Renegade LV limo firms win key ruling

Thursday, May 17, 2001 | 10:58 a.m.

Several would-be Nevada limousine operators who challenged state regulation of the industry say they'll apply for state licenses now that a judge has sided with them on a key issue in their lawsuit against the state.

Clark County District Judge Ron Parraguirre on Wednesday ruled that the Transportation Services Authority, which regulates the Nevada limousine industry, "failed to adequately supervise the application process" by allowing competitors too much influence in the TSA's system of considering new licensees.

The TSA was sued by the Independent Limousine Owners/Operators Association in May 1998 after several limousine drivers complained that state law created, in effect, a government-sanctioned monopoly preventing independent operators from breaking into the market.

A non-jury trial was conducted by Parraguirre in February.

Parraguirre's decision said the ILOA failed to satisfy a burden of proof on six allegations within its suit. But he ruled in favor of the ILOA on two critical issues, concluding that the TSA violated three drivers' rights to due process.

"We're thrilled with the decision that the TSA has not provided a fair process in the licensing process and that their behavior will not be tolerated any more," said Clark Neily, an attorney with the Washington, D.C.-based Institute for Justice, which represented the limousine drivers in the case.

"The heart of our case was that the intervenors effectively crushed any new competitors trying to enter the market," he said.

But Paul Christensen, chairman of the TSA, said his office already has modified how it works with new applicants and intervenors.

Under TSA regulations, established companies offering limousine services are allowed to testify about the impact a new competitor starting a business would have on the existing market.

Parraguirre's ruling did not say the intervenor system was improper, but that the TSA did not oversee it properly.

"Applicants are routinely encouraged to meet with the intervenors to resolve these concerns in an agreement to limit the operational scope of the proposed certification," the ruling says. "However, the TSA generally remains inactive and does not require any standards for intervenors regarding the scope or type of operational restrictions they may demand from the applicants. ... Ultimately, the only alternative for many applicants who do not wish to make such a deal with the intervenors is to be 'run to death in the paper mill' of a contested application process."

Christensen, who said he was happy with the decision, said the TSA would have no problem complying with the ruling because the agency began modifying how it dealt with intervenors after the lawsuit was filed in 1998. He said instead of allowing all companies to intervene on an application, the TSA now directs the intervenors to consolidate their efforts through one attorney.

"This is something we grew into as we learned the game," Christensen said. "We may end up with a new policy on this, our attorneys are still reviewing the decision. But this is something we can live with because it upholds the state's right to question these people in the areas of public safety and insurance."

An attorney for one of the intervenors said he thought the decision was fair.

Robert Winner, who represented Ambassador Limousine Co. in the trial, said Parraguirre was able to cut through several issues and issued a good ruling.

"It was a fair decision," Winner said. "He said the law was constitutional, but that the process may have been arbitrary in the instances of these three guys (the plaintiff limousine drivers). But I'm happy with the decision personally."