on testimony. You have a several daylong hearing. The existing businesses litigate against you.

 

And if after all of that you can prove that there is a need—how you prove that’s an open question; there’s no defining need criterion at this point; a staff attorney just sort of renders a decision—but if after all of that you can prove there’s a need after spending tens, hundreds of thousands of dollars in that quasi-litigation, then you can finally open. Between the flat ban in nearly all of the state and this de facto trial process in the rest, no entirely new home grown agency has opened in Kentucky in at least the last 20 years out of 212 applications. And that’s to say nothing of people that didn’t decide to apply at all knowing the burdens they would face.

 

Now, why does this exist? There was a reason many decades ago based on Medicare financing and how that worked at the time. Why does it exist today? It’s pure political capture. Nearly everyone who studies this issue agrees. The federal government has been saying this for decades. It encouraged these laws, realized they were a mistake, and then started saying so back in the 1980s, said it again in 2004, said it again under the Trump administration, under the Obama administration. The FTC, the DOJ, the Federal Trade Commission, agency after agency said these laws are a problem. In fact, a woman who used to run the CON program in Kentucky says it’s basically just shenanigans by existing players. It’s a relic that harms the public interest.

 

So my clients sued about it. They have no way to change this law. They have no way to apply for a CON in a way that could ever possibly work, and so they sued. And almost immediately, the existing agencies, the hospital association intervened to try to keep them out of business. And what happened after that in this case really exemplifies the problem with the current legal test that applies to these sorts of economic restrictions. We saw it really ping-pong back and forth between real review and fake review. So at first, Judge Walker, who was our judge at the time, basically said, “This looks ridiculous. This is a motion to dismiss, so I can’t ensure final judgment. But it sure looks like there is an overwhelming academic consensus. There is every reason to believe that this is just pure political protectionism, keeping people out of the market to benefit existing players.” And, if anything shows that, it’s the intervention of the hospitals. It’s not like patients are trying to intervene in this case. And he said it really looks like these people have state of claim.

 

He leaves because he was nominated to the DC Circuit. We get another judge, and then we get a completely different ruling on summary judgment under which it seems like we have no chance whatsoever. The judge excludes or calls irrelevant most of the evidence that we presented, which is the same evidence supporting the claims that Judge Walker had said stated a claim at the motion to dismiss stage. Chief Judge Stivers says, “None of that matters.” The only thing that you could possibly show is that, although it’s permissible, it is also irrational. It’s a standard that doesn’t even sound possible to meet. And we go up to the Sixth Circuit, and then something else happens.

 

The Sixth Circuit says that this law sure seems like a bad idea. It’s got a pretty low grade on the rational basis test. That’s the formal name of the test that our cert petition’s about. It teeters on the edge, but we’re going to have to say that it passes, but it’s very close. But that said, it may well be that the plaintiffs have a point. They have the option of further review in the federal courts, meaning appeal to the Supreme Court. And Judge Sutton of the Sixth Circuit who wrote the panel opinion said, “There’s a lot of criticism of this test. There’s some inconsistencies. It doesn’t necessarily make sense to think of this as an economic right as opposed to a personal freedom.” And he says these critics may have a point. And that’s the issue we’re trying to bring to the Supreme Court now.

 

There is supposed to be a right—and I’m happy to talk about the substance of our cert petition more—but there’s a very, very long tradition of the common law and the federal court system protecting a right to engage in a meaningful occupation to apply a trade to earn an honest living. And that’s certainly what we’re asking the Supreme Court to sort out. Just in this one case, we’ve seen three different tests throughout the law more broadly. There’s all sorts of mess that I’m happy to talk about. But let me stop there for a moment. That’s how we got to the cert petition. Do you want me to talk a little bit about what we’re petitioning about?

 

Adam Griffin:  Would you want me to turn it to Professor Upham for commentary, or would you like to explain the divide of the rational basis test?

 

Andrew Ward:  Sure. I’ll say just a little bit more about that. So the rational basis test is the standard that it has its origins in the nineteenth century, but it really starts clearly applying to these sorts of claims in the 1930s. And it kind of sounds okay on its face. It says that a law needs to have a rational relationship to a legitimate state interest. But the Court in the ensuing decades has never really been clear about what that means. It has decided cases where it says, “The state’s arguments don’t really make sense. They haven’t provided evidence of a point, and so we’re going to allow someone to enter a trade he’s barred from,” in a case like Schware v. Board of Bar Examiners in 1954, or in a case Cleburne Living Center v. the City of Cleburne, Texas, that your reasons for denying a permit to have a group home don’t really seem to make sense. This isn’t causing any trouble. And this is just like naked politics. You don’t like these people. You don’t want them around, and that’s illegitimate.

 

But in other cases, the Court has said basically that the limits of what the state can do under this test are just the limits of the human imagination. If there is anything conceivable that anyone could imagine to save a law—it doesn’t even have to be the party’s lawyers—if the state doesn’t do a good enough job defending a law, the judge is welcome to make something up herself. Sometimes, the Supreme Court has articulated the standard that way. And courts have taken that direction and really run with it. In some cases, you have them following the earlier cases, and they’re really assessing evidence, being deferential to the state, not imposing something like the way you would look at a restriction on speech, but checking evidence, saying, “Does this actually make sense in the real world?”

 

And then, in other cases, you have courts going down the complete fantasy root. They will say that you can’t license florists because of the possibility that a buyer of a bouquet might prick himself on a little tie holding the flowers together or might get sick from infected dirt in a bouquet, things that everyone knows do not actually happen in real life. You have cases—in fact, one happened just the other day—where the Court said, the DC Circuit said, “It’s rational to expect day care providers to get college degrees.” Because if you have a college degree, when a two-year-old keeps asking, “Why? Why? Why?” if you’ve taken courses on art and history, you might be able to answer those questions better.

 

And what we’re looking for is the Supreme Court to really sort through this mess. There are other cases where the courts just call it a mess, where they say, it’s a dilemma. It’s perplexing. It’s confusing about what to do.” It’s actually gotten to the point where there are even circuit splits about metaphors. There is a circuit split over whether the rational basis test has teeth. Some courts will say it has teeth. Some courts will call the test toothless. There is a circuit split about whether it’s a rubber stamp. “It is a judicial rubber stamp,” says the Ninth Circuit. “It is not a judicial rubber stamp,” says other cases in the Sixth. So everyone acknowledges there’s this mess, and we’re really asking the Supreme Court to sort that out and to sort it out in a way that protects the right to earn an honest living, which I suppose I can talk about, but Professor Upham’s probably even more prepared to talk about, the long history of that and common law.

 

Adam Griffin:  Professor Upham?

 

Prof. David Upham:  Well, thank you very much. And I’m going to make some comments that may suggest a disagreement. Although, if I were litigating this case in the federal courts, this seems I might make the very same arguments given the current status of the law. My main points are going to be that the rational basis test doesn’t seem to have any foundation at all in the Constitution even though it is deeply rooted in our judiciary’s precedence over the past 70 or 80 years. But at the same time, insofar as one or more justices on the Court—and I’m pretty convinced Justice Thomas might be one of them—is interested in reconsidering even 80 years of precedent in light of the actual text and original understanding of the Constitution. Then, perhaps, my remarks are not merely academic but are even relevant to current adjudication.

 

The rational basis test, which Andrew rightly indicated, the legitimate rational related to a legitimate governmental or state interest, is another way of saying the laws have to be just. And the problem with saying that that’s a constitutional rule is certainly a moral rule, I think that justice is an intelligible principle but it’s very difficult—there’s a lot of disagreement about it, but it’s not an illusion—is it’s not law in the sense of the constitution. No provision of the -- even though there’s, virtually, the Supreme Court has issued unanimous decisions endorsing the rational basis test. It’s the virtual unanimous assertion of the federal judiciary for decades now that there is a rational basis test somewhere.

 

But it’s another way of saying the Constitution tells the states, “Be just.” And it just simply asks that there be good cause for exercising coercion over the person and property of individuals, including coercing them by taxing them or regulating them from participating in a market. No provision of the Constitution does that. The only one I can think of that on its face might go in that direction absent some further inquiry would be the Fourth Amendment, which says no unreasonable searches and seizures. That probably means something more specific in its original meaning, but it does seem to suggest the kind of a general be reasonable, be fair with people when you’re searching and seizing property.

 

But, as for the Fourteenth Amendment, neither its text nor I think its original understanding includes any kind of just general rule of fairness. There are rather specific determinations of justice being made through three clauses that, the more I look at them, the more I don’t think that they’re open-ended or majestic generalities. That’s not the way -- none of those words are just going to be synonyms for majestic generalities. “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States.” That’s the first clause of that second sentence. The second sentence has two predicates. We call them clauses, but it’s actually just one clause. “Nor shall any state deprive any person of life, liberty, or property without due process of law nor deny to any person within its jurisdiction equal protection laws.”

 

Now, of those clauses, I’m going to speak of them in reverse order. The first refers to as it says. It’s about not withholding the protection, whatever it might be, that the laws provide. There can be no crystal knocks. There cannot be any open season on somebody’s -- the laws are suspended tonight so people can get beat up or lynch law can happen. The states may not deny. Instead, they must provide the equal protection of laws. That’s by some of my research that’s what they originally intended. Conversely, the states must refrain from acting. They cannot deprive anyone, kill anyone, throw them in prison, take their stuff without going through a process, a trial, that is according to law. Those two provisions do not have -- they aim at justice, they aim at reasonableness, but there are specifications and determinations as to what ought to happen. There ought to be a protective functional government that is not denied, and there ought to be a process when the government is exercising its necessary coercion to enforce its laws and coercion that can include killing people or throwing them in prison or taking their stuff.

 

The last clause is, “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States.” That has some reference to some sort of fundamental rights that cannot be abridged. It doesn’t say they can’t be abridged unreasonably or irrationally. It just says that they cannot be abridged at all. And to turn one of those rights into, “I have a right to not be treated unfairly,” is to do violence to the very nature of law itself, which is specifications of justice. And secondly, it would be to suggest that, somehow, we as Americans have a commitment to justice to our own citizens but outsiders can be beat up or treated roughly and unjustly. Although there are certain political societies that do tend to think, “Well, only insiders get justice, and everybody else gets just the beatings,” our Anglo-American legal tradition treats human beings as such as entitled to justice.

 

All that being said, I do think there is a pretty sound basis for an originalist to side with the petitioners in this case. What the petitioners are asking to do based upon my -- I have not been deeply involved in this. I’ve just looked at some of the briefs. They’re asking to enter one of the lawful markets that citizens of the United States, as defined by the laws of the state of Kentucky, allow people to do. This is not like a market for prostitution, a market for gambling that may or may not be something that should be allowed, but it’s wouldn’t be called a lawful occupation. And, in order to enter that market, they have to prove that somehow their presence is necessary.

 

And it seems to me that the rights of citizenship, unlike sort of the rights of due process, they include the right of the citizen to travel around any part of his or her country, to reside anywhere, to open a business in any particular place where he or she could open a business, to make use of the tribunals. All of those rights I’m mentioning are rights listed in Corfield v. Coryell, which is the most authoritative treatment of privileges and immunities of citizens.

 

And when you said there has to be a certificate of need, it would be akin to saying, “Well, before you can move to Texas, we need to know whether your presence is going to be necessary or helpful or not.” There might be lots of rational bases for saying—I’m only saying this half-jokingly as a Texan—that there are too many Californians moving to Texas. There may be all sorts of rational bases for limiting immigration into the United States. But insofar as once you’re a member of the community, Dallas, Texas, has no right to exclude Californians from their residing here on the basis of they have to show a certificate of need. And it seems to be the same thing applies here.

 

It’d be one thing to say that the people want to enter this market don’t know how to do it, that people will die. So you can have licensing, as he indicated, for things like nurses and doctors. And you could even have licensing for this to show that the people have at least a reasonable competence to care for the elderly, I would say. But that is different from saying, “I need to show that the market needs me.” To a certain extent, the Constitution doesn’t—no matter how rational an exclusion might be—the Constitution doesn’t allow the states to exclude any citizen from participating in its territory or its markets or its judicial process or, for that matter, freedom of speech. You don’t need a certificate of need to write a letter to the editor or start a blog or start a political association even though many political associations frankly perhaps shouldn’t exist. Perhaps, they’re useless. Perhaps, they’re even harmful.

 

The country is who we are. These are our members, and our members have a right to participate in these things that belong to the community. And the market, a lawfully established market, is both private but it’s also something that the public makes for its citizens. And insofar as the petitioners are citizens—and I understand that they’re immigrants, but I’ll assume for this that they’re lawful permanent residents at least or have lawful status—have been –

 

Andrew Ward:  They are citizens.

 

Prof. David Upham:  Okay. Okay.

 

Andrew Ward:  They are.

 

Prof. David Upham:  I’ll take it back. Then, I think that they have a very solid basis under the Privilege or Immunities Clause, and I have a fairly, for me, a fairly restrictive sense of how far the Fourteenth Amendment goes. But when you have -- it’s not every regulation that has to prove its reasonableness. But an exclusionary, a complete exclusionary basis where the test itself is called a certificate of need, that’s another way of saying, “You need to prove your citizenship again,” if that makes sense. “You need to prove you’re a member of our community again.” And I think that decision has already been made by the immigration naturalization laws or by our Fourteenth Amendment’s definition of citizenship. And once made, it’s the job of the states to not put up barriers anymore. I think that’s all I’d like to say. I can say a lot more, but I think that’s the summary of what I’d like to say now.

 

Adam Griffin:  Thank you, Professor Upham. And thank you, Mr. Ward. Those are both great remarks. I should say if anyone has questions to please use the question-and-answer function below. You can enter any questions into that Q&A box, and we’ll try to get to as many as we can. I wanted to start, Mr. Ward, I’ll give you a chance to respond to one another, and we’ll have a little discussion here.

 

Professor Upham, I just wanted to clarify your perspective. So you think that citizens have privileges or immunities and that, as part of that, a citizen can go anywhere between states or anywhere within his own state or within a state and has the right to open a business anywhere within the state. Now, there may be licensing requirements. There may be health and safety requirements. But there cannot be a “You must demonstrate a need to open a business here.”

 

Prof. David Upham:  Yeah. Insofar as just acknowledge that these people are competent to do that, and that’s not what’s going on with the certificate of need. Then, they are effectively, as defined by the laws of the state, able to do so. This is an additional obstacle that I think is unconstitutional.

 

Adam Griffin:  Okay. And then, before I go to other questions, Mr. Ward, would you like to respond to any of Professor Upham’s remarks on the rational basis test or the protection for the right to open a business or earn a living?

 

Andrew Ward:  Well, I think Professor Upham, as to the parts that we agree about where my clients win, I think he is a hundred percent correct. I did want to note that my clients are not challenging any of the separate restrictions about quality of care that there are health and safety regulations in this field unsurprisingly. And, of course, they’re not challenging those. They have every intention of meeting those. They’re challenging only restriction that says you simply can’t be in the market.

 

And I think I’d just stress, if you were in that originalist position, if the way that you think that this is most appropriately resolved sort of historically correctly is that this should have been about privileges or immunities—and small digression, that means overturning some nineteenth century business called the Slaughterhouse cases, which is something that my organization would very much like to see happen—I would just like to stress how much there is of that tradition of saying you can’t exclude someone from a market outright, that those cases exist starting at the very latest in the early 1600s.

 

And, even there, they’re putting the right back, tracing it to Magna Carta. I mean, there’s the case of the monopolies, the case of tailors, things very early on saying, “You can’t just say only one person gets to do it.” And that is effectively what we have here. Now, this is an oligopoly, not a monopoly. There are maybe about seven agencies in Louisville. That number hasn’t been up. But that number hasn’t been allowed to change upwards for at least 15 years and it hasn’t actually changed in 27 or so years that this is the kind of exclusion, that there is a very long history of saying it’s just not within the lawful power of government.

 

Now, I think a point maybe we could talk about our disagreement with each other here is that I do think there is that tradition of fairness. I mean, you could say that the Court has historically in the twentieth century gotten in wrong. You could certainly take that view. But the Court has been saying for a long time that there does need to be at least a rational relationship, and we think it’s appropriate to have that mean what it says and rational mean actually rational, not the kind of things, the jokes that pass under the test these days.

 

I mean, one of the Sixth Circuit’s holdings was that one reason that it would be rational to ban a niche language agency is that that will get you niche language agencies. Like if you give business to the existing incumbents, they might take the extra profit and decide to invest in translation apps so that they can serve people that you could just serve with an agency designed to serve them. I mean, that’s the sort of thing that passes for rational under the current test, and it shouldn’t. And there is a long history in a lot of cases in the eighteenth century and the nineteenth century of talking about that general principle about a fair relation, a substantial relation, things like that that I think the Court should be recognizing.

 

Adam Griffin:  Professor Upham, any response before we turn to questions?

 

Prof. David Upham: Yeah. And it’s not so much a direct response, but it’s just a general sort of further elaboration of why I don’t -- apart from the fact that I think it’s contrary to the nature of the Constitution to say it has just a general fairness test is the -- it’s just not appropriate, and it’s not a good place for the judiciary to be engaging in this. When you have a legislature filled with fallible, fallen human beings, just like the people you’ll find in the judiciary, the legislature has known only by law, but in fact, it is a somewhat more representative body then what’s going to happen in the courts.

 

And the judiciary, if they’re going say, “We’re going to second guess what happened in the committee meetings and in the legislative chambers, not just what they said but also their failure to change the law to adapt because the law once was rational but is no longer rational,” the people are represented in the courtroom. There may be someone who says, “I represent the state,” but that assistant attorney general or district attorney—or often may even be a private litigant who has to try to defend the rationality of the law in a civil case—is simply not adequately able to speak on behalf of all the reasons and arguments why a law may have been made. And a judge isn’t capable of assessing those things.

 

And in fact, what it would do, in a lot of cases, it would give an unreasonable advantage to people that can do better data dumps and engage in—not all cases are like this—but to a certain extent to replace a government by elected legislatures to assess the reasonableness and rationality of laws and replace that with adjudication is, I think, to do us a harm to our sort of government by the people. Lots of laws are kind of stupid. But almost all of them are a little bit smart. That’s just the way people are. And it’s difficult to say that this law is completely without rational basis, and it’s also -- well, anyway. This is a long argument, but yeah.

 

Adam Griffin:  Well, thank you, all. I appreciate it. It’s good to hear some agreement on this right to earn a living, this economical right to open a business is deeply rooted in history and tradition, and complete exclusion or these certificate of need exclusionary laws would violate the rule of protecting that right, but then a disagreement about whether there is a rational basis, but there is some kind of rationality reviews deeply rooted in the history and tradition. If there’s a rationality review or there’s not a component, it might infringe our democratic institutions versus it being a fundamental backstop on legislation from the courts.

 

So we’ll turn to Q&A. “Would the same reasoning that you both have offered justify striking down local real estate zoning laws?” I’m not sure what expertise either of you have on those or if you can speak to whether you think zoning laws or local real estate zoning laws would be threatened by this view about where you can open a business or the right to earn an honest living.

 

Andrew Ward:  Well, I can take that because IJ does do some work in the zoning space. And I think it depends. Now certainly, under the sort of flat ban type historical reasoning, I don’t think that is going to have very much to say about zoning laws. I think the kind of real and substantial type rationality review does have something to say about that, that you can -- and a good example of that is Cleburne itself or another case my firm just litigated where a town was basically trying to use the zoning laws to keep out a homeless shelter, not because there was any legitimate public health and safety justification, but because they just didn’t want those people around.

 

I think different zoning laws are, of course, going to fair differently under that sort of rational basis with bite, real and substantial test. Keeping factories that make a ton of noise and spew pollutants in one part of town may well have something totally different than a law saying you simply can’t do something with your property. You can’t look after children in your own home. That’s an IJ case. Maybe, this isn’t zoning per se, but your business might need to have a certain minimum number of parking spaces that that sort of business could never absolutely never use. Here I am a lawyer saying, “It depends,” but I think that some zoning laws, yes, would fail under a standard of real legitimacy because often they aren’t.

 

Adam Griffin:  Professor Upham, any comment on that one?

 

Prof. David Upham:  I just generally think zoning laws probably are not unconstitutional. They might be terribly unreasonable. But those are matters of geographic discrimination. There are matters of identifying certain places where you can only do certain things and others. And they can be great infringement on people’s enjoyment of their property. But the Fourteenth Amendment I don’t think goes to correct those things.

 

Adam Griffin:  Is that because, if there was a zone where you can’t open businesses as commercial because everyone equally cannot open a business in that area, it wouldn’t be an exclusion for the market type thing?

 

Prof. David Upham:  Well, there’s never -- no laws are perfectly equal. So every law’s going to give some advantage or disadvantage I’d say. So if you say that, yeah, I bet somebody who has already got a business down the road already just got an advantage. And a lot of times, the economic interests are big motivators in all politics and including adjudications in lots of direct and indirect ways. So I’m not going to say it’s a perfectly equal thing. It’s just that it doesn’t -- it defines markets, as it were. And nobody’s excluded from the market in any obvious sort of legal sense.

 

Now, you could say deep down, they knew what they were doing, and this was going to -- they knew whose ox was going to get gored by this. That could conceivably -- there are due process issues where you have the zoning law where the person whose ox is getting gored is known and is known consciously by the legislature. That’s akin to a bill of attainder or something where it’s not a general law anymore. But if law doesn’t have that kind of particularity where you’re afraid that somebody’s consciously -- and some taxes in the nineteenth century are struck down because the taxes are defined in such a way that everybody knows who’s going to get taxed. And the legislatures know that. But that would be a peculiar exception.

 

Adam Griffin:  Thank you. I think this one’s for Mr. Ward. In the case below, was their defense asserted by the state of failure to exhaust administrative remedies, or was the case began with an administrative appeal?

 

Andrew Ward:  Ooh, highly technical. So the answer is no. Number one, there’s nothing to exhaust. My clients are sort of flat banned. This arithmetic says there’s no need, so there’s nothing they could have even done in the administrative -- I mean, they did go into the administrative process, and they were promptly kicked back out because of the formula, which was brought to the attention of the administrative system by one of the local hospitals, a $2 billion conglomerate that was threatened by my clients’ startup. But there’s nothing to exhaust. And in any event, the law of this from a case called Patsy v. Board of Regents is that you don’t have to exhaust federal constitutional civil rights claims.

 

Adam Griffin:  Thank you. So thanks to a thoughtful discussion. “Given that it is easy to distinguish licensing requirements for protectionist purposes, such as the certificate of need in this case, from those for genuine public health and safety purposes, as in the case of medical doctor licensing, why is this case not a bipartisan issue?” And she asks, “Why did only conservatives and libertarians file amicus briefs in favor of the petitioners rather than bipartisan support?”

 

Andrew Ward:  I reject the premises of the question. It wasn’t only conservatives and libertarians that filed an amicus brief. There was also an immigrants’ rights group that focuses on South Asian immigrants and rightfully so. What [inaudible 41:44] products said when it cleaved off so called economic rights was that it’s not the same if you have a discreet and in sort of minority with no political power. And nobody’s put this better than Justice Willett, now Judge Willett, in a case endorsing a more vigorous form of review in the Texas Supreme Court under the Texas Constitution saying there’s basically no one more disadvantaged and politically powerless imaginable than people without a lot of money trying to start up a business who are fighting zillion dollar entrenched players. That’s a bit of a tangent there.

 

But it wasn’t only conservative and libertarian amici. And it is a bipartisan issue—not as much as I would have hoped—but the Obama administration had a very long report about decreasing licensing and increasing economic liberty during a liberal administration. The federal government, as I mentioned earlier, has consistently criticized CON laws regardless of the party of the president ever since 1988. I think because of pretty standard things about interest capture, the existing players are very loud voices. It’s hard to have political reform in this area of common law specifically.

 

But, more broadly speaking, there is bipartisan support on this. Some of the things you see in these rational basis cases, like if you want to sell caskets online—like an Amazon for caskets—you have to embalm a bunch of dead bodies for practice even though that has nothing to do with what you want to do. I mean, sure, that’s like businesses and capitalism maybe. I don’t think that’s a left/right issue. I think that’s a crazy/not crazy issue. And so there is some bipartisan support here.

 

Adam Griffin:  So next question is, “There seems to be a renaissance of examining the original meaning of the Fourteenth Amendment and all of the Civil War amendments. Can the panelists compare and contrast their views of those of professors Randy Barnett and Ilan Wurman, both of whom have recently published on the topic, or any other views that you would compare and contrast to your own views with?”

 

Andrew Ward:  I think Professor Upham’s answer is going to be much more informed, and he should go first.

 

Prof. David Upham:  Yeah. I mean, the specific goals, the stated goal of the joint committee on reconstruction who were given the -- delegated the authority to draft and explain the Fourteenth Amendment by the Congress, who in turn receive their authority from the people, was to determine the civil rights and privileges of all citizens in all parts of the republic. That’s an article, and it’s part of the book I’m working on right now is looking at that language and taking it seriously—a determination of civil rights and privileges for all Americans throughout the country. On this topic relative to Randy Barnett and Evan Bernick and Ilan Wurman, as well as Christopher Green, I disagree with their trying to find as one of the rights under the Privileges or Immunities Clause a freedom from unreasonable arbitrary rules or regulations for reasons I pointed out. The text doesn’t support it.

 

And the original intent was not to give the judiciary, whom they did not trust, a license to sort of roam abroad and find out laws to strike down because they didn’t seem to be fair, or taxes didn’t seem to be reasonable. Too much here, not enough there, the entire tax code of every state in the United States would be subject to endless judicial correction under such a principle. Not because justice is an illusion, it’s just that getting it right is extremely difficult, and so there will always be complaints about these things. And 90 percent of the complaints are going to be fair. If we could see this from a divine perspective, we would find the right answer, but the judiciary’s not the place to do it. They wanted to settle certain things.

 

And it should be pointed out, when the Fourteenth Amendment was adopted among other things, there were still four justices on the Court who were veteran supporters to the Dred Scott decision. They weren’t sure of two others. They didn’t want the Supreme Court and the southern state judges and many of the northern judges to be in the business of reviewing laws to see if they’re fair or not. My gosh, I mean, they would have lost their lunch over that. They wanted to put things they hoped to—and it didn’t work—but they hoped to make certain things clear in the Constitution that no future judiciary or democratic majorities in Congress would be able to undermine these sort of core civil rights, one of which I do think is the right to enter any lawful market simply that one is capable of entering without having to prove that the market needs them.

 

Adam Griffin:  Thank you, Professor. When I think that’s—and correct me if I’m wrong, either of you—it seems like all, but certainly Professor Barnett and Professor Wurman and Professor Green, who you mentioned, and most Fourteenth Amendment scholars think that the Fourteenth Amendment guarantees that right to enter a market, the right to earn an honest living, the right to participate in a common occupation.

 

Prof. David Upham:  Yeah.

 

Adam Griffin:  You disagree maybe about how it’s protected, where I think Professor Wurman is only arbitrary discrimination. So you couldn’t have certainly race-based discriminations, but certain other discriminations maybe -- in this case maybe insiders with a certificate of need as opposed to outsiders trying to get into the market, that might be an arbitrary discrimination as opposed to an individual right exclusion. And then my review of the scholarship seems to suggest that there’s these old cases that Andrew is talking about where there’s a rationality review and Barnett and Bernick’s work surveys these rationality cases and some of the leading ones post Fourteenth Amendment are like Mueller, which was either about alcohol or milk, and several other cases leading up to Lochner that dealt with the kind of substantial relation test after Slaughterhouse.

 

And then I think Wurman comes in and says, “Those cases were about legislative delegations to municipalities.” It was only rationality review of municipalities and then it was cases about whether something with a commercial regulation, so it violated the exclusive nature of the Commerce Clause, whether it was the contract regulation that violated the Contracts Clause, or whether it was a legitimate police power, and so they were doing a rational relationship there. And Wurman would say, “There is no rationality principle under the Fourteenth Amendment.”

 

And then, Barnett and Bernick would say, “Those cases, that rule of rationality on those old cases now applies to state legislatures under the Fourteenth Amendment.” And that’s sort of where the drawing line is on rationality, even though all agree that the right to earn an honest living and enter markets is protected in some way under the Privileges or Immunities Clause, that disagreement on the rationality point comes into play, I think, in serving those old cases between Wurman and Barnett and Bernick.

 

Prof. David Upham:  And I say it, and maybe this is a disagreement or maybe just a qualification. That discussion is about—it’s my understanding—is about the meaning of the Due Process Clause.

 

Adam Griffin:  Correct. The rationality rule is about the Due Process Clause.

 

Prof. David Upham:  But when you go to the Privileges or Immunities Clause, Wurman does find there that the word “abridge” means unreasonably abridge. And so then you go back to you have that, despite his relative judicial minimalism and a minimalist Due Process provision, which I agree with, he still finds this rather open ended, race and other unfair classifications --

 

Adam Griffin:  Right, all arbitrary classifications.

 

Prof. David Upham:  -- that he finds under Privileges or Immunities. Now, our courts today for a long time have found that under the Equal Protection Clause. But it would still go until you have Lochner again. You’d say, “Well, why should you have a maximum hours for bakers but not for office clerks?” And the Court brought that up, and it’s one of the bases on which they struck it down. Whether it’s under Due Process, Equal Protection, or Privileges or Immunities, I think it's just not there under any of them. That would be how I disagree with both of them.

 

Adam Griffin:  Interesting, so no arbitrary classifications or arbitrary infringements on individual liberty. You think both of those rules -- so Wurman thinks there’s no arbitrary discriminations, open-ended arbitrary discrimination. Barnett and Bernick think arbitrary infringements on individual liberty, rational relationship to the law to health and safety. But you think both of those arbitrariness cases are out under the Fourteenth Amendment.

 

Prof. David Upham:  Yes. I think Barnett and Bernick as well find it under both Due Process and Privileges or Immunities, whereas Wurman only finds it in Privileges or Immunities. Yeah, because even it’s safe to say, “Don’t be arbitrary is a rule.” Well, it is a rule. It’s a rule like, “Love thy neighbor.” It isn’t the same thing as a law that the human beings would make. And that’s to say it’s the beginning of political discussion. Of course, we should not be just. Law should be reasonable. We don’t impose penalties and pains on people’s bodies of property for no good reason.

 

That’s not constitutional law. If you don’t have that as an agreement before you make a constitution, you’ve got a sub-political circumstance. You might have war. You might have just terrible -- but the American Constitution is built by a political community that everyone would agree, “Be ye reasonable,” yes. The question then is does the Fourteenth Amendment provide -- they provide very, to me, limited specifications as to what reasonableness might mean.

 

Adam Griffin:  So you would come in and say on the discrimination side no race discrimination, no race classifications?

 

Prof. David Upham:  Yes.

 

Adam Griffin:  And you would on the individual rights side say, “You have a right to enter any market. Therefore, exclusions like the certificate of need law that prohibit you from entering a market because you have to demonstrate a need, that kind of complete exclusion from the market, ability to enter the market, that would violate the individual right.

 

Prof. David Upham:  Yeah. Because your card to enter is your American citizenship. That’s what gets you that right to participate in the market, my opinion. And that question has already been answered. By the way, some of it comes up in the -- why can’t I think of -- Bradwell v. Illinois when she’s excluded from licensing to the bar. The case does not involve actually sex discrimination but absolute sex exclusion of someone who the court below said, “Well, she’s obviously qualified. We just simply won’t have -- it’s simply improper for a woman to be doing this.”

 

That rule of impropriety, when the Court, once they acknowledged that she can do this, the door has to be open, even though the rules deciding whether someone is capable of being a lawyer and those tests are obviously, you could spend countless -- forever complaining that the bar’s either too easy or too hard, that the standards too lenient or too strict or stupid. But once you identify that someone actually can do something, then their American citizenship allows them to participate in that market insofar, by the way, as a practice of law as a profession rather than a public office, which is another interesting question.

 

Adam Griffin:  Mr. Ward, do you have any follow-up on the conversation?

 

Andrew Ward:  Well, I tend to take the Barnett/Bernick school of things. This isn’t an originalist counterargument. It’s a more philosophical one. To some of what Professor Wurman -- I’m sorry, Professor Upham was saying, we agree about the resolution of this case. But friendly disagreement is better than certain [inaudible 53:35], so I’ll say it anyway, which is just that I don’t think I’m skeptical of his structural skepticism of the judiciary. We talk about this some in our reply brief in support of cert because Kentucky made some of the same arguments.

 

Real review has always existed, and courts follow it sometimes. It’s explicitly existed under the state constitution in Pennsylvania, for example, at least since a 1954 case called Gambone and probably quite a bit earlier than that. And if this were going to lead to endless problems or endless interference with democracy, I think it would have happened already. I also don’t believe the courts are quite so incapable as some of the deferent school would suggest. Courts can decide government action is illegitimate. They are extremely capable of doing it. They do it all the time in every sort of case under every sort of other constitutional provision—albeit those are sometimes referring to enumerated things in the text.

 

But to take an example from our cert reply, if we tweak this law one little bit and just said that my clients weren’t allowed to advertise their business, and it’s all the same reasons—it’s just political capture; we don’t want people to know about that business because we want them to come to our business—and if the state came into court and said, “No, this is going to steer business to incumbents. That’s going to lower costs because they can buy pencils for cheaper if they’re bigger businesses. And the more clients they serve, the better apps they’re going to have to provide translators remotely, so it’s going to lead to better language and cross-cultural care than this actual agency designed to fill that role,” if this were under commercial speech doctrine, that would be laughed out of court as the nonsense that it is.

 

And, so, I think courts can and already do do the sort of robust, real—not necessarily the Herbert Spencer’s social statics that there can’t be laws in the public good—but real review, I think it already happens and the courts can do it. It might be hard to define precisely under this sort of test exactly where the line is, but it’s hard to say where twilight is exactly. But that doesn’t mean you can’t tell night from day.

 

Adam Griffin:  Thanks. That’s a good metaphor. Last question, and this I think -- and thanks to all the questions that we weren’t able to get to. I apologize. Just concession to the shortness of life, I think. And I think it’s a good way to wrap up. “What is the standard if not rational basis? So if not rational basis, what is the standard? And, other than Justice Thomas, who’s on sale on the Privileges or Immunities Clause?” Who else has bought into the Privileges or Immunities Clause?

 

Andrew Ward:  So ultimately, this is a question for the Court, right? The Court, there are virtually no serious modern scholar left, right, or center. To quote Akhil Amar, I think slaughterhouse was correct. It’s up to the Court whether we’re going to stay in the current framework or leave it. I think the narrow historically correct answer—the one that we agree about—is there is a privilege or immunity to be able to enter a law firm market. That’s the narrow version.

 

I think an equally correct answer, although it’s broader than what the Court needs to say here, is that a law needs to be rational in the old-school meaning of that term. It needs to have a fair and substantial relation to its purpose. Whether as a version of the right protected as a privilege or immunity or whether that’s a question of substantive due process, that’s a question for the Court.

 

Certainly, to answer your second question, Adam, Justice Thomas has shown interest in that. Justice Gorsuch a little bit has acknowledged the possibility too in a case called Timbs v. Indiana, which was incorporation of the prohibition against excessive fines against the states.

 

Prof. David Upham:  I would just add I think that’s correct. In Bruen, however, Justice Thomas wrote the opinion. He did not explicitly revive the Privileges or Immunities Clause, but he had five other justices writing with him using language and terms that suggest he was talking about the Privileges or Immunities Clause after all. He kept on focusing on citizens. He cites the originalist, one of the key originalist bits of evidence, which is the interpretation of that by the Court in Dred Scott precluding the right to travel, the right to speak and bear arms, et cetera, were among the privileges of citizenship. So maybe that was just a deference to him, and they let him kind of write that opinion, and they wrote on it.

 

I’d say the best one that I might hope for would be they keep the rational basis test, but they say something about that the rational basis test, when it applies to things that exclude people who are otherwise admittedly qualified to provide the service in the market, is going to have a lot of teeth. That might be kind of a hybrid with maybe some sort of deference to quoting from Corfield. And they quote Corfield in Dobbs as well. So they’re not just letting Thomas do his thing. Others are joining him or even writing opinions that incorporate part of his concerns.

 

Andrew Ward:  And indeed, in Dobbs, that’s sort of a purely historical analysis under the Glucksberg standard, but there is that footnote that says that what does exactly the Fourteenth Amendment incorporate. It’s an open question, but it might have something to do with Corfield.

 

Prof. David Upham:  Yep.

 

Andrew Ward:  I hope they take it up.

 

Prof. David Upham:  Yeah, likewise.

 

Adam Griffin:  Well, thank you both so much. Really appreciate you both lending your expertise and your experience on this case and with the history and original meaning of the Fourteenth Amendment. I really appreciated the conversation. I hope our audience did as well. Jack, I’ll turn it back over to you at FedSoc, and thank you to FedSoc for hosting this event.

 

Andrew Ward:  Thanks, Adam.

 

Jack Capizzi:  Absolutely. Well, certainly on behalf of The Federalist Society, I want to thank Adam for moderating and Andrew and Professor Upham for their valuable time today and, of course, to our excellent audience for all of their questions. Listener feedback is welcomed at [email protected]. And, as always, keep an eye on your emails and our website for future webinars. Thank you all for joining us today. We are now adjourned.