PLF suit challenges Nevada’s ban on new competition in the moving business

Reno, NV; October 4, 2012: Reno entrepreneur Maurice Underwood filed a federal civil rights lawsuit today challenging the constitutionality of a Nevada law that prohibits new competition in the moving business.

Underwood is represented, free of charge, by attorneys with Pacific Legal Foundation (PLF), a nonprofit public interest organization that litigates nationwide for limited government, property rights and free enterprise. The lawsuit charges that the state government’s cartel for the moving business violates Underwood’s constitutional right to earn a living.

“Nevada has the worst law in the nation when it comes to moving companies,” said PLF Principal Attorney Timothy Sandefur, who represents Underwood. “It specifically bars any new moving company that might compete with an existing company. This unconstitutional restriction on the right to earn a living doesn’t protect consumers — it isn’t meant to. It only protects existing businesses from having to compete fairly.”

The state law requires moving companies to get a Certificate of Public Convenience and Necessity from the Nevada Transportation Authority. But to obtain a certificate, a person must prove at a government hearing that he “will not unreasonably and adversely affect other” moving companies. The law even declares it to be state policy “to discourage any practices which would tend to increase or create competition.”

Nevada isn’t regulating for consumer health or safety — but against consumer choice and entrepreneurial freedom

Timothy M. Sandefur
Principal Attorney

“This law doesn’t help consumers,” said Sandefur. “Just the opposite — it limits consumer choice. It is a blatant abuse of government power to protect politically influential companies against entrepreneurs seeking to start new, wealth creating businesses.”

Not only is the law explicitly anti-competitive, Sandefur notes, but Nevada’s regulations governing the moving industry also pose an exceptionally high obstacle for people applying for Certificates. Applicants to provide new moving services must describe the types of household goods they intend to transport and provide (1) a map, drawn to scale, of all places they intend to serve; (2) photographs of all equipment the new company will use; (3) a year’s worth of financial statements; and (4) “facts showing that the proposed operation is or will be beneficial to the traveling public,” a vague term that is not defined in the law.

“What does ‘beneficial’ mean?” asked Sandefur. “It means whatever the government says it means. It isn’t really possible to prove beforehand that a new moving company is ‘necessary’ or ‘beneficial.’ The only way to do that is to give it a try and see if customers like your work. But the law doesn’t allow that.

“This law does not protect the public,” Sandefur continued. “It raises prices for consumers, and deprives honest people like Maurice Underwood of their right to earn a living.”

The state’s anti-competition law sideswipes a small business owner

Maurice Underwood started his business, Man With Van Moving, in 2004, after he had run a small house cleaning business. “Reno was growing a lot, and people who called for house cleaning services would often ask if I knew of any moving companies I’d recommend,” recalled Underwood. “So I decided to try my hand at it.” Today his company employs seven people. But without a Certificate of Public Convenience and Necessity, they are only allowed to load and unload trucks, not to drive them.

“This law makes no sense,” said Underwood. “It doesn’t protect the public. It only protects the existing companies.”

PLF has successfully challenged mover cartel laws in other states. In 2009, a PLF lawsuit against the Oregon Department of Transportation prompted that state to repeal a similar licensing restriction, and in July, 2012, the state of Missouri repealed its anti competitive licensing law for the moving business, due to a PLF lawsuit. PLF also recently filed a lawsuit in Kentucky to challenge that state’s mover licensing laws.

About Pacific Legal Foundation
Donor supported Pacific Legal Foundation (www.pacificlegal.org) is a nonprofit public-interest watchdog organization that litigates for limited government, property rights, individual rights, and free enterprise in courts nationwide.