Food Truck v. Farmville
2022-01-24 · Guest: Jessica Thompson (Pacific Legal Foundation) · 52:30
North Carolina food truck owner fighting protectionist regulations
Bob Zadek interviews Jessica Thompson of the Pacific Legal Foundation about the case of Mark Shirley, a North Carolina food truck owner fighting protectionist regulations in the town of Farmville. They discuss the “competitor’s veto,” the unique protections for economic liberty in the North Carolina Constitution, and the broader fight against certificate of need laws and occupational licensing.
Topics: Economic Liberty, Pacific Legal Foundation, Food Trucks, North Carolina Constitution, Competitor’s Veto, Certificate of Need, Occupational Licensing
Speakers: Bob Zadek, Jessica Thompson
Introduction: Who is Mark Shirley? [00:17]
Bob Zadek: Good morning, everyone. Welcome to The Bob Zadek Show, the longest-running live libertarian talk radio show on all of radio. The show this Sunday, and always, of ideas, never once the show of attitude.
Anybody who has read or knows about Atlas Shrugged, Ayn Rand’s work in general, will remember and often make reference to that iconic line from Atlas Shrugged: “Who is John Galt?” If you don’t know who John Galt is, why don’t you dust off your Atlas Shrugged, read it—it’s a quick, easy 1,100-page read, you’ll get through it in no time—and you will learn who actually is John Galt.
This morning, we’re going to undertake a somewhat more modest question. Rather than the weighty one, “Who is John Galt?”, we are going to ask ourselves and then learn the answer to: Who is Mark Shirley, and why do you care?
The Pacific Legal Foundation [01:42]
Bob Zadek: Okay, now that I have captured your attention, you are glued to the—if there is such a thing—radio dial. There I go showing my age. I’m happy to welcome this morning’s guest, Jessica Thompson. Jessica is a litigator for the Pacific Legal Foundation. The Pacific Legal Foundation, as Jessica will explain, is just about my favorite public interest law firm, right up there with the Institute for Justice and a few others like it. They litigate for our Essential Liberty. They are the incredibly successful organization that, behind the scenes, most of you do not know about their work, but for sure you get a profound benefit from the work of the Pacific Legal Foundation. They are in court all the time, and based upon my informal statistics, they never lose—or rarely lose—and if they do lose, the loss is temporary because they are right back in court righting wrongs.
This morning, we will learn from Jessica about her current—one of her current battles—and that is to defend the rights of Mark Shirley to make his friends and neighbors happy. Yes, the town where he lives says you cannot do that. So Jessica, welcome to the show this morning. Thank you for giving us your time on a Sunday morning. And first, before we get into your current client, Mark Shirley, please tell us a bit, expand a bit upon the wonderful work of the Pacific Legal Foundation.
Jessica Thompson: Well, hi, Bob. Good morning, and thank you so much for having me on. I’m really excited to talk about all of these things that you just mentioned and to share some of Pacific Legal Foundation’s work that we do, as you were describing, to protect Americans’ individual liberty. So we fight back whenever the government encroaches on individual liberty and oversteps its constitutional bounds. And we fight back in a number of areas. We’re big in property rights, defending the separation of powers as a protection of individual liberty, and then also ensuring the Constitution’s protections of equality under the law and opportunity for all Americans. And so I’m excited to be here today to talk about opportunity, like you said, for individuals in America to make their communities happy, to engage in the voluntary exchange of commerce, and just to improve each other’s lives and even to pursue their own happiness and fulfillment. So we’ve got a lot of fun things to talk about this morning.
Bob Zadek: It’s astonishing that we, collectively, Americans, have to have law firms actually engaged and going into court simply to protect our right to do—to engage in voluntarily, mutually beneficial exchange undertaken without coercion, just in the exercise of our freedom. That we actually need organizations like Pacific Legal Foundation just to make sure government does not deny us that most basic freedom: the right to voluntary interact with others where both sides benefit, nobody is harmed. All we want to do is make each other happy. And in any of these transactions—and I, of course, as a lawyer, I do transactions for a living, that’s what I do—and the joy that I get in doing transactions is I can say after I have a good day in the office, as a result of a transaction—I represent one side in the transaction, but I can say with total honesty that both sides are better off as a result of my work and the work of the lawyer on the other side. As a result of allowing them to each exchange whatever they wish to exchange, they are both happier than they were before. It is a wonderful way to spend a life, Jessica, and my compliments for you devoting your time to that.
The Story of Ole Time Smokehouse [06:51]
Bob Zadek: Now, tell us—the audience is on pins and needles, I dare say, dying to know who is Mark Shirley. So first, tell us who Mark Shirley is, and then explain to us why Mr. Shirley felt—or it was necessary for him to engage counsel, and what is he trying to—who is he suing and what is he complaining about?
Jessica Thompson: Absolutely. So Mark Shirley is our John Galt. He is our hero here. Mark is from a small town, Farmville, North Carolina. It’s in the eastern part of the state. About 5,000 people live in the town. And he was an automobile salesman, but he had a passion for cooking Eastern North Carolina barbecue. And in North Carolina, they take their barbecue very seriously. And he was an expert pitmaster. His family and friends raved about his barbecue, and he had a passion for cooking that he just couldn’t satiate.
So in 2019, he started doing research about what would it take to start up my own restaurant and to serve people in my community this delicious barbecue that people love. And so as he was doing his research, he found out about food trucks and that, you know, restaurants notoriously have such a high startup cost and a difficult rate of survival within the first couple of years. And food trucks are fantastic for entrepreneurs because they provide a lower entry cost for them to exercise, you know, and to try out their menu, to figure out if their restaurant idea and concept might work.
And so Mark found a food truck, he purchased a food truck, he investigated all the regulations and licenses and permits that he needed in North Carolina to operate his food truck. And in September of 2019, he set up shop in Farmville in the town limits. He rented a private parking space as the town ordinance required him to do, and got his permit and started serving his customers in the town. So he developed a loyal following. People were, you know, telling other neighbors, word of mouth, Facebook, social media—word was getting out about his barbecue.
And then unfortunately, the pandemic hit. But while a lot of restaurants in North Carolina were shut down because of indoor transmission of COVID-19, Mark was able to safely serve his customers. So he continued to grow his business even during the pandemic. But then something that he didn’t expect happened. That spring, brick-and-mortar restaurants in the town started complaining about Mark’s success. And they started complaining to the mayor and to the town council. And what do you know? They amended their town ordinance regarding food trucks. And they amended it in a way that was really just meant to put Mark out of town.
They increased the permit cost from $100 a year to $75 per day. They added a restriction that instead of 50 feet from the front door of the nearest brick-and-mortar restaurant, now Mark had to be 100 feet from the parcel boundary or the property line of any brick-and-mortar restaurant. And his parking spot, what do you know, is right across the street from a brick-and-mortar restaurant. And so while he could operate 50 feet away from that front door of the brick-and-mortar across the street, he is within 100 feet of their property line, and so he could no longer operate in his former parking spot. They also required food trucks to only operate in town two days a week. And that’s something they don’t require of the restaurants in town or any other business in town. So Mark had to move out of town, and of course, word of mouth, he’s lost customers moving out of town.
The Competitor’s Veto in Farmville [08:51]
Bob Zadek: Jessica, if I can interrupt just for a second, if I may. What was the pretext that city government, town government used to enact this legislation? Were they just saying it is designed to put Mark out of business, or did they try to dress it up in some more policy-oriented decision or basis?
Jessica Thompson: Well, people said that, “Hey, this is going to be difficult on food trucks, and we want to keep food trucks around.” And so during the town hall meeting, they said, “We understand, we want food trucks too. But they need to contribute their fair share,” was the refrain from the town council.
Bob Zadek: Fair share. Fair share. Don’t we hate that phrase? Don’t we hate that phrase?
Jessica Thompson: Absolutely. And so, you know, they bandied about, “Well, what should we charge these food trucks that would be their fair share?” And they talked about, “Well, we’ll use the proceeds and we’ll buy equipment for the Parks and Rec Department so the Boys and Girls Club have bats and gloves to play with in the summer for softball and baseball.” But in North Carolina, they don’t have the—towns don’t have the authority to just tax businesses at will. They can only charge regulatory fees to cover the cost of regulation. So they’re way out above their skis here that this is beyond the authority that the town has to implement such high costs on a food truck permit.
Bob Zadek: What about the residents of the town? Were they universally supportive of the town’s decision to put Mark out of business? What about his loyal customers? Was there any kind of a public outcry, or did they just not care?
Jessica Thompson: There has been a public outcry. Several citizens in the town of Farmville showed up to the town hall meeting whenever they were passing the ordinance and said, “Hey, we enjoy having another place to grab lunch, and this is another option for us.” And one lady who had moved back home from living elsewhere in the state said, “You know, I want to be a part of a town that invites new businesses and encourages entrepreneurs. And this isn’t encouraging people to come here and start up. You know, this is discouraging to the future generations, and I want our town to be more opening and inclusive.” Unfortunately, like I said earlier, there were some brick-and-mortar restaurants who had complained, and the town council had it in their mind that they were going to make it more difficult for food trucks. And so Mark is fighting back against this amended ordinance.
Bob Zadek: So Mark was the victim of local legislation, local regulations designed to—and succeeding in—putting him out of business, and therefore simply saying to him, “You are not permitted to earn a living within town limits because your earning a living is putting competitive pressure upon more established businesses.” So you are forbidden from earning a living. Now, they didn’t say that, but they de facto said that, and nobody would dispute that that was the goal.
Legal Theories: Fruits of One’s Labor [11:14]
Bob Zadek: But of course, putting aside the narrow-mindedness of the council or whatever the legislative body is that did that, aren’t they allowed to do it? And although Mark is a victim, what redress does he have other than to the public at large: “I want the right to earn a living.” So how did you find—so Mark found his way to you, or you found your way to Mark, and maybe you can explain that to us. And then when Mark told you how he was being victimized, how did you go about finding a cause of action, a basis to litigate on Mark’s behalf?
Jessica Thompson: Sure. So Pacific Legal Foundation, as you were mentioning at the top of the show, we’re a public interest law firm. We represent all of our clients pro bono, free of charge. And so we represent them when their individual liberty is being infringed upon by the government. And frequently, people will reach out to us. They can go to our website and submit a case, and we’ll investigate it. And then sometimes we read about their stories in the newspaper and we say, “Oh, that’s a story that we want to fight for. That’s a hero that we want to fight for.” And that’s how we found Mark, was a newspaper story about his fight against the city council to operate his food truck. And so we knew a little bit about the North Carolina Constitution and some of the—
Bob Zadek: Now, let me just interrupt, I’m sorry, for one quick second if I may. Of course. So there came a time that somebody from PLF contacted Mark Shirley, who must have been feeling mighty alone and mighty aggrieved, and he is out there not aware of a remedy. And even if he knew there was a cause of action, litigating against town government is not something that somebody would undertake. If you can, share with us, on the human level, your initial contact with Mark where you said, “We will protect your rights. We will fight for you for nothing other than your right to carry on your occupation the way you want.” Tell me if you can, if you have information on what were the first couple of interactions like between you and Mark.
Jessica Thompson: Sure. So there are many high points in being a public interest litigator, but I have to say one of the best is the moment that you say, “Hey, Mark, we believe in you and we’re going to fight alongside you. We’re going to go along with you for this journey, and we’re going to fight against the government and we’re going to keep fighting until we, you know, reaffirm your constitutional right to earn a living.” The relief, you know, and the sense that you can just see on our clients’ faces when they know that someone understands their plight, the importance of their fight, and wants to go alongside them and says, “We’re going to empower you with, you know, the legal arguments that you need to take this fight not only to court, but to the court of public opinion as well.” And so we’ve worked alongside Mark to share his story and to help garner more of that community support for not only his great barbecue, but for the economic liberty that he’s fighting for, for not only him but all entrepreneurs in North Carolina.
Bob Zadek: Now, the next question I’m going to ask is important because it’ll lead us later in the show to some very important insights into the state constitution of the state of North Carolina, which you have shared with me, and it’s part of the information I’m going to impart upon our audience that is really interesting and a lesson for other states. So tell us first what cause—there were, I think, three causes of action, three bases on which you initiated the litigation on Mark’s behalf against local government. What were, as they say, the theories of the case? What was the basis you felt you could prevail suing the town government? After all, they were simply enacting legislation, and they were doing what they’re elected to do.
Jessica Thompson: Yeah, so I’ll start out with one that I already mentioned is the challenge to the permit fee. So obviously, $100 a year for a permit fee, that seems reasonable. A food truck can afford that. But then to jump from $100 a year to $75 a day—so that would be a total of $7,800 a year for Mark to be able to operate in town. And that’s only operating in town two days a week under another limitation in the new ordinance. So many state constitutions are set up this way, that the General Assembly has the power from the people, and then they delegate power to the municipalities in the state. And so the towns in North Carolina only have the authority that the General Assembly has provided to it. And as I mentioned before, the town just doesn’t have the general authority to tax businesses arbitrarily as they see fit. They can only regulate food trucks for health and safety purposes and then cover the cost of those regulations with a reasonable regulatory fee. And goodness knows that $7,800 a year is not a reasonable regulatory fee for a food truck. And just to give your listeners an idea of what might be a reasonable fee for a food truck: Durham, North Carolina has a vibrant food truck scene, and to receive a permit there, it costs $10.40 to operate for a year. So the $7,800 is just really remarkable and outrageous. And they’ve even admitted that they’re using those proceeds to buy bats and ball gloves for their Boys and Girls Club. So it’s not for the cost of regulation. So that’s the first theory of the case.
Bob Zadek: So that’s a slam dunk, if you will. Sorry to use technical Latin phrases that we all learn in law school, but that’s a slam dunk. So the other—and that sort of, you have to win, but you’ll explain to the audience if I’m overstating it, so you have to win on that. But yet you had two other causes of action that really captured my attention. Tell us the other bases on which you brought the claim against the city.
Jessica Thompson: Yes, so we were talking earlier that the North Carolina Constitution offers some special protections. And the North Carolina Constitution is unique in that it actually identifies the right to the fruits of their own labor and explicitly protects that in Article 1, Section 1 of the state constitution. And what that means is the right to earn a living from an ordinary occupation. In North Carolina, you deserve and you have a right to, yeah, to earn a living pursuing an ordinary occupation, a lawful occupation. And so the proximity restriction in the amended food truck ordinance that requires Mark to operate 100 feet from the parcel line is an arbitrary interference with his fundamental constitutional right. Because we know this because brick-and-mortars are able to waive this restriction. If it really truly were about health and safety, the town wouldn’t allow the neighboring brick-and-mortar to do away with that requirement. And so that just demonstrates that not only is it an arbitrary restriction, but the true purpose is for the protection of those brick-and-mortar restaurants from unwanted competition.
Bob Zadek: Now, economists have a phrase for that. It’s called a competitor’s veto. And Jessica and I will discuss other manifestations of a competitor’s veto. But in simply, as Jessica has explained it, local—mostly localities, counties, and towns—have statutory protection of existing businesses—how offensive is that?—against competition. What are they afraid of? Somebody offering a better product at a lower price? Put them in prison. So competitor’s veto is not uncommon in local law, county and city ordinances around the country. And competitor’s veto has many forms. We will discuss some of them perhaps later on in the show. But what Jessica has just explained is the competitor to the food truck, the restaurant, has a veto that where the restaurant can say, “No, we are uncomfortable with the competition, so we are enforcing our veto and we are in effect prohibiting a competitor from operating.” Can anybody listening to this show imagine something less, as is commonly said, less American than that? Prohibiting lawful competition simply so you, the holder of the veto, can make more money. Okay, Jessica, sorry for interrupting. Please continue telling us your story.
Jessica Thompson: Yes, absolutely. So the second constitutional claim that we brought is related to this fruits of their labor claim and the right to earn a living. So we’ve brought an equal protection claim because a town in North Carolina violates the equal protection provision when people who are engaged in the same business are subject to different restrictions or if they’re given different privileges. And so here, Mark is in the business—the restaurant business. He serves lunch, just like many other restaurants in Farmville serve lunch, including the brick-and-mortar restaurant across the street that doesn’t have any indoor seating. They just operate out of a carry-out window. And apart from the fact that they’re in a brick-and-mortar building and Mark is in a food truck trailer, there’s not many differences between those two. And there’s no reason for the town of Farmville to limit Mark to operating two days a week or to limit him to operating 150 feet away from these other brick-and-mortar restaurants when those same restrictions aren’t placed on other lunch-serving restaurants. So we’re bringing an equal protection claim as well.
Bob Zadek: Couldn’t Mark have beat the game by simply going onto the real estate he had rented to put his food truck and take off the wheels? And if he had removable wheels, then he’s no longer a food truck. He’s a former food truck, or he’s a restaurant that used to be a food truck. And would he beat the game? And I’m asking that only to be a wise guy, but are the regulations that specific to, if you have wheels, you lose?
Jessica Thompson: So I think that, I mean, it’s a funny point, you know, but I think that that actually is getting at how subtle the differences are between these restaurants. You know, the ordinance isn’t specific to if Mark took the wheels off of his food truck trailer if that would then be considered a brick-and-mortar restaurant. But you’re nailing how close these businesses are in their function and in the effect that they have on the citizen public health, safety, and welfare. And if we can’t distinguish between the brick-and-mortar restaurant and the food truck restaurant in a way that poses a risk to people’s health and safety, then there’s no reason to regulate those two differently because they are the same business. Otherwise, you’re violating the equal protection clause and Mark’s right to earn a living.
The Influence of John Locke on North Carolina [13:29]
Bob Zadek: Now, we’re going to come back to those wonderful words, “entitled to the fruits of one’s labors,” because those words have a rich history in philosophy and in—it goes back to the Enlightenment. So we’re going to revisit that in a moment, my friends out there. So we’ll come back to that. But I want Jessica to continue to explain what is happening with this litigation and what is the likely outcome and what has been the reaction of the town, the city government. I’m astonished that the second you filed the complaint, the city government didn’t just say, “Hey, we were just only kidding. We’re sorry, but we don’t choose to litigate.” Are they digging in their heels and actually fighting you a case that they really can’t lose—can’t win, sorry?
Jessica Thompson: They have dug in their heels. So they—frequently we see a motion to dismiss in our cases. They try to knock us out of court and say, “Oh, rational basis applies here,” which means, “Judges, don’t worry about judging, just go ahead and confirm what we’ve done.” But they didn’t file a motion to dismiss here. They filed an answer and they said, “Yeah, sure, we passed this law and we think that’s just perfectly fine.” They also asserted some immunity doctrines. Some of your listeners may be familiar with sovereign immunity or public official immunity, but those don’t apply here whenever you’re violating constitutional rights. And so we’re continuing to litigate this case. We’ve moved into the part of litigation called discovery where the town is going to have to provide evidence that supports this ordinance. And so we’re waiting on those answers. But yes, they are sticking by it. And the mayor has stated publicly that, “Well, there’s other food trucks who’ve come to town since we’ve passed this ordinance, so there’s no problem.” But unfortunately, that’s not the test—or well, actually fortunately, that isn’t the test for the Constitution. The Constitution requires more than just someone else’s willing to pay the exorbitant permit fee and to operate in little small areas that the town has said you can practice your economic liberty and your right to earn a living here.
Bob Zadek: One of the reasons that I asked—I was so grateful for you to appear on the show this morning and that I asked you to join us is because what caught my attention is you are asserting Mark Shirley’s constitutional rights, obviously, but—but—you’re not asserting or protecting rights, at least not by your pleadings, that are protected by the US Constitution. I dare say that most listeners, most Americans would kind of assume that somewhere buried in those 4,500-odd words of our Constitution, somewhere in there there must be protection of the right to one’s fruits of one’s labors and the right to earn an honest living. But why wasn’t your claim asserted under the US Constitution, but rather under the North Carolina Constitution?
Jessica Thompson: Your listeners would be right to believe that the federal Constitution should protect the right to earn a living. And at Pacific Legal Foundation, we’re working to reinvigorate those federal constitutional protections for the right to earn a living. But the reason that we have to reinvigorate them is because unfortunately, the Supreme Court over time has watered down the constitutional protections for your economic liberty and the right to earn a living. And it’s been a slow decline, really since the New Deal, that they’ve watered down that right. But fortunately, the federal Constitution is not the floor. We can raise the floor higher than that. State constitutions can provide protections beyond what federal constitutions provide. And as I mentioned earlier, North Carolina Constitution says the right to earn the fruit of their labor explicitly in their constitution. But many other state supreme courts have interpreted due process clause, law of the land type clauses in their own constitutions to protect a right to earn an honest living. So it’s very much an ongoing battle in the courts. And Ben Franklin said it’s a republic if you can keep it, and Pacific Legal is out here doing the legal work to ensure that we can keep that protection of our economic liberty, and we’re doing that work in state and federal courts.
Bob Zadek: Just to expand upon what you had just explained to our listeners, what has become really interesting to me as I observe what’s going on and study it is something that there was a time it hadn’t even occurred to me. I just forgot about, as I read and think, I forgot about state constitutions, believe it or not. And we have, obviously, 50 state constitutions, and many of them, like the North Carolina Constitution, are more protective of our small-c constitutional rights than is the federal Constitution as a result of its watering down of what are called economic liberties by the Supreme Court, profoundly starting with the New Deal. So the Supreme Court has watered down, to its shame, economic rights which existed in our country implicit and not expressed as such, but implicit in the Constitution, most of us believed or most observers believed. But that has been watered down over time. But thank heaven there’s been much less litigation on state constitutions, and therefore they become a great source of liberties that we feared were being watered down at the federal level.
Now, it’s not a coincidence—or let me back up. The words “fruits of our labor,” those wonderful words in the North Carolina Constitution, those words have a rich history that is connected, as you have explained to me and I’ll ask you to explain to our listeners, to the constitutional history of the state of North Carolina. So tell us about those wonderful words in the North Carolina Constitution stating that we have—we being the citizens of North Carolina, doesn’t include me—that citizens of North Carolina have the right, and the word “right” is a strong word, means government can’t take it away, they have the right to the fruits of their labors. Where did that come from, and why North Carolina?
Jessica Thompson: Right. So many of your listeners may be familiar with John Locke and his writings during the Enlightenment. And the idea of the right to the fruits of one’s own labor very much is throughout John Locke’s works and the importance of property and the like. And North Carolina has a direct tie to that in that John Locke was actually the author of one of our first constitutions in North Carolina. In 1669, he was the author of the Fundamental Constitutions of Carolina when Carolina was still a colony. And even in North Carolina, there is a state think tank that is a great friend of Pacific Legal Foundation that’s named in his honor, it’s the John Locke Foundation, and they’re committed to free market principles and advancing those in the state. But so yeah, North Carolina has a rich classical liberal tradition there, connecting us right to the Enlightenment through John Locke and that Fundamental Constitutions of Carolina. And I like to think that that’s part of the reason that we have such a great state constitution and constitutional law there.
Bob Zadek: Has there been much litigation in North Carolina where the litigants were dependent upon that phrase in the fight that they were litigating over? Is there—if you were to check on citations to that phrase in the North Carolina citation, are there many, a few, occasional? Is it actively litigated?
Jessica Thompson: Yeah, so it’s come in waves, I would say. And it has decreased a bit around the ’80s or so. But before that, there was some rigorous enforcement under the fruits of their own labor clause, both in equal protection context and just striking down laws for being an arbitrary interference with the fruits of their own labor. Some beautiful opinions that look at attempts to ban massages from masseuses of the opposite sex, where they looked not just at massage parlors that were the target of the ordinance, but they said, “Oh, well at the YMCA and at barbershops they give massages as well, and if you didn’t outlaw it there, then you’re treating these same businesses differently, and that violates the equal protection clause and the right to earn a living.” They’ve done that with photography, with dry cleaners—there’s been a numerous area of ordinary occupations that deserve constitutional protection, and North Carolina courts have not been afraid to strike down ordinances whenever they’ve violated that fundamental constitutional right.
Status of the Litigation [15:11]
Bob Zadek: I have done a series of shows on the exercise—teams have been invited, a progressive team, conservative team, and libertarian team to rewrite the Constitution as they would have it appear to more accurately reflect their worldview. And what was interesting is I wish I would have done our show this morning before those shows because it’d be interesting to ask each team, why didn’t you follow North Carolina and John Locke’s lead and in your rewrite include a simple phrase “fruits of one’s labors” and re-establish economic liberty as an important right, as important as free speech and freedom of conscience and assembly which are embodied in the Bill of Rights? I dare say most Americans would think it was there, but it is not.
Now, the approach followed by the town government in your case is simply attempting to protect an established business against competition. Of course, to raise some money in the process for baseball bats and the like, as you have explained. But you have also been involved in other devices done by local governments to protect established businesses from competition. And one would imagine that competition, which is simply the free market expressed differently, that the free market, the right to compete so that consumers are offered the best products at the lowest prices—the way we get there is with competition. But there are many tools that you have successfully attacked, related tools such as, for example, certificate of need laws where you, Pacific Legal Foundation, has been in the forefront. So tell us about certificate of need laws, how they work as simply another example which still exists today, although they are falling one at a time as a result of Pacific Legal Foundation. But tell us about this insidious device called certificate of need laws.
Broader Economic Liberty Battles [17:14]
Jessica Thompson: Yeah, so Pacific Legal Foundation—and I’m a litigator, but we have litigators as well as policy attorneys who advocate in state courthouses as well as in state legislatures to overturn these certificate of need laws. And so we do work on both directions to overturn these laws. So we frequently call them the competitor’s veto law. And they’re a particular type of occupational licensing that’s super problematic because it has nothing to do with the ability or the safety of the services that you want to provide. It doesn’t have anything to do with the public health and safety. It has much more to do with your competitors. So certificate of need laws require would-be entrepreneurs to obtain permission from the state before they’re allowed to open or expand. And to get that permission from the state, they have to prove that their service or the facility they want to build is needed. And this most frequently comes up in the healthcare or the transportation industry. And what’s super problematic about this is to prove that your work is needed, states allow your direct competitor—so if you want to open up a respite care center for kids with special needs, for instance, then they’ll ask your competitors, “Do you think that we need another one of these in the area?” Or if you want to run a non-medical ambulance company, “Do you think that we need another transport company in the industry?” And frequently the competitors will say, “Oh no, we’ve got it covered here, state, thank you.” And then entrepreneurs are shut out.
Bob Zadek: So you actually have to get permission from the people from whom you hope to take business. Permission from them to open up your business. And how in the world can anybody prove there is a need? How—it’s impossible. You cannot prove that. What data would you possibly provide to show there is a need? And indeed, what does the word “need” even mean? That sounds like life or death as opposed to, “Yes, consumers would prefer to have the same service at a lower price.” But that’s not a need, that’s a preference. I would love to have stuff cheaper than it is now, but I don’t need another restaurant that serves delicious food, I just would like it. So even the word “need”—it’s impossible. That’s an impossible litigation task to prove that your community needs another Thai restaurant. You can’t do it.
Jessica Thompson: Well, and you know what’s particularly problematic about the “need” part of certificate of need laws is that the person determining need is not the consumer, it’s not the customer. It’s the bureaucrat. And we believe that consumers and individuals are way more empowered to know what services they need and where they should get their barbecue or where they should get their taxis from or where they should get their healthcare from than a bureaucrat to decide that.
Bob Zadek: In the Mark Shirley case right now, I can’t believe it, but you’re in discovery. Is the town—aren’t they interested in settling? Wouldn’t they just want this to go away? They have to be hiring lawyers and litigating a case that they must lose. So how could it be that this town government can hope to be re-elected by taking that position, harming their citizens by saddling them with legal expenses, all to make sure the citizens don’t get to eat the barbecue they want?
Jessica Thompson: You know, keeping citizens away from their barbecue is not a good re-election strategy in North Carolina. I wouldn’t recommend it. But you know, they’ve not been approached with any offers of settlement. And honestly, the only way that we’re going to settle here—Mark is not seeking monetary damages. He is making a philosophical point and a point about his right to earn a living that, you know, what’s right is right and wrong is wrong, he frequently says. And that’s what we’re here for, is to reinforce the Constitution. You know, they’re welcome to repeal this amended ordinance. And I should say Mark isn’t asking them to just allow him to come in and operate without a permit and to not pay any permit fee. He’s willing to go back to the same regulations that he was subject to when he first launched his business. But these amended ordinance requirements that they’ve put into place to force him out of his parking spot where he had set up and rented and to force him out of town, that’s what he’s challenging here. So they’re free to repeal that amended ordinance anytime, and then Mark will set back up and we can get on with life. But until then, we’ll just keep pushing in court so that we can secure victory for Mark and then also set precedent and protect other entrepreneurs in the state too.
Bob Zadek: One thing I don’t understand about the ordinance and the city’s or town’s position: Mark, as you have explained, has rented a vacant lot or land on which he parks his truck every day. If Mark had built a restaurant on that same land in that same location, would he have been permitted to do so?
Jessica Thompson: Yes. If he would have followed the property ordinances and everything and received all the permits necessary to build there, yes, he could put a brick-and-mortar restaurant there.
Bob Zadek: So the city’s position is simply because he can move his restaurant, if you will, off the property every evening when he goes home to his family. It’s the fact that he can move his restaurant that makes him the subject of this legislation. That’s the only distinguishing factor.
Jessica Thompson: Yeah, the, you know, brick-and-mortar restaurants contribute to property taxes, so it’s quite possible that the money that the town is bringing in from—or the lack of money that the town is bringing in from food trucks makes it a disfavored industry.
Bob Zadek: And Pacific Legal Foundation, you have been litigating food trucks—they have been targeted throughout the country. Do you happen to know about other areas, other cities where Pacific Legal Foundation has had to fight to protect the right of food truck entrepreneurs to carry on their business?
Jessica Thompson: Yeah, so Baylen Linnekin, who I believe is a friend of yours and he’s a fellow warrior in the battle for food freedom, he has a recent article out in Reason magazine about food trucks being squeezed out by local governments that I’d encourage your listeners to go check out. But it tells a great story about Detroit actually loosening up their restrictions. Food trucks must now be 200 feet away from existing restaurants and 300 feet away from sports arenas. So that’s supposed to be an improvement. But you know, it just goes to show that it’s not just small towns like Farmville, North Carolina, but even big cities like Detroit, these protectionist attitudes come out. There’s an American Coney Island brick-and-mortar restaurant in Detroit. They said, “We’re particularly concerned about trucks that sell hot dogs.” And she even said her neighbor, Lafayette Coney Island, was also upset. Well, these two brick-and-mortar restaurants are side-by-side neighbors for more than 100 years and they sell hot dogs. So it’s just—it’s amazing the protectionism and the cognitive dissonance that some of these brick-and-mortar restaurants have about what competition really does. You know, whenever there are food trucks in the area, it really revitalizes neighborhoods and encourages people to come out and to not just visit the food truck, but to also visit brick-and-mortar stores and restaurants. And we’ve seen across the country that many food trucks eventually become brick-and-mortar restaurants themselves, or successful brick-and-mortar restaurants might buy a food truck to take their brick-and-mortar food, you know, to the people elsewhere. So we see these types of restrictions and we’re willing to fight back against them across the country. And so I encourage your listeners, if you hear of other food trucks that are being targeted by brick-and-mortars and overzealous town councils, contact Pacific Legal Foundation and let’s see if we can do something to expand food freedom in your communities as well.
Bob Zadek: Now, lest our listeners believe or have come to believe that you are a wholly owned subsidiary of food truck manufacturers and that’s why you exist, in the few seconds we have left, just give our listeners a smattering of the other—we’ve discussed certificate of need laws—of the other types of legislation that you have attacked, just tick them off for us, which have the effect of denying somebody of the right to earn an honest living. We only have a few seconds left, but I want the audience to get a sense of the breath of your work at your being the organization, PLF.
Jessica Thompson: Sure. So at Pacific Legal Foundation, we’ve fought for the right for moving companies to operate, for taxi cabs to operate, for ambulance care operators to run their businesses. We’re fighting on behalf of a social worker in Louisiana who wants to be able to provide childcare services to special needs kids. We fight for economic liberty in just a variety of cases. Anytime that certificate of need laws come up or arbitrary occupational licensing, we like to fight back against all of those.
Bob Zadek: At Pacific Legal Foundation, how do the audience follow your—both your work and the work of PLF, or how can they help Pacific Legal Foundation fight for all of us in the area of economic freedom?
Jessica Thompson: Sure. I’d encourage your listeners to check out our website. You can Google Pacific Legal Foundation, and then we’re on all of the social media websites. We’re on Facebook, Twitter, and the like. So you can follow us and sign up for email updates. We’re happy to send you our mailing. We have a great magazine that we put out quarterly that talks about our clients and our campaigns that we’re prosecuting right now. So we just encourage you to Google Pacific Legal Foundation and find out how you can get involved.
Bob Zadek: And I’m just going to close with a warning. I, of course, get all of your mailings, and there ought to be a warning label on the envelope when you mail out to us, your followers, that those reports you give on your successes are so compelling, every time I open it, I get up from my chair, get in front of my computer, and click the donate button. You cannot avoid it. It is—you have mastered the art of defending those people who need to be defended, and you do great work. So thank you so much, Jessica, for sharing your story with us and for the work that PLF has done. And thank you to my friends out there for letting us in your homes and in your ears and in your minds for an hour this morning. Thanks a lot, everyone, and Jessica, have a nice rest of the week.
Jessica Thompson: Thank you, Bob. I hope you do too.