Legal Docket: Government credentialing

MARY REICHARD, HOST: It’s The World and Everything in It for this 8th day of July, 2024. So glad you’ve joined us today. Good morning! I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. It’s time for Legal Docket.

Well, the Supreme Court term is over and so begins our summer series on disputes brewing in the lower courts.

Today, government credentialing.

There’s a sense in which the government’s requiring service providers to obtain certification before offering them to the public places an undue burden on a person’s right to earn a living. There’s another sense where such credentialing could be thought of as consumer protection: shielding the unsuspecting public from unscrupulous vendors.

REICHARD: Yea, I’ve had experience with that. I hired a personal trainer who loaded me up with so much weight right off the bat, that I got four bulging discs. Very painful, and my life’s never been the same since. Wish I could go back to the day before I ever set foot in that place!

So I’m all for credentialing when bodily health is at stake. And this guy was credentialed, just not in the field I’d been led to believe he was.

EICHER: But as we are about to learn, there’s a downside when credentialing requirements aren’t closely related to the business being regulated.

Take, for example, this woman from Minnesota.

LEDA MOX: I am Leda Mox, and I’m an equine massage therapist.

Or, a man from California, David Knott.

Both run small businesses.

Mox is known in her part of the world as “The Horse Lady.”

MOX: Well, I have had horses of my own for the last 35 years, and horses have just been my life. I grew up doing rodeo. I am certified in equine massage, back in 1997. I graduated from the University of Minnesota- Crookston with my equine science bachelor's degree in 2007. I have my equine Kinesiology Tape practitioners certificate.

REICHARD: And in Knott’s part of the world, he’s known as the go-to guy to recover unclaimed money held by states. Individuals or corporations sometimes lose track of assets like bank accounts and uncashed checks. Knott earns a commission based on how much he recovers for clients.

DAVID KNOTT: I've been working since 2005 in this industry. I started the business in late '05, and then, you know, never a dull moment and been working hard ever since.

EICHER: For her part, Leda Mox taught horse handling for decades. She started a certification program in equine massage more than a decade ago.

MOX: The biggest thing that they learn is the hands on part of the massage. So learning how much pressure to use, how to listen to the horses, how to determine where the horse is sore by palpating the muscles, and you also learn anatomy.

REICHARD: So far, more than 400 students have completed the course. No complaints.

So what’s the problem? Well, Minnesota has licensing requirements for what they deem “private postsecondary education.” Think community college and online schools.

But little schools like Mox’s get swept up in those requirements. Noncompliance comes with fines.

Her lawyer is Jeff Redfern with the Institute for Justice:

JEFF REDFERN: In most states, the way this works is even if the law is written so that it applies to everyone, including people like Leda, they don't actually enforce against tiny little schools like that, because the burdens are pretty substantial. There's extensive record keeping burdens. Leda would have to create this big course catalog and submit her curriculum for advanced review by the state regulators. She'd have to submit to inspections, she'd have to have a plan in place to make sure that all student documents are kept in a fire safe repository for over 50 years. So this is not just like checking a few boxes and you get your piece of paper. It’s really quite burdensome.

EICHER: Over in California, David Knott got some news about his line of work from the state of Illinois:

KNOTT: Well, they sent me a letter in 2021 and basically said that I cannot continue providing my services to three of my corporate clients that I was working for and had been working for for years without a private detective license…

So what does Illinois want him to do?

KNOTT: Well, it would be jumping through a lot of hoops and learning a bunch of things that don't apply to my business. So, alarm systems, you know, being an armed guard, working on security systems, just a whole bunch of things that don't apply to what I do.

Knott faces civil and criminal penalties if he doesn’t jump through those hoops. He’s represented by another Institute for Justice lawyer James Knight.

JAMES KNIGHT: Everything that David wants to do, and has been doing on behalf of his clients is speech. He's reading public documents, he's communicating with the government. He's reading, analyzing and speaking on behalf of his clients, and that's all speech protected by the First Amendment. The Supreme Court has made clear your speech is protected by the First Amendment whether you are speaking as part of your job professional speech or you are speaking in your private life. And the government can't require an irrelevant license in order for you to speak.

Up in Minnesota, Mox advances a similar argument. Free speech. Lawyer Redfern:

REDFERN: And the problem with that is that teaching is speech. It's protected by the First Amendment, and when the government wants to burden speech, even if it's not trying to ban it outright, anything that's a burden triggered by your speech triggers constitutional scrutiny, and the government has a burden of proving that its regulations are narrowly tailored to a really compelling interest, and I don't think there's any way they're going to be able to do that in this case.

REICHARD: I contacted appropriate officials in each state to get their side of the story. Minnesota doesn’t comment on pending litigation, and Illinois didn’t bother to say that much.

What I can gather from available resources is that Minnesota takes the position it isn’t regulating speech; instead, it is regulating commercial conduct. If Mox tells students they can earn money by becoming certified, the state says, that’s really conduct.

REDFERN: The problem, though, is that that's all speech, also. She's allowed to tell people the truth, that you can make money doing this, and she's allowed to write on a piece of paper that she thinks that her student has done a good job and is perfectly qualified to do this.

EICHER: And in the case of Illinois, its incentives don’t run in Knott’s favor:

KNIGHT: They hold an incredibly large amount of property. They hold billions of dollars. And in one of their recent filings, in response to our complaint, they talked about how in 2022 alone, they transferred $234 million from the Unclaimed Property fund into the state revenue. Because while they hold on to that property, they can use it to spend on other state expenses to help patch holes in the budget.

REICHARD: So the common denominator in each of these cases is freedom of speech and that’s the basis of each lawsuit.

Back in 2018, the Supreme Court decided a case not factually on point, but on point with legal principle.

EICHER: It involved the crisis pregnancy center organization National Institute of Family and Life Advocates, and the current secretary of the U.S. Department of Health and Human Services, Xavier Becerra. The high court found in NIFLA v Becerra in favor of the crisis pregnancy centers that sued when California required they hand out information on abortion.

The court found that requirement was likely a First Amendment violation on the grounds of compelled speech. The case was remanded and the rule never enforced.

REICHARD: So, how does that inform these cases?

REDFERN: Prior to the NIFLA case, there were courts around the country that had basically said that so -called “professional speech” is a different category of speech, and it gets less protection. And basically what they meant by professional speech was anyone who speaks for a living. Now, the Supreme Court said that's just wrong, that states don't get to reduce this protection that speech gets by imposing a licensing requirement. So that's been huge. Unfortunately, not all courts have gotten the message.

EICHER: Redfern says the states try to get around First Amendment conflicts by redefining terms.

REDFERN: They're calling speech conduct, you know, and you can, you can always redefine speech as conduct. It's kind of a verbal game. It's not speaking, it's conveying information about something. It's trying to persuade. It's requesting something. But of course, we're always, every time we speak, we're trying to achieve something. It's not speech for its own purpose. It's speech towards some end. So, I think that unfortunately, the Supreme Court is going to have to take one of these cases sooner rather than later, because there's been resistance in a lot of courts to following its rulings.

REICHARD: Still, my mind goes back to what happened to me with my personal trainer. What about those jobs that do involve the health or safety of people … or animals like Mox’s horses? Isn’t licensure for at least physicians and veterinarians crucial?

EICHER: Redfern says the trigger for First Amendment protection is when you are just trying to convey information. It would be different if the state said you need a license to do hands-on horse massage.

REDFERN: Now we would not approve of that kind of regulation at all, because horse massage is unregulated in most states, and there's never been any issue. But it wouldn't be a First Amendment issue in that case. It would be, you know, a due process issue or something like that. The same thing is true with doctors. Like there are regulations that say doctors have to have certain conversations before they can do surgical procedures. But courts have held over and over again that doctors have First Amendment rights when all they're doing is conveying information. I mean, that's essentially what NIFLA was about, and that's what this case is about. It's about regulation that is targeted expressly at conveying information. And that's just, that's at the core of the First Amendment. This is about pure speech. It's not about regulating conduct.

REICHARD: These lawsuits are still in early stages.

Meanwhile, Knott and Mox plug away every day earning a living, and battle it out with states to remove what they insist are onerous and irrelevant obstacles to their work.

PS: I checked for myself and found money I’d left unclaimed in Illinois from years ago. This job has its perks!

EICHER: Ah, the benefits of journalistic research!

REICHARD: And that’s this week’s Legal Docket!

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