AUSTIN—Today, the Texas Supreme Court declined to hear a case challenging the city of South Padre Island’s anticompetitive restrictions on food trucks. The high court had been deliberating on whether to take up the case for the past four months. The lawsuit, brought by the Institute for Justice (IJ) and three food truck vendors—Surfvive, Anubis Avalos, and Adonai Avalo— argued that the city’s restrictions on food vendors violate the Texas Constitution.
“We’re incredibly disappointed that the court is allowing South Padre Island to continue violating the fundamental rights of people who just want to earn an honest living selling food,” IJ Managing Attorney Arif Panju said. “By declining to hear this case, the court has passed on the opportunity to protect the economic liberty rights of all Texans.”
In June 2022, the 13th Court of Appeals reversed a Cameron County District Court ruling from 2020 that favored the three food truck operators. In that earlier decision, the district court declared that two South Padre Island vending restrictions were unconstitutional. The first required food truck operators to obtain signed permission from a local restaurant owner to become eligible for a food truck permit; the second made only a few permits available each year. South Padre Island restaurant owners dreamed up both restrictions because they objected to competition from food trucks.
In reversing the district court’s ruling, the Court of Appeals held that allowing South Padre Island restaurants to shut out food truck competition falls under “economic development.” No Texas appellate court has ever used this flimsy rationale for sanctioning the use of public power to engage in private economic protectionism—picking winners and losers in the marketplace.
“South Padre Island’s rules are unfair to smaller startups that just want to earn an honest living,” Surfvive’s Erica Lerma said. “It’s very frustrating to not be able to operate my food truck in my own hometown because the city wants to protect businesses that already exist from competition.”
IJ has fought similar restrictions on economic liberty in Texas, successfully challenging regulations against mobile food vendors in San Antonio and El Paso. IJ has also prevailed in the Texas Supreme Court when challenging expensive and irrelevant economic restrictions. That landmark case, Patel v. Texas Department of Licensing & Regulation, did away with the federal test and instead created a new, stronger test under the Texas Constitution that state courts must apply when judging the constitutionality of economic restrictions.