by Daniel Horwitz
The District Court’s order denying Metro’s Motion for Summary
Judgment is obviously great news for Mr. Bokhari, since it allows his lawsuit
to continue moving forward.
It’s also
great news for anyone in Nashville
who believes that the government shouldn’t be able to mandate a $45 minimum fare
for limo rides when several companies in town are ready and willing to charge customers
$25 per ride instead.
That said, however,
this case is far from over, and Mr. Bokhari still has to overcome a heavy
burden before he can celebrate the demise of Metro’s price-fixing ordinance.
For anyone who hasn’t followed the case in detail, lead
plaintiff Syed Bokhari – the sole owner of Metro Livery, Inc. – and two other
plaintiffs who are in the “affordable limousine and sedan business” have
alleged that the following four provisions of Metro’s recently-amended livery
ordinance (No. BL2010–685) are unconstitutional:
(1) The “minimum fare” provision
that requires that limousine and sedan service operators charge a minimum of
$45.00 per trip;
(2) The “prohibition on leasing”
provision that requires that limousine and sedan service operators hold title
to their vehicles;
(3) The “dispatch restriction” that
requires that operators dispatch vehicles only from their place of business; and
(4) The “vehicle age requirement” that
requires that operators take sedans and SUVs out of service if they are more
than seven years old, take limos out of service if they are more than ten years
old, and refrain from placing any new vehicle in service if it is more than
five years old.
Represented by the libertarian public interest firm
The Institute for Justice,
the plaintiffs in this case are arguing that each of the above provisions
violates their constitutional rights under the Due Process clause of the 14th
Amendment, the Equal Protection clause of the 14th Amendment, and the
Privileges or Immunities clause of the 14th Amendment.
This latter claim concerning the Privileges or
Immunities clause is, unfortunately, foreclosed by a Supreme Court decision
handed down in the late 1800s, but the Institute for Justice and other
proponents of economic liberty remain hopeful that the current court will eventually
decide to reexamine the issue.
After a year of cross-motions between the parties, last week
District Court Judge Kevin Sharp issued an order denying – in somewhat terse
language – Metro’s Motion for Summary Judgment on each of the plaintiffs’ claims. Thus, unless an unlikely settlement is
reached sometime in the next few weeks, Mr. Bokhari’s case against Metro
Nashville will proceed to trial on January 22, 2013, where both sides are
expected to call several witnesses to testify about various aspects of Nashville’s transportation
industry. Though the case is likely to
be appealed to the Sixth Circuit no matter the outcome, the purpose of this
trial is to get sufficient facts on the record to allow Judge Sharp to answer the
following deceptively simple question: do any of the four challenged provisions
of Ordinance No. BL2010–685 bear a rational relation to a conceivably legitimate
government interest?
Though it’s obvious to just about everyone (including Judge
Sharp, as he made clear in an April memorandum) that a legally-mandated price-fixing
scheme like this one is terrible from a public policy standpoint, many people following
this case have been surprised to learn that that fact is actually irrelevant
for present purposes. As the Supreme
Court has repeatedly proclaimed since disavowing its infamous holding in Lochner v. New York back in 1937, it is simply not
the role of courts “to judge the wisdom, fairness, or logic of legislative
choices.” Instead, “the Constitution
presumes that even improvident decisions will eventually be rectified by the
democratic processes.” Thus, the reason why
Mr. Bokhari still has such a long way to go before he’ll be permitted to charge
his customers $25 per limo ride boils down to the frustrating fact that all industrial
regulations are subject to what is known as “rational basis” review: a
highly-deferential form of scrutiny that renders judicial invalidation of laws
like Ordinance No. BL2010–685 virtually unheard of.
As the Sixth Circuit has often described the “rational
basis” standard, the government’s proffered justifications for a law must
strike a court “with the force of a five-week-old, unrefrigerated dead fish” before
the law can be invalidated under rational basis review. Indeed, even the actual reasons why a law was enacted are wholly irrelevant under
this form of scrutiny— according to the Supreme Court, for a law to survive
rational basis review the government need only prove that there is a “conceivable state of facts that could
provide a rational basis” for the law in question. This legal nuance is particularly irksome in
the case at bar, of course, since both parties are in agreement that Ordinance
No. BL2010–685 was enacted, at least in part, to appease the trade lobbying
group TennLA— a partnership of expensive limo companies that have since claimed
credit for legislating more affordable competition like Metro Livery, Inc. out
of business.
Because the government has asserted several conceivably
legitimate interests in the instant case that it contends are advanced by its protectionist
regulations, Mr. Bokhari’s path to victory remains daunting. With respect to the price-fixing component of
the livery ordinance, for example, Metro argues that having a minimum fare of
$45 for limo rides (1) helps consumers differentiate between taxi companies and
limousine services, (2) helps diminish confusion as to those services, (3) reduces
poaching, (4) offers the city several economic benefits, and (5) may improve
the ground transportation industry as a whole.
Again, the government need not prove that any of these interests will actually
be furthered by the livery ordinance in order for the law to be upheld as constitutional. It merely has to prove that one of them could be.
Fortunately for Mr. Bokhari, and extremely helpful to his case
is the Sixth Circuit’s decision in Craigmiles
v. Giles, 312 F.3d 220, 224 (6th Cir. 2002): a lawsuit involving similarly absurd
regulations that Tennessee had imposed upon funeral merchandise retailers in an
effort to shield funeral directors from competition in the casket market. Finding in that case that the only conceivable
basis for the law in question was unfettered economic protectionism, the Sixth
Circuit held that the Tennessee Funeral Directors and Embalmers Act violated the
Craigmiles plaintiffs’ constitutional
rights under the Due Process and Equal Protection clauses of the 14th Amendment,
and it enjoined the state from enforcing the law as a result. Mr. Bokhari has asked for precisely the same
relief here, and as a District Court judge within the Sixth Circuit, Judge
Sharp is bound by this holding. Since Judge
Sharp has also held on several occasions that “Craigmiles is controlling” in the instant case, it is not
unreasonable to expect that Mr. Bokhari will prevail at the trial level.
Unfortunately for Mr. Bokhari, however, Judge Sharp has also
properly observed that the Sixth Circuit’s holding in
Craigmiles is constitutionally suspect.
As the Tenth Circuit has protested, for
example, “the [Supreme Court] cases collectively cited by
Craigmiles . . . do not [actually] stand for the proposition that
intrastate economic protectionism, absent a violation of a specific
constitutional provision or federal statute, is an illegitimate state interest.”
As such, even if he wins at the District Court
level, Mr. Bokhari’s case could potentially result in the reversal of
Craigmiles if it reaches the Court of
Appeals.
However, cutting against this
possibility, perhaps, is the fact that the Institute for Justice has been
uncannily successful in litigating economic liberty cases, winning both the
Craigmiles decision discussed above and
a
very recent case in the
U.S. District Court of Utah involving the economic liberty of
hairbraiders.
In sum, although the District Court’s order denying Metro’s
Motion for Summary Judgment is welcome news for those of us who oppose the kind
of blatant economic protectionism that is at issue in Mr. Bokhari’s case, it
remains true that the best possible result would be for Metro to acknowledge
its error and repeal Ordinance No. BL2010–685 of its own accord.
Unfortunately, however – at least for the
time being – that option does not appear to be on the table.
Nonetheless,
as the Supreme Court has explained,
the democratic process is really the proper mechanism for doing away with
atrocious laws like this one, so if your Metro Councilmember
is among those local legislators who supports price-fixing, you really ought to
consider voting him or her out of office.
Daniel Horwitz is a third year law student at Vanderbilt University
Law School, where he is the Vice President of Law Students for Social
Justice. He can be contacted at daniel.a.horwitz@vanderbilt.edu. 
Top Stories
Posts
