By Clay Shupak
State constitutions are not replicas of the United States Constitution: they are independent guarantors of liberty. The North Carolina Supreme Court will soon decide two cases that could increase protections for economic liberty across the state, Singleton v. North Carolina Department of Health and Human Services[1] and Kinsley v. Ace Speedway Racing Ltd.[2] Litigants in both cases have asserted rights under the Fruits of Their Labor Clause[3]—a unique provision of the North Carolina Constitution with no direct counterpart in the United States Constitution.[4] The Court now faces a choice between lockstepping[5] with federal jurisprudence or returning to an interpretation of the clause that offers more robust protections for economic liberty. The justices seem inclined not to give the Fruits of Their Labor Clause short shrift.[6]
The Fruits of Their Labor Clause
The Fruits of Their Labor Clause was added to the North Carolina Constitution during Reconstruction.[7] The clause resides in the constitution’s Declaration of Rights between words lifted directly from the Declaration of Independence.[8] The full provision states the “self-evident” truth that “all persons are created equal” and possess “inalienable rights” to “life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.”[9] Americans at the time would have viewed the clause as the recognition of an already existing right rather than the creation of a new right from whole cloth. [10]
The drafters of the 1868 Constitution added the Fruits of Their Labor Clause as an anti-slavery provision.[11] Steeped in Lockean natural rights theory,[12] the drafters believed that a special evil of slavery was that “another man” got “to hold and enjoy the fruits of [the slave’s] labor.”[13] They feared that simply applying the Bill of Rights to the states would not be enough to secure the “civil and political rights” of freed Blacks.[14] Thus, the drafters decided that safeguarding the right of all people to earn an honest living would require constitutional protection.[15] By adding the Fruits of Their Labor Clause, the drafters sought to bring North Carolina’s Constitution into closer alignment with the natural law by securing rights omitted from the federal constitution.[16]
In its early years, the Fruits of Their Labor Clause was invoked to limited effect.[17] Starting in 1940, however, plaintiffs wielded the clause to void laws that arbitrarily excluded citizens from working in their occupation of choice.[18] During this time, courts took a “more aggressive” approach towards the clause, applying a higher level of scrutiny than rational basis review.[19] But, by the second half of the twentieth century, affinity for the clause waned.[20] In Treants Enterprises, Inc. v. Onslow County,[21] the North Carolina Supreme Court applied vanilla rational basis review to a challenge brought under the clause.[22] Ever since, courts in North Carolina have followed Treants Enterprises’s approach.[23]
The Cases Pending Review at the North Carolina Supreme Court
The Court’s current approach to the Fruits of Their Labor Clause may soon change. In Singleton and Ace Speedway, litigants and their amici have asked the Court to consider whether rational basis review is the appropriate test for the Fruits of Their Labor Clause.[24] The cases arrive to the Court on a motion to dismiss for failure to state a claim. Both involve a challenge to public health laws.[25] The challengers argue that rational basis review flies in the face of history and common sense.[26] They contend that the Court’s current approach to the clause simply “mirrors the most deferential form of federal review,” allowing the government to prevail on flimsy rational justifications where factual inquiry is wholly optional.[27] The government, on the other hand, argues that the Fruits of Their Labor Clause was “never understood to prevent the government from regulating businesses to promote public welfare.”[28] Instead, according to the state, the clause was originally understood solely “as a condemnation of slavery.”[29] The state contends that a highly deferential approach is necessary to avoid harm to public health and safety.[30]
The facts of Singleton and Ace Speedway illustrate the stakes of the debate. In Singleton, the plaintiff is an ophthalmologist who runs a medical practice in the rural community of New Bern.[31] Under North Carolina’s certificate of need laws, a physician must obtain an operating room permit from the North Carolina Department of Health and Human Services before they can perform certain medical procedures.[32] The plaintiff is bringing an as-applied challenge to North Carolina’s certificate of needs laws on grounds that they limit competition rather than promoting public health.[33] Currently, he must drive to the only certified hospital in a three-county radius to perform routine eye surgeries that could be safely performed at his office.[34] The hospital charges fees that increase the cost of surgery by thousands of dollars.[35]
By contrast, in Ace Speedway, the defendant is a NASCAR racetrack that is challenging a shut-down order issued by state health officials during height of the COVID-19 pandemic. [36] The defendant contends that the shut-down order was issued in retaliation for the speedway owner’s public criticism of Governor Roy Cooper’s response to the pandemic.[37] It points to nearby racetracks that were not ordered to shut down.[38] And it contends that the government-mandated shut down infringed upon the right to earn a living.[39] Interestingly, the ACLU and the Institute for Justice, advocates on opposite ends of the political spectrum, have filed briefs in support of the plaintiff.[40]
Implications: A Right with New Bite
A victory for the government challengers in either case could have significant ramifications for peoples’ economic liberties in North Carolina. If the Court rejects the government’s argument for rational basis review, the Fruits of Their Labor Clause would gain new teeth. Government regulations that burden a citizen’s right to earn a living would be subject to increased scrutiny. The first domino to fall may be occupational licensing regulations that can show no benefit to public health, safety, or welfare.[41] In the long run, a more muscular approach to the Fruits of Their Labor Clause may remove unnecessary hurdles to entering the work force,[42] promote the formation of small businesses,[43] and make goods and services cheaper for North Carolinians.[44] What is more, the move would affirm a core tenant of American federalism. As Justice Brennan observed, “the full realization of our liberties cannot be guaranteed”[45] if state constitutions do not function as independent bulwarks of liberty, distinct from the federal constitution.
[1] 876 S.E.2d 563 (N.C. 2022) (No. 260P22-1) (order granting review).
[2] 883 S.E.2d 455 (N.C. 2022) (No. 280PA22) (order granting review).
[3] N.C. Const., art. I, § 1.
[4] The plaintiff in Singleton is not asserting a claim directly under The Fruits of Their Labor Clause. Instead, there, the plaintiff states a claim directly under North Carolina’s due process provision, the Law of the Land Clause. See N.C. Const., art. I, § 19. Nevertheless, as the plaintiff in Singleton states in an amicus brief filed in Ace Speedway, the Fruits of Their Labor Clause and the Law of the Land Clause protect one and the same right—the right to earn an honest living. Brief of Dr. Jay Singleton as Amici Curiae Supporting Plaintiff-Appellee at 2, Kinsley v. Ace Speedway Racing, Ltd., No. 260P22-1 (N.C. June 2, 2023), 2023 WL 4028053 [hereinafter I.J.’s Amicus Brief Supporting Ace Speedway]. Indeed, as North Carolina Supreme Court Justice Richard Dietz observed in a recent law review article, courts “often lump” the clauses together and “resolve them in the same analysis.” Richard Dietz, Factories of Generic Constitutionalism, 14 Elon L. Rev. 1, 21, 29 (2022).
[5] For a discussion of why state constitutional law often moves in lockstep with federal jurisprudence and why it sometimes departs, see Jeffery S. Sutton, 51 Imperfect Solutions: States and the Making of American Constitutional Law 7–27 (2008).
[6] At oral argument, concerns about restricting economic activity took center stage, with several justices questioning whether the government’s preferred reading of the North Carolina Constitution was protective enough. See, e.g., Oral Argument at 8:28, Kinsley v. Ace Speedway Racing, Ltd., No. 260P22-1 (Nov. 7, 2023), https://www.youtube.com/watch?v=iEOWwyUnPZU.
[7] John V. Orth & Paul Martin Newby, The North Carolina State Constitution 47 (2d ed., 2013).
[8] Id.; The Declaration of Independence para. 2 (U.S. 1776) (“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”).
[9] N.C. Const., art. 1, § 1 (emphasis added).
[10]Jud Campbell, Constitutional Rights Before Realism, 2020 U. Ill. L. Rev. 1433,1434–35, 1443 (2020). This understanding of rights carried forward into the twentieth century. See State v. Hay, 126 N.C. 999, 999 (N.C. 1900) (Douglas, J., Concurring) (explaining that Article I, Section 1 of the North Carolina Constitution “does not profess to confer these rights, but recognizes them as pre–existing and inherent in the individual by ‘right divine.’”).
[11] Richard Dietz, supra note 4, at 19–20; see also Joseph Ranney, A Fool’s Errand? Legal Legacies of Reconstruction in Two Southern States, 9 Tex. Wesleyan L. Rev. 1, 17 (2002). (discussing how “North Carolina . . . regulated black labor” during Reconstruction by “focus[ing] on apprenticeship laws.”).
[12] Locke’s famous labor theory of property is laid out in his Second Treatise on Government. See John Locke, Two Treatises on Government 305–06 (Peter Laslett ed., Cambridge Univ. Press 1988) (1690).
[13] Dietz, supra note 4, at 20 (quoting Albion W. Tourgée, An Appeal To Caesar 244 (1884)).
[14] Id.
[15] Id.
[16] Id. at 20–21.
[17] Id. at 21.
[18] State v. Harris, 6 S.E.2d 854, 858 (N.C. 1940).
[19] Dietz, supra note 4, at 21.
[20] See e.g., State v. Warren, 114 S.E.2d 660, 663–64 (N.C. 1960) (upholding an occupational licensing regulation for real estate agents).
[21] 360 S.E.2d 783 (N.C. 1987).
[22] Id. at 785.
[23] See, e.g., Tully v. City of Wilmington, 810 S.E.2d 208, 215 (N.C. 2018) (applying the rational basis test).
[24] I.J.’s Amicus Brief Supporting Ace Speedway, supra note 4, at 2 (noting that Kinsley and Singleton both “ask[] the Court to clarify the test that applies under Art. I, §19 when the government restricts the right to earn a living”); Reply Brief for Plaintiffs-Appellants at 2–3, Singleton v. N.C. Dep’t of Health and Human Servs., No. 260PA22 (N.C. Feb. 5, 2024), 2024 WL 635933.
[25] I.J.’s Amicus Brief Supporting Ace Speedway, supra note 4, at 2.
[26] Id. at 11.
[27] Id. at 10.
[28] Brief for Plaintiff-Appellant at 40, Kinsley v. Ace Speedway Racing, Ltd. at 40, No. 260P22-1 (May 3, 2023), 2023 WL 3467853.
[29] Id. at 37.
[30] Id.
[31] Complaint at 1, Singleton v. N.C. Dep’t Health & Human Servs., No. 20 CVS 05150 (N.C. Super. Ct. April 23, 2020), 2020 WL 13064502 [hereinafter Singleton Complaint].
[32] Id. at 26.
[33] Id. at 10.
[34] Id. at 10, 19.
[35] Id. at 1, 14.
[36] Response to Petition for Discretionary Review, Kinsley v. Ace Speedway, Ltd. at 2, No. 260P22-1 (Sept. 6, 2022), 2022 WL 4486857.
[37] Brief for Defendants-Appellees at 38, Kinsley v. Ace Speedway, Ltd. at 38, No. 260P22-1 (June 2, 2023), 2023 WL 4028000.
[38] Id. at 35.
[39] Id. at 22.
[40] I.J.’s Amicus Brief Supporting Ace Speedway, supra note 4, at 2 (emphasizing the violation of Ace Speedway’s right to earn a living); Brief of ACLU of North Carolina Legal Foundation as Amici Curiae Supporting Plaintiff-Appellee at 2, Kinsley v. Ace Speedway Racing, Ltd. No. 280PA22 (June 2, 2023), 2023 WL 4028007 (emphasizing the harm done to Ace Speedway’s free speech rights and the need for government accountability).
[41] Occupational licensing regulations were frequently struck down for violating the Fruits of Their Labor Clause in the recent past. See Dietz, supra note 4, at 21.
[42] Morris M. Kleiner & Evan J. Soltas, A Welfare Analysis of Occupational Licensing in the U.S. States, 90 Rev. Econ. Studs. 2481, 2483–84 (2023) (estimating that licensing an occupation for the first time would eliminate twenty-nine percent of jobs).
[43] Stephen Slivinski, Bootstraps Tangled in Red Tape, Goldwater Inst. (Feb. 10, 2015), https://www.goldwaterinstitute.org/bootstraps-tangled-in-red-tape (last visited Apr. 22, 2024) (discussing the negative impacts of occupational licensing on low-income entrepreneurs).
[44] See, e.g., Singleton Complaint, supra note 31, at 2 (stating that performing cataract surgery in Dr. Singleton’s office instead of the hospital required by certificate of need laws would cut costs from $6,000 to $1,800).
[45] William J. Brennan Jr., State Constitutions and the Protection of Individual Rights, 90 Harv. L. Rev. 489, 489 (1977).
