Magnum, P.C.?

John Kramer
John Kramer · June 26, 2008

Austin, Texas—The Institute for Justice—the nation’s leading litigators for entrepreneurs who find their rights violated by the government—opens its new Texas Chapter today by filing a lawsuit against the Texas Private Security Board, a state agency, on behalf of computer repair shops that are being told they need a private investigator’s license to continue solving their customers’ computer problems.

Under the new law enacted in 2007, Texas has put computer repair shops on notice that they had better watch their backs any time they work on a computer. If a computer repair technician without a government-issued private investigator’s license takes any actions that the government deems to be an “investigation,” he may be subject to criminal penalties of up to one year in jail and a $4,000 fine, as well as civil penalties of up to $10,000. The definition of “investigation” is very broad and encompasses many common computer repair tasks.

To get a private investigator’s license, owners of computer repair shops would have to close their business while they either obtained a criminal justice degree or completed a three-year apprenticeship under a licensed P.I.

But the repair shops are not the only ones at risk. The law also criminalizes consumers who knowingly use an unlicensed company to perform any repair that constitutes an investigation in the eyes of the government. Consumers are subject to the same harsh penalties as the repair shops they use: criminal penalties of up to one year in jail and a $4,000 fine, and civil penalties of up to $10,000—just for having their computer repaired by an unlicensed technician.

The newly launched Institute for Justice Texas Chapter (IJ-TX) is challenging the new law under the Texas Constitution by filing a lawsuit in Travis County against the Private Security Board on behalf of Texas computer repair companies and their customers.

Mike Rife, one of the plaintiffs in the suit, operates AustinPCTech, a company he started more than 10 years ago. Rife has hundreds of satisfied customers and his business is thriving. Rife now operates under a cloud of uncertainty about which repairs the government will allow him to perform for his customers.

David Norelid, another plaintiff, is co-owner of Citronix Tech Services in Houston. Norelid started Citronix in Florida before moving to Texas to pursue his degree in information technology management. Norelid said, “If I was required to get a P.I. license to run my business, I’d have to shut my business down.” The flexibility of being an entrepreneur allows him to work full time while going to school.

Rife and Norelid do not doubt their ability to compete with so-called “big box” competitors in the computer repair business. What they cannot compete with is a government-created cartel that demands they close their businesses and complete a three-year apprenticeship under a licensed private investigator to get a state-required license—or risk jail time and large monetary penalties if they continue serving their customers without one.

Thane Hayhurst owns and operates Kiwi Computer Services and iTalent Consulting Group, both in Dallas. Kiwi Computer is a traditional do-it-all computer repair company that Hayhurst has operated in Dallas since 1992. More recently, Hayhurst opened iTalent Consulting, which offers IT outsourcing services to many prominent local businesses. iTalent sends employees on assignments (some lasting for many months) to clients’ businesses where the consultant works to implement on-site computer and IT solutions. Both of Hayhurst’s businesses are impacted by the new law because he and his employees are not licensed private investigators. Hayhurst is worried the government will decide he can no longer offer many of the services he currently provides to his clients. Hayhurst said, “There are thousands of computer contractors performing valuable services for almost every organization in Texas, and this law will hinder their ability to remain gainfully employed.”

Joining the computer repair companies as a plaintiff in this case is consumer Erle Rawlins, who frequently uses independent computer repair shops to keep his Dallas-based real estate buyer agency business running. Rawlins said, “This law is totally unfair. It requires using someone who is more expensive and may not be as good, and it uses government power to limit the number of competitors who are out there. It is bad for consumers and it is bad for entrepreneurs.”

The filing of this case marks the launch of IJ-TX in Austin. Lead attorney on the case is IJ-TX Executive Director Matt Miller. Miller said, “Texas is working hard to bring technology innovators to our state. Yet the government is now telling them they need to get a private investigator’s license if they want to continue working here. That is not an effective strategy to grow our technology talent pool.”

Miller concluded, “It makes no sense to require a computer repairman with 10 or 20 years of experience to get a degree in criminal justice just to continue working in his occupation. This law will drive up the price of computer repair for everyone, and that’s exactly what the private investigations industry wants.”

The Institute for Justice is a public interest law firm that advances a rule of law under which individuals can control their destinies as free and responsible members of society. IJ has additional chapters in Arizona, Minnesota and Washington state. IJ-TX litigates under the state and federal constitutions to reinvigorate economic liberty, preserve property rights, promote educational choice and defend the free flow of information essential to politics and commerce.