Federal judge stops enforcement of anti-competitive law

By   /   June 14, 2013  /   1 Comment

By Eric Boehm | PA Independent

HARRISBURG – A Kentucky state law that requires new moving companies to prove to government bureaucrats that there is a “need” for their services before they can obtain a license has been blocked by a federal judge.

MOVING FORWARD: Thursday’s court ruling is good news for Raleigh Bruner, owner of Wildcat Moving. He is challenging an anti-competitive state law while Kentucky tries to shut down his business. (Photo credit: Pacific Legal Foundation)

On Thursday, U.S. District Court Judge Danny Reeves ordered the state of Kentucky to halt enforcement of its so-called “competitor’s veto” law for moving companies.  The law gives existing licensed companies the ability to block new companies from getting licenses to operate.

The state of Kentucky was seeking to prosecute Raleigh Bruner, owner of Wildcat Moving, in a state court for violating that law while Bruner is suing the state in federal court in an attempt to get the law overturned on constitutional grounds.

Reeves’ ruling will prevent the state from trying to shut down Bruner’s company, which employs 36 people in Lexington, until Reeves can rule on the constitutionality of the Kentucky law.

In ordering the injunction, Reeves seemed to indicate skepticism about the role of the law.

“Over at least the last five years, the only groups to file protests to new applicants have been existing moving companies,” he wrote. “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.”

Over the same five years, there have been no challenges to new companies on the grounds of public health, safety or welfare, according to the judge.

I wrote about Bruner’s fight – and that of businessmen fighting similar laws in Nevada and Missouri – in February:

In 2009, Raleigh Bruner started a new moving company and learned that he had to obtain an “Intrastate Household Goods Certificate” from Kentucky’s perfectly bureaucratic-sounding Transportation Cabinet Division of Motor Carriers.

And the only way to do it was to win approval from the existing license-holders in the state.

Once one of those other companies protested, state law requires the new applicant to hire a lawyer ― owners are not allowed to represent themselves at the state board ― and begin a lengthy process of hearings that costs a new company valuable start-up cash.

In practice, the only way a new business can get a license is to prove there are not already enough movers in the market to meet demand, said Tom Underwood (no relation to Maurice), state director of the Kentucky chapter of the National Federation of Independent Businesses.

“This is a state-controlled monopoly, that’s all there is to it,” Tom Underwood said.

Hat-tip to Timothy Sandefur at the Pacific Legal Foundation (which is helping Bruner fight the law in Kentucky) for bringing this to my attention.  He expects a final ruling in the federal case before the end of the year.

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 is a reporter for Watchdog.org and former bureau chief for Pennsylvania Independent. He lives in Minneapolis, Minnesota, where he enjoys great weather and low taxes while writing about state governments, pensions, labor issues and economic/civil liberty. Previously, he worked for more than three years in Harrisburg, Pennsylvania, covering Pennsylvania state politics and occasionally sneaking across the border to Delaware to buy six-packs of beer. He has also lived (in order of desirability) in Brussels, Belgium, Pennsburg, Pa., Fairfield, Conn., and Rochester, N.Y. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and elsewhere. He received a bachelor's degree from Fairfield University in 2009, but he refuses to hang on his wall until his student loans are fully paid off sometime in the mid-2020s. When he steps away from the computer, he enjoys drinking craft beers in classy bars, cheering for an eclectic mix of favorite sports teams (mostly based in Philadelphia) and traveling to new places.

  • OldTimerUSN

    We used to have this Law in MO. until recently finally was got rid of. The Moving Company’s spend a lot of money on Politian’s to keep this Monopoly in effect.