Prop 12: Supreme Court Rejects Challenge to California's Law Impacting National Hog Market
/On May 11, 2023, the Supreme Court rejected hog farmers’ challenge to California’s Prop 12 law. Prop 12 was passed by the voters of California and prohibits the sale in California of pork products derived from breeding pigs raised in confinement in a “cruel manner.” According to California, a “cruel” confinement is one where the breeding pig cannot turn around, lie down, or stretch its limbs. To protect animal welfare and consumer health, this is how the majority of breeding pigs are cared for.
Hog farmers (via American Farm Bureau and the National Pork Producers Council) challenged the law, arguing it violated the Dormant Commerce Clause (DCC) by dictating how out-of-state producers raise pigs. California imports almost all its pork, and hog farmers all over the nation raise animals that find their way onto California grocery coolers and restaurant menus. Thus, the argument goes, Prop 12 wrongly regulates interstate commerce. The Supreme Court rejected these arguments.
The Court focused on the fact that Prop 12 does not discriminate against out-of-state producers—it applies to producers no matter where they live. (The kicker, of course, is that because California imports almost all the pork it consumes, most of Proposition 12’s compliance costs will be borne by out-of-state firms.) The Court rationalizes its focus on discrimination because, it held, the DCC prohibits the enforcement of state laws driven by “economic protectionism,” meaning regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors. Since Prop 12 applies to everyone, the Court held, it does not violate the DCC.
“While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list.”
The farmers also argued that even without claims of discrimination, they had properly stated a claim under the “extraterritoriality doctrine.” The farmers contended the DCC included an additional rule forbidding enforcement of state laws that have the practical effect of controlling commerce outside the state. Relying on three earlier Supreme Court cases (Healy, Baldwin, and Brown-Forman), the farmers explained that since Prop 12 will impose substantial costs on out-of-state hog farmers, it violates the extraterritoriality doctrine. The Court rejected this argument, explaining that even those three cases really focused on the familiar concern with preventing purposeful discrimination by one state against out-of-state economic interests. For example, the Court pointed out one of the cases relied on by the farmers concerned a New York law prohibiting out-of-state dairy farms from selling their milk into New York for less than the minimum price New York guaranteed in-state dairies; the Court concluded the law violated the DCC because it “plainly discriminated” against out-of-state dairies by erecting an economic barrier protecting a major New York industry from competition from outside New York. The Court explained that the laws challenged in those three cases were discriminatory against out-of-state industries, while Prop 12 treated in- and out-of-state interests identically.
Finally, the U.S. Supreme Court rejected the farmers’ argument that under another earlier case (Pike), the Court should at least consider the burden the law in question imposed on interstate commerce and prevent its enforcement if the burdens outweigh the benefits. But again, the Supreme Court tied the analysis back to simply whether or not the law was discriminatory. The Prop 12 decision made clear courts must use “extreme caution” before deploying any Dormant Commerce Clause authority.
So where does this leave agriculture (and the rest of society, for that matter)? The DCC now, for all practical purposes, only prohibits laws that treat out-of-state industries or interests differently than in-state players are treated. Discrimination is required. Activists are already crying out that the Prop 12 case means states should pass laws prohibiting the sale of pork derived from farms who use ventilation shutdowns to cull. The Prop 12 case means the Massachusetts Question 3 is back in the spotlight, as the lawsuit challenging Q3 was stayed pending the Supreme Court’s Prop 12 decision. Of course, Prop 12 doesn’t apply to every single pork product sold in California (exceptions for ground pork, deli meat, or pre-cooked pork exist). But make no mistake, the Supreme Court’s decision green-lighting Prop 12 will have ripples throughout the pork market, beyond agriculture, and into other realms of our lives.
