Should the city of El Paso, Texas, be allowed to turn itself into a No-Vending Zone in order to protect brick-and-mortar restaurants from competition?
The Institute for Justice sought an answer to this question in a major federal lawsuit filed January 26, 2011 on behalf of four El Paso mobile food vendors.
This lawsuit launched a National Street Vending Initiative, a nationwide litigation and activism effort to vindicate the right of street vendors to earn an honest living. The case against the city of El Paso challenged the constitutionality of the city’s mobile vending restrictions that made it illegal for vendors to operate within 1,000 feet of a restaurant or convenience store, and prohibited them from stopping to await customers anywhere in the city.
In response to the lawsuit, El Paso officials passed a new ordinance eliminating the protectionist regulations against mobile food vendors that formed the basis of the claims raised. This is a major victory for El Paso mobile food vendors and for economic liberty. The new ordinance comes only three months after the case was filed.
The federal lawsuit challenged the old ordinance because it violated the vendors’ constitutional right to earn an honest living free from unreasonable and arbitrary government interference. The 1,000-foot separation requirement and the prohibition on waiting for customers curbside did nothing to protect public health or safety—both provisions simply protected brick-and-mortar businesses from competition.
While people across the country embrace mobile vendors for the vitality and creativity they bring to a local restaurant scene, cities like El Paso have decided to threaten vendors with thousands of dollars in fines and effectively run them out of town. But economic protectionism is not a valid use of government power. IJ’s victory in El Paso highlights that it is both wrong and unconstitutional for local governments to place burdensome restrictions on street vendors in order to protect brick-and-mortar businesses from competition.
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Street vending has long been an entry point for entrepreneurship in America. From sidewalk book sellers to chrome-lined mobile food trucks, vending takes many forms. What vendors have in common is the ability to go to their customers rather than asking customers to come to them. This flexibility, combined with low prices and eclectic offerings, has made mobile vending—a kind of street vending—more popular than ever in these difficult and uncertain economic times. In short: vending is hot, and smart cities have recognized that mobile vendors play an important role in developing a lively, local business climate.
In contrast with the growing public interest in and enthusiasm for mobile vending, many city governments have displayed outright hostility toward vendors. Across the country, these cities have adopted laws that punish vendors for choosing a different business model than their brick-and-mortar competitors. These laws have nothing to do with protecting the public health and safety—laws about food handling and traffic safety have been on the books for decades—and everything to do with protecting restaurants from competition.
Nowhere is this more true than in El Paso, Texas, which has long had a thriving community of mobile vendors. Whether you want a mouth-watering $2 beef brisket burrito or just a Diet Coke for $0.50, it’s not hard to find a vendor who will sell it to you. At least, it didn’t used to be hard. Today? Good luck.
In the fall of 2009, El Paso made it illegal for mobile food vendors to operate within 1,000 feet of any business that sells food—including restaurants, grocers and convenience stores, essentially turning El Paso into a No-Vending Zone. Around the same time, it began aggressive enforcement of a restriction making it illegal for vendors to park and wait for customers to show up. Instead, they just have to hope that customers will happen to see them driving and flag them down. Combined, these new restrictions threaten the very existence of El Paso’s vending community.
But a plucky group of women is fighting back. Yvonne Castaneda, Maria Robledo, Martha Avila, and Michelle Rodriguez own food trucks in El Paso. Collectively, they have been vending there for over two decades. Vending is their livelihood and their primary source of income, and they are not going to let the city take it away from them.
The Constitution doesn’t allow the government to pick winners and losers in the marketplace. And nakedly protectionist laws like El Paso’s are nakedly unconstitutional. That is why Yvonne, Maria, Martha, and Michelle are suing El Paso in federal court. They are not asking for special privileges or a bailout. They are only asking for a chance to compete fairly in the marketplace.
Street Vendors: Part of the Fabric of American Life
Street vending has been a part of the American economy since as early as the 17th century. 1 Today’s vendors are a diverse group of businesspeople, selling both from mobile and fixed locations. They are immigrants, minorities, ex-professionals, men, women, retirees and young entrepreneurs building new businesses. 2
In 2007, there were over 760,000 3 vending businesses nationwide with revenues in excess of $40 billion. 4 In the El Paso metropolitan area alone there were 1,790 5 non-food vending businesses and over 97% of these were run by self-employed individuals. These El Paso businesses contributed over $29 million 6 to the local economy. 7
Street vendors offer a number of benefits to their communities. Vending is a potential solution for unemployment. Individuals who cannot otherwise find work are able to become self sufficient by selling goods in public areas. 8 istorically, cities supported this tactic of addressing unemployment. The City of Chicago, for example, once stated in a formal report that if financial requirements on street vending were loosened it would be a good way to ease high unemployment. 9
Vending also offers entrepreneurial opportunities to those on the first rung of the economic ladder. This is especially true for minorities and immigrants often shut out of starting traditional businesses due to complicated, costly, and ever-expanding government regulations. 10 These entrepreneurial roles offer the possibility of upward mobility to individuals who otherwise have limited prospects for advancing economically. 11
In addition to improving their own quality of life, vendors improve the lives of their customers, especially in communities of modest means. Vendors provide goods and services to areas underserved by traditional retail outlets 12 and carry specialty products favored by specific ethnicities which cannot be found in retail stores. As a result, they significantly increase the variety of goods available to those in minority communities and low-income neighborhoods. 13 Furthermore, vendors become “eyes on the street” 14 safeguarding areas from crime, thereby improving the quality of life in their communities.
Today, stories celebrating street vendors are everywhere. Austin, Texas, just hosted its first “Gypsy Picnic Trailer Food Festival,” an event devoted entirely to mobile vending. 15 In New York City, an eagle-eyed vendor is credited with alerting police to a suspicious vehicle that turned out to contain a car bomb. 16 The Economist recently observed that in 2011, “some of the best food Americans eat may come from a food truck.” 17 The Food Network even has a show devoted to vendors called The Great Food Truck Race. 18
Welcome to El Paso Texas: A Vending-Free Community
Despite the love that vendors receive from the media and their customers, some cities seem to view vendors as a threat to brick-and-mortar businesses, and they are responding by making it difficult or impossible for vendors to keep operating.
The city of El Paso does not seem to want vendors to operate there at all. El Paso passed Ordinance No. 17162 on August 11, 2009, establishing new regulations targeting “mobile establishments” operating in the city. 19 Under the new law, it is illegal for a mobile vendor to operate within 1,000 feet of any restaurant, grocer, or convenience store. 20 There are many hundreds of such businesses in El Paso, each now with an invisible 1,000-foot circle around it where vendors are not welcome. Where can vendors now operate legally in El Paso? Virtually nowhere.
The city of El Paso has effectively become a No-Vending Zone.
In addition to the 1,000-foot separation requirement, El Paso also prohibits mobile vendors from parking and awaiting customers. 21 Thus, a vendor cannot park in one spot for an hour and conduct a steady lunch service. Instead, she must keep driving constantly unless a customer happens to see her and flag her down; once the customer leaves, the vendor must be on the move again. The enforcement of this restriction means that vendors spend lots of time driving, but very little time serving customers.
Violations of either restriction carry fines of up to $2,000.
Of course, vending within 1,000-feet of a restaurant, grocer, or convenience store presents no health or safety risks. Neither does being parked at a curb during the lunch rush. That is because the new law is not about protecting the public health or safety. It is about protecting brick-and-mortar restaurants from competitors who have adopted a different business model. Tellingly, El Paso’s advisory board for the new ordinance included the president of the restaurant association and many other restaurant representatives. 22
Four Entrepreneurial Women, One Shared American Dream
Yvonne Castaneda was born and raised in El Paso. After navigating the regulatory red tape of paperwork and inspections, Yvonne became a licensed mobile food vendor and began vending out of her retrofitted-van. Her vending business—named Destiny’s Ice Cream and Snacks after her daughter—is how she supports her family. Over the past five years, her vending business has steadily grown one customer at a time. She has worked hard to develop an attractive menu, educate herself about entrepreneurship, study food handling, and keep her van in good condition. Yvonne’s business was thriving until the city of El Paso passed its 1,000-foot proximity restriction last fall, and began prohibiting her from remaining at the curb unless customers were present. “It has gotten to the point where I’m concerned about being able to pay my bills,” says Yvonne. “I find myself constantly looking over my shoulder just because I might be too close to a restaurant.” City inspectors have cited Yvonne multiple times and effectively pushed her out of areas where she has vended for years.
Always viewing her glass as half full, Maria Robledo’s perseverance and entrepreneurial spirit has been the key to her success. Maria came to the United States twenty-two years ago to make a better life for her and her son. She reached her goal: her son is now a soldier in the U.S. Army and her vending business is now her full time job. But achieving that goal was not easy. As a young immigrant, Maria first worked as a maid and began learning English. She got the idea to begin vending years ago while watching her son sell packs of gum at a neighborhood park. What started as a lesson on the supply and demand of gum blossomed into a mobile food vending business, with a truck full of prepackaged foods, candy, and drinks.
By maintaining consistent routes and a steady schedule, Maria has been able to grow her business and maintain a loyal customer base. Since the passage of the new vending restrictions, however, city of El Paso inspectors have repeatedly staked out Maria’s vending route, waited for her to arrive, and cited her for waiting at the curb in between customers. They have also cited her multiple times for vending within 1,000-feet of a restaurant or convenience store. “I’m just trying to make a living,” says Maria. “I pay taxes, I have a license, and I don’t think I’m doing anything wrong.”
Martha Avila and her daughter Michelle Garcia begin each day at 4:30 a.m. In a commercial kitchen, this mother-daughter team prepares breakfast burritos for the hungry customers on their morning routes. Mobile food vending has provided Martha the means to support a household, while helping Michelle afford the ever-increasing cost of college. Their loyal customers include retirement home residents, medical staff, and construction workers. By focusing on their customers, these two entrepreneurs have been able to consistently grow their business since they began vending three years ago. But, instead of standing by their side and rewarding entrepreneurship, the city of El Paso has passed laws aimed at pushing Martha and Michelle out of business, repeatedly issuing citations to this mother-daughter team for both the 1,000-foor proximity restriction and for parking and awaiting customers.
The Right to Earn an Honest Living: Legal Claims
In defending the economic liberty of mobile food vendors in El Paso, Yvonne, Maria, Martha, and Michelle’s fight goes to the very core of our cherished constitutional right to earn an honest living free from unreasonable government interference. These four entrepreneurs want nothing more than the opportunity to run their mobile food vending businesses without being run out of town by their own government.
The 14th Amendment prevents the government from arbitrarily interfering with citizens’ ability to earn an honest living in their chosen occupation. Under the Due Process and Privileges or Immunities clauses, the government may only restrict these four mobile vendors’ right to run their businesses when there is some “rational basis” for that restriction. To demonstrate that rational basis, the government must show a reasonable connection between the restrictions in question and some legitimate public purpose. Forcing mobile food vendors 1,000 feet away from restaurants in El Paso—and prohibiting vendors from even parking to await customers—serves no legitimate public purpose. To the contrary, it is economic protectionism at its worst.
Tragically, the demise of economic liberty began almost as soon as it achieved its greatest reach. After the Civil War, emancipated slaves counted economic liberty as among the most crucial of their new civil rights. To protect entrenched white businessmen from competition, however, Southern governments soon suppressed economic opportunities for their newest citizens by heavily regulating entry into trades and business. The national government tried to curtail these abuses by enacting the Civil Rights Act of 1866 and the 14th Amendment to the U.S. Constitution, both of which sought to protect the economic liberty of all Americans by forbidding states from abridging the “privileges or immunities” of American citizenship.
But in the 1873 Slaughter-House Cases, a sharply divided U.S. Supreme Court read the Privileges or Immunities Clause out of the U.S. Constitution by a mere 5-4 vote. That decision gave states carte blanche to enact shameful Jim Crow-era laws restricting economic opportunities for black Americans. In addition to oppressing their black citizens, the states also used their now-unchecked regulatory power to protect all sorts of entrenched interests and interfere in otherwise honest enterprise. Essentially, although it is hardly known by the public, the Slaughter-House Cases ushered in our modern Nanny State under which government no longer feels restricted from imposing arbitrary or irrational restriction after restriction on businesses nationwide.
How bad has the problem grown? One need look no further than the city of El Paso’s effort to use its police power to provide economic protection to one group of competitors, by pushing another group out of town. This restriction has nothing to do with government’s legitimate function of protecting the public’s health and safety. It is arbitrary. It is abusive. It is irrational.
A National Initiative to Defend Street Vendors
El Paso is not the only city that has decided to pick on street vendors. Many other cities—like Baltimore, San Antonio, and Louisville— also engage in economic protectionism by preventing mobile food vendors from operating near brick-and-mortar restaurants. 23 Just as in El Paso, cities like Fresno, California, Memphis, Tennessee, and Washington D.C. limit the ability of vendors to stop and wait for customers. 24 Elsewhere, other protectionist restrictions, such as banning vendors from whole areas of town, preventing them from operating near sporting arenas, or limiting the range of products they can sell, make it difficult for street vending businesses to survive. 25
In response to this anti-competitive array of laws lined up against street vendors, the Institute for Justice is helping them fight back. The launch of this case against El Paso marks the beginning of the Institute’s National Street Vending Initiative, 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. In the coming year, IJ will be filing other cases across the country challenging such restrictions, and it will help street vendors oppose attempts to shut them down through the use of unconstitutional and protectionist legislation.
IJ Texas Chapter Executive Director Matt Miller will lead the litigation team, assisted by co-counsel Arif Panju from the Institute for Justice Texas Chapter. Headquartered in Austin, IJ-TX litigates statewide for economic liberty, private property rights, educational choice, freedom of speech, and other vital liberties secured by the United States and Texas Constitutions.
The Institute for Justice has scored victories for entrepreneurs across the nation including:
Craigmiles v. Giles—This IJ suit led a federal court to strike down Tennessee’s casket sales licensing scheme as unconstitutional, a decision that was upheld unanimously by the 6th U.S. Circuit Court of Appeals in 2002 and not appealed. This marked the first federal appeals court victory for economic liberty since the New Deal.
Clutter v. Transportation Services Authority—In 2001, IJ defeated Nevada’s Transportation Services Authority and its entrenched limousine cartel that had stifled competition in the Las Vegas limousine market.
Mitz v. Texas State Board of Veterinary Medical Examiners—In 2010, IJ defeated the Texas veterinary board’s three-year attempt to put horse teeth floaters out of business. Floating is the routine filing down of small points growing on horse teeth. Although individuals have floated horses’ teeth for decades, the Texas vet board abruptly changed its policy in 2007 to require floaters to be licensed vets—or work for one—and sent cease and desist letters to non-vet entrepreneurs. The court ruled that the vet board’s abrupt change in policy, without seeking public input or going through proper rulemaking, violated the Texas Administrative Procedures Act.
Ricketts v. City of New York—In 1999, IJ helped commuter van operators fight a public bus monopoly that would not allow vans to provide their service in underserved metropolitan neighborhoods in New York City.
Cornwell v. California Board of Barbering and Cosmetology—In 1999, IJ defeated California’s arbitrary cosmetology licensing requirement for African braiders.
Jones v. Temmer—In 1995, IJ helped three entrepreneurs overcome Colorado’s protectionist taxicab monopoly to open Denver’s first new cab company in nearly 50 years. IJ also helped break open government-sanctioned taxicab monopolies in Indianapolis, Cincinnati and Minneapolis.
For more information, please contact:
Assistant Director of Communications Institute for Justice 901 North Glebe Road, Suite 900 Arlington, VA 22203
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