A few weeks ago, I blogged about California’s current effort to have millions of homes and businesses in California declared “public nuisances” because they contain lead paint. The law of public nuisance is very vague: it’s defined as “an unreasonable interference with a right common to the general public,” terms that are not well understood by any lawyer, judge, or law professor in the country. The state prevailed in the trial court against several manufacturers and distributors of lead paint: the court declared lead paint a public nuisance and ordered the companies to pay over $1 billion to fund an abatement program administered by government agencies. Worse, the court declared that if home or business owners choose not to participate in that program, their names will go on a public list, basically proclaiming themselves guilty of maintaining a public nuisance on their property.
Today the Pacific Legal Foundation, along with our friends at the Institute for Justice and the Cato Institute, filed this brief supporting the ACLU in Rosebrock v. Hoffman, a free speech case that is even more interesting for what it could say about the government’s promises to stop behaving badly.
Economic Liberty Project — Challenging another competitor’s veto
We filed this complaint this week challenging Nevada’s version of a competitor’s veto in Perlman v. Mackay. Here the owners of an limousine and moving services would like to expand in Nevada — but can only do so if existing businesses do not object. So what’s the stated purpose for this restriction? Nothing other than the official state policy to “discourage any practices which would tend to increase or create competition” that supposedly might be detrimental to the public. That’s not a misprint. Nevada has an official statutory policy against competition. For more on that, see our litigation backgrounder. This is one of those cases where merely to quote the law should be more than enough to demonstrate the vacuity of the logic of that law. Or as Charles Dickens put it, “the law is a ass.”
Economic Liberty Project — Discrimination against out of state businesses
We filed this Motion for Summary Judgment in Castillo v. Ingram, our case challenging Nevada’s requirement that all private investigators have an office location in Nevada in order to do business in Nevada. Under the statute, just about anybody in the information gathering business might qualify as a private investigator under the Nevada law. As our blog post notes, this violates both the First Amendment and the Constitution’s prohibition on discrimination against people in other states.
Equality Under the Law Project — Dishonest disparate impact study rejected Continue reading
This afternoon, we asked the federal court in Las Vegas to issue a preliminary injunction barring the state from enforcing a law that makes it a crime to “furnish…information” about the “habits” or “conduct” or “acts” of “any person” without first getting a government-issued “private investigator” license. That’s right—the law defines “private investigator” so broadly that would include biographers, professors, journalists, genealogists, and many more. Disregarding the First Amendment, which protects every person’s right to freedom of expression, Nevada law makes it a crime to “furnish” this kind of information without getting the government’s permission first. This is no exaggeration: in 2013, the state’s Private Investigator Licensing Board prosecuted a man for violating the law because he had testified in a trial as an expert witness.
The law defines “private investigator” to include anyone who “furnish[es]…information” about
- the “identity, habits, conduct, business, occupation, honesty, integrity, credibility, knowledge, trustworthiness, efficiency, loyalty, activity, movement, whereabouts, affiliations, associations, transactions, acts, reputation or character of any person
- “[t]he location, disposition or recovery of lost or stolen property”;
- “[t]he cause or responsibility for fires, libels, losses, accidents or damage or injury to persons or to property”; or
- “[a] crime or tort that has been committed, attempted, threatened or suspected.”
And to get a license, the law requires you to undergo a background check, and to have your “principal place of business” inside the Silver State. The state even discriminates against non-Nevadans by charging them a lower licensing fee than it charges people from other states. The law is plainly designed to prevent investigators from other states from competing against Nevadans.
This morning the Fourth Circuit rejected the Equal Employment Opportunity Commission’s latest attempt to expand disparate impact law. In EEOC v. Freeman, the government brought suit against a company that ran employee applicants through criminal background checks before hiring them. The EEOC alleged that Freeman’s criminal background checks constituted unlawful discrimination under the disparate impact provisions of Title VII. In a commonsense decision, the Fourth Circuit held that the district court did not “abuse its discretion” when it excluded the EEOC’s expert testimony. Thus it affirmed the lower court’s grant of summary judgment to Freeman.
The Court’s opinion noted some significant problems with the EEOC’s expert testimony. “The sheer number of mistakes and omissions in Murphy’s analysis renders it ‘outside the range where experts might reasonably differ.'” It quoted extensively from the lower court’s harsh decision, noting that the district court found some of the EEOC’s expert testimony “mind-boggling.” However, in comparison to the concurring opinion filed by Judge Agee, the court’s opinion was relatively tame. Continue reading
Two of my articles were recently published in the Kentucky Journal of Equine, Agriculture, and Natural Resources Law. The first is entitled “Bringing in The Sheaves: Home Grown Wheat, Weed, And Limits on The Commerce Clause.” This article involves a detailed analysis of Supreme Court case law on the congressional commerce power. Here is the abstract:
United States Supreme Court precedent does not allow us to define the full scope of federal regulation under the Commerce Clause. It does, however, allow us to define the outer limits. By authorizing federal regulation of homegrown wheat, Wickard v. Filburn has long been seen as the furthest reach of the commerce power. It still is. The Supreme Court’s authorization of a federal statute regulating home grown marijuana in Gonzales v. Raich is a quintessential application of Wickard, though it is not an extension of that case. Wickard and Raich allow federal regulation of intrastate economic activity when necessary to support a federal market scheme involving fungible commodities. Whether and to what extent the Supreme Court will allow federal regulation of intrastate noneconomic activity remain open questions. Cases involving noncommercial regulation should continue to be analyzed under the multi-part Lopez/Morrison test to determine if the regulation “substantially affects” interstate commerce. The Supreme Court’s decision in National Federation of Independent Business (NFIB) v. Sebelius requires, as a constitutional minimum, that federal enactments regulate existing economic activity, even under the Necessary and Proper Clause. Congress may not use its commerce power to compel individuals to purchase a particular product or force them into a regulated market. With the current composition of the Supreme Court, the commerce power will not be stretched to cover activities that, if regulated, would authorize a virtual federal police power like that enjoyed by the States.
My short note on Chief Justice Roberts is also included in the publication: “How An Environmental Commerce Clause Challenge Presaged the Decision of Chief Justice Roberts in NFIB v. Sebelius.“
This morning, PLF is announcing its new nationwide campaign against “Certificate of Convenience and Necessity” laws. These are licensing requirements that apply to taxi and limo companies, moving companies, ambulances, even car dealerships and hospitals. We call these laws “Competitor’s Veto” laws because they allow existing businesses to veto their own competition. As I explain in this article in The Blaze today:
Unlike ordinary licensing rules that require a person to have a degree or pass a test before getting a license, these laws have nothing to do with whether a person is qualified. Instead, they allow established companies a special opportunity to object whenever a person applies for a license. When an objection is filed, the would-be entrepreneur must attend a lengthy and expensive hearing, to prove to state bureaucrats that there is a “public need” for a new company.
That’s no easy task, given that most of these laws are written in such vague language that nobody knows what they mean. What is a “public convenience and necessity”? Typically it’s whatever the government says it is. And if officials decide new competition isn’t necessary, they can deny a person the right to start a new business, no matter how skilled or qualified he may be.
Sadly, these anticompetitive licensing requirements are on the books in most states and major cities. That’s why we’ve decided to take them on across the country. In our two newest cases, we’re suing bureaucrats in Nevada (which has the nation’s most anti-“Certificate of Public Convenience and Necessity” law) and Montana. In the Montana case, we represent entrepreneur Tracie Pabst, who wants to start a taxi business in her home town of Big Sky, but can’t, if the existing taxi companies don’t want competition. Last year, we won a major victory in Kentucky, where a federal judge declared that the licensing requirement for moving companies violated our client Raleigh Bruner’s right to earn a living. Missouri and Oregon also repealed or modified their requirements thanks to PLF lawsuits.
The Miami Herald brings news today that the manatees of Florida continue the population surge that the federal Fish & Wildlife Service identified as far back as 2007. Outdoor writer Sue Cocking of the Herald reports:
Manatee conservation is at a crossroads, and the town of Crystal River — located about a 1 1/2-hour drive north of Tampa — is center stage for how the situation will play out.
Last summer, the U.S. Fish & Wildlife Service announced it would undertake a year-long review of the manatee’s status to see if it should be reclassified from endangered to threatened. The review was prompted by a petition filed in 2012 by the boating group “Save Crystal River” and the Pacific Legal Foundation arguing that the population is recovering. When the species was listed in 1967, only a few hundred of the creatures swam around Florida’s coastal and inland waters. Today, the population is estimated at over 4,800. Manatee deaths spiked to a record 829 in 2013, blamed mostly on red tide in the Gulf and a toxic algae bloom in east-central Florida’s Indian River Lagoon. But mortality dropped dramatically to 371 last year.
Thank you for the Pacific Legal Foundation shout-out, Miami Herald. But to ensure the clarity of the record, we note that the federal government itself recommended eight years ago that it downlist the manatee from endangered to threatened because the manatee population had surged to 3300 manatees. The report explained in pertinent part:
Should existing businesses have the power to veto new enterprises? Nevada thinks so. We don’t.
Ron and Danell Perlman are the owner-operators of Reno Tahoe Limousine, based in Reno, Nevada. They own seven limousines that they use for trips within the state, and an additional eight limousines that that they use for trips between California and Nevada. Because of their success in the Reno area, they’d like to move the eight vehicles that they use for interstate trips over to their Nevada-based fleet. But their current license only allows them to operate seven limos within Nevada. If they want to expand their Nevada business, they have to ask the government and their competitors for permission first.
In order to start or expand a transportation company in Nevada, you have to obtain a Certificate of Public Convenience and Necessity. But any time you apply for a Certificate, existing businesses can protest your application. Your future competitors need not allege that you present any health or safety risk to the public. Instead, they can protest simply because they don’t want to compete. That protest triggers an expensive and time-consuming government hearing in which the applicant must prove to the agency that its business is “necessary and convenient” to the public, and that it won’t compete with existing companies. Because this requirement is often impossible to satisfy, the process has been sometimes been called the “Competitor’s Veto.”
The Fifth Amendment requires the government to compensate a property owner when it takes property from a private landowner. To get around the requirement of paying “just compensation,” government entities often get creative. One trick is to depress property values prior to taking the land by excessively regulating land or by announcing an intent to later build something that would discourage buyers and development. Sometimes this works, but fortunately it did not work today.
Today, a North Carolina appellate court held that the state transportation agency effected a taking when it tried to freeze or depress property values of land that it might later use for a road. To keep land prices from increasing while the agency was deciding whether to build the road, the agency also passed regulations that made it very difficult for land owners to develop the affected land. The agency did not put a time limit on its decision-making process or on the restrictions on the affected landowners.
The court saw through this charade and held that the agency’s action amounted to a taking without just compensation. The taking occurred when the agency imposed the restrictions and announced that it might later take the land. You can read the decision here.