Tennesseans for Food Truck Freedom: Chivanada v. Mt. Juliet

November 20, 2023 9:09AM

Case Status:Victory! Our lawsuit prompted Mt. Juliet to repeal its $100/day fee for food trucks. 

Food trucks rushed to help Mt. Juliet residents in March 2020 after the city was ravaged by a tornado. The city and its residents welcomed food trucks with open arms in the wake of the tornado and the beginning of the COVID-19 pandemic. The residents still want the food trucks in Mt. Juliet; the city wants to force them out. This lawsuit challenges a protectionist city ordinance that allows residents of Mt. Juliet to operate food trucks for $100 per year, but forces out-of-city food truck entrepreneurs to pay $100 per day to serve customers. 

In this case, Beacon represents three innovative entrepreneurs from Middle Tennessee and their food truck businesses. Chivanada is a Colombian food truck specializing in empanadas. Its owner Daniel Yarzagaray majored in entrepreneurship and had a baking business as a teenager. The other food trucks Beacon represents are Mikey’s Pizza, which specializes in selling New York style pizza and Funk Seoul Brother, which sells Korean and Japanese street food. You can read more about their stories here.

The Problem

Mt. Juliet has always been hostile to food trucks. Before March 2020, Mt. Juliet permitted food trucks to operate only if they received permits to host a temporary event—which could take place no more than six times a year. In March 2020, Mt. Juliet—to the delight of its residents—suspended its burdensome food truck restrictions. Food trucks from Nashville and Middle Tennessee were welcomed into Mt. Juliet because the food trucks offered free food to help city residents recover from the devastating tornado. Further, because COVID-19 forced many restaurants to close, Mt. Juliet waived its food truck regulations to allow residents to order food in a safe environment. 

The very next month, Mt. Juliet re-imposed its burdensome restrictions on food trucks. The city acknowledged that its return to the status quo was driven by economic protectionism. It cited, as one reason for re-imposing its food truck restrictions, the fact “that many local restaurants are now open for in-person dining.” It emphasized the city’s desire to “protect our brick and mortar businesses” and complained that “the majority of the food trucks are not businesses based out of the city” and “food trucks take business from local businesses.” As a result, while Mt. Juliet residents still wanted food trucks, food trucks couldn’t come to Mt. Juliet. 

Earlier this year, Mt. Juliet city council members proposed a pilot program that would allow food trucks to return to residential and industrial neighborhoods. The proposal generated significant debate. A city council member who opposed the proposal stated that she was concerned about “protecting brick and mortar restaurants’ business and the fact food truck vendors produce no sales tax revenues for the city.” The city council member complained that she might have to “see food trucks everywhere, seven days a week.” She added that most food trucks will be “from outside of the city” and that the city’s “brick and mortars spend a lot of money to build.” The city council ultimately agreed to a pilot program that heavily favors in-city food trucks. Ordinance 2023-31 amends the city’s zoning code to allow food trucks based within the city limits to operate with a $100 annual permit. The ordinance requires food trucks located outside of the city to pay $100 per day to serve customers. 

The Legal Issues

Mt. Juliet’s differential treatment of in-city and out-of-city food trucks violates the plaintiffs’ constitutional rights under the federal and Tennessee constitutions. 

First, Mt. Juliet is unconstitutionally denying the plaintiffs their right to equal treatment under the law. Mt. Juliet imposes drastically different permitting fees on food truck entrepreneurs depending on whether they are residents of Mt. Juliet. There is no legitimate basis to sustain Mt. Juliet’s discrimination. Mt. Juliet may point to Tennessee Department of Revenue guidance stating that a food truck may choose to pay sales taxes in its primary business location. But nothing in Tennessee law prevents municipalities from imposing a local tax even-handedly on all food trucks doing business in the city. In any event, Mt. Juliet has not even attempted to show that the stark differences in permit fees bear any connection to the differences that in-city and out-of-city food truck operators pay in taxes. Instead, it appears that Mt. Juliet’s disfavor of out-of-city food trucks is motivated by a desire to protect local businesses from competition. But the Sixth Circuit has long held that the government has no legitimate interest in economic protectionism. 

Second, Mt. Juliet is unconstitutionally denying the plaintiffs the right to earn a living. The $100 per day permit requirement effectively freezes out the plaintiffs from the Mt. Juliet market. Mt. Juliet cannot show that the requirement relates to any legitimate health and safety concerns. Plaintiffs have won awards and served countless customers throughout Tennessee. Mt. Juliet cannot advance any plausible reason how the $100/day permit requirement protects the health and safety of Mt. Juliet residents. Even if it did, it cannot explain why any health and safety concerns that purportedly justify the requirement does not exist with local food trucks, which need not pay the same fee.  

The Legal Team 

Wen Fa is the Director of Legal Affairs at the Beacon Center.  

Ben Stormes is an attorney at the Beacon Center. 

Case Documents