State threatens businessman’s expansion

Thursday, April 13, 2000 | 10:53 a.m.

Star-Limousine

The city's largest taxi company has entered the limousine market in Las Vegas.

Yellow-Checker-Star Transportation, comprised of three separate companies serving Southern Nevada, began operating Star-Limousine last month with 12 standard and SuperStretch limos and 10 Lincoln Towncars for hire.

For nearly nine months, customers of Ilene's Bridal Gowns and Tuxedos have been shuttled around town in brand-new SuperStretch limousines licensed by the Transportation Services Authority and the U.S. Department of Transportation.

Business boomed.

But when owner Dan Ryan went to the TSA in February for permission to run more limos, he was told that his business was in violation of TSA rules.

A hearing to determine whether Ryan's limousine service is legal and whether he can continue to operate and expand his fleet is in recess until May 4.

The incident is the latest in a series of controversial actions involving the TSA's regulation of limousines in Nevada. Two high-profile cases have been through appeals and have been the subject of District Court hearings. Both are reaching critical turning points today.

John West, a former limousine driver who now lives in Albuquerque, N.M., was scheduled to have his appeal considered by the TSA today. West seeks certification to drive in Las Vegas and says he would return if he wins approval.

West balked at disclosing financial information in his initial hearing and when the TSA turned him down over the delay, West appealed to District Court, which ordered the agency to consider the request based on the financial information that was provided.

A more far-reaching case involves an appeal by another driver, William Clutter, who was fined $5,000 and had his limousine impounded for operating without a TSA certificate. Clutter's District Court appeal, which will be heard in mid-June, challenges the constitutionality of Nevada laws regulating limousines.

Both cases have captured the attention of the Institute for Justice, a Washington D.C. law firm that takes on government regulatory cases involving free enterprise. Dana Berliner, the lead attorney in the West and Clutter cases, was in Las Vegas for discovery hearings in the Clutter case this week.

The cases and Nevada's limousine licensing regulations also have been written about by Washington-based national columnist George Will, who is critical of state regulation of the industry.

Meanwhile, Ryan believes the decision on his case already has been made and that TSA Commissioner Paul Christensen is leading the charge to turn him down.

Christensen said last week that he hasn't made a decision because the hearing is still open and he is awaiting a legal interpretation. He said he couldn't discuss details of the case because it's still pending.

But as far as Ryan is concerned, he has no hope of winning and he's already talking about filing a lawsuit in District Court. He figures that Christensen already has made up his mind and has influenced the two other commissioners to vote against him.

Ryan's dealings with the TSA began in October 1998 when he applied for a certificate to operate limousine charters.

Ilene's, a Strip-based company with revenues of about $750,000 a year, offers formalwear rentals for about 900 couples a month and uses limousines to shuttle customers around for free.

Under TSA rules, limousines can be used to transport customers for free as long as one end of the trip is the place of business. That's why resorts that operate limousines don't have to get TSA certification -- they shuttle customers for free and either start from or end up at the hotel.

"We would take customers from the hotels to our store or drive them up to the courthouse to get a marriage certificate," Ryan said. "We have a great reputation on the Strip because we'd always be there on time with a nice clean vehicle. It was part of our service."

Ryan decided to keep the limousines and his drivers busy during the store's off hours. The free limo service for Ilene's customers was a good way to reach customers willing to pay $40 an hour for tours of Red Rock Canyon, Hoover Dam or on the Strip.

But the rental business required a TSA certificate. Ryan applied in October 1998 and finally was awarded a certificate of operation July 14, 1999. Ryan said he applied for and thought he was approved for the operation of eight limousines but because of a typographical error, he only was approved for three. So, he acquired four limos, operating three of them full time and having one as a backup.

Ryan also received federal Department of Transportation certification, allowing him to transport customers across state lines.

Ryan advertised the complimentary limo service with Ilene's and the limo rental service worldwide, spending thousands of dollars on brochures and advertising.

As business swelled, Ryan decided to apply for an expansion. He said he worked hard to make his case, upgrading some safety equipment in the limousines above TSA standards. He said his accountant spent 90 hours going over the books to present financial documentation for his case.

Ryan said TSA officials were helpful in the investigation and everything was running smoothly until two days before the late March hearing.

On that day, Ryan's company was cited by the TSA for an illegal operation of a limousine and for illegally advertising the business.

Then, at the hearing, an intervenor in the case, On Demand Sedan of Las Vegas, questioned whether Ilene's could operate a complimentary limousine service at the same time it was operating a for-hire service.

"They (TSA officials) said I could charge for the limousine service to Ilene's customers and then give away something at the store, like a dress or tux rental, and I wouldn't be breaking any rules," Ryan said. "But that's not how I like to operate. I like to be up front with my customers on what they're paying for."

Christensen and the TSA staff agreed to put the hearing on hold until May 4 and delay action on the two citations.

Christensen said TSA officials are researching whether Ilene's can operate the complimentary service with the same vehicles and company used for the for-hire service. The commissioner called it a gray area of the law.

"That's where I have a problem," Ryan said. "It didn't become a gray area until I wanted to expand."