Court Case Asks: “Do Americans Have the Right To Earn an Honest Living?”

John Kramer
John Kramer · September 15, 1998

Washington, D.C.-Across America, entrepreneurs are finding their right to earn an honest living under attack by state and local governments. Nowhere is that more apparent than in our nation’s economic capital, New York City.

On Wednesday, September 16, 1998 at 2:15 p.m. a lawsuit representative of this struggle will be heard before the Honorable Justice Louis B. York in the New York Supreme Court, the state’s trial court. The hearing will take place at 80 Centre Street in Manhattan, in Room 289. The Wall Street Journal described this case as “an epic battle.”

Jamaican immigrant Hector Ricketts is among four plaintiffs suing the State and City of New York. Ricketts wants to provide safe and reliable van transportation for his community of Queens, New York, but is prevented from doing so by arbitrary and onerous regulations designed to protect the local public bus monopoly. (Since 1994, 98 percent of all the vans that have sought licenses from the City Council have been denied. In addition, New York’s City Council severely limits the number of vans that may serve New York’s riding public, and it imposes regulations that prohibit vans from picking up or discharging passengers on any street where public buses operate, instead requiring vans to pick up passengers only by pre-arrangement.)

“In New York City, like in so many other cities, existing companies work with government officials to keep potential new entrants from competing,” said Chip Mellor, president of the Washington, D.C.-based Institute for Justice, a public interest law firm that represents the van drivers. “Industrious people, many of whom are economic outsiders with little money or education, are being told by their government, ‘No. You may not provide a service to your community. You may not pursue through honest enterprise a better life for yourself and your family.’ In the Land of Opportunity, that is tragically inexcusable.”

Mellor said, “This suit seeks to establish a precedent that will enable entrepreneurs to earn an honest living without arbitrary government interference.”

Having conducted a series of research reports documenting the regulation of entrepreneurs in seven cities across the country, Mellor said that the problems faced by Ricketts and the others are typical of those facing entry-level entrepreneurs nationwide. Government imposes anti-competitive regulations in about 10 percent of all occupations nationwide. He pointed out, “Onerous licensing laws that go well beyond public health and safety concerns in the barbering and hair styling industry keep thousands of would-be competitors out of the marketplace. Caps imposed on the number of taxi medallions create monopolies in that field forestalling an historic means for immigrants to enter our economic mainstream. Zoning requirements and some downright ridiculous regulations make it impossible for street vendors to operate.”

“It doesn’t require a lot of capital or a great deal of education to purchase and operate a van or to braid hair or to drive a taxicab,” said Institute for Justice Attorney Deborah Simpson. “But burdensome government regulation drives up the cost and makes it impossible to enter these occupations. Paths to better lives for van operators and their families are arbitrarily blocked.”

“This case will decide the fate of commuter vans in New York City, which each day carry 40,000 people to work, most of whom make minimum wage,” said Ricketts. “Commuter vans break the economic isolation found in city after city by not only putting people to work, but by taking people to work.”

“You can’t get off of welfare and into the workforce if you don’t have transportation,” said van driver Vincent Cummins. “For many low-income residents of Brooklyn and Queens, the vans are their only transportation.”

Mayor Giuliani agrees and said the City Council “is hurting a lot of people in Brooklyn and Queens who want to use alternative transportation, need it, and have this available. . . . I think they [the van drivers] are right, and in this particular case, the City is wrong.”

At Wednesday’s hearing, which is expected to take the entire afternoon, the Institute will address: 1) The arbitrary application process that results in the rejection of virtually all commuter van applications; 2) The legislative “call-up provision” (which allows the City Council to veto applications approved by New York’s Taxi & Limousine Commission), and the City Council’s moratorium imposed on new van licenses; and 3) Mayor Rudolph Giuliani’s lawsuit, which also challenges the call-up and moratorium. The ruling in this case could establish a legal standard protecting the constitutional right to economic liberty-the right to earn an honest living-and could have a profound effect in freeing economic opportunities nationwide.

Institute for Justice lawsuits have broken up government regulations that stifle opportunity in occupations that are ideally suited for low-income individuals, many of whom are trying to leave welfare rolls by finding or creating work. Institute for Justice’s attorneys deregulated the cosmetology industry in Washington, D.C.; helped open taxicab markets in Denver, Indianapolis and Cincinnati; and cleared the way for jitney vans to re-enter Houston’s decades-closed market. This fall, the Institute will open the Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School, which will match up some of the nation’s brightest law students with inner-city Chicago entrepreneurs who need help navigating the oceans of paperwork required to create or grow a business.