California U.S. District Court Judge Kimberly J. Mueller provided a Thanksgiving gift to egg farmers and 6 state Attorneys General when she dismissed their case “with prejudice," two key words meaning it was “futile” to continue. The 9th Circuit Court of Appeals three-judge panel ruled on Thursday of last week that the District Court should have dismissed the case “without prejudice," meaning a new complaint can be filed.
Six state Attorneys General filed a complaint in California in March of 2014 seeking to block enforcement of a California law that prescribes standards and conditions under which laying hens must be kept in California and other states exporting eggs to California. They lost and appealed. The case was finally decided last Thursday.
On its face, California’s statute appears to be unconstitutional under the federal Commerce Clause and a violation of the Egg Products Inspection Act, which preempts states from imposing requirements on facilities and operations not consistent with federal law. The case also has drawn animal rights groups in on behalf of California. The Humane Society of the United States (HSUS) intervened using the law firm of Latham and Watkins. Sullivan and Cromwell, a New York firm, filed an amicus brief for the Animal Defense Fund, Compassion over Killing, Inc. and Farm Sanctuary, Inc. Sean Reyes, Utah Attorney General, and Parker Douglas, Utah’s Federal Solicitor, filed an amicus brief on behalf of citizens of Utah, which demonstrated to the U.S. Court of Appeals that there was sufficient harm to poor consumers in Utah.
The U.S. Court of Appeals 9th Circuit agreed with the District Court opinion that the Attorneys' General complaint was simply insufficient and lacking in merit. The Appeals Court criticized the Attorneys General for not articulating an interest apart from the egg farmers. The Court concluded “…plaintiffs [Attorneys General] have not met the first requirement.” That requirement, according to the Court, comes from the Constitution that says “…an injury must be concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redress able by a favorable ruling.” The Appeals Court found the Attorneys’ General complaint fell far short of this constitutional Article III standing requirement.
California depends on several states to export eggs to its consumers. Missouri farmers produce approximately 2 billion eggs annually. Kentucky farmers produce approximately 1.1 billion eggs annually. Iowa is the number 1 state in egg production with their farmers producing over 14.4 billion eggs per year. California’s egg cage size requirements forced the farmers in these and other states to either forego the California market or comply with California’s rules and subsequent increased production costs.
The Court said, “The necessary capital improvements [would] cost Plaintiffs’ farmers hundreds of millions of dollars,…” The Court discussed the importance of the California market to egg farmers and the difficult choice egg farmers’ face in complying with California’s Shell Egg Laws. The Court’s opinion makes it clear that the Attorneys’ General complaint did not have “…specific allegations about the statewide magnitude of these difficulties or the extent to which they affect more than just an identifiable group of individual egg farmers.”
Utah's Attorney General filed an amicus brief that explained to the Court how the California law affected hundreds of thousands of its citizens because of actual increases in the prices of eggs. Utah’s brief and affidavits cited actual increases occurring in the price of eggs, which are harming Utah’s poorest consumers. The Attorneys’ General, when they filed their complaint, could only argue there would be fluctuations in the price of eggs and this would harm consumers but they had no proof. Utah did.
The 9th Circuit Court was harsh in its assertion that the Attorneys’ General complaint and theories “…required guesswork…” and such guesswork is not the job for judges. As a result, the 9th Circuit judges affirmed the District Court judge’s dismissal of the Attorneys’ General case, but in a clear reference to the Utah amicus brief said that the egg farmers and the Attorneys’ General could allege “post-effective-date facts that ‘might’ support standing to bring another lawsuit.” Then,the bombshell from the Court. The 9th Circuit Court of Appeals “ordered” the U.S. District Court judge to dismiss the case “without prejudice”! Now, a new complaint can be filed. The case begins anew, and Utah saved the case.