Would-be limousine operator loses again

Friday, April 14, 2000 | 10:50 a.m.

In a case attracting national scrutiny over alleged monopoly practices in Las Vegas, the Transportation Services Authority of Nevada again Thursday refused to issue a limousine operating certificate to a limousine driver who has battled since 1997 for a permit.

TSA members unanimously rejected the application of John West, saying he wasn't financially fit to operate a limousine company.

"(The) applicants' proposed service would not benefit the traveling public because the lack of financial fitness threatens the public safety and provides no assurances that (they) would be able to provide reliable, adequate and economical service and their lack of responsibility for legal obligations would also be detrimental to the traveling public," said an order authored by TSA Commissioner Bruce Breslow, the hearing officer in the case.

West, who now resides in Albuquerque, N.M. and works as an automobile repairman, said the decision was no surprise.

"I was expecting it," West said from his Albuquerque home. "First they bankrupt me, then they don't give me a permit because they've bankrupted me."

West first applied for certification in September 1997. The first of three requests for financial information on the initial request was made by the TSA in November 1997 and West responded in April 1998. The agency received its final information on the case in June of that year.

West failed to respond to requests for information from intervenors in the case, further delaying hearings. He has said that he did not want to give proprietary information to competitors. The TSA said West also failed to provide prefiled testimony by August 1998 and a continuance was granted to October 1998.

The TSA asked for updated financial information and West again did not provide it, leading the agency to file a motion to dismiss the case. In September 1998, commissioners voted to dismiss it. In October, West filed an appeal in District Court. Proceedings in court lasted through much of 1999. In November, the court ruled that the TSA had to act on West's original request.

A hearing was conducted in January at which West was given an opportunity to update his financial information. The hearing was conducted by Breslow, who had only been with the agency a few months at that time. He said at the time that he wanted to give West a fresh start in the process.

West has said that he spent thousands of dollars for legal representation and accountants to assemble the financial information the agency said it needed to determine if he was qualified to run the company.

Breslow said the agency "bent over backwards to make this work," but determined West didn't have the financial resources to run his company.

But Dana Berliner, an attorney with the Washington, D.C.-based Institute for Justice, said West is a plaintiff in a lawsuit against the TSA that is expected to be heard in District Court in June. Issues addressed in that suit, Berliner said, cover some of the concerns raised in the TSA's Thursday denial.

"We've always said that setting financial requirements (for a certificate) is arbitrary," Berliner said.

Specifically, the TSA order says West's ratio of current assets to current liabilities is below the agency's standard of 1 to 1. Actually, financial data supplied by West led the TSA to determine that his current ratio is about 1.09 to 1. But that didn't take into account the costs of leasing a vehicle, insurance and any company start-up expenses. It also didn't take into account fines West has yet to pay.

The TSA researched three different potential vehicle lease scenarios since West did not provide financial information to the agency on his vehicle plans. Under those scenarios, the ratio dipped to between 0.062 and 0.202 to 1.

The Institute for Justice believes financial requirements should not be a part of the approval process. The Washington, D.C.-based firm takes on similar free-market legal cases nationwide.

West and William Clutter, who was fined by the TSA and had his limousine impounded for operating without a certificate, are plaintiffs in a suit filed by the law firm that argues that Nevada's limousine regulations are unconstitutional and protect existing companies as monopolies. Berliner was in Las Vegas Thursday to wrap up the discovery phase of the case.

West said he would await the outcome of the June trial instead of appealing the TSA rejection.

"If I were to reapply today, they wouldn't be able to schedule a hearing for me until after June, so I'm just going to wait and see what happens there before deciding what to do next," West said.

Both Berliner and representatives of the Nevada Attorney General's Office are confident they will win the case when it is heard by Judge Ron Paraguirre in June.