Lake Chelan Ferries

Courtney v. Goltz
Challenging Lake Chelan’s Government-Imposed Ferry Monopoly Under the Fourteenth Amendment’s Privileges or Immunities Clause

	IJ Clients Cliff and Jim Courtney
	Watch: Sinking the Government-Enforced Ferry Monopoly on Lake Chelan

If you want to understand the public’s growing frustration with government, visit Lake Chelan in Washington state.  But if you go, you better plan to add an extra day to your travels.

Jim and Cliff Courtney have a plan to bring economic prosperity to their small community of Stehekin, located on the north shore of Lake Chelan in the center of the state.  Because Stehekin is accessible only by boat or plane, the Courtney brothers want to provide convenient ferry service across Lake Chelan so more people can enjoy the natural beauty and outdoor activities in the community their family has called home for four generations.

Unfortunately, the state of Washington has sunk their plan.  A nearly century-old state law requires Jim and Cliff to obtain a certificate of “public convenience and necessity” from the state in order to pick up and drop off passengers along Lake Chelan.  This requirement, which was implemented to protect existing ferry providers from competition, has resulted in a government-imposed monopoly on Lake Chelan ferry service since the 1920s.

The public convenience and necessity requirement is an anticompetitive condition that turns the ordinary rules of business on their head.  It forces entrepreneurs like Jim and Cliff to either obtain the existing ferry company’s permission to compete (akin to Burger King having to get McDonald’s permission before opening a restaurant) or prove in a trial-like hearing to the government that the existing company is not providing “reasonable and adequate service” and that a new service is necessary.  In practice, this standard is so arbitrary and hostile to honest entrepreneurship that enterprising citizens are routinely prevented from pursuing their dreams.  Such an approach is fundamentally inconsistent with the American tradition of allowing consumers and entrepreneurs—not bureaucrats and existing businesses—to decide whether a new business is necessary.

Not only does the public convenience and necessity requirement cost jobs and drive up prices by reducing competition, it also violates the constitutional right to earn an honest living in the occupation of one’s choice.  Although the state has a legitimate interest in requiring ferries to be insured and inspected and manned by a trained and capable crew, it should not block entry merely to protect other ferry operators from competition.

That is why, on October 19, 2011, the Institute for Justice joined with Jim and Cliff in filing a federal civil rights lawsuit to challenge the public convenience and necessity requirement on Lake Chelan and vindicate their right to earn an honest living free from arbitrary and protectionist government interference.