Implication of SCOTUS ruling upholding proposition 12

 Background: Farming Conditions and Prop 12

Currently in the US, most breeding pigs live in factory farmers, where they are confined in gestation crates which are small metal cages so small that pigs can’t even turn around, while egg-laying hens live in tiny, cramped battery cages that cause a range of psychological and physiological harm. The crowded conditions also have potential health harms by increasing the stress levels of pigs and weakening their immune systems, which can make them more susceptible to zoonotic diseases that may spread to humans.

Starting in the early 2000s, a few animal welfare groups including the Humane Society of the Unites States aimed to ban the farming system of cages for hens, breeding pigs and veal calves. In 2008, Proposition 2 was passed which put in place a “production” ban on cages, which said that producers had to ensure pigs, hens, and calves could lie down, turn around, and extend their limbs or wings without hitting the side of an enclosure. However, this specific language allowed some egg farms to circumvent the law by using bigger cages. In 2010, California passed AB 1437 which was a “sales” ban requiring all eggs sold in California had to meet those standards. These laws have brought about results — the share of hens that are cage-free has been rising and is expected to continue doing so.

In 2018, over 62% of California voters passed Proposition 12, the strongest law to improve conditions for farmed animals. Under Prop 12, some of the gaps in these laws are covered — for one, it extends the cage-free ban to cover not just the eggs that are sold in the grocery store (shell eggs) but also liquid eggs, which are sold to restaurants, cafeterias and food manufacturers (liquid eggs).

Opposition from Pork Industry

The law is expected to be especially impactful to the pork industry which has been more resistant to change in doing away with confinement systems. Progress has been very mixed in terms of companies following through with their commitments to phase out gestation crates. So far, 10 states have banned them, but Prop 12’s space requirements are stricter and close some gaps that allow for loopholes. The law also makes it illegal for eggs and pork to be sold in California if the animals in other states are put in gestation crates (pigs) or battery cages (for chickens). California consumes 14% of the US’s pork and 12% of eggs and veal, so pork and egg producers would be forced to modify barns or construct new ones (only 1% of existing sow housing meets Prop 12’s standards according to the National Pork Producers Council (NPCC)), which would be costly and time taking, causing various meat trade groups to be opposed to it. Interestingly, some industries such as Whole Foods, aren’t concerned with the law as they claim they already meet animal welfare requirements. I think this is a crucial reason why the phase out of battery cages did not get as much opposition to phasing out pork crates — many companies already have commitments to phase out battery cage. In fact, these companies may have the incentive to increase regulations to raise costs on competitors.

For this reason, the law was attacked by various meat industry trade groups, which filed three separate lawsuits to overturn it. The Supreme Court declined to take two of them, and in October 2022, the case National Pork Producers v. Ross began.

Explaining the Supreme Court Ruling

On May 11th, 2023, the Supreme Court upheld Prop 12 in a 5-4 decision of the case National Pork Producers v. Ross. Interestingly, the verdict was not split along conservative-liberal lines, with 3 conservative judges and 2 liberal judges in the majority.

The pork industry had invoked the “dormant commerce clause” which prevents states giving in-state businesses preferential treatment over other states. They claimed this law would affect out of state producers and force them to abide by California’s rules because of the size of California’s market and the fact that nearly all pork consumed in the state is produced outside it. They said this would harm consumers and raise costs substantially, hurting farmers, and that the decision sets a dangerous precedent for how states can impose regulations for consumers and businesses outside the state. However, this was weakened by five of the largest pork producers saying they could comply with the law.

Justice Gorsuch writing the majority said that the Constitution’s Commerce Clause forbids discriminatory practices by states to protect their businesses, but that Prop 12 clearly does not do this as in-state businesses have the same regulations imposed. On one hand, Prop 12 may increase costs for out of state producers who comply with the law, on the other, the law serves the moral and health benefits of in-state residents. It is not clear which concern is more compelling, and therefore Gorsuch and two other justices claimed the decision should belong to the people and their representatives. Two other justices which agreed on the decision, but differed on the reasoning, claimed that the pork producers had not satisfied the threshold to prove that there would be a substantial burden on interstate commerce.

The dissenting judges said the “sweeping extraterritorial effects” the law had justified sending it back to the appeals court to consider whether the burdens imposed to businesses outweighed the benefits.

Implications of the Ruling

For pork producers, complying will likely take time and effort, but they have enjoyed massive windfall profits in 2020 and as egg producers have shown, this is certainly possible. The NPCC estimates the costs of complying would be around $300 million. These are likely exaggerated figures, given the incentives of the NPCC, but even if so, given that the export sales alone of pork in 2022 exceeded sales of $7.7 billion (exports account for 27.5% of total pork production), the industry should be able to comply.

The law could send an important precedent for future animal welfare decisions that affect out of state businesses, and allow other states to follow suit. I do not think this verdict necessarily effects “animal rights” directly, as the moral rights animals have, was not really what the case was about. However, it may increase the ability for states that consume a lot of meat, such as Florida, to implement not just production bans, but sales bans that have repercussions for the entire country. This is important because a lot of states with high livestock production have relatively lower meat consumption, since they’re rural areas, so sales bans in large states have far greater effects on these regions.

Furthermore, the pork industry will suffer the impacts of fighting court battles instead of changing their barns and operations. In the future, I think this verdict make it is less likely they focus efforts on challenging the law and instead work to comply with regulations to ensure smoother transitions.

What about the impact on prices? Researchers at the University of California, Davis, estimate that costs of pork products will rise by $0.25 per pound and consumption will reduce by 6.3% in the state (Lee, Sexton, Sumner 2021) in “pork shortages." The impacts remain to be seen when the implementation of the law will continue on July 1st, 2023. Price increases may have positive effects since lower consumption would reduce the number of pigs that need to be slaughtered, and hurt the pork industry. Rising prices can also increase the demand for alternative proteins as a substitute. However, if price increases are too high, consumers in the future may be less likely to support welfare reforms if they believe there is a large personal cost to them.

I also hope that the justices not voting on partisan lines means animal welfare can continue to stay out of the culture war, and a bipartisan consensus can be reached about the need to increase welfare standards.

To be clear, Prop 12 is far from the end. Chickens still have their beaks cut off without anaesthesia, sows are still confined in farrowing crates, and broiler chickens still grow so fast their legs collapse under their own weight. However, it marks the progress of decades of campaigning.