Viva Las Vegas Limos

March 1, 2001

March 2001

Viva Las Vegas Limos

By Deborah Simpson

After more than three years of suffering at the hands of the Transportation Services Authority (TSA) and the existing limousine companies, IJ’s independent limousine clients finally had their day in court in a trial challenging Nevada’s limousine licensing scheme.  The trial exposed the system for what it is: a private cartel that uses government’s power to limit competition.  IJ and its clients demonstrated how existing companies keep out newcomers and how the TSA applies its force in an arbitrary and biased manner.

Clark Neily gives an interview in front of the Las Vegas court after one of the six days of trial.

From IJ attorney Clark Neily’s opening statement, the Institute for Justice described how Nevada’s regulatory system is deliberately stacked against any would-be independent operators, and showed that the TSA is a hopelessly rigged agency that has been running roughshod over our clients’ constitutional rights.  IJ’s one-two punch of Neily’s pitbull litigation style and IJ Senior Attorney Dana Berliner’s razor-sharp constitutional law expertise more than matched the eight attorneys representing the defendants and intervening limousine companies.

IJ client Rey Vinole painted a stark picture of the system.  He told the court how when he applied for a state license to operate, three existing companies intervened to challenge his application.  Faced with the debilitating costs intervenors would impose, Rey could either cut a deal with existing companies and limit his service so as not to compete with them, or he could be “run to death” in the TSA’s “papermill” (in the words of TSA Chairman Paul Christiansen.)  When asked if he tried to cut a deal, he said he didn’t think it was right for those companies to force him to do that, so he withdrew his application and operated without one, taking the chance of being stopped by the TSA.

Rey operated three limousines at the peak of his business, providing luxury limousine service and earning the respect and business of a long list of repeat clients (including Steven Spielberg and George Clooney).  At the end of his testimony, one of the lawyers for a licensed limo service asked Rey, “If one of your drivers wanted to start his own company, taking away some of your clients, wouldn’t you want to intervene in his application and have something to say about that?”  Crystallizing the heart of the case, Rey, without hesitation, proudly stated, “No. That is none of my business. That is everybody’s right in America, to open your own business and be allowed to compete.”

Even testimony from current and former TSA employees supported our clients’ claims.  Ex-enforcement officer John Riggle testified, as someone who has seen the system from the inside, that the system does not give independent limo operators a fair opportunity to receive an operating certificate.  And the chairman himself, Paul Christensen acknowledged that there is no limit on the cost or duration of an application and no way for an applicant to know at the onset what his chances are of getting a license if he survives the process.

This is the very antithesis of due process, and we have asked the trial judge to fix the system so that it respects the constitutional rights of our clients and similarly situated independent limousine operators.  A ruling is expected in mid-April.

Deborah Simpson is the Institute for Justice’s Managing Director.

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