A Kentucky law concerning certification of companies that move household goods is receiving a two-pronged attack from a local business that says it will be forced out of the market if the certification process takes place. Wildcat Moving, however, is attacking the law both from a legal standpoint as well as from a legislative one.
R.J. Bruner, managing partner of Wildcat Moving, LLC, is an unlikely combatant in this fight and even unlikelier to have gotten started in this business. After receiving his MBA from the University of Kentucky and seeking a corporate position, he and a friend advertised moving services on Craigslist to make a little extra money. It turned out that there was a substantial demand for his services. Two years later, he employs roughly 30 people and operates five trucks in his business. When he began to get serious about his business, however, is when trouble came calling.
“We got the attention of our competitors,” said Bruner. “Basically, whenever a competitor sees us, they call the police, who then calls the DOT.”
That’s because Wildcat Moving doesn’t hold a certificate of convenience and necessity, as required by Kentucky law. Operating without this certificate is a misdemeanor, punishable by $2,000-$3,000 fines per citation.
“We had everything we need,” said Bruner, “except the certificate.”
Motor carriers are required under KRS 281.615 to obtain a certificate from the Department of Vehicle Regulation in the Kentucky Transportation Cabinet. For those transporting household goods (i.e., movers), the certificate process is further defined in KRS 281.630(1), which states that a certificate shall be issued if the applicant meets certain criteria of fitness, as well as proving: “further that the existing transportation service is inadequate, and that the proposed service, to the extent to be authorized by the certificate, is or will be required by the present or future public convenience and necessity…”
Complicating the process even more are the provisions of KRS 281.625 and 281.6251, which state that certificate applicants must file notice either publicly or with every existing certificate holder affected by the application for the certificate. If any of those certificate holders file a protest against the application, the law requires the department to hold an administrative hearing, a process taking up to two years and requiring representation by an attorney. There is no provision for a temporary or interim certificate, so new businesses in this industry must apply and wait until the certification process is complete before operating legally.
“This could be a two-year process with $20,000 in legal fees,” said Bruner, which would be a catastrophic blow to his business.
To his mind, the process was already rigged in favor of established businesses. The results would be obvious if every competitor was given notice and an opportunity to challenge new permit applicants.
“Everyone would protest,” he said.
Rather than file for an application and wait, Bruner decided to fight the process itself. He contacted various members of state government and various business and legal organizations about his situation, even receiving a sympathetic ear in unlikely places.
In a letter from Rebecca Goodman, the executive director of the Office of Legal Services for the Transportation Cabinet, she wrote, “We agree that the process is laborious and cumbersome at times, especially when potential competitors are allowed to protest a new company’s entrance into the field.”
Pacific Legal Foundation (PLF) and the National Federation of Independent Business (NFIB) are two organizations spearheading challenges to the law on Bruner’s behalf. PLF is leading a legal challenge to the court by suing the Kentucky Attorney General and the Transportation Cabinet in federal court, while the NFIB is heading up legislative efforts to change the law, starting with testimony during a committee meeting of the Licenses and Occupations Committee on Sept. 14.
Bruner’s filed complaint in federal court argues that the law as it stands is unconstitutional, in that it denies him the “right to earn a living in a common occupation of [his] choice. …guaranteed by the due process, equal protection, and privileges or immunities clauses of the Fourteenth Amendment to the United States Constitution.”
The standard of review for this particular claim is particularly high, as the plaintiff will have to show that the law has no rational relation to a legitimate government interest. Even Bruner and PLF admit that the government might have a legitimate interest in making sure that motor carriers meet certain standards for safety, insurance, bonding, etc., where their customers are concerned. The protest provisions, however, serve to highlight what they believe is the true intent of the law.
“The only purpose this law serves, in our eyes,” said Joshua Thompson, attorney for PLF, “is to benefit established businesses at the expense of the upstart.”
Thompson pointed out that the filed protest does not have to have any bearing on health, safety or welfare, but can simply be filed to protest the necessity and convenience of adding another competitor to the mix.
The public affairs director for the Transportation Cabinet declined to comment on the pending litigation, saying the cabinet has not yet filed an answer to the complaint in federal court.
Tom Underwood of the NFIB sees no compelling public interest in the procedure, either. He noted that since 2007, only five such certificates have been actually granted.
“The issue is, you have a government-sponsored monopoly, and that’s wrong,” he said. “How many people were dissuaded from even trying [to start a moving business] because of this?”
Bruner and representatives from NFIB and PLF were on hand to testify before a committee meeting of the Licensing and Occupations Committee on Sept. 14 which seemed to produce positive responses with local lawmakers.
But if the two-front assault on the law doesn’t work out, Bruner said he’ll see the effective end of his business.
“I’d basically have to let all of my employees go,” he said.