Minnesota: Land of 9,998 Regulations

By Nick Dranias

Yes, indeed.

In a land known more for its liberalism than libertarianism, it took IJ’s Minnesota Chapter only a few months to liberate sign hangers from needless bureaucracy and taxi drivers from an artificial cap on the number of taxi licenses in Minneapolis.

The first victory came on September 11, 2006, with the entry of a consent judgment against the City of Minneapolis and in favor of IJ-MN’s clients Dan Dahlen and Truong Xuan Mai.  Sign hangers are now free from the red tape and once-arbitrary process that stopped them from working in the entry-level occupation of sign hanging—a job that often involves simply digging a hole, dropping in a couple of posts, filling the hole with concrete and attaching a board to the posts.

Minneapolis sign hanger Truong Xuan Mai (above) and taxi company owner Luis Paucar (below) are both entrepreneurs who want to earn an honest living without unreasonable government interference.  Thanks to the work of the IJ Minnesota Chapter they are now free to do so.

Previously, the City required the Police, Health, Water Works, Building, Zoning and Fire Departments all to approve any sign hanger license, but furnished no criteria to govern this process and no safeguards against licensing delay.  In the consent judgment, Minneapolis admitted that this unconstrained multi-departmental approval process delayed 131 sign hanger license applications for several months and, in many cases, forever.  For dozens of applicants, including Mai, these delays amounted to license denials because sign hanging is a seasonal business and sign hanger licenses expire annually.

Now, however, to receive a license to practice their trade in Minneapolis, sign hangers like Mai and Dahlen will need only to follow an objective procedure of submitting an application, proof of insurance and bonding, and a small fee.  Once this occurs, the City will have no more than five days in which to issue a license.  In short, the sign hanger consent judgment not only blew eliminated an unconstitutional barrier to earning an honest living, it reaffirmed the rule of law rather than the rule of men.

Then, only one month later, economic liberty in the North Star State triumphed once again.

On October 14, 2006, Minneapolis enacted an ordinance, supported by the IJ Minnesota Chapter, that busted open the taxi cartel created decades ago.  Previously, the City enforced a taxi cap that limited the number of authorized taxis to 343 through what was termed a “public convenience and necessity” test.  In essence, this test required anyone requesting the issuance of new licenses to prove that new competition would not hurt existing taxi companies.  Not only did the City repeal this impossible-to-meet, cartel-creating standard, but starting this December, the City will authorize up to 45 additional taxis every year until it finally eliminates its taxi cap altogether in 2010.

IJ-MN supported these crucial reforms before the City Council and in the court of public opinion.  We spotlighted the plight of immigrant entrepreneurs from Ecuador, Egypt, Laos and Somalia who were being frozen out of the market.  IJ-MN also reached out to leading transportation economists and legal experts to testify in support of reform, including Professor Jerry Fruin of the Center for Transportation Studies at the University of Minnesota and Professor Robert Hardaway of the University of Denver’s College of Law.  And when the taxi industry threatened a lawsuit to stop the taxi reforms—a historically successful tactic—IJ-MN helped stiffen the spines of City Council members by its strong, principled stance in support of reform and willingness to intervene on behalf of entrepreneurs and consumers in any industry suit.

In sum, prefaced by the publication of its study on barriers to entrepreneurship this past May, the Institute for Justice Minnesota Chapter took on Minneapolis’s regulatory regime.  Two of the 11 outrageous occupational regulatory regimes spotlighted in The Land of 10,000 Lakes Drowns Entrepreneurs In Regulations (available online at www.ij.org) have been eliminated.

With steadfast clients, solid legal advocacy and a focused media spotlight, IJ is tearing down Minnesota’s regulatory bureaucracy and is making way for unprecedented economic liberty across the state.  The times they are a-changin’.

Nick Dranias is an IJ Minnesota Chapter attorney.