Fighting for economic liberty in Kentucky

August 21, 2012 | By TIMOTHY SANDEFUR

Meet R.J. Bruner and his crew. Bruner is one of the many hardworking entrepreneurs who keep our economy thriving—and whose hard work and ingenuity improve the standard of living for all of us. Of course, when he founded Wildcat Moving two years ago, he didn’t do it as an act of charity. He did it to earn a living for himself and his family by offering moving services to the public at prices they’re willing to pay.

Sadly, Kentucky law stands as an obstacle to his small business dream. That law says that if you want to run a new moving business, you first have to file an application with the state’s Division of Motor Carriers—which then notifies all the state’s existing moving companies and gives them the chance to object. When an objection is filed, you’re required to go to a hearing and prove to the government that existing moving services are “inadequate” and that your company will serve the “present or future public convenience and necessity.” What do these terms mean? What sort of business is “inadequate”? How do bureaucrats determine what will be convenient to the public in the future? Nobody knows—the law doesn’t say. And if your business is organized as a corporation or an LLC, like R.J. Bruner’s is, you have to hire an expensive lawyer to handle the hearing for you—you’re not allowed to appear yourself.

Today, we filed a civil rights lawsuit in federal court to challenge the constitutionality of this law. We argue that it violates the Fourteenth Amendment’s guarantees of due process, equal protection, and the privileges or immunities of citizenship. In short, it deprives R.J. Bruner of his constitutionally protected right to earn a living without unreasonable government interference.

The Kentucky law is a typical “Certificate of Necessity” or CON law—one of dozens on the books in several states—that exist not to protect the general public, but to protect established businesses against having to compete for business fairly. We know that these laws have nothing to do with public safety because even a company like Bruner’s, which is perfectly safe, can be denied a license just because other businesses don’t want the competition.

If you’ve followed PLF’s work, you know that earlier this year, thanks to one of our lawsuits, the state of Missouri repealed its anti-competitive CON law, replacing it with a rule that says you only have to operate safely and carry the required insurance, and you can start a moving company. And two years ago, another PLF lawsuit got the state of Oregon to repeal its cartel system for movers.

CON laws are a relic of the nineteenth century. Originally designed to regulate railroads and other semi-public institutions, they have no place in a competitive free market. They deprive people of their economic freedom for no good reason, and in the famous Supreme Court case of New State Ice Co. v. Liebmann, they were declared unconstitutional. It’s time for state lawmakers to respect the constitutional right of every person to earn an honest living—a right that Supreme Court Justice William O. Douglas once called “the most precious liberty that man possesses.”