Chicago Food Trucks

Introduction

Food trucks are an American success story. Years ago, food trucks were known for serving coffee and sandwiches to construction workers. But as the housing market crashed and social media blossomed, a few intrepid chefs realized that they could use the trucks to take their food directly to the people.

Chicago is a city that prides itself on its food. But despite that, the city lagged when it came to food trucks, largely due to the fact that Chicago’s laws restricted what food trucks could serve and where they could go. So, both foodies and entrepreneurs were excited to hear that the city planned to amend its food truck law.

Those hopes were soon dashed. At the behest of a few politically connected restaurateurs, one of whom is Alderman Tom Tunney, the City Council passed a law that, as the Chicago Tribune said, “seems designed to contain the food truck trend, not to nurture it.” That’s because the law makes it illegal for food trucks to operate within 200 feet of any restaurant, forces food trucks to install tracking devices that let city officials and members of the public follow their every move, and imposes fines of up to $2,000 for violating the 200-foot rule—more than ten times the fine for parking in front of a fire hydrant.

Chicago has its priorities backwards; it should focus on protecting public health and safety, not hurting consumers by restricting competition. To protect their right to serve their customers, two Chicago food trucks—The Schnitzel King and Cupcakes for Courage—teamed up with the Institute for Justice to challenge Chicago’s ill-conceived law in Illinois state court. Unfortunately, due to the rule, The Schnitzel King had to close shop in 2014. But IJ and Cupcakes for Courage have marshalled on for the past six years to save this set-upon industry, protect Illinoisans’ right to economic liberty, and make cities think twice before passing anti-competitive laws like this in the future.

Chicago:  The City that Works?

Like Chicago, food trucks have a long and storied history.  Historians trace the origin of the food truck back to the Old West, where cowboys during a cattle drive would be out in the wilderness for days.  To serve the cowboys meals, ranchers retrofitted old Civil War era wagons, loaded them with pans and provisions, and the “chuck wagon” was born. ¹   The successor to these wagons, the night lunch wagon, served late-night workers and began appearing in New York and other major cities several decades later. ²   Many of these wagons were initially mobile but became and more wedded to a single location over time.  These wagons became fixed in place and turned into the diners that we know today.

Despite their long pedigree, food trucks have only recently become a mainstream phenomenon, with cities across the country just now starting to embrace them and the benefits they provide to customers and the larger community.  Food trucks offer convenience and variety to consumers.  Many office workers typically have a limited time for lunch and only a few nearby dining options.  Food trucks, on the other hand, often sell specialty products that are too “niche” for a fixed business, such as a lobster roll or Vietnamese Banh Mi sandwich, which can be a welcome change of pace for workers who would have otherwise “brown-bagged” it.

Food trucks make cities safer and more exciting places to live.  As Jane Jacobs, the famous author and activist, wrote, “A well-used street is apt to be a safe street.” ³   By drawing consumers out, food trucks turn empty streets into vibrant marketplaces.  Furthermore, food-truck “rallies” are popular social events that frequently draw tens of thousands of hungry customers to otherwise underutilized areas. ⁴

Food trucks give chefs a chance to create jobs for themselves and others.  Notably, though, these jobs do not come at the expense of traditional brick-and-mortar restaurants.  Those cities with the most vibrant food-truck industries also tend to be the ones with the best restaurant scenes.  Many food trucks call Austin, Tex., Los Angeles, and New York City their homes, but none of these cities is suffering from a dearth of restaurants.  Indeed, a news story in the Austin American-Statesman reported that restaurateurs and economists in Austin generally agree that the rise of food trucks has led to a boon in the city’s restaurant scene. ⁵

If a food truck gets within 200 feet of a restaurant, its owner faces fines of $1,000 to $2,000. And to enforce the 200-foot rule, the ordinance requires trucks to install a global positioning system (GPS) tracking device so the City can monitor their whereabouts.

In fact, vending can often give entrepreneurs the tools and capital they need to try their hands at the restaurant business.  One example is Portillo’s, perhaps the company most affiliated with the iconic Chicago hot dog.  In 1963, Dick Portillo opened his first location, a six by 12 foot hot dog trailer, on North Avenue in Villa Park.  Years later, Portillo’s is a national brand, with 35 locations in Illinois, Indiana, and California that collectively employ thousands of people.

Food trucks also give restaurants a way to extend their brands and reach new customers.  Scott Gregerson is managing partner of Curried, a Loop-area Indian restaurant that launched a Curried-branded food truck in 2011.  In an interview with the National Federation of Independent Business, Gregerson said that “we’ve definitely seen an increase in business at the restaurant” due to the food truck. ⁶   Restaurants nationwide, including some national chains, are also jumping into the food-truck fray. ⁷

With these benefits, one would expect that Chicago would embrace food trucks.  But sadly, Chicago’s laws make it one of the worst places to operate a food truck in the country.  Food trucks in Chicago could not prepare food on board; all of their food had to be made in a kitchen and kept warm on the truck. Trucks’ hours were greatly limited.  And since 1991, it has been illegal for any food truck (except those serving construction workers) to operate within 200 feet of a restaurant.

Not surprisingly, the number of food trucks in Chicago trailed that in many similarly sized cities. In July 2012, there were only about 120 food trucks on the road in Chicago, only 50 of which constituted modern “gourmet” food trucks; the rest generally served construction sites.

So many were excited when Mayor Rahm Emanuel introduced his food-truck ordinance. But although the law contained some improvements, it also contained some less than laudable changes, changes made at the behest of a small cadre of powerful restaurateurs and aldermen who sought to “protect” those restaurateurs from competition. One powerful force was Alderman Tom Tunney, who owns several Ann Sathers’ restaurants and previously said, “One of the major issues is spacing from brick-and-mortar restaurants. . . . We need to make sure we protect … restaurants.” ⁸   Another vocal restaurateur was Glenn Keefer, who implied that the trucks were “peddling substandard fare while often breaking rules, clogging traffic and littering our streets.” ⁹

None of these claims are true.  As the Institute for Justice notes in Seven Myths and Realities about Food Trucks: Why the Facts Support Food Truck Freedom,  a vibrant food-truck industry can help restaurants by increasing the number of available consumers and by giving them a new way to reach their customers.  ¹⁰ Nor do trucks, as Mr. Keefer said, peddle substandard fare or litter the streets.  A review of Los Angeles County health records showed that food trucks are just as clean as their brick-and-mortar counterparts. ¹¹   And food truck associations in Chicago and across the country have been especially diligent in reminding their members to keep their areas clean. ¹²   Cities looking for a better way to regulate food trucks than Chicago can look at Food Truck Freedom:  How To Build Better Food Truck Laws in Your City.

Despite their inaccuracy, the claims by Keefer and others had the desired effect.  The ordinance kept the ban on food trucks operating within 200 feet of a restaurant. ¹³   If a truck gets too close, its owner faces fines of $1,000 to $2,000.  And to enforce the 200-foot rule, the ordinance requires trucks to install a global positioning system (GPS) tracking device so the City can monitor their whereabouts.  Although GPS units are imprecise, ¹⁴ the ordinance presumes that a food truck was where the vehicle’s GPS device says it was.” ¹⁵   Chicago’s GPS requirement is quite unusual and quite intrusive.—only one other major city, Boston, requires it. ¹⁶

Governments exist to protect public health and safety, not pick winners and losers in the marketplace. But Chicago’s 200-foot rule exists solely to protect brick-and-mortar restaurants from competitors.

As can be seen below, the 200-foot rule has turned entire swaths of Chicago, particularly prime commercial locations like the Loop, into no-vending zones.

Members of the fledging food-truck community voiced their concerns about the ordinance, but to no avail. Aldermen ignored those who supported the food trucks, including almost 2,000 area residents who petitioned for food-truck freedom. ¹⁷  As a result, the ordinance moved quickly.  On July 19, 2012 the Committee on License and Consumer Protection forwarded the bill, largely unchanged, to the full City Council.  Six days later, the Council voted 44-1 in favor of the ordinance.  The sole “no” vote came from Alderman Tom Arena, who succinctly summarized the bill when he said, “A brick-and-mortar restaurant lobby got ahold of [the ordinance], and it was stuffed with protectionism and baked in the oven of paranoia.”

The ordinance, rather than encouraging the growth of food trucks, made it impossible for many to compete. In the six years since the ordinance’s passage, the number of trucks in Chicago has dropped from approximately 120 in 2012 to only about 70 working in the Windy City today. Chicago now has significantly fewer food trucks compared to cities its size like New York and Los Angeles, and even fewer trucks than smaller cities noted for their food scenes such as Austin and Portland, Ore. Portland is one quarter of Chicago’s size but has more food trucks.

Food Truck Owners Stand Up for Economic Liberty

Many people, after experiencing a legislative defeat, would have given up their fight for economic liberty. But food truckers are resilient people who through hard work and ingenuity made something out of nothing. Rather than just accepting their fate, two Chicago-area food trucks stood up to fight for their right to earn an honest living.

One of those trucks was The Schnitzel King, which focused on schnitzel sandwiches (a hand-breaded and fried pork or chicken cutlet). Its owner, Greg Burke, pulled together his life savings, bought a vintage 1970s Jeep, and became the Chicago Schnitzel King. Together with his wife, Kristin, Greg tried to become his own boss by giving the people what they wanted.

Greg and Kristin were joined in their fight for food-truck freedom by entrepreneurial dynamo Laura Pekarik, who owns and operates the Cupcakes for Courage food truck. When Laura’s sister, Kathryn, was diagnosed with non-Hodgkin’s Lymphoma, Laura and her mother quit their jobs to take care of her. During that time Kathryn and Laura created many new cupcakes recipes while Kathryn went through her cancer treatment.

After Kathryn recovered, Laura thought about returning to her job, but instead chose to go into business for herself. Like many new entrepreneurs, Laura didn’t have the money for a storefront location, so she opened Cupcakes for Courage food truck in June 2011. Laura donates 10% of Cupcakes for Courage’s proceeds to cancer charities.

As a result of her success, Laura opened a brick-and-mortar location in September 2012. ¹⁸ Named Courageous Bakery, the store also serves as the new home for the food truck, which continues to operate throughout all of Chicago.

Unfortunately, Greg and Kristin were not so fortunate. With the 200-foot rule leaving them unable to take The Schnitzel King to where would-be customers wanted them, the two soon struggled. Unable to continue, Greg and Kristin were forced to give up their food-truck dream in 2014. They left the Windy City, their families’ home for generations, and moved to North Dakota in search of work.

Open Markets, Open Opportunities: Legal Claims

Laura continues on the legal challenge against Chicago’s 200-foot rule and GPS requirement not because that challenge is easy, but because it is right. Competition is the American Way; it makes us innovate, work hard, and serve better food—all to the benefit of consumers. But local governments too often try to thwart that competition by enacting anti-competitive rules at the request of a few politically connected actors.

What happened Chicago is not only wrong; it’s unconstitutional. Governments exist to protect public health and safety, not pick winners and losers in the marketplace. Thankfully, the Due Process Clause of the Illinois Constitution protects all Illinoisans’ right to earn an honest living, and Illinois courts have repeatedly struck down laws that would “manage” competition on behalf of a preferred special-interest group.

The Due Process Clause of the Illinois Constitution requires that laws further a legitimate government purpose, such as protecting the public’s health and safety.  But Chicago’s 200-foot rule, also known as a proximity restriction, exists solely to protect brick-and-mortar restaurants from competitors.  Courts throughout the country have stricken down attempts by local government to enact restrictions to favor the politically connected.  In Thunderbird Catering Co. v. City of Chicago, the Cook County Circuit Court—the same Court that Schnitzel King and Cupcakes for Courage are in—invalidated an earlier version of the 200-foot rule. ¹⁹   In People v. Ala Carte Catering, a California state court held that prohibiting food trucks from operating within 100 feet of a restaurant was unconstitutional. ²⁰   And the New York Court of Appeals upheld a decision striking down a law that kept peddlers from operating within 250 feet of a store selling the same item if the owner objected. ²¹   The lesson is clear:  Businesses should succeed or fail based on how good their products are, not on who they know at City Hall.

Chicago’s attempt to enforce the 200-foot rule by making all food trucks install GPS tracking devices is equally unconstitutional.  The Searches, Seizures, Privacy and Interceptions Clause to the Illinois Constitution prevents cities from conducting searches for anti-competitive reasons. ²²  Further, the U.S. Supreme Court has recognized that “GPS monitoring generates a precise, comprehensive record of a person’s public movements.” ²³   Because GPS tracking devices reveal so much, the government must show that the devices are necessary and that their use is circumscribed.  But nothing in Chicago’s law limits how, when, or for what reason City officials can access or use the information these devices transmit.  This kind of discretion is incompatible with the decisions of the U.S. and Illinois supreme courts, which have said that the “time, place, and scope of the inspection [must be] limited.” ²⁴

 The Litigation Team

The Institute for Justice filed its complaint in this case, Burke v. City of Chicago, on November 14, 2012.  The litigation team for the Institute for Justice in this case is IJ Senior Attorney [email protected]“>Robert Frommer, IJ Attorney Erica Smith and IJ Senior Attorney [email protected]“>Bert Gall.

The Institute for Justice

The Institute for Justice is a public interest law firm that brings challenges nationwide in support of fundamental individual liberties. IJ has successfully challenged restrictions on economic liberty across the nation, including through its National Street Vending Initiative.

IJ’s National Street Vending Initiative is a nationwide effort 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. As it has done across the country, IJ stands ready to challenge such restrictions, and it will help vendors oppose attempts to shut them down through the use of unconstitutional protectionist laws. In 2018, IJ convinced Louisville, Ky. and Carolina Beach, N.C. to end restrictive food truck rules. IJ is currently in state courts fighting Baltimore, Md., Fort Pierce, Fla. and Fish Creek, Wi. over their anti-competitive food truck ordinances.