IJ Expands Economic Liberty Lawsuit, Second State Agency Sued to Bust Limousine Monopoly

John Kramer
John Kramer · October 21, 1998

Washington, D.C.-Not satisfied that its own denial of constitutional rights against would-be limo operators was severe enough, Nevada’s Transportation Services Authority (TSA) recently called on its sister agency-Nevada’s Taxicab Authority (NTA)-to seize the cars of independent operators. This one-two punch against economic liberty-the denial of long-sought permits to operate a limousine legally, then the seizure of the applicant’s vehicles-prompted the Institute for Justice this week to move to name the Taxicab Authority as a co-defendant in a lawsuit seeking to break up Las Vegas’s government-imposed limousine monopoly. In addition, the Institute filed papers with the court demanding the immediate reinstatement of an application summarily dismissed without consideration by the TSA.

John West’s limousine was recently taken in a sting operation coordinated by the TSA and the NTA. For twelve months, West worked through the TSA’s permit application process seeking a certificate of “public convenience and necessity”-the authorization needed to provide limousine service solely within Nevada. Despite being federally licensed to operate throughout the continental United States, West and many other aspiring drivers may not operate within their home state without this state permit. Yet even after demonstrating his clean criminal and driving records, his proof of insurance, and his vehicle’s passage of the TSA’s inspection, the TSA refused to issue West his permit. Instead, it dismissed the application without consideration of its merits. The TSA dismissed his application because it had become, in the words of one TSA Commissioner, “too complicated.” All of the complications arose, however, out of the specific requests for information from the TSA and competing limousine companies that the TSA allowed to intervene in the process.

After the arbitrary and illegal dismissal of West’s application for a certificate of public convenience and necessity, the Institute for Justice sprung into action. Among other court actions this week, it filed a new lawsuit asking for a “writ of mandamus,” a court action that would force the TSA to reinstate West’s application.

Starting in late September of this year Nevada’s Taxicab Authority began impounding limousines and citing drivers for operating without a limousine license. The Taxicab Authority is an entirely separate agency from the Transportation Services Authority. Until recently the NTA had shown little interest in enforcing the limousine laws. With this latest wave of enforcement, the Institute for Justice asked the court to join the NTA as a defendant in its ongoing lawsuit challenging Nevada’s irrational limousine licensing laws.

“The TSA’s plotting with the NTA to take away West’s limousine-his means of earning an honest living-can best be described as bureaucratic desperation,” said Institute for Justice President Chip Mellor. “All West wants is to earn an honest living, yet the state is denying that right by the hyper-enforcement of laws designed to keep out competition. What these two state agencies are doing is not only morally reprehensible, it is unconstitutional.”

“Nevada’s limousine application process is purposefully complicated,” said Dana Berliner, an Institute for Justice attorney. “The state can demand extremely complex and utterly unnecessary financial projections and business plan information, all of which are completely unrelated to whether or not he will be a safe limousine driver. These kind of demands are designed to keep would-be limousine operators off the streets.”

“The TSA and the NTA worked together to seize West’s limousine because he has the courage to fight their unfair system,” said Deborah Simpson, IJ’s lead attorney on the case. “What the TSA and the NTA have put this man through is Orwellian. The Institute fights similar economic liberty battles nationwide, but what these agencies are doing hits a new low.”