Missouri AG Plans to Sue California Over Egg Import Restrictions
Dec 10, 2013
Missouri's Attorney General, Chris Koster, used the Missouri Farm Bureau's annual meeting to announce that he intends to sue the State of California to overturn a law that will limit most commercially-produced eggs from entering the state. Such a lawsuit was only a matter of time as many of the country's egg producers are forced to either adopt California's larger egg-cage standards or forego shipping eggs to a valuable market.
The underlying dispute began when the HSUS-backed California ballot proposal, Proposition 2, was enacted in 2008. Proposition 2 required California farmers and ranchers to abide by new animal housing requirements that banned certain practices, such as swine gestation crates, and provided for more space for laying hens. Egg producers are required to comply with the new housing requirements starting in 2015.
These new housing requirements created a competitive disadvantage for California's egg producers when compared with out-of-state producers. California egg facilities will be required to have more space and heating costs when compared to more efficient, out-of-state producers that are not subject to Prop. 2's requirements. To remedy this disadvantage, the California legislature passed a law prohibiting the import of shell and liquid egg imports from farms that do not meet California's strict hen housing requirements. This law will insulate California's farmers from competition with lower-cost competitors, but it may be problematic under the U.S. Constitution.
No lawsuit has been filed at this point, but I suspect that Attorney General will base the state's action on what is known as the Dormant Commerce Clause. In general, the Dormant Commerce Clause prohibits a state from enacting a law that discriminates against or unduly burdens interstate commerce. The Dormant Commerce Clause prevents states from enacting protectionist laws designed to favor in-state businesses over out-of-state competitiors.
Courts have recognized exceptions to the Dormant Commerce Clause. One such exception is the "health and safety regulation" exception. A state may discriminate against out-of-state competitors if it can show that the discriminatory law is related to the state's power to regulate the health and safety of its citizens. The California egg import law is clearly designed to protect California's egg industry from the effects of Prop. 2. However, California may prevail in the litigation if it can convince the court that the legislature meant to protect its citizens and discrimination against out-of-state eggs was simply collateral damage.
The California egg law doesn't have many fans outside of the State of California. In addition to this threatened lawsuit, Rep. Steve King (R - IA) is pushing a Farm Bill amendment that would prohibit state governments from setting livestock standards for products produced outside of their own state. This amendment, if enacted into law, would supersede California's efforts to insulate their farmers from competitors that are subject to less stringent regulations. It is not known whether Rep. King's amendment will make it into the Farm Bill, but if it does, states might be a little more mindful of their own farmers and ranchers before they pass legislation that makes them less competitive.
John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA. John focuses his practice on agricultural and environmental law. He occasionally tweets at @DCAgLawyer. This column is not a substitute for legal advice.