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`MAYER BROWN LLP
`TIMOTHY S. BISHOP (IL 6198062)
`(pro hac vice application forthcoming)
` tbishop@mayerbrown.com
`71 S. Wacker Drive
`Chicago, Illinois 60606
`Telephone: (312) 782-0600
`Facsimile: (312) 701-7711
`
`MAYER BROWN LLP
`C. MITCHELL HENDY (SBN 282036)
` mhendy@mayerbrown.com
`350 South Grand Avenue
`25th Floor
`Los Angeles, California 90071-1503
`Telephone: (213) 229-9500
`Facsimile:
`(213) 625-0248
`Attorneys for Plaintiffs National Pork Producers
`Council & American Farm Bureau Federation
`
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`NATIONAL PORK PRODUCERS
`COUNCIL & AMERICAN FARM
`BUREAU FEDERATION,
`
`
`Plaintiffs,
`
`v.
`KAREN ROSS, in her official capacity
`as Secretary of the California
`Department of Food & Agriculture, &
`SONIA ANGELL, in her official
`capacity as Director of the California
`Department of Public Health, and
`XAVIER BECERRA, in his official
`capacity as Attorney General of
`California,
`
`
`Defendants.
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`CASE NO. _____________________
`
`COMPLAINT FOR
`DECLARATORY AND
`INJUNCTIVE RELIEF
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`'19
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`CV2324
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`AHG
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`W
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`Plaintiffs the National Pork Producers Council and the American Farm
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`Bureau Federation allege upon information and belief as follows:
`INTRODUCTION AND NATURE OF CLAIMS
`1.
`The market for pork produced in the United States (“U.S.”) is
`enormous and national and international in scope.
`2.
`It meets a demand for high-quality, affordable protein.
`3.
`According to the U.S. Department of Agriculture’s Census of
`Agriculture for 2017, nearly 65,000 farms nationwide sold hogs that year with a
`market value of more than $26 billion.
`4.
`During the first nine months of 2019, some 94 million hogs were
`slaughtered at federally inspected facilities, for a rate of about 125 million hogs
`slaughtered per year.
`5.
`Pigs are raised throughout the country, but production is concentrated
`in the Midwest and North Carolina. The latest Agriculture Census reported that
`22.7 million pigs were sold by Iowa farms in 2017, 8 to 9 million each by North
`Carolina, Oklahoma, and Minnesota farms, 5.25 million by Illinois farms, and 4.5
`million by South Dakota farms.
`6.
`The U.S. is one of the world’s top five pork exporters. It has exported
`over 5 billion pounds of fresh and frozen pork cuts annually to foreign markets, on
`average, since 2010, principally to Mexico, China, Japan, and Canada.
`7.
`The U.S. commercial production chain for pork is complex and
`varied, using principally a segmented production model driven by herd health
`considerations and to achieve economies of scale.
`8.
`Sows are female pigs held for breeding that give birth to the piglets
`that ultimately become hogs sent to market. For disease prevention and efficiency,
`sows are usually maintained on sow-specific farms that are commonly separated
`from other hog facilities. On those sow farms, the sows are generally artificially
`inseminated, litters of piglets are born (“farrowed”), and the piglets are then raised
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`for about three weeks before they are weaned at the weight of approximately 10
`pounds.
`9.
`The overwhelmingly vast majority of sow farms use some type of
`indoor confinement for these processes. Indoor housing allows year-round
`production by protecting sows from seasonal weather changes, disease exposure,
`and predators, while facilitating the management of each sow’s health,
`conditioning, feeding, and reproduction.
`10. Only a small portion of the pigs that are slaughtered for meat are sows
`that have been kept to reproduce—only 2.2 million in the first nine months of
`2019, compared to 91.8 million of their male (“barrows”) and female offspring,
`which are raised as feeder or market hogs. And almost none of the meat from
`those sows is sold as whole pork cuts; it is instead used in prepared or cooked
`products and sausages.
`11. The offspring of sows (“market hogs”) are raised to market weight in
`separate, specialized production facilities: (1) feeder pig producers, or nurseries,
`which raise pigs from weaning to about 40-60 pounds, then sell them for finishing;
`(2) feeder pig finishers, which buy feeder pigs and grow them to their slaughter
`weight of about 240-280 pounds; and (3) farrow-to-finish operations, a small
`percentage of farms that raise hogs from weaning to their slaughter weight.
`Farrow to finish takes 24-26 weeks.
`12. Once they reach slaughter weight, hogs are sent to packing facilities,
`which may be local or in other states. Packer facilities receive hogs from multiple
`farms, operated by multiple producers. These farms may be owned by affiliates of
`the packer, by producers who have contracts to deliver hogs to the packer, or by
`independent producers.
`13. A packing facility typically slaughters thousands, or even tens of
`thousands, of hogs daily. Packers process the slaughtered hogs into whole pork
`cuts (or send them to separate processing facilities for this and later steps), pack the
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`meat, and deliver it to wholesale or large retail customers throughout the country
`and abroad.
`14. California’s Proposition 12, challenged here, is a ballot initiative that
`was passed in November 2018 and that amended the California Health and Safety
`Code.
`15. Proposition 12 has thrown a giant wrench into the workings of the
`interstate market in pork.
`16.
`In California itself, there are estimated to be only some 8,000
`breeding sows, most of which are in family-focused “4-H” and other county fair
`and similar show-pig programs.
`17.
`It is believed that only about 1,500 out of California’s 8,000 sows are
`used in commercial breeding in the state, housed in a handful of very small farms.
`18. Commercial sows typically produce two litters a year of about 10
`piglets, so those 1,500 sows may produce around 30,000 offspring a year. Those
`sows are therefore insufficient even to supply the current in-state farms’ annual
`capacity of approximately 65,000 commercial hog finishing spaces that exist in
`California, which must therefore be filled from out-of-state sows.
`19. By contrast to the tens of millions of hogs sold by farms in many other
`states, the Agriculture Census reports that only 208,000 hogs were sold by all
`farms in California in 2017, including those born (farrowed) outside California.
`20. California’s pork consumption makes up about 13 percent of the
`national market. Accordingly, California’s in-state sow breeding scarcely puts a
`dent in the demand for pork consumed in the state. The offspring of about 673,000
`sows is required to satisfy California consumers’ demand for pork meat annually,
`compared to the 1,500 sows that are commercially bred in-state.
`21. Proposition 12 forbids the sale in California of whole pork meat from
`hogs born of sows that were not housed in conformity with the law’s requirements.
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`22. A violation of Proposition 12 is a criminal offense punishable by fines
`and imprisonment, and also the basis for civil liability under California’s unfair
`competition statute.
`23. Proposition 12 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 sides of its stall or another animal. This requirement is often referred
`to as “stand up-turn around.”
`24. Stand-up turn-around effectively requires that producers house their
`sows together in a group, referred to as “group housing.” This housing structure
`may also be referred to as a “pen.” In contrast, individual stalls each hold one sow
`apiece and do not allow sows to turn around.
`25. Proposition 12 bans the use of individual stalls that do not meet stand-
`up turn-around requirements, except during the five-day period prior to farrowing
`and during weaning. It accordingly bars the use of individual stalls during
`breeding and most of the gestation period.
`26. After December 31, 2021—but with immediate impact now on what
`producers must do given the lead time needed for building and production
`changes—each sow must be allotted at least 24 square feet of space in the group
`pen, subject to the same limited exception for the five-day period prior to
`farrowing and during weaning.
`27. Only a miniscule portion of sows in the U.S. are housed in compliance
`with all of Proposition 12’s requirements.
`28. Proposition 12 institutes a wholesale change in how pork is raised and
`marketed in this country. Its requirements are inconsistent with industry practices
`and standards, generations of producer experience, scientific research, and the
`standards set by other states. They impose on producers costly mandates that
`substantially interfere with commerce among the states in hogs and whole pork
`meat. And they impose these enormous costs on pork producers, which will
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`ultimately increase costs for American consumers, making it more difficult for
`families on a budget to afford this important source of protein. And they do all this
`for reasons that are both fallacious and vastly outweighed by the economic and
`social burdens the law imposes on out-of-state producers and consumers and on the
`authority of other states over their domestic producers.
`29. Proposition 12 imposes these severe requirements as the result of a
`ballot initiative drafted by the Humane Society of the United States (“HSUS”).
`30. Because Proposition 12 was a ballot initiative, it was passed without
`any semblance of meaningful legislative deliberation, let alone inclusive input and
`inquiry into the impacts of its requirements on national commerce in pork, on the
`pork production industry, or even the welfare of sows.
`31. Because it reaches extraterritorially to impose California’s
`idiosyncratic and unjustified sow housing requirements on other states and their
`producers, because it Balkanizes hog production in ways inconsistent with our
`Federalist system, and because it imposes burdens on interstate commerce that far
`outweigh any of its benefits, Proposition 12 violates the dormant Commerce
`Clause and is unconstitutional.
`32. Plaintiffs seek a declaration that Proposition 12’s requirements with
`regard to breeding pigs violate the Commerce Clause and principles of interstate
`federalism embodied in the U.S. Constitution, and an injunction against the
`enforcement of Proposition 12’s requirements concerning pork.
`33. While Proposition 12 regulates the production of veal, pork, and eggs,
`the basis of Plaintiffs’ challenge here is Proposition 12’s extraterritorial reach and
`market disruption regarding pork production.
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`JURISDICTION
`34. This Court has subject matter jurisdiction over this action under 28
`U.S.C. §§ 1331 and 1343 because this case presents a federal question arising
`under the Commerce Clause of the U.S. Constitution and under 42 U.S.C. § 1983.
`35. This Court has authority to enjoin enforcement of Proposition 12
`under 42 U.S.C. § 1983 and to grant declaratory relief pursuant to 28 U.S.C.
`§§ 2201 and 2202.
`
`VENUE
`36. Venue is proper in this district under 28 U.S.C. § 1391(b) because all
`Defendants maintain an office and conduct their official duties within this judicial
`district.
`37. Additionally, substantial events giving rise to this lawsuit occurred
`and will continue to occur within this judicial district. Plaintiffs’ members produce
`and sell pork that is or may be sold in California (including within this judicial
`division). Pork produced by Plaintiffs’ members inevitably is imported into and
`consumed within this district, because the roughly 9% of California’s population
`located within this district consumes more pork than can be produced by the
`approximately 8,000 sows located within California.
`THE PARTIES
`38. Plaintiff National Pork Producers Council (“NPPC”) is a federation of
`42 affiliated state associations and other regional and area organizations. NPPC’s
`members include U.S. pork producers along with other industry stakeholders such
`as packers, processors, companies that serve the pork industry, and veterinarians.
`NPPC is the global voice of the U.S. pork industry. Its mission is to advocate on
`behalf of its members to establish reasonable federal legislation and regulations,
`develop revenue and export-market opportunities, and serve the interests of pork
`producers and other industry stakeholders. This includes advocating for free
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`market access for pork producers and opposing measures that restrict producers’
`market opportunities.
`39. Plaintiff American Farm Bureau Federation (“AFBF”) is a voluntary
`membership organization formed by farm and ranch families in 1919. Today,
`AFBF represents just under 6 million member families through Farm Bureau
`organizations in all 50 States plus Puerto Rico. America’s largest general farm
`organization, AFBF represents the people who grow and raise virtually every
`agricultural product in the United States. AFBF seeks to promote the development
`of reasonable and lawful public policy for the benefit of farmers and consumers.
`According to AFBF’s mission statement: “We are farm and ranch families working
`together to build a sustainable future of safe and abundant food, fiber, and
`renewable fuel for our nation and the world.”
`40. Defendant Karen Ross is sued in her official capacity as the Secretary
`of the California Department of Food and Agriculture (“CDFA”), which is a State
`of California regulatory entity responsible for jointly issuing regulations to
`implement Proposition 12.
`41. Defendant Sonia Angell is sued in her official capacity as the Director
`of the California Department of Public Health (“CDPH”), which is a State of
`California regulatory entity responsible for jointly issuing regulations to implement
`Proposition 12.
`42. Xavier Becerra is sued in his official capacity as the Attorney General
`of California. The Attorney General’s office is responsible for enforcing the
`provisions of Proposition 12 that make its violation a criminal offense.
`STANDING
`43. AFBF and NPPC bring this suit on behalf of themselves and their
`members. They have each suffered and continue to suffer concrete and
`particularized injuries that are fairly traceable to Proposition 12. Their injuries will
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`COMPLAINT FOR DECLARATORY AND
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`be redressed by a favorable decision. See Organic Consumers Assoc. v. Sanderson
`Farms, Inc., 284 F. Supp. 3d 1005 (N.D. Cal. 2018).
`44. As a result of Proposition 12, AFBF and NPPC have expended
`substantial resources to understand the obligations, requirements and impacts of
`Proposition 12, and then to explain to pork producer members the meaning and
`requirements of Proposition 12 and changes to farming practices that would be
`necessary to comply with Proposition 12.
`45. On NPPC’s part, these efforts have entailed fielding inquiries from
`members regarding Proposition 12 and its expected impact on pork production and
`the supply chain, developing data sheets that summarize Proposition 12 into
`audience-friendly information, and holding and participating in meetings and
`teleconferences with members and industry-stakeholders. See Exh. A, Decl. D.
`Hockman, ¶¶ 21-24.
`46. NPPC personnel additionally fielded numerous questions from
`suppliers, packers, distributors, retailers, and food-service companies regarding the
`impact that Proposition 12 will have on the supply of pork product. Id.
`47. AFBF personnel have also hosted and participated in presentations,
`teleconferences, and other events for purposes of informing members and state
`Farm Bureau staff about what coming into compliance with Proposition 12 will
`require. See Exh. B, Decl. S. Bennett, ¶¶ 9-11.
`48. Both AFBF and NPPC submitted detailed comments to the CDFA on
`June 3, 2019, explaining how Proposition 12 will negatively impact the pork
`production industry and is unconstitutional. See Exh. A, Decl. D. Hockman, ¶ 22;
`Exh. B, Decl. S. Bennett, ¶ 11.
`49. Because of resources they have expended addressing Proposition 12,
`both AFBF and NPPC have diverted resources from pursuing other matters central
`to the organizations’ missions. See Exh. A, Decl. D. Hockman, ¶ 30; Exh. B, Decl.
`S. Bennett, ¶ 12.
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`COMPLAINT FOR DECLARATORY AND
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`50. On AFBF’s part, this includes time and money that could have been
`spent advancing other issues critical to AFBF’s mission to advance reasonable
`farm policy. Exh. B, Decl. S. Bennett, ¶ 4.
`51. On NPPC’s part, these diverted costs include time and resources that
`could have been spent pursuing NPPC’s core mission of establishing reasonable
`industry regulation on a nationwide level. Exh. A, Decl. D. Hockman, ¶ 20.
`52. Resources have also been diverted from NPPC’s efforts on behalf of
`its members to address other important issues, including international trade and
`free access to markets. Id. ¶ 30; Exh. C, Decl. H. Roth, ¶¶ 9-12.
`53. Both NPPC and AFBF anticipate that, as California implements
`Proposition 12, they will need to divert more resources and time from other core
`organizational priorities to assist members with understanding what is involved in
`coming into compliance (or not coming into compliance) with Proposition 12. See
`Exh. A, Decl. D. Hockman, ¶ 28; Exh. B., Decl. S. Bennett, ¶ 13.
`54. These organizational injuries would be remedied by the relief sought
`in this action.
`55.
`In addition, both AFBF and NPPC have associational standing to
`challenge Proposition 12 on behalf of their members.
`56. One or more members of AFBF and NPPC have standing to bring this
`action in their own right. Plaintiffs are submitting declarations from some of these
`members as exhibits, attached to this Complaint and incorporated herein by
`reference. See Exh. D, Decl. G. Boerboom; Exh. E, Decl. P. Borgic; Exh. F, Decl.
`N. Deppe; Exh. G, Decl. M. Falslev; Exh. H, Decl. T. Floy; Exh. I, Decl. T. Hays;
`Exh. J, Decl. P. Jordan; Exh. K, Decl. C. Leman; Exh. L, Decl. G. Maher; Exh. C,
`Decl. H. Roth; Exh. M, Decl. R. Spronk; Exh. N, Decl. J. Hofer.
`57. Thousands of AFBF and NPPC pork producer members are directly
`subject to Proposition 12 because they breed or raise pigs that are or may be sold
`into California. Almost all of these members are currently raising pigs that do not
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`COMPLAINT FOR DECLARATORY AND
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`meet Proposition 12’s requirements and are suffering and will suffer imminent,
`concrete and particularized injuries as a result of Proposition 12—either substantial
`compliance costs or loss of a major market for their products.
`58. While all manner of hog farms across the country are harmed by
`Proposition 12, from large-scale to small, independent farms, a sampling of
`affected NPPC and AFBF pork producer members who have submitted
`declarations in support of the Complaint includes the following:
`a. Mr. Greg Boerboom is a hog producer on his third-generation farm in
`Southwest Minnesota. He has lived on that farm since he was born.
`Mr. Boerboom now owns a total of 10,000 sows, from which he
`produces around 320,000 market hogs annually. Some of his sows are
`housed in group pens, and others in individual stalls. But, as a
`consistent practice since 1988, Mr. Boerboom has always housed his
`sows in individual stalls for at least seven days between weaning and
`breeding. He noticed when he held his sows in group pens for these
`seven days after weaning that they would fight and bite at each other,
`resulting in rips and permanent damage to the sows’ udders. Since
`keeping sows in breeding stalls during this time, the productivity rate
`on his farm has increased, and incidences of sow injuries have
`decreased. Mr. Boerboom is one of the most successful hog
`producers in the U.S. to operate under a group housing system, which
`he manages through an incredible amount of hard work and an
`expensive electronic feeding system developed by a Dutch company,
`Nedap, that requires skilled labor and training to operate. Despite Mr.
`Boerboom’s great success in managing sows, his farming practices do
`not comply with Proposition 12, because he does not provide each
`sow 24 square feet, and he cannot not imagine moving his sows back
`into a group pen directly after weaning, as Proposition 12 requires.
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`COMPLAINT FOR DECLARATORY AND
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`INJUNCTIVE RELIEF
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`Nor does Mr. Boerboom comply with Proposition 12’s requirements
`as to gilts (young, unbred sows), because he follows the standard
`industry practice of keeping gilts in individual stalls until they are first
`bred at about seven months of age, which is past the six months
`during which Proposition 12 allows use of stalls. Because Mr.
`Boerboom will not comply with Proposition 12, his product will be
`barred from the California market. See Exh. D, Decl. G. Boerboom.
`b. Mr. Phil Borgic is the owner of a family farm located in Nokomis,
`Illinois. Mr. Borgic produces around 225,000 hogs annually and sells
`his product under market contracts with Smithfield Foods
`(“Smithfield”) and JBS USA (“JBS”). Mr. Borgic houses his sows in
`individual stalls throughout gestation because, based on his lifetime of
`experience raising sows, he determined that individual stalls are best
`for the welfare of his sows and the productivity of his farm. Mr.
`Borgic’s housing of gilts also does not comply with Proposition 12.
`Compliance with Proposition 12 would be cost-prohibitive for Mr.
`Borgic. It would require him either to spend around three million
`dollars on construction costs expanding his facilities or to reduce his
`sow herd by one-third, destroying his farm’s productivity and
`rendering him unable to meet delivery performance requirements in
`his contracts with JBS and Smithfield. It would also result in worse
`welfare outcomes for his sows, significantly lower sow productivity,
`and increased labor costs. If Proposition 12 remains in place, Mr.
`Borgic is concerned that the price he receives for his product will drop
`because whole meat from his market hogs could not be sold into
`California. Mr. Borgic also stands to lose his longstanding business
`relationships with JBS and Smithfield, both of which sell into
`California. See Exh. E, Decl. P. Borgic.
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`c. Mr. Nathan Deppe operates a farrow-to-finish hog farm in
`Washington, Missouri, that has been in his family for generations. He
`produces around 30,000 market hogs annually, which he then sells to
`JBS under a marketing contract. Mr. Deppe houses his sows in group
`pens that provide about 15 square feet per sow for most of gestation.
`Nevertheless, he also uses individual breeding stalls to help sows
`regain weight post weaning, to accomplish artificial insemination, and
`then to house the sows for an additional 28 days until he can confirm
`that his sows are pregnant before moving them back into the group
`pens. The changes required to comply with Proposition 12 are too
`costly for Mr. Deppe’s business to survive. Mr. Deppe anticipates
`Proposition 12’s restrictions would significantly damage productivity
`on his farm and negatively impact the welfare of his animals.
`Productivity losses, along with construction costs to convert his
`housing to provide 60% more space per sow to comply with
`Proposition 12, would be too high for him to bear. Because of
`Proposition 12, Mr. Deppe has lost the opportunity to sell his whole
`pork product into supply chains bound for the large California market.
`See Exh. F, Decl. N. Deppe.
`d. Mr. Mike Falslev is an independent hog producer on his farm near
`Logan, Utah. Mr. Falslev’s farm specializes in serving the
`predominantly Asian-American market for suckling pigs. To satisfy
`the demand primarily from Asian-American consumers in California,
`he sells about 600 pigs per week under a five-year contract to a
`packing plant located in California. Thus, essentially all of his
`product is bound for California. Currently, Mr. Falslev houses all of
`his sows in individual stalls until he confirms that they are pregnant.
`He keeps some of the sows in individual stalls throughout gestation,
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`but, after confirming that these sows are pregnant, moves others into a
`hoop barn where they are housed in a group. Changing these
`practices to comply with Proposition 12’s housing requirements
`would lower productivity on Mr. Falslev’s farm by requiring him to
`move his sows into the hoop barn directly after weaning. He would
`lose the ability to provide a peaceful environment for the sows to
`recover and regain weight from their previous litter, and instead be
`required to subject them to stress and fighting with other animals
`during the vulnerable time between insemination and before the
`embryo attaches to the uterine wall. This would seriously damage
`productivity and conception rates, because his pigs fight for feed and
`territory when moved into the group pen. It would also make Mr.
`Falslev’s process for artificially inseminating sows much more
`difficult and increase his labor costs, because it is more difficult for
`him to care for the sows in the hoop barn. Compliance would also
`require Mr. Falslev to expend significant construction costs to
`construct a new barn with open space. Alternatively, constructing
`enough hoop barns to replace his lost production would cost Mr.
`Falslev almost as much, and would take up an enormous amount of
`land. Operating solely out of hoop barns rather than using individual
`breeding stalls would also significantly increase Mr. Falslev’s
`operating costs. For example, the colder hoop barn requires straw
`bedding to provide warmth, and the straw bedding triples the amount
`of waste and manure that needs to be disposed of, requiring a great
`deal of additional labor. It also makes it much more difficult to
`maintain comfortable temperatures for his sows during the cold of
`winter and the heat of summer. If Mr. Falslev does not bear these
`significant costs, Proposition 12 will block Mr. Falslev’s product from
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`the lucrative suckling pig market in California. Proposition 12 leaves
`Mr. Falslev with no good alternatives. See Exh. G, Decl. M. Falslev.
`e. Mr. Tom Floy has been an Iowa hog producer for the past 45 years.
`Mr. Floy produces 1,500 to 2,000 market hogs annually. He sells his
`hogs exclusively to Tyson Foods (“Tyson”), which in turn sells the
`resulting product all over the country and the world. Mr. Floy houses
`his sows in individual stalls that do not allow them to turn around.
`Compliance with Proposition 12 would require Mr. Floy to bear
`significant construction costs to provide his sows with around 40%
`more space. Mr. Floy would need to expend significant time to select
`appropriate equipment and design and educate himself on how to
`manage the new sow housing system. Mr. Floy also expects that
`compliance would significantly lower productivity on his farm and
`reduce the welfare of his sows. After moving from open lots to
`individual stalls in 1994, Mr. Floy noticed that his sows experience
`fewer injuries and produce a greater number of parities (farrowings).
`Because of Proposition 12, Mr. Floy’s product will be barred from the
`California market. He is concerned that loss of access to the market
`harms the value of his product and will decrease its price. See Exh. H,
`Decl. T. Floy.
`f. Mr. Todd Hays is a fifth-generation hog producer on a farrow-to-
`finish farm located in Monroe City, Missouri, who raises and finishes
`approximately 13,500 market hogs per year. Pursuant to a two-year
`contract, Mr. Hays sells ninety percent of these hogs to Smithfield,
`which he has been in business with for the past ten years. Mr. Hays
`houses his sows in individual stalls. Mr. Hays anticipates that
`changing his sow housing practices to comply with Proposition 12
`would increase sow mortality and lameness rates on his farm,
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`dramatically reduce his productivity rates, and require more labor and
`personnel to operate his farm. These productivity losses and the costs
`of either constructing new Proposition 12-compliant facilities or
`reducing his current sow population to provide the needed space per
`sow are likely greater than his business could bear, because Mr. Hays
`would not receive enough return to cover these large costs. Because
`of Proposition 12, Mr. Hays will lose the opportunity to sell his whole
`pork product into supply chains bound for the large California market
`and his business will become less attractive to suppliers who choose
`to comply with Proposition 12. See Exh. I, Decl. T. Hays.
`g. Mr. Phil Jordan is a hog producer on his family-owned farm in Ohio,
`where he produces approximately 35,000 market hogs annually and is
`looking to expand his operations. Mr. Jordan sells his market hogs
`primarily to JBS under a marketing agreement. He holds the majority
`