Wednesday, April 20, 2011

Institute for Justice Makes a Federal Case out of Nashville's Minimum Limo Price Law

Government's incompetence and greed sometimes take creative turns. Recently, in Nashville, Tennessee, the city government turned its corrupt cross-hairs on limousines and other unmarked sedans. The Institute for Justice's Mark Meranta writes via e-mail:

Until last year, limos and sedan cars in Nashville, TN were an affordable alternative to taxicabs. A trip to the airport only cost $25. But in June 2010, the Metropolitan County Council passed a series of regulations requested by the Tennessee Livery Association—a trade group formed by high-end limousine companies. These regulations force limo and sedan companies to increase their fares to $45 minimum. And, in January 2012, companies will have to take all 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.

Advocates of government regulation have to come to terms with corrupt special interests' consistent capture of the very government whom they religiously believe will reduce abuses. Here, government regulation is serving to institutionalize high prices and institute monopoly at consumers' expense.

Happily, the Institute for Justice, the group that brought Suzette Kelo's law suit against New London, Connecticut's corrupt city government, is bringing a case against Nashville on behalf of the small operators whom the government bosses and high end limo operators aim to grind under their heels.

According to the Institute

The regulations prohibit limo and sedan companies from using leased vehicles, require them to dispatch only from their place of business, require them to wait a minimum of 15 minutes before picking up a customer and forbid them from parking or waiting for customers at hotels or bars. And, in January 2012, companies will have to take all 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...These regulations have nothing to do with public safety.

IJ has teamed up with some limo drivers to bring suit in federal court. Bless them, and may they win in court.



As one of the original pro se plaintiffs in this case, let me add an update to this story. We did have a four day jury trial in January 2013. The law firm was so confident of victory, they decided to have their first jury trial in 20 years and the jury said the regulators conceivably had possible reasons for the four rules, they were asked to consider. This was a serious tactical mistake, as the judge in the case had seen things our way in most of the pretrial rulings and I believe we would have secured a total victory had the case stayed entirely in his hands. BTW, the only arguments the law firm made were based on the 14th Amendment, which only constituted 25% of my original filing.

Somehow, it seems that state laws regulating safety, insurance, etc, that have been on the books since the 1980's, have been quite sufficient for every other local and county government entity in the state. We did get this municipal regulator to back down on some of these rules along the way during the last four years. We also provided the pressure to break a long standing oligopoly and opened the taxi business to the first new entrants in over 20 years. At least two of these are employee owned, one is pink and donating part of their revenue towards breast cancer research and another is green, using hybrids, etc. Open markets can truly be, as well as, lead to beautiful things. Scandals we helped expose in the way the regulatory process was being administered, led to the elimination of their department and their employees being rolled into another much better managed department. The head regulator lost his job and the last I heard, he is now a marriage counselor. The alleged 'trade group', the Tennessee Livery Association, was exposed as a pile of s*** through the discovery process of our lawsuit, subsequent court rulings and has since unceremoniously and quietly disbanded. In the last month I hear they are reincarnating under a different name. It seems they now want to eliminate all these regulations they insisted were needed 'for public safety', because they have discovered they cannot operate their businesses, under the heavy regulatory burdens they ever so badly just had to have.


The price fixing rule, which my co-plaintiff had been criminally cited for violating in an undercover sting operation, because he charged less than $45 for a ride, was one of these four rules the jury allowed. A year later, the regulator changed this rule merely because Uber came to Nashville and asked for some rule changes. Another change Uber was granted, was it then became legal to order an ASAP on demand ride using a smart phone as an internet device, but is still against the law to use that same device as a phone to call for an ASAP ride. It is also still against the law to get a sedan or limo on a walk up, on demand basis or otherwise provide service in less than 15 minutes. Based on the Uber rule changes, I wouldn't hesitate for one second to return to Federal Court, should these rules be enforced against me today.

The only point I would disagree with in this wonderful and insightful original article, is that no single locally based anti-competitive rule of this sort is a huge deal on its own terms. From my micro perspective, it was a HUGE deal! In order to have my day in court, I had to have 'clean hands' when I got in front of the court. The rules were calculated to push single car operators like myself out of the business, so I parked the the limos and shut down my small business that I worked my ass off for 12 years to build. Then I had to get a job and when your resume shows self employed for that long, you are not going to get a good job. Earlier this year, I was pushed out of that job because I made a major stand against sexual harassment being inflicted on some of my coworkers, that HR and corporate was trying to sweep under the carpet. I cashed in my retirement, bought a couple of used limos that are long enough that they are exempt from the surviving regulations and am starting from scratch to rebuild my small business and my life. So when looked at in terms of real life, yes it was a HUGE deal!

You can discover more about the history of this litigation on this page of my new website,