With Big Odds and High Stakes Limo Drivers and IJ Lawyers Roll to Victory

July 2001 Volume 10 Number 4

Everybody knows that Vegas is a gambling town where the odds are king. So consider these odds: a small group of indepen-dent limousine operators decides to take on an entrenched cartel to open up a 50-million-dollar-a-year industry that has been closed to outsiders since its inception. The cartel is made up of a handful of limo companies that are wealthy, politically connected and, when it comes to keeping out potential competitors, ruthless. The independents are neither rich nor well-connected, but they have two things on their side that the limo cartel does not: the Constitution and the Institute for Justice.

After three years of litigation, after repeated obstructions and delays by their opponents, and after enduring a week-and-a-half long trial during which they were grilled by four sets of lawyers representing the Transportation Services Authority (TSA) and the intervening cartel members, the independent limousine operators finally slew their Goliath. In a strongly worded opinion, Judge Ron Parraguirre announced on May 16 of this year that the combined actions of the TSA and the big limousine companies violated the plaintiffs’ due process rights by subjecting them to an “arbitrary and unreasonable” licensing process. The judge wrote, “Ultimately, the only alternative for many applicants who do not wish to make . . . deal[s] with the intervenors is to be run to death in the ‘paper mill’ of a contested application proceeding.”

Documents obtained through discovery showed how cartel members like Bell Trans, Star and Ambassador manipulated and abused the licensing process to create an insurmountable barrier to independent limousine operators. At trial, lawyers for the TSA and the intervening limousine companies fought desperately to exclude those materials, arguing not only that they were hearsay (a ridiculous argument, given that virtually all of the items in question came straight from the files of the TSA), but that they were irrelevant to the issues in this case as well. Despite their Herculean efforts to prevent the court from seeing the entire picture, the court’s decision made it clear that what passed for business as usual at the TSA was unacceptable. As Judge Parraguirre explained, the limousine licensing process “amounted to an onerous and unduly burdensome process by which the applicants were forced to either withdraw their applications, agree to limit the scope of their proposed [operating authority], or incur increasing litigation fees and costs in order to comply with the numerous financial information and disclosure demands made by the TSA as well as the intervening carriers.”

The argument that finally carried the day—namely, that the TSA’s arbitrary and capricious delegation of power to intervening limo companies violated applicants’ due process rights—was both subtle and unusual. This “delegation” theory was the brainchild of IJ’s resident economic liberties guru Dana Berliner, and it had our opponents so flummoxed that during trial they began making legal arguments that were contradicted not only by briefing they had submitted earlier in the case, but by their own constitutional law expert as well. All the while, John Kramer, IJ’s vice president for communications, provided us with “air cover,” generating editorials and news stories to ensure that the public knew about the fight for freedom.

This case was a long shot by any measure. But in the end, Dana’s scholarly command of the law, Clark Neily’s relentless legal battling, the commitment and support of the entire IJ team, and, above all, the simple, sincere eloquence of IJ clients Rich Lowre, Rey Vinole, John West, Ed Wheeler and Bil Clutter carried the day, once again affirming that ours is a country of laws, not of men—or giant limo companies.

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