On March 28, the United States Supreme Court granted the petition for certiorari in National Pork Producers v. Ross, a lawsuit challenging the constitutionality of California’s Proposition 12 (Prop 12).  To hear more about animal confinement statutes generally and Prop 12 specifically, click here for a podcast episode I did with Beth Rumley from the National Agricultural Law Center.

Image by William Murphy from Pixabay

Background

Prop 12, passed by California voters in 2018, makes it illegal to sell pork in California unless the pig from which it comes was born to a sow housed with 24 square feet of space and in conditions to let her turn around freely and not touch the pen.  (The law imposes requirements on chickens and veal as well, but those are not at issue in this case).  Any pork sale in California not meeting these requirements is a crime punishable by a fine or jail sentence.  Sellers can also face a civil damages action.

According to the Petition, California consumes about 13% of pork in the US, it has only about 0.133% of the national breeding herd.  Further, Petitioners state that very few production facilities in the nation satisfy the spacing requirements of Proposition 12, and that converting to do so would be extremely expensive.

Dormant Commerce Clause

The Constitution grants Congress the power to regulate commerce among the states.  Although the Constitution does not expressly prohibit state law impacting interstate commerce, the Supreme Court has always interpreted the Commerce Clause to implicitly preempt state laws that “regulate commerce in a manner disruptive to economic activities in the nation as a whole.”  This is known as the “dormant Commerce Clause.”  There are essentially two parts to the dormant Commerce Clause: (1) states may not discriminate against interstate commerce; and (2) states may not impose undue burdens on interstate commerce.  A state law may violate the dormant commerce clause when it has “extraterritorial effects.”  Additionally, the Pike balancing test provides that a state law that regulates “even-handedly to effectual a legitimate local public interest” will be upheld unless the burden imposed on commerce is clearly excessive in relation to the intended local benefits.

Litigation 

Petitioners National Pork Producers Council (NPPC) and American Farm Bureau Federation (AFBF) challenged Prop 12 as violating the dormant Commerce Clause.

The trial court granted Defendants’ Motion to Dismiss.

The US Court of Appeals for the Ninth Circuit affirmed that dismissal in 2021. [Read Opinion here.]  Specifically, the Ninth Circuit based this on three determinations.  First, Petitioners’ interpretation of the Healy case was overly broad and limited the application of that case to situations involving price control or affirmation statutes, which Prop 12 is not.  Second, the Court held that significant upstream effects outside the state do not violate the Commerce Clause even if the burden of the law falls primarily on other states so long as the only conduct regulated  is that in California.  Here, although producers nationwide would face those upstream effects, the only conduct regulated, the court held, was pork sales within California.  Finally, with regard to the Pike balancing test, the court found there was no “significant burden on interstate commerce” because it deemed the increase costs not to qualify for dormant Commerce Clause purposes.  Thus, because the court found no burden to weigh, it did not consider the importance of the law as articulated by California.

Petition for Certiorari

The Petitioners argue that Prop 12 violates the dormant Commerce Clause in two ways.  [Read Petition here.]

First, they argue, it is impermissibly extraterritorial.  Because nearly all of the pork sold in California is imported from other states, Prop 12 “in practical effect regulates wholly out-of-state commerce.”  Petitioners allege that it requires “massive and costly” alteration to swine facilities nationwide, having a financial impact on farms and businesses with no connection to California.  Moreover, they contend, Prop 12 will be “policed by intrusive inspections of out-of-state farms conducted by California’s agents.”  The Petition states that, “if any law violates the dormant Commerce Clause’s extraterritoriality principle because of its practical effects on commerce in other states, it is Proposition 12…”  Further, if the Ninth Circuit opinion stands, Petitioners argue, they have essentially eviscerated the essential protections provided by the dormant Commerce Clause’s extraterritoriality doctrine.  They argue the Ninth Circuit’s opinion conflicts with US Supreme Court precedent as well as causes a circuit split among federal courts.

Second, Petitioners argue that the law fails the Pike balancing test articulated by the Court.  Prop 12, they say, has no human health rationale and rests “only on philosophical preferences about conduct occurring almost entirely outside California.”  Neither of these, they argue, outweigh the “wrenching effect of the law on interstate commerce.”  Again, the Petitioners argue that the Ninth Circuit impermissibly narrowed the scope of the Pike  balancing test by refusing to consider increased costs as a qualifying factor.

In light of this, the Petitioners argue that “the Ninth Circuit’s dormant Commerce Clause jurisprudence has gone off track.”

Response by California 

The State of California filed a Response.  [Read Response here.]

They argue that the Petitioners’ extraterritoriality challenge does not warrant review.  In particular, they argue that the Ninth Circuit correctly ruled that Prop 12 does not have any impermissible extraterritorial threats.  The State argues there is not a circuit split as the Petition claims.  The State argues that Prop 12 is “an in-state sales restriction” that “does not have impermissible extraterritorial reach merely because some out-of-state businesses will opt to modify their production or distribution practices in order to serve the enacting State’s market.”  The State points to other state laws across the country that may have ripple effects both within the enacting estate and elsewhere, such labeling or quality requirements.  The State also questions the Petition’s claim that it would be impossible for pork producers to segregate their operations and produce California-specific products that comply with Prop 12.  They argue the Petitioners failed to offer evidence to support this claim, and point to various large businesses now requiring supply chain specializations and to pork producers and supplies who have announced they will comply with the Prop 12 restrictions.

The State also notes that Prop 12 does not expressly provide for any out-of-state inspections by California officials to ensure compliance with Prop 12.  Such inspections are merely part of a proposed regulation from the California Departments of Food and Agriculture and Public Health.  If the final version includes similar language, the Petitioners can challenge said regulations at that time.

The State also argues the “dramatic economic effects” that the Petitioners claim does not satisfy the Pike balancing test.  Further, the State claims the Petitioners “overstate the practical economic effects of Proposition 12.”

Finally, the State rebuts the Petitioner’s assertion that Prop 12 has no health-related justification, offering as an example the fact that close confinement of animals may increase the spread of disease between hogs, which can create threats to human health as well.

Response by HSUS

A group of non-government intervenors including the Humane Society of the United States (HSUS), Animal Legal Defense Fund, Animal Equality, The Humane League, Farm Sanctuary, Compassion in World Farming UA, and Animal Outlook, intervened as a party to the case and also filed a response opposing the Petition for Certiorari. [Read Brief here.]

The Intervenors offer two primary arguments:  (1) The case does not present the questions the Petition asserts; and (2) Pike balancing test.

First, they argue that there is no circuit split as argued by the Petitioners and the Ninth Circuit has not imposed the limitations Petitioners’ claim on the dormant commerce clause analysis.  They also argue that the lower court correctly applied precedent from the US Supreme Court.

Next, they claim that Petitioners “falsely represent” Prop 12 as directed “exclusively to humane treatment, urging that the dormant Commerce Clause prohibits States from banning the in-state sale of a product based solely on moral concerns about how it was produced.”  On the contrary, the Intervenors argue, Prop 12 serves to prevent animal cruelty, but also addresses threats to consumer’s health caused by confinement of animals, which is “unquestionably a valid state interest.”

Then, similar to the State’s brief, they question the Petitioners’ claims of impacts arising from Prop 12, including claims that segmenting supply chains to separate pork that can be sold in California would be impossible. They also question the claim that Prop 12 will require every US pork consumer to pay for California’s proposed housing, noting that producers could continue to sell pork outside of California without making any changes.  The brief also notes that major pork producers Tyson Foods and Hormel either comply or have noted that coming into compliance is “not significant.”

The post US Supreme Court Will Hear Proposition 12 Challenge appeared first on Texas Agriculture Law.