Double Victory

Midwest transportation entrepreneurs are free to earn an honest living

In October, IJ scored not one but two major federal court victories for transportation freedom—and they both happened on the same day. These ground-breaking decisions serve to solidify the ability of cities to push aside outdated protectionist regulations in order to make way for new entrepreneurs.

The first case came out of Milwaukee. Longtime readers of Liberty & Law will remember that we sued Milwaukee back in 2011 on behalf of a group of cab drivers who simply wanted the right to own their own businesses but who found themselves blocked by the city’s draconian cap on taxi permits. And we won that case. A state court judge sided with IJ and threw out Milwaukee’s cap. But as soon as Milwaukee passed a law complying with the court’s order, it was sued again—this time by incumbent taxi companies who were arguing that the U.S. Constitution gave them the right to a permanent monopoly over taxi services in the city. Determined to defend our victory, IJ once again teamed up with Milwaukee cab drivers and intervened in the case, making a straightforward argument: There is no constitutional right to have the government protect you from economic competition.

In the second case, a group of established Chicago taxi companies filed a lawsuit against the city, also arguing that they had a constitutional right to a monopoly over transportation services, and, astonishingly, actually asked the court to order Chicago cops to go out and arrest people who were driving for ridesharing services like Uber and Lyft. IJ acted again, teaming up with a group of longtime Chicago residents who drove for different ridesharing companies to intervene to defend against this lawsuit as well.

Our interventions in these cases reflect a simple principle. If incumbent taxi companies can win a lawsuit like this—if a city even settles a lawsuit like this—no city will ever pass good free-market transportation reform again. That is the insight that propelled our first intervention in one of these cases more than 10 years ago, when we intervened in a lawsuit in Minneapolis and successfully defended the constitutionality of a free-market taxi law we had helped that city pass, and it has guided us in case after case ever since.

Back in Chicago and Milwaukee, both cases made their way to the 7th U.S. Circuit Court of Appeals after IJ victories in the trial courts. And in a surprise move, both cases were set for oral argument on the same morning. In an IJ first, we had to prepare for argument in two totally different cases only about 20 minutes apart—a daunting task made easier by the fact that IJ lawyers were the true experts in the room. We were the only lawyers involved in both cases, the only ones who had been litigating this issue for over a decade, and the ones best positioned to show the judges that-—even though the taxi companies in Chicago and Milwaukee were making different arguments—they were wrong for the same reason.

And it worked. Less than three weeks later, the court handed down two opinions by Judge Richard Posner, a prominent law-and-economics scholar before he was appointed to the federal bench by President Reagan, taking IJ’s side in each case. With expansive language extolling competition, Judge Posner said that under the protectionist theory the incumbent taxi owners made, “[E]conomic progress might grind to a halt. Instead of taxis we might have horse and buggies; instead of the telephone, the telegraph; instead of computers, slide rules.” Equally important, Judge Posner expressly connected the cases to IJ’s earlier victory in the 8th Circuit in our Minneapolis taxi case, recognizing exactly what IJ advocates: Incumbent companies do not have a constitutional right to be protected from competition.

These decisions build on a series of IJ victories for transportation freedom in recent months. We successfully defended free-market reforms and opened markets up to competition in three other cities in the past year alone. This double victory in the 7th Circuit clears the way for even more cities to spread transportation freedom and let drivers earn an honest living.

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