Oklahoma Interior Design - Backgrounder

September 2008 

Litigation Backgrounder

Challenging Oklahoma’s Free Speech Licensing For Interior Designers
 

The Issue in a Nutshell:

Kelly Rinehart is an interior designer, but the State of Oklahoma will not allow her to tell anyone that.  Oklahoma may allow anyone to perform interior design services, but it dictates that only those with government-issued licenses may call themselves “interior designers.”  Besides unconstitutionally censoring truthful commercial speech, “titling laws” like Oklahoma’s serve as precursors to full-blown occupational licensure, which is the ultimate goal of a small faction within the interior design industry led by the American Society of Interior Designers (ASID).  

In November 2007, the Institute for Justice (IJ) released an updated case study, Designing Cartels, which documents a long-running campaign by ASID and its affiliates to increase regulation of interior designers in order to thwart competition and impose a one-size-fits-all set of credentials for the entire interior design industry.  Not surprisingly, the nationwide push for more regulation of interior designers has not come from the public or the government, but rather from a small cartel of industry insiders seeking government protection from competition.

Only three other states besides Oklahoma license the use of the term “interior designer” without regulating the work itself.  The anti-competitive intent behind such title acts is clear: anyone who goes looking for an “interior designer” on the Internet or in the Yellow Pages in those states will find only government-licensed cartel members, while overlooking scores of capable designers like Kelly Rinehart.

On September 30, 2008, the Institute for Justice, a national public interest law firm that defends free speech and the rights of entrepreneurs, filed suit in the U.S. District Court for the Western District of Oklahoma in Oklahoma City on behalf of three entrepreneurs challenging Oklahoma’s “titling” law as a violation of free speech rights protected by the First Amendment.

Americans’ right to freely express themselves certainly includes the right to provide truthful information to potential customers and clients.  That right, enshrined in the First Amendment, cannot be brushed aside by states seeking to promote the anti-competitive interests of the interior design cartel.  Simply put, IJ’s lawsuit will demonstrate that the First Amendment is more than mere window dressing when it comes to interior designers.


Introduction

Starting a new business is a daunting task for even the most talented and dedicated entrepreneurs,  and among the greatest challenges any new business faces is attracting customers.  The Internet has made that task easier because clients can now find you.  But imagine what would happen if the government suddenly decided that you could not truthfully and accurately tell customers what business you were in.  Whether on your homepage, business card or stationery, imagine you had to come up with euphemisms for what it is you do rather than simply stating it.  You would be out of work in no time.

Yet that is exactly what the State of Oklahoma is doing to individuals in the interior design field.

At the behest of lobbyists representing a small, pro-regulation faction of the interior design industry, several states, including Oklahoma, have unconstitutionally censored interior designers through so-called “titling laws.”  These laws allow anyone to practice a trade but allow only a select few state license holders to call themselves “interior designers” or use the words “interior design” to describe what they do—even when both terms accurately describe a person’s trade.[1]

Only Oklahoma and three other states[2] license the term “interior designer” but not the practice of interior design, thereby granting certain favored members in the industry a monopoly on the use of that term in their business names, their advertising, their websites and so on.  The competitive advantages of such a speech monopoly are obvious:  anyone who goes looking for an “interior designer” on the Internet or in the Yellow Pages in Oklahoma will find only government-licensed cartel members, while overlooking scores of highly capable designers who do not meet the state’s arbitrary requirements.

Thankfully, however, the Constitution does not allow such speech licensing.  In a free nation like ours, the government has no business censoring truthful commercial speech the way Oklahoma does.

Given this threat to the livelihoods of hundreds or even thousands of hard-working small businesspeople in Oklahoma, the time is ripe for action.  That is why, on September 30, 2008, the Institute for Justice challenged Oklahoma’s interior design censorship law as a violation of free speech rights protected by the First Amendment to the U.S. Constitution.

 

Oklahoma: Merely the Latest Step in a Thirty-Year Interior Design Cartelization Effort

ASID’s attempt to cartelize the interior design industry began nearly 30 years ago, with an unsuccessful push for a practice act in New York in 1979.[3]  Setting their sights lower, both substantively and geographically, members of the design cartel scored their first success with a title act in Alabama in 1982.[4]  Oklahoma adopted its title act in 2006, the 22nd state to enact interior design regulation.  Most of the regulation has come in the form of title acts regulating the terms “licensed interior designer,” “registered interior designer,” or “certified interior designer”—rather than just “interior designer,” the way Oklahoma does.[5]    

ASID views titling laws like the one in Oklahoma as merely a first step, with the ultimate goal being a full-fledged practice restriction that dictates who may and may not work as an interior designer.[6]  Despite its zealous pursuit of additional licensing laws around the country, the ASID-led pro-regulation faction has, thus far, met with very limited success, particularly regarding “practice acts.”  Only three states—Florida, Louisiana and Nevada (plus the District of Columbia)—regulate who may perform interior design work, and those laws contain various gaps and loopholes.[7]  Florida, for example, exempts residential work, while other states exempt interior design work that does not implicate building codes or bona fide health and safety concerns. 

For the moment, anyone may perform interior design work in Oklahoma, but the only people who are allowed to call themselves “interior designers” are those who have registered with the Oklahoma Board of Architects, Landscape Architects, and Interior Designers (“Board”), which is responsible for enforcing the title act.  The goals of the Institute for Justice’s lawsuit filed on behalf of three Oklahoma interior design entrepreneurs are not only to strike down the current law, which bans the truthful exchange of information between interior designers and consumers, but also to prevent the pro-regulation cartel from taking the next step toward full-blown occupational licensure, as it has in several other states.

 

The Plaintiffs—Forbidden to Speak Truthfully

Kelly Rinehart struck out on her own as an interior designer in 2003, having spent nearly eight years out of college cultivating a client-base and gaining on-the-job experience.  The classic American entrepreneur, Kelly incorporated as K.K. Rinehart Interiors and has not had time to look back as she has grown her primarily residential interior design business into a thriving success with projects in Oklahoma, Colorado, Maine, Texas, Virginia and Dubai, United Arab Emirates.  The State of Oklahoma, rather than applauding and supporting Kelly’s entrepreneurial spirit, has instead thrown up new obstacles in her path, threatening to slow down or derail her business altogether.

Kelly graduated from Oklahoma State University in 1995 with a degree in interior design.  From August 1995 through January 2003, Kelly worked in a variety of furniture retail stores gaining experience and building a customer base.  Technically, Kelly is currently eligible to take the national qualifying exam to obtain an interior design license in Oklahoma (which is discussed further below).  So why hasn’t she taken it?  The exam is costly, time consuming and test knowledge largely unrelated to Kelly’s work.  She does not need to take the test to know she is a successful interior designer—her ongoing business success demonstrates that fact.  Further, Kelly finds it offensive that the government would take away her choice to decide whether to obtain a particular credential; if she is ever to take the test, she wants it to be her choice alone.

Maria Gore has worked for the Veterans Administration in Oklahoma City for 17 years this month.  But her dream is to be a full-time interior designer.  In November 1999, Maria learned about Interiors by Decorating Den, an international company with over 500 franchises in operation.  The reference went into Maria’s “dream file” for consideration at a later date.  That later date came in 2004 when Maria, after battling health issues for several years, decided that there is no time like the present to pursue your dreams.  By January 2005, Maria was in training to open her own franchise.

Interiors by Decorating Den has high standards for its franchisees.  Before being allowed to open a store, Maria had to pass a series of rigorous exams covering the spectrum of operating an interior design business, including interior design work, people skills, finance, entrepreneurship, and business math.  Maria navigated the training and testing successfully and has been building her franchise for nearly four years now. 

Jeffrey Evans, while working in special events, began to recognize his talent and natural aptitude for interior design.  Being the go-getter type, Jeffrey set about making the most of his natural abilities.  He first called experts in the field at interior design publications and asked for advice on how to get started.  Then he got a job for two companies in Tulsa, Okla., over the course of three years to learn the industry from the inside—and also to begin making client contacts.  In 1999, Jeffrey set out on his own with Jeffrey Evans Designs and now has a full 12 years of experience providing interior design services to clients in Oklahoma, Arkansas, Ohio, and Texas.

Unlike Kelly, neither Maria nor Jeffrey is eligible to sit for the licensing exam Oklahoma requires, despite the fact that both have already demonstrated success in the field.  This means that both must choose between running afoul of the censors at the Board if they truthfully advertise themselves as interior designers, or using various euphemisms to advertise their business that suggest—falsely—that they are something other than experienced, talented, and well-established interior designers.

 

Getting a License to Speak in Oklahoma 

Oklahoma’s speech-licensing requirements for interior designers are not easy to meet.  There are three general requirements: 1) a degree from an interior design program accredited by the Foundation for Interior Design Education Research, or a program the Board deems substantially equivalent; 2) a minimum of two years “full-time diversified and appropriate experience”; and 3) a passing grade on a government-mandated exam administered not by the state, but by a private, national credentialing body called the National Council for Interior Design Qualification (NCIDQ).[8]  While the Board, in its sole discretion, may decide what kinds of education and experience are “appropriate” under the title law, the NCIDQ exam has its own set of prerequisites.  Just to sit for the exam, NCIDQ requires people to have six years combined college-level interior design education and work experience.[9]  

The exam and application process is expensive and time consuming.  The cost of the exam alone can reach about $1,000, and it takes two days to complete.[10]  If an aspiring designer passes the NCIDQ exam, he or she may then apply to the Board to register as an interior designer, but that requires an additional $100 application fee plus a $350 registration fee,[11] which must be paid biannually.[12]  All that just so people who lawfully practice interior design can get permission from the state to advertise themselves, truthfully, as “interior designers.”

 

Legal Challenge

The Institute for Justice’s legal challenge is straightforward:  prohibiting people from truthfully describing what they do—interior design—violates their First Amendment right to free expression.  With very narrow exceptions, all types of speech are protected by the Constitution, including so-called “commercial speech” that “does no more than propose a commercial transaction.”[13]  Thus, to regulate advertising, the government must have a substantial reason for restricting speech, and any limits must be carefully designed to actually achieve the government’s objectives while imposing only the narrowest infringement on speech.[14]

Oklahoma’s titling law for interior designers falls woefully short of those stringent legal standards.  Instead of advancing any bona fide public purpose, titling laws are merely the first step in a carefully crafted strategy to suppress competition within the interior design industry.  As noted above, many other states have rejected similar efforts due in large part to the complete lack of evidence that there is any public harm from the unregulated practice of interior design. 

Besides establishing a substantial government interest in censoring truthful speech by unlicensed interior designers—which it cannot do because no such interest exists—Oklahoma will have to prove that its titling act directly advances the state’s asserted goals, whatever those might be, in a manner that is no broader than necessary to achieve them.  Oklahoma will not be able to make that showing because there is simply no threat to the public from truthful communications from and advertising by interior designers—whether or not they hold a license to speak from the State of Oklahoma.

Americans’ right to freely express themselves most certainly includes the right to provide truthful, accurate information to potential customers and clients.  That right, enshrined in the First Amendment to the U.S. Constitution, cannot simply be brushed aside by states seeking to promote the anti-competitive agenda of the interior design cartel.  Simply put, this lawsuit will demonstrate that the First Amendment is more than mere window dressing when it comes to interior designers.

 

The Defendants 

The defendants in this case are the members of the Oklahoma Board of Architects, Landscape Architects, and Interior Designers, who are being sued in their official capacity.  This Board, located in Oklahoma City, is responsible for the registration and regulation of interior designers in Oklahoma.

 

IJ:  A History of Protecting Free Speech & Economic Liberty

Founded in 1991, the Institute for Justice (IJ) has represented entrepreneurs nationwide who successfully fought arbitrary government regulation, opening up long-closed markets and securing free speech rights.  These include:

  • Franzoy v. Templeman, et al.—The Institute for Justice represented two interior designers in challenging New Mexico’s titling law, which was nearly identical to Oklahoma’s current law.  Rather than attempt to defend its blatantly unconstitutional speech restrictions, the New Mexico Interior Design Board chose to seek an amendment to the law through the legislative process, which the Governor signed in April 2007.

  • Swedenburg v. Kelly[15]—Representing Virginia and California vintners as well as New York wine consumers, the Institute for Justice persuaded the U.S. Supreme Court to declare unconstitutional New York State’s laws that barred the interstate direct shipment of wine to New York consumers.  IJ also persuaded the second U.S. Circuit of Court of Appeals to enforce the First Amendment by striking down a prohibition on advertisements and solicitation for alcoholic beverages by anyone other than licensed retailers.

  • Taucher v. Born[16]—The Institute for Justice persuaded the U.S. District Court for the District of Columbia to enforce the First Amendment by striking down a regulation issued by the Commodity Futures Trading Commission that would have required publishers of financial newsletters and Internet websites to register as commodity trading advisors.

  • Wexler v. City of New Orleans[17]—The Institute for Justice persuaded the U.S. District Court for the Eastern District of Louisiana to enforce the First Amendment by striking down an ordinance that prohibited booksellers from selling books on city sidewalks without a permit.
  • Rissmiller v. Arizona Structural Pest Control Commission­—The Institute’s Arizona Chapter filed suit in 2005 challenging the Structural Pest Control Commission’s requirement that gardeners and landscapers providing weed control services must first demonstrate 3,000 hours of experience spraying weeds.  As a result of the lawsuit, the Arizona Legislature passed, and the governor signed into law on May 8, 2006, an exemption for providers of weed control services using products available to the general public over the counter.
  • Craigmiles v. Giles[18]—This IJ suit led a federal court to strike down Tennessee’s casket-sales licensing scheme as unconstitutional, a decision that was upheld unanimously by the U.S. 6th Circuit Court of Appeals and not appealed.  This marked the first federal appeals court victory for economic liberty since the New Deal.

 

The Litigation Team

The lead attorney in this case is Institute for Justice Arizona Chapter Staff Attorney Jennifer Perkins, who litigates First Amendment and economic liberty cases in Arizona and other nearby states.  Most recently, Perkins worked to free interior designers in New Mexico from that state’s titling law, allowing all designers in New Mexico to now truthfully advertise their services, and she is also assisting in the Institute’s ongoing challenge to Texas’ and Connecticut’s interior design title acts.  Jennifer will be joined in the litigation by Institute for Justice Senior Attorney Clark Neily who litigates First Amendment, economic liberty, and school choice cases throughout the nation.  Assisting the Institute for Justice as local counsel is Jami Fenner, of the Lester, Loving, and Davies firm, in Edmund.

 

For more information contact:

Bob Ewing
Assist. Director of Communications
Institute for Justice
(703) 682-9320 ext.206
(202) 494-2567 mobile
bewing@ij.org



[1]  Okla. Stat. Ann. tit. 59, § 46.41 (A). (“It shall be unlawful for any person or entity to use the title ‘Interior Designer’ or any other derivation … if the person is not registered under this act and not exempt from the requirement for registration.”)

[2] The other states are Connecticut, Illinois, and Texas.  New Mexico, which previously restricted use of these terms, changed its law in 2007 as a result of the Institute for Justice’s lawsuit filed against the New Mexico Interior Design Board in September 2006.  The Institute filed suit against Texas’ interior design title act in May 2007, and that case is currently pending in federal court in Austin.

[3] Bradford McKee, Interior Motives, 89 Architecture, Mar. 1, 2000 at 68.

[4] Id.

[5] See Dick M. Carpenter II, Designing Cartels: How Industry Insiders Cut Out Competition, Institute for Justice, September 2006 at 7, Table 1.  Available at http://www.ij.org/publications/other/designing-cartels.html.

[6] ASID, “The Interior Design Profession:  Facts and Figures” at 18 (2004).

[7] Fl. Stat. §§ 481.2131 & 481.229 (exemption for residential design work); Nev. Rev. Stat. §§ 623.0225 & 623.360; La. Rev. Stat. § 37.3171 et seq. (distinguishing between “designers” and “decorators” and not regulating the latter); D.C. Code Ann. §§ 47.2853-101 (only regulating interior design work that involves health, safety or welfare).  Alabama once had the nation’s most sweeping interior design practice act—which literally criminalized the unlicensed selection of throw pillows and paint colors—but it was declared unconstitutional by a state trial court in August 2004, and that decision was affirmed by the Alabama Supreme Court in October 2007.  Alabama v. Lupo, 984 So.2d 395 (Ala. 2007).  Due to an attempted amendment in 2006 while the case was on appeal, the precise status of Alabama’s interior design law remains unclear but should be clarified through agency rulemaking and possibly by further court proceedings in the near future.

[8] Okla. Rev. Stat. tit. 59, § 46.38(B).

[9] See Exam and IDEP Eligibility Requirements Chart (available at:  www.ncidq.org/pdf/eligibility_chart.pdf, accessed on Sept. 4, 2008).

[10] See Exam Information (available at www.ncidq.org/exam/examinfo.htm, accessed on April 16, 2007).

[11] Okla. Admin. Code § 55:10-3-13(a) (2008)

[12] Id.

[13] Pittsburgh Press Co. v. Human Relations Comm’n, 413 U.S. 376, 385 (1942).

[14] Piazza’s Seafood World v. Odom, 448 F.3d 744, 752-53 (5th Cir. 2006) (citing Central Hudson Gas & Elec. Corp. v. Public Service Comm’n of New York, 447 U.S. 557, 566 (1980)).

[15] 358 F.3d 223 (2nd Cir. 2004), aff’d 544 U.S. 460 (2005).

[16] 53 F. Supp.2d 464 (D.D.C. 1999).

[17] 267 F. Supp.2d 559 (E.D. La. 2003).

[18] 312 F.3d 220 (6th Cir. 2002).


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