Ninth Circuit Dismisses Lawsuit Challenging Constitutionality of California’s Sow Confinement Law

August 10, 2021 | Kitt Tovar Jensen

Note: In response to this decision, Senators Marshall, Grassley, Ernst, Cornyn, and Hyde-Smith introduced the Exposing Agricultural Trade Suppression (EATS) Act, S. 2619. The stated purpose of the bill is to “prevent States and local jurisdictions from interfering with the production and distribution of agricultural products in interstate commerce.”

In 2018, California residents passed Proposition 12. The law prohibits farm owners and operators in the state from confining any “calf raised for veal, breeding pig, or egg-laying hen who is kept on a farm” in a “cruel manner.” Cal. Health & Safety Code § 25990(b)(1). Cruel manner is defined as “a manner that prevents the animal from lying down, standing up, fully extending the animal's limbs, or turning around freely.” Producers must also provide a minimum amount of space, depending on the species, for each covered animal.

In addition to the farm owner and operator provisions, the law prohibits the sale of veal, pork, or egg products that comes from an animal, or offspring of an animal, that was confined in a cruel manner. This applies to all covered products regardless of where the animal was raised. Proposition 12 goes into effect January 1, 2022.

The National Pork Producers Council (NPPC) and the American Farm Bureau Federation (AFBF) filed this lawsuit claiming that Proposition 12 violates the dormant Commerce Clause by regulating out-of-state activities and by excessively burdening interstate commerce. The plaintiffs sought declaratory and injunctive relief. The Southern District of California rejected the plaintiffs’ claims and granted the motion to dismiss. Nat’l Pork Producers Council v. Ross, 456 F.Supp.3d 1201 (S.D. Cal. 2020). The plaintiffs appealed.

On July 28, 2021, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal, finding that even though the complaint plausibly alleged that “Proposition 12 will have dramatic upstream effects and require pervasive changes to the pork production industry nationwide,” it did not state a violation of the dormant Commerce Clause under existing precedent.

The Dormant Commerce Clause

Under the Commerce Clause, Congress has the exclusive power to “regulate Commerce ... among the several States.” U.S. Const. art. I., § 8, cl. 3. While not explicitly stated in the Constitution, the courts have determined that a state cannot impose laws that disrupt commerce. The dormant Commerce Clause prohibits a state from imposing an “undue burden” on interstate commerce. South Dakota v. Wayfair, Inc., 138 S. Ct. 2080, 2091 (2018). This restriction, however, has been interpreted narrowly.

Impermissible Extraterritorial Effect

On appeal, the plaintiffs argued that Proposition 12 impermissibly affects out-of-state prices. Although Proposition 12 does not directly dictate the price of pork, the plaintiffs urged that the extraterritoriality principle applied because of the interconnected nature of the pork industry. A single animal may yield many pork products sold all over the country. In order to comply with Proposition 12, all producers are faced with an expensive choice. They must either change their production methods to ensure compliance or guarantee that their products are not sold in California. Because 87% of pork produced in the U.S. is consumed outside of California, the plaintiffs assert that Proposition 12 has an “upstream effect” on pork production and transactions outside of California.

Acknowledging that Proposition 12 will likely impact pork production methods and costs, the court, nonetheless, rejected the plaintiffs’ arguments, noting that many laws have a de facto effect on other states. See Gillian E. Metzger, Congress, Article IV, and Interstate Relations, 120 Harv. L. Rev. 1468, 1521 (2007) (explaining “Delaware's corporate law, which has de facto nationwide application”). This effect, the court explained, does not necessarily constitute an impermissible extraterritorial effect. Additionally, this “extraterritoriality principle” generally only applies to price-control or price affirmation laws. See Pharm. Rsch. & Mfrs. of Am. v. Walsh, 538 U.S. 644, 669 (2003).

Interpreting dormant commerce clause precedent very narrowly, the court found that Proposition 12, although imposing an increased financial burden on producers, applies equally to both in-state and out-of-state conduct. A state law is impermissibly extraterritorial when it specifically regulates out-of-state conduct. On the other hand, a state may regulate commerce within its boundaries. For the same reason, the court reasoned, Proposition 12 does not directly regulate out-of-state transactions, but only the sale of certain products in California.

The plaintiffs also argued that Proposition 12 posed a risk of inconsistent regulations that undermined a “compelling need for national uniformity in regulation.” The court ruled that the complaint failed to make a plausible allegation that the pork production industry was of such national concern that it was analogous to taxation or interstate travel, where uniform rules are crucial.  See Rosenblatt v. City of Santa Monica, 940 F.3d 439, 452 (9th Cir. 2019). Accordingly, the court held that Proposition 12 did not have an impermissible extraterritorial effect. In making this ruling, the court relied upon the Supreme Court’s determination that a uniform foie gras production method did not rise to the level of national concern. Ass'n des Eleveurs de Canards et d'Oies du Quebec v. Harris, 729 F.3d 937, 950 (9th Cir. 2013).

Excessive Burden on Interstate Commerce

The court also summarily dismissed the plaintiffs’ argument that Proposition 12 placed an excessive burden on interstate commerce in relation to the local benefits. The plaintiffs argued that Proposition 12 would impose significant additional costs on producers to comply and that the “costs were not justified by any animal-welfare interest.” Further, the plaintiffs alleged that the California law had “no connection to human health or foodborne illness.” The plaintiffs alleged that the cost would either be passed onto the consumer in the form of more expensive products or force producers who could not afford to absorb the increased cost to withdraw from the California market.

Again rejecting the plaintiffs’ arguments, the court ruled that laws that simply increased costs to ensure compliance were not a burden on interstate commerce. The court concluded that the law would not impede the flow of commerce between the states. Therefore, the court affirmed the dismissal of the complaint, finding that the plaintiffs failed to show that Proposition 12 placed an excessive burden on interstate commerce.

The case is Nat'l Pork Producers Council v. Ross, 2021 WL 3179247 (9th Cir. July 28, 2021).