How Your Child’s Lemonade Stand Could Land You in Jail

Originally published at The Daily Signal by Jonathan Zalewski | 7/27/18

Have your kids ever asked you if they could set up a lemonade stand in the neighborhood? If so, don’t be so quick to give permission—it could be conspiracy to commit a crime.

Across America, parents and children are learning that the hard way. From Louisiana to Colorado, families set up makeshift lemonade stands, hoping to teach children the virtues of capitalism, make a few bucks, or raise funds for charity. Then they find themselves in trouble with the law if they do not first obtain a government license to conduct their “food-vending business.”

These stories reflect the way our society has become overcriminalized through the overuse and abuse of the criminal law to fix every problem and punish every mistake.

They also reveal how crony capitalism and government bureaucracy are destroying free markets, innovation, and entrepreneurialism in our local neighborhoods.

In Denver, for example, the city’s laws and regulations require any food vendor operating a vending cart in or within 300 feet of a Denver park to obtain a temporary food-vending permit before selling any food or non-alcoholic beverage to the public.

Food vendors who do not obtain a permit or violate any other provision of Denver law governing the operation of food-vending carts face up to a $999 fine, 300 days in jail, or both, for each violation of the law.

These laws and regulations even apply to lemonade stands—which brings us to the story of Jennifer Knowles and her three young sons.

Over Memorial Day weekend this year, Knowles helped her sons set up a lemonade stand across the street, within 300 feet, from an arts festival in a Denver park.

But, according to police, vendors from the art festival called and complained that the boys were undercutting the vendors’ prices and lacked a permit. Since Knowles and her boys did not have a permit to operate the stand within 300 feet of the park, police shut it down.

Neither Knowles nor her sons were criminally charged, but the boys were embarrassed and scared when the police made them close the stand. One began to cry, and another said, “I put my hat over my face. I didn’t want to see anyone.”

Clearly, Knowles and her family meant no harm to either the city or the festival vendors. In fact, they set up the lemonade stand to raise money for a charity that helps children in poverty.

Perhaps the old adage is true: No good deed goes unpunished.

If so, we need to ask ourselves what we are teaching our children about civic virtues.

The Denver laws and regulations that got Knowles and her sons into trouble present a classic case of overcriminalization. A perfectly innocent economic activity—selling lemonade to people in the neighborhood to raise money to help others in need—becomes the basis for a criminal law and punishment, including a potential jail sentence.

When the police showed up to Knowles’ house that day, they indeed could have arrested her for allowing her sons to run the stand without a permit.

The thought of that should concern every American.

Some may say obtaining a food-vending license serves a legitimate public interest by protecting consumers from foodborne illnesses. But is that what happened over Memorial Day weekend in Denver?

Police said they closed the Knowles’ lemonade stand because vendors were complaining the boys were undercutting their prices. It had nothing to do with whether Knowles and her sons were operating an unsanitary lemonade stand.

Food-vending licenses, like other types of occupational licenses, offer individuals and businesses protection from competition, which destroys free markets and innovation. Licensing laws incentivize individuals and businesses, such as food vendors, to seek and lobby for government intervention—at little or no cost—to obtain economic benefits at the expense of others.

The story of Knowles and her three sons illustrates how government licensing promotes crony capitalism, which—in addition to overcriminalization—creates economic barriers for people who are often economically or politically disadvantaged.

Their story also illustrates how children can become fearful of the law and uninterested in entrepreneurship and philanthropy.

But Knowles and her sons are not letting these barriers stop them.

Since their lemonade stand was shut down, Knowles and her sons have continued their philanthropic efforts and partnered with a local Chick-fil-A store to sell lemonade in the store for a day to raise additional money for charity.

Knowles is also working with the city of Denver to devise a solution that would allow young children to operate a lemonade stand without committing a crime.

For Knowles and her sons, when life gives them lemons, they truly do make lemonade.


Homemade Ceviche Case Exemplifies Need to Address Overcriminalization

Originally published at The Orange County Register by James R. Copland and Rafael A. Mangual | 11/17/16

Mariza Ruelas, a single mother in Stockton, California, is facing possible jail time for offering to sell her homemade ceviche, a Latin American seafood dish, through a Facebook group in which users swap recipes and occasionally swap meals. A man took her up on her offer, but unbeknownst to Ms. Ruelas, he was a government agent working on an undercover sting operation targeting those who sell food without a license.

Ms. Ruelas’s case is part of a trend of “overcriminalization,” a term describing the rapid expansion, and increased complexity, of criminally enforceable rules and regulations regarding conduct that is not intuitively wrong.

At the federal level alone, there are an estimated 300,000 criminally enforceable rules and regulations. The five states we have studied to date in our “Overcriminalizing America” research project average more than 570 percent more sections in their criminal codes than in the Model Penal Code, the template established by leading legal scholars that forms the criminal-law basis for most states, and they are enacting, on average, more than 42 new crimes on the books, each and every year. More than three-fourths of these new crimes have been scattered around state statutes outside the criminal codes themselves. States also regularly outsource the creation of crimes to unelected commissioners, administrative agencies and even private licensing associations.

In 2013, California enacted the California Homemade Food Act, intended to help what the law called “cottage food operations” but still ensnared Ms. Ruelas. Any violation of the law’s multiple provisions — it numbers almost 7,000 words — is a misdemeanor. The law criminalizes food sales for anyone who has not registered paperwork with government authorities, and it prohibits such operations in kitchens that are also used to prepare family meals or wash dishes.

Clearly, Ms. Ruelas violated the express provisions of the act — even though she claims she meant to do nothing wrong. Traditionally, under American law and the British law upon which it is based, the state had to prove a “guilty mind” to prosecute an individual of a crime. Today, however, states regularly prosecute individuals for crimes that specify no necessary criminal intent. Fifteen states follow the Model Penal Code in mandating a default criminal-intent requirement where statutes are silent, but others, including California, assume that if the legislature fails to specify any level of criminal intent, no showing of intent is required.

Individuals acting in good faith like Mariza Ruelas should be able to go through daily life without having to worry about ending up behind bars. California could pursue steps to make its criminal law more manageable by enacting a criminal-intent default standard, requiring legislative votes on any regulatory crimes, or following the lead of other states that have held special legislative sessions or creating commissions to repeal outdated crimes and reform the criminal law. Special attention should be paid to the occupational licensing space.

While not entirely curative, adopting these reforms would represent a meaningful first step toward addressing the overcriminalization problem. Until then, well-meaning citizens like Mariza Ruelas will remain at risk of imprisonment for conduct as seemingly innocent as selling some homemade food for a few extra bucks.

James R. Copland is a senior fellow and Rafael A. Mangual a legal-policy project manager for the Manhattan Institute for Policy Research.


Overcriminalization Hits the Barbershop

Originally published at National Review by Josh Barro | November 8, 2010

The Orlando Sentinel reports that the Orange County (Florida) Sheriff’s Office has been enforcing Florida’s barber licensing requirements in an unusually aggressive way: conducting armed raids of barbershops, handcuffing barbers while their records are checked, and searching (without warrants) for drugs and other contraband. Adding to the sensitivity of such operations, all the establishments raided to date cater to a primarily black or Hispanic clientele:

In “sweeps” on Aug. 21 and Sept. 17 targeting at least nine shops, deputies arrested 37 people — the majority charged with “barbering without a license,” a misdemeanor that state records show only three other people have been jailed in Florida in the past 10 years.

The operations were conducted without warrants, under the authority of the Department of Business and Professional Regulation inspectors, who can enter salons at will. Deputies said they found evidence of illegal activity, including guns, drugs and gambling. However, records show that during the two sweeps, and a smaller one in October, just three people were charged with anything other than a licensing violation…

[Barbershop owner Brian] Berry said deputies entered his store and told his barbers to stop cutting and put their hands behind their backs. As barbers sat on the ground in handcuffs, he said, deputies removed his customers — including children — from the store, and began searching workstations and checking licenses without explanation.

Barbers and witnesses at several shops told the Orlando Sentinel that deputies shouted and cursed during the raids, demanding the location of illegal drugs, which they searched for extensively. They never found more than misdemeanor amounts of marijuana at eight of the nine shops they raided.

If you were a police detective who wanted to raid my office, you would have to go before a judge and show probable cause to believe that I was committing a crime. But because barbers in Florida (and in most states) are subject to licensing requirements, they must agree to submit to inspections on demand by the Department of Business and Professional Regulation—which can then join up with local law enforcement to conduct warrantless searches that cover matters beyond barber licensing issues. Essentially, to be a barber in Florida, you must agree to give up your Fourth Amendment rights at work.

I’d never heard of a case like this involving barbershops before, though the Orlando Sentinel story talks about similar raids earlier this decade in Moreno Valley, California. Where you most often hear about raids that spill over from licensing issues to more general law enforcement is in bars.

Texas, in particular, has a reputation for aggressively raiding liquor licensees. Starting in 2005, the Texas Alcoholic Beverage Commission would jointly raid a bar along with local law enforcement, with no need for a warrant as the raid is in service of the liquor license. Mostly, the purpose of the raids was to issue citations for overservice and for public intoxication—yes, for the crime of being drunk in a bar. TABC argues that these arrests benefit public safety, as drunk patrons may drive home, though TABC does not have to prove that a person intends to drive before arresting him or her.

TABC drastically scaled back its bar raid program in 2006, as a result of a public outcry. The case that most undermined the TABC’s public position was one woman’s public intoxication arrest at an Irving, Texas hotel bar. Says the Austin American-Statesman:

The arrest arguably did not prevent a DWI; the woman had a room at the hotel that night. The TABC agent contended she was a danger to herself because she had no one to escort her to her room.

The point of this story is that the only brake on the abuse of warrantless bar inspections has been public opinion; TABC is still legally empowered to raid bars at any time for any reason, and continues to do so on a smaller scale. Indeed, an aggressive raid on a gay bar in Fort Worth in 2009 (on the 40th anniversary of the Stonewall Riots, no less) led to another public outcry. As with barbershops, the “license inspection” excuse deprives bar owners, employees and patrons of their Fourth Amendment rights—and they must rely on public opinion to restrain state officials from exploiting this opening.

Debates over business licensing usually weigh the value of protection from unqualified service providers against the cost of erecting barriers to entry. Examined this way, some license requirements look ridiculous even if you assume that licensing officials will act benevolently and efficiently; floristry licenses in Louisiana are a good example.

But it is also important to consider the costs that are likely to arise when a government misuses its license power. Licensing bodies can use their powers to bar qualified operators from entering new markets, to punish politically disfavored individuals or groups, or (as seen in the above cases) to circumvent the Fourth Amendment. The potential for abuse puts another thumb on the scale against business licensing.

The simplest way to stop licensing-related erosion of Fourth Amendment rights is to reduce the number of activities that require a license. Unfortunately, this is inappropriate in some cases, and politically infeasible in others. Personally, I oppose liquor licensing; I believe that liquor sales should be regulated through zoning and generally applicable laws, in the same way that governments regulate most other kinds of retail businesses. But the regime of liquor licensing is politically entrenched and unlikely to go away.

Assuming liquor licensing is retained, the warrantless inspection powers of liquor inspectors should be limited to civil matters, with Fourth Amendment protections preserved for matters such as public intoxication. And meanwhile, Texas should repeal its overbroad public intox law.

But with barbering, the solution is simple: barber licensing should be abolished (as has long been advocated by CAP’s Matt Yglesias). Hell, I’d get rid of the entire Florida Department of Business and Professional Regulation, which also conducts the important business of licensing auctioneers, cosmetologists, interior designers, landscape architects, talent agents and yacht brokers and salespeople, among others.

Barbershops could still be subject to health and safety inspections, much in the way that restaurants are in most jurisdictions—restaurant cleanliness matters, but you don’t need a license to run a restaurant*, nor do you have to put in a certain number of hours at culinary school. And barbershop inspections should be limited to addressing health and safety issues, not enforcing laws more broadly.