MISSOURI Attorney General Chris Koster formally filed a lawsuit Feb. 3 in the U.S. District Court for the Eastern District of California arguing that a California farming law violates the Commerce Clause of the U.S. Constitution and encroaches on Missouri sovereignty.
Koster announced during a speech at the Missouri Farm Bureau Federation annual meeting in December that he was planning to sue California (Feedstuffs, Dec. 23, 2013).
In 2008, California voters approved Proposition 2, a ballot initiative that prohibits California farmers from employing a number of agricultural production methods currently in widespread use throughout the country. Beginning in 2015, for example, California egg producers will be required to comply with new regulations concerning the size of enclosures housing egg-laying hens.
To protect its farmers from out-of-state competition, the California State Assembly passed new legislation (AB1437) in 2010 requiring egg producers in other states to comply with Proposition 2 themselves in order to continue selling their eggs in California.
Koster is asking the federal court to rule that California's legislation violates the Commerce Clause, which prohibits any state from enacting legislation that regulates conduct wholly outside its borders, protects its own citizens from out-of-state competition or places undue burdens on interstate commerce.
"California has placed restrictions on the sale or transfer of a commodity based on production methods that have nothing to do with the health or safety of California consumers," Koster said. "If California legislators are permitted to mandate the size of chicken coops on Missouri farms, they may just as easily demand that Missouri soybeans be harvested by hand or that Missouri corn be transported by solar-powered trucks."
Blake Hurst, president of the Missouri Farm Bureau Federation, expressed sympathy for egg producers in California who have been faced with an untenable situation of either asking for legislation that protects them from out-of-state producers or risking losing business to those who are not operating by the same rules. However, he said their fight should be with voters in California.
Koster added that this case is not merely about farming practices but said "at stake is whether elected officials in one state may regulate the practices of another state's citizens who cannot vote them out of office. When California passes legislation that imposes new requirements or limits on Missouri businesses, it is my job to fight against it."
Having a state attorney general's office take on a case saves the egg industry from having to pony up the roughly $20 million in costs that could result from a drawn-out court case that lasts five to eight years. There is some indication that if a state sues a state, it could go straight to the Supreme Court and shorten that timeline. If so, this provides one final answer without challenge, should the court decide to hear the case.
Missouri's 7 million egg-laying hens produce about 1.7 billion eggs per year. Approximately 540 million of those eggs are sold to consumers in California.
According to Koster, California's law puts Missouri egg producers in a bind. If they comply with the law, Missouri egg producers face an estimated $120 million in capital improvement costs, plus a 20% increase in ongoing production costs. If, instead, they choose to stop selling eggs in California, Missouri egg producers will face a surplus of a half-billion eggs, which could depress prices in the state and force some Missouri farmers out of business, Koster argued.
Hurst said if there is no legal relief, producers will be forced to contend with a 20% surplus of eggs.
John Bryan, who represents Missouri in the Poultry Federation, a trade association for poultry and egg producers in Arkansas, Missouri and Oklahoma, said the suit is "wonderful news."
Chad Gregory, chief executive officer of the United Egg Producers (UEP), said UEP is not taking a position on this lawsuit and California's shell egg safety rule in specific given the varying impact of its members.
"As the organization representing egg farmers across the U.S., we will continue to identify solutions that support all of our members," he said in a statement to Feedstuffs.
UEP had previously reached an agreement with The Humane Society of the United States to lobby for national egg production standards in order to avoid the problems that come with having a patchwork of regulations that differ from state to state.