On May 11, 2023, the United States Supreme Court rejected a challenge to California’s Prop 12 law. Prop 12 was passed by the voters of California and prohibits the sale in California of pork products derived from breeding pigs raised in confinement in a “cruel manner,” regardless of what state those pigs came from. This Supreme Court decision has important implications for state environmental law.
Hog farmers (via American Farm Bureau and the National Pork Producers Council) challenged the law, arguing it violated the Dormant Commerce Clause (DCC) by dictating how out-of-state producers raise pigs. California imports almost all its pork, and hog farmers all over the nation raise animals that find their way onto California grocery coolers and restaurant menus. Thus, the argument goes, Prop 12 wrongly regulates interstate commerce. The Supreme Court rejected these arguments.
The Court focused on the fact that Prop 12 does not discriminate against out-of-state producers—it applies to producers no matter where they live. (The kicker, of course, is that because California imports almost all the pork it consumes, most of Proposition 12’s compliance costs will be borne by out-of-state firms.) The Court rationalizes its focus on discrimination because, it held, the DCC prohibits the enforcement of state laws driven by “economic protectionism,” meaning regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors. Since Prop 12 applies to everyone, the Court held, it does not violate the DCC.
The farmers also argued that even without claims of discrimination, they had properly stated a claim under the “extraterritoriality doctrine.” The farmers contended the DCC included an additional rule forbidding enforcement of state laws that have the practical effect of controlling commerce outside the state. Relying on three earlier Supreme Court cases (Healy, Baldwin, and Brown-Forman), the farmers explained that since Prop 12 will impose substantial costs on out-of-state hog farmers, it violates the extraterritoriality doctrine. The Court rejected this argument, explaining that the laws challenged in those three cases were discriminatory against out-of-state industries, while Prop 12 treated in- and out-of-state interests identically.
Finally, the U.S. Supreme Court rejected the farmers’ argument that under another earlier case (Pike), the Court should at least consider the burden the law in question imposed on interstate commerce and prevent its enforcement if the burdens outweigh the benefits. But again, the Supreme Court tied the analysis back to simply whether or not the law was discriminatory. The Prop 12 decision made clear courts must use “extreme caution” before deploying any Dormant Commerce Clause authority.
So where does this leave us? The DCC now, for all practical purposes, only prohibits laws that treat out-of-state industries or interests differently than in-state players are treated. Discrimination is required. Does this mean a state could pass a law prohibiting the sale of any vegetables produced with the help of employees without proper immigration documentation? Or that a state could prohibit the sale of other products not manufactured with “clean energy”? The hypotheticals are endless. The key takeaway is that unless a law clearly discriminates against out-of-state interests, it seems a state can legislate behavior on the other side of the country.
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