Brownsville, Tex.—In a sweeping victory for economic liberty, Judge Arturo Cisneros Nelson of the Cameron County District Court struck down South Padre Island’s anti-competitive food truck permit cap and restaurant-permission scheme. The district court ruled that the city violated the Texas Constitution when it forced food truck owners to get permission from local restaurant owners before being eligible for a food truck permit, and by making it illegal for more than twelve food trucks to open for business on the island.
The Institute for Justice (“IJ”) challenged both anti-competitive restrictions on behalf of food truck owner SurfVive, a local nonprofit spearheaded by Erica Lerma, and the Brownsville-based Chile de Árbol food truck operated by brothers Anubis and Adonai Avalos. Both food trucks were forced to the sidelines and could not operate under the city’s permitting scheme.
“This is a victory under the Texas Constitution for entrepreneurs across Texas,” said Arif Panju, Managing Attorney of IJ’s Texas Office. “The government cannot pass laws to protect politically connected insiders from competition— operating a small business in the current climate is challenging enough without the government picking winners and losers.”
Until 2016, the city of South Padre Island banned food trucks from opening for business on the island. When the city finally allowed food truck entrepreneurs in, evidence showed that local restaurant owners lobbied the city council to cap the number of available food truck permits—and also require applicants to first obtain a signature from their brick-and-mortar competitors to qualify for a permit. The district court rejected this economic protectionism as a violation of the Texas Constitution.
“SurfVive will finally be able to pursue our goal of providing healthy, sustainable food for our community,” said Erica Lerma. “This victory also means that other new entrepreneurs can pursue their dreams of opening businesses on South Padre Island without being restricted by laws that serve no purpose other than limiting competition.”
This case continues IJ’s National Street Vending Initiative, which protects vendors’ rights coast to coast. For example, IJ lawsuits in San Antonio, El Paso and Louisville successfully eliminated protectionist laws that banned food trucks from operating near their brick-and-mortar competitors.