Source: https://mdappblog.com/2019/06/18/food-trucks-vs-brick-and-mortar-restaurants-vestiges-of-lochner-v-new-york-and-the-parameters-of-marylands-rational-basis-test-pizza-di-joey-llc-v-mayor-of-baltimore/
Timestamp: 2020-08-05 07:32:37
Document Index: 558327490

Matched Legal Cases: ['Art. 15', '§17', 'Art. 15', '§17', 'Art. 15', '§ 17']

Food trucks vs. brick-and-mortar restaurants, vestiges of Lochner v. New York, and the parameters of Maryland’s rational basis test – Pizza di Joey, LLC v. Mayor of Baltimore | Maryland Appellate Blog
Food trucks vs. brick-and-mortar restaurants, vestiges of Lochner v. New York, and the parameters of Maryland’s rational basis test – Pizza di Joey, LLC v. Mayor of Baltimore
By J. Bradford McCullough
Economic rivalries between classes of competitors have long existed. In the late eighteenth century, for example, disputes between shepherds and cattlemen were legendary, and clashes between farmers and ranchers supplied the grist for movies depicting life in the American west. In the urban America of the early twenty-first century, a rivalry has developed between food truck vendors and the operators of brick-and-mortar restaurants. The past ten years have seen a rapid increase in the number of food trucks in scores of American cities, leading to restaurateurs’ cries of unfair competition. Different cities have responded in different ways, with some localities welcoming food trucks and carts, while others have acted to protect restaurants by restricting the areas where food trucks may operate. See America’s food-truck industry is growing rapidly despite roadblocks, The Economist, May 2, 2017. Baltimore falls within the latter camp. In an opinion authored by Judge Douglas Nazarian – for a panel that included Judge Daniel Friedman and Senior Judge of the Court of Appeals (specially assigned) Lynne Battaglia – the Court of Special Appeals discussed Baltimore’s regulation of food trucks, considered a legal argument that flowed from the Supreme Court’s decision in Lochner v. New York, 198 U.S. 45 (1905) and explained the parameters of Maryland’s rational basis test. Pizza di Joey, LLC v. Mayor of Balt., No. 2411, Sept. Term, 2017 (May 30, 2019). Ultimately, the Court upheld Baltimore’s regulation.
Joseph Salek-Nejad, known professionally as Joey Vanoni, owns Pizza di Joey, which operates a food truck that “is an Italian kitchen on wheels, complete with 4000-pound brick pizza oven.” Slip Op. at 3. Nicole McGowan owns Madame BBQ, which also operates a food truck. Ms. McGowan’s truck initially sold barbeque, before shifting “to more health-conscious cuisine,” rebranding her truck as MindGrub Café. She describes her cuisine as “brain food for knowledge workers.” Id. at 4 (internal quotation marks omitted). While Joey would like to focus his business on Baltimore City, most of his operations are in Anne Arundel County. Similarly, Nicole would like to do business in Baltimore City, but she instead conducts most of her business in Howard County.
Baltimore’s “300-foot rule” is what discourages Joey and Nicole from operating their food trucks in the City. That rule is codified in Baltimore City Code, Art. 15, §17-33, which prohibits food trucks from operating within 300 feet of an establishment that offers the same type of food as the truck: “A mobile vendor may not park a vendor truck within 300 feet of any retail business establishment that is primarily engaged in selling the same type of food product, other merchandise, or service as that offered by the mobile vendor.” (quoted at Slip Op. at 2). Anyone who sells, distributes, or offers to sell or distribute food from a motor vehicle is a “mobile vendor.” Baltimore City Code, Art. 15, §17-1(e) (quoted at Slip Op. at 2 n. 2). Thus, a food truck is prohibited from operating with 300 feet of a traditional restaurant that offers the “same type of food product” offered by the food truck.
Pizza di Joey and Madame BBQ sued the City in the Circuit Court for Baltimore City, alleging “that the 300-foot rule violated their rights to equal protection and due process under Article 24 of the Maryland Declaration of Rights, both on its face and as applied,” and seeking declaratory and injunctive relief. Slip Op. at 5. The circuit court denied the City’s motion to dismiss and the parties’ cross-motions for summary judgment, and then held a two-day bench trial. Although the court found that the 300-foot rule was neither facially unconstitutional, nor was it unconstitutional as applied to the facts presented by the plaintiffs, the court nonetheless ruled in the plaintiffs’ favor, concluding that the rule was impermissibly vague. The court first “found that the phrases ‘primarily engaged in’ and ‘same type of food product’ left the parties without fair notice of the rule’s scope and how the City would enforce it.” Id. at 12. The court also “found that ‘the entities enforcing this ordinance do not have guidance as to how to measure the 300-foot distance between bricks-and-mortar establishments and food trucks.’” Id. Based on those conclusions, the circuit court enjoined enforcement of the rule.
Faced with the parties’ cross-appeals, the Court of Special Appeals first considered the City’s argument that the plaintiffs had “not presented a justiciable controversy under the Declaratory Judgment Act.” Id. Pizza di Joey has never been cited for violating the 300-foot rule, but was approached once by a law enforcement officer, who was responding to a complaint lodged by a nearby deli owner. Joey, however, convinced the officer that there was no violation, because the deli did not sell pizza. Similarly, Madame BBQ has not been cited for violating the rule, but unlike Pizza di Joey, Madame BBQ “has never had any encounter with enforcement agencies.” Id. at 5. Their experiences are not unique, as in the time since 2015 when the Rule’s penalties went into effect, “no vendor has received a citation or had a license suspended for violating the 300-foot rule.” Id. at 3.[1] Because neither Pizza di Joey nor Madame BBQ “has been cited for violating the 300-foot rule, and because there is no guarantee that they ever will be,” the City argued that the two mobile food vendors had presented a purely abstract issue and that the circuit court should have dismissed the case. Id. at 13.
The Court of Special Appeals disagreed. While “a credible threat of prosecution is ordinarily a prerequisite to a declaratory judgment action challenging a penal statute,” and while “neither Pizza di Joey nor Madame BBQ faced imminent prosecution when they brought this case before the circuit court,” the intermediate appellate court nonetheless concluded that the case presented a justiciable controversy. Id. at 14. For if the vendors’ “only opportunity to challenge the 300-foot rule’s constitutionality arises when they are issued a citation, that opportunity is unlikely ever to arise because the City and its enforcement agencies do not enforce the 300-foot rule by pursuing any of the penal consequences authorized by the Baltimore City Code.” Id. As the Court explained, justiciability arose not because of the threat of prosecution, but because of the real harm it caused to the vendors’ opportunity to pursue their business opportunities:
When considering a statute’s constitutionality, we are more concerned with its substance than its label, and so too when we assess the ripeness of the Food Trucks’ challenge here. Although designated a misdemeanor, the 300-foot rule is, in substance and application, a local economic regulation. The primary injury the Food Trucks allege is not the possibility of prosecution, which the Court of Appeals has rejected as non-justiciable, but the loss of their right to pursue a business opportunity in their chosen profession, an interest that qualifies as a basis for a declaratory judgment.
Having determined that the two vendors presented a claim that allowed them to challenge the constitutionality of the 300-foot rule, the Court turned its attention to the merits of that claim, which alleged a violation of Article 24 of the Maryland Declaration of Rights. That provision of Maryland’s Constitution states: “That no man ought to be taken or imprisoned or disseized of his freehold, liberties or privileges, or outlawed, or exiled, or, in any manner, destroyed, or deprived of his life, liberty or property, but by the judgment of his peers, or by the Law of the land.” While Article 24 does not expressly contain an equal protection clause, Maryland courts acknowledge that the provision encompasses “the concept of equal protection.” Id. at 16 (internal quotation marks omitted) (citations omitted).
The Court first considered the vendors’ argument that the 300-foor rule is unconstitutional on its face, noting that “[a] facial constitutional challenge attacks the legislation in question as unconstitutional per se,” meaning that there is no set of circumstances under which the legislation could be valid. Id. at 18. The vendors argued that the rule is facially unconstitutional, due to what they described as the legislation’s anti-competitive ends and economic favoritism. The Court rejected that argument, observing that it was not aware of any Maryland appellate decision striking “down an economic regulation based on a facial challenge,” and further observing that the cases cited by the vendors “were all decided on a review of the challenged statutes as applied to the plaintiffs in each case.” Id. at 19 (citations omitted). Moreover, as the Court noted, “there is support in Maryland case law for constitutionally valid economic regulations targeted at curbing unfair competition.” Id. (emphasis added) (citation omitted).
The Court next considered the vendors’ argument that the rule was unconstitutional as applied to them. The Court began its analysis by discussing whether the rule should be subject to strict scrutiny or a more deferential rational basis review. A statute is subject to strict scrutiny if it makes a distinction based on a suspect classification, i.e. race, religion, alienage, or national origin, or it infringes on a fundamental constitutional right. As the 300-foot rule does neither, the parties agreed that the Court should apply a rational basis review. But they disagreed on what that review should involve. The City urged a “deferential rational basis review,” while the vendors sought use of what they called “the real-and-substantial test,” which they described as “far more probing than the cursory examination called for by the City.” Id. at 20 (internal quotation marks omitted).
The Court traced the origin of the “real and substantial relation test” to the period between 1905 and 1937, when, beginning with its decision in Lochner v. New York, 198 U.S. 45 (1905), “the Supreme Court invalidated a series of federal and state economic regulations on the theory that they interfered with private economic liberty and contract rights.” Slip Op. at 21 (citations omitted). While the Supreme Court abandoned and repudiated that theory of substantive due process by at least the late 1930s, the Maryland Court of Appeals continued to adhere to it until 1977, when it abandoned it in Governor of Md. v. Exxon, 279 Md. 410, 424-26 (1977) (quoted at Slip Op. at 23). As the Court of Special Appeals noted, however, the “real and substantial” language occasionally surfaces in Maryland case law, although “this vestige of the Lochner-like substantive due process standard does not carry any of its old meaning,” and where it is has been used, it “has meant, and has been applied the same way as, traditional rational basis scrutiny.” Slip Op. at 23-24 (citations omitted).
In advocating “for less deferential rational basis scrutiny,” the vendors relied on two decisions of the Court of Appeals – Attorney Gen. of Md. v. Waldron, 289 Md. 683 (1981) and Verzi v. Balt. City, 333 Md. 411 (1994), each of which “invalidated legislation that impaired important, but non-fundamental, constitutional rights.” Slip Op. at 24. As the Court of Special Appeals said: “Both are still good law, both applied Article 24 rational basis scrutiny to legislation implicating important personal rights, and neither supports the application of less deferential scrutiny here.” Id. Thus, neither case advanced the vendors’ cause.
As the Court noted, while decisions interpreting the Fourteenth Amendment to the U.S. Constitution may help inform Maryland court’s interpretation of Article 24 of the Maryland Declaration of Rights, a statute “that passes federal constitutional muster can fail Article 24 rational basis review.” Id. at 25 (citing Verzi, 333 Md. at 417). On one hand, unless a statute “designates a suspect (or quasi-suspect) class or implicates a fundamental right,” thus triggering “strict or intermediate scrutiny,” the discrimination established by that statute does not violate the Fourteenth Amendment “if any state of facts reasonably may be conceived to justify it.” Id. (quoting McGowan v. Md., 366 U.S. 420, 426 (1961) (internal quotation marks omitted) (emphasis added by Court of Special Appeals). But Maryland courts, in applying Article 24, “look at the nature of the right infringed by a challenged statute, regardless of whether the right at issue has been declared fundamental under the U.S. Constitution.” Id. If the statute does not affect “important private rights, traditional rational basis applies.” Id. Where important private rights are impaired, however, Maryland courts “conduct a more searching inquiry into the rationality of the challenged legislation.” Id. (emphasis in original). Yet, the inquiry is “still rational basis scrutiny;” courts “just look more closely at the rationale.” Id. at 26.
What does this mean? How does this “higher degree of scrutiny” differ from “the traditional rational basis test?” Id. at 25 (quoting Murphy v. Edmonds, 325 Md. 342, 357 (1992)) (internal quotation marks omitted). Context is the key: “Article 24 rationality depends on context – a legislative distinction that might be rational in some circumstances may be irrational in others, depending on the nature of the right infringed and the extent of the infringement.” Id. at 26 (citing Waldron, 289 Md. at 722). In short, “Article 24 requires a closer fit between the means and the ends of a regulation that affects important personal rights, and it does not permit courts to speculate about the legislature’s purpose.” Id. (citing Waldron, 289 Md. at 713).
The Court held that the 300-foot rule did not threaten important personal rights in the way the regulations in Verzi and Waldron did. “In Verzi, the Court of Appeals struck down a county regulation that required towing operators to be located within Baltimore County as a condition of obtaining a license to operate there,” holding “that the legislation’s locational preference failed Article 24 rational basis review because it wasn’t related to the county’s interest in regulating towing service.” Id. at 27. The Court rejected the food truck vendors’ reliance on Verzi, explaining that the case “does not stand for the blanket proposition that legislation favoring one set of businesses over another is categorically impermissible,” but only that preferences based on geography or residence are not permitted. Id. at 28. Thus, while “the holding in Verzi would preclude the City from conditioning mobile vendor licenses on City residences,” the 300-foot rule does not do that. Id. Instead, the rule “regulates the places all City-licensed mobile vendors can operate in Baltimore City, wherever those food trucks are parked at idle.” Id. (emphasis in original). The Court characterized the rule as “classic economic regulation subject to the most deferential review.” Id.
The vendors’ reliance on Waldron fared no better. “Waldron involved a statute that prohibited retired judges from practicing law for profit.” Id. at 29. The Court of Appeals concluded that the statute denied the retired judges the ability to pursue their chosen vocation, which was an important personal right. Consequently, the prohibition “merited more vigorous review,” which it failed. Id. Unlike the prohibition in Waldron, “the 300-foot rule does not deny the Food Trucks the opportunity to engage in their chosen vocation. Their right to be mobile vendors isn’t threatened, only their right to park and sell in certain places within Baltimore City.” Id. (citation omitted). The rule was nothing more than an economic regulation that deserved “the highest level of legislative deference under traditional rational basis review.” Id. at 30 “citation omitted).
The Court reviewed the rule under that traditional test and the rule passed with flying colors. The Court held “that the 300-foot rule rationally furthers the City’s legitimate interest in addressing the free-rider problem that arises when mobile vendors set up within a block of direct brick-and-mortar competitors.” Id. at 30. At trial, the City had presented evidence, including expert testimony, discussing the contributions that brick-and-mortar restaurants make to the local community and how food trucks, which park close to those restaurants “take advantage of the environment created by the restaurateurs’ investments while siphoning off a portion of the business that their competitors have worked to generate.” Id. at 10. The City’s expert witness called this situation a “free rider problem.” Id. (internal quotation marks omitted). The Court explained that the 300-foot rule’s restrictions “are not arbitrary, oppressive, or unreasonable, and are directly relevant to the policy adopted to promote the general welfare.” Id. at 31 (citation omitted). The Court concluded that “because the 300-foot rule rationally furthers the legitimate government interest of protecting brick-and-mortar establishments from free-riding mobile vendors by requiring them to keep their distance from direct competitors, it doesn’t violate Article 24.” Id. at 32.
The Court of Special Appeals also concluded that the rule is not unconstitutionally vague and thus reversed the circuit court. The appellate court noted that the vendors “never pled, then expressly disclaimed, a void for vagueness challenge,” and “even if pled, neither a facial nor as-applied vagueness challenge can properly be considered in this case.” Id. at 33. As the City had not enforced the rule against the two plaintiffs, the trial court lacked “a record on which to assess the 300-foot rule’s vagueness as applied.” Id. at 35. (citation omitted). Therefore, “the circuit court’s decision amounted to finding that the 300-foot rule unconstitutionally vague on its face. And a facial vagueness challenge can be made only when the challenged statute implicates a fundamental constitutional right.” Id. (citations omitted). It was undisputed that the plaintiffs did not allege a violation of a fundamental constitutional right, so the trial court should not have considered a facial challenge. The Court of Special Appeals concluded:
There may well be close questions about the scope of the 300-foot rule as food trucks grow and spread in Baltimore. We can imagine, for example, that a hot dog truck might dispute that a brick-and-mortar deli is “primarily engaged in” selling the “same type of food product,” while the deli might claim that it is. But the City need not resolve the hot dog/sandwich conundrum to the satisfaction of all in order to avoid a vagueness challenge. The City could reduce the possibility of confusion or vagueness by promulgating regulations or providing guidance about how it plans to enforce the rule – perhaps by adopting the Cube Rule of Food Identification or some other set of guidelines. But even without a formal food taxonomy in hand, City enforcement authorities are allowed to exercise reasonable discretion in applying the 300-foot rule. And the absence of any enforcement activity against Pizza di Joey or Madame BBQ left the parties and the circuit court only to speculate about where those margins might be. Courts can only evaluate the as-applied vagueness of a statute in context, against a record in which the City has, in fact, exercised its discretion. Courts cannot evaluate the application of a statute for vagueness on this record, even if the Food Trucks had postured a vagueness claim in the first place.
Id. at 36-37 (footnote omitted).[2]
Much can be gleaned from this opinion. The opinion teaches that a request for declaratory relief can be justiciable where the plaintiff claims the loss of the right to pursue a business opportunity. The opinion also teaches that the scope of the due process and equal protection guarantees of Article 24 of Maryland’s Declaration of Rights are slightly more expansive than those found in the Fourteenth Amendment of the U.S. Constitution, and that Maryland courts may continue to borrow some of the language (but not the rationale) of the Supreme Court’s decision in Lochner. Even so, a facial constitutional challenge, based on equal protection, seems unavailable to attack an economic regulation, and an as-applied challenge is fact-intensive and depends largely on the context of the case. Finally, a claim that a statute is unconstitutionally vague on its face can be made only when the statute implicates a fundamental constitutional right. And a claim that a statute is unconstitutionally vague as applied to the plaintiff – like an as-applied equal protection challenge – is fact-intensive.
[1] A violation of the 300-foot rule is a misdemeanor. Violators are liable for a $500 fine and may have their mobile vending licenses suspended or revoked. Anyone who commits three violations within a year automatically loses his or her license and must wait a year before applying for a new one. Id. at 2 (citing Baltimore City Code Art. 15 § 17-44).
[2] For the Cube Rule of Food Identification, see id. at 36-37 n. 17; http://cuberule.com/.
Tags: Judge Douglas Nazarian