Alabama, Iowa, Kentucky, Nebraska and Oklahoma, through their representatives, have joined the Missouri Attorney General's federal lawsuit asking the court to declare invalid and enjoin enforcement of California statutes that would allow the state to enforce Proposition 2 provisions on all eggs sold in California. The lawsuit was brought because the representatives of these state maintain that the California statutes (AB1437 and 3CA ADC) violate the commerce and supremacy clauses of the U.S. Constitution.
In the amended lawsuit, the representatives for these six states say egg producers face a difficult choice regarding California AB1437:
"Either they can incur massive capital improvement costs to build larger habitats for some or all of their egg-laying hens, or they can walk away from the largest egg market in the country. For example, Missouri farmers - who export one-third of their eggs to California each year - must now decide whether to invest over $120 million in new hen houses or stop selling in California. The first option will raise the cost of eggs in Missouri and make them too expensive to export to any state other than California. The second option will flood Missouri's own markets with a half-billion surplus eggs that would otherwise have been exported to California, causing Missouri prices to fall and potentially forcing some Missouri farmers out of business."
California, the most populous state in the nation, is the largest single egg market in the U.S. According to the lawsuit, Californians consume 9 billion eggs per year, with 4 billion of those eggs coming from other states. The lawsuit claims that nearly 30 percent of the eggs imported into California come from Iowa, around 1.07 billion eggs per year. Missouri sends one-third of its total egg production to California, and this represents 13 percent of the eggs imported into California.
Proposition 2 is scheduled to take effect on January 1, 2015, for all eggs produced in California. California AB1437 was enacted to protect California egg producers from competition from egg producers outside the state who would not have to comply with Proposition 2. The lawsuit contends that the public health aspects of AB1437 are not the real reason for the legislation and the legislation's impact of restricted interstate commerce should invalidate it.