In May 2001, the Institute for Justice scored a major legal victory for economic liberty on behalf of independent Las Vegas limousine operators. A Nevada court ruled that the State’s Transportation Services Authority (TSA) violated the constitutional rights of independent limousine operators who were unable to get limousine licenses due to the action of regulators and established limousine companies seeking to limit competition.
In his decision, Clark County District Court Judge Ron Parraguirre declared, “The right to earn a living in one’s chosen profession is a liberty interest protected by the due process clauses of both the U.S. and Nevada constitutions.”
Nevada’s onerous and arbitrary limousine licensing procedure, declared an unconstitutional violation of due process rights by Judge Parraguirre, was a classic case of regulatory “capture” by the regulated. The TSA allowed existing limousine companies to “intervene” in the administrative hearings for license applications from new companies; in other words, it allowed existing companies to protest in a government forum the entrance of new competitors into the market. Not surprisingly, from 1979 to 1998—the year the Institute for Justice filed suit against the agency to break up its state-enforced cartel—only four new companies were admitted to the market and they were only permitted to operate under onerous restrictions.
After IJ’s legal victory, client Ed Wheeler secured a limo license and now runs a successful and popular business, Omni Limo (www.omnilimo.com) in Las Vegas.
The Independent Limousine Owner/Operator Association (ILOA) was founded by the Association’s President, Richard Lowre, William Clutter, John West and others. The ILOA membership of approximately 65 members includes independent limousine owners and/or operators, limousine tour services, contract limousines, and limousine sales companies. These individuals range from eager young businessmen and women just entering the work force,…
When IJ began litigation, John West was an independent driver who wanted to establish his own limousine service.
William Clutter is a college graduate who, like many other Americans, wished to become financially self-sufficient by establishing and operating his own business, rather than working for others. Further, he and his wife wanted a job where they could work together. Mr. Clutter believed that opening his own limousine service would be the answer, after…
Washington, D.C.-Nevada limousine entrepreneurs can finally heave a sigh of relief. The Nevada legislative session has closed, and SB 576—the proposal to further restrict the ability of entrepreneurs to enter the limousine business—did not make it into the statute books. As soon as Judge Ron Parraguirre announced his decision on May 16 that the Transportation…
Washington, D.C.Las Vegas limousine operators increasingly find themselves behind bars or in front of a judge rather than behind the wheel as a Nevada state agency cracks down on the operator’s right to earn an honest living. But a Washington, D.C.-based public interest law firm is looking to change that. In October 1997, Nevada’s legislature…
Washington, D.C.-Should government be allowed to create exclusive cartels that protect favored companies from competition and keep out newcomers, or does that violate the constitutional rights of would-be entrepreneurs who seek to enter the marketplace? That is the question the Nevada District Court for Clark County of will answer at a trial in a case…
Washington, D.C.On Monday, May 4, 1998, independent limousine drivers in Las Vegas will file suit to break up that city’s government-imposed limousine monopoly. Following the filing of their lawsuit and a related court hearing, the drivers will caravan down The Strip in a “freedom ride” calling for an opening of the market. Last October, the…
Washington, D.C.-Not satisfied that its own denial of constitutional rights against would-be limo operators was severe enough, Nevada’s Transportation Services Authority (TSA) recently called on its sister agency-Nevada’s Taxicab Authority (NTA)-to seize the cars of independent operators. This one-two punch against economic liberty-the denial of long-sought permits to operate a limousine legally, then the…
License to Work: A National Study of Burdens from Occupational Licensing is the first national study to measure how burdensome occupational licensing laws are for lower-income workers and aspiring entrepreneurs. The report documents the license requirements for 102 low- and moderate-income occupations—such as barber, massage therapist and preschool teacher—across all 50 states and the District…
THE CURRENT SITUATION
In April and May 1998, the Institute for Justice filed two lawsuits in the State District Court of Nevada seeking to vindicate the right to earn an honest living. The State of Nevada and the Transportation Services Authority ("TSA") violate that right by enforcing laws that arbitrarily and unreasonably prohibit hardworking individuals from providing limousine service in Las Vegas and throughout the State of Nevada. Instead of encouraging individuals and assisting them in starting their own businesses, the TSA blocks those entrepreneurs by seizing their limousines, assessing high-dollar sanctions against them, and even sending them to jail for criminal violations. In so doing, the TSA creates a "black market" for limousines and turns respectable, law-abiding citizens into criminals.
In light of the important role limousines play in the unique commercial landscape of Las Vegas, Nevada's hostility toward new limousine services is not only ironic but also self-destructive. Limousines have been an essential part of Las Vegas's tourism and entertainment industries throughout the city's rapid development over the past three decades. The demand for luxury limousine services has probably never been greater than it is right now. The recent surge in hotel and resort development-bringing with it a corresponding surge in tourism-fuels the demand for new and better limousine services. Unlike many other resources that have to be imported into Las Vegas to support this development, individuals who are willing to provide limousine services are local and plentiful. Hundreds of self-starters stand ready to do just that on any given day, but the TSA will not let them out on the streets. Why? Because the TSA is more concerned with protecting the entrenched handful of licensed limousine companies from competition from eager upstart companies than it is about providing the best service to the riding public.
The ramifications of these lawsuits extend far beyond this desert city, however. Specialty transportation services nationwide are heavily regulated or even banned outright. In New York City, jitney commuter van services are nearly regulated out of business under the same protectionist standard that governs Las Vegas limousines-the "public convenience and necessity" standard. This standard requires new businesses to show that their proposed services will have no adverse effect on existing businesses. In other words, the new limousine service must show they will not successfully compete with the existing ones. Such regulations amount to granting existing companies the right to a monopoly -i.e., government protection from competition-and the right to veto the establishment of any new companies. In practical effect, this precludes legitimate new entrants because they cannot obtain licenses even though they are competent and customers want to patronize them.
Public convenience and necessity standards far exceed legitimate public health and safety objectives. They operate instead to exclude newcomers and to protect politically powerful existing companies. Such regulations are not in the public interest, since they benefit only two groups and harm everyone else. That is, the only beneficiaries are the entrenched limousine services, which hold a virtual monopoly on the market, and the TSA itself, which gets to keep all of the fines it assesses against non-licensed drivers. The would-be entrepreneurs, their passengers, and individuals working in the Las Vegas tourism and entertainment industries, all of whom depend on quality limousine service, are left out of the equation. Even worse, they must pay the bill to maintain the very machinery that keeps them out of the game.
The Institute for Justice represents individual drivers who have had their businesses shut down or who are in imminent danger of losing their livelihoods, and the Independent Limousine Owner/Operator Association ("ILOA"), which represents limousine drivers who are in similarly precarious circumstances.
William Clutter is a 37 year old college graduate who, like many other Americans, wished to become financially self-sufficient by establishing and operating his own business, rather than working for others. Further, he and his wife wanted a job where they could work together. Mr. Clutter believed that opening his own limousine service would be the answer, after he saw first-hand the demand for such service when he provided shuttle service around Las Vegas for clients of his former employer. He had also talked with numerous limousine drivers who confirmed the high demand for limousine service. He even drove a limousine part-time so he could learn about the industry. Based on these experiences, he concluded that this could be a way to achieve his dream of self-sufficiency.
Mr. Clutter borrowed money to buy his own limousine, purchased a million-dollar insurance policy, and began driving. In addition to providing shuttle service for his former employer, he offered short trips and charter service to the public. He mainly provided service for weddings and proms and rides to and from the Strip and around Las Vegas. He quickly understood that if he continued to provide his high level of specialized customer-based service, he would be able to quit his job, buy a second limousine, and he and his wife could make a good, honest living on their own.
However, before he could realize this goal, the government hammer dropped and stopped his fledgling business dead in its tracks. In October 1997, the TSA began to crack down on independent limousine operators; impound their vehicles; assess large civil fines against them; and prosecute them in criminal court for operating limousines without certificates of public convenience and necessity. The TSA wielded this three-pronged weapon against Mr. Clutter on December 4, 1997. His limousine has been impounded since then, collecting storage fees at a rate of $15/day; the TSA has assessed two $2,500 civil fines against him and has initiated a criminal prosecution against him for the same offense. Now, although Mr. Clutter can no longer operate his business to earn a living, he still must continue paying off the loan he took to buy the limousine and continue paying for insurance for a vehicle the government will not allow him to use. In one day, the TSA transformed him from an independent hard-working entrepreneur into an unemployed criminal-all for simply driving a limousine.
John West is also a young independent driver who wants to establish his own limousine service. John filed an application with the TSA for his proposed limousine service on September 23, 1997. Now, more than seven months later, he still has not received approval from the TSA. In fact, the TSA has yet to hold a hearing to determine whether it will grant him a certificate to operate. However, John has been served with demands for information and documents from existing taxi and limousine services, whom the TSA allowed to intervene in the application process. John has personally felt the devastating impact of the TSA's law enforcement activities. He was cited for driving without a certificate and assessed a $2,500 fine, which he is appealing. He is facing serious financial difficulties because of his drastic loss in income. John has a wife and two young daughters to support without the income from driving, which he was counting on to pay the bills.
Other drivers have already lost their homes and been forced to plea to criminal charges. Now they have a criminal record that greatly hampers their ability to find new employment or even to transact other commercial business. A group of these drivers came together and organized an association to protect their rights called the Independent Limousine Owner/Operator Association (ILOA).
The ILOA was founded by the Association's President, Richard Lowre, and plaintiffs William Clutter, John West, and others. The ILOA membership of approximately 65 members includes independent limousine owners and/or operators, limousine tour services, contract limousines, and limousine sales companies. These individuals range from eager young businessmen and women just entering the work force, to hard working immigrants who came to this country looking to achieve the American Dream, to transportation veterans who remember a time when this country understood and valued entrepreneurs willing to take a chance on starting a new business and in so doing improve things just a little for everyone. The ILOA is dedicated to protecting its members' fundamental right to earn an honest living. It also seeks to help its members serve their communities safely and responsibly by securing a legitimate place for independent limousine services in Nevada. The ILOA lobbied unsuccessfully against the laws that currently prohibit such services. Officers of the Association met with the Governor and other state officials and participated in a TSA sponsored workshop discussing possible reform to the restrictive laws. Many of the ILOA's members have lost their livelihoods and their vehicles, and some have even lost their homes due to the TSA's enforcement of the limousine laws.
The Licensing Process
To provide limousine service, Nevada law requires individuals like William, Rich, John, and Ed to first obtain a certificate of "public convenience and necessity" from the TSA. The process to obtain the certificate, however, is far from a routine matter. The applicant must first complete a lengthy application, which seeks at least nineteen different types of information about the proposed limousine service. This information includes: personal background information, business information and documentation, financial statements and projections prepared in accordance with complex accounting principles, a description of the type of service and the rates to be charged, detailed maps of the proposed route and geographic area to be served, copies of all contracts, proof of insurance, and a statement of the qualifications and experience of the person who will manage the service. All of this is required for one person to drive one limousine.
As if this exhaustive laundry list were not enough, it is simply the initial stage of the process. After the application is filed, the TSA may, and routinely does, request additional information it deems necessary. This may include interviews with personnel, inspections of vehicles and business locations, or even private information. In addition, once an application is filed, the TSA allows existing limousine services to intervene in the process and object to the application on the grounds that the new service would adversely affect their business by directly competing with them. The existing services regularly join forces in cartel-like fashion to oppose all new applications and to protect the allocation of the limousine market amongst themselves. The TSA allows these intervening limousine and taxi services to barrage the applicant with requests for documents and other information, often duplicating requests of prior interveners. One local reporter compared watching the existing companies intervening in a license application to watching a "Great White feeding frenzy."
Compounding the onerous burden of responding to endless information requests are the prohibitively high costs of the application process, which place the applicant at an insurmountable disadvantage throughout the process. In connection with each intervener, the applicant must pay for a newspaper advertisement providing notice of a hearing; the court reporter fees to record and transcribe each hearing; attorneys fees for representation at each hearing, costs associated with responding to boundless discovery; and other related costs. One recent limousine applicant spent approximately $250,000 in its unsuccessful attempt to gain approval for ten limousines and three vans from the TSA's predecessor, the Public Service Commission. Obviously, smaller applicant companies or individuals who cannot afford such a fight don't stand a chance and can't even justify the time or costs to initiate the process.
The cause of this high cost and lengthy process is Nevada's public convenience and necessity requirement. Under that standard, applicants bear the ridiculous burden of showing that their service will not "adversely affect other carriers." In practice, of course, this is virtually impossible. Whenever there is a new supply or source of a service there is always the possibility, or more accurately the likelihood, that existing sources will be affected by the new source. Only the first supplier of a product or service can honestly claim that its service will not affect any existing providers. The effect of the new source may be adverse from the perspective of the existing providers, but it is clearly beneficial to the public. The core of good business is competition; without it the result is monopolies, which translate into higher prices, fewer choices, and worse service. That is a pretty apt description of the limousine market in Las Vegas these days, and it is a direct result of the public convenience and necessity requirement.
The notion of "public convenience and necessity" is a flawed concept. The public, not the government, should decide through the market which services are convenient and necessary. If someone wanted to open a new coffee shop, that person would not have to show that the new shop wouldn't compete with others in the city before it could open. The customers would decide which shop they wanted to patronize. All the public convenience and necessity standard does in the limousine market is give existing limousine operators veto power over possible competitors. The public convenience and necessity requirement does nothing to protect the riding public from unprofessional or even dangerous drivers. In fact, by forcing otherwise good service providers underground, it places all of the unlicensed drivers, including those who may not meet legitimate vehicle and driver safety requirements, beyond the proper regulatory reach of government.
Furthermore, any suggestion that the limousine market in Las Vegas is saturated and cannot sustain any additional providers is simply unsupportable. If there is no business, they will fail. All the independent drivers want is a chance to compete. Limousines provide integral transportation to Las Vegas's booming tourist trade, casinos, and resorts. Las Vegas has a population of more than 1.3 million and hosts an additional 30.5 million visitors per year. The most recent available information shows there are only six licensed limousine services on the road to service that market. In comparison, Miami has roughly twice the population but only one third the number of visitors, and it has approximately 20 licensed services (more than 3 times as many as Las Vegas). Put another way, each limousine service in Las Vegas must serve 5.3 million people on average, while each Miami limousine service must serve only 600,000 people on average.
An even more striking comparison exists between the number of limousine companies in South Lake Tahoe, California, and the numbers for Las Vegas. South Lake Tahoe has a combined population and visitor figure of 2.03 million and at least eleven licensed limousine companies. That means each Tahoe company services only 180,000 people; in Las Vegas, each company services 5.3 million people on average. The striking difference in regulation is most probably the source of the contrast. While it can take years in Nevada to receive authorization to operate a limousine service at the cost of hundreds of thousands of dollars, in California, an applicant can receive authorization through the mail in just a few days at a cost of a few hundred dollars.
Nevada's residents and businessmen and women would be wise to take notice of the damaging effects of the public convenience and necessity requirement and the TSA's enforcement of the limousine licensing statutes. When anti-competitive regulations hurt limousine drivers, they also hurt the customers they service and thereby the businesses those customers patronize. Reasonable regulations that genuinely protect the public are wholly appropriate, for example requiring that limousines should be inspected and insured. But artificial limits on entry into the business do nothing to protect the public and do everything to protect existing companies from competition and provide the Transportation Services Authority with a lucrative source of funding (discussed below). Enforcement
The most forceful way that the TSA protects the limousine monopoly is through its aggressive enforcement of the public convenience and necessity licensing provisions. Nevada law provides no less than three separate avenues of enforcement against drivers for the same activity. These are (1) immediate impoundment of the vehicle and issuance of a civil citation, which authorizes assessment of up to a $10,000 fine; (2) issuance of a separate civil citation authorizing the assessment of another $10,000 fine; and (3) issuance of a criminal citation, which carries a fine of up to $2,000 and a jail term of up to one full year. So, if someone is out driving his own well-maintained, fully-insured limousine and he provides a ride to someone for a fee, in Nevada he can be thrown in jail, stripped of his valuable property, and fined thousands of dollars.
The TSA's multiple enforcement actions mean that anyone accused of a violation must appear at multiple hearings and face multiple fines and punishment. (See attached chart of proceedings). Mr. Clutter has already had to appear at four hearings and has incurred large bills for legal representation at each of those. But that accounts for only two of the enforcement actions, the impoundment and the civil citation. The results of those actions have left him with fines totaling $5,000 and his vehicle impounded for over four months collecting towing and storage fees that amount to more than $2,000 to date. In addition, he is still facing the worst of TSA's many weapons, the criminal prosecution that could land him in jail for a year.
In addition to the drastically out-of-proportion punishment authorized by Nevada's statutes, those laws permit the abuse of power, harassment of innocent people, and improper allocation of funds. The various enforcement statutes are drafted in such vague and ambiguous language that TSA officers have virtually boundless discretion-they can stop and cite anyone driving a limousine with passengers inside. What's more, during the violation hearings, the TSA takes the position that the government is not required to even show that any fare was charged, or even discussed, in order to find someone guilty of a violation. All they need show is that a driver transported others from one place to another within the State of Nevada and that the TSA had not authorized the driver to do so.
An even more pernicious problem in regard to the hearings is that the same agency that cites the accused is responsible for conducting the hearings and making determinations of guilt. Moreover, all money collected from the assessment of any fines as a result of those hearings is deposited in a special TSA regulatory fund that the agency uses to pay, among other things, the salaries and expenses of TSA employees. Obviously, this gives the presiding TSA commissioner an incentive to find against an accused violator and assess high-dollar fines.
In practice, what this amounts to is broad misuse of power. The TSA can harass people without having to defend those actions in an impartial adjudication. In fact, often there will be no adjudication at all, since many people cannot afford to fight. They need their cars and can't take the chance of having to pay even higher fines, so they plead guilty to a reduced fine and end up with a record. This, they believe, is better than losing their vehicle for good and/or going to jail. Limousine drivers who have not yet been stopped face a similar Hobson's choice-either abandon their livelihood or face devastating legal action in the future. This type of enforcement scheme is common practice. It relies on the fact that most people cited will not have the money or stamina to fight the system and will just pay the fines. For the TSA, it is a great way to raise revenue for its own fund.
What that regime ignores is the crushing effects of such actions on the individuals. What happens to them when government seizes their property, holds it indefinitely, and threatens jail time and multi-thousand-dollar fines? The following scenario happens to more and more would-be entrepreneurs every day in Las Vegas because of the TSA's enforcement of unconstitutional laws.
Limousine entrepreneurs take out a loan to purchase a limousine in hopes of working for themselves, only to find the government blocks them out of the market. When individuals try to provide service without a license, they are fined, sometimes jailed, and their vehicle-their means of employment-is seized. While they fight the system to get their vehicle back, they often have to take a loan on their house to meet their limousine payments and quickly mounting legal bills. But because they no longer have the income from driving and they can't find new jobs because of their new criminal record associated with driving the unlicensed limousine, they often lose not only their job and their vehicle, but also their home.
But things don't have to be this way.
If the Court or the legislators remove the limousine restrictions, entrepreneurs could at last be able to compete and to provide the services that customers demand. At the same time they could, through honest enterprise, employ people who might not otherwise have an opportunity to enter the economic mainstream. The experience of other Institute for Justice clients bears this out. In Denver, IJ client Leroy Jones and his partners began Freedom Cabs, breaking that city's 50-year-old monopoly on cab service. Today his company employs nearly 100 people. In Washington, D.C., African hairbraiders Taalib-Din Uqdah and Pamela Ferrell were nearly put out of business by anti-competitive regulation. But since breaking open the cosmetology cartel, they have trained dozens of inner-city women on the art and occupation of African hairbraiding. The same could be said of William Clutter and the Las Vegas limousine market a short time from now if the Nevada District Court takes this opportunity to protect the economic liberty of its citizens.
THE IMPORTANCE OF ECONOMIC LIBERTY
After the Civil War, economic liberty was one of the civil rights most cherished by newly-emancipated slaves. Yet southern governments acted quickly to suppress economic opportunities by enacting laws that made it difficult or impossible for black Americans to earn a livelihood. The federal government acted to curtail these abuses by passing first the Civil Rights Act of 1866 and then the Fourteenth Amendment, both of which sought to protect economic liberty among the "privileges or immunities of citizenship" that states were prohibited from violating.
In the 1873 Slaughterhouse-Cases, however, the U.S. Supreme Court essentially read the "privileges or immunities clause" of the Fourteenth Amendment out of the Constitution. This decision 125 years ago gave states virtual carte-blanche to enact the shameful Jim Crow era laws that restricted opportunities for black Americans. Ever since, states have imposed onerous and arbitrary restrictions on occupations. These restrictions often far exceed those needed to protect public health and safety, sometimes going so far as to prohibit certain legitimate occupations altogether.
A rule of law that better reflects the original understanding of the constitutional limits on government power, however, would require a closer ends-means fit between the government interest and the regulation used to address that interest. For instance, regulations requiring limousines to be safe, insured, and driven by competent drivers would be appropriate. The current legal regime goes far beyond this.
Recognizing the need for an ends-means fit, a federal court in 1994 struck down a Houston law prohibiting jitney commuter vans from operating on city streets. The Court found that the ban on jitneys bore no reasonable relationship to legitimate health and safety considerations and that it unconstitutionally infringed on Alfredo Santos' right to earn a livelihood.
In 1995, the Colorado legislature deregulated Colorado's taxi cab industry in response to an Institute for Justice lawsuit on behalf of four minority entrepreneurs who challenged Denver's 50-year-old ban on new taxi companies. In addition to Denver, IJ also helped lead the way to open taxi markets in Indianapolis and Cincinnati. Building on this string of victories, in February 1997, the Institute filed a lawsuit against the City and State of New York challenging the regulatory regime governing commuter vans as an unconstitutional barrier to entry and a violation of the drivers' economic liberty.
The Institute for Justice challenges arbitrary legal restrictions on behalf of entry-level entrepreneurs struggling to pursue their American dreams. Our ultimate goal is to restore economic liberty as a fundamental civil right by overturning the Slaughter-House Cases in the U.S. Supreme Court.
The two Las Vegas lawsuits filed by the Institute for Justice go to the very core of cherished constitutional values: the right of individuals to earn an honest living. The plaintiffs ask for nothing more than the opportunity to provide needed transportation service for the residents and tourists of their city. Yet the laws of the State of Nevada erect impossible barriers to their aspiration and brand them criminals. Administrative Appeal
The first lawsuit filed by the Institute for Justice on April 8, 1998, is an appeal of the administrative decision by the TSA against William Clutter. In that suit, IJ asks the Court to reverse the TSA's impoundment of Mr. Clutter's limousine, its assessment of two $2,500 civil fines against him, and its issuance of a criminal violation against Mr. Clutter. The PCN licensing provisions and the TSA's enforcement of them violate Mr. Clutter's right to engage in a legitimate occupation as protected by Article 1, §§ 1, 8, and 20 of the Nevada Constitution and the privileges or immunities clause of the Fourteenth Amendment to the U.S. Constitution. These enforcement statutes further no legitimate governmental objective related to protecting public health and safety and thus constitute arbitrary and unreasonable barriers to entry into the limousine service industry.
The TSA's enforcement actions also violate Mr. Clutter's right to due process of law as guaranteed by Article 1, § 8 of the Nevada Constitution and the Fourteenth Amendment to the U.S. Constitution. The enforcement statutes fail to provide alleged violators with an impartial adjudication because TSA commissioners, who make determinations of guilt, have a direct financial incentive to rule against alleged violators. All fines collected pursuant to these enforcement actions are deposited into a special TSA regulatory fund, which the agency uses to pay, among other things, the salaries and expenses of the TSA commissioners. Moreover, the enforcement statutes also violate due process because they are drafted in such vague and ambiguous terms that they fail to provide adequate notice of prohibited conduct and fail to provide meaningful standards and guidance for law enforcement. As a result, the TSA has unbridled discretion to arbitrarily enforce the limousine laws.
In addition to reversal of the TSA's Order against Mr. Clutter, IJ seeks a preliminary injunction to enjoin the TSA from enforcing any of the unconstitutional laws against Mr. Clutter through any of the three possible enforcement mechanisms. Declaratory Judgment Action
The second lawsuit, filed on May 4, 1998, on behalf of Mr. Clutter, John West, and the ILOA, asks the Court to declare that the limousine licensing barriers violate the plaintiffs' right to economic liberty-to earn an honest living-as protected by Article 1, §§ 1, 8, and 20 of the Nevada Constitution and the privileges or immunities guarantee of the Fourteenth Amendment to the U.S. Constitution. The laws regulating limousine services infringe on IJ's clients' basic right to earn an honest living because they are unrelated to any legitimate public health and safety concerns. Instead, they were passed to protect from competition powerful economic interests, namely, the existing licensed limousine cartel. The lawsuit also asks the Court to declare the three-pronged enforcement program unconstitutional and to enjoin TSA's enforcement efforts under that program because, as discussed above, they violate the plaintiffs' right to due process of the law protected by Article I, § 8 of the Nevada Constitution and the Fourteenth Amendment to the U.S. Constitution.
If successful, these lawsuits will put the independent drivers back on the streets and establish precedent that will give hope to all aspiring entrepreneurs that America remains a land of opportunity.
The lead attorney in this case for the Institute for Justice is Staff Attorney Deborah Simpson. She is joined in this work by Institute for Justice Staff Attorney Dana Berliner and Institute Vice President and Director of Litigation, Clint Bolick, who has litigated economic liberty cases nationwide. Joining the Institute for Justice as able local counsel are John P. Lukens and James S. Kent.
This document was prepared by Deborah Simpson and Clint Bolick for the Institute for Justice.
For more information, or to arrange an interview with the Institute for Justice and its clients, please contact:
John E. Kramer, Director of Communications Institute for Justice901 N. Glebe Road, Suite 900Arlington, VA 22203Phone: (703) 682-9320Fax: (703) 682-9321 E-mail: firstname.lastname@example.org
N.R.S. § 706.391. Nevada's limousine industry is more accurately described as an oligopoly because there are six licensed services rather than only one. However, the pernicious effects of an oligopoly are directly analogous to those of a government-protected monopoly. This delay in processing is not a new phenomenon. It appears that the TSA has adopted the practices of its predecessor, the Public Services Commission ("PSC"), in processing applications. Past applications have been pending for close to a year or longer before the agency makes a final determination. See also Bill Gang, Limo service sues PSC over competitor, LAS VEGAS SUN, October 19, 1989 (reporting how the PSC took nine to ten months to schedule hearings on four limousine company applications, which were all filed about the same time in April 1988 and noting that the only one of the four that was approved was an application of an existing company to expand its service.) N.R.S. § 706.386. N.A.C. § 703.165. Id. Existing transportation providers are allowed to intervene in the application process pursuant to N.A.C. § 703.580 and, as parties, gain the right to conduct discovery, introduce evidence, cross examine witnesses, make and argue motions and generally participate in the proceeding. N.A.C. § 703.500. For example, in the pending application of John West, the three largest licensed limousine companies filed two motions to intervene and three existing cab companies filed a third. By joining forces in this manner, the existing companies can get around the statute allowing the TSA to limit the number of interveners when two or more interveners have substantially the same interests. See N.A.C. § 703.600. John L. Smith, Bell owner fights to keep his big share of limousine market, LAS VEGAS REVIEW JOURNAL, September 19, 1996. Id. See, e.g., N.R.S. § 706.2873 (requiring the applicant to pay the "costs of recording and transcribing testimony at any hearing"). John L. Smith, Bell Trans always gives rough rides to limousine applicants, LAS VEGAS REVIEW JOURNAL, September 17, 1996. Another proposed service, Presidential Limousine Service, which was at the time the first new company authorized in ten years, had to fight a multi-year court battle with the existing companies and expend more than $200,000 before it could receive its authorization. Public Service Commission reviews "Limousine Wars," LAS VEGAS SUN, October 20, 1985; Julie Penn, Las Vegas Limousine Rivalry in High Gear, LAS VEGAS REVIEW JOURNAL, October 20, 1986. Although the PSC approved the company in 1984, two existing companies filed suit against Presidential and convinced the District Court to strike down Presidential's certificate on a technicality. After expending hundred's of thousands of dollars on application costs, purchasing limousines, and paying attorneys fees, the company was forced to cease operation less than six months after it started. It would be close to two years and thousands of dollars later before the PSC would finally authorize Presidential's second application and it could resume operations. Mary Manning, Presidential Limo Service wins permit, LAS VEGAS SUN, April 7, 1987. N.R.S. § 706.391. Las Vegas Convention and Visitors Authority, Research Department; University of Nevada, Las Vegas, Center for Business and Economic Research, Metropolitan Las Vegas Tourism Statistics 1997, April 10, 1998. Telephone Interview with Transportation Services Authority employee, (April 1998). Greater Miami Convention and Visitors Bureau (population and visitor information); Dade County Consumer Protection and Advocate's Office, Passenger Transportation Regulatory Division (number of limousine companies). South Lake Tahoe Chamber of Commerce. The average size of each company may also impact the number of companies in an area; however, in Las Vegas the size of the companies is regulated by the TSA with the effect being that the largest company has approximately 100 limousines, where the next largest only has 35, and the remaining companies are all under 25. The size of the companies in South Lake Tahoe are not expressly limited by the regulatory agency. Telephone Interview with California Public Utility Commission, Rail Safety and Carriage Division, (April 1998). Limousine licenses are routinely approved within a few weeks with a showing of insurance, workmen's compensation coverage, vehicle maintenance program, driver background check and the payment of a $500 filing fee and administrative costs of processes the application. Telephone Interview with Richard Konczak, owner of All Seasons Tahoe Limousine Service, (April 1998). N.R.S. § 706.476. N.R.S. § 706.771 pursuant to N.R.S. § 706.386. N.R.S. § 706.756. N.R.S. § 706.1514(2). N.R.S. § 706.1516. Clint Bolick, Unfinished Business (1992); see also Michael Kent Curtis, No State Shall Abridge (1986) at 175-77. Legal scholars' condemnation of the Slaughter-House Cases is nearly universal. See, e.g., David Richards, Conscience and the Constitution pp. 204-17 (1993); Akhil Reed Amar, "The Bill of Rights and the Constitution," 100 Yale Law Journal 1466-69 (1992); William E. Nelson, The Fourteenth Amendment: From Political Principle to Judicial Doctrine (1988) at 156-64. Santos v. City of Houston, 852 F. Supp. 601 (S.D. Tex. 1994); See also Brown v. Barry, 710 F. Supp. 352 (D.D.C. 1989).