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A Colorado Bill Uses “Levels of Scrutiny” to Protect Competition

A Colorado Bill Uses “Levels of Scrutiny” to Protect Competition

A proposed bill in the Colorado legislature would cut state regulations that unfairly block people from earning an honest living.

Senate Bill 18-193, the “Colorado Right to Earn a Living Act,” is sponsored by Sen. Don Coram, along with nearly half his Senate colleagues. Instead of adopting a counterproductive “meat axe” approach, the bill uses a method both more creative and potentially more effective: It enlists a method of judging the courts commonly apply in constitutional cases.

When deciding whether laws and administrative regulations are constitutional, judges apply different standards to different kinds of measures. Some measures are viewed more skeptically, some more leniently.

The courts call their varying review standards the levels of scrutiny — strict scrutiny, intermediate scrutiny, and the rational basis test.

A level of scrutiny test has two parts: The court examines (1) the goal of the law being reviewed (“the end”) and (2) the method the law uses to achieve the end (“the means”).

Usually both ends and means fall under the same category — strict, intermediate, or rational basis. Suppose, for example, a state passed a law restricting advertisements that promote Venezuelan socialism. In reviewing the measure’s constitutionality, a judge would ask whether it is “necessary” or “narrowly tailored” to serve a “compelling governmental purpose.” The “necessary” and “narrowly tailored” language addresses the means, and the governmental purpose part addresses the end. Both of these are strict scrutiny standards.

In reviewing some other kinds of measures, the courts mix and match. Consider a law or regulation restricting advertisements for a new, life-saving medication. In that case the judge will apply strict scrutiny as to means (“necessary” or “narrowly tailored”), but only intermediate scrutiny as to the end. The judge will uphold the measure if it serves merely a “substantial” goal rather than requiring a “compelling” one.

As you might suspect, the Constitution does not really authorize the courts to discriminate among constitutional rights in that way. As I explain in my book, The Original Constitution, the founders intended for judges to review laws for constitutionality, but they envisioned very different methods.

In fact, the levels of scrutiny were not even created until the mid-20th century. Because most of the Supreme Court’s justices at that time were relatively liberal, they developed the standards in ways favoring “blue state” over “red state” values. The two examples above illustrate the point: Under the court’s modern jurisprudence, advocacy of a thoroughly discredited political ideology receives more constitutional protection than commercial information about a thoroughly proven lifesaving drug. Nothing in the First Amendment’s Free Speech Clause justifies that kind of discrimination.

Indeed, judicial protection from most economic regulations — even grossly unfair and anti-competitive ones — is so weak as to be nearly non-existent. Courts typically uphold an economic regulation that is “rationally related” to a “legitimate governmental purpose” (unless it is a regulation of abortion; then the standard is much more strict). The stated purpose for the regulation doesn’t even have to be the real one. Regulations purportedly adopted for health reasons sometimes are really designed to protect the politically-powerful from outside competition.

Senate Bill 18-193 would require rules that limit occupational entry to meet a higher level of scrutiny. It would mandate that each regulation be “demonstrably necessary and narrowly tailored to achieve a specific legitimate health, safety, or welfare objective.”

This standard is a mixed one. The “end” part (“specific legitimate … objective”) requires the stated goal to be the real goal. The “means” part is classic strict scrutiny. It would trim down regulations going beyond what is needed to address the goal.

For example, a licensing agency could ensure a prospective restaurant cook understands food preparation health standards. The agency could, therefore, test a candidate to ensure that she is familiar with those standards. But it could not require her to spend three years attending a particular school before she could flip her first burger. That kind of regulation needlessly bars the door to good people.

In applying the new methods of scrutiny, an agency may unduly favor its own measures. So Senate Bill 18-193 permits citizens to trigger review by a court, and the judge must apply the new, higher standard.

Read the whole article originally published in The Hill on March 21, 2018.

Rob Natelson