March 31, 2021
In an ongoing effort to protect states’ rights under the Commerce Clause, 20 states filed an amicus curiae brief with the U.S. Supreme Court supporting the petition filed by the North American Meat Institute challenging the constitutionality of California’s Proposition 12.
Enacted in November 2018, Californian voters approved Proposition 12 which imposes space requirements regarding breeding pigs and veal calves within California. Prop 12 creates a barrier to trade by imposing obligations on out-of-state competitors in an effort to assist local producers of pork and veal, the Meat Institute challenges.
Prop 12 reaches beyond the state’s borders by prohibiting the sale in California of uncooked pork or veal from animals housed in ways that do not meet California’s requirements. As a result, Prop 12 sets confinement standards for how pigs and veal calves are raised anywhere in the United States or in any foreign country.
“The governments of nearly half the states agree, if California is allowed to apply its laws to conduct in other states, a single state will dictate policies in all others, encouraging a patchwork of regulations and threatening the free flow of interstate commerce,” says Meat Institute President and CEO Julie Anna Potts.
The brief was filed by Indiana, joined by Alabama, Alaska, Arkansas, Georgia, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia and Wyoming.
The brief details that “California’s animal-confinement rules depart markedly from the conventional rules of the vast majority of States, which permit farmers to raise calves and hogs in accordance with commercial standards and agricultural best practices, rather than dictate mandatory animal-confinement requirements.”
It continues to note, “California’s rules have serious economic consequences, as it is costly to convert animal-husbandry operations to comply with the new rules. According to Christine McCracken, senior analyst of animal protein at Rabobank, ordinarily an ‘average barn might cost $1,600 to $2,500 per sow, or $3 million to $4.5 million in total.” Under California’s animal-confinement rules, however, some compliant barns are “averaging as much as $3,400 per sow,” with the decision to convert operations becoming increasingly difficult in light of recently “elevated building costs,” the brief adds.
In February, the Meat Institute filed a petition for a writ of certiorari asking the Supreme Court to review an earlier ruling of the U.S. Court of Appeals for the Ninth Circuit in the Meat Institute’s challenge to the constitutionality of California’s Proposition 12: The Farm Animal Confinement Initiative. The Meat Institute opposes the law because it is unconstitutional and will hurt the nation’s food value chain by significantly increasing costs for producers and consumers.
The question in the case is whether the U.S. Constitution permits California to extend its police power beyond its territorial borders by banning the sale of wholesome pork and veal products sold into California unless out-of-state farmers restructure their facilities to meet animal-confinement standards dictated by California, the Meat Institute states.
In its brief, the Meat Institute urged the Court to grant review because the “Ninth Circuit’s decision conflicts with the decisions of other federal courts of appeals on the question whether the Constitution limits a state’s ability to extend its police power beyond its territorial borders through a trade barrier dictating production standards in other States and countries.”
Allowing Prop 12 to stand “insulates in-state farmers from out-of-state competition, while imposing crushing burdens on out-of-state farmers and producers who have no political voice to shape the regulations that California has unilaterally determined to foist upon their operations outside of California.
The states’ brief notes, “California’s Proposition 12 is a paradigm of unconstitutional extraterritorial regulation: It requires hog and veal-calf farmers in every state to follow California’s animal-confinement rules on pain of exclusion from the California market. Yet the Ninth Circuit upheld Proposition 12 on the ground that the Constitution permits any extraterritorial regulation that ‘is not a price control or price affirmation statute.’ That decision warrants consideration not only because it permits precisely the sort of market-balkanizing interstate regulatory conflict the Commerce Clause was meant to prevent, but also because it conflicts with the holdings of at least five other circuits.”
Slippery slope on states’ rights
The states also argue “it is easy to imagine farmers getting caught in the crossfire should other states attempt to impose regulations that differ from California’s. Massachusetts, Maine, Michigan, and Rhode Island have enacted similar exacting animal confinement laws with a market-exclusion enforcement mechanism.”
In addition, similar regulation that encourages states’ voters to prosecute their political disagreements rather than via their representatives in Congress could extend far beyond Proposition 12’s agricultural context including the energy sector or labor market.
“Under the Ninth Circuit’s misguided approach, a state could close its markets to goods produced by labor paid less than $15 per hour,” the brief explained as the hypothetical “satisfactory wage scale” the U.S. Supreme Court dismissed in Baldwin v. G.A.F. Seeling, Inc.
“The Constitution permits California to serve as a laboratory of state policy experimentation with its animal-confinement laws—but only within its own borders. Precisely to ensure other states may experiment with animal-confinement policies of their own, however, the Constitution prohibits California from applying its animal-confinement laws to conduct in other States.
“By allowing California to do so, the decision below creates an untenable situation: It permits California and a handful of other states to impose their policy choices on defenseless other states. Because the Constitution forecloses such unequal treatment, the Court should grant the petition and reverse the decision,” the brief concludes.
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