By Mitch Kokai
Carolina Journal
North Carolina’s second-highest court will decide in the months ahead whether a Jacksonville property owner and two food truck operators can move forward with a lawsuit challenging city food truck restrictions.
Plaintiffs hope the state Court of Appeals will follow guidance spelled out recently by the state’s highest court.
During oral arguments last month, attorney Bob Belden of the Institute for Justice made repeated references to the state Supreme Court’s Aug. 23 decision in Kinsley v. Ace Speedway Racing. In that case, the court’s seven justices agreed unanimously that the owners of an Alamance County racetrack could pursue a lawsuit against state government officials. Ace Speedway challenged a government order shuttering the track during the COVID-19 pandemic.
The Supreme Court did not guarantee that Ace Speedway ultimately would win its case. But justices ruled that racetrack owners had made a strong enough argument to move forward with claims that the government had violated fundamental economic rights.
Belden hopes a three-judge Appeals Court panel will apply the Ace Speedway reasoning to his clients’ case. Nicole Gonzalez owns property in Jacksonville with zoning that permits food trucks. Gonzalez would like to host trucks owned by fellow plaintiffs Anthony Proctor and Octavius Raymond. Current city rules prevent that business transaction.
Belden told appellate Judges John Tyson, Allegra Collins, and Jefferson Griffin that Jacksonville’s rules appear designed to thwart food truck operations.
“The trial court dismissed our claims that the Jacksonville City Council used its police power to choose winners and losers in a private marketplace,” Belden argued.
“We allege: that the city manager warned the city council of food trucks, saying ‘We must protect the brick-and-mortar restaurant’; that the mayor agreed, saying that food trucks needed to be kept substantial distances away from restaurants; and the city planning and transportation director confirmed for the city council that food trucks would not be allowed to create competition with restaurants,” Belden added.
The lawsuit, Proctor v. City of Jacksonville, does not challenge every city food truck regulation. The complaint challenges only those rules that appear designed to protect restaurants from competition.
“You can’t be within 250 feet of a restaurant. You can’t be within 250 feet of a property that has another food truck on it. You can’t be within 250 feet of a residential area,” Belden said. The restrictions effectively place 96% of the city off-limits for food trucks, he argued.
Arguing for Jacksonville, lawyer Norwood Blanchard countered that courts can distinguish the city’s food truck rules from other economic restrictions struck down in the past.
“There’s a difference between a complete prohibition or a licensing scheme that makes it impossible — literally puts you out of business — and business regulations,” Blanchard said.
Tyson’s questions tested arguments on both sides of the legal dispute.
On one hand, the judge asked whether a court should second-guess Jacksonville’s elected officials. “We see regulations passed all the time by cities that a lot of rational people would disagree with, and they can be targeted, and they’ve been upheld under the rational basis standard under the police power,” Tyson said to Belden. “Aren’t you just asking us for a substitution of judgment here?”
Yet Tyson also questioned Blanchard about cases when courts have considered other economic restrictions. He cited regulation of businesses involving hair braiding, teeth whitening, and “monks making wooden caskets.” “All three of those, the courts overturned the regulation,” Tyson said.
Belden urged the Appeals Court to give his clients the chance to prove their case.
The lawsuit features “free speech, property rights, economic liberty, and ultra vires claims,” according to a June court filing. “Ultra vires” refers to a claim that a government has taken actions beyond its powers.
“But instead of applying each claim’s respective test, the trial court dismissed all the claims at the pleadings stage under a single, incorrect legal test that only requires ‘envision[ing] … reasonably conceivably rational bases’ for the challenged restrictions,” Belden wrote.
The Ace Speedway ruling is little more than one month old. Yet it’s already having an impact on other cases addressing economic rights.
In addition to the Jacksonville food truck dispute, a New Bern eye surgeon has asked state courts to apply the Ace Speedway precedent to his case. Dr. Jay Singleton challenges North Carolina’s certificate-of-need restrictions for health care providers.
In each case, plaintiffs face uphill climbs to win courtroom battles against government regulation. But the Ace Speedway ruling could pave the way for those plaintiffs to have a real opportunity for their arguments to be heard.
Mitch Kokai is senior political analyst for the John Locke Foundation.
