By Mitch Kokai, Carolina Journal

When it comes to protecting economic liberty, North Carolinians get good help from their state constitution and state Supreme Court precedent. The Tar Heel State fares well in comparison with other states. But that could change.

That’s one lesson that emerged from a recent online conversation with Justin Pearson of the Institute for Justice. He’s a lawyer who specializes in economic liberty cases. He’s looked at state-level constitutional safeguards across the country.

“Oftentimes, these state constitutions have enumerated, expressed protections” of economic liberty rights, “and so you’d think, at least as a matter of state constitutional law, you’d still get strict scrutiny — the highest level of review,” Pearson said during our Sept. 13 chat for a John Locke Foundation forum.

Under the legal standard known as “strict scrutiny,” a law or regulation must be designed to further a “compelling governmental interest.” Plus the law must be “narrowly tailored” to achieve that interest without unnecessary restrictions.

“Strict scrutiny” stands in stark contrast to “rational basis.” Under the latter legal standard, government has broader leeway to enact new restrictions. Court cases can stand or fall based on which standard judges apply to a challenged law.

As the U.S. Supreme Court wrestled with Franklin Roosevelt’s New Deal in the 1930s, justices ended up deciding that only some constitutional rights are fundamental, Pearson said. Those rights deserved the most protection, through “strict scrutiny” of proposed restrictions. Nonfundamental rights ended up with less protection. That was the sad fate for most economic rights.

The written texts of state constitutions generally offer more protection for economic rights than the U.S. Constitution, Pearson explained. “But what we’ve seen in some states — like California or Oregon — is … they took that bad precedent from the U.S. Supreme Court about so-called nonfundamental rights, and they applied it even to stuff that was expressly enumerated in their own state constitution.”

“From a logical standpoint, it made zero sense,” Pearson added. “That’s why it can unfortunately be so frustrating. I’ll come across a protection in a state — usually not North Carolina — where I’ll get all excited, and then I read the precedent, and it’s been eviscerated by the state Supreme Court.”

Pearson shies away from discussing state Supreme Court elections. But his arguments send a clear message about the types of judges needed to protect economic liberty.

“It’s just so important to have judges and justices that respect the Constitution, respect the original public meaning, … don’t try to change it to what they wish it was, or try to view it as some sort of obstacle or test of their creativity,” he said.

If all states had courts that were “actually faithful to the original understanding of the constitution,” then “every state would have these wonderful protections that I could use” to help clients battling harmful economic restrictions, Pearson said.

“Instead what ends up happening is that states that need it the most, that have the most overregulation, that have the worst climates for business, the worst climates for individual liberty, they also happen to be the ones where … the state Supreme Court doesn’t care about the constitution the way that some courts might,” he said. “At the end of the day, you need real judges who care about first principles, and that’s not always true.”

First principles crop up in Pearson’s “personal favorite” N.C. Supreme Court ruling. The 2014 case of King v. Town of Chapel Hill dealt with local ordinances linked to towing and mobile phone use. The state’s highest court issued a mixed ruling for the town and a towing business. Pearson focuses on elements of the court’s decision with wider implications.

For one thing, the court’s standard of review drew his praise. “The court explains that its test, under the ‘rational basis’ test, which is the lowest standard of review for rights the courts don’t care about — like economic liberty and property rights — that even under that test, the North Carolina test is better than the federal test,” Pearson said. “Facts really matter. Evidence really matters, and so the business won.”

Second, the court’s written opinion offered strong support for a key economic right. “It talks about under the North Carolina Constitution, the right to earn a livelihood is a fundamental right,” Pearson said. “That’s just huge. Typically, if a court says something is a fundamental right, that means you’re going to have the highest standard of review. There’s going to be a real burden placed on the government to justify these regulations.”

As a lawyer defending economic liberty from government encroachment, “it makes my life a lot easier,” Pearson said. “It gives me so much ammunition and so many tools to use to fight for people” like his overly regulated clients.

Left unsaid: North Carolina needs judges who will follow good precedents and not mimic other states’ approach toward watering down economic rights.

Fans of economic liberty ought to keep this discussion in mind as they head to the polls again in 2022.