Kentucky federal judge bars state from enforcing its anti-competition law
This afternoon, U.S. District Court Judge Danny Reeves issued an order blocking the state from enforcing its Competitor’s Veto law for moving companies, at least until he has the opportunity to decide whether that law is constitutional. That decision came after PLF lawyers filed an emergency motion to block the state from prosecuting our client, Raleigh Bruner, in state court under the very same law he’s challenging in the federal court. In an extremely questionable move, state lawyers filed an identical lawsuit in state court, using Bruner’s federal case as the basis for asking a state judge to shut down his business, and filed a motion for an injunction in the state court on Friday, which would have blocked Bruner’s federal lawsuit from going forward. Judge Reeves’s decision makes clear that he will not allow the state to subvert federal civil rights protections in this way.
Bruner and his moving company, Wildcat Moving, operate seven trucks and employ about 36 people in Lexington, Kentucky. But then he discovered that if you want to run a moving business in Kentucky, you first have to notify the existing moving companies and give them the opportunity to file “Protests” against you. These protests aren’t based on you being dangerous or incompetent. They’re based on whether you would compete against existing moving companies. And when a protest is filed, you’re required to go before a group of bureaucrats and prove that “existing moving companies are inadequate” and that your moving services would serve the “present or future public convenience and necessity”—whatever that means. Hearings are slow and expensive—after all, a corporation like Wildcat Moving, LLC, is required to hire a lawyer when there’s a hearing. Of course, if no protest is filed, the government can cancel the hearing—but even then, you’re still required to prove to a bureaucrat that there’s “a need” for a new moving company before you can get your license.
Why should bureaucrats make that choice? Why should existing moving companies make that choice? More importantly, how does this protect public health or safety? Answer: it doesn’t. It protects existing moving companies. And that’s unconstitutional. So in August of last year, we filed a case challenging this law under the Fourteenth Amendment. Since then we’ve been engaged in collecting evidence and getting ready to present our final arguments on August 15, the deadline set by the judge long ago.
And then last Friday, state officials decided to enforce this law against Raleigh Bruner for the first time—filing a new lawsuit against him, this time in state court, seeking an emergency order to shut down his business. That complaint set a hearing date for Monday, June 17—yet in violation of ordinary rules of procedure, the state failed to serve Bruner’s lawyers, and failed to notify them of the proceeding, even while they were in regular conversations about the federal lawsuit.
Understandably, when Raleigh Bruner was handed copies of the state lawsuit, he was disturbed. As a hardworking small-business owner, Raleigh has to make his payroll. Wildcat Moving is the sole means of support for 36 busy employees—and of course, he also has to take care of his own family, including his baby daughter, Juliet Hope Bruner, who was born shortly after this lawsuit was filed. Raleigh’s a big guy, strong and athletic—and it was a shame to see the government making him worry about how he would put food on the table for his family—not, mind you, because he was a danger to the public safety, but simply because he was running a moving company without permission from the government and his competitors!
Fortunately, PLF’s legal team was able to put together a motion in the federal court asking the judge to block the state’s effort to interfere with the federal court’s jurisdiction. You can read that motion here. Although state lawyers filed a brief in opposition at 10pm the night before the hearing, they did not deny that they’d failed to serve Bruner’s lawyers with the state complaint, and they made untrue claims—for example, that if Bruner could prove to the government that his company was safe, that he wouldn’t have to submit to the other parts of the licensing procedure. We know that’s false because of the case of Michael Ball, whose application for a new license was denied just last fall in a written decision that found Ball fully qualified, but decided that existing moving companies were “adequate.”
In his decision this afternoon, Judge Reeves barred the state from proceeding with its own obstructionist lawsuit and expressed serious skepticism about the law’s constitutionality:
The articulated basis for the protest and hearing procedure is to allow the department to receive outside “evidence” regarding the applicant at the Certificate hearing. Over at least the last five years, the only groups to file protests to new applicants have been existing moving companies. The Sixth Circuit has held that “protecting a discrete interest group from economic competition is not a legitimate governmental purpose.” And it appears that the notice, protest, and hearing procedure in the statutes — both facially and as applied — operate solely to protect existing moving companies from outside economic competition. The Defendants have admitted that they know of no instance where, upon a protest by an existing moving company, a new applicant has been granted a certificate…. [O]ver the past five years, no protest filed has been regarding an applicant’s safety record. Likewise, no applications have been denied on the grounds that the applicant was a danger to public health, safety, or welfare. The Defendants and their agents can and should continue to enforce regulations against commercial vehicles, and the limited preliminary injunction in this case has no effect on the department’s ability to carry out these duties.
It’s a relief to know that the state’s effort at obstructionism in this case has been stopped—and we now look forward to a complete hearing of the case in August. Remarkably, PLF attorneys are scheduled to argue a very similar motion in a very similar case in Reno, Nevada, a week from tomorrow. [Update: The Nevada hearing has been rescheduled for June 27. The hearing’s back on for June 21.] There, state officials have cited PLF client Maurice Underwood for advertising his business, Reno Movers, without having a license. And there, too, getting a license requires you to prove that you would not compete against existing moving companies.
In the meantime, Raleigh Bruner can rest assured that he’ll be able to make payroll for his employees—and continue to earn a living for himself and his family—including baby Juliet, who, as you can see, was pretty happy about the Temporary Restraining Order herself!