Institute for Justice Minnesota Chapter Challenges Minneapolis’ Sign Licensing Law

J. Justin Wilson
J. Justin Wilson · May 4, 2006

Minneapolis, Minn,—Should Minnesotans be ruled by laws or the whims of men? That is the question the Institute for Justice Minnesota Chapter (IJ-MN) seeks to answer with its latest lawsuit, filed today on behalf of sign hangers who wish to do business in Minneapolis but are prevented because of the arbitrary decisions of city officials.

“Entrepreneurs in Minneapolis have no idea what hoops they must jump through to receive a sign hanging license,” said Executive Director of IJ-MN Lee McGrath. “There are no written standards or guidelines; as it stands right now, it is left up to the whim of government officials who arbitrarily decide what must be submitted to receive a license. That’s not how the laws of our state are supposed to operate.”

IJ-MN filed this lawsuit today in the State’s Fourth Judicial District Court for Hennepin County on behalf of two sign-hangers, Dan Dahlen and Truong Xuan Mai, who cannot get a license in Minneapolis. According to Mai, who has already met twice with a license-issuing government official, “It is May, my license renewal application has been postponed for almost five months now. I have lost too many opportunities. It is wrong for city officials to deny me a license by adding their own rules on top of what the law requires. I just want to be free to earn an honest living.”

The City ordinance on sign hanging requires multiple city departments to approve the issuance of a license but it doesn’t set any standards governing such approval. This means an unelected government official has complete discretion over which Minnesotans are allowed to engage in the sign hanging business. Any applicant can be refused for any reason—or for no reason at all. In addition, new and renewed applications are arbitrarily postponed for months at a time. And there are no safeguards giving applicants notice or an opportunity to challenge how Minneapolis’ officials treat them.

Minneapolis takes anywhere from one to over twelve months to issue a sign hanging license—assuming the government official issuing the license doesn’t randomly decide to deny or indefinitely postpone the application. “This is an abuse of government power,” said Plaintiff Dan Dahlen, co-owner of Dahlen Sign Company of Shakopee. “It frustrates sign hangers like me from even trying to do business in Minneapolis.”

Sign installation and hanging often involve the most basic construction skills—digging a hole, dropping a couple posts, filling a hole with concrete and attaching a board to the posts. This is why cities like Brooklyn Park typically issue licenses in three days or less based on submission of an application, a fee and proof of bonding and insurance. St. Paul issues sign hanger licenses in minutes. And cities like Bloomington, Falcon Heights, Forest Lake, Shakopee, Prior Lake, Eagan and Chaska do not require a license at all. “Obviously there are no genuine health or consumer-protection reasons to justify Minneapolis’ arbitrary licensing law,” McGrath said.

This lawsuit, Dahlen v. City of Minneapolis, is the third case in the Institute for Justice Minnesota Chapter’s campaign to restore economic liberty as a basic civil right under both the Minnesota State and U.S. Constitutions. The first was Anderson v. Minnesota Board of Barber and Cosmetologist Examiners, in which IJ-MN successfully freed African hairbraiders from the State of Minnesota’s onerous cosmetology licensing regime. The second was Crockett v. Minnesota Department of Public Safety, in which IJ-MN successfully stopped the government from enforcing a blanket ban on advertising, soliciting or using the Internet to conduct lawful, direct sales of wine.

IJ-MN seeks to restore the constitutional protection for the right to economic liberty—the right to earn an honest living in the occupation of one’s choice free from excessive government regulation.

Barrier Study Released

“Over-reaching occupational regulations are not limited to sign hangers or to Minneapolis,” said Nick Dranias, a staff attorney with the Institute for Justice Minnesota Chapter. “Minnesota is one of the most heavily regulated states in the nation. State and city governments have created enormous barriers that keep Minnesotans from working in the fields of their choice.”

Today, the Institute for Justice issued a study that shows how Minnesota’s government-imposed regulations block the path to the American Dream, and how these barriers can be removed. The 21-page paper, titled The Land Of 10,000 Lakes Drowns Entrepreneurs In Regulations, exposes the shocking state of Minnesota’s occupational licensing laws. IJ-MN analyzed 11 occupations in the report, including manicurists, taxicab businesses, furniture movers, cosmetologists, barbers and flower vendors. These occupations do not require huge amounts of financial capital or a great deal of formal education to enter. In the absence of unreasonable regulation, they would attract large numbers of entrepreneurs who would like to work for themselves.

Among the report’s findings, would-be manicurists must undergo at least 350 hours of training—more than twice the hours required of basic level emergency medical technicians—at a government-approved institution at a cost of around $3,000. To moisturize and massage faces in Minnesota, prospective estheticians must complete at least 600 hours of training at a cost of approximately $4,850—in addition to taking a government-sponsored licensing exam.

“Manicurists should not be thrown in jail for coloring fingernails without government approval,” said Dranias, the study’s author. “Cosmetology school should not require more hours than law school. Minnesota’s economy is being strangled by unnecessary government regulations that do nothing more than cut off the first rungs of the economic ladder to those who most desperately need opportunity. No Minnesotan should be prevented from earning an honest living because the government is protecting existing businesses from competition.”

“This study on Minnesota’s government-imposed regulations will serve as a wake-up call,” said McGrath. “We invite other entrepreneurs to join us in challenging these irrational barriers to entry and we urge the state legislature and judiciary to protect economic liberty by reviewing new and existing occupational licensing schemes with an appropriately skeptical eye.”

Opened in 2005, the Minnesota Chapter is one of three state chapters of the Institute for Justice, a public interest law firm founded in 1991 to advance free speech, property rights, educational choice and economic liberty. Headquartered in Arlington Va., the Institute for Justice has a long record of success in representing entrepreneurial Davids against governmental Goliaths.

IJ opened up hairbraiding markets in Arizona, California, the District of Columbia, Mississippi and Washington, in addition to Minnesota. IJ led the effort to strike down Tennessee’s casket sales licensing scheme as unconstitutional. This marked the first federal appeals court victory for economic liberty since the New Deal. Its litigation also led the U.S. Supreme Court to declare unconstitutional New York State laws that barred the interstate direct shipment of wine to New York consumers. It opened taxicab markets in Denver, Indianapolis and Cincinnati, as well as the limousine market in Las Vegas, and removed the New York City Council’s veto over new dollar van operators.

Legislators and journalists may obtain the report here.