Rio Grande Valley Food Trucks Ask Texas Supreme Court to Hear Challenge Against South Padre Island’s Anticompetitive Restrictions

AUSTIN, Texas—Can the government use public power to throttle competition in order to protect well-connected local business owners? That is the subject of a Texas Supreme Court petition filed late Wednesday by the Institute for Justice (IJ) on behalf of three Rio Grande Valley food truck vendors: Surfvive, Anubis Avalos and Adonai Avalos. 

In June 2022, the 13th Court of Appeals reversed a Cameron County district court ruling in favor of the three food truck operators. The district court had struck down two South Padre Island vending restrictions as unconstitutional in 2020. The first restriction requires that food truck operators obtain the permission of a local restaurant owner on the island in order to become eligible for a food truck permit, and the second further restricts the availability of food truck permits by making only 18 permits available. Both restrictions were dreamed up by South Padre Island restaurant owners that objected to food-truck competition. Despite the district court declaring the anti-competitive restrictions unconstitutional, the appellate court reversed. 

In reversing the district court’s ruling, the court of appeals held that the city of South Padre Island was immune from the constitutional challenge because using government power to protect local businesses by shutting out new competition is a legitimate government interest. No Texas appellate court before it has ever sanctioned the use of public power to protect private market participants from competition. 

“The Texas Constitution protects everyone’s right to pursue a common occupation free from unreasonable interference by the government,” said IJ Managing Attorney Arif Panju. “We are asking the Texas Supreme Court to grant review because using public power to protect favored groups from competition is both wrong and unconstitutional.” 

“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.”  

IJ has fought against similar restrictions on economic liberty, successfully challenging vending restrictions in San Antonio and El Paso. IJ has also prevailed in the Texas Supreme Court when challenging expensive and irrelevant occupational licensing requirements. In that landmark case, Patel v. Texas Department of Licensing & Regulation, the Texas Supreme Court set precedent and announced the test that Texas courts must apply when analyzing the constitutionality of economic restrictions.