Laura Pekarik launched Courageous Cupcakes, her pastry-laden food truck, in 2011 to help raise money for cancer research after her sister was diagnosed with non-Hodgkin's lymphoma. Now her cupcakes might do even more good, as the Illinois Supreme Court considers her case challenging Chicago's draconian regulations on the portable eateries.

The state's highest court heard oral arguments last week as she seeks to overturn a local ordinance that makes it virtually impossible to do business. At the heart of the matter is a rule that prohibits vendors from parking within 200 feet of any brick-and-mortar food service establishment, which Pekarik says quashes competition in favor of restaurants. According to the Chicago Tribune, that restrictive category goes so far as to include convenience stores that sell hot dogs.

"This case literally is about life and death for the food truck industry in Chicago," Robert Frommer, Pekarik's attorney from the Institute for Justice, tells Reason. "Around the country, we see that vendors and restaurants together can create great, vibrant food cultures in cities, but unfortunately that's not the case in Chicago."

Indeed, those who visit the downtown area in search of one of the brightly colored food trucks will notice they are in short supply. An analysis by the U.S. Chamber of Commerce Foundation found that just 3 percent of curb space in the central business district—known as the Loop—remains legally available for operators to set up shop. A violation constitutes a fine between $1,000 to $2,000, which, as the Foundations's study notes, is 10 times higher than the penalty for parking too close to a fire hydrant.

The state disputes that such regulations are unfair or discriminatory. "The purpose is not to suppress competition but to protect the many benefits that bricks-and-mortar restaurants bring to Chicago: tax revenue, jobs, they make a major contribution to tourism and bring cultural contributions to the city," said city attorney Suzanne Loose in court Wednesday. "This balancing is proper, even when some competition is suppressed."

Whatever the motive, competition has been more than suppressed—it's been smothered. Food truck ownership in the Windy City has fallen by nearly 50 percent since the regulations took effect in 2012. That nosedive is welcome news for the Illinois Restaurant Association, which lobbied in favor of the regulations.

Pekarik's case also contests Chicago's GPS mandate, which requires that all food trucks carry a monitoring device so the city can track their location. Loose argues that the rule exists to keep tabs on the nomadic businesses for the sake of regulatory compliance and inspections, the latter of which are triggered with even the slightest menu change.

But Frommer says that could have "profound consequences for individual privacy, not just in Illinois but throughout the nation." The state's lower court ruling on the Pekarik case held that the GPS location tracking didn't merit constitutional scrutiny, as it was on the condition of a license. According to Frommer, that means that individuals could be subject to "random searches" if applying for something as incidental as a business or driver's license.

Pekarik says that 80 percent of her annual income now comes from her two brick-and-mortar bakeries, and that her food truck seldom leaves the suburbs anymore. She's not the first to retreat, Frommer notes. His first food truck client, Greg Burke of The Schnitzel King, left Chicago where he's "lived for generations" to try his luck in North Dakota.

"The government will always be able to after the fact come up for some reason for its blatant discrimination," he tells Reason. "But whether you succeed or fail, your business should turn on how good your food is—not who you know at City Hall."