Nashville, Tenn.—Today, the U.S. District Court for the Middle District of Tennessee ruled that a group of limousine and sedan entrepreneurs can bring their case over Metropolitan Government’s transportation regulations to trial on January 22, 2013.
Today’s decision comes in response to the government’s request that the court decide the case in its favor without a trial—a request the court roundly denied. In the decision, Judge Kevin H. Sharp noted a previous ruling in the case in which he had called the Metropolitan Government’s wholesale use of a lobbying group’s draft legislative language “a bit fishy,” and said that new evidence introduced by the plaintiffs “only adds to the level of pungency.” Ultimately, Judge Sharp concluded, “it will be for the jury to determine whether enactment of the ordinance passes the ‘smell test.’”
This latest ruling by Judge Sharp is part of a civil rights lawsuit filed in April 2011 by the Institute for Justice on behalf of a group of independent limousine and sedan operators. The lawsuit argues that Nashville’s sedan and limousine regulations, including a $45 minimum fare for car service, were passed into law to protect the city’s expensive limousine companies from more affordable competition. The regulations also prohibit limo and sedan companies from using leased vehicles, requires them to dispatch only from their place of business and take vehicles off the road if they are more than seven years old for a sedan or SUV or more than ten years old for a limousine.
“Today’s decision is a classic example of judicial engagement,” said IJ Attorney Wesley Hottot. “The court refused to turn a blind eye to the evidence showing that Nashville enacted this law simply to do the bidding of the city’s expensive limo companies. Now that evidence will end up where it belongs: presented in open court.”
In January, Judge Sharp denied Metropolitan Government’s motion to dismiss the case, emphasizing that “Courts have repeatedly recognized that protecting a discrete interest group from economic competition is not a legitimate governmental purpose,’” quoting Craigmiles v. Giles, a 2002 case that the Institute for Justice won on behalf casket retailers in Tennessee. The casket retailers in that case, like the affordable car services in this case, were being locked out of the marketplace by a cartel of well-connected individuals. The casket retailers won their case.
“Today’s decision reaffirms a bedrock principle of American law: The government cannot use its power just to protect favored interest groups from competition,” explained IJ Senior Attorney Robert McNamara. “We look forward to January’s trial, where we will demonstrate once and for all exactly what Nashville’s anticompetitive limo-and-sedan law is—a law written by the expensive limo companies, for the expensive limo companies.”
The trial, which will determine the constitutionality of the challenged restrictions, is set for January 22, 2013.