Streets of Dreams: Street Vending and Economic Opportunity

From our nation’s founding, street vending has proven a reliable method for people of modest means to enter the American economic mainstream—a starting point for a better life. Without much need for investment capital or formal education, street vendors can be their own bosses while providing for their family and climbing the economic ladder.

There is no better example of this than Silvio Membreno. Twenty years ago, Silvio came to this country from Nicaragua in search of a better life. And he found it: For 15 years, he has been earning his living as a flower vendor in and around the city of Hialeah, right outside of Miami. Silvio, however, was not satisfied with merely vending by itself. Instead, he used the income and contacts he developed as a vendor to expand his business and start distributing flowers from Ecuador to street vendors throughout South Florida, which they would then resell. Street vending has been Silvio’s road to economic success.

Just like Silvio, many people in the United States make their living by bringing the products they sell right to the consumers who want them. Street vendors provide consumers with a convenient means to buy goods that would otherwise be unavailable, all while creating jobs for themselves and others. What’s more, street vendors—by providing more sets of responsible eyes on the street—even make communities safer. ¹ In Hialeah, vendors sell a wide range of goods: fresh cut flowers, churros, fruits, vegetables, bottled water and guarapo, ² to name a few. By providing quality goods at competitive prices—and in convenient locations, particularly for customers who don’t own cars—many of Hialeah’s vendors have developed large contingents of loyal repeat customers.

Hialeah’s Laws Make Safe & Effective Street Vending Impossible

In light of all these benefits, one would expect the city of Hialeah to welcome vendors with open arms. Instead, it is essentially trying to destroy them. It is perfectly legal to work as a street vendor in Hialeah, and several hundred people are licensed by the city to do just that. But the city’s vending regulations are set up to make effective street vending all but impossible. Designed to protect local brick-and-mortar businesses from competition, the city’s laws do their job all too well, with huge costs to vending entrepreneurs and consumers alike.

The centerpiece of Hialeah’s regulations is a “proximity restriction,” which makes it illegal for a street vendor to vend within 300 feet of any store that sells “the same or similar” merchandise. ³ In other words, a street vendor has to be at least a football field away from any store with whom he might compete—not because the city government is trying to protect the public health or safety, but because the city government is trying to protect entrenched businesses from entrepreneurs who might offer consumers lower prices or better quality goods.

The law also prohibits vendors from standing still; unless they are actually in the middle of a transaction, street vendors have to be in constant motion and are not ever allowed to display any of their goods anywhere on public or private property. ⁴ This means that it is even illegal for Hialeah’s vendors to sell on private property with the permission of the owner. Amazingly, the law seems to assume that people will somehow be safer if street vendors are in constant motion, driving at two miles an hour around a parking lot or walking through intersections, instead of vending the way that makes sense: finding a spot where they can stay, sell and be safe.

The laws have only one purpose: to protect entrenched brick-and-mortar businesses from competition.

In addition, the Hialeah law forbids vendors from placing their merchandise, supplies or equipment on the ground—even when vending on private property with the permission of the property owner. This provision imposes a total ban on effective vending within the city of Hialeah. If vendors cannot display their merchandise or equipment on the ground, they cannot sell and compete. Flower vendors, such as Silvio Membreno for example, cannot even set a bucket of flowers on the ground near their feet. Yet brick-and-mortar stores, such as Home Depot, are allowed to display flowers and other merchandise on the ground outside their buildings.

These laws have nothing to do with protecting the public health or safety. Indeed, in many ways—such as the requirement that vendors constantly be in motion—they actually create safety problems. Instead, the laws have only one purpose: to protect entrenched brick-and-mortar businesses from competition. That is why street vendors like Silvio have joined forces with the newly launched Institute for Justice Florida Chapter to challenge these unconstitutional regulations head on in court.

The Plaintiffs

Silvio managed to build up a thriving business despite Hialeah’s restrictions, but not every vendor is so fortunate. And even vendors that manage to attract a loyal customer base are constantly vulnerable to the law’s unpredictable demands: If a vegetable vendor develops a loyal customer base through months or years of service at one location, he can be forced to abandon those customers when a new Publix opens up nearby. Likewise, although one enforcement agent might allow a vendor to sell certain goods one day, another enforcement agent could decide the very next day that such items are too similar to a nearby brick-and-mortar business’ goods and thus put the vendor out of business. Because the law’s requirements are nearly impossible to comply with, they force many vendors to operate in a kind of legal limbo, subject to enforcement at the whim of the police—or, worse, at the whim of their local brick-and-mortar competitors. After all, it is entirely the arbitrary call of a government enforcement official whether a product a vendor sells is “the same or similar” to a brick-and-mortar retailer.

These impossible burdens have motivated Silvio and the Florida Association of Vendors, a nonprofit membership organization comprising many of Hialeah’s street vendors, to team up with the Institute for Justice to challenge Hialeah’s restrictive vending laws. In a lawsuit filed October 13, 2011, in the Circuit Court in Miami-Dade County, Silvio argues that Hialeah has infringed on his right to earn an honest living under the Florida Constitution. A win for Silvio means economic freedom not only for Hialeah’s street vendors, but for entrepreneurs throughout Florida.

The Legal Challenge: Defending the Right to Earn an Honest Living

Silvio and the Florida Association of Vendors have joined with the Institute for Justice Florida Chapter to challenge Hialeah’s vending ordinance under the Florida Constitution. Their fight against Hialeah goes to the very core of our cherished constitutional right of economic liberty—the right to earn an honest living free from arbitrary and unreasonable government interference. Silvio and other street vendors want nothing more than the opportunity to earn an honest living through competition while the brick-and-mortar stores seek to use government power to protect them from would-be rivals in the marketplace—hardly a constitutional use of government power.

Fortunately, the Florida Constitution protects individuals like Silvio and the members of the Florida Association of Vendors from the kind of economic protectionism behind Hialeah’s vending ordinance. Article I, Section 2 of the Florida Constitution—the “Basic Rights” provision—declares that all persons “are equal before the law, and have inalienable rights, among which are the right to enjoy and defend life and liberty, to pursue happiness, and to be rewarded for industry, and to acquire, possess and protect property . . . .”

The equal protection component of the Basic Rights provision—declaring that all persons “are equal before the law”—requires that any legal classification between individuals must be reasonable and non-arbitrary. By exempting several favored categories of street vendors—such as vendors of Christmas trees and fireworks, and door-to-door sellers—the Hialeah ordinance engages in irrational and arbitrary discrimination among sellers of the same or similar goods.

In addition, the inalienable rights component of the Basic Rights provision—recognizing the right to enjoy and defend liberty, to acquire, possess and protect property, and “to be rewarded for industry”—protects substantive rights including the right to do business free from unreasonable government regulation. Any law that interferes with a lawful business for irrational reasons or that creates a substantial impossibility of compliance with the law violates these inalienable constitutional rights.

The Florida Constitution also contains a Due Process Clause in Article I, Section 9. This constitutional provision invalidates laws that fail to give individuals adequate notice about the law’s content and meaning. By enacting a vague and breathtakingly broad vending ordinance, the city of Hialeah has failed to provide due process of law as required by the Florida Constitution.

Moreover, the Due Process Clause of the Florida Constitution has been interpreted to protect individuals’ substantive rights to property, to contract and to pursue a lawful occupation. Laws violate these constitutional rights when they do not reasonably further a legitimate state interest such as public health or safety. Because Hialeah’s restrictions on street vendors lack a rational relationship to public health or safety—in fact they arguably increase risks to consumers and vendors alike—they are unconstitutional under Florida’s Due Process Clause.

Vending Restrictions throughout the U.S.

Unfortunately, Hialeah is far from alone in adopting draconian vending regulations. In its recent study, Streets of Dreams: How Cities Can Create Economic Opportunity by Knocking Down Protectionist Barriers to Street Vending, the Institute for Justice highlighted restrictions on vending in the 50 largest U.S. cities. What the study found was staggering. Of the 50 largest cities, 45 have adopted at least one type of significant restriction on a street vendor’s ability to earn an honest living, whether it is a proximity ban like Hialeah’s or a flat prohibition on vending in many areas.

The study also found that these laws are often adopted at the behest of local brick-and-mortar establishments for no purpose beyond economic protectionism. ⁵ Time and again, local governments adopt laws that favor one type of business over another, making it impossible for smaller entrepreneurs to compete.

To combat this rampant protectionism, the Institute for Justice earlier this year launched its National Street Vending Initiative to eradicate anticompetitive vending laws across the United States. Just a few short months later, IJ achieved a major victory for economic liberty and vendors’ rights. In Texas, the Institute for Justice filed suit against the city of El Paso for laws very similar to the ones in Hialeah. Three months into litigation, El Paso abandoned its claim that its proximity restriction and other burdensome regulations had anything to do with protecting the public health or safety. The city repealed those regulations and other anticompetitive vending laws, vindicating the rights of El Paso’s vendors and bringing IJ’s Street Vending Initiative its first major win.

The Institute for Justice also filed suit in Atlanta to invalidate that city’s plan to eliminate a huge number of long-standing street vendors. With Silvio’s lawsuit, IJ joins the fight for vendors’ rights in South Florida.

The Institute for Justice: A History of Protecting Economic Liberty

As the nation’s leading public interest law firm dedicated to protecting economic liberty, the Institute for Justice engages in cutting-edge, nationwide litigation and advocacy to defend individual rights. Among IJ’s economic liberty victories are:

Castaneda v. City of El Paso—In January 2011, the Institute for Justice brought suit against the city of El Paso, which stopped 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. Three months later, the city passed a new ordinance that eliminated these and other protectionist restrictions.

Louisiana Caskets—In August 2010, the Institute for Justice teamed up with the monks of the Saint Joseph Abbey to challenge the constitutionality of Louisiana’s requirement that the monks must be licensed as funeral directors in order to sell their handmade wooden caskets. The Institute won at the trial court level and the case is now on appeal to a federal appeals court.

Chauvin v. Strain—In July 2010, as a result of IJ’s lawsuit, the Louisiana legislature abolished the demonstration portion of the nation’s only florist licensing exam, while leaving in place (for now) a short written exam that presents no serious obstacle to would-be florists. The bill passed both houses of the Louisiana legislature by wide margins and was signed into law.

Swedenburg v. Kelly—In May 2005, the Institute for Justice won an important economic liberty case before the U.S. Supreme Court, striking down a protectionist law that granted monopoly power to distribute wine to large, politically connected liquor wholesalers.

Craigmiles v. Giles—The Institute for Justice secured a federal court victory striking down Tennessee’s casket sales licensing scheme as unconstitutional, a decision that was upheld unanimously in December 2002 by the 6th U.S. Circuit Court of Appeals and not appealed. This marked the first federal appeals court victory for economic liberty since the New Deal.

Clutter v. Transportation Services Authority—In 2001, the Institute for Justice defeated Nevada’s Transportation Services Authority and its entrenched limousine cartel that had stifled competition in the Las Vegas limousine market.

Ricketts v. City of New York—In 1999, IJ helped commuter van operators fight a public bus monopoly that would not allow vans to provide their service in underserved metropolitan neighborhoods in New York City.

Uqdah v. D.C. Board of Cosmetology—In 1993, an Institute for Justice lawsuit led the District of Columbia to eliminate a 1938 Jim Crow-era law requiring African hairbraiders to obtain a cosmetology license that required thousands of hours of “training,” none of which included instruction in the art of hairbraiding. This would be the first of many IJ victories on behalf of African hairbraiders across the nation.

The Litigation Team

The Institute for Justice filed its complaint in this case, Membreno v. City of Hialeah, on October 13, 2011 and the team is currently seeking review of this matter in the Florida Supreme Court. The litigation team is comprised of IJ Attorneys Robert Peccola, Bert Gall and Justin Pearson.

The Institute for Justice

The Institute for Justice is a public interest law firm that advances a rule of law under which individuals can control their destinies as free and responsible members of society. Through litigation, communication, outreach and strategic research, IJ secures protection for individual liberty and extends the benefits of freedom to those whose full enjoyment is denied by the government. IJ litigates to defend property rights, expand economic liberty, advance school choice and vindicate the right to free speech.

The Institute for Justice is based in Arlington, Va. IJ has state chapters in Arizona, Florida, Minnesota, Texas and Washington, as well as a Clinic on Entrepreneurship at the University of Chicago Law School.

For more information, contact:

John E. Kramer
Vice President for Communications
Institute for Justice
901 Glebe Road, Suite 900
Arlington, VA 22203
jkramer@ijstaging.wpengine.com
(703) 682-9320 ext. 205