Independent limousine operators challenge state regulation

Is the newly formed Nevada Transportation Services Authority an important state regulatory agency monitoring the operation of limousine services while protecting consumers or a bureaucratic bully that turns well-meaning entrepreneurs into criminals?

The Independent Limousine Owners/Operators Association is forcing the issue today and is hauling in some Washington-based firepower to lead the fight.

Three separate court actions are being filed today in a bid to allow drivers to operate with less regulation. The ILOA is calling attention to the court filings with a limousine caravan down the Strip this afternoon. After drivers circle the Clark County courthouse, they'll regroup for a press conference to explain their actions.

But the message they're sending is that they're unhappy with the current regulatory environment represented by the TSA, a three-member commission formed when the Nevada Legislature split the former Public Service Commission in two. The TSA monitors transportation issues; the Public Utilities Commission oversees electricity, gas and water matters.

"It's ironic," said Rich Lowre, president and founder of the ILOA, which represents 63 members that own 100 limousines. "The Public Utilities Commission was formed to usher in competition, but the TSA has done the exact opposite. It's actually protecting some of the existing operators and discouraging competition."

Not true, counters TSA Chairman John Mendoza. The mission of the agency is to clear up some of the problems brought upon by the so-called "gypsy limousine" operators.

Illegal operators use their vehicles to transport unsuspecting customers without proper training, maintenance checks and insurance, Mendoza said. His 20-member staff -- including inspectors in Northern Nevada, an enforcement staff of five in Las Vegas as well as a small administrative crew -- certifies operators, inspects vehicles, monitors maintenance files and enforces tariffs to prevent price gouging.

Lowre said oversight on limousine operators would be welcome if TSA certification were more expedient and the process weren't so politicized. He said the way certification occurs now, competitors can argue against the "public convenience and necessity" of new operators, effectively shutting them out of the market.

The TSA was formed at the end of last summer's legislative session in action that Mendoza and Lowre agree was a hurry-up effort.

"It was an issue that was proposed and voted on within 2 1/2 hours at the end of the session," Lowre said.

Mendoza has said that many of the details of the operation of the TSA were left to the commission, which has slowly adopted a series of rulemaking procedures and appeal processes since it first met last October. In the meantime, the TSA staff took on the authority granted by the legislation to get uncertified limos off the street.

Vehicles have been impounded and fines assessed. Lowre said of 100 vehicles associated with the ILOA, 60 have been impounded.

But Lowre said the procedure is a violation of due process and some specific cases were targeted by the organization to call attention to what they consider to be a problem.

When reading a George Will column about the Institute for Justice, Lowre discovered a public interest law group championing property rights and free-enterprise issues. He got the libertarian group to take the case of William Clutter, an independent limo driver who had his car impounded in December by the TSA after he illegally offered public transportation to two undercover agents. Clutter was not certified when he offered his limousine for hire.

The damage to the operator was compounded when Clutter's car was mistakenly sold by the impound lot. Although it was quickly repurchased, the interim owner had already begun removing parts from the vehicle, Lowre said.

The Institute for Justice also was attracted to a case involving John West, who has been delayed seven months in his bid to apply for certification. Lowre said that case exemplifies how difficult it is to be certified.

In California, a state notorious for regulatory roadblocks, Lowre said a limousine driver must adhere to basic procedures the average motorist follows when registering a car, then acquire a business license.

But Nevada officials contend limousine and taxi operations have to be monitored more closely since conventions draw so many visitors in need of transportation and the impression those companies leave are important to the visitor experience.

Today, Institute of Justice lead attorney Deborah Simpson was to file suit in District Court on behalf of Clutter against the state and the TSA. She also is seeking an injunction to overturn AB366, the Nevada Assembly legislation that created the TSA and empowers it to impound vehicles. Institute for Justice attorneys say the law is unconstitutional.

As a public-interest law firm, the Institute for Justice takes on civil liberties cases on a pro-bono basis. That means the ILOA won't have be confronted with legal expenses in today's filings. A spokesman for the organization said it is common for it to seek attorney's fees in some of the actions they take. It hasn't been determined if that would occur in this case.

"Nevada's protectionist public convenience and necessity standard requires new businesses to show that their proposed services will have no adverse effect on existing businesses," said Clint Bolick, the Institute of Justice's litigation director. "Under that absurd standard, our entire free-market economy would collapse."

Mendoza contends that he is enforcing legislative policy. He also pointed out that the Institute of Justice's court filings and demonstration today are publicity stunts most attorneys wouldn't try.

Lowre said while the publicity is a part of the strategy to build awareness on the issue, he and the Institute for Justice intend to win in court -- and the organization has a 98 percent success rate on the cases they take.

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