In 2008 California voters approved the Prevention of Cruelty to Farm Animals Act, which provided that after January 1, 2015 a “person shall not tether or confine any covered animal, on a farm, for all or the majority of any day, in a manner that prevents such animal from: (a) Lying down, standing up, and fully extending his or her limbs; and (b) Turning around freely.” In part, this measure was intended to free laying hens from the claustrophobia of so-called battery cages, where the hen is confined to a space, shared with several other hens, that permits each hen no more 67 square inches. That’s 10 inches by 6 3/4 inches, less than the size of a standard sheet of copying paper. Giving hens space to stretch their wings costs money: the old cages must go, new ones purchased, and fewer hens can be accommodated in the same building that housed them in battery cages. California egg producers, placed at a competitive disadvantage because out-of-state producers were not subject to the law lobbied for and obtained an additional law, AB1437, that after January 1, 2015 forbids the knowing sale of any eggs in California that have not been produced under the conditions applicable to California producers. A legislative committee stated that the intent of AB1437 was to level the playing field to prevent disadvantage to California egg producers. But law actually says its intent was to “protect California consumers from the deleterious, health, safety, and welfare effects of the sale and consumption of eggs derived from egg-laying hens that are exposed to significant stress and may result in increased exposure to disease pathogens including salmonella.” When the Governor signed the bill he extolled its benefits for “California egg producers and animal welfare” but said nothing about its supposed health and safety benefits.
Enter a handful of states who have joined the Missouri Attorney General in a federal suit contending that the ban on the sale of eggs not produced under California’s standards is an unconstitutional interference with interstate commerce. California produces about 6% of the nation’s eggs but consumes over 12%. Over 40% of California’s egg supply comes from out-of-state. Missouri only exports a third of its annual egg production, or some 670 million eggs, to California.
The plaintiffs have three good arguments. First, while AB1437 does not openly discriminate against out-of-state egg producers, it bears the smell of economic protectionism, an illegitimate objective. AB1437's purpose was to protect California egg producers from the lower prices that foreign producers could offer due to their battery cage production methods. But after the legislature realized that protectionism is illegitimate it claimed that AB1437 was just to protect consumers from salmonella, even though the scientific evidence that salmonella is promoted by battery cages is weak at best. AB1437 resembles the North Carolina regulation at issue in Hunt v. Washington State Apple Advertising Commission, which that barred the use of Washington State apple grades on shipping containers sent into North Carolina. The Supreme Court rejected the state’s contention that the law prevented consumer deception. It did almost nothing to achieve that goal because consumers almost never see the shipping containers. The Court required North Carolina to prove that it had no less discriminatory alternative available, but there were many less discriminatory alternatives. Here, due to an evident discriminatory purpose California must prove that it had no alternative but AB1437 to protect egg consumers from salmonella. I am no expert on detection of salmonella in eggs, but given the skimpy scientific evidence linking close confinement of hens to salmonella in eggs I doubt that California can make that showing.
Second, even if AB1437 is construed as non-discriminatory and the plaintiffs are forced to prove that AB1437's burden on interstate commerce is “clearly excessive” in relation to the “putative local benefits” of the law, they have a good case. The legitimate local benefit is reduction of salmonella infections, and there is paltry evidence that cage size has much, if any, effect on the incidence of salmonella. Not much benefit there. On the other hand, the impact on out-of-state egg producers is enormous. Californians consume about 5.5 billion eggs from out-of-state sources each year. The cost of restructuring egg production methods in those states is astronomical. As in prior cases, when the economic impact on interstate commerce dwarfs the local benefits the burden on interstate commerce is plainly excessive and the law should be voided.
Finally, while ethical and humane treatment of laying hens is a legitimate, even important, state interest, this argument is in essence an argument that California has the right to impose its regulatory regime on out-of-state producers. Extraterritorial regulation can take several forms. Massachusetts required beer wholesalers to affirm monthly that the price of its beer in Massachusetts was no higher than the price of its beer in neighboring states, which effectively regulated beer prices in those other states. In Healy v. Beer Institute the Supreme Court said this was impermissible extraterritorial regulation. The Healy principle is portable: When compliance with a state regulation necessarily requires extraterritorial compliance with that regulation, the state has exceeded its authority. In the absence of federal law on the subject, California could ban the sale of all eggs, because that would require no extraterritorial compliance. But California chose to ban the sale of only those eggs produced in non-conformity with California regulations and thus sought to extend its regulations beyond its borders. It matters not that foreign egg producers are free to stop selling eggs in California; Massachusetts beer wholesalers could have ceased selling beer in Massachusetts or neighboring states.
If California wants a regulatory solution, it should ask Congress to authorize it to regulate interstate commerce, or require all egg producers to use roomier cages. As for me, I will continue to buy free range eggs. After all, there is also a market solution.
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