California Law Creates Heavy Burden For U.S. Pork Industry

From LAW 360 article by Daniel Kolkey

Does California have the legal authority to effectively regulate the national pork market, thereby forcing a restructuring of an entire U.S. industry and significantly increasing its costs?

In October, the U.S. Supreme Court will hear oral argument in National Pork Producers Council v. Ross, a dispute over whether California has the constitutional authority to exploit its big-state leverage to force a particularly misguided policy upon the entire pork industry and the states whose economies rely on it.

In 2018, California’s voters enacted a law — Proposition 12 — banning, among other things, the sale of all pork within their state unless it comes from pigs born to sows housed during pregnancy in pens that meet Proposition 12’s standards. Since 99.87% of the pork that Californians consume comes from hogs born out of state, this ban applies almost exclusively to other states’ farms.

And since nearly all pork producers house their own sows in ways that do not meet California’s standards, the law would require a significant restructuring of the national pork industry, raising costs and estimate 9.2% per pig.

The law’s express purpose is “to prevent animal cruelty,” which “threaten[s] the health and safety of California consumers.”[1] But the California Department of Food and Agriculture, the state agency responsible for enforcement of Proposition 12, acknowledges that California’s standards are not based on any “peer-reviewed published scientific literature” nor are “accepted … within the scientific community to reduce human food-borne illness.'”[2]

Still, out-of-state producers cannot ignore California, which consumes 13% of the nation’s pork production. The question before the justices in October will be whether California has the authority to do this.

Our Constitution’s commerce clause grants Congress, not California. the power “[t]o regulate commerce … among the several states.”[3] And although the clause is drafted as an affirmative grant of power to Congress, the Supreme Court has long ruled that the flip side of this power bans states from unduly regulating interstate commerce[4] — the so-called dormant commerce clause.

Still, the question often arises as to what an undue regulation of commerce is, since states retain their police power to protect the health, morals and safety of their people, which permits some regulation of goods coming into the state.[5]

In response, the high court has articulated two tests. First. as stated in its 2018 decision in South Dakota v. Wayfair inc., “state regulations may not discriminate against interstate commerce.”[6] Proposition 12 passes this test since, at least on its face, it even-handedly applies to pork produced in or outside the state.

But the second test is another story: As the court also noted in Wayfair, even-handed regulations intended to “effectuate a legitimate local public interest” can nonetheless be invalidated where “the burden imposed on … commerce is clearly excessive in relation to the putative local benefits.”[7]

Many of us would say that restructuring an entire national industry. which would likely result in a 9.2% price hike, is a substantial burden on commerce, particularly in relation to a state interest that lacks scientific consensus.

But as some justices skeptical of the dormant commerce clause have noted, such a weighing of local interests against a law’s burden may take the judiciary into policymaking, and different judges can weigh those burdens differently. Indeed, in declining to find a commerce clause violation here, the U.S. Court of Appeals for the Ninth Circuit ruled last year in this case that “these alleged cost increases [of 9.2% per hog] … [did] not qualify as a substantial burden to interstate commerce.”[8]

However, judicial tests can occasionally impair, rather than illuminate. analysis. Here, the justices can strike down Proposition 12’s pork production standards merely by applying the dormant commerce clause’s core purpose, which all can agree on: preventing states from controlling interstate commerce in a way that undermines our national economic union.

In 1935, in Baldwin v, G.A.F. Seelig Inc,, a decision that struck down a New York law that set a minimum price for out-of-state milk, renowned former Justice Benjamin Cardozo ruled that “a state may not, in any form or under any guise, directly burden the prosecution of interstate business.”[9]

Over 50 years later, while explaining in its 1989 decision in Healy v. Beer Institute Inc. that the commerce clause was designed to maintain “a national economic union unfettered by state-imposed limitations on interstate commerce,” the court reiterated that “[t]he critical inquiry is whether the practical effect of … [a state] regulation is to control conduct beyond the boundaries of the State.”[10]

California’s Proposition 12 effectively regulates the entire national pork industry. It thus usurps Congress’ power to regulate interstate commerce. For consumers in other states who never voted for it, it represents regulation without representation.

Daniel M, Kolkey is a member of the Pacific Research Institute’s board of directors and chairman of the board’s California Reform Committee.

He was previously an associate justice on the California Court of Appeal, and counsel to former California Gov. Pete Wilson.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of National Pork Producers Council, the Law 360 organization or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Uncodified Section 2 of Proposition 12.

[2] See Brief of the United States as Amicus Curiae Supporting Petitioners, pp. 4–5.

[3] U.S. Constitution, art. I, Section 8.

[4] Tennessee Wine and Spirits Retailers Association v. Thomas, 139 S.Ct. 2449,2459 (2019).

[5] Tennessee Wine and Spirits, 139 S.Ct. at 2464, citing Mugler v. Kansas, 123 U.S. 623. 659.

[6] South Dakota v. Wayfair Inc., 138 S.Ct. 2080, 2091 (2018); Healy v. Beer lnstitute Inc., 491 U.S. 324, 337, n. 14 (1989).

[7] South Dakota v. Wayfair Inc., 138 S.Ct. 2080, 2091 (2018); Pike v. Bruce Church Inc., 397 U.S. 137, t42 (1970); Healy v. Beer Institute Inc., 491 U.S. 324,337, n. 14 (1989).

[8] National Pork Producers Council v. Ross, 6 F.4th 1021, 1033 (9th Cir. 2021).

[9] Baldwin v. G.A.F. Seelig Inc., 294 U.5.511, 522 (1935).

[10] Healy v. Beer Institute Inc., 491 U.S. 324, 336 (1989).