Washington Ferry Monopoly Leaves Economic Liberty High and Dry

By Michael Bindas and Larry Salzman

In October, IJ filed a lawsuit to sink the government-imposed ferry monopoly on Washington’s Lake Chelan and allow entrepreneurs like Jim and Cliff Courtney to set sail.

Jim and Cliff are fourth-generation residents of Stehekin, a remote community on the northwest end of the 55-mile-long lake. For decades, Stehekin has been a popular destination for tourists and outdoor enthusiasts. In fact, the Courtney family owns a rustic ranch and outfitter in the community.

But getting to Stehekin can be a bit of a challenge: It’s only accessible by boat, plane or foot.

For years, Jim and Cliff listened as their customers complained about the inconvenient schedule of the lake’s lone ferry operator. Much of the year, it runs a single boat, which makes only one trip per day, three days per week. During peak summer months, it operates two boats, but each still only makes one trip per day and, absurdly, both boats depart at the same time each morning, headed in the same direction. That means vacationers from Seattle or Spokane must often spend an extra night in Chelan, on the lake’s southeast end, in order to catch one of the early morning ferries to Stehekin.

Several years ago, Jim decided to launch a competing ferry, but a state law makes it illegal to operate a ferry without a “certificate of public convenience and necessity.”

What does it take to get a certificate? Either the consent of the existing ferry operator (which essentially gives existing businesses veto power over potential competitors) or convincing the government, in a trial-like proceeding, that the existing operator’s service is unreasonable and inadequate, and that the “public convenience and necessity” require additional service. The existing operator gets to participate and argue why the newcomer should be kept out of the market.

Needless to say, Jim did not get his certificate. In fact, the state has allowed only one ferry operator on Lake Chelan since the 1920s.

Like most Americans, the Courtney brothers know that consumers and entrepreneurs—not the government—should decide whether a ferry business is “necessary.” So they teamed up with IJ to sink the Lake Chelan monopoly.

What will we use to sink it? The Privileges or Immunities Clause. As regular Liberty & Law readers know, this provision of the 14th Amendment was adopted in the wake of the Civil War to protect the economic liberty of newly freed slaves and other Americans. But in the Slaughter-House Cases, the Supreme Court gutted the Privileges or Immunities Clause by construing it to protect only a handful of very narrow rights.

Fortunately for Jim and Cliff, one of the few rights that Slaughter-House recognized is “the right to use the navigable waters of the United States.” That may seem pretty arcane, but for Jim and Cliff, it is anything but: The right to use Lake Chelan, which the federal government has designated a navigable waterway, is essential to the pursuit of their livelihood—that is, to their economic liberty.

By challenging the ferry monopoly, we will achieve one of IJ’s founding goals: reinvigorating the Privileges or Immunities Clause. We’ll restore the clause to its proper place as the primary bulwark of economic liberty and, in so doing, allow entrepreneurs like Jim and Cliff to chart their own course free from excessive government regulation.

Michael Bindas is an IJ Washington Chapter senior attorney and Larry Salzman is an IJ staff attorney.