Opinion Editorial

Oregon stops sideswiping new moving companies

By Timothy Sandefur
posted in the Oregon North County News

While many politicians are using the economic crisis as an opportunity to give handouts to favored companies and impose expensive regulations on businesses or industries they don’t like, Oregon state lawmakers have taken an important step in the right direction. A bill recently signed by Gov. Ted Kulongoski repeals a decades-old rule that allowed established moving companies to shut out would-be competitors, thereby raising prices and stifling economic freedom.

Ultimately, credit for ending the state's moving business cartel belongs to Portland college student Adam Sweet, who launched a lawsuit and a public awareness campaign that made the political establishment see the light – and feel the heat.

Sweet set out to be an entrepreneur, not an activist. He co-founded a moving company called 2 Brothers, to help put himself through college.

But he and his five employees soon discovered a state law lying like a spike strip in the path of economic opportunity.

Under this statute – just repealed – when a person applied for a license to operate a moving company, the Oregon Department of Transportation notified all existing moving companies and gave them the chance to object. If an objection was raised, the newcomer had to "prove" to a panel of bureaucrats that there was a "public need" for a new moving company.

How did one prove such a thing? Nobody knew for sure: There were no rules explaining what kind of evidence was required, or how ODOT should decide what the public needed. Maybe this is why no new licenses have been issued for at least two years.

Tax money was also spent running "stings" against start-ups. Undercover ODOT investigators called for moving services—and trucks and equipment were seized if the mover lack the required license.

If there’s one lesson the last 20 years have taught us, it’s that the freedom to compete gives innovators a chance to try new ideas, and lowers prices for goods and services that consumers need. In contrast, when bureaucrats intervene, and try to pick which companies should succeed and which should fail, the results are usually wasteful and often corrupt.

These are some of the reasons why attorneys with Pacific Legal Foundation last year launched a federal lawsuit on behalf of Adam Sweet, challenging the constitutionality of Oregon’s restrictions against new moving companies.

Decades ago, courts recognized and protected the constitutional "right to earn a living," when it was threatened by unfair government interference, just as today they protect the freedom of speech or the freedom of religion. Unfortunately, ever since the 1930s, judges have tended to ignore the importance of this right, often merely shrugging when legislators restrict economic freedom without good reason.

Fortunately, there are signs of change. Just last fall, in a Pacific Legal Foundation economic-freedom case in California, the Ninth Circuit declared that the Constitution forbids government from using licensing laws to favor established companies against newcomers. This type of "economic protectionism" is "irrational," declared the court, and "cannot be said to be in furtherance of a legitimate governmental interest."

Before the courts could act on Sweet’s own litigation, state lawmakers commendably realized the need for change. After Sweet drove to the state capitol at the head of a protest caravan of trucks from several different moving companies, Sen. Rick Metsger (D-Mt. Hood), Sen. Larry George (R-Sherwood), and Rep. Terry Beyer (D-Springfield) put forward bills to eliminate the moving cartel and open up the marketplace. Both houses passed repeal legislation without dissent, and late last month it was signed by Gov. Kulongoski. Now, as long as an entrepreneur has the required insurance and meets other simple, objective requirements, he or she can start a moving business without interference.

Economic freedom has driven the engine of progress in this country. When it is stifled by arbitrary restrictions and state-imposed cartels, consumers and entrepreneurs suffer. Oregon’s lawmakers deserve credit for taking the steps necessary to extend opportunity to hardworking wealth creators like Adam Sweet.

Timothy Sandefur is an attorney with Pacific Legal Foundation (www.pacificlegal.org), a watchdog legal organization that litigates for limited government and free enterprise. Sandefur and other PLF attorneys represented Adam Sweet in his federal court challenge to Oregon’s now-repealed restrictions against new moving businesses.