Introduction

An observer from the industrial revolution, or even one from a few decades ago, would find today’s economy unrecognizable. Over the last century and a half, the economy has become increasingly decentralized, and workers have become much more mobile due to enormous technological innovations.¹See Liya Palagashvili, Flexible Benefits for a Flexible Workforce: Unleashing Portable Benefits Solutions for Independent Workers and the Gig Economy, Mercatus Ctr. Policy Briefs 1 (Feb. 2023), https://perma.cc/8Z9W-7FGW. In response to these changes, many states have imposed oppressive occupational licensing regimes that stifle growth. In turn, courts have given these regulations and the enacting legislatures far too much deference.²See The National Occupational Licensing Database, Nat’l Conf. of State Legislatures (Aug. 12, 2022), https://perma.cc/3RFS-DQEK; see also Morris M. Kleiner & Evgeny S. Vorotnikov, At What Cost? State and National Estimates of the Economic Costs of Occupational Licensing 5 (2018); see also Alexandra L. Klein, The Freedom to Pursue a Common Calling: Applying Intermediate Scrutiny to Occupational Licensing Statutes, 73 Wash. & Lee L. Rev. 411, 447 (2016). This combination locks out many prospective small business owners from achieving the American Dream.

As just one example, Ndioba Niang and Tameka Stigers owned African-style hair braiding businesses in Saint Louis, Missouri.³Niang v. Carroll, No. 4:14 CV 1100, 2016 WL 5076170, at *2 (E.D. Mo. Sept. 20, 2016), aff’d, 879 F.3d 870 (8th Cir. 2018), vacated as moot sub nom. Niang v. Tomblinson, 139 S. Ct. 319 (2018). The businesses did not engage in any hair cutting or coloring and did not use any chemicals on hair.⁴Id. at *3. Even so, the state of Missouri sought to force Niang and Stigers, as well as other practitioners of African-style hair braiding, to obtain a cosmetology license.⁵Id. at *1. But many of the license requirements bestowed no benefits upon Niang, Stigers, or customers. The state-mandated curriculum was largely irrelevant to their practice.⁶Id. Unable to endure the hundreds of hours and thousands of dollars required to obtain the cosmetology license, Niang and Stigers sued the Missouri Board of Cosmetology and Barber Examiners (“Board”), alleging that the state’s overly broad cosmetology licensing requirements violated their rights to substantive due process and equal protection.⁷Id. at *1, *4. Finding that Niang and Stigers could not discredit every conceivable basis that could support the Board’s regulation, the District Court for the Eastern District of Missouri found for the Board.⁸Id. at *19. The Court of Appeals for the Eighth Circuit affirmed.⁹Niang v. Carroll, 879 F.3d 870, 875 (8th Cir. 2018). Fortunately, Missouri later realized the error in its overbroad licensing regime, and instituted a new standalone license for African-style hair braiding.¹⁰      H.B. 1500, 99th Gen. Assemb., 2d Reg. Sess. (Mo. 2018). Still, the case illustrates both the breadth of occupational licensure in the United States today and the harm that irrational licensing regimes can cause.

Not all state-licensing regimes are unreasonable. No one would seriously suggest, for example, that requiring doctors, lawyers, or pilots to pass a licensing exam before beginning professional practice is overly burdensome.¹¹Dep’t of the Treasury Off. of Econ. Pol’y, Council of Econ. Advisers & Dep’t of Lab., Occupational Licensing: A Framework for Policymakers 6 (2015) [hereinafter Occupational Licensing]. These exams are nothing new.¹²See id. at 3. And there is little debate that these requirements further the health, safety, and welfare of those who require these professional services. Thus, state and local governments promulgate these rules through the state’s police power.¹³See Jacobson v. Massachusetts, 197 U.S. 11, 24–25 (1905) (discussing the nature and origin of the state’s police power). But many newer occupational licensing regimes—such as those for florists, taxidermists, hair braiders, and fortune tellers—have a far more tenuous connection to the public’s health, safety, and welfare.¹⁴See Paul J. Larkin, Jr., Public Choice Theory and Occupational Licensing, 39 Harv. J.L. & Pub. Pol’y 209, 216–18 (2016) (describing the myriad occupations to which licensing has spread).

And these regimes’ time and fee requirements prove particularly onerous. Generally, an applicant often must (1) pass one or more tests, (2) log a certain number of on-the-job and classroom training hours, and (3) pay a licensing fee or fees.¹⁵See Dick M. Carpenter II, Lisa Knepper, Kyle Sweetland & Jennifer McDonald, License to Work: A National Study of Burdens from Occupational Licensing 6, 52–55 (2d ed. 2017) (describing certain representative state licensing requirements and the number of required hours for different occupations). For some occupations, the state requires hundreds of training hours.¹⁶See id. Associated costs may range from the thousands to tens of thousands of dollars.¹⁷See id. at 16–19 (cataloguing direct costs of various occupations requiring licensure); see also Brief of Appellants at 10, Niang v. Carroll, 879 F.3d 870 (8th Cir. 2018) (No. 16-3968) (documenting the Missouri requirement of 1,500 training hours and average cost of related instruction of $11,750, with some exceeding $21,000). These hurdles reduce competition, raise costs to consumers, and provide dubious benefits to consumer protection.¹⁸See Larkin, Jr., supra note 14, at 216–18 (2016) (describing the occupations to which licensing has spread); Kyle Sweetland & Dick M. Carpenter II, Raising Barriers, Not Quality: Occupational Licensing Fails to Improve Services 10–11 (2d ed. 2022) (comparing consumer ratings for occupations between licensed and non-licensed jurisdictions); Patrick A. McLaughlin, Matthew D. Mitchell & Anne Philpot, The Effects of Occupational Licensure on Competition, Consumers, and the Workforce 4–5 (2017) (describing the lack of evidence to suggest a positive effect on quality from occupational licensing); Carolyn Cox & Susan Foster, Fed. Trade Comm’n Bureau of Econ., The Costs and Benefits of Occupational Regulation 32–34 (1990) (summarizing regulation-driven consumer cost increases in select industries). Despite the apparent drawbacks, occupational licensing is five times more common now than just seventy years ago—nearly one in four employed workers today requires a license from the government to practice his or her trade, up from roughly one in twenty in the 1950s.¹⁹See Nat’l Conf. of State Legislatures, The State of Occupational Licensing: Research, State Policies and Trends 2–3 (2017).

Even if an individual believes that an occupational licensing regulation is too burdensome, vague, or otherwise invalid, it is extremely difficult to prevail in court.²⁰See Klein, supra note 2, at 425–27 (discussing the uphill battle plaintiffs face when challenging licensing regulations). When individuals like Ndioba Niang challenge such draconian regulations, they are most often met with a quick dismissal because under the rational basis test, the state always wins.²¹See Powers v. Harris, 379 F.3d 1208, 1216–18 (10th Cir. 2004) (applying rational basis review to Oklahoma funeral industry licensing regulations); see also Sensational Smiles, LLC v. Mullen, 793 F.3d 281, 286 (2d Cir. 2015) (applying rational basis review to Connecticut dentistry licensing regulations); see also Thomas B. Nachbar, The Rationality of Rational Basis Review, 102 Va. L. Rev. 1627, 1629 (2016) (“Rational basis review is the poor stepchild of judicial review.”). Under rational basis review, courts defer to the legislature, and a plaintiff may prevail only if no conceivable relationship between a regulation and a state interest exists.²²See Gen. Motors Corp. v. Romein, 112 S. Ct. 1105, 1112 (1992). This is an extremely high bar, made even higher because some courts commonly accept dubious state interests as valid.²³See Meadows v. Odom, 360 F. Supp. 2d 811, 823–24 (M.D. La. 2005) (accepting licensing requirements for florists as rationally related to public safety), vacated as moot, 198 F. App’x. 348 (5th Cir. 2006); Powers, 379 F.3d at 1216–18 (accepting intrastate economic protectionism as a legitimate state interest).

But not all courts apply this overly deferential framework. Indeed, some have applied second-order rational basis review, under which a court may analyze a law’s actual purpose, not merely any conceivable justification.²⁴See St. Joseph Abbey v. Castille, 712 F.3d 215, 227 (5th Cir. 2013); Craigmiles v. Giles, 312 F.3d 220, 226–29 (6th Cir. 2002); Austin Raynor, Note, Economic Liberty and the Second-Order Rational Basis Test, 99 Va. L. Rev. 1065, 1081 (2013); see also Bertrall L. Ross II, The State as Witness: Windsor, Shelby County, and Judicial Distrust of the Legislative Record, 89 N.Y.U. L. Rev. 2027, 2030–31 (2014). Importantly, courts may look to the regulation’s legislative history in assessing its connection with the public’s health, safety, and welfare.²⁵Craigmiles, 312 F.3d at 222, 226–29. This Comment argues that the second-order rational basis test provides the most appropriate framework to evaluate occupational licensing regimes. This framework is especially appropriate considering the proliferation of over-inclusive occupational licensing requirements over the last sixty years to include jobs as innocuous as hair braiders and interior designers. Combined with the second-order rational basis test, courts should further adopt a categorical rule that naked economic protectionism—regulating for no other purpose than protecting the entrenched industry from new entrants—is not a valid government goal.

Part I provides an overview of the explosion in occupational licensing requirements since World War II and describes the traditional (and nontraditional) standards of review that courts use to assess such requirements. Part II argues that the second-order rational basis test is the proper standard of review for such challenges and that naked intrastate economic protectionism should be a per se invalid governmental purpose.

Because state legislatures enact occupational licensing laws, one potential solution requires all state and local governments to repeal overly burdensome regimes and refrain from implementing more in the future. Some states have already done so, and the federal government has nodded in approval.²⁶Some states have begun to enter compacts honoring other states’ licenses for certain occupations. See S.B. 3093, 101st Gen. Assemb., Reg. Sess. (Ill. 2020) (entering an interstate nurse licensure compact); S. Enrolled Act 61, 121st Gen. Assemb., 2d Reg. Sess. (Ind. 2020) (entering an interstate emergency medical services personnel compact). Some states have enacted narrow laws honoring out-of-state licenses for military service members and their dependents. See Mich. Comp. Laws Ann. § 339.213 (West 2021) (granting temporary licenses and an expedited full licensing process for servicemembers and dependents). Other states have unilaterally acted to accept out-of-state licenses in good standing. See Miss. Code Ann. § 73-50-2 (2021) (providing for universal recognition of out-of-state occupational licenses); Kan. Stat. Ann. § 48-3406 (West 2023) (temporarily honoring out-of-state licenses and establishing an expedited licensing process). But, this reformative avenue falls outside the scope of this Comment, which is restricted to judicial review of state and local occupational licensing laws.

I.      Judicial Review of Economic Regulations and the Rise of Ubiquitous Occupational Licensure

While a government-issued license to do one’s job was not invented in the twentieth century, the practice exploded after World War II. And courts have endorsed this boom.²⁷See Occupational Licensing, supra note 11, at 31, 52. Except for the first few decades of the twentieth century,²⁸This era of enhanced scrutiny for economic regulations is most often called the “Lochner Era.” See, e.g., Cass R. Sunstein, Lochner’s Legacy, 87 Colum. L. Rev. 873, 880 (1987). courts generally evaluated economic regulations under the rational basis test, which gives great deference to state and local legislatures.²⁹See, e.g., Powers v. Harris, 379 F.3d 1208, 1223 (10th Cir. 2004) (applying the rational basis test to the Oklahoma funeral industry); Klein, supra note 2, at 424; Jack Brown, A Blind Eye: How the Rational Basis Test Incentivizes Regulatory Capture in Occupational Licensing, 17 J.L. Econ. & Pol’y 135, 145–48 (2022).

Rational basis review is the least strict of the three traditional standards of review, with intermediate scrutiny and strict scrutiny giving legislatures less deference.³⁰See Heller v. District of Columbia, 670 F.3d 1244, 1256–57 (D.C. Cir. 2011) (describing the three traditional tiers of judicial scrutiny). In practice, however, courts apply more nuanced forms of the three basic tests.³¹R. Randall Kelso, Standards of Review Under the Equal Protection Clause and Related Constitutional Doctrines Protecting Individual Rights: The “Base Plus Six” Model and Modern Supreme Court Practice, 4 U. Pa. J. Const. L. 225, 230 (2002); see Will Clark, Comment, Intermediate Scrutiny as a Solution to Economic Protectionism in Occupational Licensing, 60 St. Louis U. L.J. 345, 350–51 (2016). The lesser-known, unspoken standards of review provide an avenue for more variations on the traditional three-tiered structure of judicial scrutiny.³²See Kelso, supra note 31, at 230. This Comment argues that courts can properly use one of these implicit standards, known as the second-order rational basis test, when analyzing occupational licensing laws. This test would not be a return to the oft-criticized Lochner Era, but rather would fit soundly within Supreme Court precedent and, as already done by several federal courts, reject occupational licensing laws based solely on political favoritism.

A.      The History of Judicial Scrutiny of Occupational Licensing Laws and Similar Economic Regulations

In the 1950s, less than five percent of American jobs required state licensure.³³Morris M. Kleiner & Alan B. Krueger, Analyzing the Extent and Influence of Occupational Licensing on the Labor Market, 31 J. Lab. Econ. S173, S175 (2013) (detailing the history of occupational licensing in America). In 2022, roughly seventy years later, twenty-two percent of all American jobs were subject to federal, state, or local licensure requirements.³⁴U.S. Bureau of Lab. Stats., U.S. Dep’t of Lab., Labor Force Statistics from the Current Population Survey: 2022 Household Data Annual Averages, tbl.53 (2022) (In 2022, the percentage of employed workers holding an occupational license was 21.7%). Proponents of such laws often tout consumer protection benefits that result from ensuring individuals and businesses are competent to practice their trades before entering the market.³⁵See Jeffrey P. Gray, In Defense of Occupational Licensing: A Legal Practitioner’s Perspective, 43 Campbell L. Rev. 423, 447–50 (2021) (discussing safety and economic benefits of occupational licensing). The claimed result: consumer safety and trust.³⁶See Nick Robinson, The Multiple Justifications of Occupational Licensing, 93 Wash. L. Rev. 1903, 1935–36 (2018) (examining the safety and consumer trust benefits of occupational licensing).

Even staunch opponents of occupational licensing are willing to concede that some professions need state licensing to protect the public.³⁷See Clark, supra note 31, at 358–59; Klein, supra note 2, at 427–28. But they assert that overly broad occupational licensing serves as nothing more than a barrier to entry that raises costs to consumers with negligible effects on quality.³⁸Tzirel Klein, Note, Occupational Licensing: The Path to Reform Through Federal Courts and State Legislatures, 59 Harv. J. Legis. 427, 434–35 (2022) (discussing the additional costs to consumers attributable to occupational licensing); see Kleiner & Vorotnikov, supra note 2, at 8–13, 19–20 (discussing job losses and lost output attributable to occupational licensing). Some critics go so far as to state that the motivation for passing occupational licensing laws comes down to political cronyism and a desire to avoid competition.³⁹See Larkin, Jr., supra note 14, at 243–44 (discussing the campaign tactics of local industries seeking to become licensed); see also Morris M. Kleiner, Licensing Occupations: Ensuring Quality or Restricting Competition? 31–35 (2006) (detailing legislative successes and failures of industries seeking to become licensed). Whether one believes in the merits of occupational licensing generally, such laws have become so widespread that both the Obama and Trump administrations sought to address what they saw as overregulation in licensing.⁴⁰See Occupational Licensing, supra note 11, at 42–43; Exec. Order No. 13,966, 3 C.F.R. § 493 (2020).

Occupational licensing regulations, and indeed economic regulations generally, have not always received rational basis review.⁴¹See Brown, supra note 29, at 160–62. At the end of the nineteenth century, and for much of the first half of the twentieth century, the Supreme Court struck down economic regulations because they violated the Court’s interpretation of the Due Process Clause.⁴²See David E. Bernstein, Lochner Era Revisionism, Revised: Lochner and the Origins of Fundamental Rights Constitutionalism, 92 Geo. L.J. 1, 46–51 (2003) (discussing the myriad decisions striking down economic regulations during the early twentieth century). Indeed, the most illustrious case is Lochner v. New York,⁴³198 U.S. 45 (1905). which concerned a state law seeking to remedy poor working conditions in the baking industry.⁴⁴Id. at 52–53. The Court struck down the relevant state law capping the maximum hours an employee could work because it violated the “right of contract between the employer and employees.”⁴⁵Id. at 53. Finding that the right to contract in relation to one’s business is protected by the Fourteenth Amendment, the Court held the law unconstitutionally deprived employers and employees of that right without due process.⁴⁶Id. This decision lent its name to one of the Court’s most activist eras, in which it struck down hundreds of state laws.⁴⁷See Jessica E. Hacker, Comment, The Return to Lochnerism? The Revival of Economic Liberties from David to Goliath, 52 DePaul L. Rev. 675, 685–86 (2002) (discussing the impact of the Lochner Era on challenges to state laws).

In the Lochner Era heyday, the Court struck down a variety of laws, such as a minimum wage for women and children,⁴⁸Adkins v. Child.’s Hosp. of D.C., 261 U.S. 525, 561 (1923). state and federal bans on firing employees for participating in a labor union,⁴⁹Adair v. United States, 208 U.S. 161, 190 (1908); Coppage v. Kansas, 236 U.S. 1, 26 (1915). and a ban on the regulation of materials used to manufacture bedding.⁵⁰Weaver v. Palmer Bros., 270 U.S. 402, 415 (1926). While some view this era as one of judicial activism,⁵¹See, e.g., David E. Bernstein, Rehabilitating Lochner: Defending Individual Rights against Progressive Reform 2 (2011) (discussing how “Progressive Era legal reformers” viewed the Lochner Era as “a product of unrestrained judicial activism”). it does not deserve the vitriol it receives. The Court did not strike down every economic regulation brought before it, as it upheld licensing requirements for dentists⁵²Graves v. Minnesota, 272 U.S. 425, 429 (1926). and doctors,⁵³Dent v. West Virginia, 129 U.S. 114, 128 (1889); Reetz v. Michigan, 188 U.S. 505, 510 (1903). among others. The Lochner Era’s death came in a series of cases in the middle of the New Deal Era.⁵⁴See Hacker, supra note 47, at 686–88; Nebbia v. New York, 291 U.S. 502, 517 (1934); W. Coast Hotel Co. v. Parrish, 300 U.S. 379, 400 (1937); United States v. Carolene Prods. Co., 304 U.S. 144, 154 (1938). In these cases, the Court upheld regulations such as price floors and ceilings⁵⁵Nebbia, 291 U.S. at 530–33. and a minimum wage law⁵⁶W. Coast Hotel, 300 U.S. at 395–96.—laws that would have been struck down only a few years before.⁵⁷Compare Adkins v. Child.’s Hosp. of D.C., 261 U.S. 525, 561–62 (1923) (holding unconstitutional a minimum wage law), with W. Coast Hotel, 300 U.S. at 400 (upholding a state minimum wage law). Justice William Douglas summed up the so-called retreat from Lochner, writing, “[t]he day is gone when this Court uses the Due Process Clause of the Fourteenth Amendment to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought.”⁵⁸Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483, 488 (1955).

Many commentators criticize the Lochner Era, and the name Lochner has become mud to some in legal academia.⁵⁹See Brown, supra note 29, at 159–61 (discussing the wide array of Lochner critics); Larkin, Jr., supra note 14, at 250–52 (categorizing Lochner as “one of the Supreme Court’s most highly vilified decisions”). Though not without its advocates,⁶⁰See, e.g., Bernstein, supra note 51, at 6 (discussing unwarranted vitriol towards Lochner). Lochner and its eponymous era constituted judicial policymaking at a level unacceptable to most practitioners and academics.⁶¹See Larkin, Jr., supra note 14, at 250–52. Following the Court’s retreat from Lochner, economic regulations, such as occupational licensing laws, have typically been subject only to the rational basis test, giving federal, state, and local legislatures significant deference.⁶²See Jim Thompson, Comment, Powers v. Harris: How the Tenth Circuit Buried Economic Liberties, 82 Denv. U. L. Rev. 585, 587–88 (2005). The level of scrutiny that courts apply to laws, however, is not a binary choice between the rational basis test and the Lochner Era’s extremely strict analysis of economic regulations.

B.      The Second-Order Rational Basis Test

To satisfy the traditional rational basis test, an occupational licensing statute must merely be rationally related to the accomplishment of a legitimate state interest.⁶³City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432, 440 (1985). This is a low bar for an enacting legislature, especially when a plaintiff must not only argue against the state’s given arguments but also counter “every conceivable basis which might support [the law] . . . whether or not the basis has a foundation in the record.”⁶⁴Heller v. Doe ex rel. Doe, 509 U.S. 312, 320–21 (1993). Some commentators have criticized the rational basis test as too lenient and even violative of due process because it allows a presiding judge to look to facts outside the record to decide the case.⁶⁵See James M. McGoldrick, Jr., The Rational Basis Test and Why It Is So Irrational: An Eighty-Year Retrospective, 55 San Diego L. Rev. 751, 792–99 (2018) (discussing the unpredictability of when to apply the rational basis test); Andrew Ward, The Rational-Basis Test Violates Due Process, 8 N.Y.U. J.L. & Lib. 714, 715 (2014) (asserting that the rational basis test requires otherwise impermissible judicial bias). Regardless of its critics, courts still apply it regularly.⁶⁶See, e.g., Sanchez v. Off. of State Superintendent of Educ., 45 F.4th 388, 395 (D.C. Cir. 2022) (applying the rational basis test to a law setting the requirements for childcare workers).

The rational basis test represents the lowest end of the judicial scrutiny scale.⁶⁷See FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313–15 (1993). Next on the traditional scale of scrutiny is the slightly less lenient intermediate scrutiny, under which a statute must “promote[] a substantial government interest”⁶⁸Turner Broad. Sys., Inc. v. FCC, 520 U.S. 180, 213 (1997) (emphasis added). by means that are substantially related to that interest.⁶⁹See id. Intermediate scrutiny is traditionally applied when a court finds a law harms a protected class or quasi-suspect classification.⁷⁰See Klein, supra note 2, at 455–56. Finally, at the highest end of the traditional scale, strict scrutiny requires a law to further a compelling government interest through narrowly tailored means.⁷¹Johnson v. California, 543 U.S. 499, 505 (2005). Courts apply strict scrutiny when a law or regulation in question burdens fundamental constitutional rights.⁷²See id. at 509–10. Both intermediate and strict scrutiny give significantly less deference to legislatures than the rational basis test.

Within this seemingly rigid scale of judicial scrutiny, however, exist variants on the traditional standards of review.⁷³See Kelso, supra note 31, at 225–26. One of these so-called “implicit” standards of review is the second-order rational basis test (sometimes called the “rational basis with bite” test).⁷⁴See Erwin Chemerinsky, Constitutional Law: Principles and Policies 735–36 (6th ed. 2019) (stating that the Supreme Court may use a more rigorous rational basis test, “one with ‘bite’”); Robert C. Farrell, Legislative Purpose and Equal Protection’s Rationality Review, 37 Vill. L. Rev. 1, 65 (1992) (asserting that the Supreme Court uses multiple forms of the rational basis test); Kelso, supra note 31, at 230–33. Under the second-order rational basis test, a court gives less deference to the legislature and instead “balances for itself the relevant costs and benefits” of the law to determine whether the balance is rational and does not unduly burden an individual.⁷⁵R. Randall Kelso, Three Years Hence: An Update on Filling Gaps in the Supreme Court’s Approach to Constitutional Review of Legislation, 36 S. Tex. L. Rev. 1, 3–4 (1995). Under this test, a court may look for the actual rational government interest instead of the traditional idea of any conceivable rational government interest.⁷⁶See Sarah Finnane Hanafin, Comment, Legal Shelter: A Case for Homelessness as a Protected Status Under Hate Crime Law and Enhanced Equal Protection Scrutiny, 40 Stetson L. Rev. 435, 466 (2011) (assessing the more searching form of rational basis review used in City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432 (1985)).

Courts mainly use the second-order rational basis test in cases involving the Equal Protection Clause,⁷⁷See Romer v. Evans, 517 U.S. 620, 631–32 (1996) (rejecting the means Colorado used as overly broad to address a government interest); U.S. Dep’t of Agric. v. Moreno, 413 U.S. 528, 535–38 (1973) (investigating legislative history and asserting that a showing of intent to discriminate against a population reveals an illegitimate governmental interest). but they also apply it in due process cases,⁷⁸See U.S. Dep’t of Agric. v. Murry, 413 U.S. 508, 514 (1973) (rejecting as irrational the government’s methods in determining the indigency of a child); Jackson v. Indiana, 406 U.S. 715, 725, 738–39 (1972) (asserting that the facts in the record did not support Indiana’s stated interest); Robert C. Farrell, Successful Rational Basis Claims in the Supreme Court from the 1971 Term Through Romer v. Evans, 32 Ind. L. Rev. 357, 367 (1999) (discussing due process claims subjected to what may be called second-order rational basis test). as well as other areas of constitutional analysis.⁷⁹See generally Kelso, supra note 31, 231–33.

While never explicitly endorsing the second-order rational basis test, the Supreme Court has nevertheless used this heightened standard to strike down laws that would seemingly withstand the traditional rational basis test.⁸⁰See Lawrence v. Texas, 539 U.S. 558, 586 (2003) (Scalia, J., dissenting) (asserting that the majority subjected the law in question to heightened scrutiny under the guise of the rational basis test); Moreno, 413 U.S. at 534; Metro. Life Ins. v. Ward, 470 U.S. 869, 882–83 (1985). In using this more searching form of rational basis review, the Court has given less deference to legislatures and looked toward the actual motives behind a regulation, instead of any conceivable reason.⁸¹See Moreno, 413 U.S. at 534 (analyzing legislative history to show that the actual motive behind a law was to prevent “hippies” from receiving food stamps); Lawrence, 539 U.S. at 577–78 (asserting that personal moral disapproval of an act is not a legitimate government purpose). This increased willingness to examine a law’s actual purpose gives a court the ability to decide a case on its true merits instead of bending over backwards to find a reason, even if nonsensical, for a regulation to survive.

Some commentators, and judges, criticize the second-order rational basis test as an abuse of judicial power (potentially even as a slippery slope on the way back to Lochnerism)⁸²See Powers v. Harris, 379 F.3d 1208, 1223–25 (10th Cir. 2004) (asserting that judicial inquiry into actual motivations of a legislature is inappropriate). or as inappropriate because of its unpredictability.⁸³See Kelso, supra note 31, at 237–42 (pointing out potential problems of several implicit standards of review); Gayle Lynn Pettinga, Note, Rational Basis with Bite: Intermediate Scrutiny by Any Other Name, 62 Ind. L.J. 779, 800–02 (1987) (suggesting the second-order rational basis test is a step towards Lochnerism). These concerns are overblown, however, as the basis of the test is still mere rationality, not substantial or compelling interests, and the means need not be narrowly tailored. The real change is a judge ruling on the rationality of the law based on the evidence and the parties’ arguments, not on any conceivable basis, regardless of how remote or unrealistic.

C.      Is Intrastate Economic Protectionism a Legitimate Government Interest? The Circuits Are Split.

States may exercise broad discretion when legislating pursuant to their police power.⁸⁴See Penn. Coal Co. v. Mahon, 260 U.S. 393, 413 (1922). That power gives state and local governments authority to regulate for the “health, morals, or safety” of their constituency.⁸⁵See Goldblatt v. Town of Hempstead, 369 U.S. 590, 593 (1962) (quoting Mugler v. Kansas, 123 U.S. 623 at 668–69 (1887)). But this broad authority does not mean that state power is limitless.⁸⁶See Penn. Coal, 260 U.S. at 413. Generally, states must exercise their police power in accordance with due process and equal protection and may not enact laws arbitrarily.⁸⁷See Treigle v. Acme Homestead Ass’n, 297 U.S. 189, 198–99 (1936) (“[A] proper exercise of the police power . . . must not be arbitrary or oppressive.”); S. Burlington Cnty. NAACP v. Twp. of Mount Laurel, 336 A.2d 713, 725 (N.J. 1975) (“It is elementary theory that all police power enactments . . . must conform to the basic state constitutional requirements of substantive due process . . . .”). Most laws need not be the narrowest fit possible to achieve their goals, but the means used must relate to the state interest.⁸⁸See FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313–15 (1993). Because occupational licensing laws generally undergo the rational basis test, a key part of a judge’s decision is whether the state has a legitimate interest in requiring licensure for the industry in question.

Generally, a state may not discriminate against interstate commerce,⁸⁹See Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 37–38, 77–79, 83 (1824); Hughes v. Oklahoma, 441 U.S. 322, 336–37 (1979). but whether a state may enact laws aimed at the protection of certain groups engaged in intrastate commerce is up for debate.⁹⁰Compare Powers v. Harris, 379 F.3d 1208, 1221 (10th Cir. 2004) (“[I]ntrastate economic protectionism constitutes a legitimate state interest.”), with Craigmiles v. Giles, 312 F.3d 220, 224–25 (6th Cir. 2002) (“[P]rotecting a discrete interest group from economic competition is not a legitimate governmental purpose.”). Currently, a circuit split exists between the Courts of Appeals for the Tenth and Second Circuits and the Courts of Appeals for the Fifth, Sixth, and Ninth Circuits.⁹¹Compare Powers, 379 F.3d at 1223–25, and Sensational Smiles, LLC v. Mullen, 793 F.3d 281, 286–88 (2d Cir. 2015) (finding a rational basis to support legislation aimed at protecting certain interest groups from intrastate commerce), with Craigmiles, 312 F.3d at 222, 229, St. Joseph Abbey v. Castille, 712 F.3d 215, 223–27 (5th Cir. 2013), and Merrifield v. Lockyer, 547 F.3d 978, 991–92 (9th Cir. 2008) (finding measures favoring certain business groups over others cannot survive rational basis review).

In Powers v. Harris,⁹²379 F.3d 1208 (10th Cir. 2004). the Court of Appeals for the Tenth Circuit upheld an Oklahoma law requiring all persons who sell caskets or other “funeral merchandise” to be licensed as funeral directors and operate out of licensed funeral establishments.⁹³Id. at 1211–12. To become licensed, a potential seller is required to complete sixty credit hours of undergraduate study, perform a one-year apprenticeship, and pass a state exam.⁹⁴Id. at 1212.

Even though plaintiffs sold only caskets and offered no other funeral services, such as embalming or burial, Oklahoma sought to apply the law to them, and the court upheld the law using the rational basis test.⁹⁵Id. at 1213, 1214–15. The court went out of its way to emphasize that naked economic protectionism in and of itself is a legitimate state interest “absent a violation of a specific constitutional provision or other federal law.”⁹⁶Id. at 1221. The court explicitly sanctioned laws passed simply to protect a profession’s incumbent members from competition from new members.⁹⁷Id.

The court acknowledged the second-order rational basis test but refused to further search legislative motives or employ any higher standard for legitimate state interests.⁹⁸Powers, 379 F.3d at 1223–24. Indeed, the court emphasized that, even under that more rigorous standard, the regulation would prevail because the state’s goal of economic protectionism was valid.⁹⁹Id. at 1223–25.

Taking its lead from the Tenth Circuit, the Court of Appeals for the Second Circuit upheld a Connecticut law requiring all teeth-whitening services to be performed by licensed dentists.¹⁰⁰Sensational Smiles, LLC v. Mullen, 793 F.3d 281, 288 (2d Cir. 2015). In Sensational Smiles v. Mullen,¹⁰¹Id. at 281. plaintiffs offered only LED light tooth-whitening services, but they were not dentists.¹⁰²Id. at 283–84. Even though the law allowed customers to use the same technology on themselves, the court held that Connecticut “might have” had a reasonable basis for the law, therefore satisfying the rational basis test.¹⁰³Id. at 285. Further, the court sided with the Tenth Circuit and held that naked intrastate economic protectionism is a rational state interest.¹⁰⁴Id. at 286–88.

Using the rational basis test, these holdings permitted regulations with no purpose other than protecting a small, though influential, population of incumbent professionals from market competition in areas unconnected with the health or safety of the community.¹⁰⁵Id. at 287–88; Powers v. Harris, 379 F.3d 1208, 1224–25 (10th Cir. 2004); see Brown, supra note 29, at 153–55. Both courts expressed their concerns that establishing economic protectionism as an illegitimate government interest risked a return to the Lochner Era and judicial activism.¹⁰⁶See Powers, 379 F.3d at 1218–19; Sensational Smiles, 793 F.3d at 287.

On the other hand, in St. Joseph Abbey v. Castille,¹⁰⁷712 F.3d 215 (5th Cir. 2013). the Court of Appeals for the Fifth Circuit addressed the issue when presented with a challenge to Louisiana state laws that granted funeral homes the exclusive right to sell caskets.¹⁰⁸Id. at 217–20. The petitioners, a group of monks seeking to replace lost income following Hurricane Katrina, began to sell their caskets to the public at rates lower than those offered by the entrenched funeral home industry.¹⁰⁹Id. at 217. The monks did not engage in any funeral-related services outside of casket sales, and Louisiana did not regulate the construction or use of caskets, only the sale of caskets.¹¹⁰Id. at 217–18.

To obtain a state license, the monks would have needed to construct a building containing a parlor suitable for a minimum of thirty people, a display room for the caskets for sale, an arrangement room, and embalming facilities.¹¹¹Id. at 218. Additionally, the monks would have needed to employ a full-time, licensed funeral director, who must complete an apprenticeship and a certain number of college credit hours and pass the state’s rigorous test.¹¹²Id.

While Louisiana cited cases such as United States v. Carolene Products¹¹³304 U.S. 144 (1938). and Williamson v. Lee Optical Co.,¹¹⁴348 U.S. 483 (1955). representing “the zenith of . . . judicial deference to state economic regulation,”¹¹⁵St. Joseph Abbey, 712 F.3d at 221, 226. the court held that the economic protectionism’s wealth transfer from disfavored groups to favored groups is not a legitimate state interest, particularly when it is not related to advancing the public’s general welfare.¹¹⁶See id. at 221, 223–26 (“[N]aked economic preferences are impermissible to the extent that they harm consumers.”) (quoting Greater Houston Small Taxicab Co. Owners Ass’n v. City of Houston, 660 F.3d 235, 240 (5th Cir. 2011)). The court dismissed the state’s purported rationales (consumer protection, public health and safety, and economic protectionism) because no rational connection existed between the restrictions and the harm it sought to address.¹¹⁷Id. at 223–27. Importantly, the court stated that “[t]he great deference due state economic regulation does not demand judicial blindness to the history of a . . . rule or the context of its adoption nor does it require courts to accept nonsensical explanations for regulation.”¹¹⁸Id. at 226. As such, the court was willing to examine the regulation’s legislative history and found that the regulation lacked a basis apart from intrastate protectionism to the consumer’s detriment.¹¹⁹Id. at 226–27.

Similarly, in Craigmiles v. Giles,¹²⁰312 F.3d 220 (6th Cir. 2002). the Court of Appeals for the Sixth Circuit struck down a Tennessee law forbidding sales of caskets by anyone besides a licensed funeral director.¹²¹Id. at 229. To become licensed, anyone seeking to enter the casket sales industry must complete two years of study before passing an exam, costing prospective entrants thousands.¹²²Id. at 224–25.

Plaintiffs did not offer any funeral or mortuary services, such as embalming or arrangement of burials, instead offering only sales of funeral-related merchandise.¹²³Id. at 222–23 (noting that the plaintiff’s stores sold only “caskets, urns, gravemarkers, monuments, flower holders, and other merchandise items”). Finding no rational connection between this restriction and the state’s asserted goals of consumer protection and public health, the court examined the requirement’s legislative history.¹²⁴Id. at 226–29. The court held that the specific amendment that added casket sales to the list of licensed occupations had no basis other than economic protectionism.¹²⁵Id. at 222, 226–27. Holding that naked economic protectionism is not a legitimate state interest, the court held the regulation unconstitutional.¹²⁶Craigmiles, 312 F.3d at 222, 229.

Siding with the Fifth and Sixth Circuits, in Merrifield v. Lockyer¹²⁷547 F.3d 978 (9th Cir. 2008). the Court of Appeals for the Ninth Circuit found that applying California’s pesticide-based pest control licensing scheme to pest controllers using only non-pesticides could not survive the rational basis test.¹²⁸Id. at 991–92. The court found that no basis could conceivably exist for the law’s application other than economic favoritism and rejected it as an illegitimate state interest.¹²⁹Id.

These three circuits willingly looked past a state’s boilerplate statements of purpose and discovered the true purpose and effects of a law. They also held that such economic favoritism was not a legitimate state purpose because it is “not . . . in the service of a public good.”¹³⁰St. Joseph Abbey v. Castille, 712 F.3d 215, 226–27 (5th Cir. 2013). While the Supreme Court has yet to explicitly acknowledge the second-order rational basis test or decide whether naked economic protectionism is a legitimate state interest, at least three circuits have held sufficient reason exists to strike down such irrational regulations.

II.      Utilizing the Second-Order Rational Basis Test for Occupational Licensing Laws and Rejecting Naked Economic Protectionism

States and localities have broad authority under the police power, but courts should not read that power to permit such entities to enact irrational barriers to employment for the sole purpose of economic protectionism. The right to engage in one’s occupation has not been deemed a fundamental right, but the ability to pursue one’s profession is deeply rooted in the history and tradition of the United States.¹³¹See Schware v. Bd. of Bar Exam’rs of N.M., 353 U.S. 232, 238–39 (1957); Sup. Ct. of N.H. v. Piper, 470 U.S. 274, 280 n.9 (1985); Conn v Gabbert, 526 U.S. 286, 290 (1999); see also David E. Bernstein, The Due Process Right to Pursue a Lawful Occupation: A Brighter Future Ahead?, 126 Yale L.J. F. 287, 294–99 (2016). Enabling judges to look at the actual government interest and its burdens instead of imagining any conceivable interest strikes the desirable balance between judicial restraint and engagement. Combining the second-order rational basis test with a categorical rejection of naked economic protectionism as a legitimate government interest is both proper and desirable.

A.      The Second-Order Rational Basis Test Is Proper for Challenges to Occupational Licensing Laws

While not universally accepted (or even admitted to), courts routinely apply the second-order rational basis test to a variety of different issues, including due process claims.¹³²See U.S. Dep’t of Agric. v. Murry, 413 U.S. 508, 514 (1973) (rejecting as irrational the government’s methods in determining the indigency of a child); Farrell, supra note 78, at 367 (discussing due process claims subjected to what may be called second-order rational basis test). Implementing this test will allow judges to assess these laws with more impartiality and a more realistic view of government interests. The test also does not interfere with state and local legislatures’ autonomy because it does not impose a higher bar. Rather, it merely refuses to accept outlandish assertions based on theoretical governmental interests.¹³³See St. Joseph Abbey, 712 F.3d at 226–27 (refusing to accept “nonsensical explanations” for the regulation in question); Jackson v. Indiana, 406 U.S. 715, 725, 738–39 (1972) (asserting that the facts in the record did not support Indiana’s stated interest).

In United States Department of Agriculture v. Moreno,¹³⁴413 U.S. 528 (1973). the Supreme Court struck down part of the Food Stamp Act of 1964 because an amendment denying access to food stamps for a certain classification of households was “clearly irrelevant to the stated purposes of the Act.”¹³⁵Id. at 534. The law itself attempted to relieve low-income households’ food insecurity.¹³⁶Id. at 533. In 1971, however, Congress redefined the term “household” to include only groups of related individuals.¹³⁷Id. at 530.

While the government asserted that this change was rationally related to the interests of preventing fraud and conserving resources, the Court declined to take the government’s position at face value.¹³⁸Id. at 535–37. While still asserting that it was applying the rational basis test, the Court departed from the traditional test and looked for the actual motive behind the change rather than any imaginable motive.¹³⁹Id. at 534–35. The Court analyzed the amendment’s legislative history and found that the change was actually intended to ensure that “hippies” and “hippie communes” would not have access to food stamps.¹⁴⁰Moreno, 413 U.S. at 534. The Court emphasized that a “desire to harm a politically unpopular group cannot constitute a legitimate government interest.”¹⁴¹Id.

A decade after Moreno, the Supreme Court gave another indication that a heightened form of the rational basis test may be appropriate in certain circumstances. As the Court of Appeals for the Sixth Circuit pointed out, the Supreme Court has indicated that, even when applying the rational basis test, it may be “suspicious of a legislature’s circuitous path to legitimate ends when a direct path is available.”¹⁴²Craigmiles v. Giles, 312 F.3d 220, 227 (6th Cir. 2002). In City of Cleburne v. Cleburne Living Center,¹⁴³473 U.S. 432 (1985). the Court invalidated a local zoning law that required “a special use permit for the operation of a group home for the mentally [disabled] . . . .”¹⁴⁴Cleburne, 473 U.S. at 435, 450. The city denied the plaintiff’s permit.¹⁴⁵Id. at 437. The city asserted that the legitimate state goal was preventing overcrowding and congestion, but the Court was willing to look past the stated reason to the actual reason for the denial.¹⁴⁶Id. at 448–50. Finding that the actual reason arose from the “negative attitude” and “fears” toward such group homes, the Court found that requiring such a permit for group homes, while not requiring one for apartments, fraternity houses, or dormitories, violated the Equal Protection Clause.¹⁴⁷Id.

After another decade, in Romer v. Evans,¹⁴⁸517 U.S. 620 (1996). the Supreme Court followed Moreno’s reasoning and invalidated an amendment to the Colorado Constitution that prohibited local anti-discrimination laws and policies protecting “[h]omosexual, [l]esbian, or [b]isexual [o]rientation.”¹⁴⁹Id. at 624, 635–36. Once again, the Court refused to accept the state’s offered rationales for the amendment, including religious freedom and conservation of resources, and looked for the law’s actual reason.¹⁵⁰Id. at 635. The Court acted on the “inevitable inference that the disadvantage imposed is born of animosity toward the class of persons affected.”¹⁵¹Id. at 634.

Citing Moreno, the Court willingly looked past the state’s reasoning, while maintaining that it was still using the rational basis test, because of this animosity.¹⁵²Id. at 634–35. The Court’s willingness to act on an “inference” places Romer outside the traditional rational basis test and within the higher scrutiny of the second-order rational basis test.¹⁵³See id. at 639–40 (Scalia, J., dissenting).

The Court’s holdings in Moreno, Cleburne, and Romer show that when a legislature likely bases its regulation on animosity toward a “politically unpopular group,”¹⁵⁴U.S. Dep’t of Agric. v. Moreno, 413 U.S. 528, 534 (1973). the Court will look past pretextual rationales that might otherwise satisfy the traditional rational basis test. Some assert that the traditional, hyper-deferential rational basis test is the only rational basis test.¹⁵⁵See Powers v. Harris, 379 F.3d 1208, 1223–24 (10th Cir. 2004); Sensational Smiles, LLC v. Mullen, 793 F.3d 281, 286 (2d Cir. 2015). These cases show, however, that the Supreme Court is willing to look for the actual motive for some regulations and not simply any imaginable motive.

As in Moreno, Cleburne, and Romer, many occupational licensing regulations are established to harm a politically unpopular group—those not (yet) welcomed into the licensed industry. The explosion of occupational licensing over the last fifty years has not been a result of consumers seeking protection but rather has “emerge[d] from occupational associations . . . when they have the political clout and the organizational skills to lobby a state legislature.”¹⁵⁶Kleiner, supra note 39, at 147–48. Once an industry successfully imposes a licensing requirement, the board overseeing the occupation is almost invariably dominated by those already licensed by the board itself.¹⁵⁷See Rebecca Haw Allensworth, Foxes at the Henhouse: Occupational Licensing Boards Up Close, 105 Calif. L. Rev. 1567, 1573–75 (2017) (detailing survey results finding that eighty-five percent of occupational licensing boards are dominated by license holders). This gatekeeping power gives licensing boards a significant incentive to insulate themselves from competition. To accomplish this goal, licensing boards often erect barriers to entry for the profession. This sort of widespread regulatory capture leads to absurdity. For instance, until recently, aspiring florists in Louisiana were required to take a practical exam subjectively graded by already-licensed florists who had a significant incentive to limit competition by failing applicants.¹⁵⁸Brown, supra note 29, at 141–42. Predictably, the exam’s fail rate exceeded fifty percent.¹⁵⁹Id. This is one of numerous examples of an occupational licensing board erecting protectionist barriers to entry solely to limit competition.¹⁶⁰See Carpenter et al., supra note 15, at 16–19 (detailing the financial cost and number of days lost to licensing burdens).

Such irrational barriers represent a politically powerful group (the entrenched industry) defining an unpopular group (prospective entrants representing unwanted competition) and seeking to harm them through unreasonable barriers to entry. This desire to harm a politically unpopular group fits within the framework of Moreno, and courts should therefore use the second-order rational basis test for challenges to occupational licensing regulations.

While some scholars have criticized the second-order rational basis test as creating confusion or being the first step in a slippery slope towards the Lochner Era,¹⁶¹See Powers v. Harris, 379 F.3d 1208, 1223–25 (10th Cir. 2004) (asserting that judicial inquiry into actual motivations of a legislature is inappropriate); Pettinga, supra note 83, at 800–02 (suggesting the second-order rational basis test is a step towards Lochnerism). the criticism is overstated. Critics sometimes assert that the second-order rational basis test creates confusion in lower courts because the Court has used it without formal adoption.¹⁶²See Pettinga, supra note 83, at 800–02. But neither has the Court explicitly stated what constitutes a legitimate state interest, the central issue when using the traditional form of the rational basis test.¹⁶³Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 834 (1987) (“Our cases have not elaborated on the standards for determining what constitutes a ‘legitimate state interest’” . . . .). The Fifth, Sixth, and Ninth Circuits show that there is not only a basis for engaging in a more searching review of a law’s purpose, but also demonstrate that blatant economic protectionism may not be a legitimate state interest.¹⁶⁴See supra Section I.C. The Tenth and Second Circuits, on the other hand, await explicit directions from the Court that a more rigorous form of the rational basis test (1) exists, and (2) is appropriate for certain economic regulations.¹⁶⁵See supra Section I.C. While these two circuits await such direction, citizens within their jurisdictions remain irrationally barred from licensed occupations, and consumers pay the price.

B.      Naked Intrastate Economic Protectionism Should Be an Illegitimate Government Interest

It is well established that states may not discriminate against interstate commerce, but the law remains unsettled as to whether intrastate economic protectionism is a legitimate government interest. The Second and Tenth Circuits have split with the Fifth, Sixth, and Ninth Circuits in assessing the validity of such protectionist regulations.¹⁶⁶See Powers, 379 F.3d at 1223–25; Sensational Smiles, LLC v. Mullen, 793 F.3d 281, 286–88 (2d Cir. 2015); St. Joseph Abbey v. Castille, 712 F.3d 215, 223–27 (5th Cir. 2013); Craigmiles v. Giles, 312 F.3d 220, 222, 229 (6th Cir. 2002); Merrifield v. Lockyer, 547 F.3d 978, 991–92 (9th Cir. 2008). This split requires resolution through a per se rule that naked economic protectionism is not a legitimate government interest, even if courts continue to use the second-order rational basis test.

1.      The Tenth and Second Circuits’ Decisions Are Based on a Misguided Reading of Precedent

The Court of Appeals for the Tenth Circuit has explicitly stated that even naked intrastate economic protection is a legitimate government interest, going so far as to label it “the favored pastime of state and local government.”¹⁶⁷Powers, 379 F.3d at 1221. Importantly, the court went on to say that even under the second-order rational basis test (advanced by the plaintiffs), such protectionism would still prevail.¹⁶⁸Id. at 1223–25. The Court of Appeals for the Second Circuit agreed, calling approval of such protectionism “common sense.”¹⁶⁹Sensational Smiles, 793 F.3d at 286–87.

The Fifth, Sixth, and Ninth Circuits, on the other hand, hold that naked economic protectionism is not a legitimate government interest.¹⁷⁰St. Joseph Abbey, 712 F.3d at 223–27; Craigmiles, 312 F.3d at 222, 229; Merrifield, 547 F.3d at 991–92. These circuits insist that a reasonable connection must exist to a legitimate state interest aside from such protectionism and emphasize that the rationale “cannot be fantasy.”¹⁷¹St. Joseph Abbey, 712 F.3d at 223. This position accords with precedent and common sense.

In Powers, the Court of Appeals for the Tenth Circuit relied heavily on Williamson v. Lee Optical Co. to assert that a state granting special benefits to a section of its population is, in and of itself, legitimate.¹⁷²Powers, 379 F.3d at 1221. The Court of Appeals for the Second Circuit agreed, also relying on Williamson.¹⁷³Sensational Smiles, 793 F.3d at 286–88. But the Courts of Appeals for the Fifth Circuit, pointing out the concurring opinion in Powers,¹⁷⁴Powers, 379 F.3d at 1225–26 (Tymkovich, J., concurring) (“Rather than hold that a government may always favor one economic actor over another, the Court . . . insisted that the legislation advance some public good.”). asserted that such a reading of Williamson is incorrect.¹⁷⁵St. Joseph Abbey, 712 F.3d at 222–23; see also Allison B. Kingsmill, Comment, Of Butchers, Bakers, and Casket Makers: St. Joseph Abbey v. Castille and the Fifth Circuit’s Rejection of Pure Economic Protectionism as a Legitimate State Interest, 75 La. L. Rev. 933, 948–50 (2015). The court went on to demonstrate that the Williamson Court did not condone pure economic protectionism as a legitimate government interest, but rather that an incidental protectionist result did not automatically doom a challenged statute.¹⁷⁶St. Joseph Abbey, 712 F.3d at 222–25 (“[C]ases indicate that protecting or favoring a particular intrastate industry is not an illegitimate interest when protection . . . can be linked to advancement of the . . . general welfare.”).

The Powers and Sensational Smiles courts relied on other Supreme Court precedent to assert that pure economic protectionism is a legitimate government interest.¹⁷⁷See Powers, 379 F.3d at 1220; Sensational Smiles, 793 F.3d at 286–87. The cases, including Fitzgerald v. Racing Association of Central Iowa¹⁷⁸539 U.S. 103 (2003). and City of New Orleans v. Dukes,¹⁷⁹427 U.S. 297 (1976). however, do not embrace the Tenth and Second Circuits’ broad view of the legitimacy of economic protectionism.¹⁸⁰See Fitzgerald, 539 U.S. at 109; Dukes, 427 U.S. at 304–05; see also Cass R. Sunstein, Naked Preferences and the Constitution, 84 Colum. L. Rev. 1689, 1713–14 (1984). The plaintiffs in Fitzgerald challenged a preferential tax scheme as purely for economic protectionism.¹⁸¹See Fitzgerald, 539 U.S. at 105–07. The Powers court’s assertion¹⁸²Powers, 379 F.3d at 1220. that the Supreme Court held such protectionism valid, however, is erroneous. While the Court upheld the statute, it did not sanction economic protectionism as its own end.¹⁸³See Fitzgerald, 539 U.S. at 108–09. Rather, it stated that a favorable tax rate could be justified due to the state’s interest in economic development for depressed communities or for protecting regional history.¹⁸⁴Id.

Similarly, in Dukes, the Court did not sanction pure economic protectionism as a legitimate government goal.¹⁸⁵See Dukes, 427 U.S. at 304–06. Rather, the Court held that the statute banning certain street peddlers from New Orleans’ French Quarter was justified by the city’s historic preservation rationale.¹⁸⁶Id. The Powers court relied on, and the Sensation Smiles court cosigned, this holding to demonstrate that the Supreme Court condones intrastate economic protectionism as a legitimate government interest.¹⁸⁷Powers, 379 F.3d at 1220. But the Court’s reasoning does not support that conclusion.¹⁸⁸See St. Joseph Abbey v. Castille, 712 F.3d 215, 222–23 (5th Cir. 2013); see also Kingsmill, supra note 175, at 948–50.

Just as in Dukes and Fitzgerald, Nordlinger v. Hahn,¹⁸⁹505 U.S. 1 (1992). which both the Powers and Sensational Smiles courts relied upon, did not sanction naked economic favoritism as a legitimate state interest.¹⁹⁰See id. at 12–13. Despite the Courts of Appeals for the Tenth and Second Circuits’ assertions, the Nordlinger Court held that “local neighborhood preservation, continuity, and stability” justified California’s different tax treatment for new property owners.¹⁹¹Id. at 12. Rather than naked economic favoritism, such a legitimate government interest satisfied rational basis review.¹⁹²Id.

These two circuits explicitly held that naked economic protectionism is a legitimate government interest, but the cases they relied upon do not support that proposition. Because of this deficiency, other courts should side with the Fifth, Sixth, and Ninth Circuits in holding that naked economic protection is not a legitimate government interest.

2.      Naked Economic Protectionism Is an Illegitimate Government Interest

While the cases cited by the Powers and Sensational Smiles courts do not support the position that naked economic protectionism is a valid state interest in and of itself, the Courts of Appeals for the Fifth, Sixth, and Ninth Circuits’ holdings rest on sound precedent. Naked economic protectionism should not be considered a legitimate government interest because it does not relate to the public welfare.¹⁹³See Craigmiles v. Giles, 312 F.3d 220, 224 (6th Cir. 2002) (citing City of Philadelphia v. New Jersey, 437 U.S. 617, 624 (1978); Kleiner & Vorotnikov, supra note 2, at 8–14, 18–20 (discussing job losses, lost output, and increased costs to consumers attributable to occupational licensing).

As the Craigmiles court demonstrated, the Supreme Court has “repeatedly recognized that protecting a discrete interest group from economic competition is not a legitimate government purpose.”¹⁹⁴Craigmiles, 312 F.3d at 224. As shown in City of Philadelphia v. New Jersey¹⁹⁵437 U.S. 617 (1978). and H. P. Hood & Sons v. Du Mond,¹⁹⁶336 U.S. 525 (1949). if a statute’s purpose is nothing but effecting “simple economic protectionism,”¹⁹⁷City of Philadelphia, 437 U.S. at 624 (citing Du Mond, 336 U.S. at 537–38). it is invalid because it does not “credibly advance[]” legitimate legislative objectives.¹⁹⁸See id. Such naked economic protectionism uses public power to promote purely private interests.¹⁹⁹Cf. Hoover v. Ronwin, 466 U.S. 558, 584 (1984) (Stevens, J., dissenting) (“The risk that private regulation of market entry . . . may be designed to confer monopoly profits on [industry members] at the expense of the consuming public has been the central concern of both the development of the common law . . . and . . . antitrust jurisprudence. . . . [P]rivate parties have used licensing to advance their own interests in restraining competition at the expense of the public interest.”).

In Metropolitan Life Insurance v. Ward,²⁰⁰470 U.S. 869 (1985). the Supreme Court invalidated an Alabama law giving preference to certain insurers because it was “the very sort of parochial discrimination that the Equal Protection Clause was intended to prevent.”²⁰¹Id. at 878, 883. The Court went on to emphasize that merely promoting a particular industry does not automatically serve as a legitimate government interest.²⁰²See id. at 882. Preference of one industry or group over others requires an independent public welfare justification to act as a legitimate government purpose.²⁰³See id. at 888; Craigmiles v. Giles, 312 F.3d 220, 224–25, 227, 229 (6th Cir. 2002); St. Joseph Abbey v. Castille, 712 F.3d 215, 222–23, 226–27 (5th Cir. 2013); Merrifield v. Lockyer, 547 F.3d 978, 991 n.15 (9th Cir. 2008); Greater Houston Small Taxicab Co. Owners Ass’n v. City of Houston, 660 F.3d 235, 240 (5th Cir. 2011) (“[N]aked economic preferences are impermissible to the extent that they harm consumers.”). Based on this precedent, courts should not view arbitrary occupational licensing regulations that serve only to increase the revenue of already-licensed florists, taxidermists, fortune tellers, and other similarly nonharmful professions as rationally connected to a legitimate government interest.

Despite fears of judicial activism, this rejection of naked economic protectionism is not a return to the Lochner Era. As the Court of Appeals for the Fifth Circuit points out, this stance does not “deploy [an] economic theory of social statics or draw upon a judicial vision of free enterprise.”²⁰⁴St. Joseph Abbey, 712 F.3d at 226–27. Instead, it merely holds that such naked transfers of wealth unrelated to the public welfare are not innately legitimate government interests. In doing so, courts taking this correct view are “invalidat[ing] only the [regulation’s] naked attempt to raise a fortress protecting monopoly rents that [such irrationally licensed occupations] extract from consumers.”²⁰⁵Craigmiles, 312 F.3d at 229. Invalidating government-enforced monopoly rents that harm the consuming public should not be considered judicial activism.

Government regulation solely promoting economic favoritism is the exercise of government power to promote purely private interests. Such an exercise in naked favoritism without grounding in the health, safety, or welfare of the community should not be considered a legitimate government interest. The Courts of Appeals for the Fifth, Sixth, and Ninth Circuits already recognize this, and others should follow their example.

C.      Second-Order Rational Basis Review Compared with Alternative Levels of Judicial Scrutiny

The problems that arbitrary occupational licensing regulations present are no secret, and some scholars propose subjecting such regulations to intermediate or strict scrutiny.²⁰⁶See Klein, supra note 2, at 456–57; Clark, supra note 31, at 361; Brown, supra note 29, at 155–56. Both standards involve significantly more judicial scrutiny, but both are unlikely to be applied to occupational licensing.

1.      Strict Scrutiny Is an Unlikely Alternative Due to the Concerns About a Potential Return to Lochnerism

Even some of the country’s sillier occupational licensing laws are unlikely candidates for strict scrutiny. Strict scrutiny applies only when a fundamental constitutional right is infringed, and the Supreme Court has never declared the right to practice an occupation to qualify. Though not without its advocates,²⁰⁷See Brown, supra note 29, at 155–56; see also Randy E. Barnett, Does the Constitution Protect Economic Liberty?, 35 Harv. J.L. & Pub. Pol’y 5, 11 (2012). applying strict scrutiny to occupational licensing laws (or economic regulations in general) is difficult to defend due to the movement away from and disdain for the Lochner Era.

As some commentators point out, strict scrutiny has been described as “strict in theory, but fatal in fact,”²⁰⁸Contra Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 237 (1995) (denying strict scrutiny is “strict in theory, but fatal in fact”). because courts require such narrow tailoring for laws that infringe on fundamental rights such as the right to be free from racial or religious discrimination. As previously asserted, not all occupational licensing regulations are irrational, and strict scrutiny’s fatally high bar would make state and local regulation of any occupation almost unachievable.²⁰⁹See Klein, supra note 2, at 451–53. Additionally, the Supreme Court has shown itself reluctant to show any hint of a potential return to the days of Lochner, and strict scrutiny would cement such a return.²¹⁰See City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432, 440, 460 (1985); Griswold v. Connecticut, 381 U.S. 479, 481–82 (1965); see also Klein, supra note 20, at 451–52. The application of the second-order rational basis test is much more likely and more desirable than strict scrutiny.

2.      Intermediate Scrutiny Is Also Unlikely Because the Harm to Suspect Classifications Is too Attenuated

While more plausible than strict scrutiny, intermediate scrutiny is still an unlikely standard of review for occupational licensing regulations. Intermediate scrutiny, falling between second-order rational basis review and strict scrutiny, “applies when a law targets a quasi-suspect classification such as gender.”²¹¹Clark, supra note 31, at 351; see Cleburne, 473 U.S. at 440–41. If courts applied intermediate scrutiny, many outlandish occupational licensing regulations would be struck down, but this is an unlikely solution.

Data shows that occupational licensing harms disadvantaged classifications of individuals such as minorities, individuals living below the poverty line, individuals with low levels of education, and ex-offenders.²¹²See Klein, supra note 2, at 456–58; see also Nick Sibilla, Barred from Working: A Nationwide Study of Occupational Licensing Barriers for Ex-Offenders 1–4 (2020); see also Dick M. Carpenter II, Lisa Knepper, Angela C. Erickson & John Ross, License to Work: A National Study of Burdens from Occupational Licensing 7–9 (1st ed. 2012). But the connections between occupational licenses and the protected classes is fairly attenuated and would raise questions of which regulations target such classifications.²¹³See Washington v. Davis, 426 U.S. 229, 240 (1976). Because tracing such regulations to a discriminatory purpose is extremely difficult, courts are less likely to apply intermediate scrutiny than the second-order rational basis test.

Conclusion

When used appropriately, occupational licensing regulations can protect the health, safety, and welfare of the regulated community by ensuring that competent individuals staff certain professions. When abused, however, these same regulatory structures erect unreasonable barriers to employment in fields that pose little or no risk to the health, safety, and welfare of the community. Legislatures enacting occupational licensing laws may seek to protect a small sector of businesses that want to find a way around competition and have sufficient political clout to do so. When confronted with such dubiously motivated statutes, courts can, and should, apply a stricter test than the extremely deferential rational basis test.

Despite the Supreme Court’s hands-off approach, at least as compared to the Lochner Era, these regulations are still subject to judicial scrutiny. While some courts utilize the rational basis test and, with it, give extreme deference to the state or local legislature, others have begun to employ a more demanding test akin to the second-order rational basis test. This slightly stricter test allows a court to evaluate actual legislative motives in its determination of a statute’s validity. Federal courts should exclusively use the second-order rational basis test and definitively state that naked economic protectionism is a per se invalid government purpose. When combined, these steps encourage economic liberty and prosperity, protect prospective entrants to professions, and do so without the return of the judicial policymaking of the Lochner Era. Enacting these steps will allow people like Ndioba Niang and Tameka Stigers the chance to safely earn a living without undue government interference.