Constitution Daily

Smart conversation from the National Constitution Center

Constitution Check: Has the time come to expand commercial rights?

January 3, 2012 by Lyle Denniston


In a continuing series of posts, Lyle Denniston provides responses based on the Constitution and its history to public statements about the meaning of the Constitution and what duties it imposes or rights it protects. Today’s topic: the lesser degree of constitutional protection given to commercial activity.

The statement at issue:

“There is a principle much favored by all of America’s governments: It may parcel out certain economic liberties sparingly and only to those who can prove to government that the exercise of their liberty will satisfy some government-concocted criteria. That principle lacks constitutional warrant and repudiates the nation’s foundational philosophy…In 1938, the [Supreme] Court bowed to the progressive desire to empower government to allocate wealth and opportunity…The Court decided…that economic liberty should be assigned a status markedly inferior to that of ‘fundamental’ liberties.”
--Syndicated columnist George F. Will, in “Taking liberties with liberty,” published December 18 in the Washington Post, discussing a case in federal court in Washington State, Courtney v. Goltz, in which two small businessmen are seeking to break a company’s monopoly over providing ferry service on Lake Chelan in the Cascade Mountains.

We checked the Constitution, and…

Columnist Will was attacking one of the most durable ideas in constitutional history: that the Nation’s basic charter treats economic rights and opportunity less favorably than it does individual civil rights. His remarks fit well into a new wave of criticism of that doctrine, criticism that is part of the new anti-government sentiment often associated with the “Tea Party” movement. There may be almost no chance, however, that the Supreme Court would repudiate that doctrine any time soon.

Will, of course, was attacking the Court’s 1938 ruling in the case of U.S. v. Carolene Products, in which a majority of the Court upheld a federal law that barred the shipment in interstate commerce of “filled milk” – that is, skim milk with ingredients added to make it appear, misleadingly, more like whole milk. The particulars of that law are no longer of wide interest, but the ruling has a lasting feature – a footnote. Footnote 4 is widely considered to be the most consequential footnote ever dropped into a Supreme Court opinion.

The footnote played a key role in the overall objective of the Carolene Products opinion, which was to establish clearly the notion that laws regulating “ordinary commercial transactions” would survive constitutional challenge far more easily than other forms of legislation, especially laws that would restrict individual rights. A hierarchy of constitutional tests, used ever since, made clear that the easiest test to satisfy was the “rational basis test.”

Here is the way the opinion spelled out that low-level test: “Regulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional unless, in the light of the facts made known or generally assumed, it is of such a character as to preclude the assumption that it rests upon some rational basis within the knowledge and experience of the legislators.”

In short, unless a commercial law was wholly irrational, with no imaginable justification, it was “presumed” to be constitutional.

After reciting that test, the Court inserted Footnote 4. The full text of the note is too lengthy for this space, and it uses somewhat stilted language and is sprinkled with legal citations that slow down its reading. Its essence, though, is that the Court thereafter would not give a “presumption of constitutionality” to laws that would intrude upon such rights as the right to vote, freedoms of the press and political assembly, political and religious freedoms, or the rights of national or racial minorities. It said that “discrete and insular minorities” may need special protection, because of their lack of political power to influence government.

As columnist Will protested, economic liberties were left out of the preferred list.

It is fair to assume that no member of the current Court would publicly advocate abandonment of the preferred status of individual rights or the lesser protection of economic liberties; the Court regularly applies only a rationality test to economic legislation. And, of course, even if a lower court were tempted to back away from that hierarchy, it has no authority to do so as long as Footnote 4 has validity in the highest court.

Perhaps it is not surprising, then, that the lawyers pressing the case over ferry service in Lake Chelan have made no mention – at least so far – of a desire to overrule the Carolene Products decision. They are relying instead mainly upon claims that navigable waters, under the Constitution, should be open to competitive enterprise. And the state is replying that no one has a constitutional right to operate a ferry, competitively or otherwise.

Lyle Denniston is the National Constitution Center’s Adviser on Constitutional Literacy. He has reported on the Supreme Court for 53 years, currently covering it for SCOTUSblog, an online clearing house of information about the Supreme Court’s work.

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