Court Orders Milwaukee to Cease Enforcing Cap on Taxi Cabs

Milwaukee, WI—Today Judge Jane Carroll of the Milwaukee County Circuit Court issued an injunction preventing Milwaukee officials from denying taxicab permits to qualified drivers. While the judge stayed the ruling to allow the city to appeal, the effect of today’s injunction is to reaffirm the court’s April 16 ruling that the city’s law capping the number of taxi permits violated the economic liberty of taxi drivers protected under the Wisconsin Constitution. The law, implemented by the city in 1991, caused the price of a taxi permit to rise from $85 to over $150,000.

“Today Judge Carroll made it clear that the city’s 20-year taxi monopoly is over,” said Institute for Justice Attorney Anthony Sanders. IJ filed suit against the city in September 2011 on behalf of three local taxi drivers. “The court understands that the city purposefully created an unconstitutional taxi system where only the privileged few would benefit and competition would be outlawed. Thankfully, those days are over.”

In April, Judge Carroll found that both of the arguments the city provided for the law were illegitimate. The city argued that officials did not want to hold an annual meeting on the issue of taxicabs. But the judge ruled that public servants cannot write laws that simply save themselves from the trouble of going to a meeting. The city also argued that limited competition would make taxi owners more professional. Judge Carroll rejected that argument as well, saying that all the city did was provide a windfall for those who happened to have cabs in 1991.

The Milwaukee Journal Sentinel declared the judge’s ruling in favor of the drivers a “significant legal victory.” The paper has editorialized that “Milwaukee’s cap on taxicab permits makes little sense. The city needs more transportation options, and cabs should be one of them. . . . Lift the cap, and let the market decide.” Likewise, the Financial Times of London featured the Milwaukee taxi system in an article on economic protectionism, calling it a “visible and easy-to-measure example” of a “minor evil” that allows “some to grow rich at the expense of others.”

The Institute for Justice has helped open taxi markets in Denver, Indianapolis, Cincinnati and Minneapolis and for more than 20 years has been the nation’s leading legal advocate for the rights of entrepreneurs. For more on the lawsuit to open Milwaukee’s taxi market, visit www.ij.org/MKETaxis.