District Court denies Metro’s Motion for Summary Judgment in Limo price-fixing case

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. 

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Metro business owner sues over limo, taxi fees - WSMV Channel 4

NASHVILLE, TN (WSMV) -
A Metro business owner has sued the city over a law he said he will destroy his business. Then, he said, Metro staked him out for fines and citations.
Limousines mean luxury, and for Syed Bokhari, they are a livelihood.
Six years ago, he moved from Pakistan to Nashville and founded Metro Livery.
"Business was so successful before we had last year, the limo regulation came from the city," Bokhari said.
Metro enacted a $45 flat-rate requirement for every livery company. So, Bokhari sued.
"It killed the competition, and it takes the customer's choice," Bokhari said. "I think this is my right to charge customers what I want. And government doesn't have any business to interfere with our prices."
Since then, enforcement officers cited and fined Bokhari's company several times. Last week, a driver charged an inspector, posing as a customer, just $25.
The citations and fines followed.
See Metro business owner sues over limo, taxi fees - WSMV Channel 4.

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Federal Judge Denies Nashville’s Motion for Costs In Metro Livery Case

by Daniel Horwitz

Daniel Horwitz

In an Order issued last week, the Honorable Kevin H. Sharp, District Court Judge for the Middle District of Tennessee, denied Metro’s motion for $6,785.40 in court costs in Bokhari v. Nashville, an economic liberty case that was tried by the renowned libertarian public interest firm the The Institute for Justice in January of last year. The case was brought on behalf of Mr. Syed Bokhari, the owner of the discount limousine company Metro Livery, and two other plaintiffs who challenged a variety of Metro’s limousine regulations. Most notable among the challenged provisions was Metro’s livery price-fixing ordinance, which required that limousine and sedan service operators charge their customers a minimum fare of $45.00 per trip.

As I begrudgingly predicted at the outset of the lawsuit, the plaintiffs faced a steep uphill climb from the beginning. They initially lost the battle when a jury rejected their claim that the challenged regulations violated their rights under the 14th Amendment to the U.S. Constitution. However, they ultimately won the war after Metro slashed its minimum fare from $45.00 to $9.00 just a few months ago, allowing the discount limousine companies to continue serving their customers.

Federal law provides that certain costs of litigation—such as the cost of obtaining transcripts or making copies of key documents—“should be allowed to the prevailing party.” Fed. R. Civ. P. 54(d)(1). However, judges retain discretion to deny costs under appropriate circumstances, and in exercising that discretion, they may consider factors such as the losing party’s good faith, the difficulty of the case, and the prevailing party’s conduct.

Describing Mr. Bokhari’s lawsuit as “a close case and one worth litigating,” Judge Sharp’s Order was based on the first of these factors. He also noted that “imposing costs would have a chilling effect on similarly situated litigants” that could discourage them from “pressing important public interest issues.” Most crucially, though, Judge Sharp explained that the case “was important because it allowed the public at large to scrutinize Metro’s actions, actions which the jury ultimately decided passed constitutional muster.”

Certainly, this case brought much-needed attention to the ridiculous and highly suspect set of limousine regulations enacted by Metro at the request of the expensive limousine lobbying organization TennLA. Accordingly, it stands to reason that the case played a key role in the ensuing legislative repeal of Metro’s $45.00 minimum fare, although the sudden entrance of companies like Uber and Lyft to Nashville’s transportation market undoubtedly contributed as well. As a result, Judge Sharp’s Order denying Metro’s motion for costs in this case was right on the money, and his obvious understanding of the importance of public interest litigation and the benefits of a free market economy should be applauded by all.

Daniel Horwitz is an attorney in Nashville and a 2013 graduate of Vanderbilt Law School. He can be reached at daniel.a.horwitz@gmail.com.

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How Big Car Services Use Legislation to Drive Over Competition

by J. L. Green, December 8, 2011, The Huffington Post

NASHVILLE, Tenn.-- In June 2010 the Nashville Metropolitan City Council passed legislation raising the city's minimum fee for limo and sedan rentals, bumping it from $25 to $45. Drivers were prohibited by law from charging less. Other new regulations forbid limo companies from using leased vehicles, require cars to be dispatched only from the place of business, compel companies to wait 15 minutes before picking up a client, and ban parking in front of hotels and bars to wait for customers. More laws that take effect in January 2012 would also require companies to replace all sedans and SUVs over seven-years-old, and all limos 10-years-old and older. Vehicles older than five years cannot enter into service.

Passed under the guise of consumer protection, the net effect is to give large, existing car companies (also known as livery services) a huge advantage over smaller companies, and to effectively prevent any new companies from entering the market. Prior to the new laws, Tennesseans could purchase transportation from downtown Nashville to the airport in a limo or sedan for the same price as an average taxi ride. Nashville residents and visitors will now pay almost double for the same service. (link)

My Comments

This is an excellent article explaining how Nashville came to adopt price fixing for limousine services. Please read the whole article.

According to this story, the bill that fixed prices was actually written by Matthew Yorke, president of the Tennessee Livery Association and owner of Signature Transportation. In addition to Matthew Yorke, another player in the push to fix prices was Opryland Hotel which operates their own limousine service and the Nashville Chamber of Commerce.


In this article, Green says of the move to fix prices that, "It's a case of regulations actually costing jobs and driving up costs, just as Republicans charge they always do. But this time, the regulations are being pushed by the GOP's so-called "job creators," the new name given to big business."  I think Green is right. Many in big business do not really believe in free enterprise. They are not above using government to get or maintain an economic advantage. Much of the regulation of business is simply an effort to suppress competition and has little to do with health and safety. I also would not be surprised if the folks at Signature Limousine and Opryland and the Chamber are not indeed Republicans. 

Too often, Republicans and Democrats are indistinguishable when it come to who is willing to use government power to get an economic advantage. Party labels are often nothing but names used to identify members of your team. Many seem to view politics as a chance to help your friends and Republicans help other Republicans and Democrats help other Democrats. Republicans are often just as guilty as Democrats of using regulation or eminent domain or awarding of contracts to benefit their business or institution or friends. 

When I first posted on this topic some moths ago, an anonymous person left a comment that said, "HAHA! A disgruntled Republican! Step into Mr. Bokhari's office and you will see a life size photo of President Obama."

Mr. Bokhari, who I have never met, is an owner of an economy limousine service and leader in the effort to overturn Nashville's limousine price fixing. I have no idea if it is true or not that he has a life size photo of President Obama in his office but it is irrelevant. I take position on issues because of my values not because the affected party is a Democrat or a Republican.

While the article tells how the price fixing bill was pushed through Council, the article credits Councilman Eric Crafton and Councilman Sean McGuire for last year trying unsuccessfully to repeal the price fixing bill. The story does not report that the issue is now back on the Metro Council agenda. Sponsored by Council member Blalock, Council bill BL2011-49 would repeal the limo price fixing bill and establish new limousine regulations devoid of the price fixing feature.

Last Tuesday the Council voted to defer BL2011-49. I don't know what is going on behind the scene with this bill. I don't know if the "fat cats" at Opryland and the Chamber who can make nice campaign contributions are twisting arms or not but it is not a good sign when a bill is deferred. If will be a shame if Council fails to undo their imposition of limousine price fixing. I was very disappointing that in June 2010 when Council imposed limousine price fixing that not a single member of the Council who identify themselves as conservative or Republican opposed it. I still wonder how it can happen that not a single member of the council looked at the bill and said, price fixing is contrary to my principles.

Perhaps many on the Council did not really know that the regulations they were adopting was price fixing. If an individual Council member was not on one of the committees that considered the bill, they may very well not have known the impact of the bill. Perhaps also they did not know their was any opposition to the bill. This time however, there are no excuses.

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More on the Attempt to Repeal Metro's Price-fixing Limo Law

Below is additional information about last night's council meeting and the effort to repeal  Metro's limousine price-fixing ordinance. I don't know how I forgot Councilman Bo Mitchell. Along with Councilman Tygert, he was the other leading proponent of maintaining Metro's price-fixing ordinance. Actually, he was much worse than Tygert. Tygert argued we needed a comprehensive approach to the issue. Mitchell seemed to have contempt for those wanting to change the law and belittled the opposition as a few insignificant people who did not want to play by the rules. He was also dismissive and arrogant in is unconcern for the law suit facing the city over this issue.

Mr. Bokhahi is the owner of Metro Livery, one of the companies Metro is trying to drive out of business and one of the plaintiffs in the law suit against the city. Rod

From Syed A Bokhari
Rod,
Thank you for writing a good article with the true picture of how metro council handled things last night. Councilman Bo Mitchell spoke in opposition of BL2011-049, stating that all parties had been invited with the formation of the original bill in 2010. Simply, I am here to say, that was not the case. My company, Metro Livery, was never invited.

1. In 2009, we gave opposition to the Transporation Licensing Commission. See link:

2. Additionally, I called and even mailed letters to Mr. McQuistion to ask him to come and see my operation, so that I may explain my business model, and show him my 24 hour dispatch facilities. Mr. McQuistion did not return my calls or accept my invitation.

3. During the formation of the bill, I personally called Bo Mitchell and never received a return phone call.

4. Matter fact, even in 2011, there was a meeting called, at the behest of Council Lady Edith, where again, I was not invited. A representative of my company was invited to attend in my place. It was during that meeting late last year, that Bill Faeth stated the parties that formed the original bill did so to put my company out of business.

Bo Mitchell stated only two companies are behind the bill because they do not want to follow the rules. Councilman Mitchell also stated out of 57 operators, only two operators disagree. In reality, there were over 15 operators that attended last night’s meetings in support of BL2011-049. Mr. Mitchell stated Metro gets sued every day. He does not mind that Metro has to spend thousands of taxpayer’s money in lawsuits for the City.

My company, Metro Livery, has been a licensed operator with the Metro Nashville Airport for the last six years. Our business entity was same like any Tennessee Livery Association member. We are a licensed operator with the Transportation Licensing Commission from the FIRST DAY of the new ordinance in December of 2010. We are safety complaint and have spent a lot of resources to ensure we are complaint with the rules. Metro Livery stands firm in its commitment to safety regulations. Some of the rules are to support the luxury limousine business model. My business does not have room to survive with several of the rules in the ordinance.

It saddens me to see that we have to defer the bill, while there are many companies and families waiting for these changes. Mr. McQuistion wants a consultant to and what is called a comprehensive analysis of his office. Meanwhile, he and his inspectors continue to work tirelessly to put existing companies out of business that try to follow the rules. And Mr. McQuistion himself stated there were about 40 operators in the city that have not even applied to his office.

Again, my company applied the first day for the operator certificate. My assistant met with Mr. McQuistion to set a plan of action (since the ordinance did not have a defined timeline of when all existing companies should get complaint by) to get all vehicles and drivers in my company complaint and to find out from the Director when the enforcement would begin. My assistant was told by Mr. McQuistion that he would notify us before enforcement began. Sadly, that was not the case. He began enforcement targeted to my company almost immediately. We asked Mr. McQuistion for a “comprehensive fix” for our company, he denied, and brought my company in for disciplinary action. And yet, now Mr. McQuisiton needs a “comprehensive analysis” of his department?

To this day there are still drivers working for Tennessee Livery Association companies that are unlicensed. There has been no enforcement upon those companies. My company has even reported to the Inspectors specific locations of drivers for these companies so that everyone could be fairly enforced. Sadly, we were told “that is out of my jurisdiction” by the Inspector.

I am not a taxi. I am not a luxury limousine. I am a car service. I do not exist in the ordinance. All we are asking for is the opportunity to survive.

As Wesley Hottot stated in his article for the Tennessean: "‘The Supreme Court has long recognized that the U.S. Constitution protects the right to earn an honest living, stating in Truax v. Raich, for example, that this right is “the very essence of the personal freedom and opportunity that it was the purpose of the 14th Amendment to secure.””

This is a sad example of abuse of power and authority by the legislators who took the oath to protect the constitution.

Thank you again for all your support and for covering this story on your blog.
Syed A. Bokhari

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New Movie "American Patriot" to Expose Nashville's Abuse of Authority

After a great success with An Inconsistent Truth, the movie critiquing climate change and featuring Phil Valentine, Director Shayne Edwards has a new project, a movie to be called "American Patriot". 

It will be the story about Syed A Bokhari and his journey from a small town in Pakistan to the United States and ultimately the fight for his American rights, taking place right here in Nashville, Tennessee. This movie will expose how Nashville Government worked to put Metro Livery out of business. Soon, you will see the true story of abuse of authority and the misuse of public power for private gain. 

Updates will follow as more is known. 

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Nashville limo owners want to stop enforcement of $45-per-trip minimum fare

A group of budget limousine and sedan service companies urged a federal judge Monday to temporarily bar Metro government from enforcing a $45-per-trip minimum fare.

The companies sought the preliminary injunction until the court can decide the merits of a lawsuit calling Nashville’s new limo regulations anti-competitive and unconstitutional. read more

This is another step in the on-going battle to overturn Metro's mandatory livery service price-fixing scheme. At the heart of the battle is a Metro requirement that a "limo" charge a $45 minimum fee for a fare even if the fare is a 5 mile, 10 minute ride.

Until June 2010, limousine service was largely unregulated and limo's were a luxury service. However, a new service appeared on the scene a few years ago which was not a taxi but was cheaper than a limo. This new service did not use the stretch limousine vehicle but used black sedans.

This service was started by Ali Bokhari, who emigrated from Pakistan in 2000, and ended up in Nashville.  He saw an opportunity for a new kind of livery service and he developed a successful business model. From starting with one car, his business has grown to a fleet of 20 cars plus 15 independent owner-operators who work for him. Seeing his success, others started providing the same service. This new type of service was popular. Instead of paying $45 or more for a limo to take one from the airport to a downtown hotel, this new service only charged $25. Also, a lot of clients preferred the less ostentatious black sedan over a stretch limousine.

There was problem however.  The big well-connected limo companies were losing customers to the sedan companies so they went to Metro and got a bill passed that essentially would put the sedan companies out of business and made them operate like limo companies. The regulation they drafted established a minimum $45 fee for a limo ride.  The Metro Council passed their anti-competitive bill in June 2010 and no one in the Council, even the self-identified constitution-loving, free-market advocating conservatives, opposed the bill.

In addition to the new minimum fare requirement, the new law did a lot of other things designed to restrict the ability of the sedan companies to provide the service they were providing. The new law did such things as permit only one fare per hour; require a central dispatch office, which has the effect of prohibiting clients from directly contacted the driver by cell phone and thus prohibiting the single-car, owner-operator; established discriminatory vehicle age and mileage requirements on sedans which are more restrictive than those on the limo body type vehicle; and more. 

It seems regulators do not like innovation or deviation from the way things have always been done.  They want all services to fit in neat little well-defined boxes so they can more easily be regulated. Innovation and regulations just do not go well together. Also, well established firms do not like to lose business to innovators and those who can successfully compete for their customers. With friends in high places, many successful businesses are not above using the power of government to squash the competition. The fact is, a lot of businessmen are not advocates of free markets. They like government favors and protection from competition.

In April 2011, Metro Livery and two other economy limo companies filed a federal lawsuit challenging challenging the constitutionality of the new regulation and the minimum fee. The Institute for Justice, a libertarian public-interest law firm, is representing the livery companies. Metro sued to dismiss the law suit.

On January 20^th, 2012 the motion to dismiss was heard in the U.S. District Court for the Middle District of Tennessee and the court denied the motion to dismiss. That ruling emphasized that “Courts have repeatedly recognized that protecting a discrete interest group from economic competition is not a legitimate governmental purpose,” quoting Craigmiles v. Giles, a 2002 case that the Institute for Justice won on behalf of some casket retailers in Tennessee. The casket retailers in that case were being locked out of the marketplace by a group of well-connected companies. The casket retailers won their case.  In dismissing Metro’s motion to dismiss, the court recognized precedent in holding that legislating for no other purpose than protecting industry insiders is illegitimate.

This latest action is a motion to prohibit the city from enforcing the $45 fee until the constitutional issue is decided.  I am hopeful the court will not allow the city to enforce what may very well be ruled an unconstitutional law.

For more on this issue click here.

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Nashville Limo Price-fixing : Bokhari v. Nashville Press Conference

"These regulations were written by the city's most expensive limousine companies for the city's most expensive limousine companies."

"They were designed to put the affordable competition out of business."

"Customers, not government, should pick winners and losers in the transportation industry."

"This case is a sad example of the city using public power for private gain."

"I came in this county because it is the land of opportunity and freedom. All I need is to be left alone to pursue my American dream."

"There is a bourgeois elite in the limo business that believe that only the very rich should be able to afford limousine service."

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George Will on Nashville's Limo Price Fixing

Cabbie fights for economic liberty 
by George Will, The Tennessean, March 28, 2012

Ali Bokhari, 39, emigrated from Pakistan in 2000, eventually settled in Nashville as a taxi driver, and soon experienced a quintessentially American itch, a nagging sense that “I cannot grow.” But he had an idea: “I can build a better business model for something Nashville has been missing.” He built it, and now knows no good deed goes unpunished by today’s political model: collusion between entrenched businesses and compliant government. read more

This is a great article!  George will explains "collusion between entrenched businesses and compliant government." He exposes "a Metro government that is, as interventionist governments generally are, devoted to regulations that protect the strong by preserving the status quo." He explains what is at stake and the importance of this issue.

I have reported on this issue extensively and closely followed the developments in this case. I have been extremely disappointed in our former and current Metro Council. With the exception of Council Member Davette Blalock, who has championed the cause of the victims of price fixing, there have few admirable participants in this drama. In June 2010 when the Council approved the price fixing mechanism, not a single Council Member objected or voted against the legislation.  That included the conservative members of the Council who claim support of the Constitution and free enterprise. The Council has had the opportunity to undo Metro's price fixing bill but did not do so. Hopefully the Courts will restore the economic liberty that our Metro administrations and Metro Council disdains.

It is gratifying to see this issue picked up by someone of the stature of George Will. George Will writes a twice-weekly column on politics and domestic affairs which is syndicated in hundreds of newspapers across the Country. He began his column with The Washington Post in 1974, and he received the Pulitzer Prize for Commentary in 1977. He is also an ABC News commentator and regular panelist on “This Week.” He is the author of several best selling books and one of my favorite columnist.

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More on How Metro Stifles Competition

This is too good to get lost in the comments section of the previous post.  This is futher explanation of how Metro has tried to stack the deck against competitors to the well-connected established limousine companies. 


Syed A Bokhari has left a new comment on your post "Repeal of Limo Price Fixing on Metro Council Agend...":

Also, the ordinance requires a dispatch office for even the one car owner. It is a limo business for last decades lot of people were this business part time. They have a full time jobs. And also, have sedan or limo to supplement their income. They drive the car only on weekend to support their families. It is hard to make a living with one job because of the slow economy or other contributing factors.

What realistic numbers a small business owner afford an office and a payroll of a full time dispatcher when he is making only a couple hundred a week on weekends? The ordinance was written by the high end limo companies that have fleets and full time office with dispatchers so one car owners or a small guy cannot even survive. I have a question for Brian McQuistion, tell me the numbers how a small operator can afford all the expenses and pay the city licensing fees, dispatch office, etc.????

I could see how you hate the small guys in your open public meeting. You called security to a small guy when he asked you about public safety and tried to put him out of a public meeting, since you were a public servant you, Brian, violated his first amendment right. Are you a public servant? I strongly believe an the ordinance was an organized crime against small guys. I personally have the largest discount car service in Nashville with the largest dispatch office as well. But I started everything with one car. So they made sure there will never be another Metro Livery born again.

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Please support the Institute for Justice

From time to time I make modest financial contributions to organizations and candidates I believe in. One of those organizations I support is the Institute for Justice. They litigate for the cause of liberty in four primary areas: economic liberty, property rights, political and commercial speech, and school choice.

Cases they have taken on range from defending homeschoolers  to hair braiders. I know of two occasions were they have been active in Nashville defending the little guy against local government tyranny.

One, is the case of Joy Ford from 2008. Ms Ford who had a long career in the music business owned a small piece of land on music row. The neat but simple brick building housing County International Records was located in the middle of a redevelopment district. MDHA sought to acquire the Ford’s property on behalf of the developer who planed a $70 million office tower on the adjacent property. Ms Ford did not want to sell, so the city closed an alley behind her property so tour buses could not access her property. She still did not break, so MDHA deemed her property “blighted” and tried  to take the property by eminent domain condemnation.  The Tennessean's Gail Kerr brought attention to this case as well as radio personality Phil Valentine. The Institute for Justice stepped in and represented Joy Ford in Court and slowed the condemnation process. MDHA then offered a land swap. Ms Ford got to keep her building and swapped part of her parking lot for parking on the other side of the building.  Had it not been for IJ, MDHA would have taken her land by eminent domain.  For more on this story, follow this link.

The other Nashville case in which IJ was involved was that of Metro Livery. In 2009, a new service which has since come to be called "Black Cars" made there appearance in Nashville.  This new type service was introduced to our city by a Pakistani immigrant named Ali Bokhari. For as little as $25 his company offered luxury rides from the Air Port to downtown.  These plain large vehicles such as Crown Ford Victoria's or other large luxury cars were much nicer than a taxi but not ostentatious like a stretch limousine and they were driven by driver wearing suits. The established limo companies made an all out effort to drive him out of business. The city's Transportation Licensing Commission had inspectors exercising police power illegally.  The inspectors for the Metro Transposition Incensing Commission harassed drivers for Metro livery.  Eventually the police chief intervened and forced the MTLC to cease illegally acting as law enforcement agents. 

In June 2010, the council passed a limousine price-fixing bill that protected the big limo companies from competition. The ordinance imposed a minimum $45 fee for limo services, it prohibited the use of leased vehicles, and imposed vehicle age and mileage restrictions. And while customers of Metro Livery called for a Black Car by calling the driver's on his cell phone, this new ordinance required vehicles be dispatched from a central location. They also prohibited drivers from serving more than one car an hour and mandated a minimum of a 15 wait for a vehicle. Metro Livery fought back. This fight went on and on for years.  Institute for Justice joined in the case and litigated on behalf of Metro Livery and other Black Car drivers who had started providing the same service.  Eventually IJ lost in court, but Metro failed in an effort to get the case thrown out and it went to trail.

The delay in allowing Metro to force Metro Livery out of business eventually resulted in publicity for Metro Livery and victory.  The case was picked up nationally by John Stossell and George Will and others and as more people began using the service, the city realized it would be difficult to kill this service and then with the appearance of services like Uber and Lyft making a Nashville appearance, the council rewrote the law that they had passed which was designed to force Metro Livery out of business. Most likely if not for IJ's intervention, Metro would have succeeded in driving this company out of business and keeping Uber and Lyft from entering the Nashville market. I have blogged about this case numerous time, if interested in learning more, follow this link.

These are two examples were the Institute for Justice fought for the little guy against the city of Nashville and justice was served.  They are doing this all across the country when cities want to ban alternative transportation or food trucks or  hair braiding or unjustly take property by eminent domain or only want caskets to be permitted to be sold by funeral homes or restrict home schooling and various other  infringements on economic liberty and free speech.

If you are in the giving mood this Christmas season, I know of no organization more deserving of support than the Institute for Justice. You can donate at this secure link.

Below is IJ' solicitation to me: 

Dear Mr. Williams.

As 2014 draws to a close, I hope you will consider renewing your support of the Institute for Justice.  With 51 active cases in 26 different states and the District of Columbia, IJ is The National Law Firm for Liberty.  Please renew your support now to help us make even greater gains for liberty in 2015.

Generous donors like you enable IJ to fight for everyday heroes who choose to stand up to government bullies and oppression rather than take the easy way out.  Here are just a few of the victories your past support has made possible this year:

• Tens of thousands of mom-and-pop tax preparers can continue to run their small businesses without fear of unconstitutional licensing requirements from the IRS.
• More than 1,800 children in North Carolina are able to attend the school that best meets their needs, despite multiple attempts of the teachers’ unions to revoke their scholarships.   
• People in Arizona can now speak freely about important political issues without first having to register with the government.
• Transportation entrepreneurs in Milwaukee are now free to start their own taxi companies and pursue their American Dream.

The stakes for liberty are high and impact the lives of all Americans.  In the coming year, we must, and will, bring our best efforts to bear as we defend the Constitution.  If your check is already in the mail, please pardon the reminder.  If not, then please visit www.ij.org/donate to renew your support today.

Thank you for making our work possible.  I look forward to hearing from you soon.
Chip

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Entrepreneurs and IJ: Driving Forces for Innovation

From Institute for Justice

IJ client Ali Bokhari had an innovative and successful business model of using late-model towncars to keep prices low until Nashville, Tenn., instituted a minimum fare for sedans.  IJ is fighting on behalf of Ali and similar entrepreneurs whose right to economic liberty is in jeopardy.

By Larry Salzman, Institute for Justice - 

If there is any ironclad rule of entrepreneurship, it is that every new innovation is likely to be attacked by businesses and regulators opposed to change.

Entrepreneurs are men and women who take action to bring into reality their vision of what might be. Sometimes that is simply a vision of a better job and a better life for the entrepreneur and his or her family—like the business of IJ client Silvio Membreno, who came to the United States from Nicaragua and has earned his living as a flower vendor in Hialeah, Fla., for the past 15 years. Sometimes an entrepreneur has a vision of offering a unique service in a new place, such as IJ client Jestina Clayton: She found a wide-open market in Utah for the traditional African hairbraiding she learned in her native Sierra Leone.

Silvio’s and Jestina’s success threatened established businesses, which ran to lawmakers to outlaw them rather than compete. But with IJ’s help, Silvio and Jestina fought back. Silvio joined with us to file a lawsuit challenging regulations being pushed by florists and other established retailers to drive mobile vendors out of business. Thanks to an IJ legal victory over Utah’s cosmetology cartel in federal court in August, Jestina is now free to continue her hairbraiding.

Sometimes, however, entrepreneurs have a vision so large it not only threatens local bullies or lazy competitors, but also changes the shape of entire industries in order to create something new and better. Consider, for instance, the Internet communications company Skype. In less than a decade it rose from a small startup with a few employees to an international juggernaut, used by more than 500 million people, in nearly every country, connecting more people around the world on any given day than several of the largest traditional telecom companies combined—at a tiny fraction of the cost. That success was possible in part because Skype was free to innovate outside the thicket of traditional telecom regulation—and had deep pockets to fend off legislation that might have shut it down.

In just the past year we have begun to see powerfully disruptive entrepreneurship occurring in two fields very familiar to IJ: vending and transportation.

On the vending front, food trucks are changing how Americans eat. Once relegated to construction sites, food trucks are now booming in popularity, selling creative, cutting-edge cuisines to an excited public. Innovative culinary entrepreneurs rely on the Internet, using Twitter and Facebook and other web tools to let patrons know where they will be selling that day and to establish a following. A trend that began at the beginning of the economic downturn due to the relatively low startup costs of food trucks has bloomed into thousands of trucks nationwide serving millions of patrons each day. Unfortunately, it has also attracted opposition from regulators and politically connected restaurant associations who seek to use the law to block food trucks from competing with brick-and-mortar establishments.

All but five of the 50 largest cities in the United States now have laws that make it difficult, if not impossible, to successfully operate food trucks. IJ has rebutted the myths that have fueled these ordinances in a report, Seven Myths and Realities about Food Trucks, and has begun taking cities to court. An IJ lawsuit in El Paso forced the repeal of protectionist legislation that stifled food truck vendors, and this past November, IJ teamed up with two Chicago-area food trucks—The Schnitzel King and Cupcakes for Courage—to kick off a major constitutional challenge to a protectionist ordinance recently passed in the city.

IJ has long fought against regulations that prevent independent taxi and sedan car drivers from earning an honest living. Recently, however, Internet entrepreneurs have started a quiet revolution in the transportation industry. Smartphone apps created by companies such as Uber.com, Hailo.com, TaxiMagic and others use the Internet and GPS to link drivers and riders, routing limos, sedan cars and taxis to passengers within minutes and allowing passengers to pay online with their phone. Since most of the sedan-car operators who use these services are independent entrepreneurs, they pose a major challenge to taxi cartels. The new services make transportation more convenient for riders and more profitable for drivers, who spend less time circling around looking for passengers and more time running their meters. Hailing a car with your smartphone is now possible in more than 20 U.S. cities and dozens of European cities as well.

It is estimated that in the past two years since hail-by-app began in London, more than 50 percent of the cabs there—likely the world’s busiest taxi market—are hailed by smartphones. That success was made possible because the city adopted a hands-off regulatory approach to the new technology, increasing competition. Unfortunately, many U.S. cities, at the behest of a powerful taxi lobby, are considering legislation aimed at prohibiting competition between taxis and livery vehicles and outlawing the convenience of hailing by smartphone app. These proposed laws have nothing to do with protecting public safety but are merely a way for politically powerful cab companies to try to shut down a flourishing new market. In Portland, Ore., and Nashville, IJ has teamed up with independent sedan car drivers to prove that such protectionist laws are not only wrong, but unconstitutional.

Entrepreneurs expect to fight the status quo. Too often today, however, they must also fight unjust and arbitrary regulations to see their vision become reality. But entrepreneurs who refuse to submit do not stand alone. IJ stands with the innovators—and is itself as entrepreneurial as the clients it defends. We are seizing opportunities presented by these new and emerging business models to establish a rule of law under which individuals can control their destinies as free and responsible members of society—and our past successes show that we can win.

My comment: While not successful in overturning Nashville limo price fixing bill, IJ fought the good fight. A few years ago, IJ was successful in stopping the taking of Joy Ford's property.  Her property was going to be taken to benefit a developer who wanted her building so he could develop the site. IJ is on the front line protecting property rights, opposing policies that fix prices and restrict competition and standing up for free enterprise. We can not trust local government to do what is right.  In the case of limo price-fixing, the Metro Council voted unanimously to impose it.  When even the so-called conservatives on the Council side with the entrenched interest and trample our liberties we need an organization like IJ. Institute for Justice is one of those organizations that I support. To make a contribution, follow this link: Donate, The Institute for Justice.

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Wendy Hancock found guilty of custodial interference. Attorney Connie Reguli will now go on trial.

Weny Hancock and
Connie Reguli

by Rod Williams- July 15, 2021- Yesterday in Franklin Tennessee, Wendy Hancock was found guilty of the crime of custodial interference.  I had, prior to the trial in a previous post, said that family law attorney and Department of Children's Services critic Connie Reguli was on trial.  She was not, but the trial could have determined her fate.

The person on trial was Wendy Hancock.  She was charged with custodial interference and Connie was her attorney at the time. Connie was charged with accessory to custodial interference or abetting custodial interference or facilitating custodial interference or some such charge.  If Wendy would have been found not guilty, then charges would have been dropped against Connie because that would mean there was no custodial interference and thus no crime to which Connie would have been an accessory. Unfortunately, in my view, Wendy was found guilty. Connie will now go on trial.  

I attended the last day of the three-day trial. I got to see the attorneys argue the wording of the charges to the jury and watch closing arguments. While I missed the first two days of the proceeding, I had a close friend, Lydia Hubbell, who attended and she took good notes and gave me detailed reports of what happened, also, another friend, Jeni Bokhari gave me reports on what she observed.  I also watched various videos and read social media reports from others who attended the trial and feel I have a pretty good understanding of the case. 

Here is the essence of what this was all about as far as I can tell.  In 2019 Wendy Hancock, a single mother of a teen boy and a pre-teen girl was having problems with her out-of-control son. He was doing drugs, skipping school, and would not mind.  Wendy asked the state to intervene.  They took the child and put him in foster care.  He, in retaliation, told State authorities that his mother was a bad mother and was dealing drugs. The state then took action to remove Wendy's daughter and place her in foster care also.  By all accounts, there was no truth to the charges against Wendy and there was no indication that Wendy's daughter was in any danger, was being neglected, or otherwise in an unsafe environment. 

This is where the charge of custodial interference gets confusing.  Wendy had participated in an investigation that led up to the order to take her daughter.  She anticipated an order was to be issued to take her child.  She sought the help of attorney Connie Reguli. At some point, she knew or assumed an order to take her daughter had been issued but she had not been served. She avoided service. She fled her home in Lebanon and stayed a couple days with relatives in Watertown.  She stayed a couple nights in a motel.  She put her cell phone on "airplane mode," so it would not be tracked.  

She went to see her attorney and, I think, spend a night at Connie's home in Brentwood.  I am not clear on how, but somehow the Williamson County sheriff tracked her down at Ms Regali's house and took the child, and arrested both the mother, Wendy, and the attorney Connie Regali. 

In defense of Wendy's actions, it was pointed out that the order to take the child into custody did not specify a date by which she must surrender the child or a place to do so.  Also, Connie Reguli called the DCS office numerous times to say she was representing Ms. Hancock, and would someone please call her.  She was wanting to accommodate the surrender of the child in a less traumatic fashion than having law enforcement take her into custody. No one returned her call.

Why was the mother and Connie Reguli arrested? Many believe it is because Connie Reguli is a thorn in the side of DHS and this was revenge for her activism.  Ms Reguli has represented numerous parents in custody battles and has represented parents who have had their children removed by DHS.  She has become a national leader in the parental rights movement.  She does videos on the topic, has been a featured speaker at conferences across the county, and has testified before state legislative bodies. Connie Reguli believes Wendy was a victim of the State's effort to take revenge on her.  During the trial, the prosecutor objected to any attempt by Ms Reguli to make this point and the judge would not let her do much more than answer yes-no questions. Several observers of the trial told me, it was terrible the way Ms Reguli was treated in court.

I believe the charge that this fiasco was revenge against Ms Reguli. Listening to closing arguments, I can see how the jury could have found Ms Hancock guilty as charged. However, in my view, she should never have been charged. Once charged, the charges should have been dropped.  She had no intent to permanently avoid surrendering her child; she was a mother in distress about having her child taken and stalled for time hoping her lawyer could stop it from happening.  Wendy was never ruled an unfit mother. She was forced to take numerous drug tests which she always passed and after her daughter was in foster care for six months, she was returned to her mother. 

This trial did not get mainstream press news coverage but it should have.  It is being widely reported on social media.  Several people came from across the country to observe the trial. Among those attending was Jennifer Winn, an outspoken and passionate family rights activist who was a gubernatorial candidate in her home state of Kansas, and investigative journalist, Terri LaPoint, from Alabama.  Parents and grandparents who have had negative experiences in family court and advocate for child welfare and family court reform who were in attendance came from Texas, Georgia, and from several counties in Tennessee.

Now that Wendy Hancock has been found guilty, the State will proceed with the charges against Connie Reguli.  If found guilty, Connie would lose the ability to practice law.  I have no doubt, that even if she does lose her ability to practice law, that Connie Reguli will remain a fierce advocate for families. 

While there are cases in which children need to be removed from a home and while the state has an interest in protecting children, the state often fails.  Children or too often removed from homes without just cause, judges will sign anything DHS puts in front of them, parents are powerless to oppose DHS, proceedings in DHS custody cases are conducted in closed court and parents rights are often not protected, and children sometimes die in foster care or are abused.  Even if not mistreated in foster care, they may be in several foster homes in a short period of time being required to change schools several times in the year. In my view, children should only be removed from a home in rare circumstances.  If necessary to remove a child because a situation may be dangerous, then that determination should be made quickly and the child reunited with their parents as soon as possible. 

Part of the problem causing so many children to be taken from their parents is that government funding is often contingent upon showing results.  To get more funding, state agencies must show the federal government or the state agency must show the state legislature they are being productive and that means removing children from their homes.  I have heard many tales of children being taken from parents when it was unjustified.  Even if parents are not great parents, unless a child is in danger if it remains in that environment, children should not be taken from their parents. 

I hope when Connie Reguli goes to trial, it gets mainstream press coverage.  Her trial could help shed light on a problem that needs it. 

For more on this story see these links: Family Forward Project with video reports,  Connie Reguli's Facebook page, Jennifer Winn's Facebook page with video interviews of the day of the trial and more, link.

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Institute for Justice wins Hairbraider’s Constitutional Rights case in Utah

In a major victory for economic liberty, a federal court ruled this week that Utah’s requirement that hairbraiders have a government-issued cosmetology license is unconstitutional.  Along with the Institute for Justice and local counsel. Jestina Clayton filed suit to fight the state’s anti-competitive cosmetology regulations and won. The above video tells her story.

The Institute for Justice is the organization representing the Nashville limo owners who are suing metro seeking to overturn Metro's limousine price-fixing bill. Until June 2010, limousine service was largely unregulated in Nashville and limo's were a luxury service. However, a new service appeared on the scene a few years earlier which was not a taxi but was a service cheaper than a limo. This new service did not use the stretch limousine vehicle but used black sedans.

This service was started by Ali Bokhari, who emigrated from Pakistan in 2000, and ended up in Nashville.  He saw an opportunity for a new kind of livery service and he developed a successful business model. From starting with one car, his business has grown to a fleet of 20 cars plus 15 independent owner-operators who work for him. Seeing his success, others started providing the same service. This new type of service was popular. Instead of paying $45 or more for a limo to take one from the airport to a downtown hotel, this new service only charged $25. Also, a lot of clients preferred the less ostentatious black sedan over the stretch limousine.

There was problem however.  The big well-connected limo companies were losing customers to the sedan companies so they went to Metro Council and got a bill passed that essentially would put the sedan companies out of business and make them operate like traditional limo companies. The regulation they drafted established a minimum $45 fee for a limo ride.  The Metro Council passed their anti-competitive bill in June 2010 and no one in the Council, not even the self-identified constitution-loving, free-market advocating conservatives, opposed the bill.

In addition to the new minimum fare requirement, the new law did a lot of other things designed to restrict the ability of the sedan companies to provide the service they were providing. The new law did such things as permit only one fare per hour; require a central dispatch office, which has the effect of prohibiting clients from directly contacted the driver by cell phone and thus prohibiting the single-car, owner-operator; established discriminatory vehicle age and mileage requirements on sedans which are more restrictive than those on the limo body type vehicle; and more. These regulation had nothing to do with health and safety but were designed for no other purpose than to squash the competition.

In April 2011, Metro Livery and two other economy limo companies filed a federal lawsuit challenging the constitutionality of the new regulation and the minimum fee. The Institute for Justice, a libertarian public interest law firm represented the livery companies. Metro sued to dismiss the law suit and that law suit failed. 

On January 20^th, 2012 the motion to dismiss was heard in the U.S. District Court for the Middle District of Tennessee and the court denied the motion. That ruling emphasized that “Courts have repeatedly recognized that protecting a discrete interest group from economic competition is not a legitimate governmental purpose,” quoting Craigmiles v. Giles, a 2002 case that the Institute for Justice won on behalf of some casket retailers in Tennessee. The casket retailers in that case were being locked out of the marketplace by a group of well-connected companies. The casket retailers won their case.  In dismissing Metro’s motion to dismiss the Metro Livery case, the court recognized precedent in holding that legislating for no other purpose than protecting industry insiders is illegitimate.

 
Any day now, the court may rule on Nashville's limo price fixing bill. Let us hope economic liberty prevails again. 

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Nashville Transportation Entrepreneurs Hit Government Roadblock

Press release, Nashville, Tenn.—Today, a jury ruled in favor of the Nashville government as part of a long-running dispute over the city’s limousine and sedan regulations. A group of the city’s transportation entrepreneurs and the Institute for Justice first filed suit in 2011 challenging Nashville’s minimum-fare law and other unreasonable restrictions on the city’s affordable car services. The decision means that for now Nashville’s $45 minimum fare for sedans and limousines will remain in place.

“Our fight isn’t over,” promised Ali Bokhari, owner of Metro Livery, which had charged as little as $25 for trips between the airport and downtown before the law was passed. “These laws were wrong when they were passed, they are wrong now and they will be wrong until they are struck down.”

The plaintiffs in the case had argued that the minimum-fare law, which was literally written by a lobbying group representing the interests of the city’s expensive limousine companies, did not advance any legitimate government purpose. The week-long trial featured testimony from local small-business owners, sedan customers, and even the regulators and limousine-company owners responsible for the law itself. After deliberating, the jury found that the government had at least one legitimate interest for the law beyond mere protectionism.

“Unfortunately, across the country, governments continue to pass protectionist laws at the behest of powerful private interests,” explained Wesley Hottot, the lead attorney on the case. “We remain committed to fighting back against encroaching government power on every available front.”

The week-long trial featured testimony from local small-business owners, sedan customers, and even the regulators and limousine-company owners responsible for the law itself. After deliberating, the jury found that the government had at least one legitimate interest for the law beyond mere protectionism.

“Achieving economic liberty is a marathon and not a sprint,” explained Institute for Justice Senior Attorney Robert McNamara. “The jury’s verdict will neither stop nor slow our efforts to free transportation entrepreneurs here in Nashville and nationwide.”

“The Institute for Justice has fought for the rights of entrepreneurs for over 20 years, seeking to make sure that all Americans have the right to earn an honest living in the occupation of their choice,” concluded Institute for Justice President and General Counsel Chip Mellor. “As long as government officials insist on abusing their power, we will insist on holding them to account.”

For more information contact: Shira Rawlinson, (703) 682-9320 ext. 229

To contribute to IJ, follow this link and hit the "donate" tab. I am so disgusted, I made an additional contribution to IJ. One of the things that really disgust me is that even the so-called "conservative" members of the Council were guilty of voting for price fixing when the current anti-free enterprise price-fixing legislation was adopted. Rod 

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Federal Court Denies Nashville’s Motion to Dismiss Transportation Case

Rejects Economic Protectionism as a Legitimate Governmental Interest 

FROM INSTITUTE FOR JUSTICE,  Arlington, VA.—Today, the U.S. District Court for the Middle District of Tennessee denied the city of Nashville’s motion to dismiss a major federal lawsuit challenging the constitutionality of its limousine and sedan regulations.

The ruling by Judge Kevin Sharp is part of a civil rights lawsuit filed in April 2011 by the Institute for Justice on behalf of a group of independent limousine and sedan operators. The lawsuit argues that Nashville’s new limousine and sedan regulations, including a $45 fare minimum for car service, were passed into law to protect the city’s expensive limousine companies from more affordable competitors.

The city’s rules also prohibit limo and sedan companies from using leased vehicles, require them to dispatch only from their place of business and 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.

WATCH A SHORT VIDEO ON THE CASE 

Today’s ruling emphasized that “Courts have repeatedly recognized that protecting a discrete interest group from economic competition is not a legitimate governmental purpose,” quoting Craigmiles v. Giles, a 2002 case that the Institute for Justice won on behalf of casket retailers in Tennessee. The casket retailers in that case, like the affordable car services in this case, were being locked out of the marketplace by a cartel of well-connected individuals. The casket retailers won their case. And the Court today recognized that precedent in holding that legislating for no other purpose than protecting industry insiders is illegitimate.

“This case is about protecting our clients’ right to engage in business free from unreasonable government interference,” said Wesley Hottot, an attorney with the Institute for Justice who is representing the plaintiffs. “That is a basic right of citizenship under the U.S. Constitution and the government must respect it in good economic times and in bad. Today’s ruling correctly recognizes the principle that the government can’t deny your right to be in business, just so your competitors can get richer.” 

READ THE FULL DECISION

“If my customers prefer to take a sedan over a taxi and to pay for that choice, that is their business, not the city’s,” said Ali Bokhari, owner of Metro Livery and a plaintiff in the case. “Limos and sedans have served the people of this city for decades without Nashville’s help. All we want is to be left alone to continue doing that.” Today’s ruling puts the case on track for a trial in January 2013, in which the plaintiffs will demonstrate that there is no health or safety justification for Nashville’s limo and sedan rules.

My Comment:  This a great victory, not only for the independent limousine companies, but for all citizens who believe in free enterprise, the constitution, and that the power of government should not be used to protect the well-connected from competition. There is a long way to go in this case, but this ruling was a major victory.  The Council could still do the right thing and repeal price-fixing, however the majority of the Council are not yet ready to make that move.

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Institute for Justice: Nashville Repeals $45 Minimum Fare Law

Affordable Car Services Back On The Road With Reasonable Prices

Institute for Justice, January 8, 2014, Nashville, Tenn.— In a major victory for Nashville’s transportation entrepreneurs and customers, the Metropolitan County Council voted 29-3 late yesterday to reduce the city’s $45 minimum price for limousine and sedan service to $9.  The original law, passed in 2010, nearly doubled the price of car service in Nashville, driving small transportation businesses off the road and leaving their customers out in the cold.  The change will go into effect immediately once Mayor Karl Dean signs it into law. READ THE NEW LAW

The change in the minimum fare follows a three-year legal battle over its constitutionality.  A group of local transportation entrepreneurs and the Institute for Justice (IJ) filed a federal lawsuit in 2011, pointing out that the law was literally written by Nashville’s most expensive limousine companies and designed to destroy their affordable competition.  The case came to a dramatic conclusion in January 2013, when a jury upheld the law. LEARN MORE ABOUT THE CASE

“The $45 minimum fare almost destroyed my business,” said Ali Bokhari, a plaintiff in the lawsuit and owner of Metro Livery, a popular car service that charged as little as $25 for trips between downtown Nashville and the airport before the minimum fare went into effect.  “We have fought to repeal the minimum fare every day since it passed.  After years of struggle, we are pleased to have regained the basic right to charge our customers a reasonable price.”

“Today’s decision is a victory for consumers, entrepreneurs and basic common sense,” said IJ

Attorney Wesley Hottot, the lead lawyer in the case against the minimum fare, “but it should not have taken more than three years and a federal lawsuit for Nashville officials to recognize that consumers do not need the government’s protection from prices that are too low, any more than they need the government’s protection from pillows that are too soft.”

The change was prompted by the Nashville Convention and Visitors Bureau (CVB) over concerns that there are now too few private transportation options to meet visitors’ needs.  Less than a year ago, however, the CVB helped defend the minimum fare in court, arguing that it was essential to draw more visitors to the city.

“Unsurprisingly, a law that was written by the city’s expensive limo companies turned out to be no good for anybody except the expensive limo companies,” explained IJ Senior Attorney Robert McNamara.  “Nashville’s minimum fare was not the only law of its kind and we are committed to seeing similar laws join Nashville’s where they belong:  off the books.”

The Institute for Justice is currently challenging the constitutionality of similar minimum-fare laws in Portland, Ore., and Tampa, Fla.

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Metro's Price-fixing on trial: Report from the Courtroom

Daniel Horwitz

by Daniel Horwitz

[Author’s note: After discovering that absolutely no one in the media is covering this trial, I wrote all of this up fairly quickly based on my notes at 2:00AM in order to get it out as soon as possible.  I have not had a chance to edit it or review it, so please forgive me for any typos, run-on sentences or incomplete thoughts, which I promise to fix at some point later on.]

Sitting in attendance for day two of the trial between several low-cost limousine companies and the Metro Transportation Licensing Commission (MTLC), I’m happy to report what I thought was a very strong day for the plaintiffs. 

To provide a general summary of what this trial is about, the three plaintiffs in this case –represented by the extraordinarily successful libertarian public interest firm the Institute for Justice – have sued the MTLC over the following four provisions of Metro’s livery ordinance (No. BL2010–685):

(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.

I should note that only the minimum fare provision, dispatch restriction and vehicle age requirements were mentioned today, so it’s possible that #2 was dropped at some point between the filings submitted last month and the start of trial without my noticing.  In any case, the plaintiffs have alleged that each of the above provisions violates their constitutional rights under (1) the Due Process clause of the 14th Amendment, (2) the Equal Protection clause of the 14th Amendment, and (3) the Privileges or Immunities clause of the 14th Amendment.  As such, the plaintiffs claim, each of these regulations must be struck down as unconstitutional.  The plaintiffs’ 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 Supreme Court will eventually decide to reexamine the issue.  It is not, however, going to be a successful claim for relief at this point in this particular case.  

In order to win, the plaintiffs in this case must prove that the regulations above fail what is known as “rational basis review.”  Basically, this means that they bear the burden of proving that these laws do not bear a rational relation to any conceivably legitimate government interest.  The MTLC has asserted that nine separate government interests are advanced by its regulations, so the plaintiffs must therefore disprove, by a preponderance of the evidence, that there is a rational connection between each of the laws above and any of the government’s nine stated purposes.  Those rooting for a favorable outcome for the plaintiffs in this case (and I count myself among them) should not be naïve about just how difficult this burden is to overcome; though the Institute for Justice has been uncannily successful in its recent “economic liberty” lawsuits, victories in cases like these are virtually unheard of.  The fact that this is a jury trial is likely to help the plaintiffs (judges applying the law correctly generally find that the standard in a case like this is all but impossible for plaintiffs to meet), but it’s important to remember that Judge Sharp can always overturn the jury’s verdict. 

Extremely helpful to the plaintiffs in this particular case, however, is the controlling 2002 decision that the Sixth Circuit reached in Craigmiles v. Giles, 312 F.3d 220, 224 (6th Cir. 2002) (also won by the Institute for Justice), which stands for the general proposition that pure economic protectionism is insufficient to provide the rational basis necessary to justify a law under the 14th Amendment.  Though in my own humble opinion (and according to Judge Sharp, the Tenth Circuit and several others) the Craigmiles decision was constitutionally suspect, the case is nonetheless controlling here in the Middle District, and as such it prevents the MTLC from being able to argue that the above regulations may be justified on the basis that they protect more expensive limo companies from competition.  For what it’s worth, I’ve believed for some time that the Tennessee case Consumers Gasoline Stations v. City of Pulaski, 200 Tenn. 480, 292 S.W.2d 735 (1956), stands for a similar anti-protectionism rationale under the Tennessee Constitution, and I hope very much that somebody develops this argument one day.

In any case, with that primer, here’s how the day played out:

Before the jury was brought in, there were a handful of motions made regarding whether certain witnesses could testify.  The plaintiffs won the first two of these motions over the MTLC’s objections, with Judge Sharp ruling that the witnesses “barely get over the bar, but do get over the bar of relevance.”  (Author’s note: only relevant evidence is admissible at a trial, and pursuant to Federal Rule of Evidence 401, evidence is considered relevant only if it has “any tendency to make a fact [of consequence in determining the action] more or less probable[.]”)   A third witness on the plaintiff’s witness list was prohibited from testifying, however.  The witness was apparently going to testify as to the protectionist intent of the lobbying group that drafted the regulations (hereafter, TennLA), but Judge Sharp responded that it is only Metro’s intent that matters, and thus that “the motivation of [TennLA] has nothing to do with whether the Metro Council had a protectionist motive.”  Though the plaintiffs’ attorneys countered – persuasively, in my view – that the drafters of the legislation “had protectionist purposes, and therefore it’s more likely that Metro’s purpose was protectionist,” the witness was nonetheless disallowed.  Two reasons for this ruling that Judge Sharp alluded to were that the witness’s testimony (1) could potentially confuse the jury, and (2) could be seen as being needlessly cumulative since TennLA’s representative, who testified yesterday, apparently did not come across as credible and was consistently evasive on this point.  Since, pursuant to Federal Rule of Evidence 403, relevant evidence may be excluded if its value is substantially outweighed by the danger of issues like these and others, Judge Sharp’s ruling on this point was soundly within his discretion. 

Witness 1: Richard “Limo John” Simpkins

The first witness of the day was Richard “Limo John” Simpkins: former sole proprietor and owner-operator of “Limo for You.”  Dressed in a flashy business suit that his attorney initially mistook for a tuxedo, Mr. Simpkins testified that after holding several uninspiring jobs, he decided he wanted to become self-employed and thus opened a limo company twelve years ago “to make a go of it.”  Drawing inspiration from Cornelius Vanderbilt’s ferry business model, he explained, his goal was to become the low-cost provider in Nashville’s livery market, and to be “very disruptive to the marketplace” by giving customers better deals on fares on both roundtrip and short-trip pricing.  According to Mr. Simpkins, before the recent regulations $20 limo rides made up 80% of his business.  After the $45 minimum fare requirement was enacted, however, Mr. Simpkins claimed he was forced to shut his doors.  Furthermore, Mr. Simpkins noted, his business model depended on a simplified, low-cost dispatch system that is no longer legal today due to the new “dispatch restriction.”  Operating a single white super-stretch Lincoln Town Car which he described as the only true “classic limousine,” Mr. Simpkins testified, he was able run his businesses using nothing more than a calendar and a cell phone. 

On cross-examination, the MTLC touched on several points.  First, they noted, Mr. Simpkins had been kept informed throughout the development of the new livery regulations.  I’m still not quite sure what the point of this line of questioning was, but in any case Mr. Simpkins responded that he had voiced his objections so vociferously that the former director of the MTLC “told me if I opened my mouth again I'd be thrown out.”  Next, the MTLC’s attorney hammered Mr. Simpkins on whether his business model aimed to compete with taxicabs.  (Author’s note: the state is asserting that helping consumers differentiate between taxi and livery services and helping the transportation industry as a whole provide rational bases for the regulations.)  True to form, Mr. Simpkins delivered a line that earned a chuckle from the jury: “I want to compete with taxis, airplanes, and everyone else involved in the transportation business!” he exclaimed.  “I just want to go back to being Limo John.”

Witness 2: Mark Sissel

The second witness of the day was Mark Sissel, a longtime customer of Metro Livery who painted a vivid and personal picture of the way that the new regulations had affected him.  Mr. Sissel explained that he works at an artist management company three miles away from his home, and doesn't have a driver’s license due to his eyesight.  As such, he often uses a car service to get to work and other places (but not always, since he sometimes walks, bikes, or works from home). 

Mr. Sissel’s account of how he ended up as a customer of Metro Livery was worth smiling about.  He had been accustomed to taking a cab to work, he said, and one day he called Metro Livery mistakenly believing that they were a cab company.  To his delight, he stepped out of his home that morning to find a polished black Lincoln Town Car with a driver wearing a suit waiting for him.  This “was exceptional” Mr. Sissel noted, beaming from ear to ear.  “Cabs are just means of getting from A to B,” he continued.  But “Metro Livery gave me a sense of dignity.  They treat me like a VIP.  They take care of my son in Franklin when I’m not there, and wait for him to get safely into his apartment.  They make me feel like somebody special.”   

Before the recent regulations, Mr. Sissel testified that he had paid $18 per ride with tip included.  Now, in order to get the same price, he and Metro Livery have to try to exploit a loophole in the minimum fare provision by paying $54 per ride, then taking two rides free.  This arrangement often doesn’t work for him, however, since his schedule is unpredictable and it’s hard to keep track of the “free” rides that are owed.  “I don’t understand why, if someone can create a business model that allows me to work the way I want to in the city I love, then...” he started to say before his testimony was cut short by MTLC’s objection.

Nothing of note was discussed on cross.

 

Witness 3: David Clegg

If Mr. Sissel’s testimony was your average human interest story, Mr. Clegg’s story was the tear-jerking “All I WantFor Christmas Is You” moment from Love Actually.  I’ve watched several trials in my life, and even tried a few myself, but never have I ever seen an entrance quite like this one. 

According to his testimony, Mr. Clegg is “totally blind” and suffers from “severe rheumatoid arthritis and osteoarthritis.”  Swiveling a black cane out in front of him and wearing dark sunglasses to cover his eyes, Mr. Clegg slowly inched his way into the courtroom with the help of his attorney Wesley Hottot.  The jury, visibly sensitive to his difficulties, hung onto every word of his testimony.  “I can’t hardly walk . . . and there’s no cure,” he began.

After explaining his condition, Mr. Clegg explained that he uses Metro Livery four or five times per month, and maybe more.  Before the minimum fare regulation, he also used to be charged just $25 per trip.  “It’s hard to beat a deal like that,” Mr. Clegg noted.  “With my condition I often need extra help, and [Metro Livery] helps me get in my house and makes sure I’m ok before they leave.”  Now, in an effort to keep him as a customer and comply with the minimum fare requirement, Metro Livery has worked out a deal with Mr. Clegg where he’s charged $50 upfront for a round trip.  “It all amounts to about the same, but it means I have to pay more upfront,” Mr. Clegg explained.  “I liked it the way it was.”

 

Witness 4: Theresa Anglan

The fourth witness of the day was Theresa Anglan, the manager and principal dispatcher for Metro Livery.  Ms. Anglan has been with the company since its inception, and handles all duties from car inspection to customer complaints to booking.  She also testified that Metro Livery drivers used to spread out throughout the city in order to maximize the speed of service, but that this is no longer possible due to the dispatch restriction’s requirement that limousines only dispatch from their place of business. 

Ms. Anglan’s testimony started out fairly aggressively, then moved quickly to the emotional.  “Many customers are going out to black tie events, the Ryman, or for a nice night on the town, and they don’t want to show up in a dirty, nasty cab” she exclaimed.  “They want a service that opens a door for them and a driver in a suit.”  Customers also used to be charged an average of $22-$25 per ride, she continued.  But “now, we charge them $45.  Some people— they can’t afford that.  We’ve lost almost 50% of our business” she said, appearing to be on the verge of choking up. 

What would happen if the minimum $45 fare rule remains in effect, she was asked?  “I’ve had to cut our employees hours, then cut them again.”  “We’ll keep losing business,” she said, needing a moment to collect herself.  “It used to be so pleasant, so fun to work in our office.  We can’t make a living here anymore.  You can sit there for hours and hours and the phone doesn’t ring.”  Some employees have already had to leave the company for new jobs to make ends meet, and 70% of Metro Livery’s customers also can’t pay in advance or aren’t comfortable with exploiting the loophole in the law, she explained.  “We shouldn’t have to put this on our customers.  Eventually we’re going to have to shut out doors.  I have worked so hard to build this company, earn these customers and keep these customers.”  “It breaks my heart,” she finished actually choking up this time. 

Attorney Jerry Smith of the MTLC handled the cross, which was primarily dominated by both attorney and witness becoming frustrated about Ms. Anglan claiming she didn’t understand the questions she was being asked.  “It’s a yes or no question,” Judge Sharp once interjected, joining in the frustration.  The cross centered on some hearing at which Ms. Anglan had responded to several questions from MTLC Chairwoman Helen Rogers, and at which some individual named Boyd Kinser – a driver of Metro Livery who had also once been a licensed attorney – had appeared.  I can’t say I understood the relevance, though, and I doubt the jury did either. 

 

Witness 5: Clint Catshod

The fifth witness of the day was Clint Catshod, a current driver for Metro Livery who had once been ticketed for violating the minimum fare ordinance.  Mr. Catshod described a sting operation that MTLC had conducted, and was still visibly perturbed about the experience.  Sometime after the minimum fare regulation went into effect, an MTLC employee apparently called Metro Livery to negotiate a $25 fare, and then halfway through the ride, an MTLC inspector pulled Mr. Catshod over and assessed him a $50 fine. 

To me, the most interesting part of Mr. Catshod’s testimony was the fact that he had been pulled over by an MTLC car equipped with blue lights, and that both the MTLC inspector who had posed as a passenger and the one who pulled him over had flashed official police badges and represented themselves as law enforcement officers.  This, of course, was one of several scandals that wonthe MTLC national headlines last year, as well as a scathingrebuke from Nashville’s Chief of Police Steve Anderson.  MTLC inspectors, of course, are not actually law enforcement personnel, and impersonating a police officer by illegally equipping a car with blue lights, holding oneself out as a law enforcement officer, and flashing a falsified police badge– otherwise known as a “Criminal Impersonation” under TCA§ 39-16-301(b) – is a Class A misdemeanor that carries a sentence up to eleven months, twenty-nine days in prison and a fine of up to $2500.  Despite apparently having engaged in the practice of impersonating police officers for thirty-five years, however, not a single MTLC official was ever charged, presumably because Nashville prefers to waste its resources rotating non-violent drug addicts and homeless people in and out of prison. 

 

Witness 6: Brian McQuistion

After a break for lunch, the trial resumed again at 1:00PM.  The sixth witness of the day was former MTLC Director Brian McQuistion, who for the sake of full disclosure I have been no fan of and publicly demanded be fired several times last year both in the Tennessean and in this blog.  After recounting how he became MTLC Director, the parties spent the following four hours painstakingly tracing the process by which the livery ordinance was enacted.  Several members of the gallery had to get up to stretch and pace the hall in order to prevent from falling asleep throughout this testimony, and more than a few jurors began to nod off at various points as well.  The highlights of his direct testimony, as far as I could tell, were (1) his reading of the MTLC meeting minutes from August 2009 (“Chair Rogers asked where the minimum $50 fare [later reduced to $45] had originated; the Director responded that this had been a recommendation of [TennLA] during the revision process”), and (2) his testimony that “Bo Mitchell put the minimum fare back in” when it was voted on by the Metro Council, and that this “surprised everyone except TennLA.”  Plaintiffs’ attorneys also spent considerable time getting Director McQuistion to rebut, in part, many of the MTLC’s asserted interests in this case (e.g.— Q: “Do you believe that businesses always make more money when they charge higher prices?”  A: “No”).

On cross, the MTLC retraced all the steps of the ordinance’s drafting process.  Toward the beginning of the cross-examination, I was rather surprised that he was asked whether “other cities had used minimum fares” (he had testified that Nashville’s livery ordinance was based in great part on those used in other cities), to which he promptly responded “no.”  This seems like exactly the sort of evidence that helps the plaintiffs in this case, but quite frankly I didn’t follow the relevance of the rest of the cross-examination, either, and may have completely misunderstood whatever trial strategy the government was pursuing.  Mr. McQuistion did state that many other municipalities have dispatch and vehicle age requirement regulations, though, which does lend credibility to the MTLC’s non-protectionism claim.  Another fun fact— apparently Nashville pays fairly hefty dues for our MTLC commissioner to attend some international conference of transportation regulators every year, and for this we get one of the most dysfunctional, embarrassing and borderline corrupt transportation regulatory bodies that you or mother has ever heard of. 

By 4:00PM – after three hours of testimony from Mr. McQuistion and seven hours of trial – I had to leave.  Something like 12 exhibits detailing the minutiae of the bill’s drafting process had been introduced at this point in his cross examination (with several more to come) though, and I’m relatively certain that nobody was paying attention anymore. 

 

In any event, I’m looking forward to tomorrow. 

-Daniel Horwitz

I showed up for a while yesterday, just to get a flavor for what was going on to extend moral support ot Ali Bokhari, owner of Metro Livery. I heard Brian McQuistion testify that one to the justifications for the minimum fare for limo companies was to protect the taxi industry and to insure that taxi drivers make a decent wage. Astonishingly, at least to me, he said that this was important or the taxi drivers would resort to criminal activity to earn a living.  That seems pretty paternalistic if not racist and anti-immigrant given the demographic of the taxi drivers.

I am astonished that no local media is covering this trial. Thanks to Daniel Horwitz for this excellent report. Rod

 

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