PORTLAND, June 4, 2008 – Sacramento-based Pacific Legal Foundation (PLF), a public interest legal organization that litigates for limited government and free enterprise on behalf of small business owners, has filed a lawsuit against the State of Oregon in U.S. District Court-Portland claiming the state illegally restricts potential competitors in the moving business from entering the market.
The lawsuit, Sweet v. Myers, filed by PLF on behalf of Adam Sweet, a Portland State college student and co‑founder of upstart moving company 2Brothers Moving and Delivery, alleges that that practice of startups having to get permission from existing movers before opening for business creates an unfair barrier to competition.
PLF has its work cut out in the lawsuit. In Oregon, the moving industry is a monopoly by design and is regulated by the state, much like the utility industry. That policy was reaffirmed by General Assembly vote in 2003, Oregon Department of Transportation Division spokesperson Patrick Cooney said.
“Unless someone can prove there is a specific need (for new competitors in the marketplace), or the existing carriers are proven to be inadequate, the industry (players) will remain the same,” Cooney said.
Movers that want to enter the Oregon market are required to apply for what’s called the “Oregon Intrastate Certificate to Transport Household Goods or Passengers.” Applications are reviewed by ODOT, and existing moving companies are then notified. If an existing company protests an application, the potential business owners have to prove that existing movers are not meeting the needs of the public.
“Imagine you want to start a business, but the government says you can’t unless you get an OK from your competitors,” PLF attorney Elizabeth A. Yi said. “We’re challenging this anti-competition law because the right to earn a living in one’s chosen occupation is protected under the U.S. Constitution. Government may regulate to protect the consumer, but not to protect businesses and interest groups from competition.”
2Brothers offered services ranging from full-service moving to small jobs, such as moving furniture around a client’s home. In February, ODOT fined 2Brothers an undisclosed amount and towed its truck on the grounds that the business didn’t have the required license, according to PLF.