A Victory For Economic Liberty In Minnesota

The guys at the Institute for Justice are among the unsung heroes in the fight for liberty.

Here are a bunch of lawyers dedicated to little more than fighting laws and regulations that restrict the ability of people to run their business, or even to go into business. They’ve been on the winning side and the losing side of more than a few legal battles where liberty was at stake, including representing the homeowners in the infamous Kelo v. City of New London case.

This time, they helped break up a taxicab cartel in Minneapolis, Minnesota:

Minneapolis, Minn,—Can an entrenched cartel of Minneapolis taxi drivers violate the civil rights of entrepreneurs and consumers?

No, according to U.S. Magistrate Judge Franklin L. Noel. In an opinion released today, the judge recommended that a lawsuit brought by members of the taxi cartel to overturn the city’s free-market reforms be dismissed.

“This is a victory for both aspiring taxi entrepreneurs and for Minneapolis consumers,” said Scott Bullock, a senior attorney at the Institute for Justice who argued the case. “Established businesses should not be able to use the law to quash competition and close the marketplace. Today’s ruling ensures that does not happen.”


The Institute for Justice Minnesota Chapter (IJ-MN) intervened in the case on the side of the city of Minneapolis to defend its free-market reforms that removed a cap on the number of taxis allowed to operate within city limits. The reforms, finalized on March 30, 2007, will open the market to entrepreneurs who are fit, willing and able to serve the public, increase the number of cabs by 180 in the coming years, and eliminate completely the cap on the number of cabs in Minneapolis by 2010.

In response to the free-market and consumer-friendly reforms, the established taxicab cartel sued the city, demanding the reversal of reforms and proclaiming its owners should be able to keep the spoils of the old law that excluded new competitors from the taxi market in Minneapolis for more than 10 years.

The Institute represents taxi entrepreneur Luis Paucar, who had tried for nearly four years to provide service in Minneapolis. He has received 22 licenses under the new law.

“I am thrilled!” said Paucar. “All I ever asked for was the ability to enter the market and to compete.”
“The cartel violated the civil rights of entrepreneurs like Luis,” said Nick Dranias, an IJ-MN staff attorney. “We got involved in this case to defend the city’s free-market reforms because taxicab entrepreneurs have the right to earn an honest living in the occupation of their choice free from the anti-competitive barriers to entry that the taxi cartel wants to preserve.”

In his opinion, Judge Noel determined: “The [established] taxi vehicle license holders do not have a constitutionally protected freedom from competition.”

Good work guys.

  • Bob

    Bravo, its good to see a court make the correct decision. What was the legal argument of the taxi owners?

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  • http://www.belowthebeltway.com Doug Mataconis


    I’m not sure since I have not seen anything about the case beyond IJ’s press release.

  • http://www.ij.org Lee

    The existing license holders argued that the City of Minneapolis’ new law was unconstitutional because it was a regulatory taking. The license holders said that the City should not be allowed to issue more licenses because it would reduce the value of the licenses in a secondary market from which they many of the license holders bought their licenses.

    IJ argued that the new law was not a regulatory taking because the City did not take away the license holders’ right to use the license to drive cabs. IJ also argued that there is not a property interest, protected by the Constitution, in the premium value of a license in a secondary market.