Why the Second Circuit’s decision striking down DOMA could be bad for economic liberty

Last week the Second Circuit Court of Appeals issued a ruling in Windsor v. United States of America striking down Section 3 of the Defense of Marriage Act as unconstitutional. In particular, the Court found that Section 3’s denial of federal spousal benefits to legally married same sex couples violated the equal protection component of the Fifth Amendment. The Court’s opinion has been both praised and criticized.  Gay rights organizations have declared the decision a victory for fairness. Others have argued that the court’s reasoning in the case is suspect. Lost in the shuffle is the broad ranging effects this ruling could have in other areas of the law – in particular economic liberty cases.

Since the late 1930s courts have applied a three-tiered standard of review to determine whether discriminatory government regulations violate equal protection. Laws which discriminate on the basis of membership in a “suspect class” (e.g. race or national origin) or infringe upon a “fundamental right” (e.g. speech, religion) are subject to the highest level of scrutiny known as “strict scrutiny” – whereby a law will only survive review if it is “narrowly tailored” to furthering a “compelling state interest.”  Laws which discriminate on the basis of membership in a quasi-suspect class (e.g. gender) are subject to a slightly more relaxed “intermediate” scrutiny, under which a law will only survive review if it is “substantially related” to an “important” government interest. Laws which discriminate on the basis of non-suspect classifications (e.g. wealth, lifestyle) or only burden non-enumerated rights (e.g. the right to earn a living) are subject to rational basis review – a law will not be struck down unless it is not “rationally related” to a “legitimate” government interest.

From 1937 to 1996 rational basis scrutiny was virtually a death sentence for constitutional claims. While some lower courts were willing to strike down some of the more onerous regulations on business and members of non-suspect classes, judicial review was little more than a rubber stamp for government action. Then, in Romer v. Evans, the Court signaled a return to more consistent jurisprudence. Applying rational basis scrutiny to a Colorado constitutional amendment that banned laws protecting homosexuals from discrimination, the Court struck down the law as a violation of the Equal Protection Clause. Hearkening to legal traditions at the heart of the 14th Amendment, the Court explained that even under rational basis review, it has a duty to examine laws to ensure that they serve a “legitimate governmental purpose.” “Class legislation” or laws which classify individuals for arbitrary or nefarious reasons fall beyond the legitimate powers of the state.  Accordingly, in Romer, where the Court found that the purpose of the law was to treat homosexuals differently than others merely because they were homosexuals, and not for any legitimate public purpose, the Court declared the law unconstitutional.

Since that time, plaintiffs in economic liberty cases (like challenges to unfair licensing laws, and laws which favor existing companies by blocking out legitimate competition) have successfully cited Romer to support the proposition that some legislative purposes – like protectionism - are simply beyond the legitimate authority of the legislature .  Romer thus provides one of the few modern toe-holds for economic liberty plaintiffs to argue that even when applying rational basis scrutiny, courts have a duty to engage in some sort of meaningful constitutional review.

Last week’s opinion in Windsor threatens to rip that toehold apart. In striking down Section 3 of DOMA, the Second Circuit held that restrictions aimed at homosexuals are not subject to rational basis scrutiny, but instead must be reviewed under intermediate scrutiny. In reaching that opinion, the Second Circuit openly questioned whether or not the Court in Romer was actually applying rational basis scrutiny at all, or was applying some heightened form of scrutiny specific to laws effecting disfavored groups. Yet, if Romer was a special case, applicable only to regulations dealing with homosexuals, it would lose its precedential weight in other more run-of-the-mill rational basis cases.  The loss of Romer as a standard in these other cases would allow courts to return to rubber-stamping economic regulations under rational basis scrutiny.  Worse, when combined with the D.C. Circuit’s recent opinion in Hettinga (holding that rational basis claims in economic liberty cases can be dismissed prior to any discovery) it is not difficult to imagine a scenario where challenges to economic regulations become nearly impossible.

Yet, legitimate judicial review is not something that should be limited to laws dealing with certain groups. Indeed, the Equal Protection Clause was designed to ensure that every individual, regardless of group affiliation, gets a fair shake.  Whatever one’s views may be on DOMA and gay marriage, we should all agree that courts have an obligation to ensure that laws serve a constitutionally permissible interest. For that reason alone, the Second Circuit’s opinion in Windsor is dangerous.