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Texas Food Trucks Sue for Right to Compete on South Padre Island

South Padre Island, Tex.—Today, a group of South Texas food trucks filed a lawsuit aiming to shut down South Padre Island’s anti-competitive food truck restrictions. The lawsuit, which was filed in Cameron County District Court, challenges the constitutionality of the city’s requirement that all food trucks obtain permission from a brick-and-mortar restaurant before opening for business, as well as its arbitrary cap on food truck permits that prohibits more than twelve food trucks from operating on the island. But restaurants shouldn’t get to decide who can open for business or how much competition is enough. 

South Padre Island’s food truck laws serve only one purpose: to preserve brick-and-mortar restaurants’ near-monopoly over the island’s more than 4 million annual visitors. Among the vendors caught in the city’s crosshairs are local nonprofit SurfVive and its food truck, along with brothers Anubis and Ramses Avalos and their Chile de Árbol food truck. The city’s unconstitutional laws prohibit both from opening for business on South Padre Island, which is why they’ve partnered with the Institute for Justice (IJ) to sue to put an end to the city’s illegal economic protectionism. 

“No one should need their competitor’s permission to open a business,” said Arif Panju, managing attorney of IJ’s Texas office and lead counsel for the food truck operators. “South Padre Island’s food truck laws do nothing to protect consumers; their purpose is only to protect existing restaurants from competition. Thankfully, Texas courts don’t look kindly on such bald-faced economic protectionism. The Texas Supreme Court recently made it clear that economic liberty—the right to earn an honest living free from unreasonable government interference—receives meaningful protection under the Texas Constitution.”

In a landmark ruling by the Texas Supreme Court, Patel v. Texas Department of Licensing and Regulation, which the Institute for Justice also brought, the Texas Supreme Court made clear that the Texas Constitution vigorously protects economic liberty. The ruling sets forth the meaningful, robust standard by which South Padre Island’s anti-competitive vending restrictions will be judged.

Panju continued: “In any marketplace, customers—not the city council or competitors—get to pick winners and losers. If a food truck’s food tastes better than a nearby restaurant’s, that is not a crime worthy of government-imposed punishment.  Certainly not the food truck’s. These anti-competitive laws only eliminate a menu of options for the island’s residents and visitors, while shutting out entrepreneurs.”

It is no coincidence that South Padre Island’s permitting laws serve only the interests of restaurant owners. In 2016, when the city’s vending laws hit the books, the city convened a committee called the Food Truck Planning Committee, which was composed of South Padre Island restaurant owners.

The roots of today’s lawsuit reach back more than a year, when a local nonprofit called SurfVive decided to purchase a food truck to serve the South Padre Island community. SurfVive runs a free surf school on the island and teaches the importance of healthy food choices through its learning gardens. The SurfVive food truck planned to sell smoothies, coffee, and vegetable bowls to help support their programs. But in April 2018, when it first attempted to open its food truck on the island, it learned that there were no permits available. Then, a few months later, after SurfVive learned that a permit had became available, the city denied its vending permit—this time, because no restaurant owner had signed off on the application. 

“I grew up on South Padre Island, and I just want to serve a community that I care about,” said SurfVive Director Erica Lerma. “It is shocking to me that Texas—of all places—still tolerates such anti-competitive laws. I don’t know what the restaurants are afraid of. Competition is what should encourage restaurants to do better. I think our food truck offers something unique- a healthy, organic menu with food sourced locally when possible. I wish more restaurants served food like ours. I filed my lawsuit not only because I want the SurfVive food truck to open for business, but also because I don’t want our government passing laws to help some businesses by hurting others.”

Like SurfVive, Ramses and Anubis Avalos—the owners of Chile de Árbol—want to offer healthy, affordable alternatives to South Padre Island residents and beachgoers. The brothers want to bring their creative, vegan fare to the island, but cannot do so until a permit becomes available, and even then only if they can get permission from their brick-and-mortar competition.

“South Padre Island’s restrictions on food truck permits were designed by and for the owners of brick-and-mortar restaurants,” said IJ attorney Kirby Thomas West. “They serve no purpose beyond that. Laws that exist only to protect certain businesses from competition are unconstitutional, and we aim to put a stop to them—in Texas and across the country.”

IJ is no stranger to fighting anticompetitive food truck laws in the Lone Star State. IJ previously won victories for food truck freedom in El Paso and San Antonio. IJ has also litigated other food truck cases around the country, including a recent case before the Illinois Supreme Court and a second in Fort Pierce, Florida, where the court granted a preliminary injunction prohibiting the city from enforcing a law that prohibits food trucks from operating within 500 feet of a restaurant.

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