Nat'l Pork Producers Council v. Ross

456 F.Supp.3d 1201

NATIONAL PORK PRODUCERS COUNCIL & American Farm Bureau Federation, Plaintiffs,

v.Karen ROSS, in her official capacity as Secretary of the California Department of Food and Agriculture, Sonia Angell, in her official capacity as Director of the California Department of Public Health, and Xavier Bacerra, in his official capacity as Attorney General of California, Defendants,The Human Society of the United States; Animal Legal Defense Fund; Animal Equality; the Human League; Farm Sanctuary; Compassion in World Farming USD; and Compassion Over Killing, Defendant-Intervenors.

Case No.: 19-cv-02324 W (AHG)

United States District Court, S.D. California.

Signed April 27, 2020

Christopher Mitchell Hendy, Mayer Brown LLP, Los Angeles, CA, Colleen M. Campbell, Pro Hac Vice, Dan Himmelfarb, Pro Hac Vice, Mayer Brown LLP, Washington, DC, Timothy S. Bishop, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, for Plaintiffs.

Matthew Wise, California Department of Justice, Sacramento, CA, for Defendants.

Bruce Wagman, Riley Safer Holmes & Cancila LLP, San Francisco, CA, for Defendant-Intervenors.

ORDER:

(1) GRANTING DEFENDANTS’ MOTION TO DISMISS; AND

(2) GRANTING DEFENDANT-INTERVENORS’ MOTION FOR JUDGMENT ON THE PLEADINGS

Thomas J. Whelan, United States District Judge

Pending before this Court are Defendants’ motion to dismiss and Defendant-Intervenors’ motion for judgment on the pleadings. The Court decides the matters without oral argument pursuant to Civil Local Rule 7.1(d)(1). For the reasons that follow, the Court GRANTS Defendants’ motion to dismiss [Doc. 18] and Defendant-Intervenors’ motion for judgment on the pleadings [Doc. 19] with leave to amend.

I. BACKGROUND

National Pork Producers Council & American Farm Bureau Federation (collectively "Plaintiffs") file this case against Defendants Karen Ross, in her official capacity as Secretary of California Department of Food and Agriculture, Sonia Angell, in her official capacity as Director of the California Department of Public Health, and Xavier Bacerra, in his official capacity as Attorney General of California (collectively "Defendants"). Plaintiffs file this action for declaratory and injunctive relief and allege California's Proposition 12 violates the Commerce Clause of the U.S. Constitution.

A. Procedural Background

This case was initially filed on December 5, 2019. (Compl. [Doc. 1].) On January 9, 2020 Defendant-Intervenors’ motion to intervene was granted. [Doc. 17.] On January 10, 2020, Defendants filed a motion to dismiss for failure to state a claim. [Doc. 18.] That same day Defendant-Intervenors filed a motion for judgment on the pleadings. [Doc. 19.] Plaintiffs filed an opposition to these motions on February 28, 2020. [Doc. 26.]

On January 29, 2020, California Egg Farmers filed a supplemental Amicus Brief in support of the Defendants’ motion to dismiss and Defendant-Intervenors’ motion for judgment on the pleadings. [Doc. 25.] A supplemental Amicus Brief in support of the Plaintiffs was filed on March 10, 2020, by the States of Alabama, Arkansas, Indiana, Iowa, Kansas, Louisiana, Missouri, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, and West Virginia. [Doc. 32.]

B. Factual Background

Plaintiffs allege Proposition 12 violates the Commerce Clause of the U.S. Constitution because it reaches extraterritorially and imposes substantial burdens on interstate commerce. (Compl. ¶ 31.) Plaintiffs seek a declaration that Proposition 12 violates the Commerce Clause and seek an injunction against the enforcement of Proposition 12's requirements concerning pork. (Id. ¶¶ 31, 32.)

Proposition 12 is a ballot initiative passed in November 2018 that amended the California Health and Safety Code. (Id. ¶ 14.) Proposition 12 regulates the production of veal, pork, and eggs. (Id. ¶ 33.) Importantly for this case, it forbids the sale in California of pork meat from the hogs born of sows (female pigs) not housed in conformity with the law's requirements. (Id. ¶ 21.) The law "requires that a sow cannot be confined in such a way that it cannot lie down, stand up, fully extend its limbs, or turn around without touching the side of its stall or another animal." (Id. ¶ 23.) This requirement, known as the stand up-turn around requirement, "requires producers to house their sows together in a group, referred to as ‘group housing.’ " (Id. ¶¶ 23, 24.) In contrast, individual stalls each hold one sow and do not allow sows to turn around. (Id. ¶ 24.) Thus, Proposition 12 bans the use of individual stalls that do not meet the stand up-turn around space requirements. (Id. ¶25.)

The U.S. Department of Agriculture's Census of Agriculture for 2017 estimates nearly 65,000 farms nationwide sold hogs for a market value of $26 billion. (Id. ¶ 3.) Pigs are raised throughout the country with a majority of production concentrated in the Midwest and North Carolina. (Id. ¶ 5.) A small percentage of farms are structured as "wean to finish," meaning the pigs are held at the same farm throughout the production process. (Id. ¶ 145.) However, a majority of the production of pork comes from a segmented production chain. (Id. ¶ 138.) Sows give birth to piglets on sow-specific farms where the piglets are raised for about three weeks before they are weaned at approximately 10 pounds. (Id. ¶ 8.) After weaning, piglets are generally moved to nursery farms for about six to eight weeks. (Id. ¶¶ 142, 143.) At six to eight weeks piglets have grown into "feeder pigs" and are "transferred again to separate finishing facilities." (Id. ¶ 143.) Pigs spend 16 to 17 weeks at the finishing farms before being sent to markets and packers where the pigs are slaughtered. (Id. ¶ 144.) Packers slaughter and butcher the market hogs and sell the pork to wholesalers or retailers, which then distribute to consumers. (Id. ¶ 124.) Pork product from one hog is cut into primals, or different cuts of meat, and then shipped to different end users across the country. (Id. ¶ 96.)

Beginning December 31, 2021, Proposition 12 requires each sow whose offspring is intended to be sold into California be allotted at least 24 square feet in the group pen. (Id. ¶ 26.) However, Proposition 12 has an immediate impact on what producers must do now given the time needed for building and production changes. (Id. ) Plaintiffs allege these requirements are "inconsistent with industry practice and standards, generations of producer experience, scientific research, and standards set by other states." (Id. ¶ 28.) Plaintiffs also allege these requirements impose costly mandates on producers that interfere with commerce among the states and impose costs on pork producers that will ultimately increase costs for American consumers. (Id. )

In California, there are an estimated 8,000 breeding sows and "1,500 out of California's 8,000 sows are used in commercial breeding" which produces around 30,000 offspring a year. (Id. ¶¶ 16, 17.) However, "California's pork consumption makes up about 13 percent of the national market." (Id. ¶ 20.) As a result, California's in-state sow breeding does not supply the demand of pork consumption in the state. (Id. ) Thus, the offspring of approximately "673,000 sows is required to satisfy California consumers’ demand for pork meat annually." (Id. )

Plaintiffs claim that by imposing these requirements on an industry that is national in scope, Proposition 12 unconstitutionally interferes with the functioning of a $26 billion a year interstate industry. (Id. ¶ 303.) In addition, Plaintiffs claim that compliance with Proposition 12 will require new and less efficient methods of animal husbandry that will increase operating, staff training and veterinary costs. (Id. ¶ 322.) As a result, Plaintiffs allege producers may be forced to comply with Proposition 12 standards even if most of their product is not bound for California. (Id. ¶¶ 339, 347.)

II. LEGAL STANDARD

The Court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). In ruling on the motion, a court must "accept all material allegations of fact as true and construe the complaint in a light most favorable to the non-moving party." Vasquez v. L.A. Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007).

A complaint must contain "a short plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court has interpreted this rule to mean that "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The allegations in the complaint must "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ).

Leave to amend should be freely granted when justice so requires. See Fed. R. Civ. P. 15(a). However, where an amendment would be futile, a district court may dismiss a pleading without leave. Chubb Custom Ins. Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 956 (9th Cir. 2013).

A motion for judgment on the pleadings may be brought "[a]fter the pleadings are closed—but early enough not to delay trial[.]" Fed. R. Civ. P. 12(c). "Analysis under Rule 12(c) is substantially identical to analysis under Rule 12(b)(6) because, under both rules, a court must determine whether the facts alleged in the complaint, taken as true, entitle plaintiff to a legal remedy." Chavez v. United States, 683 F.3d...