Las Vegas Limousines Under Fire By Regulators

John Kramer
John Kramer · March 4, 1998

Washington, D.C.­Las Vegas limousine operators increasingly find themselves behind bars or in front of a judge rather than behind the wheel as a Nevada state agency cracks down on the operator’s right to earn an honest living. But a Washington, D.C.-based public interest law firm is looking to change that.

In October 1997, Nevada’s legislature amended its taxi and limousine statutes to transfer authority over limousines from the Public Service Commission to the newly created Transportation Services Authority (TSA). The amendments gave the TSA broad powers to impose steep fines and/or jail terms on limousine operators who operate without a “certificate of public convenience and necessity.” To obtain a certificate, a driver must show, among other things, that the proposed limousine service will not compete with existing limousine companies. Since its creation, the TSA has impounded approximately 25 to 30 vehicles, arrested the drivers, and assessed tens of thousands of dollars in fines, putting in jeopardy the livelihoods of both the owners and those who lease the vehicles from them. While some drivers have filed applications with the TSA, most likely in vain, hundreds of drivers without certificates continue to drive every day in fear of being arrested and having their limousines impounded.

“The regulations here go well beyond concerns for public health and safety,” said Deborah Simpson, staff attorney for the Washington, D.C.-based Institute for Justice, a public interest law firm that litigates nationwide on behalf of would-be entrepreneurs. Simpson recently met with limousine drivers to assess the situation. “The TSA should ensure that vehicles are inspected and insured, and that drivers are competent and responsible. But the actions it is taking now are purposefully anti-competitive. They look out for existing companies not for what will best serve the riding public.”

“Imagine if every burger joint that wanted to open had to show that it would not be taking business away from McDonalds,” said Bil Clutter, who was recently cited by the TSA when he used his limousine to shuttle customers from a restaurant to a hotel. A TSA agent stopped him for operating without a certificate then issued several citations and seized the limousine. At the impoundment hearing, the presiding TSA official ordered Clutter’s limousine impounded and assessed him a $2,500 impoundment fine. The TSA will not release the car until the impoundment fine plus $1,600 in towing charges and storage fees are paid. Last week, the impoundment lot mistakenly sold Clutter’s limousine. Although it was bought back days later, it sustained noticeable damage and many of his personal documents had been discarded. Clutter continues to face yet more fines and even jail time under a pending criminal prosecution based on the offense.

Simpson said. “This is just one example of a much larger problem in Las Vegas that has cost many people their livelihoods and property.”

The Institute for Justice, whose attorneys were in Las Vegas in late February investigating this predicament, believes the government has erected unreasonable and insurmountable barriers in the way of hard-working entrepreneurs. Together with Rich Lowre, President of the Independent Limousine Owner/Operator Association (“ILOA”) and local attorneys John Lukens and Jamie Kent, the Institute is considering a challenge to Nevada’s statutes and the TSA’s enforcement of those laws against independent limousine drivers. Institute for Justice attorneys have already opened up decades-closed transportation markets in Houston, Denver, Indianapolis, and Cincinnati, and are currently litigating on behalf of van drivers who are barred from providing their services in New York City.

“These statutes raise serious due process, equal protection, and other constitutional concerns,” said William Mellor, president of the Institute for Justice. “There is no rational health and safety reason for requiring drivers to show that they will not compete with existing companies. This is simply a prohibition on competition-a protectionist measure in favor of the existing licensed limousine services.”

The Institute for Justice is a libertarian public interest law firm. Through strategic litigation, training, communications, and outreach, the Institute for Justice advances a rule of law under which individuals can control their own destinies as free and responsible members of society. It litigates to secure economic liberty, school choice, private property rights, freedom of speech, and other vital individual liberties, and to restore constitutional limits on the power of government. Through these activities the Institute challenges the ideology of the welfare state and illustrate and extend the benefits of freedom to those whose full enjoyment of liberty is denied by government. The Institute was founded in September 1991 by William Mellor and Clint Bolick.