Local government accused of unconstitutionally stifling business

Georgia lawmakers have made it their quest to keep the Peach State the best place to do business.

Over the past several years, the General Assembly has approved favorable tax reforms, removed needless red tape and enacted landmark occupational licensing reforms that make it easier for military spouses, veterans and those who move here to get a job.

It helps that the executive branch is occupied by Gov. Brian Kemp who has made pro-business policies central to his agenda from day one. In 2018, a chainsaw-wielding Kemp even announced in a campaign ad, “My chainsaw is ready to rip up some regulation.”

He has stayed true to his word—although his bill-signing pen has vanquished more regulations than his chainsaw—but some local officials don’t share his zeal. Their actions serve as threats to individual prosperity and the American dream.

One particular case may prove to epitomize this danger in South Fulton where the City Council is accused of acting illegally to prop up existing businesses at the expense of new ventures, and it is receiving national attention.

Matters came to a head in July, after Awa Diagne—an immigrant mother of six who has lived in the United States for 30 years—applied for a special-use permit in South Fulton to open and operate an African hair-braiding shop.

She has decades of experience, and at the time, she had already signed a lease for her operation and done all of her due diligence to open her business in South Fulton—save for acquiring the permit.

It seemed pro forma. South Fulton staff and the planning commission recommended approving her request, but at a City Council hearing matters took a strange turn. A hair salon proprietor operating near Diagne’s lease rose in opposition and claimed, “We don’t need a braiding salon right in the same plaza as my full-service salon.” It seems as though she simply doesn’t want more local competition and prefers the government to strong arm it out of her way.

Members of the public regularly testify and make odd requests, but most elected officials politely listen and brush unreasonable appeals aside. Not this time. One council member said, “It is not fair for small businesses to have to compete with someone right next door to them.”

The City Council ultimately rejected Diagne’s permit—even though she had already acquired and began paying for her lease—and council members assert their right to do so under the special-use permit process. I reached out to South Fulton Mayor Khalid Kamau’s office for a statement, but they did not provide a quote.

The City Council’s decision could have been the end of Diagne’s venture in South Fulton, but she lawyered up. Her counsel filed a petition in Superior Court to obtain relief. I caught up with Diagne’s attorney—Renée D. Flaherty of the Institute for Justice—who explained, “The city of South Fulton has decided that [Diagne] shouldn’t be allowed to open her business because it might provide competition with existing businesses. That is not only wrong; it is unconstitutional according to a case decided by the Supreme Court of Georgia just last year.”

Flaherty is referencing Jackson v. Raffensperger. The court ruled—thanks to the Due Process Clause—“We have long interpreted the Georgia Constitution as protecting a right to work in one’s chosen profession free from unreasonable government interference.” Legislative bodies can interfere only if they can show it is necessary to protect “public health, safety, or welfare.”

Diagne’s attorney asserts that her permit denial doesn’t fit within these categories—and thus is unconstitutional—but this may not be the first time the city of Fulton has acted in such a manner. “We know that [it] has done something similar to at least one other beauty salon owner who wanted to open a second location but was denied as ‘an effort to diversify South Fulton’s business landscape,’” Flaherty told me.

In the end, Flaherty doesn’t mince words with regard to the council’s decision: “What the City of South Fulton has done isn’t just unconstitutional and morally wrong, but it also will negatively impact the entire community. Taken literally, the South Fulton City Council’s justification for denying [Diagne’s] special-use permit is because she might be too good at her business. This is as absurd as it is illegal.”

At least one municipal government is accused of inappropriately and unconstitutionally dabbling in economic protectionism. Instead of pursuing this policy, local officials ought to consider some of the Georgia General Assembly’s efforts to cut regulation and allow consumers and a freer market to determine winners and losers, not the government.