Seattle, Wash.—May the government impose regulations on entrepreneurs that have no purpose other than to protect existing businesses from competition?
That is the question the newly formed Institute for Justice Washington Chapter (IJ-WA) will seek to answer when it files a state court lawsuit on Tuesday, May 13, 2003, in King County Superior Court in Seattle on behalf of two Seattle entrepreneurs. The suit challenges the City’s recently created prohibition on construction waste hauling by companies other than those granted a monopoly by the City. Hauling construction waste in Seattle by anyone except the Scottsdale, Ariz.-based Allied Waste Industries and Houston, Texas-based Waste Management, Inc. is against the law.
The lawsuit is being filed on behalf of Joe Ventenbergs and Kendall Trucking, the Seattle-based firm he owns, and Ron Haider and his Lynwood-based Haider Construction, Inc. About 60 percent of Kendall Trucking’s business is hauling so-called “construction waste” from construction and demolition sites. Ventenbergs provides dumpsters to the sites, the construction and demolition companies fill up these dumpsters with construction waste, and Ventenbergs takes away the dumpsters and unloads the contents at transfer stations in King County. One of the construction companies Ventenbergs hauls for is Haider Construction, Inc.
Rather than celebrate Joe and Ron’s efforts to maintain and grow their local businesses, however, the City of Seattle has made it illegal for them to do business with each other.
“The City’s actions show that governments that are often pro-business are not necessarily pro-free enterprise,” said Bill Maurer, executive director of the Institute for Justice Washington Chapter, which filed this suit as its launch case. “Because the government is playing favorites, one man’s trash is now another man’s monopoly. Rather than allowing different companies to compete to serve consumers, the City granted monopolies on construction waste hauling to two politically connected companies thereby trashing the free market and hurting consumers.”
The City’s monopoly-granting contracts became effective April 1, 2001, and continue in effect until March 31, 2008.
“This law demonstrates that Seattle is unsafe for small businesses; with the stroke of a pen, the government can arbitrarily make entire industries illegal,” said Jeanette Petersen, a staff attorney with the IJ-WA. “The only people benefiting from this law are the out-of-state big trash companies who are seeking to maintain a government-protected monopoly. Consumers don’t need to be protected from more choices and lower prices, and entrepreneurs don’t need to be protected from opportunity.”
Maurer concluded, “This law serves absolutely no health or safety purpose. The contents of the bins and how they are responsibly handled don’t suddenly change because one company is granted a monopoly; the same construction waste ends up at the same transfer station. The only difference is with a monopoly, there are no choices for consumers and no opportunities for would-be entrepreneurs. It is not the proper use of government force to grant special treatment. Our clients only want to be left alone to earn an honest living.”
Although there may be a legitimate role for limited regulations that are carefully tailored to protect the public’s health and safety, many of the regulations burdening entrepreneurs have nothing to do with those concerns but rather are purposefully designed to limit entry. They are all about limiting competition and stifling opportunity. Since its creation in 1991, the Institute for Justice headquarters office in Washington, D.C., has succeeded in convincing the courts to lift regulatory barriers to entry while allowing other common sense regulations designed to protect the public’s health and safety to remain in place. IJ has scored significant victories on behalf of entrepreneurs and in the process opened up long-closed markets. These include:
- Craigmiles v. Giles—A federal appeals court upheld a lower court ruling that found Tennessee’s government-imposed cartel on casket sales was unconstitutional. This is the highest pro-economic liberty court decision since the New Deal.
- Swedenburg v. Kelly—A federal judge declared unconstitutional New York state’s laws that barred the interstate direct shipment of wine into New York.
- Cornwell v. California Board of Barbering and Cosmetology—IJ represented JoAnn Cornwell, who created the Sisterlocks technique of hairbraiding and locking, in defeating the cosmetology licensing requirement for African hairbraiders in California.
- Ricketts v. City of New York—IJ helped commuter vans fight a public bus monopoly that would not allow the vans to put people to work and take people to work in underserved metropolitan neighborhoods.
- Clutter v. Transportation Services Authority—IJ represented independent limousine drivers who defeated Las Vegas’s Transportation Services Authority (TSA) and entrenched limousine companies that had stifled competition. Through IJ’s litigation, the once closed market was opened.
- Jones, et. al. v. Temmer, et. al.—Leroy Jones, Ani Ebong and Girma Molalegne opened Freedom Cabs, Inc., in Denver after IJ helped them overcome Colorado’s protectionist taxicab monopoly. Stemming from pressure in the court of public opinion created by their lawsuit, the state legislature enabled Freedom Cabs to become the first new cab company in Denver in nearly 50 years. Jones’s testimony also contributed to the breakdown of government-sanctioned taxicab monopolies in Indianapolis and Cincinnati.
- Uqdah v. D.C. Board of Cosmetology—Although they lost in court, Taalib Din Uqdah and his wife Pamela Farrell prevailed against the District of Columbia to eliminate a 1938 Jim Crow-era licensing law for African hairbraiders when the District subsequently deregulated cosmetology.