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Court gives farmers another way in California egg lawsuit

Lawsuit filed by six attorneys general dismissed without prejudice which leaves the door open to be refiled with new information.

A court case brought by six state attorneys general to block enforcement of California laws and regulations prescribing standards for the conditions under which chickens must be kept in order for their eggs to be sold in the state was dealt a blow Friday, however, it does leave the door open to refile a challenge.

The court stated the state attorneys general failed to establish “parens patriae” standing – which would grant the inherent power and authority of the state to protect persons who are legally unable to act on their own behalf.

The states of Missouri, Alabama, Iowa, Kentucky, Nebraska and Oklahoma said the 2010 law which laid out how out-of-state producers would comply with its egg-laying standards required under its approved Proposition 2 - was an unconstitutional violation of interstate commerce and usurped the supremacy of federal law. They estimated a cost of $120 million to remodel laying houses to meet California standards and said the state unfairly was imposing burdens on farmers outside its borders.

The Commerce Clause 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. 

The latest ruling found that the states “failed to articulate an interest apart from the interests of private egg producers, who could have filed an action on their own behalf,” and “allegations about potential economic effects of the challenged laws, after implementation, were necessarily speculative” and “the allegations of discrimination were misplaced because the laws do not distinguish among eggs based on their state of origin.”

The court opinion stated, “Plaintiffs have not satisfied the requirements of parens patriae standing. But in theory, Plaintiffs could allege post-effective-date facts that might support standing. As a result, the complaint should have been dismissed without prejudice.”

Gary Baise, an attorney at OFW Law, who has been following the case closely, said the ruling is a “huge loss for the way the complaint was filed, but a huge win to refile a complaint that is a correct one.”

Baise worked with the Utah attorney general’s office to file an amicus brief which did show that states do have merits if justified properly.

The latest ruling stated, “Alleging harm to the egg farmers in Plaintiffs’ States is insufficient to satisfy the first prong of parens patriae standing. Other courts have recognized that parens patriae standing is inappropriate where an aggrieved party could seek private relief.”

The judge also outlined how the plaintiffs argue that fluctuations in the price of eggs will harm consumers, thereby affecting a substantial segment of their populations and establishing parens patriae standing. “Plaintiffs filed their complaint before the Shell Egg Laws took effect. As a result, their allegations about the potential economic effects of those laws, after implementation, were necessarily speculative,” the court opinion noted.

More is also known today about how egg prices have changed due to the implementation of the law promulgated for the egg-cage regulations. After passage of Prop 2, the cost of eggs in California jumped nearly 20%. The Citizens for Food Tax Injustice said this increase in egg prices was almost 14 times higher than the inflation rate for other foods in California and 35 times higher than America’s overall inflation rate.

Today, the price of eggs in California is 90% higher than the cost of eggs around the nation. Prior to the implementation of Proposition 2 requirements, California’s egg prices were only 16% higher than the national average.

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