Laboratories of Democracy

Laboratories of democracy

The phrase "laboratories of democracy" was coined Supreme Court Louis Brandeis in a dissenting opinion filed in the 1932 case of New State Ice Co. v. Liebmann. The case involved Oklahoma regulations imposed on ice manufacturing and sales businesses. The background of the case concerned two separate factors. One was the rise of the refrigerator, which posed a competitive risk to ice makers. The other factor was the Great Depression, which placed greater urgency on all court rulings regarding the regulation of business.

The case began when the New State Ice Co., which had received a license from the state of Oklahoma to operate this kind of business, filed suit against Liebmann, an ice cream manufacturer who had not received this license. In return, Liebmann claimed that the statute created by the state of Oklahoma was unconstitutional. The terms of the statute stated that regulation was necessary in the greater public interest.

However, Liebmann argued that the right to conduct a private enterprise without depending upon the issuance of a permit was guaranteed under the 14th Amendment.

While the court ruled against the New State Ice co. in a majority opinion, Louis Brandeis filed his dissenting opinion to explain why the state of Oklahoma was entitled to take this action. The idea of the "laboratories of democracy" was a major part of his argument to explain why Oklahoma could be permitted to take this step.

Citing the ongoing economic crisis, Louis Brandeis argued that states and municipalities can act as "laboratories of democracy" in order to determine what kind of regulation was most efficacious in helping to end the Great Depression. These local rulings could then serve as models for federal legislation. Hence, the states and cities enacting such laws were participating as laboratories of democracy by serving as a kind of experimental zone.

In explaining why Oklahoma might be justified in passing this legislation, Louis Brandeis cited a number of potential concerns. He noted that public utilities, such as railroads, always had to apply for a permit, which had never been found to be a violation of the 14th Amendment. He went on to note Oklahoma's weather and the rural isolation of many of its residents made ice an essential part of daily life. Therefore, he argued that the state was within its constitutional rights to classify the manufacture and retail of ice as a public utility.

Other concerns which Louis Brandeis cited in his opinion included the possibility of such an unlicensed business turning into a monopoly. Prior to 1925, when the statute in question was passed, he noted that ice distribution throughout the state had been inconsistent and that distribution had been much fairer and ice easier to obtain since. Therefore, he determined that in this case, Oklahoma's legislation had worked in the public interest and served as an example of how "laboratories of democracy" could use the law to improve the lives of their citizens.