He's misconstruing what transpired. Mexican and dude contract over a piece of real estate, that real estate is zoned for limited commercial use. That limited commercial use means can't have fast food, no drive through, no music outside, no seating outside, but you can have to go sandwich shops like subway. Both of the contracting parties agreed initially that the taco shop was not a to go sandwitch shop, so they amended their agreement to allow to go tacos. That amendment needed approval from the city or board or whatever. They denied it. So, to court they go. Judge found that the board that denied the agreement was reasonable. The judge however believed the amendment wasn't needed as to go burritos/tacos are similar enough to sandwitches that he's chill to build his mexican joint.
There's a subtext, I read, that the sandwiches clause was to keep brownoids out of the neighborhood and the judge didn't want to deal with the racism angle of their contract. A taco and burrito is not like a sandwich, they attract a different clientele. There's a freedom of association that is being undermined here that is kinda cringe.