California Proposition 12
The Supreme Court of the United States takes on a second important case for agriculture next week when it hears arguments in National Pork Producers v Ross. The Court opened its new term yesterday with a well-known case about the Clean Water Act and EPA authority over wetlands, Sackett v EPA. In National Pork Producers, the Court will hear challenges to California’s Proposition 12, a livestock housing standards law.
Proposition 12. Voters in California approved the Proposition 12 ballot measure in 2018, but the law’s impact spreads beyond California’s borders. The law sets living space standards for sows, egg-layers, and veal calves—sows must have 24 square feet or more of space, egg-laying hens require at least 144 square inches, and veal calves must have at least 43 square feet. Commonly used gestation crates for sows and battery cages for hens would not meet California’s space standards. And Proposition 12 also prohibits the sale of products from any animal whose housing does not comply with the living space requirements. That prohibition doesn’t apply just to products of animals raised in California, but to products of animals raised anywhere and sold in California. Selling pork, eggs, or veal from animals not raised according to the standards is a crime that could result in fines, jail sentences, and civil actions.
Challenges to Proposition 12. The out-of-state application of Proposition 12 immediately raised concerns across the United States. Several lawsuits followed, with the primary argument being that Proposition 12 violates the Commerce Clause of the U.S. Constitution, which grants Congress the authority “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” The Supreme Court has long determined that implicit in the Commerce Clause is a restriction on the ability of states to pass legislation that discriminates against or excessively burdens interstate commerce, referred to as the “dormant Commerce Clause.” Opponents of Proposition 12 argue that California has burdened interstate commerce by prohibiting sales of products within the state from out-of-state livestock producers who do not comply with the California state law for animal housing.
Federal courts disagreed with the commerce clause argument in an earlier challenge to Proposition 12, North American Meat Institute v Becerra, for which the Supreme Court of the U.S. (SCOTUS) declined review. Another case, Iowa Pork Producers v Bonta, also alleged Commerce Clause violations along with several other constitutional challenges, and that case is now on appeal after being dismissed by a federal district court in California.
A federal district court also dismissed the current National Pork Producers case, presented again on a Commerce Clause claim. The Ninth Circuit Court of Appeals upheld that dismissal while agreeing that the law would “require pervasive changes to the pork production nationwide.” The court concluded, however, that National Pork Producers had not stated a constitutional claim by alleging that Proposition 12 discriminates against out-of-state interests. Absent a showing of discrimination, “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.” As long as the only conduct regulated by the law is conduct within California, the court explained, significant upstream effects beyond California would not violate the Commerce Clause. Last April, the Supreme Court accepted the request to review the Ninth Circuit’s decision.
The SCOTUS review. National Pork Producers, joined by the American Farm Bureau Federation, raises two questions in the current case before SCOTUS. The first is whether the economic effects outside of California that require pervasive changes to an integrated nationwide industry state a violation of the dormant Commerce Clause. The second question is whether Proposition 12 states a Commerce Clause claim according to an earlier SCOTUS decision in Pike v. Bruce Church, which held that even when a law doesn’t discriminate on its face against interstate commerce, the law is not permissible if its burdens greatly exceed the benefits to local commerce.
The petitioners argue that Proposition 12 is “impermissibly extraterritorial” because 99.87% of all pork sold in California comes from producers outside of the state. They claim that the practical effect of Proposition 12 is to regulate out-of-state commerce and require significant and costly changes to sow housing across the country. Proposition 12 also fails the Pike v Bruce Church balancing test because its "false human health rationale and philosophical preferences about conduct outside of California are outweighed by the “wrenching effect” the law has on interstate commerce."
On the opposite side, California describes the law's impact as having only a “ripple effect” both within and outside of California rather than creating an impermissible extraterritorial effect. An upstream, practical effect, California argues, is not sufficient to render a state law invalid under the Commerce Clause. Claiming that the petitioners overstate the economic effects of the law, the State argues that it would not be impossible to segregate animals to meet California requirements while continuing housing requirements for other markets. California argues that “there is nothing illegitimate or insubstantial about the voters’ expressed purpose of addressing extreme methods of farm animal confinement and potential threats to the health and safety of California consumers.”
Implications: who should control farm animal welfare standards? National Pork Producers and California’s Proposition 12 raise a critical question about the future of farm animal welfare standards. Should such standards be determined on a state-by-state basis, or should there be a uniform federal standard? While the federal Animal Welfare Act does establish animal care standards, it does not apply to farm animal care. In the absence of a federal law for farm animals, eight states have joined California in addressing farm animal housing standards. Ohio is one of them. Ohio’s Livestock Care Standards for swine housing will prohibit the use of sow gestation crates after December 31, 2025, except in special circumstances. Unlike California, however, Ohio’s law does not prohibit retail sales from animals that aren’t housed according to the state standards. Only California and Massachusetts tie housing standards compliance to retail product sales and criminal penalties, raising the issue of controlling producers beyond the state’s borders. A federal law, on the other hand, would equally affect all producers across the country and could preempt restrictions on sales such as in Proposition 12, but would place control over farm animal care practices in the hands of the federal government. Perhaps we’ll more carefully analyze the federal-state question after SCOTUS issues its decision in National Pork Producers, expected early next year.
The Supreme Court will hear the oral arguments in National Pork Producers v Ross at 10:00 a.m. on Thursday, October 11. Live audio will be available at https://www.supremecourt.gov/oral_arguments/.
Did you know that ants are the only creatures besides humans that will farm other creatures? It’s true. Just like we raise cows, sheep, pigs, and chickens in order to obtain a food source, ants will do the same with other insects. This is particularly true with aphids. Ants will protect aphids from natural predators and shelter them during heavy rain showers in order to gain a constant supply of honeydew.
Like an ant, we have done some heavy lifting to bring you the latest agricultural and resource law updates. We start with some federal cases that deal with the definition of navigable waters under the Clean Water Act, mislabeling honey products, and indigenous hunting rights. We then finish with some state law developments from across the country that include Georgia’s right to farm law and California’s Proposition 12.
Supreme Court to review navigable waters definition under the Clean Water Act. The Supreme Court announced that it would hear the case of an Idaho couple who have been battling the federal government over plans to build their home. Chantell and Mike Sackett (“Plaintiffs”) began construction on their new home near Priest Lake, Idaho but were halted by the Environmental Protection Agency (“EPA”). The EPA issued an administrative compliance order alleging that Plaintiffs’ construction violates the Clean Water Act. The EPA claims that the lot, on which the Plaintiffs are constructing their new home, contains wetlands that qualify as federally regulated “navigable waters.” Plaintiffs are asking the Court to revisit its 2006 opinion in Rapanos v. United States and help clarify how to determine when a wetland should be classified as “navigable waters.” In Rapanos, the Court found that the Clean Water Act regulates only certain wetlands, those that are determined to be “navigable waters.” However, two different tests were laid out in the Court’s opinions. The Court issued a plurality opinion which stated that the government can only regulate wetlands that have a continuous surface water connection to other regulated waters. A concurring opinion, authored by Justice Kennedy, put forth a more relaxed test that allows for regulation of wetlands that bear a “significant nexus” with traditional navigable waters. Justice Kennedy’s test did not take into consideration whether there was any surface water connection between the wetland and the traditional navigable waters. In the lower appellate court, the Ninth Circuit Court of Appeals used Justice Kennedy’s “significant nexus” test to uphold the EPA’s authority to halt Plaintiffs’ construction. Now, Plaintiffs hope the Supreme Court will adopt a clear rule that brings “fairness, consistency, and a respect for private property rights to the Clean Water Act’s administration.”
SueBee sued for “bee”ing deceptive. Sioux Honey Association Cooperative (“Defendant”) finds itself in a sticky situation after Jason Scholder (“Plaintiff”) brought a class action lawsuit against the honey maker for violating New York’s consumer protection laws by misrepresenting the company’s honey products marketed under the SueBee brand. Plaintiff claims that the words “Pure” or “100% Pure” on the Defendant’s honey products are misleading and deceptive because the honey contains glyphosate. Defendant filed a motion to dismiss the class action lawsuit and a federal district court in New York granted Defendant’s motion in part and denied it in part. Defendant asked the court to find that its labels could not be misleading as a matter of law because any trace amounts of glyphosate in the honey is a result of the natural behavior of bees interacting with agriculture and not a result of Defendant’s production process. However, the court declined to dismiss Plaintiff’s mislabeling claims. The court concluded that a reasonable consumer might not actually understand that the terms “Pure” or “100% Pure” means that trace amounts of glyphosate could end up in honey from the bees’ foraging process. The court also declined the Defendant’s request to dismiss Plaintiff’s unjust enrichment claim because of the alleged misrepresentations of the honey. However, the court did dismiss Plaintiff’s breach of express warranty claim and request for injunctive relief. The court dismissed Plaintiff’s breach of express warranty claim because Plaintiff failed to notify Defendant of its alleged breach of warranty, as required by New York law. Plaintiff’s request for injunctive relief was also dismissed because the court could not find any imminent threat of continued injury to Plaintiff since he has now learned that the honey contains trace amounts of glyphosate. The court ordered the parties to proceed with discovery on Plaintiff’s remaining claims, keeping the case abuzz.
Indigenous Hunting Rights. Recently, two members of the Northwestern Band of the Shoshone Nation (“Northwestern Band”) were cited for hunting on Idaho lands without tags issued by the state. The Northwestern Band filed suit against the state of Idaho declaring that its members possessed hunting rights pursuant to the Fort Bridger Treaty of 1868 (the “1868 Treaty”). The 1868 Treaty provided that the Shoshone Nation agreed to permanently settle on either Fort Hall Reservation, located in Southeastern Idaho, or Wind River Reservation, located in Western Wyoming. By agreeing to settle on one of the two reservations, the Shoshone Nation was granted hunting rights on unoccupied lands of the United states. However, the Northwestern Band ended up settling in Northern Utah and not on one of the two named reservations. After considering the 1868 Treaty, the Federal District Court of Idaho dismissed Northwestern Band’s lawsuit. The court held that the hunting rights contained in the 1868 Treaty were tied to the promise to live on one of the reservations, and that a tribe cannot receive those hunting rights without living on one of the appropriate reservations. Thus, the court found that because the Northwestern Band settled in Northern Utah and not on one of the reservations, the hunting rights of the 1868 Treaty did not extend to the Northwestern Band of the Shoshone Nation.
Tensions rise over Georgia’s Freedom to Farm Act. A few days ago, Georgia lawmakers introduced legislation that seeks to further protect Georgia farmers from nusiance lawsuits. House Bill 1150 (“HB 1150”) proposes to change current Georgia law to protect farmers and other agricultural operations from being sued for emitting smells, noises, and other activities that may be found offensive by neighboring landowners. Georgia’s current law, which became effective in 1980, does provide some protection for Georgia farmers, but only from neighboring landowners that have moved near the farm or agricultural operation after the current law went into effect. All neighboring landowners that lived near the farming operation prior to the current law going into effect have retained their right to sue. HB 1150, on the other hand, will prevent these nuisance lawsuits by all neighboring landowners, as long as the farm or agricultural operation have been operating for a year or more. Passing a right to farm law has proven to be difficult in Georgia. In 2020, House Bill 545, also known as the “Right to Farm bill” failed to pass before the final day of the 2019-2020 legislative session. Private landowners, farmers, and their supporters, are divided on the issue and seek to protect their respective property rights. It doesn't look like HB 1150 will have the easiest of times in the Georgia legislature.
Confining California's Proposition 12. Meat processors and businesses that sell whole pork meat in California (collectively the “Petitioners”) have delayed the enforcement of California’s Proposition 12 (“Prop 12”), for now. Prop 12 is California’s animal confinement law that has sent shockwaves across the nation as it pertains to raising and selling pork, eggs, and veal. Last week, the Superior Court for Sacramento County granted Petitioners’ writ of mandate to delay the enforcement of Prop 12 on sales of whole pork meat. Petitioners argue that Prop 12 cannot be enforced until California has implemented its final regulations on Prop 12. To date, California has yet to implement those final regulations. California, on the other hand, suggests that final regulations are not a precondition to enforcement of Prop 12 and the civil and criminal penalties that can be brought against any farmer or business that violates Prop 12. The court disagreed. The court found that the language of Prop 12, as voted on by California residents, explicitly states that California voters wanted regulations in place before the square-footage requirements of Prop 12 took effect. Therefore, the court granted Petitioners’ writ of mandate to prevent the enforcement of Prop 12 until final regulations have been implemented. The court’s writ will remain in effect until 180 days after final regulations go into effect. This will allow producers and businesses to prepare themselves to comply with the final regulations. Opponents of Prop 12 believe this is another reason why the Supreme Court of the United States should review California’s Proposition 12 for its constitutionality.
We’ve quickly reached the end of January, and several of the legal issues I’ve talked about in OSU’s “Agricultural Outlook” meetings have surfaced this month. If the current pace keeps up, 2022 promises to be a busy year for agricultural law. Here’s a review of three legal issues I predict we’ll see that have already begun to emerge in 2022.
Water, water. From defining WOTUS to addressing Lake Erie water quality, water law will continue to be everywhere this year. The U.S. Supreme Court just announced on January 24 that it will hear the well-known case of Sackett v EPA to review whether the Ninth Circuit Court of Appeals used the proper test to determine whether wetlands are “waters of the United States” (WOTUS). The case is one example of the ongoing push-pull in the WOTUS definition, which establishes waters that are subject to the federal Clean Water Act. The Biden administration proposed a new WOTUS rule last December that would replace the Trump-era rule, and comments remain open on that definition until February 7. Ohio has wrangled with its own water issues, particularly with agricultural nutrient impacts on water quality. We’ll see this year if the state will continue to rely on H2Ohio and similar incentive-based programs and whether the Ohio EPA will face additional litigation over its development of a Total Maximum Daily Load for Lake Erie.
Pesticide challenges. The EPA announced a new policy on January 11 to more closely evaluate potential effects of pesticide active ingredients on endangered species and critical habitats. That was the same day the agency re-registered Enlist One and Enlist Duo pesticides, but with new label restrictions and prohibited use in hundreds of counties across the U.S., including a dozen Ohio counties. An EPA report documenting dicamba damage in 2021 could form the basis for yet another lawsuit this year demanding that EPA vacate dicamba’s registration. Meanwhile, we await a decision by the U.S. Supreme Court on whether it will review Hardeman v. Monsanto, one of dozens of cases awarding damages against Monsanto (now Bayer) for personal injury harms caused by glyphosate.
Opposition to livestock production practices. Ohio pork producers watching California’s Proposition 12 will be happy with a recent California court decision prohibiting enforcement of one part of the law that went into effect on January 1. The provision requires any pork and eggs sold in the state to be from breeding pigs and laying hens that are not raised in a “cruel manner,” meaning that the animals have a certain amount of usable pen space. The California court agreed with grocers and other retailers that the law could not be enforced on sales of pork meat because the state hasn’t yet finalized its regulations. The law could be subject to further scrutiny from a higher court. Several agricultural organizations have unsuccessfully challenged the law as a violation of the Constitution’s Commerce Clause, but one of those cases currently awaits a decision from the U.S. Supreme Court on whether it will review the case. Other livestock production issues we’ll see this year include continued battles over Right to Farm laws that limit nuisance lawsuits against farms, and challenges to “ag gag” laws that aim to prevent or punish undercover investigations on farms.
There’s more to come. Watch for more of our predictions on what 2022 may bring to the agricultural law arena in upcoming posts. Or drop into one of our Agricultural Outlook and Policy meetings to hear my Ag Law Outlook. As quickly as the year is moving, we’ll soon know how many of those predictions are correct.
Perhaps it’s an overused phrase but “sometimes you win, sometimes you lose” has relevance to agriculture lately. It’s a fitting response to several new decisions from the federal courts. Some of the decisions align with positions advocated by agricultural interests but others do not. We wrote last week about a case in the “sometimes you lose” category--the Court’s ruling in favor of small refineries claiming exemptions from renewable fuels mandates. Several members of Congress have already proposed legislation that would nullify the Court’s decision in that case. A second loss came with a challenge to California’s animal welfare standards and a third with the court striking down a waiver of E15 ethanol blends. The sole win came with a challenge to a California statute allowing union organizing activities on private property. Here’s a summary.
California Proposition 12 – North American Meat Institute v. Bonta
The U.S. Supreme Court announced that it would not grant certiorari and review a decision by the Ninth Circuit Court of Appeals’ on California Proposition 12. Voters approved Proposition 12, the “Prevention of Cruelty to Farm Animals Act,” in 2018. The Act establishes housing standards for egg-laying hens, breeding hogs and veal calves and prohibits the confinement of animals in spaces that don’t meet the standards. Business owners and operators in California may not sell meat or egg products from animals that are not confined according to the standards. Standards for calves (43 square feet) and egg laying hens (1 square foot) became effective in 2020 while standards for breeding pigs and their offspring (24 square feet) and cage-free provisions for egg laying hens are to be effective beginning January 1, 2022.
The North American Meat Institute (NAMI) sought a preliminary injunction against Proposition 12 in 2019, arguing that it violates the Interstate Commerce Clause of the U.S. Constitution, which grants only Congress the authority to regulate commerce among the states. NAMI claimed that the Act establishes a “protectionist trade barrier” that would protect California producers from out-of-state competition and control conduct outside of its state borders.
Both the federal District Court and the Ninth Circuit Court of Appeals disagreed with NAMI. The appellate court affirmed the District Court’s conclusions that Proposition 12 is not discriminatory on its face and does not have a discriminatory purpose or effect, as there was no evidence that the state had a protectionist intent and the Act treats in-state and out-of-state producers the same. Nor does the Act try to directly regulate out-of-state conduct or impose burdens on out-of-state producers, but instead only precludes sale of meats resulting from certain practices, the courts concluded. The federal government and 20 states joined NAMI in a request for a rehearing of the case by the full panel of judges on the Ninth Circuit but were unsuccessful.
NAMI turned to the U.S. Supreme Court, seeking a review of the case on the basis that the Ninth Circuit’s decision conflicts with holdings by other appellate courts and the U.S. Supreme Court. The Supreme Court denied the request for review on June 28, offering no explanation for its decision. The legal challenges to Proposition 12 do not end with that denial, however. A separate case filed by the National Pork Producers Association and American Farm Bureau Federation is pending before the Ninth Circuit Court of Appeals. It also argues that Proposition 12 negatively impacts interstate commerce and will increase consumer costs for pork and that the federal district court judge who dismissed the case failed to examine the practical effects the law would have on producers. The Ninth Circuit heard the appeal in April, so we may see a decision in the next few months.
E15 waiver: American Fuel & Petrochemical Manufacturers v. EPA
The D.C. Circuit Court of Appeals held in favor of a claim by the American Fuel and Petrochemical Manufacturers (AFPM) challenging a Trump Administration rule in 2019 that waived restrictions on summer sales of E15 due to higher fuel volatility in summer temperatures. The decision could mean that current sales of E15 must end unless further legal challenges follow.
The 2019 Reid Vapor Pressure (RVP) waiver for E15 allowed fuel stations to sell 15% ethanol blends during the summer months rather than limiting those sales to 10% ethanol, a move that would increase ethanol sales. As expected, the oil and gas refining industry responded to the waiver issuance with a legal challenge, arguing that the administration lacked the authority to grant the RVP waiver for fuels over 10% ethanol.
The volatility waiver authority derives from the Clean Air Act, which establishes when the EPA may alter volatility limits through the waiver process and specifically allows the EPA to grant an ethanol waiver for “fuel blends containing gasoline and 10 percent denatured anhydrous ethanol” in Section 745(h)(4). The EPA relied upon the ethanol waiver language in the Clean Air Act back in 1992 to waive volatility standards for E10. But whether the EPA could use the Clean Air Act language to issue a waiver for ethanol beyond 10 percent is the question at the heart of the dispute. The EPA and intervenors in the case representing biofuel interests claimed the language was ambiguous enough to allow the EPA to grant waivers for fuel with 10% ethanol or more.
In a unanimous decision, the Court of Appeals concluded that “the text, structure, and legislative history” of the Clean Air Act do not allow EPA to extend a waiver to E15. The court found the statutory language straightforward, lacking any modifiers that would establish a range of ethanol blends rather than the 10 percent stated in the statute. Legislative actions at the time also supported an interpretation that the 10 percent language addressed E10 and not ethanol blends in excess of 10 percent.
The next critical question for this case is what the Biden Administration EPA will do with case and the E15 waiver. A request for further review of the D.C. Circuit’s opinion is possible. Or perhaps the EPA will pursue a legislative fix that increases the statutory reference from 10 percent to 15 percent ethanol. And it’s always possible that no further action will occur and E15 summer sales will no longer be an option.
Union organizer access as a taking – Cedar Point Nursery v Hassid
In the “win” column for agricultural employers is a case that asks whether a state regulation granting access to private property for union activities is a “taking” of property under the Constitution. The U.S. Supreme Court’s answer to the question is “yes,” although three of the Justices dissented from the majority opinion.
A regulation formed under the California Agricultural Labor Relations Act of 1975 gives labor organizations a “right to take access” to an agricultural employer’s property “for the purpose of meeting and talking with employees and soliciting their support.” The regulation requires agricultural employers to allow union organizers to be on the property up to three hours per day and four 30-day periods per year but cannot be “disruptive” and must provide written notice to employers. An employer who interferes with the organizers can be subject to sanctions.
After representatives from United Farm Workers accessed Cedar Point Nursery and engaged in disruptive conduct and sought to access Fowler Packing Company, both occasions without notice to the employers, the companies filed a lawsuit seeking an injunction from the federal District Court. They argued that the regulation was a physical taking of their properties because it granted an easement to the union organizers, which required compensation under the Fifth and Fourteenth amendments of U.S. Constitution.
The District Court did not grant the injunction and held that the regulation is not a physical taking because it doesn’t allow the public a permanent and continuous right of access to the property for any reason. The Ninth Circuit Court of Appeals affirmed that decision, agreeing that it wasn’t a physical taking, but a strong dissent argued that the union activities were a physical occupation and taking of property. The agricultural companies sought but were denied a hearing before all of the Ninth Circuit judges, leading to a request for review granted by the U.S. Supreme Court.
The majority of the Justices concluded that the California regulation is a physical taking because it grants union organizers a right to invade an agricultural employer’s property. Particularly important to the majority was the regulation’s removal of an owner’s right to exclude people from their private property, which is a “fundamental element” of property rights according to the Court. The Court rejected the argument that the access must be continuous and permanent to be a physical taking and dispensed with claims that the holding could endanger regulations that allow government entries onto private land. The Court’s holding was clear: the access regulation amounts to simple appropriation of private property.
Read the court opinions in these three cases here: