Navigating Extraterritoriality and Regulatory Burdens

National Pork Producers Council v. Ross

Wikipedia · Justia (with opinion) · Docket · oyez.org

Argued on Oct 11, 2022.
Decided on May 11, 2023.

Petitioner: National Pork Producers Council, et al..
Respondent: Karen Ross, in Her Official Capacity as Secretary of the California Department of Food & Agriculture, et al..

Advocates:

• Timothy S. Bishop (for the Petitioners)
• Edwin S. Kneedler (for the United States, as amicus curiae, supporting the Petitioners)
• Michael J. Mongan (for the State Respondents)
• Jeffrey A. Lamken (for the Humane Society of the United States, et al., Respondents)

Facts of the case (from oyez.org)

In 2018, California voters passed Proposition 12, which amends the California Health and Safety Code to prohibit the sale of pork from animals confined in a manner inconsistent with California standards. Trade associations representing the pork industry and farmers challenged the law as violating the dormant Commerce Clause, which prohibits states from discriminating against interstate commerce or imposing undue burdens on interstate commerce.

According to the challengers, Proposition 12 places an undue burden on interstate commerce and that it causes an impermissible “extraterritorial effect” because it effectively forces all or most hog farmers, regardless of their location, to comply with the California requirements yet mostly affects non-California transactions (because 87% of the pork produced in the country is consumed outside of California).

The district court dismissed the complaint for failure to state a claim, and the U.S. Court of Appeals for the Ninth Circuit affirmed, finding the complaint did not plausibly plead that Proposition 12 violates the dormant Commerce Clause under either theory.

Question

Does a California law that prohibits the in-state sale of pork from animals confined in a manner inconsistent with California standards violate the “dormant” component of the Constitution’s Commerce Clause?

Conclusion

California’s Proposition 12 does not violate the dormant Commerce Clause. Justice Neil Gorsuch authored an opinion in which a majority of the Court voted to affirm the judgment of the U.S. Court of Appeals for the Ninth Circuit.

State laws violate the dormant aspect of the Commerce Clause when they seek to “build up…domestic commerce” through “burdens upon the industry and business of other States.” An antidiscrimination principle is at the core of the dormant Commerce Clause; an “almost per se” rule against state laws that have extraterritorial effects is unsupported. A state law that does have extraterritorial effects but does not purposefully discriminate does not necessarily violate the dormant Commerce Clause. Under the balancing test established in Pike v. Bruce Church, Inc., 397 U.S. 137 (1970), a court must assess “the burden imposed on interstate commerce” by the state law and prevent its enforcement if the law’s burdens are “clearly excessive in relation to the putative local benefits.” A majority of the Court concluded that under this test, Proposition 12 does not violate the dormant Commerce Clause.

Justice Sonia Sotomayor, joined by Justice Elena Kagan, concluded that the petitioners failed to plausibly allege a substantial burden on interstate commerce and thus voted with the majority. Justices Clarence Thomas and Amy Coney Barrett, concluded that the petitioners did allege a substantial burden on interstate commerce, but the benefits and burdens of Proposition 12 are incommensurable.

Chief Justice John Roberts filed an opinion, joined by Justices Samuel Alito, Brett Kavanaugh, and Ketanji Brown Jackson, concurring in part and dissenting in part. Chief Justice Roberts argued that the petitioners did allege a substantial burden on interstate commerce and that the judgment should be vacated and the case remanded to the court below to decide whether the petitioners had stated a claim under Pike.

Justice Kavanaugh authored an opinion concurring in part and dissenting in part, largely agreeing with the Chief Justice but pointing out also that state economic regulations like California’s Proposition 12 may raise questions not only under the Commerce Clause, but also under the Import-Export Clause, the Privileges and Immunities Clause, and the Full Faith and Credit Clause.