Federal Court Nullifies Kentucky Law Permitting Firms to “Veto” Licensing Applications of New Competitors

In a
ruling issued on Monday, the U.S. District Court for the
Eastern District of Kentucky struck down a state law requiring
would-be entrepreneurs in the moving company business to receive
permission to compete from their established rivals.

At issue in Bruner v. Zawacki was a Kentucky statute
forcing anyone interested in entering the moving business to first
convince state officials “that the existing transportation service
is inadequate.” How? By surviving a government hearing where
existing moving companies were invited to “file a protest to the
granting, in whole or in part, of the application.” In the words of
yesterday’s ruling by Judge Danny Reeves, the Kentucky agency
charged with issuing those licenses “has never issued a Certificate
to a new applicant when a protest from a competing mover was
made.”

That monopolistic state of affairs prompted Raleigh Bruner,
owner of the unlicensed Wildcat Moving company in Lexington, to
file suit. Represented in federal court by the Pacific Legal
Foundation, a national public interest law firm, Bruner argued that
the Kentucky law violated his right to earn a living under the
Fourteenth Amendment.

The U.S. district court agreed. The “notice, protest, and
hearing procedures” amount to “an act of simple economic
protectionism,” Judge Reeves declared, and therefore “offend and
violate the Fourteenth Amendment of the United States
Constitution.” Henceforth, the judge ruled, “prospective moving
companies…will not be subject to a ‘veto’ from their competition
before they may lawfully act as a moving company.”