NEW REGULATIONS THREATEN TO DRIVE NASHVILLE TRANSPORTATION ENTREPRENEURS OFF THE ROAD

Nashville, Tenn.—Can the government force certain businesses to charge a minimum price just to protect politically connected companies from competition? That is the question the Institute for Justice and three of its clients want answered in a federal lawsuit filed in the U.S. District Court for the Middle District of Tennessee. Their lawsuit challenges the constitutionality of Nashville's new limousine and sedan regulations including a $45 fare minimum for car service. The plaintiffs own affordable limousine and sedan services and charge an average of $25 per trip

"This $45 minimum has nothing to do with protecting the public," said IJ attorney Wesley Hottot, who is representing the plaintiffs. "It has everything to do with protecting expensive limousine companies from competition and driving up prices for consumers."

The regulations passed by Nashville's Metropolitan County Council in June 2010 were largely designed (and in some cases written) by the Tennessee Livery Association, a trade group formed to represent the interests of high end limousine companies. The new regulations force sedan and independent limo companies to meet a number of unreasonable, and unconstitutional requirements just to stay on the road.

"Nationwide, cities are relaxing regulations to allow more transportation entrepreneurs to compete in the marketplace," explained IJ attorney Robert McNamara. "Unfortunately, Nashville's unconstitutional new regulations buck that trend by destroying affordable car service in the city."

• Transportation companies are now prohibited from leasing new vehicles;
  
  
  
• they are required to dispatch only from their places of business;
  
  
  
• they must wait a minimum of 15 minutes before they can pick up a customer; and, beginning in January 2012,
  
  
  
• companies will have to take all vehicles off the road if they are more than seven years old for a sedan or SUV or more than ten years old for a limousine.
  

These regulations threaten to put the plaintiffs out of business, and are driving up the cost of affordable car service by
80 percent.

"Many Nashville residents use my limo and sedan service," explained Ali Bokhari, owner of Metro Livery and a plaintiff in the case. "If this law stays on the books my customers will be forced to spend twice as much money for exactly the same service and I risk losing my business."

"The government can't just take away your right to compete against other businesses," said Hottot. "This case is about protecting our clients' economic liberty—the constitutional right to earn an honest living free from unreasonable government interference."