{"id":12101,"date":"2023-05-17T01:47:55","date_gmt":"2023-05-17T06:47:55","guid":{"rendered":"https:\/\/agrilife.org\/texasaglaw\/?p=12101"},"modified":"2026-04-17T15:12:46","modified_gmt":"2026-04-17T20:12:46","slug":"united-states-supreme-court-allows-proposition-12-to-stand","status":"publish","type":"post","link":"https:\/\/agrilife.org\/texasaglaw\/2023\/05\/17\/united-states-supreme-court-allows-proposition-12-to-stand\/","title":{"rendered":"United States Supreme Court Allows Proposition 12 to Stand"},"content":{"rendered":"

The United States Supreme Court has ruled in a closely watched agricultural law case involving California’s Proposition 12.\u00a0 [Read Opinion here<\/a>.]<\/p>\n

\"\"

Image by Zach Dulli<\/a> from Pixabay<\/a><\/p><\/div>\n

Background\u00a0<\/strong><\/p>\n

In 2018, California voters passed Proposition 12 (“Prop 12”), a ballot initiative setting production standards for eggs, veal, and pork sold in California.\u00a0 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.”\u00a0 “Cruel” conditions were defined as a pig being unable to lie down, stand up, fully extend limbs, and turn around freely.\u00a0 Prop 12’s requirements applies to all whole pork meat sold in California, regardless of where the animal may have been raised.<\/p>\n

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.\u00a0 The United States Court of Appeals for the Ninth Circuit affirmed.\u00a0 \u00a0The United States Supreme Court granted NPPC’s petition for certiorari<\/a> and oral argument<\/a> was held in October.<\/p>\n

Applicable Law<\/strong><\/p>\n

The United States Constitution expressly grants the power to regulate commerce between the states to Congress.\u00a0 This is known as the “Commerce Clause.”\u00a0 The dormant Commerce Clause is the concept that because this power is granted to Congress, states are prohibited from regulating interstate commerce.\u00a0 In particular, states are prohibited from passing discriminatory laws that amount to “economic protectionism.”\u00a0 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.\u00a0 For example, a state cannot impose a tax only on out-of-state products, while not imposing the tax on in-state products.\u00a0\u00a0See, e.g., West Lynn Creamery, Inc. v. Healy<\/em>, 512 U.S. 186 (1994).<\/p>\n

Also relevant is the Pike\u00a0<\/em>balancing test.\u00a0\u00a0See Pike v. Bruce Church, Inc.<\/em>, 397 U.S. 137 (1970).\u00a0 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.<\/p>\n

Opinion<\/strong><\/p>\n

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.\u00a0 [Read Opinion here<\/a>.]<\/p>\n

Discrimination-based claims<\/span><\/p>\n

The anti-discrimination principle lies at the “very core” of the Court’s dormant Commerce Clause jurisprudence.\u00a0 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.\u00a0 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.<\/p>\n

Extraterritoriality doctrine<\/span><\/p>\n

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.\u00a0 NPPC argued there is an “almost\u00a0per se<\/em>” 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.\u00a0 The Justices unanimously rejected this argument.<\/p>\n

“In our interconnected national marketplace, many (may be most) state laws have the ‘practical effect of controlling’ extraterritorial behavior.”\u00a0 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.<\/p>\n

Pike<\/em> balancing test<\/span><\/p>\n

NPPC also argued that Prop 12 fails the\u00a0Pike<\/em> 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.\u00a0 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).<\/p>\n

The unanimous approach to the opinion came to an end when the Justices reached the discussion of the\u00a0Pike\u00a0<\/em>balancing test.<\/p>\n

Pike discriminatory purpose (Part IV-A)<\/em><\/p>\n

In Part IV-A, the Opinion (Gorsuch, Thomas, Kagan, Sotomayor, Barrett) discussed the Pike\u00a0<\/em>balancing test generally.\u00a0\u00a0The discussion began with the basic description of the Pike\u00a0<\/em>balancing test.\u00a0 The Court explained that while many dormant Commerce Clause cases involve facially discriminatory regulations, the\u00a0Pike<\/em> line of cases act “as an important reminder that a law’s practical effects may also disclose the presence of a discriminatory purpose.”\u00a0 For example, in\u00a0Pike<\/em> 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.\u00a0 As one legal scholar put it,\u00a0Pike<\/em> serves to “smoke out” a hidden protectionism intent.\u00a0\u00a0<\/span><\/p>\n

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.<\/p>\n

Weighing of burdens (Part IV-B)<\/em><\/p>\n

In Part IV-B of the Opinion (Gorsuch, Thomas, Barrett) discuss a court’s role in balancing these interests.\u00a0 These three Justices believe NPPC asks the Court to “retool Pike<\/em> 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.'”\u00a0 This, the three Justices say, they cannot do.\u00a0 \u00a0The 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.<\/p>\n

Using the facts of this case, the Justices note on the “costs” side, NPPC argues they will face increased production expenses.\u00a0 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.\u00a0 “How is a court supposed to compare or weigh economic costs (to some) against noneconomic benefits (to others)?\u00a0 No natural legal rule guides the way.”\u00a0 It is not possible, or proper, for the Court to undertake this type of task, they write.\u00a0 “How should we settle that dispute?\u00a0 The competing goods are incommensurable.\u00a0 Your guess is as good as ours.\u00a0 More accurately, your guess is better<\/em> than ours.\u00a0 In a functioning democracy, policy choices like these usually belong to the people and their elected representatives.”\u00a0 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.<\/p>\n

Substantial burden (Part IV-C)<\/em><\/p>\n

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.\u00a0 Plausible facts are required, rather than speculation.\u00a0 The Justices offer a number of reasons NPPC fails to meet this requirement.\u00a0 Here, pork farmers have multiple options:\u00a0 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.\u00a0 These same choices exist for California producers and out-of-state producers.\u00a0 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.\u00a0 Additionally, NPPC admits that the producers will be able to pass along some of their increased costs to the consumer.\u00a0 The Justices note that “further experience may yield further facts,” but in the current pleadings, NPPC failed to prove a substantial burden.<\/p>\n

Response to dissents (Part IV-D)<\/em><\/p>\n

In Part IV-D (Gorsuch, Thomas, Barrett), the Justices respond to the approach offered by the dissenting opinions.<\/p>\n

First, the Justices claims that the Chief Justice Roberts’ dissent would advance a broader view of\u00a0Pike<\/em> allowing courts to invalidate a law if it threatens “excessive harm to the interstate market.”\u00a0 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.<\/p>\n

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.\u00a0 This will give states with smaller markets greater authority to regulate sales than larger states.<\/p>\n

Third, the three Justices believe it is wrong for the Chief Justice’s and Justice Kavanaugh’s opinions to read\u00a0Pike<\/em> 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.\u00a0 These costs are difficult to quantify and are not properly considered under the dormant Commerce Clause.<\/p>\n

Conclusion<\/span><\/p>\n

In light of this, the decision of the US Court of Appeals for the Ninth Circuit dismissing the case is affirmed.<\/p>\n

Sotomayor Concurring in Part (Joined by Kagan)<\/strong><\/p>\n

Justices Sotomayor and Kagan wrote an opinion concurring in part.\u00a0 They note that they join all but Parts IV-B and IV-D of Justice Gorsuch’s opinion.<\/p>\n

Justices Sotomayor and Kagan believe NPPC failed to allege a substantial burden on interstate commerce as required under\u00a0Pike<\/em>, but do not agree with any “fundamental reworking” of that doctrine. Specifically, they disagree that\u00a0Pike<\/em> only applies in situations where there is an allegation of discriminatory principle.\u00a0 Failure to allege discrimination or impact “does not doom” a\u00a0Pike\u00a0<\/em>claim, although most cases in the\u00a0Pike<\/em> line do so.<\/p>\n

Next, they disagree with Justice Gorsuch’s view that “judges are not up to the task that Pike<\/em> prescribes.”\u00a0 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.<\/p>\n

Nevertheless, here, they would hold that NPPC failed to allege a substantial burden, and thus, the Court should not even engage in the\u00a0Pike<\/em> balancing analysis.<\/p>\n

Barrett Concurring in Part<\/b><\/p>\n

Justice Barrett wrote a solo opinion concurring in part.\u00a0 She does not join in Part IV-C of Justice Gorsuch’s opinion.<\/p>\n

She agrees with Justice Gorsuch that the benefits and costs of Prop 12 are incommensurable.\u00a0 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.”<\/p>\n

She does not, however, agree that NPPC failed to allege a substantial burden on interstate commerce.\u00a0 She believes the complaint plausibly alleges pervasive, burdensome costs that will be felt primarily outside of California.<\/p>\n

Thus, she believes NPPC satisfied the threshold requirement to allege substantial burden and would proceed to the\u00a0Pike<\/em> balancing test, were the burdens and benefits capable of judicial balancing.<\/p>\n

Chief Justice Roberts Concurring in Part and Dissenting in Part (Joined by Alito, Kavanaugh, Jackson)<\/strong><\/p>\n

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<\/em>” rule offered by NPPC is improper for cases with extraterritorial effects.\u00a0 They do not, however, agree with the Gorsuch opinion approach to the\u00a0Pike<\/em> balancing test.<\/p>\n

Pike<\/em> 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.”\u00a0 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\u00a0Pike<\/em> balancing test in evaluating NPPC’s allegations.\u00a0 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<\/em>.<\/p>\n

There are two types of dormant Commerce Clause cases: those involving discriminatory state laws, and those implicating the “instrumentalities of interstate transportation.”\u00a0 But, the\u00a0Pike<\/em> test has not been read so narrowly.\u00a0 Indeed, Pike<\/em> 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.<\/p>\n

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.”\u00a0 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.<\/p>\n

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.\u00a0 “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.\u00a0 NPPC identifies broader market-wide consequences of compliance.\u00a0 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.\u00a0 They also allege animal health concerns including increased stress, disease, and injury.\u00a0 These extraterritorial effects are relevant to the Pike<\/em> balancing test and were not properly considered by the Ninth Circuit.\u00a0 He would hold NPPC did plead substantial harm, ad remand the case for the Ninth Circuit to apply the Pike<\/em> balancing test.<\/p>\n

Kavanaugh Concurring in Part and Dissenting in Part<\/strong><\/p>\n

Justice Kavanaugh writes to make clear that six Justices (Kavanaugh, Roberts, Alito, Jackson, Sotomayor, Kagan) “affirmatively retain the longstanding\u00a0Pike<\/em> balancing test for analyzing dormant Commerce Clause challenges to state economic regulations.”\u00a0 Although Justice Gorsuch would essentially overrule\u00a0Pike<\/em> in Parts IV-B and IV-D, those subsections are not controlling precedent.<\/p>\n

But, as to Part IV-C, a four-justice plurality is controlling precedent for NPPC’s\u00a0Pike<\/em> 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.<\/p>\n

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.\u00a0 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.\u00a0 Thus, he would hold it does substantially burden the interstate pork market.<\/p>\n

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\u00a0amicus<\/em> 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.”<\/p>\n

Opinion Summary<\/strong><\/p>\n

Untangling exactly where the Justices line up on each issue proved complicated.\u00a0 Here is my attempt to simplify.<\/p>\n