Legal victory against anti-competitive licensing law in Kentucky

By   /   February 26, 2013  /   No Comments

By Eric Boehm | Watchdog.org

HARRISBURG – Earlier this week, I wrote about the ongoing fight against anti-competitive licensing laws in a variety of states, including in Kentucky, where Raleigh Bruner is challenging one such law in federal court.

On Monday, Bruner won a significant victory when a federal judge threw out the state government’s request to dismiss the case.

From the Pacific Legal Foundation’s blog, here are the details of the case:

“The government asked the court to throw out our lawsuit on the grounds that it was “unripe,” meaning that Bruner was required to apply for a certificate and be denied before he could argue that the law was unconstitutional. That argument was clearly contrary to the law—the Supreme Court has repeatedly held that you’re allowed to challenge the constitutionality of a law without having to first submit yourself to it. Today’s decision rejects the government’s arguments in every respect and allows us to proceed to prove our case.”

In Kentucky, like in Nevada and elsewhere, licensing laws for moving companies effectively allow existing companies to veto new license applicants on the grounds that they may compete or negatively affect existing companies.

It also has another consequence – reducing the number of licenses on the market and thus driving up the cost of each existing license, which can be bought and sold by the companies that hold them.

Though it did not make it into the final draft of my article (which also appeared on Reason.com), Tom Underwood, state director of the Kentucky chapter of the National Federation of Independent Businesses, told me that a recent moving company license was sold for more than $14,000.

If you get one through the government, it will cost about $25.

That’s a pretty good return on an initial investment for companies who hold licenses and use their weight to keep other competitors out of the market.

Boehm is a civil liberties reporter for Watchdog.org and bureau chief for PA Independent. He can be reached at Eric@PAIndependent.com

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Eric Boehm