Sad news from Carson City today, where Gov. Brian Sandoval has chosen to keep in place the nation’s most anti-competitive licensing law. This morning, Sandoval announced his veto of SB 183, a bill that would have opened the market for entrepreneurs to freely compete for jobs running moving companies, or taxi or limo companies. The state’s current law, which we’re challenging in three federal lawsuits, says you’re not allowed to start a business unless you prove that you would not compete against existing companies. SB 183 would have ended that, and said that if you’re safe, qualified, and honest, that’s good enough.
The current law is patently unconstitutional, because licensing laws must be related to a person’s “fitness or capacity to practice” the trade. Last year, a Kentucky federal court struck down a law similar to Nevada’s, holding that it is unconstitutional for the state to use its licensing laws simply to prevent competition against existing businesses. It called the Kentucky law a “Competitor’s Veto” because it essentially allowed established businesses to veto their own competition. Nevada’s law is far worse than Kentucky’s, since it expressly forbids new companies from competing against the state’s established monopolies. SB 183 would have allowed a new company to start up as long as it complied with laws protecting consumers.
Rather than end the state’s unconstitutional prohibition on economic freedom—a right that all Americans ought to enjoy—Gov. Sandoval chose to reinforce the state’s unconstitutional Competitor’s Veto law. As the Sacramento Bee asked not long ago, how business-friendly is Nevada, really?
In his veto message, Gov. Sandoval claimed that he vetoed the bill because it would “eliminate procedures and policies in Nevada law that govern the Nevada Transportation’s [sic] Authority’s ability to oversee and ensure that a motor carrier operator always transports members of the public safely.” This is a lie. The bill kept in place all of the state’s safety regulations and did not alter the NTA’s authority in this respect at all. Instead, it would have ensured that anyone who complies with public safety rules would be allowed to start a business and compete fairly.
The beneficiaries of Gov. Sandoval’s veto are the owners of the state’s powerful taxi and limo cartels, who are afraid of fair competition and need to use the government to give them favors instead. The losers are Nevada consumers, who are forced to pay higher prices for lower quality service because Gov. Sandoval would prefer a monopoly to economic competition. Even sadder, the losers are hard-working entrepreneurs like Maurice Underwood or Danelle Perlman, who aren’t asking for a handout or a bailout—just the freedom of economic opportunity that everyone is promised under our flag.
While Gov. Sandoval’s decision to disregard the Constitution is unfortunate, it’s hardly the end of the story. Fortunately for us all, the law promises us protection for our rights even when politicians would prefer to do otherwise. Our Competitor’s Veto lawsuits continue, and will continue, until Nevada—and every state—respects the Constitution’s guarantees for our right to earn a living.