Today, March 24, 2014, a 'friend of the court' brief (amicus curiae) was filed in a federal case to support two brothers interested in starting a ferry business in the State of Washington. As we wrote earlier this month, the libertarian advocacy law firm, Institute for Justice (IJ), is taking a business rights case to the U.S. Supreme Court on behalf of two brothers simply interested in starting a business, as the State of Washington has prevented them from doing so.
The amicus curiae was filed by historian James Ely and law professors Randy Barnett, Richard Epstein, Ilya Somin, Christopher Green and Josh Blackman. The brief is in support of IJ's appeal to the U.S. Supreme Court to break a State of Washington monopoly on the ferry business, which is seen by many as protectionism for the only ferry operator of Lake Chelan, rather than opening up for competition.
For nearly two decades, brothers Jim and Cliff Courtney have tried to offer a convenient alternative to the current ferry monopoly on Washington’s 55-mile-long Lake Chelan. Their efforts, however, have been thwarted by Washington’s requirement of a “certificate of public convenience and necessity” to provide ferry service on the lake. The state will only issue a certificate if the lake’s current ferry operator—that is, the monopoly holder—consents or the applicant can prove to the government, in a costly legal proceeding, that the public convenience and necessity require another ferry. The existing ferry operator gets to participate in that proceeding and effectively veto new entry into the market.
Not surprisingly, since the public convenience and necessity requirement was imposed, the state has granted one—and only one—certificate for ferry service on Lake Chelan. The same ferry operator has held it since 1929.
The friend of the court brief filed today undertakes a thorough review of the history of the Privileges or Immunities Clause and convincingly demonstrates the errors of the 9th Circuit’s take on that history and the clause’s purpose.
“The 9th Circuit’s removal of economic activity from the scope of the clause cannot be reconciled with history demonstrating that economic freedom lay at the provision’s core,” the brief argues. “Slaughter-House never suggested that economic activity was excluded from the scope of the national privileges or immunities” recognized in that case, and the history of the clause “flatly contradicts the 9th Circuit’s refusal to apply the right to ‘use’ navigable federal waters to [the Courtneys’] intended use of the waters for economic activity. The framers of the Privileges or Immunities Clause did not act to secure the right to ‘use’ the navigable waters only for yacht racing, sport fishing, or pleasure cruises.”
Jim and Cliff filed a federal constitutional challenge to the certificate requirement in October 2011. The requirement and resulting monopoly, they argue, violate the Privileges or Immunities Clause of the 14th Amendment. That clause was adopted in the wake of the Civil War to protect the newly freed slaves, whose economic rights were still being routinely violated by Southern states. In the notorious Slaughter-House Cases, decided in 1873, the Supreme Court held that although the clause does not protect a general, open-ended right to economic liberty, it does protect certain rights of national citizenship. The court identified some of those rights, many of which have an economic component. They include the “right to use the navigable waters of the United States”—the very right the Courtneys wish to exercise.
Unfortunately, the district court dismissed the Courtneys’ lawsuit in April 2012, and the 9th Circuit affirmed that decision in December 2013. According to the 9th Circuit’s misguided opinion, the rights that the Privileges or Immunities Clause protects are, with one limited exception, necessarily non-economic in nature and, therefore, the right to use the navigable waters of the United States is merely a right to navigate such waters—not to use them in economic activity. The 9th Circuit’s decision effectively guts the clause of any meaningful protection.