This Report summarizes opinions issued on March 23, 24, and 31, and April 4, 2022 (Part I); and cases granted review on March 28, 2022 (Part II).

Cases Granted Review: National Pork Producers Council v. Ross, 21-468

National Pork Producers Council v. Ross, 21-468. The Court will resolve a dormant Commerce Clause challenge to California’s Proposition 12, which makes it a criminal and civil violation to sell pork in California unless the pig it comes from was born to a sow that was housed with 24 square feet of usable space and in conditions that allow the sow to turn around freely without touching the enclosure. The voters of California adopted Proposition 12 in November 2018; it directs that farm owners and operators in California must not “knowingly cause” certain animals “to be confined in a cruel manner.” One standard imposed by the proposition is that in-state breeders of pigs must abide by the 24-square-feet-of-usable-space requirement; and the in-state sale of meat from breeding pigs (and their offspring) must abide by that requirement. The ballot arguments submitted in support of Proposition 12 stated that it would address especially “inhumane and unsafe” meat production practices. Californians consume 13% of the pork eaten in the U.S., but 99.87% of the pork consumed there comes from hogs born on farms outside of the state. In December 2019, petitioners (the National Pork Producers Council and the American Farm Bureau Federation) brought a dormant Commerce Clause challenge to Proposition 12’s in-state sales restriction on pork. The district court dismissed petitioners’ complaint, ruling that “Proposition 12 applies to . . . California producers just the same as out-of-state producers” and “does not regulate extraterritorially.” The court also held that petitioners failed to adequately allege a claim under Pike v. Bruce Church, Inc., 397 U.S. 137 (1970), which asks whether a challenged law imposes a burden on interstate commerce that is “clearly excessive in relation to [its] putative local benefits.” The Ninth Circuit affirmed. 6 F.4th 1021.

The Ninth Circuit emphasized that petitioners have “not allege[d] that Proposition 12 has a discriminatory effect” or that it “discriminates against out-of-state interests.” The court also concluded that Proposition 12 “regulate[s] only conduct in the state, including the sale of products in the state.” While acknowledging that, “as a practical matter,” certain pork producers will opt to make changes to their out-of-state production or distribution methods in response to Proposition 12, the court ruled that such “indirect,” “upstream effects” cannot, on their own, render a law invalid under the dormant Commerce Clause. As to petitioners’ Pike claim, the Ninth Circuit held that petitioners’ allegation that “Proposition 12 makes pork production more expensive” was insufficient, on its own, to state a claim that the measure imposes a clearly excessive burden on interstate commerce.

Petitioners argue that Proposition 12 violates the dormant Commerce Clause in two ways. First, petitioners claim that, because compliance with Proposition 12 will require pork producers (who are overwhelmingly out-of-state) to engage in massive and costly alteration to existing sow housing nationwide, Proposition 12 regulates wholly out-of-state commerce, and therefore has impermissible extraterritorial effects. In making that argument, petitioners ask the Court to affirm that the extraterritoriality principle of the dormant Commerce Clause applies to all laws that impose practical burdens on out-of-state commerce, even if those burdens are indirect effects of state regulation.  Petitioners also ask the Court to resolve a circuit spilt as to the scope of the extraterritoriality principle and whether it applies predominantly, if not exclusively, to price-control and price-affirmation statutes.

Petitioners also argue that Proposition 12 fails the balancing test set forth in Pike.  Again pointing to the increased costs to conform existing sow enclosures to the requirements of Proposition 12, petitioners take issue with the Ninth Circuit’s conclusion that these costs were not cognizable burdens. Petitioners argue that “Proposition 12 in practice (1) requires a significant restructuring of an entire national, $26-billion industry; (2) requires out-of-state farmers to adopt housing that they believe endangers their herds, employees, and livelihoods; (3) requires California-compliant housing for sows regardless of whether their offspring are sold in California or elsewhere; and (4) will result in consolidation of the industry and put sow farmers out of business. Saying that these and other effects of Proposition 12 are just ‘increased costs’ that don’t count for dormant Commerce Clause purposes turns the Pike inquiry into a largely meaningless exercise.” Petitioners argue that Proposition 12 provides no local benefit because (1) “[t]here is no evidence that the square footage provided to a sow has any bearing on the safety of pork derived from her offspring,” and (2) “[p]reventing allegedly cruel treatment of sows in other states—where the pigs are raised in compliance with those states’ laws—is not a legitimate ‘local benefit.’”

California responds in part that, “[a]s then-Judge Gorsuch explained, a rule providing that such indirect, upstream effects are sufficient to render a state law invalid under the dormant Commerce Clause would ‘risk serious problems of overinclusion.’ [Energy & Env. Legal Inst. v. Epel, 793 F.3d 1169, 1175 (10th Cir. 2015)]. The ‘reality is that the States frequently regulate activities that occur entirely within one State but that have effects in many.’ Am. Beverage Ass’n v. Snyder, 735 F.3d 362, 379 (6th Cir. 2013) (Sutton, J., concurring). States routinely adopt ‘standards for products sold in-state (standards concerning, for example, quality, labeling, health, or safety)’ that have ‘ripple effects . . . both in-state and elsewhere’—including, at times, effects on how out-of-state businesses opt to structure their production or distribution practices with respect to products sold in the enacting State’s market. Epel, 793 F.3d at 1173. As courts throughout the Nation have recognized, that kind of upstream, ‘practical effect’ does not render a state law invalid under the dormant Commerce Clause extraterritoriality doctrine.” As to Pike balancing, California quotes Judge Easterbrook’s statement that “[i]f Pike invited constitutional challenges based merely on concerns that a law would be economically disruptive to a particular industry, the Pike balancing inquiry would resemble ‘judicial review of statutory wisdom [in] the fashion of Lochner.’” California adds that, “[i]n any event, petitioners overstate the practical economic effects of Proposition 12.” And California says “[t]here is nothing illegitimate or insubstantial . . . about the voters’ expressed purpose of addressing ‘extreme methods of farm animal confinement’ and potential ‘threat[s] [to] the health and safety of California consumers’ (such as ‘risk[s] of foodborne illness’).”

[Editor’s note: Some of the language in the background section of the summary above was taken from the petition for writ of certiorari and brief in opposition.]