Won: The Sixth Circuit ruled that Kentucky can’t use certificate-of-need requirements to restrict ambulance trips between Kentucky and other states.

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 was that Kentucky law forbade Phillip from driving his clients back home to Ohio. Kentucky was one of four states that required a Certificate of Need (CON) in order to operate an ambulance service. This meant that although Phillip could transport people from Ohio into Kentucky, he needed a certificate to bring them back home to Ohio. And Kentucky’s CON law made 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 he 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 U.S. 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 Pacific Legal Foundation free of charge, Phillip filed a federal lawsuit in 2019 to vindicate his constitutional right to earn a living and to stop the state from pursuing cronyism for its own sake.

In a victory for Phillip and his family, on September 1, 2023, the Sixth Circuit ruled that Kentucky can’t use certificate-of-need requirements to restrict ambulance trips between Kentucky and other states just because a state agency determines new competition is “undesirable.”

Unfortunately, the decision doesn’t overturn Kentucky’s certificate-of-need law entirely. State regulators can continue to require a certificate of need for intrastate ambulance trips—that is, Legacy Medical Transport still won’t be able to transport Kentuckians from one location to another within Kentucky without first securing a CON.

For Phillip Truesdell, the decision is a relief that opens up new possibilities for his growing business.

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.

Case Timeline