IL appeals court: Chicago OK to favor property taxpaying restaurants over food trucks; appeal vowed

By Jonathan Bilyk | Dec 19, 2017

A state appeals panel has refused to allow food truck owners to restart their legal challenge to Chicago food truck regulations the owners say unconstitutionally shielded restaurants from their more mobile competitors.

On Dec. 18, a three-justice panel of the Illinois First District Appellate Court upheld the ruling served up just over a year ago from Cook County Circuit Judge Helen A. Demacopoulos, who had tossed out the challenge to the ordinance brought by plaintiff LMP Services, finding the city acted within its constitutional authority in regulating where food trucks can park in the city, how long they can stay there and how much they must allow City Hall to track their whereabouts.

Numerous times throughout the 25 page ruling, the appellate justices returned again and again to an overarching point: Food trucks, as all businesses, should have no expectation of an unfettered right to operate their business from a city street or sidewalk.

“Notwithstanding LMP’s license, which granted them the privilege to conduct business on the City’s streets and sidewalks, LMP fails to recognize that while one has a constitutional right to pursue a profession, Illinois courts have long recognized that no individual or business has the constitutional right to conduct business from the city street or sidewalk,” the justices wrote.

The decision was authored by Justice Sheldon A. Harris, with justices Mary L. Mikva and Daniel J. Pierce concurring.

The legal battle over the food truck regulations date back to 2012 when the city first enacted the ordinance. Under those rules, food trucks are required to stay at least 200 feet from the entrance of brick-and-mortar restaurants; to move to another location every two hours; and to install a GPS tracking device, which must be turned on when the food truck operators are selling their wares.

The rules prompted food truck owners, including LMP Services, which is headed by entrepreneur Laure Pekarik and operates the food truck “Cupcakes for Courage,” to file suit in Cook County court, asserting the city had overstepped its constitutional authority in passing the regulations. They argued the ordinance was merely a means of protecting existing restaurants from disruptive competition to their business model.

In response, the city argued it had the authority to regulate where the food trucks can operate, saying the ordinance “balances the needs of the community, which includes the interests of brick-and-mortar restaurants.”

Demacopolous sided with the city, asserting the city had legitimate interests in promoting the economic health of its restaurants, as well as in regulating pedestrian sidewalk traffic and in knowing where the food trucks are serving food to the public.

Further, she disputed the food trucks’ assertions they were competitors of restaurants, saying case law that would forbid the city from blocking new restaurants from opening within a certain radius of existing restaurants, could not be used to similarly forbid such regulations against food trucks.

LMP appealed the decision, maintaining its assertion the ordinance violates the due process rights of food truck operators under the Illinois constitution, citing “the accepted general principle that ‘every citizen has the right to pursue a trade, occupation, business or profession’ and this right ‘constitutes both a property and liberty interest entitled to protection of the law as guaranteed by the due process clauses of the Illinois and Federal constitutions.’”

 As in Cook County court, however, the appellate justices sided with the city, rejecting “LMP’s assertion that the City may not protect brick-and-mortar restaurants,” and agreeing the city can claim the ordinance is intended to promote “the general welfare of the City of Chicago.”

“Unlike brick-and-mortar restaurants, LMP and all food trucks do not pay property taxes or other assorted fees to the City that would be associated with the operation of a brick-and-mortar restaurant occupying real property in the City,” the justices wrote. “Property taxes represent a key source of revenue for the City. The 200-foot rule seeks to protect those in the food service industry who pay and support the City’s property tax base from those food businesses that do not.”

The justices noted the authority to favor businesses that pay more taxes, against those that pay less, “is not new and has been accepted as a legitimate and reasonable government action by previous courts.”

And the justices also threw out LMP’s arguments against the mandatory GPS tracking, saying they believed the city had established the tracking was needed to allow city officials to locate the food trucks for random inspections and other official matters, and to log data that could be needed to resolve complaints or investigations against the trucks.

The justices likened it to licenses required for some businesses to discharge wastewater into a sewer system.

“Similarly, LMP and all food trucks have no constitutionally protected property right in conducting business from Chicago’s streets or sidewalks,” the justices wrote. “Like the conditions surrounding the district’s issuance of discharge licenses, the GPS requirement at issue is a condition precedent that LMP and all food trucks must comply with to obtain a license to sell on the City streets or sidewalks.”

Following the decision, an attorney representing LMP and the food trucks said they intended to appeal the decision to the Illinois Supreme Court.

The ruling, said attorney Robert Frommer of the Institute for Justice, “is a loss not just for food trucks and their fans, but all Illinoisans.

“The appellate court's holding that local governments may enrich a special interest group by making it illegal to compete with them runs counter to decades of holdings by the Illinois Supreme Court,” Frommer said.  “We intend to appeal this ruling and ask the Supreme Court to hold that whether a business succeeds should turn on how good its food is, not on who it knows at City Hall.”

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