Dan King
Dan King · June 10, 2022

CORPUS CHRISTI, TexasYesterday, Texas’ 13th Court of Appeals reversed a lower court’s decision and granted the city of South Padre Island immunity from a lawsuit challenging the constitutionality of the city’s anti-competitive food truck restrictions. The plaintiffs, food truck owners represented by the Institute for Justice (IJ), plan to appeal the decision to the Texas Supreme Court. 

“The court held that South Padre Island can use government power to pick winners and losers in the marketplace and label it economic development. But the Texas Constitution protects the right to earn an honest living free of protectionist regulations,” said IJ Managing Attorney Arif Panju. “It’s the role of courts to protect economic liberties, not immunize cities from the Texas Constitution in the name of ‘economic development’.” 

In December 2020, the Cameron County District Court sided with two food truck owners and struck down South Padre Island’s anticompetitive restrictions as unconstitutional. The challenged restrictions capped the number of food truck permits at 12 and required food truck operators to get the permission of local restaurant owners to be eligible for a food truck permit. Despite that ruling by the trial court, the city defied the ruling and continued to enforce the regulations against food trucks. It also appealed the ruling and argued that it is immune from the constitutional challenge filed by IJ client SurfVive, a non-profit dedicated to educating people about healthy living. 

“Not being able to open a small food truck in my own hometown because of an ordinance designed to keep people out of the market is heartbreaking, and it’s not very Texan,” said SurfVive’s Erica Lerma. “Everyone should have the opportunity to follow their dreams and choose a profession or business that they love without having to overcome barriers created by people to fence out competition.” 

Until 2016, South Padre Island banned all food trucks from operating within city limits, before ultimately imposing the arbitrary restaurant permission scheme and food truck permit cap. In 2019, IJ filed its lawsuit on behalf of SurfVive and the Brownsville-based Chile de Árbol food truck operated by brothers Anubis and Adonai Avalos. Both sets of would-be entrepreneurs were being kept out of the market by the city’s restaurant permission scheme and permit cap. 

IJ has fought against similar restrictions on economic liberty, including a victory in the Texas Supreme Court, which struck down a law that required eyebrow threaders to obtain an expensive and irrelevant cosmetology license. That case has set a precedent for challenging unreasonable restrictions on economic liberty like South Padre Island’s food truck restrictions. In that landmark case, Patel v. Texas Department of Licensing & Regulation, the Texas Supreme Court held that Texas courts must analyze constitutional claims challenging economic legislation by offering meaningful protection of economic liberty rights, and evaluate the reasonableness of an economic regulation with the burden it imposes in the “actual, real world.”