Tuesday, January 22, 2013

Trial starts today in Nashville Price Fixing Case

The Federal jury trial over Nashville's transportation price fixing policy started today and will continue tomorrow and Thursday

In 2010 the Metro Council unanimously passed a bill setting a minimum price for a limousine ride, becoming one of only seven cities in the nation to have a mandatory minimum.  The legislation was written my the big limo companies. The legislation also set other onerous requirements which served no apparent purpose other than to protect existing politically connected limo companies from competition and drive the competitors out of business.  Even the so-called conservative members of the Council voted for this legislation. 

This blog has reported on this issue extensively.  The story of harassment, abuse of power and blatant effort to protect existing providers from competition reads like something one would expect from a third world dictatorship. To read more about the issue follow this link

The trail is  open to the public and is taking place on the 8th floor of the Federal Court House at 8th and Broadway.  Below is a summary of the issues taken from the website of The Institute for Justice:

The Issue in a Nutshell

Can government force transportation businesses to charge a minimum price to protect politically connected companies from competition?

That is the question the Institute for Justice (IJ) and its clients seek to answer in federal court with a challenge to Nashville’s new limousine and sedan regulations.

Until 2010, sedan and independent limo services were an affordable alternative to taxicabs.  A trip to the airport only cost $25.  But in June 2010, the Metropolitan County Council passed a series of anti-competitive regulations requested by the Tennessee Livery Association—a trade group formed by expensive limousine companies.  These regulations force sedan and independent limo companies to increase their fares to $45 minimum.

The regulations also prohibit limo and sedan companies from using leased vehicles, require them to dispatch only from their place of business and forbid them from parking or waiting for customers at hotels or bars.  And, 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 have nothing to do with public safety.  Nashville could have limited its requirements to those regulations that are designed to genuinely protect the public’s health and safety, such as requiring insured and inspected vehicles, and driver background checks, but instead, Nashville is stooping to economic protectionism to put affordable car services out of business in favor of more expensive services that happen to have more political power.  Many Nashville residents who regularly use limos and sedans will be forced to spend twice as much money for exactly the same service and hard-working sedan drivers will be driven out of business.

On April 20, 2011, the Institute for Justice teamed up with three Nashville entrepreneurs and filed a federal lawsuit in the U.S District Court for the Middle District of Tennessee to vindicate the right of Nashville’s limo and sedan operators to earn an honest living free from excessive government regulation.
With high unemployment and widespread economic uncertainty, this case asks one of the most important questions today:  Can the government restrict someone’s right to earn an honest living just to protect a group of politically favored insiders—in this case members of the Tennessee Livery Association—from competition?

According to the U.S. Constitution, the answer is a resounding “No!”

To read much more about the specifics of the case and the legal arguments, follow this link: http://www.ij.org/nashville-limos-background 

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