United States Supreme Court Allows Proposition 12 to Stand

The United States Supreme Court has ruled in a closely watched agricultural law case involving California’s Proposition 12.  [Read Opinion here.]

Image by Zach Dulli from Pixabay


In 2018, California voters passed Proposition 12 (“Prop 12”), a ballot initiative setting production standards for eggs, veal, and pork sold in California.  Relevant in this case, Prop 12 prohibited the sale of whole pork meat from breeding pigs or their immediate offspring that were “confined in a cruel manner.”  “Cruel” conditions were defined as a pig being unable to lie down, stand up, fully extend limbs, and turn around freely.  Prop 12’s requirements applies to all whole pork meat sold in California, regardless of where the animal may have been raised.

The National Pork Producers Council (NPPC) and American Farm Bureau Federation filed suit claiming that Prop 12 had extraterritorial impacts and violated the dormant Commerce Clause. The district court granted California’s motion to dismiss.  The United States Court of Appeals for the Ninth Circuit affirmed.   The United States Supreme Court granted NPPC’s petition for certiorari and oral argument was held in October.

Applicable Law

The United States Constitution expressly grants the power to regulate commerce between the states to Congress.  This is known as the “Commerce Clause.”  The dormant Commerce Clause is the concept that because this power is granted to Congress, states are prohibited from regulating interstate commerce.  In particular, states are prohibited from passing discriminatory laws that amount to “economic protectionism.”  In other words, states cannot pass laws “driven by…economic protectionism–that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors.  For example, a state cannot impose a tax only on out-of-state products, while not imposing the tax on in-state products.  See, e.g., West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994).

Also relevant is the Pike balancing test.  See Pike v. Bruce Church, Inc., 397 U.S. 137 (1970).  This test provides that where a statute even-handedly regulates to affect a local public interest, and its effects on interstate commerce are merely incidental, it will be upheld unless the burden imposed on interstate commerce is clearly excessive in relation to the local benefits.


The Court issued a fractured opinion allowing Prop 12 to stand, with some portions agreed upon by all nine of the Justices, and others garnering support from far fewer.  [Read Opinion here.]

Discrimination-based claims

The anti-discrimination principle lies at the “very core” of the Court’s dormant Commerce Clause jurisprudence.  The Justices unanimously agree that NPPC has failed to allege a discrimination-based claim that the California law expressly distinguishes between in-state and out-of-state producers.  In fact, the NPPC disavows that claim, admitting that Prop 12 applies equally by imposing the same burdens on in-state and out-of-state pork producers.

Extraterritoriality doctrine

NPPC raises the “extraterritoriality doctrine” which claims that there is a separate test under the dormant Commerce Clause for situations where there is not a discrimination-based claim.  NPPC argued there is an “almost per se” rule prohibiting state laws that have the “practical effect of controlling commerce outside the State” even if these laws do not purposefully discriminate against out-of-state interests.  The Justices unanimously rejected this argument.

“In our interconnected national marketplace, many (may be most) state laws have the ‘practical effect of controlling’ extraterritorial behavior.”  The Court offered a number of examples such as state income taxes causing some companies to relocate to other states and state environmental laws influencing where businesses choose to manufacture goods. Adopting the NPPC position that laws with the practical effect of controlling extraterritorial commerce “would cast a shadow over laws long understood to represent valid exercise of the State’s constitutionally reserved powers.” The Court held that it has never read the applied the dormant Commerce Clause this broadly, and it saw no reason to do so now.

Pike balancing test

NPPC also argued that Prop 12 fails the Pike balancing test, arguing that a court must assess the burden imposed on interstate commerce and prevent enforcement if that burden is clearly excessive in relation to the local benefit.  NPPC argues that the costs of Prop 12 (including compliance costs for farmers, potential increased food cost for consumers) far outweigh the benefits to California (including ensuring non-cruel treatment to animals, health and safety concerns).

The unanimous approach to the opinion came to an end when the Justices reached the discussion of the Pike balancing test.

Pike discriminatory purpose (Part IV-A)

In Part IV-A, the Opinion (Gorsuch, Thomas, Kagan, Sotomayor, Barrett) discussed the Pike balancing test generally.  The discussion began with the basic description of the Pike balancing test.  The Court explained that while many dormant Commerce Clause cases involve facially discriminatory regulations, the Pike line of cases act “as an important reminder that a law’s practical effects may also disclose the presence of a discriminatory purpose.”  For example, in Pike an Arizona law required all cantaloupes grown in Arizona to be processed and packed in Arizona. Even though this order appeared facially neutral, the Court held that the “practical effect” of the order revealed a discriminatory purpose of seeking to insulate in-state processing and packing businesses from out-of-state competition.  As one legal scholar put it, Pike serves to “smoke out” a hidden protectionism intent.  

In light of this, the 5 Justices held that NPPC admits Prop 12 does not facially discriminate, but that they also fail to suggest that the practical effects disclose purposeful discrimination against out of state businesses.

Weighing of burdens (Part IV-B)

In Part IV-B of the Opinion (Gorsuch, Thomas, Barrett) discuss a court’s role in balancing these interests.  These three Justices believe NPPC asks the Court to “retool Pike for a much more ambitious project” and authorize courts to strike down state laws “based on nothing more than their own assessment of the relevant law’s ‘costs’ and ‘benefits.'”  This, the three Justices say, they cannot do.   The Justices note there is nothing in the Constitution’s text or history that would allow this interpretation. Prior case caution against this type of approach. Additionally, they write, judges are not “suited to draw reliable conclusions of the kind that would be necessary” as NPPC conceives the test.

Using the facts of this case, the Justices note on the “costs” side, NPPC argues they will face increased production expenses.  On the “benefits side” California voters voted for Prop 12 for a variety of reasons, many non-economic like preventing animal cruelty and health and safety concerns.  “How is a court supposed to compare or weigh economic costs (to some) against noneconomic benefits (to others)?  No natural legal rule guides the way.”  It is not possible, or proper, for the Court to undertake this type of task, they write.  “How should we settle that dispute?  The competing goods are incommensurable.  Your guess is as good as ours.  More accurately, your guess is better than ours.  In a functioning democracy, policy choices like these usually belong to the people and their elected representatives.”  If the law does have the impacts NPPC predicts, such as increased costs and a massive disruption of the pork industry, Congress is free to intervene with a nationwide rule.

Substantial burden (Part IV-C)

In Part IV-C of the Opinion (Gorsuch, Thomas, Sotomayor, Kagan) believe that NPPC has failed to meet the threshold issue of alleging a “substantial burden” it must satisfy before it can even get to the balancing test.  Plausible facts are required, rather than speculation.  The Justices offer a number of reasons NPPC fails to meet this requirement.  Here, pork farmers have multiple options:  they can provide the space Prop 12 requires and sell in California, they can segregate their operations to ensure some portion of their product may be sold in California, or they may continue production practices and withdraw from the California market.  These same choices exist for California producers and out-of-state producers.  Although California has few in-state producers, there are some who must comply with Prop 12 just like out-of-state producers. Further, although NPPC argues it will be difficult for out-of-state producers to comply with Prop 12’s requirements, they admit that many producers have already converted to meet the standards.  Additionally, NPPC admits that the producers will be able to pass along some of their increased costs to the consumer.  The Justices note that “further experience may yield further facts,” but in the current pleadings, NPPC failed to prove a substantial burden.

Response to dissents (Part IV-D)

In Part IV-D (Gorsuch, Thomas, Barrett), the Justices respond to the approach offered by the dissenting opinions.

First, the Justices claims that the Chief Justice Roberts’ dissent would advance a broader view of Pike allowing courts to invalidate a law if it threatens “excessive harm to the interstate market.”  This would violate federalism, the three Justices argue, making it a requirement that any good available in one state must be made available in every state.

Second, Chief Justice Roberts’ dissent claims that Prop 12’s burdens are substantial because they are as far-flung as Indiana and North Carolina. But as Justice Kavanaugh noted in his solo opinion, this poses a problem for large states because almost any in-state measure will impact out-of-state firms.  This will give states with smaller markets greater authority to regulate sales than larger states.

Third, the three Justices believe it is wrong for the Chief Justice’s and Justice Kavanaugh’s opinions to read Pike as allowing consideration for not only economic harms, but also “all manner of derivative harms” to out of state interests including social costs, traditions, and industry practices.  These costs are difficult to quantify and are not properly considered under the dormant Commerce Clause.


In light of this, the decision of the US Court of Appeals for the Ninth Circuit dismissing the case is affirmed.

Sotomayor Concurring in Part (Joined by Kagan)

Justices Sotomayor and Kagan wrote an opinion concurring in part.  They note that they join all but Parts IV-B and IV-D of Justice Gorsuch’s opinion.

Justices Sotomayor and Kagan believe NPPC failed to allege a substantial burden on interstate commerce as required under Pike, but do not agree with any “fundamental reworking” of that doctrine. Specifically, they disagree that Pike only applies in situations where there is an allegation of discriminatory principle.  Failure to allege discrimination or impact “does not doom” a Pike claim, although most cases in the Pike line do so.

Next, they disagree with Justice Gorsuch’s view that “judges are not up to the task that Pike prescribes.”  They acknowledge the inquiry is difficult and should be approached with caution, but courts are able to weigh disparate burdens and benefits and care called to do so frequently.

Nevertheless, here, they would hold that NPPC failed to allege a substantial burden, and thus, the Court should not even engage in the Pike balancing analysis.

Barrett Concurring in Part

Justice Barrett wrote a solo opinion concurring in part.  She does not join in Part IV-C of Justice Gorsuch’s opinion.

She agrees with Justice Gorsuch that the benefits and costs of Prop 12 are incommensurable.  California’s interest in eliminating allegedly inhumane products cannot be weighed against dollars and cents, “at least not without second-guessing the moral judgments of California voters or making the kind of policy decisions reserved for politicians.”

She does not, however, agree that NPPC failed to allege a substantial burden on interstate commerce.  She believes the complaint plausibly alleges pervasive, burdensome costs that will be felt primarily outside of California.

Thus, she believes NPPC satisfied the threshold requirement to allege substantial burden and would proceed to the Pike balancing test, were the burdens and benefits capable of judicial balancing.

Chief Justice Roberts Concurring in Part and Dissenting in Part (Joined by Alito, Kavanaugh, Jackson)

These Justices agree with the first sections of Justice Gorsuch’s opinion, notably that the leading cases involving the dormant Commerce Clause involve economic protectionism, and that the “almost per se” rule offered by NPPC is improper for cases with extraterritorial effects.  They do not, however, agree with the Gorsuch opinion approach to the Pike balancing test.

Pike provides that a nondiscriminatory state law is valid “unless the burden imposed on interstate commerce is clearly excessive in relation to the putative local benefits.”  NPPC failed to meet that burden, but these Justices say this “is through no fault of [its] own” as they believe the Ninth Circuit misapplied the Pike balancing test in evaluating NPPC’s allegations.  NPPC alleged not only harm to producers who wish to sell in California, but harm including health issues to the national pig population and changes to established practices to the entire industry. Thus, they would find that NPPC plausibly alleged a substantial burden against interstate commerce and would vacate the judgment and remand for the court to decide whether they have stated a claim under Pike.

There are two types of dormant Commerce Clause cases: those involving discriminatory state laws, and those implicating the “instrumentalities of interstate transportation.”  But, the Pike test has not been read so narrowly.  Indeed, Pike has not been limited to discriminatory cases or only those involving instrumentalities of transportation. A majority of the Court agrees on this, says the Chief Justice, noting that Justices Kagan, Sotomayor, and Kavanaugh all appear to believe the same.

Next, the Chief Justice appreciates Justice Gorsuch’s concern over the difficulty of balancing competing interests, but notes that “sometimes there is no avoiding the need to weigh seemingly incommensurable values.”  Again, he notes that a majority of the Court agree that it is possible for courts to do so, citing to Justice Sotomayor and Justice Kavanaugh’s opinions.

He says the Ninth Circuit misread the Complaint in this case, concluding it only alleged an increase in compliance costs as the harm from Prop 12.  “But as I read it, the complaint alleges more than simply an increase in ‘compliance costs,’ unless such costs are defined to include all the fallout from a challenged regulatory scheme.  NPPC identifies broader market-wide consequences of compliance.  These include compliance costs and capital expenditures for reconstructing barns, but also harms to the interstate market itself, particularly given the interconnected nature of the pork industry.  They also allege animal health concerns including increased stress, disease, and injury.  These extraterritorial effects are relevant to the Pike balancing test and were not properly considered by the Ninth Circuit.  He would hold NPPC did plead substantial harm, ad remand the case for the Ninth Circuit to apply the Pike balancing test.

Kavanaugh Concurring in Part and Dissenting in Part

Justice Kavanaugh writes to make clear that six Justices (Kavanaugh, Roberts, Alito, Jackson, Sotomayor, Kagan) “affirmatively retain the longstanding Pike balancing test for analyzing dormant Commerce Clause challenges to state economic regulations.”  Although Justice Gorsuch would essentially overrule Pike in Parts IV-B and IV-D, those subsections are not controlling precedent.

But, as to Part IV-C, a four-justice plurality is controlling precedent for NPPC’s Pike claim, finding that NPPC failed to allege a substantial burden on interstate commerce. He disagrees with this conclusion for reasons stated in the Chief Justice’s opinion but wrote separately because he believes that Prop 12 may also raise questions under the Import-Export Clause, the Privileges and Immunities Clause, and the Full Faith and Credit Clause.

He notes that by its own terms, Prop 12 impacts pork producers outside of California, and notes that the vast majority of pork in the United States is raised in other states. The Prop 12 requirements “depart significantly from common agricultural practices that are lawful in major pig-farming and pork-producing states” and may actually worsen animal health and welfare.  It is nearly impossible for a producer to practically decide not to comply with Prop 12 given the difficulty of segregating animals and the 13% market share held by California consumers. Prop 12 will impact pork producers, consumers, and meatpacking workers.  Thus, he would hold it does substantially burden the interstate pork market.

California has attempted to “unilaterally impose its moral and policy preferences for pig farming and pork production on the rest of the Nation.” This undermines federalism and the authority of individual states. And, he notes, this may not be limited to pork production, citing to examples from amicus briefs including a hypothetical law prohibiting the sale of fruits picked by citizens unlawfully in the country. “If upheld against all constitutional challenges, California’s novel and far-reaching regulations could provide a blueprint for other states.”

Opinion Summary

Untangling exactly where the Justices line up on each issue proved complicated.  Here is my attempt to simplify.

  • All Justices agreed NPPC failed to allege a facially discriminatory law.
  • All Justices rejected NPPC’s extraterritoriality “almost per se” rule that a showing of extraterritorial effects is sufficient to strike a state law.
  • A majority of Justices (Roberts, Alito, Kavanaugh, Jackson, Barrett) believe NPPC did satisfy its burden of sufficiently alleging a substantial burden on interstate commerce.  Four of these Justices would have remanded the case back to apply the Pike balancing test, but Justice Barrett does not believe that such balancing is a proper role for courts.  Because of this, she does not vote to remand, but sides with the other four Justices that dismissal is proper.
  • A majority of Justices (Roberts, Alito, Kavanaugh, Jackson, Sotomayor, Kagan) believe courts can properly balance interests under Pike.  However, as noted above, Justices Sotomayor and Kagan believe NPPC failed to sufficiently plead a substantial burden and, therefore, they do not get to the balancing test.

Key Takeaways

Proposition 12 will stand, and the rules related to pork are set to go into effect in July.  It still seems possible that another lawsuit could be filed against the law alleging additional harms as a result of Prop 12.  This is particularly true given that the majority of the Court believed that NPPC alleged a substantial burden to reach the Pike balancing test. Further, given Justice Kavanaugh’s suggestion that there may be other constitutional concerns related to Prop 12, there could be a lawsuit that raises those challenges as well.

Keep in mind, there are other state laws addressing animal production as well.  For example, Massachusetts passed a similar law for which a legal challenge is pending.  Given the result allowing Prop 12 to stand, it is certainly possible we could see additional states draft their versions of laws aimed at animal production practices.  For the agricultural industry, this could pose significant concerns about a patchwork of different standards and requirements for each state, which could greatly increase the cost of production.

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