San Antonio Food Trucks

No One Should Need Their Competitors’ Permission to Operate a Business

How San Antonio Helps Restaurants Shut Down Their Food-Truck Competition, and How IJ Is Going to Stop It.

From coast to coast, cities are forcing food truck entrepreneurs to navigate laws that only protect restaurants from competition while providing no public benefit at all.[1] San Antonio is one of those cities. The Alamo City has spent the past decade banning food trucks from operating within 300 feet of any restaurant or other brick-and-mortar food establishment.

San Antonio’s 300-foot rule has created thousands of “no-vending” zones across the city. To have any chance at operating in these areas, San Antonio forces food trucks to get written permission slips from every restaurant and food establishment within 300 feet of them, the very brick-and-mortar competitors the law is designed to protect.

Street vending has long been an entry point for entrepreneurship in America. In cities across the country, food trucks have gained in popularity because it gives people willing to work hard a way to become entrepreneurs and small business owners. Breaking into the business requires little or no specialized training, just a lot of hard work.

Smart cities have recognized that food trucks play an important role in developing a lively, vibrant, and local business climate. But the city of San Antonio uses its 300-foot rule to punish food trucks for choosing a different business model than their brick-and-mortar competitors. San Antonio should be encouraging the entrepreneurs that operate food trucks, not disadvantaging them by playing favorites.

It is people, not the government, who get to pick winners and losers in the marketplace. That is why the Institute for Justice (“IJ”) and four San Antonio food truck owners are teaming up to challenge the constitutionality of San Antonio’s 300-foot rule under the Texas Constitution.

San Antonio’s 300-Foot Rule Against Food Trucks 

The city of San Antonio is not friendly to food truck entrepreneurs. For over a decade, the city has protected restaurants and other food establishments from competition by food trucks.[2] Food trucks are banned from vending within 300 feet of their brick-and-mortar competitors—the same 100-yard-distance that spans a football field. There are literally thousands of these “no-vending zones” throughout the city.[3]

The San Antonio City Code provides that mobile vending operations “shall not be carried on within three hundred (300) feet of the property line of any permitted food establishment.”[4] Food trucks that violate the 300-foot rule face fines of up to $2,000 per day.[5] The law broadly defines “food establishment,” which includes restaurants, grocery stores, and retail food stores such as convenience stores.[6] The 300-foot rule applies even if a food truck is parked on private property,[7] and it is enforced citywide (except for a small area of downtown).[8]

Vending within a 300-foot “no-vending zone” is extremely difficult. To attempt to do so, food trucks must: (1) approach every restaurant and other brick-and-mortar competitor within 300 feet; (2) ask the owner for a written and notarized permission slip allowing them to operate their food truck within 300 feet of their property line; and (3) keep each of those permission slips in their food truck “at all times.”[9] If any brick-and-mortar competitor revokes their permission—something they are free to do at any time and without notice—the affected food truck must shut down all vending operations.

If that wasn’t enough, San Antonio does nothing in the 300-foot rule to prevent restaurants and other brick-and-mortar food businesses from making food truck owners pay the restaurant in exchange for the permission slips the city requires. In one case, a food establishment that opened across the street from a pre-existing food truck is requiring $400 monthly payments for their permission and calling it “rent”; if the food truck fails to pay the permission will be revoked and the food truck will be forced to shut down.

The 300-foot rule also hurts food trucks that do not currently vend anywhere near a restaurant. If a restaurant, or another brick-and-mortar business that sells food, opens a new location within 300 feet of pre-existing food trucks, San Antonio’s 300-foot rule forces those food trucks to shut down if they are not given permission to remain open.[10] It matters not if the food trucks were there first, nor does it matter if food truck owners have signed leases for their vending locations. For the same reason, the 300-foot rule constrains food trucks seeking to vend in multiple locations, and makes it very difficult to expand one’s business by adding a second food truck.

Last year, the 300-foot rule became even more burdensome. The San Antonio City Council passed an ordinance adding the words “of the property line” to the 300-foot rule.[11] This means the 300-foot “no‑vending zone” need not extend to a restaurant’s building to force a food truck to shut down; instead, if a food truck is 300 feet away from the edge of a restaurant’s lot it is prohibited from operating. This change effectively increased the reach of the 300-foot rule.

The Legal Argument

San Antonio’s 300-foot rule is not just bad policy—it is unconstitutional. The Texas Constitution does not allow government to use its power in order to pick winners and losers in the marketplace. But that is exactly what San Antonio is doing. By enforcing its 300-foot rule against food trucks, the city is violating the economic liberty of every food truck entrepreneur in San Antonio. And it is adding insult to injury by making food trucks beg their brick-and-mortar competitors for permission to operate.

Economic liberty is an individual right protected by Article I, Section 19 of the Texas Constitution. It allows everyone to earn an honest living in their chosen occupation, free from unreasonable government interference. No health or safety concerns are addressed by San Antonio’s 300-foot rule against food trucks. Laws addressing food and traffic safety are already on the books. The 300-foot rule is not one of them. All that the rule does is protect brick-and-mortar restaurants and other retail food establishments from their food-truck competition. But protecting one type of business by harming another—i.e., pure economic protectionism—is not a legitimate use of government power.

The Texas Supreme Court issued a landmark ruling this June in a constitutional case involving economic liberty. In Patel v. Texas Department of Licensing and Regulation, the Court made clear that economic liberty is a vigorously protected individual right under Article I, Section 19.[12] Under Patel, Texas courts apply a constitutional test that provides greater protections for economic liberty under the Texas Constitution than under the U.S. Constitution.[13] Texas courts must determine whether a legitimate government interest exists to support an economic regulation, whether the challenged law is rationally related to that governmental interest, and now must also look at the law’s effect as a whole and determine if it is so “unreasonably burdensome that it becomes oppressive.”[14] Importantly, the Texas Supreme Court also held that determining whether a law is unconstitutional under the Patel test will require judges to review all the evidence in the record.[15]

The evidence and very structure of the law make clear that San Antonio’s 300-foot rule is nothing but protectionism. Simply put, the government cannot impose burdens on food truck entrepreneurs for no good reason. It is for consumers to decide the winners and losers in the marketplace, not the government.

The Plaintiffs

The plaintiffs in this case illustrate the real costs the law has for food truck entrepreneurs across the city. In some cases, food truck businesses were shut down because restaurants did not want a food truck competing against them. In others, food truck businesses have trouble growing their businesses and signing leases for new vending locations because of the constant threat of being shut down by the city’s 300-foot rule. 

Rafael Lopez owns and operates a Mexican restaurant named El Bandera Jalisco. Earlier this year, he set to open a second location where he planned to combine the indoor seating of a restaurant alongside a food truck parked on the same property. He signed a lease, invested $40,000 in a food truck, obtained the required permit, and began operating his new El Bandera Jalisco food truck at his new location. Two months later he was visited by a city inspector.

San Antonio shut down Rafael’s food truck and threatened him with daily fines of up to $2,000 per day if he continued to vend. The city inspector told him to ask his next door neighbor, the Hung Fong Chinese Restaurant, for a written and notarized permission slip allowing him to reopen. Unsurprisingly, he was unable to obtain their permission. By invoking the 300-foot rule, the city shut down Rafael’s food truck. The El Bandera Jalisco food truck now sits in storage. If Rafael had opened a restaurant on the same property he would be in business; because he opened a food truck instead, San Antonio has put him out of business.

Regino Soriano owns a popular food truck named El Bandolero. He offers customers Zacatecas cuisine with tortas, burritos, quesadillas, and tacos. His food has become very popular.[16] For the past eight years, he has leased space in the parking lot of an HEB grocery store and vends during the evening and night hours. Soon after opening for business, a city of San Antonio inspector told him to shut down or face daily fines. Regino was told to get written and notarized permission slips from the nearby McDonald’s restaurant and also the HEB grocery store, even though he already had a signed lease with them. Regino did just that.

Although he was able to reopen, he operates in the 300-foot rule’s long shadow. First, Regino worries that a new restaurant will open nearby. This would force him to shut down El Bandolero and possibly leave even though he has a lease with HEB. Second, McDonald’s could revoke their permission at any time which would also force him to shut down his vending business. Third, his plans to expand his business and vend in other locations around the city have been significantly restricted by the city’s 300-foot rule. Good locations that are beyond the rule’s reach are hard to find.

Bernardo Soriano, Regino’s 24-year old son, owns and operates El Bandolero II, a food truck on the north side of San Antonio. He vends on private property off of US Highway 281. While there is not much around his vending location, his customers know exactly where to find his food truck. He learned the ropes from his father when he was a teenager and decided to open his own vending business two years ago. Bernardo grew his customer base, slowly paid off his food truck, and now owns it outright.

Bernardo has plans to grow his food truck business but the 300-foot rule is making it very difficult for him to realize his goals. He has been asked to take on private vending engagements and bring his food truck to his customers. But restaurants, convenience stores, retail food stores, and grocery stores are ubiquitous throughout San Antonio; if customers want to hire him to vend at their function, he would need to reject everyone falling within a 300-foot “no-vending zone.”

Ricardo Quintanilla operates Tacos el Regio. He offers his customers Mexican cuisine inspired by recipes from Monterrey, Mexico. He operates his food truck on private property along Nacogdoches Road. Recently, however, Ricardo had to decide whether or not to sign a 2-year lease under a cloud of uncertainty created by the 300-foot rule.

Across the street from his food truck—within 300 feet away—sits a vacant commercial property. If a brick-and-mortar business that sells food moves in across the street, Ricardo will be forced to shut down Tacos el Regio. Even worse, if that happens and he is unable to get the newcomer’s permission to reopen his food truck business, Ricardo will have no choice but to relocate his popular food truck while remaining on the hook for the 2-year lease he signed. Ricardo is not alone. The same cloud of uncertainly hangs over Regino and Bernardo, and it has already put Rafael’s El Bandera Jalisco food truck out of business.

Street Vendors: Part of the Fabric of American Life

Street vending has been a part of the American economy since as early as the colonial times.[17] Today’s vendors are a diverse group of businesspeople, selling both from mobile and fixed locations. They are immigrants, minorities, ex-professionals, men, women, retirees and young entrepreneurs building new businesses.[18] 

Vending also offers entrepreneurial opportunities to those on the first rung of the economic ladder. In a new IJ report, Upwardly Mobile: Street Vending and the American Dream, IJ surveyed 763 licensed street vendors in the 50 largest cities in the U.S., and found that vending is a diverse and vibrant industry that gives people the ability to support themselves, their families and their communities.[19] Nearly two-thirds—62%—of licensed vendors are persons of color, including 35 percent who are Hispanic.[20] And these entrepreneurs create jobs for themselves and others: 39 percent of vendors in large cities like San Antonio are employers.[21]

But many would-be entrepreneurs are often shut out of starting street vending businesses due to complicated, costly, and ever-expanding government regulations.[22] In El Paso, Texas, the city forced food trucks to stay 1,000 feet away from restaurants and banned them from waiting for customers; the city repealed the laws after IJ challenged their constitutionality.[23] San Antonio’s 300-foot rule against food trucks is yet another example of a regulation that hurts those who simply seek to work their way up the economic ladder.

In addition to improving their own quality of life, vendors improve the lives of their customers, especially in communities of modest means. Vendors provide goods and services to areas underserved by traditional retail outlets and carry specialty products favored by specific ethnicities which cannot be found in retail stores. As a result, vendors significantly increase the variety of goods available to those in minority and low-income communities.[24] Furthermore, vendors become “eyes on the street”[25] safeguarding areas from crime, thereby improving the quality of life in their communities.

IJ’s National Street Vending Initiative

In response to the anti-competitive array of laws lined up against street vendors in cities nationwide, the Institute for Justice is helping them fight back. IJ’s National Street Vending Initiative is a nationwide effort to vindicate the right of street vendors to earn an honest living by fighting unconstitutional vending restrictions in courts of law and the court of public opinion. As it has done across the country, IJ stands ready to challenge such restrictions, and it will help street vendors oppose attempts to shut them down through the use of unconstitutional and protectionist laws.

The Litigation Team

IJ filed its petition in this case, Lopez v. City of San Antonio, on October 6, 2015. The litigation team for IJ in this case will be lead by IJ Attorney Arif Panju, and assisted by co-counsel Matt Miller, Managing Attorney of IJ’s office in Austin, Texas.

The Institute for Justice: A History of Protecting Economic Liberties

The Institute for Justice is a public-interest law firm that brings challenges nationwide in support of fundamental individual liberties. IJ has successfully challenged restrictions on economic liberty across the nation including the following cases:

• Castaneda v. City of El Paso—In January 2011, the Institute for Justice brought suit against the city of El Paso, Texas, which barred mobile food vendors from operating within 1,000 feet of a restaurant or convenience store, and prohibited them from stopping to await customers anywhere in the city. As a result of the lawsuit, the city passed a new ordinance that eliminated these and other protectionist restrictions.

• Patel v. Texas Department of Licensing and Regulation—In June 2015, the Texas Supreme Court ruled that the Texas Department of Licensing and Regulation violated the state constitution when it ordered eyebrow threaders—who practice a traditional South Asian method of using only cotton thread to remove eyebrow hair—to stop working unless they obtained 750 hours of conventional cosmetology training, not a minute of which taught eyebrow threading. This landmark ruling vindicated the threaders’ economic liberty rights under the Texas Constitution. Patel established a new test for reviewing the constitutionality of economic regulations that infringe on an individual’s economic liberty.

• Brantley v. Kuntz—In January 2015, the United States District Court for the Western District of Texas declared as unconstitutional under the 14th Amendment a set of laws that forced small African hair braiding schools to transform into fully-equipped barber schools just so they could teach students to braid hair for a living. The court’s ruling is a model of judicial engagement, a genuine search for the truth concerning the constitutionality of the government’s ends and means on the basis of real evidence.

• Saint Joseph Abbey v. Castille—In August 2010, the Institute for Justice teamed up with the monks of Saint Joseph Abbey in Louisiana to challenge a requirement that they be licensed as funeral directors just to sell their handmade wooden caskets. In 2013, the Fifth U.S. Circuit Court of Appeals agreed that the requirement violated the 14th Amendment to the United States Constitution, declaring that mere economic protectionism is an illegitimate “naked transfer of wealth[.]”

For more information, please contact:
J. Justin Wilson

Director of Communications
Institute for Justice
901 North Glebe Road, Suite 900
Arlington, VA  22203

(703) 682-9320

jwilson@ijstaging.wpengine.com

[1] See generally Dick M. Carpenter II, Ph.D., Inst. for Justice, Upwardly Mobile: Street Vending and the American Dream (2015).

[2] See San Antonio, Tex., Ordinance No. 101406 (Sept. 15, 2005).

[3] The San Antonio Business Journal reported that in 2012 there were 4,826 restaurants in San Antonio, a 4% increase from the prior year. See Tricia Lynn Silva, San Antonio Sees Rise in Restaurant Scene, NPD Reports, San Antonio Bus. J. (Jan. 25, 2013), http://www.bizjournals.com/sanantonio/blog/2013/01/san-antonio-sees-rise-in-restaurant.html.

[4] San Antonio, Tex., Code § 13-63(a)(10).

[5] Id. § 13-11.

[6] Id. § 13-3 (“Food Establishment”).

[7] See Mobile Vending, City of San Antonio, http://‌www.sanantonio.gov/‌Health/‌FoodLicensing/‌Mobile/MobileVending.aspx (last visited Oct. 2, 2015).

[8] San Antonio has set of rules for a small downtown vending program and maintains a schedule for the handful of vending sites and participating food trucks. See Downtown Vending, City of San Antonio, http://www.sanantonio.gov/CCDO/vending.aspx.

[9] See San Antonio, Tex., Code § 13-63(a)(10).

[10] See id.

[11] See San Antonio, Tex., Ordinance No. 2014-08-07-0539 (Aug. 7, 2014).

[12] Patel v. Tex. Dep’t of Licensing and Regulation, No. 12-0657, 2015 WL 3982687 (Tex. Jun. 26, 2015).

[13] Id. at *14.

[14] Id. at *13–14.

[15] Id. at *14.

[16] See John Griffin, Craving Shrimp Tacos? Find El Bandolero, Savor SA (Jun. 11, 2011), http://www.savorsa.com/2011/06/craving-shrimp-tacos-find-el-bandolero/.

[17] Ryan Devlin, Illegibility, Uncertainty and the Management of Street Vending in New York City, Address at the University of California-Berkeley Breslauer Symposium (April 14, 2006), http://escholarship.org/uc/item/2dq8p606.

[18] Ray Bromley, Street Vending and Public Policy: A Global Review, 20 Int’l J. Soc. & Soc. Pol’y 1 (2000); Yvonne V. Jones, Street Peddlers as Entrepreneurs: Economic Adaptation to an Urban Area, 17 Urb. Anthropology 143 (1988); Victor R. Martinez, Eats to Go: Food Truck Craze Spreads to El Paso, El Paso Times (Sept. 15, 2010), http://archive.elpasotimes.com/living/ci_16075092; Emily Stone, A Hot Job in a Tough Market, Chi. Trib. (Apr. 23, 2010), http://articles.chicagotribune.com/2010-04-23/news/ct-x-c-hot-dog-school-20100423_1_hot-job-students-tough-market.

[19] See Upwardly Mobile, supra note 1, at 5–7.

[20] Id. at 5.

[21] See id. at 5, 9, 36.

[22] See Erin Norman, Robert Frommer, Bert Gall & Lisa Knepper, Inst. for Justice, Streets of Dreams: How Cities Can Create Economic Opportunity By Knocking Down Protectionist Barriers to Street Vending 3–4 (2011); see also John Cross, Street Vendors, Modernity and Postmodernity: Conflict and Compromise in the Global Economy, 20 Int’l J. Soc. & Soc. Pol’y 29 (2000).

[23] See Inst. for Justice, Food Truck Wars: Victory for Mobile Vendors in El Paso, YouTube (May 26, 2011), https://www.youtube.com/watch?v=oiIfnqZ9O6c.

[24] Regina Austin, “An Honest Living”: Street Vendors, Municipal Regulation, and the Black Public Sphere, 103 Yale L.J. 2119, 2123–25 (1994).

[25] Jane Jacobs, The Death and Life of Great American Cities 36 (1961).