A federal judge in Lexington struck down Monday part of a state law that essentially gave moving companies a veto over new competition.
The ruling was a victory for Raleigh Bruner, who successfully challenged the constitutionality of the law that was used in an attempt to keep his company, Wildcat Moving LLC, from operating in the Lexington area.
"I could not be happier with the ruling. I think justice has been served," Bruner said.
"We knew going into it that the law was unconstitutional and unfair and anti-competitive, but things like that tend to get lost in translation when you try to use the U.S. judicial system," he said. "But to have the federal judge stand behind us and say, yes, this state law is unconstitutional and you have been treated unfairly, it brings to an end a two-year nightmare for me and my family, and the workers of Wildcat Moving."
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The state Transportation Cabinet is reviewing the decision and "will determine whether to appeal today's ruling," spokesman Ryan Watts said.
U.S. District Judge Danny Reeves held that the notice, protest and hearing procedures in the law "offend and violate" the 14th Amendment, which protects a person from arbitrary action of the government.
In April 2012, transportation officials sent a letter to Wildcat Moving, ordering it to apply for a household goods certificate. The certificate, which has been required since the 1950s, gives companies the legal right to carry goods throughout Kentucky.
To get a certificate, an owner must prove that a need exists for a new moving company. If an existing company challenges the certificate, the battle moves to a hearing, where companies often argue that allowing another mover would hurt their business and the overall economy.
Since 2007, no Kentucky company has received a certificate after having its application protested by another moving company. Instead, companies have offered to sell existing permits for $25,000, according to the judge's written opinion and order.
Reeves wrote that his decision does not invalidate past certificates. It does mean, he wrote, that "prospective moving companies in the future will not be subject to a 'veto' from their competition before they may lawfully act as a moving company."
Aspiring moving companies must continue to demonstrate that they are "fit, willing and able" to operate as a moving company.
That means that "as long as you can show that you have the proper insurance in place and the proper U.S. (Department of Transportation) safety checks on your trucks in place, you should be able to get a license to move," Bruner said.
The Pacific Legal Foundation, a legal group based in Sacramento, Calif., that fights for limited government, represented Bruner. The group is fighting a similar battle in Nevada and has won fights in Missouri and Oregon.
Tim Sandefur, an attorney with the foundation, said Monday's decision was a victory not only for Bruner but for other entrepreneurs like him and for consumers. Sandefur predicted that Kentucky would see more competition in the moving industry.
"One of the points that Judge Reeves made in the opinion — that I thought was a really good point and that I didn't even make in the brief that we filed — is this: The proof that the government is not considering consumer need is that there are illegal movers. The fact that people can run an illegal, unlicensed moving company and still make money proves that there is demand out there that is not being met," Sandefur said.
"It's definitely a victory for consumers because it eliminates the monopoly that raised prices and decreased choices for consumers," he said. "But it leaves in place the parts of the law that protect safety. You still have to operate safely and honestly.
"But to me, the more important thing is it's a victory for entrepreneurs. The people who start businesses are the wealth creators of our society, and when I see a law like this on the books that bars somebody from making a living for no good reason, it's really offensive to our Constitution."
Last year, Bruner had hoped that the legislature would pass a bill that would have removed the requirement that a moving company prove its services are necessary. The bill cleared the Senate but never got a hearing in the House transportation committee.
This year, state Sen. Tom Buford, R-Nicholasville, has again sponsored a similar bill, SB 23. It was introduced Jan. 7; on Jan. 13 it was sent to the Senate transportation committee.
Bruner said he was happy that he "can continue to operate my very successful moving company, pay my employees and feed my family, and continue to grow. It's really been a nightmare for us to not know whether they were going to shut our doors at any time. It's a relief, a huge, huge relief.
"We just started another company in Louisville called Cardinal Moving. And we're seeing some immediate success up there."