Active: A federal lawsuit has been filed to challenge an anti-competitive law.

Phillip Truesdell credits his parents for his entrepreneurial spirit. He’s used that spirit throughout his life to earn a good living for himself and his family.

In 2017, the state shut down the local power plant, and his family faced job losses. Phillip spotted an ambulance for sale on the side of the road and decided it’d be a good idea for a new business.

So Phillip launched Legacy Medical Transport, a non-emergency medical transport service based in Aberdeen, Ohio, that shuttles people between their homes and medical appointments or between hospitals. With help from his wife and two kids, the company has grown to seven ambulances and a clientele that often needs transport across the border into Kentucky.

The problem is that Kentucky law forbids Phillip from driving his clients back home to Ohio. Kentucky is one of four states that require a Certificate of Need (CON) in order to operate an ambulance service. This means that although Phillip can transport people from Ohio into Kentucky, he needs a Certificate to bring them back home to Ohio. And Kentucky’s CON law makes it nearly impossible to obtain a Certificate.

The CON law, or Competitor’s Veto, requires applicants to submit an application and then suffer a waiting period during which any existing business in Kentucky can protest that application. A protest prompts a hearing at which the applicant must convince government officials that there is a “need” for their business. Proving a “need” means proving that you won’t harm the financial interests of the existing operators.

As in most states with CON laws, applications that are protested are almost always denied—including Phillip’s. Several businesses protested the application Phillip filed in January 2018, and at the subsequent hearing he was made to feel like a criminal simply for wanting to operate a business in the state. Ultimately, Phillip’s application was denied.

A recent Pegasus Institute report details how Kentucky’s CON law for ambulances has led to a startling lack of providers in the state.

The Constitution protects the right to earn a living free of irrational government laws. This means that the government cannot use its regulatory power simply to dole out favors to the existing businesses. It must allow entrepreneurs to freely compete.

Represented by PLF free of charge, Phillip filed a federal lawsuit to vindicate his constitutional right to earn a living and to stop the state from pursuing cronyism for its own sake.

What’s At Stake?

  • Government shouldn’t be in the business of choosing winners and losers.
  • Economic freedom benefits entrepreneurs, who get to pursue their ambitions, as well as consumers, who have greater choice.

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