Does the Dormant Commerce Clause or Federal Pre-emption Shield Out-of-State Egg Farmers From California Animal Welfare Laws?
By Mike Dorf
Late last year, I blogged about the then-proposed King Amendment to the Farm Bill, which would have precluded states from regulating agricultural products more strictly than sister states. The amendment was not enacted but a pending federal lawsuit--originally filed by Missouri but now joined by four other states plus the governor of a fifth, aims to achieve through litigation the core of what the King Amendment aimed to achieve through legislation. According to the amended complaint in Missouri v. Harris, California cannot legally enforce its law forbidding the sale of eggs produced by methods other than those approved in Proposition 2 by California voters in 2008.
In 2008, California voters approved Prop 2 by a nearly two-to-one margin. The provision regulates the conditions of confinement of animals raised for food in California, requiring that each animal be given sufficient room to lie down, stand up, turn around, and spread his or her limbs. Thus, effective in 2015, California will no longer permit gestation crates for pigs, veal crates, or battery cages for hens. In 2010, California enacted a law that forbids the in-California sale of eggs produced anywhere, unless they were produced in accordance with the same standards as those that implement Prop 2. The lawsuit by Missouri et al challenges that application of California standards to eggs produced outside of California on grounds that it violates the dormant Commerce Clause and/or is pre-empted by the federal Egg Products Inspection Act.
Regular readers of this blog know that I am ambivalent about such regulations. If animal agriculture is inevitable, then I think that measures like Prop 2 are marginally better for the captive animals than leaving the industry unregulated because such measures do reduce suffering a little--although even the pigs, cows, and chickens raised for food under so-called humane conditions are subject to horrific suffering. Perhaps campaigns for laws like Prop 2 raise consciousness more generally, so that people who voted for Prop 2 in 2008 will come to value animal interests more broadly and eventually stop participating in the mistreatment and killing of animals. But there is also the possibility that the marginal improvements like Prop 2 reassure people who really do care about animal interests that they can eat their bacon cheeseburgers with a clean conscience. In my view, the question of whether measures like Prop 2 ultimately do more harm than good is a complex empirical one about which we do not have sufficient information to reach a definitive conclusion.
All of that is by way of full disclosure: As a critic of Prop 2 from "the left", as it were, I have less of a moral investment in its surviving a legal attack than one might think. Put differently, I'm interested in this topic chiefly as a constitutional law scholar, and only secondarily as a vegan.
The complaint cites various bits of the legislative history of the California legislation to show that the purpose of extending Prop 2 to out-of-state egg producers was to "level the playing field." Complying with Prop 2 will substantially increase the capital cost and somewhat increase the marginal cost of egg production, and thus absent the legislation applying the same standards to out-of-state producers, Prop 2 would confer a competitive advantage on the out-of-state producers. Accordingly, the complaint alleges that the legislation is protectionist in violation of the anti-discrimination norm of the dormant Commerce Clause.
The law itself cites a health purpose, not a protectionist purpose. The law cites a Pew Commission report stating that animal products pose fewer risks to human health when the animals producing those products are treated well. The complaint alleges that the health benefits of the law are illusory, pointing to studies that reach different conclusions, and arguing that, in any event, the health justification was pretextual in light of the legislative history.
This claim strikes me as weak. The law is not facially discriminatory. It imposes the same standards on all eggs offered for sale in California. Thus, the burden will be on the plaintiffs to show that their health studies are clearly right and California's studies are clearly wrong. To the extent that I have a view about this matter, I think I'm probably closer to that of the plaintiffs, but for reasons that they will hardly like and certainly wouldn't introduce in evidence. Namely: The harmful effects of egg consumption on human health are so large that it's hard to take seriously the state's asserted interest in human health, even if Prop-2-compliant eggs are slightly less dangerous to humans than non-Prop-2-compliant eggs.
But even if the plaintiffs succeed in showing that the real purpose of the legislation was to "level the playing field," that does not count as a discriminatory purpose where, as here, the field is being leveled from a point that is made unlevel by another California law. Suppose that a certain kind of bean grows fastest in soil that is naturally found only in Missouri. If California were to enact a law that requires that sort of bean to be grown in the inferior kind of soil found in California, that would be a de facto protectionist measure. Although neutral on its face, the law would simply aim to take away an advantage that Missouri beans naturally enjoy.
By contrast, where, as here, another provision of California law confers an advantage on out-of-state egg producers, a law that "levels the playing field" in the sense of applying the same standards to out-of-state egg producers yields equal treatment. That's why the Ninth Circuit rejected the same sort of argument when brought by out-of-state foie gras producers who challenged the state's application of the same standards to them as applied to California producers under a different statutory provision.
The foie gras decision also pretty much disposes of the other dormant Commerce Clause claims--that the law unduly burdens interstate commerce and that it regulates extraterritorially. The standard for winning a challenge to a neutral law on the ground that it unduly burdens interstate commerce is very high: the plaintiff must show that the burden on interstate commerce clearly outweighs the law's in-state benefits. The plaintiff states have studies showing high compliance costs but (much to my chagrin), these somewhat higher production costs may well be offset by the marketing opportunity provided by shifting their facilities to "humane" egg production. The key point here, though, is that "undue burden" dormant Commerce Clause challenges rarely succeed.
Likewise, the claim that the California law regulates extraterrititorially is both precluded by the foie gras case and by basic logic. Any state law that imposes product regulation that takes the form of limiting the sale of an item produced in a certain manner would be invalid under the plaintiffs' theory, but that is plainly not the law.
The plaintiffs have a better argument that the California law is pre-empted by the federal law, but here too I think they should lose. The key statutory language provides that "no state or local jurisdiction may require the use of standards of quality, condition, weight, quantity, or grade which are in addition to or different from the official Federal standards." The plaintiffs say that if the California law is a health measure, and thus doesn't fail the nondiscrimination test of the dormant Commerce Clause, then it is pre-empted as an additional "quality" standard that differs from the federal standard.
I think that argument would work if the California law only aimed at protecting human health. But the law's obvious purposes include the promotion of (or, in my view, the marginal reduction in assaults on) the welfare of egg-laying hens. And the text of the California law says: "It is the intent of the Legislature to protect California consumers from the deleterious, health, safety, and welfare effects of the sale and consumption of eggs derived from egg-laying hens that are exposed to significant stress and may result in increased exposure to disease pathogens including salmonella." (Emphasis added).
The linguistic context of that sentence suggests that the law aims at human welfare, and if so, then it would appear to be a "quality" standard that falls within the scope of federal pre-emption. But it is very hard to figure out how human welfare is enhanced by better conditions for laying hens, apart from health and safety, which are also part of the law's purpose. Thus, I think that read in the overall context, the California law has animal welfare as one of its central purposes. And as such, it strikes me that the law is not pre-empted, because the federal Egg Products Inspection Act is not concerned with animal welfare at all.
But does California have an interest in promoting animal welfare in places outside of California? Is promotion of that interest really an effort to regulate extraterritorially in violation of the dormant Commerce Clause after all? I think the pretty clear answer here is no. Last year the Ninth Circuit upheld California's fuel standards against (among other things) a claim that in regulating based on carbon intensity, California was regulating extraterritorially in violation of the dormant Commerce Clause. As in the foie gras case, so too in the carbon tax case, the court affirmed the proposition that a state can validly assert an interest in the process by which a product sold in the state has been produced--even if the production process occurred out of state.
So, on the merits, it looks like the plaintiff states should lose their challenge. I would note two caveats, however. First, the court may not reach the merits because there are threshold questions of standing and ripeness. Second, the plaintiffs do have one somewhat stronger claim that the California legislation discriminates against out-of-state egg producers in that California egg producers were given seven years to reconfigure their plants in order to bring them into compliance with Prop 2, but that the out-of-state producers were only given five years to reconfigure their own plants (because the legislation came two years later than Prop 2). If this is a valid claim, then, pursuant to the law's severability clause, it would entitle the out-of-state producers to an extra two years to comply with the law; it would not result in the law's invalidation.
Late last year, I blogged about the then-proposed King Amendment to the Farm Bill, which would have precluded states from regulating agricultural products more strictly than sister states. The amendment was not enacted but a pending federal lawsuit--originally filed by Missouri but now joined by four other states plus the governor of a fifth, aims to achieve through litigation the core of what the King Amendment aimed to achieve through legislation. According to the amended complaint in Missouri v. Harris, California cannot legally enforce its law forbidding the sale of eggs produced by methods other than those approved in Proposition 2 by California voters in 2008.
In 2008, California voters approved Prop 2 by a nearly two-to-one margin. The provision regulates the conditions of confinement of animals raised for food in California, requiring that each animal be given sufficient room to lie down, stand up, turn around, and spread his or her limbs. Thus, effective in 2015, California will no longer permit gestation crates for pigs, veal crates, or battery cages for hens. In 2010, California enacted a law that forbids the in-California sale of eggs produced anywhere, unless they were produced in accordance with the same standards as those that implement Prop 2. The lawsuit by Missouri et al challenges that application of California standards to eggs produced outside of California on grounds that it violates the dormant Commerce Clause and/or is pre-empted by the federal Egg Products Inspection Act.
Regular readers of this blog know that I am ambivalent about such regulations. If animal agriculture is inevitable, then I think that measures like Prop 2 are marginally better for the captive animals than leaving the industry unregulated because such measures do reduce suffering a little--although even the pigs, cows, and chickens raised for food under so-called humane conditions are subject to horrific suffering. Perhaps campaigns for laws like Prop 2 raise consciousness more generally, so that people who voted for Prop 2 in 2008 will come to value animal interests more broadly and eventually stop participating in the mistreatment and killing of animals. But there is also the possibility that the marginal improvements like Prop 2 reassure people who really do care about animal interests that they can eat their bacon cheeseburgers with a clean conscience. In my view, the question of whether measures like Prop 2 ultimately do more harm than good is a complex empirical one about which we do not have sufficient information to reach a definitive conclusion.
All of that is by way of full disclosure: As a critic of Prop 2 from "the left", as it were, I have less of a moral investment in its surviving a legal attack than one might think. Put differently, I'm interested in this topic chiefly as a constitutional law scholar, and only secondarily as a vegan.
The complaint cites various bits of the legislative history of the California legislation to show that the purpose of extending Prop 2 to out-of-state egg producers was to "level the playing field." Complying with Prop 2 will substantially increase the capital cost and somewhat increase the marginal cost of egg production, and thus absent the legislation applying the same standards to out-of-state producers, Prop 2 would confer a competitive advantage on the out-of-state producers. Accordingly, the complaint alleges that the legislation is protectionist in violation of the anti-discrimination norm of the dormant Commerce Clause.
The law itself cites a health purpose, not a protectionist purpose. The law cites a Pew Commission report stating that animal products pose fewer risks to human health when the animals producing those products are treated well. The complaint alleges that the health benefits of the law are illusory, pointing to studies that reach different conclusions, and arguing that, in any event, the health justification was pretextual in light of the legislative history.
This claim strikes me as weak. The law is not facially discriminatory. It imposes the same standards on all eggs offered for sale in California. Thus, the burden will be on the plaintiffs to show that their health studies are clearly right and California's studies are clearly wrong. To the extent that I have a view about this matter, I think I'm probably closer to that of the plaintiffs, but for reasons that they will hardly like and certainly wouldn't introduce in evidence. Namely: The harmful effects of egg consumption on human health are so large that it's hard to take seriously the state's asserted interest in human health, even if Prop-2-compliant eggs are slightly less dangerous to humans than non-Prop-2-compliant eggs.
But even if the plaintiffs succeed in showing that the real purpose of the legislation was to "level the playing field," that does not count as a discriminatory purpose where, as here, the field is being leveled from a point that is made unlevel by another California law. Suppose that a certain kind of bean grows fastest in soil that is naturally found only in Missouri. If California were to enact a law that requires that sort of bean to be grown in the inferior kind of soil found in California, that would be a de facto protectionist measure. Although neutral on its face, the law would simply aim to take away an advantage that Missouri beans naturally enjoy.
By contrast, where, as here, another provision of California law confers an advantage on out-of-state egg producers, a law that "levels the playing field" in the sense of applying the same standards to out-of-state egg producers yields equal treatment. That's why the Ninth Circuit rejected the same sort of argument when brought by out-of-state foie gras producers who challenged the state's application of the same standards to them as applied to California producers under a different statutory provision.
The foie gras decision also pretty much disposes of the other dormant Commerce Clause claims--that the law unduly burdens interstate commerce and that it regulates extraterritorially. The standard for winning a challenge to a neutral law on the ground that it unduly burdens interstate commerce is very high: the plaintiff must show that the burden on interstate commerce clearly outweighs the law's in-state benefits. The plaintiff states have studies showing high compliance costs but (much to my chagrin), these somewhat higher production costs may well be offset by the marketing opportunity provided by shifting their facilities to "humane" egg production. The key point here, though, is that "undue burden" dormant Commerce Clause challenges rarely succeed.
Likewise, the claim that the California law regulates extraterrititorially is both precluded by the foie gras case and by basic logic. Any state law that imposes product regulation that takes the form of limiting the sale of an item produced in a certain manner would be invalid under the plaintiffs' theory, but that is plainly not the law.
The plaintiffs have a better argument that the California law is pre-empted by the federal law, but here too I think they should lose. The key statutory language provides that "no state or local jurisdiction may require the use of standards of quality, condition, weight, quantity, or grade which are in addition to or different from the official Federal standards." The plaintiffs say that if the California law is a health measure, and thus doesn't fail the nondiscrimination test of the dormant Commerce Clause, then it is pre-empted as an additional "quality" standard that differs from the federal standard.
I think that argument would work if the California law only aimed at protecting human health. But the law's obvious purposes include the promotion of (or, in my view, the marginal reduction in assaults on) the welfare of egg-laying hens. And the text of the California law says: "It is the intent of the Legislature to protect California consumers from the deleterious, health, safety, and welfare effects of the sale and consumption of eggs derived from egg-laying hens that are exposed to significant stress and may result in increased exposure to disease pathogens including salmonella." (Emphasis added).
The linguistic context of that sentence suggests that the law aims at human welfare, and if so, then it would appear to be a "quality" standard that falls within the scope of federal pre-emption. But it is very hard to figure out how human welfare is enhanced by better conditions for laying hens, apart from health and safety, which are also part of the law's purpose. Thus, I think that read in the overall context, the California law has animal welfare as one of its central purposes. And as such, it strikes me that the law is not pre-empted, because the federal Egg Products Inspection Act is not concerned with animal welfare at all.
But does California have an interest in promoting animal welfare in places outside of California? Is promotion of that interest really an effort to regulate extraterritorially in violation of the dormant Commerce Clause after all? I think the pretty clear answer here is no. Last year the Ninth Circuit upheld California's fuel standards against (among other things) a claim that in regulating based on carbon intensity, California was regulating extraterritorially in violation of the dormant Commerce Clause. As in the foie gras case, so too in the carbon tax case, the court affirmed the proposition that a state can validly assert an interest in the process by which a product sold in the state has been produced--even if the production process occurred out of state.
So, on the merits, it looks like the plaintiff states should lose their challenge. I would note two caveats, however. First, the court may not reach the merits because there are threshold questions of standing and ripeness. Second, the plaintiffs do have one somewhat stronger claim that the California legislation discriminates against out-of-state egg producers in that California egg producers were given seven years to reconfigure their plants in order to bring them into compliance with Prop 2, but that the out-of-state producers were only given five years to reconfigure their own plants (because the legislation came two years later than Prop 2). If this is a valid claim, then, pursuant to the law's severability clause, it would entitle the out-of-state producers to an extra two years to comply with the law; it would not result in the law's invalidation.