By Andrew Staub | PA Independent
Cosmo Losco and his wife Mary Anne want to start a moving business, but they need a license from the Pennsylvania Public Utilities Commission before they can haul boxes from one apartment to another.
The Telford couple has declined to apply for one for their College Hunks Hauling Junk franchise. Instead, they’re suing the state over a law they contends infringe upon their free-enterprise rights.
Filed earlier this month, the complaint alleges that Pennsylvania allows other moving companies to effectively “veto” new competition when they apply for the necessary certificate of public convenience.
RED TAPE: A Pennsylvania couple wants to start a moving business, but say regulatory requirements would hamper them. Instead of asking permission, they’re suing the state.
“This was a shock,” Cosmo Losco said in a statement. “It didn’t make sense that existing moving companies get a ‘vote’ on who gets to do business.”
The Pacific Legal Foundation, a public-interest law firm that has fought similar laws across the country, is representing the Loscos. Other lawsuits have already led to the repeal of similar regulations in Oregon, Missouri and Montana, according to the PLF.
PUC attorneys had not yet been served with the lawsuit as of Friday morning, but spokespersons for the regulatory agency fired back quickly, saying that although someone can protest an application, there is no such thing as a “competitor’s veto” like the one described in the Loscos’ lawsuit.
“It’s not something where an individual can keep an entity out of a market just based on a whim,” said Nils Hagen-Frederiksen, the PUC’s press secretary. “That is complete and utter fiction.”
The licensing process, Hagen-Frederiksen said, exists to ensure an even playing field on which businesses compete with the same levels of insurance requirements, safety inspections and qualifications of equipment to protect all parties involved.
Protests are filed on nearly every type of application that comes through the PUC, Hagen-Frederiksen said, but must be based on “factual points” about issues like financial fitness to run a business, a history of past violations or safety regulations. Otherwise, they’re rejected.
If a true veto existed, ride-sharing companies like Uber and Lyft, which drew heated opposition from traditional taxi companies, would not be operating in Pennsylvania, Hagen-Frederiksen said.
“The bureaucrats always say it’s not a competitor’s veto, but, in fact, the law is in effect a competitor’s veto,” said Timothy Sandefur, PLF’s principal attorney.
The lawsuit – which aims to “vindicate Cosmo and Mary Anne Losco’s constitutional right to earn a living at an occupation of their choice without unreasonable government interference” – paints the application process as a weapon that existing moving companies can use against competitors.
It’s illegal to operate a moving company without the certificate of public convenience. To get one, prospective movers must file an application and then wait 15 days for anyone objecting to file a protest.
If a protest is filed, a 20-day waiting period commences. During that time, an applicant can amend the request to facilitate the withdrawal of protests – by carving up the market, Sandefur said. If that doesn’t happen, the issue heads to a hearing.
According to the lawsuit, the applicant then has to prove that it is “necessary or proper for the service, accommodation, convenience, or safety of the public.” It must also show it would serve a useful purpose that’s responsive to public demand or need and that it would not endanger an existing carrier.
“These are expensive delays for them at the very minimum,” Sandefur said.
Since the lawsuit was filed May 4, the PUC has eliminated the requirement that applicants establish that they will serve a useful public service, responsive to a public demand or need. The commission also no longer considers the effects on existing carriers.
PUC attorneys will have their chance to offer a legal response in the coming weeks. For now, it’s in the court of public opinion.
Considering the Loscos have not applied for a certificate of public convenience, Hagen-Frederiksen took issue with a PLF news release that characterized Pennsylvania as “blocking” new moving businesses.
Mary Anne Losco told Watchdog.org that the PUC “absolutely” would not have approved the application had she and her husband applied. Another nearby College Hunks Hauling Junk franchise has run into roadblocks – including protests from existing moving companies – when applying for its own certificate of public convenience, she said.
Because of that, the Loscos decided to challenge the licensing process instead of apply for their own certificate.
“All those existing moving companies have a say, which is a crazy,” Mary Anne Losco said.
The case Mary Anne Losco has no bearing on the Loscos’ situation, said Robin Tilley, the PUC’s deputy press secretary. That applicant was denied for reasons unrelated to the protests, such as providing nearly 400 unauthorized moves without a certificate of public convenience and failing to respond to information requests, Tilley said.
Hagen-Frederiksen believes the Loscos could have cleared up concerns with a phone call to the PUC. He still thinks they should apply for the certificate.
“If the legal advice is what’s keeping them out of business in Pennsylvania, they have more of a case against their lawyer than they do the PUC,” Hagen-Frederiksen said.