Arkansas Supreme Court Strikes Down City's Illegal Trash Monopoly

In an important victory for the right to earn a living, the Arkansas Supreme Court has ruled in favor of Goldwater Institute client Steven Hedrick, striking down efforts by the city of Holiday Island to bar him from running his dumpster business.

Steven started his company to serve his rural Northwest Arkansas community—renting dumpsters to customers and picking up the trash when they’re done. However, leaders in Holiday Island banned his business, declaring that because they had made a contract with another trash-hauler to operate weekly household trash pickup, his business was prohibited—even though Steven’s company doesn’t even offer weekly trash-hauling, and wouldn’t compete with the other company.

The Goldwater Institute filed a lawsuit on Steven’s behalf to challenge the city’s prohibition on the grounds that it violates the Arkansas Constitution, which explicitly prohibits the government from granting monopolies.

In their ruling on Thursday, the justices held that the state law under which the city operates doesn’t allow it to exclude alternative businesses like Steven’s. “Nothing in that provision says that where, like here, a municipality opts to contract with a single provider, it can also bar city residents from using other providers to collect solid waste,” the court wrote. And because the statute doesn’t even allow the city to ban Steven’s business, it wasn’t even necessary for the justices to decide whether the statute is unconstitutional. The court found that there was “a significant difference between the ability to contract with a single party—and only that party—and the power to bar all others from offering the services.”

The case is just the latest in a series of lawsuits in state and federal courts vindicating the right to earn a living—a right that U.S. Supreme Court Justice William Douglas once called “the most precious liberty that man possesses.”

Over the past 20 years, courts have become increasingly concerned about government’s use of licensing laws and other regulations to protect existing businesses against competition, rather than to protect the public against harm. Fortunately, many states have clauses in their constitutions that—like Arkansas’ anti-monopoly clause—preserve economic freedom against unreasonable government interference.

The Arkansas Supreme Court has previously held that monopolies, which crush competition, raise prices for consumers, and deny hard-working Arkansans their right to freely practice their chosen profession, are unjustifiable restrictions on individual freedom. The prohibition on monopolies is so important, in fact, that the court has said “no amount of judicial interpretation should ever be permitted to cause the slightest deviation from the clear language of the constitutional inhibition.”

We’re grateful for AFN member Whitfield Hyman for his help on this case, and to our sister liberty organizations, the Institute for Justice and Pacific Legal Foundation, for helping support Steven’s cause by filing “friend of the court briefs” before the Arkansas Supreme Court. You can read those briefs here and read the court’s ruling here.