Original Author: Hemsley, Sid
Date of Material: 10/19/2001
Businesses--Laws and regulations
Festivals and celebrations
MTAS was asked if a city has the right to restrict street vendors to particular businesses during festival days.
October 19, 2001
You have the following question: Can the Town limit or restrict the sale of prepared food by individuals or groups other the Community Club during the “community involvement days” festival?
The answer is probably no.
I am indebted to Ann O’Connell, who is temporarily working for MTAS, for her excellent research on this question.
As I understand the facts, the Town recognizes annual “community involvement days” during which the Community Club, a local non-profit association, puts on a festival, which is paid for in part by the sale of prepared food at the festival. At the last festival, an individual set up a barbeque stand across the street and drew off much of the business that otherwise would have gone to community club vendors. Because the community club does so much for the town, the Town would like to amend their peddlers ordinance to limit or restrict the sale of prepared food by individuals or groups other than the community club during the festival.
I have found no cases in Tennessee addressing the exact situation in which a municipality sought to protect non-profit vendors for only a few days. The general rule is that “[a]lthough a municipality may enact regulations in the interest of public safety, health, welfare, or convenience, within the limits permitted by law, this power to regulate must be so exercised as not to unduly infringe any freedom protected by the United States Constitution or by the constitution of the state.” 60 Am.Jur.2d §30.
A survey of the federal and state cases from other jurisdictions reveals that regulation of peddlers or transient vendors to reduce traffic or sidewalk congestion, to protect children, and even to create an aesthetically pleasing environment has been upheld, while those aimed at shielding particular businesses from competition have been struck down. Those cases have generally applied a rational basis test, looking for a no more than “‘rational relationship’ to a legitimate state end.” Service Employees International Union v. District of Columbia, 608 F. Supp. 1441 (D.D.C. 1985). Thus, courts have upheld ordinances restricting peddlers from operating near duly-founded municipal markets in order to control congestion. See House-Wives League v. City of Indianapolis, 204 Ind. 685, 185 N.E. 511(1933), People v. Keir, 43 NW 1039 (Mass. 1889).
The Tennessee Supreme Court has also noted that “the finding of the municipal authorities that the area was congested would be entitled to great weight.” Dooley v. City of Cleveland, 175 Tenn. 439, 442, 135 S.W.2d 649, 651 (1940). However, Dooley is not directly on point. In that case, the Court upheld an ordinance prohibiting the sale on certain streets designated as congested of fruit, vegetables, ice cream, and other refreshments and merchandise against a vendor who tried to sell ice cream from a wagon on such a street. There was no allegation by the vendor that the city’s ordinance was an attempt to favor some merchants over others. In addition, as I understand the facts, the sales at issue do not involve sales from the city’s streets.
In Vaden v. Village of Maywood, 809 F.2d 361 (7th Cir. 1987), the Seventh Circuit applying a rational basis test upheld an ordinance which created a complicated system for regulating the sale of food from vehicles remarking that it could not find that the ordinance was “wholly unrelated” to the stated and valid purpose of preventing the distraction and delay of school children. Vaden v. Village of Maywood, 809 F.2d 361, 365 (7th Cir. 1987). The court upheld the ordinance without regard for whether or not the city could have constructed a regulation scheme that would have “accomplished its goals more effectively.” Id.
The lesson to be drawn from the cases above is that an ordinance that furthers a purpose within the police powers of a city will be given much deference. However, there are two other lessons to be learned: (1) saying the intent of the ordinance is to protect other merchants from competition posed by peddlers is the kiss of death to an ordinance; and (2) hanging the rationale of congestion about an ordinance that otherwise looks like it is intended to protect certain merchants will not always save an ordinance.
N.J. Good Humor v. Borough of Bradley Beach, 124 N.J.L. 162, 11 A.2d 113 (NJ 1940) illustrates the first point. Here, the New Jersey Supreme Court struck down an ordinance that banned all peddlers from operating within the city. The stated purpose of the ordinance was to protect the peace and quiet of a residential community and protect the business and profits of local storekeepers against the competition from peddlers. N.J. Good Humor v. Borough of Bradley Beach, 124 N.J.L. 162, 165, 11 A.2d 113, 116 (NJ 1940). The court struck down the ordinance condemning it as an abuse of the city’s police power because it “was dictated by a purpose to shield the local shopkeepers from lawful competition, and thus to serve private interests in contravention of common rights.” Id. at 171, 11 A.2d at 118.
Similarly, in Service Employees International Union v. District of Columbia, 608 F. Supp. 1434, (D.D.C. 1985), the United States Court for the District of Columbia identified the “maintenance of [a] certain environmental quality or consumer protection” as “permissible police power objectives, but stated that the “avowed purpose of protecting one class of merchants ... at the expense of another class of merchants ... is a goal of highly doubtful legitimacy”. Service Employees Int’l Union v. District of Columbia, 608 F. Supp. 1434, 1443 (D.D.C. 1985).
Likewise, the New York Supreme Court held that a city could ban peddlers from certain streets when the purpose is to maintain the streets free of congestion but if “conditions in the restricted section are not dissimilar from those existing in many other areas and where the resolution bears no relation to the welfare of the public but is designed for the convenience and interest of a special class,” the ordinance would be held unconstitutional. Italiano v. Town of Harrison, 110 A.D.2d 684, 684-85, 488 N.Y.S.2d 13, 14 (N.Y. App. Div. 1985).
This brings us to the second lesson. Courts will not always defer to a city’s asserted rationale. In the two following cases from other jurisdictions courts were not convinced of the city’s intent and struck down ordinances regulating peddlers though the city’s claimed their purpose was to control congestion on streets and sidewalks. In People v. Ala Carte Catering, 98 Cal. App. 3d Supp. 1, 159 Cal. Rptr. 479 (Cal. App. Dep’t Super. Ct. 1979), the New York Supreme Court addressed an ordinance banning the sale of food by transient vendors or peddlers within 100 feet of any stationary restaurant. The court called this restriction a “rather naked restraint on trade” even though the given rationale for the ordinance was to reduce traffic hazards. People v. Ala Carte Catering, 98 Cal. App. 3d Supp. 1, 13, 159 Cal. Rptr. 479, 484 (Cal. App. Dep’t Super. Ct. 1979). The court took issue with the traffic hazard rationale asking “how a catering truck is more of a traffic hazard within 100 feet of the entrance to a restaurant than it is within 100 feet of the entrance to a gas station or other commercial enterprise.” Id.
Similarly, in Impress Promotions v. City of Saratoga, 127 Misc. 2d 1029, 488 N.Y.S.2d 126 (NY Sup. Ct. 1985), the Supreme Court of New York found an ordinance banning peddling within 500 feet of the lands of the New York Racing Authority (“NYRA”) to be unconstitutional. The court acknowledged the city’s “legitimate need to regulate traffic at the race track on racing days,” but called the city’s method “overkill” and condemned the creation of a “dead zone” around the NYRA lands. Impress Promotions v. City of Saratoga, 127 Misc. 2d 1029, 1030, 488 N.Y.S.2d 126, 127 (NY Sup. Ct. 1985). The court exhorted the city to regulate rather than ban peddlers in this area. Id. at 1030, 488 N.Y.S.2d at 127.
In Ala Carte the purpose to protect stationary restaurants was certainly implied though not stated. Likewise, the result in Impress was probably dictated by the court’s concern that the ordinance was meant to protect the sale of souvenirs by NYRA from competition by outside vendors. In neither case does the court say that cities cannot regulate peddlers in this area, only that they cannot be completely banned from the vicinity of their stationary competition.
None of these cases addresses the question of whether or not community club vendors and for-profit vendors are “similarly situated” or distinct classes that could be lawfully treated differently. I have found no cases pitting charitable vendors of any kind against for-profit vendors in the area of protecting sales. While they are treated differently for licensing purposes, I cannot think of any legitimate reason for the government to protect the sales of non-profit vendors over those of for-profit vendors.
This is all to say that the Town would do well not to restrict peddlers or transient vendors in the name of protecting the community club vendors. But, I did want to make it clear that the city can restrict peddlers and transient vendors to further public safety, health, welfare, or convenience so long as an ulterior motive is not too apparent.
Sidney D. Hemsley
Senior Law Consultant
Sale of Food at Special Events public.wpd