April 8, 2012 in Opinion

Guest opinion: Stehekin ferry case about economic freedom

Michael Bindas
 

Thursday, the U.S. District Court in Spokane will hear a case about ferries and slaughterhouses – topics you might not think are related, unless you follow the nitty-gritty world of constitutional law.  If you care about removing arbitrary, government-imposed barriers that prevent entrepreneurs from creating jobs, however, you’ll care about this case.

 This constitutional challenge was brought by two brothers, Jim and Cliff Courtney, who, for 15 years, have tried to provide boat transportation service on Lake Chelan.  Jim and Cliff live in Stehekin, a popular outdoor destination on the remote, northwest end of the 55-mile long lake.  They are fourth-generation residents of the community, which their great-grandparents helped settle, and their family owns several businesses there, including a rustic ranch and outfitter.

 Unlike the claim of many tourist destinations, however, not all roads lead to Stehekin.  In fact, no roads lead there; it is accessible only by boat or plane.  What’s more, since 1927, the state of Washington has allowed only one ferry provider to operate on Lake Chelan. 

What kind of service do you get with the existing monopoly?  Exactly what you’d expect.  Riders regularly complain about the inconvenient ferry schedule.  So Jim and Cliff, bootstrap entrepreneurs that they are, decided to launch an alternative service that would provide greater choice to Stehekin’s visitors and residents.

 There’s only one problem:  To provide ferry service on Lake Chelan, you have to get a “certificate of public convenience and necessity” from the state.  To get a certificate, you must either obtain the consent of the existing ferry company – that is, your competitor – or prove to the government, in a costly legal proceeding, that “public convenience and necessity” require another ferry.  The existing ferry company gets to participate in that proceeding and effectively veto your entry into the market.

Now you know why there’s been a monopoly for 85 years. 

 Jim and Cliff have tried to get a certificate, to no avail.  They have even tried to launch services short of a full-service ferry – an on-call boat, for example, or a shuttle exclusively for patrons of Courtney family and other Stehekin-based businesses.  According to the state, however, even shuttling customers to and from your own business requires the government-issued certificate.

 In America, the public and entrepreneurs – not the government and existing businesses – should decide whether a new business is convenient and necessary.  So long as the Courtneys have an insured and inspected boat and a trained and capable crew, they should be able to operate a ferry or other boat service on Lake Chelan. 

 The Constitution, in fact, guarantees their right to do so.  The Privileges or Immunities Clause of the 14th Amendment prohibits states from abridging the “privileges or immunities” – that is, rights – of citizens.  The clause was adopted in the wake of the Civil War to protect the newly freed slaves, whose economic rights were routinely trampled by Southern states. 

Only a few years later, however, the clause was largely gutted in the infamous Slaughter-House Cases, involving a challenge to a state-created slaughterhouse monopoly in Louisiana.  In rejecting the challenge, the U.S. Supreme Court construed the clause to protect only a handful of seemingly narrow rights.  Among them, however, was “the right to use the navigable waters of the United States” – the very right that Jim and Cliff Courtney wish to exercise.

 In asking the court to dismiss Jim and Cliff’s case, the state is arguing that nobody really knows what “the right to use the navigable waters of the United States” means, and that, “[w]hatever it is, it is not a right to operate a ferry” or “ ‘to use such waters … in engaging in business.’ ”

 That argument ignores the history and purpose of the Privileges or Immunities Clause.  We did not fight a Civil War for the right to go canoeing.  We fought it to vindicate the idea and ideal of individual freedom.

 With their case, the Courtneys aim not only to defend their right to use the navigable waters, but also to restore the Privileges or Immunities Clause to its proper role as the primary constitutional guarantee of economic liberty.

 So why should the average American care about a case involving ferries and slaughterhouses?  Because the case is really about economic freedom and ensuring that the protections in our Constitution are enforced – not dismissed as meaningless words on an old piece of paper.

 

Michael Bindas is a senior attorney with the Washington chapter of the Institute for Justice, which represents Jim and Cliff Courtney. 


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