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In a Supreme Court case scheduled for oral argument on October 11, pro-business justices could curb the power of liberal states to pass regulations with economic consequences for large industries across the country. Meat lobbyists in National Pork Producers Council (NPPC) v. Ross argue that California’s new agribusiness regulations force them to overhaul pork production practices nationwide. They say that the Golden State cannot lift standards for its own consumers if those changes affect the whole sector—an argument which, if upheld, could have far-reaching impact on state regulation of issues like energy policy, public health, and worker pay.
As America’s most populous state, California has long used regulation to raise standards in industries with impacts on public health and the environment. Its vehicle emission standards have jump-started the national market for electric cars. Now, the pork industry is casting California as obnoxiously imposing its “philosophical preferences” on all Americans. It argues that the Court should resist “allowing a State to export its social experiments extraterritorially.”
A general trend toward greater state-led progressive regulation may be precisely why the Court agreed to hear this relatively obscure case. Justices who typically defend federalism, or states’ rights, where it serves conservative interests, could weigh in on NPPC v. Ross in order to foil state-led economic regulation.
“It’s preordained what they’re going to do. They’re going to find this had an undue impact on interstate commerce,” John Coffee, a corporate law professor at Columbia, told the Prospect. “It’s the most inconsistent thing that the Court has done. They are great protectors of federalism—they live and die for federalism. But now, they are stomping on federalism.”
The American Farm Bureau Federation and NPPC, the agribusiness lobby groups that brought the case, are attempting to overturn Proposition 12, a ballot measure Californians passed in 2018 banning the sale of meat and eggs from animals raised in extreme confinement.
Most female pigs raised for breeding in the United States are currently kept in metal “gestation crates” roughly the size of their own bodies, where they are fed a steady stream of laxatives. Since they don’t get enough exercise to defecate, they become constipated to avoid soiling their cramped living spaces. Pigs in these conditions exhibit desperate behaviors, animal advocate Matthew Scully explains in a brief, such as frenzied chewing on bars and nest-building with imaginary straw.
Prop 12 guaranteed farm animals new minimum standards for movement, including the ability to lie down and turn around in their enclosure. California isn’t the first state to prohibit gestation crates. Florida banned the cages in 2002, and deep-red Arizona banned them in 2006.
But whereas those states banned producers from using the crates within state lines, Prop 12 targets the consumer side, banning the in-state sale of pork from pigs raised in gestation crates anywhere. The agribusiness industry says that would foist high costs on pig farmers in other states, since California imports almost all of its pork.
The new standards are so costly, NPPC and the Farm Bureau write in their brief, because it is nearly impossible to keep track of a single slab of pork as it travels to retail: “A market pig progresses through multiple farms outside of California as it is raised, and then is processed into many different cuts of meat that are sold across the country.” As a result, they say, the new standards would have to be implemented uniformly across the industry.
A general trend toward greater state-led progressive regulation may be precisely why the Court agreed to hear this relatively obscure case.
Producers have told their shareholders a different story. The Chinese-owned pork producer Smithfield Foods, which is NPPC’s largest member, has bragged in investor-facing materials that it is piloting “a blockchain process to promote supply chain traceability for consumers.” In other words, Smithfield tells investors that it actually has the power to track pigs through their life cycle and keep digital records of those transactions.
Other producers say in public materials that they are prepared to fully comply with the California law. “Prop 12, it’s about 4 percent of total production. That’s not significant for us today … it’s not something we were excited about, but we can align suppliers,” Tyson Foods’ CEO said in an earnings call.
The meat industry stakes its case on the Dormant Commerce Clause, a legal doctrine aimed at preventing protectionism, which is typically used to argue that states cannot discriminate against out-of-state businesses. Prop 12 doesn’t discriminate—it applies equally to producers within and outside the state—so the industry is calling on an older strand of the doctrine which says that even nondiscriminatory state regulations can be challenged if they place an undue burden on interstate commerce in a way that outweighs “local benefits.”
Coffee said local benefits like humane treatment of pigs could be harder to quantify in cost-benefit analysis, and could receive less weight than more easily measured business costs.
The Ninth Circuit Court of Appeals dismissed the pork industry’s objections, avoiding evaluating the costs of California’s ballot measure. But the Supreme Court agreed to hear the case, suggesting that the justices may want to extend the Court’s right to weigh whether the business cost imposed by any new regulation is justified.
In the early 20th century, the Supreme Court frequently struck down legislation seen as interfering with the free market: minimum-wage laws, child labor laws, bank and insurance regulations. The so-called Lochner Era of laissez-faire capitalism, named for a case in which the Court said New York could not set limits to working hours, ended with the New Deal. In Coffee’s view, the Supreme Court’s apparent interest in preventing interference with large interstate markets “could signal the resurgence of a Lochner-like style of judicial review.”
Briefs filed in support of the pork producers by industry trade groups express enthusiasm for returning to an environment of freer interstate trade in which a pro-business Court strikes down economic regulation. The pork industry warns explicitly in its brief that if Prop 12 is upheld, all sorts of threatening rules could follow.
California could ban goods produced below its own $15-an-hour minimum wage, or goods that are not produced by union members, NPPC and the Farm Bureau caution. That would cripple interstate competition, they write, explaining, “It is not farfetched, given the deep divisions on moral and social issues within our country, to see a threat to the Union in the construction of these kinds of legal moats around a State’s markets.”
If the Court overturns Prop 12, state renewable-energy standards like those in California and Colorado could be at risk of legal challenge and invalidation, given their impacts on energy producers outside the state.
Kelsey Eberly, a Harvard Law School fellow, published a report listing laws that could be jeopardized by the ruling. They range from a Missouri statute requiring natural gas utilities to receive approval to buy stock in other utility companies to a Kansas rule regulating payday loans on the internet. A pharmaceutical industry trade group wrote in a brief that the case could impact whether states can require drug companies to give advance notice when they hike the price of medicine, a demand the industry is resisting.
Preserving states’ role as business-regulating laboratories of democracy would not exclusively benefit progressives. Another looming issue of interstate commerce is whether states with strict abortion bans will block abortion pills shipped from other states. In that event, professors Will Baude of the University of Chicago Law School and Dan Epps of the Washington University School of Law say on the podcast Divided Argument, “California’s power over Iowa would become Texas’s power over Illinois.”
