California Egg Production Laws Survive Lawsuit
–by Caitlin Lomazzo
Citations: Mo. ex rel. Koster v. Harris, 2016 U.S. App. LEXIS 20613 (2016); Mo. v. Harris, 2014 U.S. Dist. LEXIS 89716 (2014); Cal Health & Saf Code § 25990; 3 CCR 1350 § 1350(a–d).
Abstract: On October 19, 2016, the Ninth Circuit Court of Appeals reviewed a lower court’s dismissal of a suit brought by five states and the Governor of Iowa. The suit alleged injuries caused by California state laws and regulations that governed egg production. The court affirmed that the states did not have parens patriae standing, but it remanded the case for dismissal without prejudice.
In 2014, five states (Missouri, Nebraska, Oklahoma, Alabama, Kentucky) and the Governor of Iowa, Terry Branstad, filed a complaint in the Eastern District of Northern California. The Plaintiffs asked the court to overturn California laws and regulations related to egg production, namely California’s Assembly Bill 1437 (“AB1437”) and California Code § 1350(d)(1). AB1437 provided that “a shelled egg shall not be sold or contracted for sale for human consumption in California” if the egg seller “knows or should have known that the egg is a product of an egg-laying hen that was confined on a farm or place” out of compliance with Proposition 2, a voter initiative that says a farmed animal must not live in conditions that prohibit “[l]ying down, standing up, and fully extending his or her limbs; and [t]urning around freely” for at least the majority of the day. The second item, a set of food safety regulations by the California Department of Food and Agriculture, included minimum cage size requirements.
The Plaintiffs argued the court should strike down the laws, known collectively as the “Shell Egg Laws,” based on their violation of the Commerce Clause or preemption by a federal statute. They also asked the court to bar the state’s enforcement of the laws. The district court determined the Plaintiffs lacked parens patriae standing to sue and dismissed the case with prejudice. It also denied leave to amend the complaint. The Plaintiffs appealed the decision.
The Ninth Circuit reviewed the Plaintiffs’ standing arguments on appeal. A plaintiff state that seeks to establish parens patriae standing must fulfill certain requirements in addition to the Article III standing requirements. It must demonstrate it has “an interest apart from the interests of particular private parties” that will impact “a sufficiently substantial segment” of the state’s population. The interest must also constitute a “quasi-sovereign interest.”
In its decision, the Ninth Circuit did not reach the second question of whether the states had quasi-sovereign interests because it determined that the Plaintiffs had failed to prove they had separate interests that would impact “a sufficiently substantial segment” of their respective populations. The court determined that harms to egg farmers alone would not support parens patriae standing and emphasized that egg farmers could obtain complete relief without state intervention if they filed their own suits. It also noted that price changes that might impact consumers could not constitute a harm to justify standing. Lastly, it determined that the Shell Egg Laws would not single out eggs based on their states of origin and thereby disadvantage certain states’ economies. Because the states could not prove discrimination, they could not establish parens patriae standing on that basis.
In addition to upholding the decision to dismiss the case, the Ninth Circuit also upheld the lower court’s decision to deny the Plaintiffs leave to amend their complaint. The states could not add descriptions of recent occurrences to the complaint they filed years ago and thereby establish parens patriae standing. Moreover, the states sought to modify the complaint to include price changes that would impact consumers of eggs or egg-containing products who did not purchase items directly from egg farmers. The court determined that price changes, which had, if anything, a tenuous relationship to the Shell Egg Laws, could not establish standing. Because the amendments would not save the complaint for lack of parens patriae standing, the Ninth Circuit affirmed the lower court’s denial of leave to amend.
The Plaintiffs had not described injuries that would establish parens patriae standing, but the Ninth Circuit determined that the Plaintiffs could theoretically establish standing if they demonstrated other, actual injuries that occurred after California implemented the laws and regulations in 2015. Therefore the Ninth Circuit remanded the case with instructions to dismiss without prejudice.