In Detail: Supreme Court Rules on California Proposition 12 in Blow to Hog Industry

SCOTUS upholds animal-welfare law approved by California’s voters in 2018

• The verdict: The Supreme Court on Thursday upheld an animal-welfare law approved by California’s voters in 2018, ruling that the state’s restrictions on the sale of pork produced by confinement of breeding pigs does not violate the Constitution. Link to ruling.
  
  The 5-4 majority scrambled the court’s makeup. The five justices in the majority were conservatives Neil Gorsuch, Clarence Thomas, and Amy Coney Barrett, and liberals Sonia Sotomayor and Elena Kagan. Gorsuch’s opinion was joined in full by Justice Clarence Thomas, in most parts by Justices Sonia Sotomayor and Elena Kagan, and to a different degree by Justice Amy Coney Barrett. Meanwhile, Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito, Brett M. Kavanaugh and Ketanji Brown Jackson dissented in part. They said the California restrictions on pork sales put a substantial burden on the free flow of interstate commerce.
   
• Opinions:
  
  Justice Neil M. Gorsuch, writing for the court, said the Constitution leaves it to states and their voters to decide on the products that will be sold there. He said these questions should not be decided by federal judges. “Companies that choose to sell products in various states must normally comply with the laws of those various states,” he said. “While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list.” Gorsuch said Congress shall have the power “to regulate commerce among the states.” It does not put that power entirely in the hands of judges, he said. The court has long been skeptical of using the Constitution to strike down state laws. That authority rests in a provision that says Congress may “regulate commerce ... among the several states.”
  
  Gorsuch: “What goods belong in our stores? Usually, consumer demand and local laws supply some of the answers. Recently, California adopted just such a law banning the in-state sale of certain pork products derived from breeding pigs confined in stalls so small they cannot lie down, stand up, or turn around. In response, two groups of out-of-state pork producers filed this lawsuit, arguing that the law unconstitutionally interferes with their preferred way of doing business in violation of this court’s dormant Commerce Clause precedents. The district court and court of appeals dismissed the producers’ complaint for failing to state a claim. We affirm. Companies that choose to sell products in various states must normally comply with the laws of those various states. Assuredly, under this court’s dormant Commerce Clause decisions, no state may use its laws to discriminate purposefully against out-of-state economic interests. But the pork producers do not suggest that California’s law offends this principle.”
  
  Justice Gorsuch lost his liberal votes when he sought to push legal doctrine further. In a 1970 case, Pike v. Bruce Church, the Supreme Court said when a state law burdens interstate commerce, it may be unconstitutional if those burdens greatly outweigh its in-state benefits. Justice Gorsuch wrote that such balancing might be possible when one economic interest conflicts with another. But, joined only by Justices Thomas and Barrett, he went on to write that when a state law involves noneconomic concerns — such as Proposition 12, which reflected voters’ moral views toward animal welfare — how could courts weigh the competing interests? “Your guess is as good as ours,” he wrote. “More accurately, your guess is better than ours. In a functioning democracy, policy choices like these usually belong to the people and their elected representatives.”
  
  Justice Brett Kavanaugh’s opinion: "I add this opinion to point out that state economic regulations like California’s Proposition 12 may raise questions not only under the Commerce Clause, but also under the Import-Export Clause, the Privileges and Immunities Clause, and the Full Faith and Credit Clause. Although the Court today rejects the plaintiffs’ dormant Commerce Clause challenge as insufficiently pled, state laws like Proposition 12 implicate not only the Commerce Clause, but also potentially several other constitutional provisions, including the Import-Export Clause, the Privileges and Immunities Clause, and the Full Faith and Credit Clause. In other words, if one State conditions sale of a good on the use of preferred farming, manufacturing, or production practices in another State where the good was grown or made, serious questions may arise under the Import-Export Clause. I do not take a position here on whether such an argument ultimately would prevail. I note only that the question warrants additional consideration in a future case. Under this Court’s precedents, one State’s efforts to effectively regulate farming, manufacturing, or production in other States could raise significant questions under that Clause [Privileges and Immunities Clause].  Again, I express no view on whether such an argument ultimately would prevail. But the issue warrants further analysis in a future case." 
  
  Kavanaugh conclusion: "It appears, therefore, that properly pled dormant Commerce Clause challenges under Pike to laws like California’s Proposition 12 (or even to Proposition 12 itself) could succeed in the future — or at least survive past the motion-to-dismiss stage. Regardless, it will be important in future cases to consider that state laws like Proposition 12 also may raise substantial constitutional questions under the Import-Export Clause, the Privileges and Immunities Clause, and the Full Faith and Credit Clause.
  
  Through Proposition 12, “the State has aggressively propounded a ‘California knows best’ economic philosophy — where California in effect seeks to regulate pig farming and pork production in all of the United States,” Kavanaugh wrote. That could “foreshadow a new era where States shutter their markets to goods produced in a way that offends their moral or policy preferences,” he wrote. “What if a state law prohibits the sale of goods produced by workers paid less than $20 per hour?” he continued. Or what if a state banned the sale of goods from companies that don’t pay for employee birth control or abortions, “or alternatively, that do pay for employees’ birth control or abortions?” he wrote.
  
  Justice Kavanaugh said Proposition 12 did burden interstate commerce, because the state’s market share “makes it economically infeasible for many pig farmers and pork producers to exit the California market.”
   
• Background: In 2018, 63% of California voters approved Proposition 12, which prohibited the sale of eggs or meat that originates from the extreme confinement of egg-laying hens, breeding pigs or calves raised for veal. Under the state law, breeding pigs require 24 square feet of movement and minimum floor space; veal calves require 43 square feet; and egg-laying hens require 1 square foot. The law was due to take full effect last year, but pork producers went to court to challenge the provisions affecting their industry. At issue: the practice of holding breeding pigs in tight metal cages where they cannot turn around or lie down, and sometimes in frustration try to chew the metal bars. The California law required larger pens or open areas where sows could move freely.
  
  Proposition 12 applies to uncooked pork sold in California, regardless of whether it was raised in the state or not. The law stipulates that any uncooked pork products sold within California must come from animals raised in accordance with the space requirements set forth by the proposition. This means that out-of-state and even international pork producers must comply with these standards if they wish to sell their uncooked pork products in California. This extraterritorial reach is intended to create a level playing field for all producers selling their products in the state while also ensuring that animal welfare standards are maintained across the supply chain.
   
• Winners and losers:
  
  The ruling is a victory for animal-rights advocates and the rights of the states to set their own laws. The court “made clear that preventing animal cruelty and protecting public health are core functions of our state governments,” said Kitty Block, president of the Humane Society of the U.S., which intervened to help defend Proposition 12. “It’s astonishing that pork industry leaders would waste so much time and money on fighting this common-sense step to prevent products of relentless, unbearable animal suffering from being sold in California,” Block said. 
  
  For the pork industry, the Supreme Court decision is a significant loss. Agriculture groups said that if the California law was upheld, it would not be long before other states adopted separate requirements making it difficult for producers to meet a maze of requirements.
  
  The pork industry noted that 99% of the pork sold in California is produced elsewhere, so the burden of its law would be largely felt by other states. While some of the largest meat packers, including Hormel Foods and Tyson Foods, said they could comply, the National Pork Producers Council (NPPC) said the law would require farmers in Iowa and North Carolina and other states to change how they raise and confine their breeding pigs. To comply with the California law, breeding pigs would have to be given larger pens that would allow them to stand and turn around, or they could be confined in an open area with other pigs. The producers said those changes would increase their costs by 9%. Pork producers argued that 72% of farmers use individual pens for sows that do not allow them to turn around and that even farmers who house sows in larger group pens do not provide the space California would require. They also say that the way the pork market works, with cuts of meat from various producers being combined before sale, it is likely all pork would have to meet California standards, regardless of where it is sold. Complying with Proposition 12 could cost the industry $290 million to $350 million, they said. 
  
  NPPC says Iowa sells 80% of the pork used in California. Proposition 12 will force them to either adapt, or stop selling to California. Eldon McAfee, an attorney representing the Iowa Pork Producers, says there is no science to back up California Proposition 12. "We believe the animal welfare is better served by the systems we have," McAfee said. "They'll have to change their housing methods, etc., so it will be a substantial economic burden and that's what was argued to the court." “Trish Cook, Iowa Pork Producers Association president, said: “It’s expensive to meet the rules that they set in Proposition 12 and a lot of farmers do not have the capital and will not borrow the money to go forth and change their facilities to match up with Proposition 12.” 
  
  Iowa Agriculture Secretary Mike Naig released a statement on the ruling saying, in part, “This disappointing decision sets a concerning precedent and opens the door for the largest states to dictate the laws and regulations for consumers and businesses to the rest of America. This sets the stage for a state-by-state patchwork of ever-changing and costly requirements that will increase the cost of production and drive higher costs for food and other consumer products.”

Proponents of Proposition 12 note:

— Improved animal welfare: By requiring more spacious living conditions, the law aims to reduce the suffering of animals raised for food, including pigs.

— Public support and trust: Consumers are increasingly concerned about animal welfare, and the adoption of higher welfare standards can boost public trust in the industry.

— Potential for better product quality: Some studies suggest that improved living conditions can lead to better meat quality due to reduced stress levels in animals.

— Higher price premiums: Producers adhering to higher welfare standards may be able to charge a premium for their products, potentially offsetting the costs of compliance.

Opponents of Proposition 12 note:

— Increased production costs: Complying with the new space requirements may necessitate facility upgrades or expansions, which can be expensive for producers.

— Reduced competitiveness: Higher production costs can make California pork products less competitive in the market, potentially leading to reduced market share.

— Supply chain disruptions: Adjusting to the new standards may cause temporary disruptions in the supply chain, as producers may need time to meet compliance requirements.

— Out-of-state producer burden: The law's extraterritorial reach may create legal challenges, as out-of-state pork producers must also comply with the requirements if they wish to sell their products in California.

• History of case: The pork producers initially lost before a federal judge in San Diego and at the U.S. 9th Circuit Court of Appeals, which said they had no claim of a constitutional violation. But last year, the Supreme Court agreed to hear the industry’s appeal. The appeal to the Supreme Court came after the U.S. Court of Appeals for the 9th Circuit in July 2021 upheld a lower court ruling against the NPPC case. The Supreme Court's opinion affirms that ruling.
   
• What the different sides argued:
  
  The attorney for the pork producers argued that if California’s law were upheld, it would open the door for other states to seek changes that would affect the national economy. For example, they said Oregon could require that products sold there from other states must be made by workers who were paid the state’s higher minimum wage, while Texas might require products sold there be made by only lawful U.S. residents.
  
  Scott Hays, president of the NPPC, which challenged Proposition 12, said the group was still studying the opinion. “Allowing state overreach will increase prices for consumers and drive small farms out of business, leading to more consolidation,” said Hays, owner of Two Mile Pork in Monroe City, Mo.
  
  California represents some 13% of the national market for pork but other states produce nearly all the pork Californians eat. As a result, the meatpacking industry alleged, Proposition 12 unconstitutionally reached beyond the state line to burden companies based in Iowa, North Carolina, Illinois and other pork-producing states. Not so, Justice Gorsuch wrote, upholding lower-court decisions dismissing the industry’s lawsuit. “While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list,” he said. The law applied equally to the small number of pork producers in California as it did to those elsewhere, Justice Gorsuch said, and the fact that it might affect the economic calculations of businesses across the country made it no different from myriad laws states regularly pass that regulate the marketplace. 
  
  The Biden administration joined the case on the side of the pork producers and stressed a similar argument. California’s Proposition 12 “imposes a substantial burden on interstate commerce,” said Deputy Solicitor Gen. Edwin Kneedler. “It invites conflict and retaliation and threatens the balkanization of the national economic union.” 
  
  California Solicitor Gen. Michael Mongan defended the law on the grounds that it applied only to pork sold in the state and not elsewhere. “California voters chose to pay higher prices to serve their local interest in refusing to provide a market to products they viewed as morally objectionable and potentially unsafe,” he said.
   
• When will California’s Prop 12 provisions take effect for pork? Attention now also shifts to the actual implementation of Proposition 12 regarding pork. A California superior court judge in December extended a delay in enforcing the law in California given the pending Supreme Court decision. In that ruling, the judge said enforcement would not take place until July 2023, pending the outcome of the Supreme Court’s ruling.
   
• Other impacts: A similar measure in Massachusetts that had been delayed by state courts until the Supreme Court ruled can now go into effect. At least nine other states — Arizona, Colorado, Florida, Maine Massachusetts, Michigan, Ohio, Oregon and Rhode Island — have banned or restricted gestation crates for pigs. The SCOTUS decision could result in animal rights groups targeting other states with similar initiatives.
  
  “Although the specific issue in this case is very narrow, the implications are quite broad,” said Steve Vladeck, CNN Supreme Court analyst and professor at the University of Texas School of Law. He said the decision “leaves a lot of room for states, by regulating what businesses can and must do within their borders, to impact how those businesses act in other states… How far that goes remains to be seen in future cases, but it gives a lot of power, especially to larger states, to influence what happens elsewhere.”
   
• Farm-state lawmakers push back on SCOTUS Prop 12 ruling. Sen. Roger Marshall (R-Kan.) said he plans to reintroduce the Exposing Agricultural Trade Suppression (EATS) Act that would preempt state and local governments from “interfering with the production or manufacture of agricultural products in other states.” House Ag Committee member Randy Feenstra (R-Iowa), who represents the nation’s top pork-producing district, vowed to work to repeal Prop 12. “Quite frankly, California liberals have no jurisdiction over how Iowa farmers raise our hogs,” Feenstra said in a statement. “We simply can’t allow radical state laws to dictate the agricultural practices of the rest of the nation, especially in a way that will only increase food costs for the food insecure and drive farmers and ranchers out of business,” Marshall said in a statement.