Montana is sued for allowing shuttle and taxi firms to “veto” new competitors

Big Sky businesswoman Tracie Pabst filed a federal lawsuit yesterday, February 4, 2015, against Montana officials, challenging a state law that allows existing transportation businesses to prohibit her from opening her own taxi business and competing against them.  Pabst, owner of Big Sky Shuttle, Inc., has run her transportation company since 2006, operating in several different states.  But Montana’s anti-competition licensing law forbids her from starting a new taxi service in her hometown of Big Sky, unless she first gives existing transportation firms an opportunity to “veto” her business.

Ms. Pabst’s case is part of PLF’s national legal campaign against “competitors’ veto” laws such as she faces in Montana.  PLF has challenged these anti-competition laws in several other states, defeating a similar Kentucky provision in federal court, and triggering repeal of laws in Oregon and Missouri.The law at issue — called a “Certificate of Public Convenience and Necessity” law (Mont. Code Ann. Section 61-12-312(1)) — requires a person to get a Certificate before starting a taxi, limo, or moving company.  But whenever a person applies for a Certificate, existing businesses are allowed to file a “protest” against the new competitor.  When a protest is filed, the applicant is required to prove to the state’s Public Service Commission that a new business would serve the “public convenience and necessity” — a term that isn’t defined in the law.  Officials are allowed to deny a license even to a fully qualified applicant if the new business would compete against the existing firms.

Pabst’s lawsuit seeks no damages — only an injunction and a declaration that this “competitors’ veto” law violates constitutional protections for free enterprise, as secured by the Fourteenth Amendment.

Ms. Pabst is represented, free of charge, by Pacific Legal Foundation (PLF), a non-profit, public interest watchdog organization that litigates nationwide for limited government, individual rights, and free enterprise.  PLF Principal Attorney Timothy Sandefur and PLF attorney Anastasia Boden are litigating the case, with the assistance of Montana attorney Quentin M. Rhoades, of Rhoades & Siefert, PLLC in Missoula.

Transportation entrepreneur Tracie Pabst:  With extensive national experience and an impressive track record, she wants to serve her community of Big Sky

Through her nine-year-old company, Big Sky Shuttle, Inc., Tracie Pabst currently operates in New Mexico and Texas, shuttling employees to work sites; in the past she has also provided service in North Dakota communities.  Since its founding, Big Sky Shuttle has transported more than 200,000 passengers without a single traffic violation or safety-related incident.

Now Pabst wants to begin taxi operations in her home community of Big Sky.  But even though her qualifications are exceptional, Montana’s “Certificate of Public Convenience and Necessity” mandate — or “competitors’ veto” — could allow existing companies to block her.

Statement by PLF Principal Attorney Timothy Sandefur:  By roadblocking start-up businesses, Montana is violating the U.S. Constitution

“Montana has created a ‘competitors’ veto’ system that allows established taxi and shuttle companies to run new businesses off the road,” said PLF Principal Attorney Timothy Sandefur.  “By forcing new businesses to justify their existence, with no clear criteria for doing so, the state sides with well-connected, established commercial interests over potential competitors.

“This is an illegitimate use of regulatory power,” Sandefur continued.  “Licensing rules are supposed to shield the public from unsafe and unfair business practices, not shield entrenched businesses from competition.  The U.S. Constitution protects the right of entrepreneurs to earn a living and create jobs through hard work and resourceful service to consumers.  Montana is sideswiping that right by denying qualified start-ups the opportunity to serve the public.”

Statement by Tracie Pabst:

“The Big Sky community is growing and drawing more tourists each year,” said PLF client Tracie Pabst, owner of Big Sky Shuttle, Inc.  With our extensive experience and unsurpassed track record, Big Sky Shuttle can offer safe and reliable transportation.  But Montana’s competitor’s veto law stands in the way.  It means I’m not allowed to enter the arena and compete.  It creates monopolies, end of story.

“I’m fighting back because these restrictions aren’t fair to me or to the public,” Pabst continued.  “I believe that this assault on free enterprise is unconstitutional.  I’m proud to stand with Pacific Legal Foundation and defend the right of all entrepreneurs to pursue the American dream.”

PLF’s nationwide legal campaign against “competitors’ veto” laws

As part of its mission to defend constitutionally protected free enterprise rights, PLF is challenging anti-competition, “competitors’ veto” laws in states throughout the country.  In his nationally syndicated New Year’s column at the beginning of 2015, Pulitzer Prize-winning commentator George F. Will highlighted PLF’s victory against Kentucky’s competitors’ veto law for the moving business.  He called PLF’s victory “a blow for liberty and against crony capitalism,” and the “most encouraging development in governance” in 2014.

The Montana case is titled, Pabst v. Fox, et al.  More information, including the complaintand a litigation backgrounder, is available at:

Donor-supported Pacific Legal Foundation is a legal watchdog organization that litigates for limited government, property rights, and free enterprise in courts nationwide.  PLF represents Tracie Pabst — and all PLF clients — free of charge.

Categories: Business, Government

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