The United States Supreme Court has agreed to hear a case that could have significant implications for women who travel across state lines to obtain reproductive health services and the employers who cover the costs of such travel. Oral arguments will take place in October in National Pork Producers Council; American Farm Bureau Federation v. Karen Ross, in her official capacity as Secretary of the California Department of Food & Agriculture, et al. (No. 21-468; U.S. Court of Appeals for the Ninth Circuit No. 20-55631).
The Council sued the State of California to block the implementation of Proposition 12, a 2018 ballot measure adopted by California voters to prohibit California businesses from selling whole pork meat not produced in compliance with specific sow confinement restrictions. Plaintiffs are seeking a declaratory judgment that Proposition 12 violates the so-called “dormant Commerce Clause” of the U.S. Constitution because it: (1) impermissibly regulates extraterritorial conduct outside of California’s borders by compelling out-of-state producers to change their operations to meet California standards; and (2) imposes excessive burdens on interstate commerce without advancing any legitimate local interest by substantially increasing production costs without justification by any animal-welfare interest. The trial court granted the state’s FRCP 12(b)(6) motion to dismiss for failure to state a claim and motion for judgment on the pleadings (FRCP Rule 12(c)). The Ninth Circuit affirmed.
SCOTUS precedent on the dormant Commerce Clause stretches back to 1824. The Court’s most recent consideration, South Dakota v. Wayfair, Inc., 138 S.Ct. 2080, 2090 (2018), states two “primary principles that mark the boundaries of a State’s authority to regulate interstate commerce. . . . First, state regulations may not discriminate against interstate commerce; and second, States may not impose undue burdens on interstate commerce.” Plaintiff concedes that Proposition 12 does not discriminate against interstate commerce but argues the undue burden theory. In Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970), the Court held that “State laws that regulat[e] even-handedly to effectuate a legitimate local public interest . . . will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Additionally, as noted in Wayfair, state law may violate the dormant Commerce Clause when it has extraterritorial effects.
Plaintiff’s undue burden argument rests on the assertion that conforming to California’s sow confinement restrictions will have the “practical effect” of increasing production costs by 9.2%, even though California accounts for only 13% of national pork sales. The Ninth Circuit, however, observed that although Plaintiff’s complaint “plausibly alleges that Proposition 12 has an indirect ‘practical effect’ on how pork is produced and sold outside California, we have rejected the argument that such upstream effects violate the dormant Commerce Clause.” Under the court’s precedent, “state laws that regulate only conduct in the state, including the sale of products in the state, do not have impermissible extraterritorial effects,” and “a state law may require out-of-state producers to meet burdensome requirements in order to sell their products in the state without violating the dormant Commerce Clause” (citations omitted). Indeed, a state law only goes over the line if “it directly regulates conduct that is wholly out of state..”
The court likened this case to Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Harris, 729 F.3d 937 (9th Cir. 2013), in which it upheld a California law banning the sale of duck products made by force feeding the duck against an extraterritoriality challenge. As in Eleveurs, here the “requirements under Proposition 12 likewise apply to both California entities and out-of-state entities, and merely impose a higher cost on production, rather than affect interstate commerce. Therefore, even though Proposition 12 has some upstream effects, California is ‘free to regulate commerce and contracts within [its] boundaries with the goal of influencing the out-of-state choices of market participants’” (citations omitted). The court also rejected Plaintiff’s contention that Proposition 12 “poses a risk of inconsistent regulations that undermines a ‘compelling need for national uniformity in regulation’” (citations omitted). Only a few cases, however, have ever found that “compelling need for national uniformity,” and they “generally concern taxation or interstate transportation” (citations omitted).
“While the dormant Commerce Clause is not yet a dead letter,” the court concludes, it is moving in that direction.” Noting Justice Clarence Thomas’s criticism of the doctrine as “unmoored from any constitutional text,” the court set a very high standard for prevailing in a dormant Commerce Clause challenge. Only where “a state law facially discriminates against out-of-state activities, directly regulates transactions that are conducted out of state, substantially impedes the flow of interstate commerce, or interferes with a national regime” might a plaintiff’s complaint get past a motion to dismiss.
It remains to be seen what SCOTUS has in mind for the dormant Commerce Clause, but whatever the Court says will likely have far-reaching effects on efforts by some states to regulate activities that take place in other states or to impede travel across state lines for purposes that may be unlawful in one state but lawful in another. The only thing that seems clear at the moment is that all bets are off on what the Court might do next.
*George E. Christian, TCJL’s research intern, researched and contributed to writing this article.
