Entrepreneur Files Constitutional Lawsuit Against San Juan County

J. Justin Wilson
J. Justin Wilson · September 16, 2009

Arlington, Va.—For more than 30 years, Gary Franco has earned a living as a vendor who sells fresh, Washington-grown produce in and around San Juan County. But this summer—pressured by local businesses who don’t like Gary’s competition—government officials passed a law designed to force vendors like Gary out of business.

That is why today [Wednesday, September 16, 2009] Gary Franco teamed up with the Institute for Justice—the nation’s leading legal advocate for the rights of entrepreneurs—to file suit against San Juan County.

In July 2009, at the urging of a handful of brick-and-mortar business owners, the county passed an ordinance requiring vendors to obtain a costly and unnecessary permit to sell in public places. A vendor must pay $50 for each day he wishes to sell—that is, $50 per day for the right to earn a living. Yet the permit can only be obtained after first receiving the written consent of competing business owners. In other words, government has given business owners the power to veto their competition. Vending without a permit incurs an incredible penalty of $250 per hour.

“Hard-working entrepreneurs like Gary should not be threatened with thousands of dollars in fines simply because the government has given into favored businesses who want protection from competition; that is an abuse of government power,” said Michael Bindas, a staff attorney at the Institute for Justice Washington Chapter (IJ-WA). “Gary Franco’s right to earn an honest living is protected by the Washington Constitution. Unfortunately, government officials have decided instead to protect politically connected special interest groups.”

Gary grows some of his produce on his own farm and purchases the rest from local farmers. Most of the produce—including strawberries, blueberries and raspberries—is picked fresh the morning Gary sells it. His customers include local families, tourists and mom-and-pop restaurants. Because he typically charges half the price of the supermarket, his product is much cheaper—not to mention fresher—than that of his competition.

Although the County maintains that requiring a permit to vend is necessary to ensure public health and safety, it doesn’t force all vendors to obtain a permit. Rather, it carved out exemptions for its own favored categories of vendors—for example, ice cream trucks; farmers who sell their own produce; and nonprofit and charitable groups, such as the Lions Club or Kiwanis. Vendors like Gary pose no more of a threat to public health and safety than these favored, exempt vendors, yet they are still required to pay the government and obtain the blessing of their competitors in order to earn a living.

“Economic liberty is a basic civil right that cannot be trampled on simply to benefit special interest groups,” said IJ-WA Executive Director Bill Maurer.

Bindas added, “Entrepreneurs are the engine that will drive us into an economic recovery. The government needs to get out of their way and protect their rights rather than protect existing businesses from competition.”

San Juan County’s ordinance is not only unfair—it is unconstitutional. The Washington Constitution protects the right to economic liberty, especially against the kind of protectionism at play in San Juan County.

“The Institute for Justice seeks not only to vindicate Gary’s right to economic liberty but also to challenge the premise of San Juan County’s licensing regime: that government can exclude someone from a lawful occupation simply to protect favored businesses from fair competition,” said Bindas. “A victory for Gary will establish important constitutional precedent protecting entrepreneurs throughout Washington.”

IJ President and General Counsel Chip Mellor said, “This lawsuit is an important part of the Institute for Justice’s nationwide campaign to restore economic liberty to all Americans by defending their constitutional right to earn an honest living.”

Read more on this case