In an emergency pleading filed Friday afternoon with a Nevada federal judge, PLF attorneys are asking for a temporary restraining order to prevent the government from shutting down Reno entrepreneur Maurice Underwood’s small business.
Underwood is the owner of Reno Movers, a small company that has helped thousands of Nevadans move—but he doesn’t have the state-required Certificate of Public Convenience and Necessity, or CPCN, that all full-service moving companies have to have. (That means he can only load and unload trucks, but can’t drive them.)
How do you get a CPCN? That’s where the problems begin—because Nevada has the most anti-competitive licensing law in the nation when it comes to moving companies. That law says that you can only get a license to run a moving company if you prove that you won’t compete with the state’s existing moving companies. The licensing law says that to get a license you have to go to a hearing before the Nevada Transportation Authority and prove that a new moving company will “will foster sound economic conditions within the [moving] industry,” and “will not unreasonably and adversely affect other carriers,” and that “the potential creation of competition in a territory which may be caused by the granting of the certificate . . . will [not] unreasonably and adversely affect other carriers operating in the territory” or be “detrimental to . . . the motor carrier business.”
Where’s the part about protecting the consumer? You may well ask. The Nevada CPCN law isn’t about protecting consumers—it’s about protecting established firms against fair competition.
Worse than that, the law is completely vague. The Constitution prohibits the government from using vague laws that nobody understands, which allow bureaucrats to do basically whatever they want. But the Nevada CPCN law uses terms like “unreasonably and adversely affect other carriers” or “detrimental” competition or “sound economic conditions,” which aren’t defined in the law. At a hearing before the Nevada State Senate last month, Andrew Mackay, the head of the state’s Transportation Authority, admitted to lawmakers that he couldn’t define these terms. “Um, it is what it is,” he said. “You, you know it when you see it—or when it’s not there.” (You can see that at 1:47:29 in this video. Also check out 1:45:41 where he acknowledges that his testimony is “effectively under oath.”) As we point out in our brief, that’s the very definition of unconstitutional vagueness.
We filed a lawsuit last fall challenging this law, but last week, state transportation bureaucrats ticketed Maurice for advertising without having a CPCN. That’s a very serious threat, because the law allows the government not only to fine you for advertising, but even force you to disconnect your telephone line—which would, of course, cripple Underwood’s small business.
To learn more about this case and anti-competitive CPCN laws, check out our legal backgrounder, or some of our articles about these laws. You can also check out our case video about Underwood v. Mackay.