Food trucks are not only a popular culinary innovation now found in cities throughout the country, but they have also pitted them against traditional restaurants and local governments. For example, in 2012, the zoning commission of Holland MI shut down the business of a 12-year-old boy who sold hot dogs from a cart in order to support his disabled parents. As a result of the decision, he became homeless.
In another case, four food truck vendors in San Antonio TX have taken recourse to legal counsel
to challenge a law that bans food trucks from vending within 300 feet of their brick-and-mortar competitors—the same 100-yard-distance that spans a football field. Throughout San Antonio, there are thus thousands of these food truck-free zones. Other cities in the United States, such as Chicago and San Diego, have similar laws restricting food trucks.
The San Antonio City Code provides that food truck vending “shall not be carried on within three hundred (300) feet of the property line of any permitted food establishment.” Violators can face fines of as much as $2,000 per day. The code defines “food establishment” broadly, and includes restaurants, grocery stores, and retail food stores such as convenience stores. The rule applies even if a food truck is parked on private property. The law is enforced throughout the city, with the exception of a small area downtown.
San Antonio's no-vending areas
In order to sell within one of the 300-foot no-vending zones, food truck businesses must;
(1) approach every restaurant and other brick-and-mortar competitor within 300 feet;
(2) ask the owner for a written and notarized permission slip to operate their food truck within 300 feet of their property line; and (3) keep each of those permission slips in their food truck “at all times.” If a brick-and-mortar competitor revokes the permission—something they are free to do at any time and without notice—the food truck must shut down.
In addition, the city does not prohibit brick-and-mortar food businesses from making food truck owners pay for the permission slips the city requires. In one case, a food establishment that opened across the street from a pre-existing food truck requires $400 monthly payments for their permission and calling it “rent.” Should the food truck fail to pay, the permission will be revoked and the food truck will be forced to shut down.
If a brick-and-mortar food business opens a new location within 300 feet of pre-existing food trucks, the code forces the food trucks to shut down if they are not given permission. This is regardless of whether the food trucks were there first, nor does it matter if food truck owners have signed leases for their vending locations. The rule constrains food trucks seeking to vend in multiple locations, and makes it very difficult to expand one’s business by adding a second food truck.
In 2014, the San Antonio City Council added the words “of the property line” to the 300-foot rule. This means the 300-foot “no‑vending zone” need not extend to a restaurant’s building to force a food truck to shut down. Instead, if a food truck is 300 feet away from the edge of a restaurant’s lot, it is prohibited from operating. This effectively increased the reach of the 300-foot rule.
The Institute for Justice
– which describes itself as the National Law Firm for Liberty – is of counsel to the four food truck vendors. In a statement on its website, the firm recognized that street vending is an entry to entrepreneurship in the United States. “In cities across the country, food trucks have gained in popularity because it gives people willing to work hard a way to become entrepreneurs and small business owners. Breaking into the business requires little or no specialized training, just a lot of hard work.”
The Institute for Justice (IJ) contends that the 300-foot rule is unconstitutional. IJ said “The Texas Constitution does not allow government to use its power in order to pick winners and losers in the marketplace. But that is exactly what San Antonio is doing. By enforcing its 300-foot rule against food trucks, the city is violating the economic liberty of every food truck entrepreneur in San Antonio. And it is adding insult to injury by making food trucks beg their brick-and-mortar competitors for permission to operate.”
IJ contends that the Texas Constitution protects economic liberty, allowing Texas to earn an honest living. It noted that neither health or safety concerns are addressed by the 300-foot rule. “All that the rule does is protect brick-and-mortar restaurants and other retail food establishments from their food-truck competition. But protecting one type of business by harming another—i.e., pure economic protectionism—is not a legitimate use of government power.”
The firm cited a June 2015 ruling by Texas’s Supreme Court where it made a finding in Patel v. Texas Department of Licensing and Regulation under Article I, Section 19 of the Texas charter. Under Patel, Texas courts apply a constitutional test that provides greater protections for economic liberty under the Texas Constitution than under the U.S. Constitution. Texas courts must determine whether a legitimate government interest exists to support an economic regulation, whether the challenged law is rationally related to that governmental interest, and now must also look at the law’s effect as a whole and determine if it is so “unreasonably burdensome that it becomes oppressive.” The Texas Supreme Court also held that determining whether a law is unconstitutional under the Patel test will require judges to review all the evidence in the record.
According to IJ, “The evidence and very structure of the law make clear that San Antonio’s 300-foot rule is nothing but protectionism. Simply put, the government cannot impose burdens on food truck entrepreneurs for no good reason. It is for consumers to decide the winners and losers in the marketplace, not the government.” Furthermore, stated IJ, “It is people, not the government, who get to pick winners and losers in the marketplace.”
Plaintiff Regino Soriano
One of the plaintiffs being represented in the suit is restaurant owner Rafael López. He owns a restaurant called El Bandera Jalisco. This year, López prepared to open a second location where he planned to combine the indoor seating of a restaurant alongside a food truck parked on the same property. He signed a lease, invested $40,000 in a food truck, obtained the required city permit, and began operating his new El Bandera Jalisco food truck at his new location.
Two months later, López was visited by a city inspector who shut down his food truck and threatened him with daily fines of as much as $2,000 per day if he continued to vend. The inspector told him to ask his next door neighbor, the Hung Fong Chinese Restaurant, for a written and notarized permission slip allowing him to reopen. López was not able to get permission from Hung Fong. As a result, López’s food truck now remains in storage. According to IJ, if he had opened a brick-and-mortar restaurant on the same property he would be in business; because he opened a food truck instead, the city of San Antonio put him out of business.
In El Paso, Texas, the city forced food trucks to stay 1,000 feet away from restaurants and banned them from waiting for customers; the city repealed the laws after IJ challenged their constitutionality. IJ contends that San Antonio’s 300-foot rule against food trucks is yet another example of a regulation that hurts those who simply seek to work their way up the economic ladder.
The Institute for Justice is helping food truck vendors nation-wide to contest anti-competition laws. It’s National Street Vending Initiative seeks to “to vindicate the right of street vendors to earn an honest living by fighting unconstitutional vending restrictions in courts of law and the court of public opinion.”
Julian Castro, the current Secretary for Housing and Urban Development in the Obama administration, was the mayor San Antonio from June 2009 until July 2014.