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Egg Production
on March 11, 2015

Farm Bureau files brief in Proposition 2 case

AFBF: Court was wrong to dismiss lawsuit brought on by other states that asserts California egg laws are unfair

The American Farm Bureau Federation (AFBF) believes a California law that regulates agricultural production in other states is unconstitutional for multiple reasons, and a lower court ruling that barred other states from bringing suit against California on behalf of their citizens should be reversed.

In a friend-of-the-court brief filed March 11 in the U.S. Court of Appeals for the Ninth Circuit (State of Missouri, et al. v. Harris, et al.), AFBF urged the court to find that six states have standing to challenge California’s egg law.

A federal district court in California dismissed a lawsuit brought by officials from Missouri, Alabama, Iowa, Kentucky, Nebraska and Oklahoma on behalf of their citizens in October 2014, months before a new California law imposed hen cage size restrictions on any shell eggs sold in the state, including those produced out-of-state. California’s legislature enacted the law to protect California egg producers from a competitive disadvantage resulting from the Proposition 2 ballot initiative that imposed cage size restrictions on California egg producers.

“It is unfortunate that California’s voters put egg producers in their state at a clear competitive disadvantage, and we sympathize with the California farmers who will bear the brunt of that action,” said AFBF President Bob Stallman. “Freedom from unreasonable restrictions on interstate commerce, however, is a hallmark of our nation and the federalist system of government established in the U.S. Constitution. Without a legitimate health or safety justification, the California Legislature simply does not have the authority to regulate how eggs are produced in other states. A foreign trading partner attempting this kind of trade-barring action would cause an outcry all across the world trade arena.”

The California law presents out-of-state egg producers with an untenable situation and, because all “consumers will suffer,” the states of Alabama, Iowa, Kentucky, Missouri, Nebraska and Oklahoma should be allowed to file suit against California on behalf of all their citizens, AFBF said. According to AFBF’s brief, the law would have detrimental effects on the national egg market, since California accounts for one in every eight eggs sold in the U.S.  

As for out-of-state egg producers, they “are placed between a rock and a hard place,” deciding whether to opt out of that sizeable market, or comply by incurring enormous capital costs associated with installing cage systems required by California law. The Congressional Research Service estimates compliance costs between $25 and $30 per hen. For a medium-sized farm with 300,000 hens, costs would be between $8 million and $9 million.

“It is more than sufficient to establish … standing to allege that one state has enacted a law that threatens broad-based harm to an entire industry within another state,” according to AFBF’s brief.  “The injury to each state’s egg-consuming public assuredly is enough (to warrant the suit against California),” according to AFBF. “The claim is straight-forward: By playing with the levers of the national supply of shell eggs, California’s legislation is likely to drive up the cost of eggs for consumers within the plaintiff states.”
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