Las Vegas Independent Limousine Drivers Sue to Break Up Monopoly, Take Freedom Ride

John Kramer
John Kramer · May 1, 1998

Washington, D.C.­On Monday, May 4, 1998, independent limousine drivers in Las Vegas will file suit to break up that city’s government-imposed limousine monopoly. Following the filing of their lawsuit and a related court hearing, the drivers will caravan down The Strip in a “freedom ride” calling for an opening of the market.

Last October, the newly created Transportation Services Authority (TSA) began cracking down on independent limousine operators-those who do not have a certificate of “public convenience and necessity.” The TSA impounds their vehicles, assesses large civil fines against them, and prosecutes them in criminal court for operating limousines without the proper certificate.

Last December, the TSA wielded this three-pronged weapon against William Clutter, one of the drivers filing suit against both the State of Nevada and the TSA. His limousine has remained impounded since then, collecting storage fees at a rate of $15/day. The TSA assessed two $2,500 civil fines against him and has initiated a criminal prosecution against him based on the same activities. (At one point the impound lot actually sold Clutter’s car unbeknownst to him, then bought it back, damaged and missing the license plates, registration and important personal papers.) Now, although Clutter can no longer operate his business to earn a living, he still must continue paying off the loan he took to buy the limousine and continue paying for insurance for a vehicle the government will not allow him to use. In one day, the TSA transformed him from an independent hard-working entrepreneur into an unemployed criminal-all for simply driving a limousine without the proper government-issued certificate.

So why didn’t Clutter just get the needed state certificate? Because the system is hopelessly rigged against new entrants.

“Nevada’s protectionist public convenience and necessity standard requires new businesses to show that their proposed services will have no adverse effect on existing businesses,” explained Clint Bolick, the Institute for Justice’s litigation director. “Under that absurd standard, our entire free-market economy would collapse.”

“The whole notion of public convenience and necessity is a fraud,” added Chip Mellor, president of the Institute for Justice. “The public, not the government, should decide what services are convenient and necessary. If an enterprise can’t provide service the public wants and enjoys, it will go out of business. All public convenience and necessity does is give existing limousine operators veto power over possible competitors.”

“The public convenience and necessity standard far exceeds legitimate public health and safety objectives,” said Deborah Simpson, the Institute for Justice’s lead attorney on the case. “These could easily be achieved by ensuring vehicles have proper insurance, have passed inspection, and that drivers have met a minimal background check. Public convenience and necessity instead excludes newcomers-actually driving them underground and out of the proper regulatory oversight-and limits services the public demands. All the while benefiting only two groups: the politically powerful existing companies and the regulatory agency.”

Perhaps most troubling is the fact that the TSA, the same agency that cites the accused, is responsible for conducting the hearings and making determinations of guilt. Moreover, all money collected from the assessment of any fines as a result of those hearings is deposited in a special TSA regulatory fund that the agency uses to pay, among other things, the salaries, allowances, and expenses of TSA employees. It gives TSA’s enforcement personnel an incentive to stop and impound as many vehicles as possible. It also gives the presiding TSA commissioner an incentive to find against an accused violator and assess high-dollar fines.

That is why Clutter, John West, and the Independent Limousine Owners/Operators Association are fighting this system. On Monday, May 4, 1998, they will join with the Washington, D.C.-based Institute for Justice in filing suit in state district court challenging the TSA’s regulations and the monopoly it has imposed on Las Vegas limousine passengers. Their goal is to restore economic liberty-the right to earn an honest living free from excessive government regulation-as a fundamental civil right.

At 2 p.m. on Monday, May 4, the independent limousine operators will caravan leaving the Beltz Outlet Mall, travel north on Las Vegas Boulevard, drive downtown, turn left on Carson, left on Third, around the courthouse, back onto Carson, right on Las Vegas Boulevard, left on Sahara Avenue, right one block before Maryland Parkway into the Commercial Center parking lot where they will hold a brief press conference.

“Stifling competition isn’t the proper role of government,” said Simpson. “For a Nevada state agency to tell otherwise productive limousine entrepreneurs that they can’t compete with a private cartel is simply un-American.”

Las Vegas limousine drivers aren’t alone in their fight against over-reaching government regulation. As part of its national campaign to restore the right of economic liberty-the right to earn an honest living, free from excessive government regulation-the Institute for Justice has helped break open similar cartels on behalf of would-be cab drivers in Denver, African hairbraiders in Washington, D.C., and jitney van drivers in Houston. Today the Institute continues its battle for economic liberty on behalf of commuter van drivers in New York City and on behalf of hairbraiders in San Diego. Across the nation, government restricts entry into nearly 10 percent of all occupations through the use of licensing and other credentialing requirements.