Case: 20-55631, 09/30/2020, ID: 11841979, DktEntry: 21, Page 1 of 40
`
`No. 20-55631
`
`IN THE
`United States Court of Appeals
`for the Ninth Circuit
`
`NATIONAL PORK PRODUCERS COUNCIL & AMERICAN FARM BUREAU FEDERATION,
`Plaintiff-Appellants,
`
`v.
`KAREN ROSS, et al.,
`Defendant-Appellees,
`
`and
`THE HUMANE SOCIETY OF THE UNITED STATES, et al.,
`Intervenor-Defendant-Appellees.
`
`On Appeal from the United States District Court
`for the Southern District of California
`No. 3:19-cv-02324-W-AHG, District Judge Thomas J. Whelan
`
`BRIEF FOR THE NATIONAL ASSOCIATION OF MANUFACTURERS,
`THE CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA,
`FMI – THE FOOD INDUSTRY ASSOCIATION, THE NATIONAL
`CATTLEMEN’S BEEF ASSOCIATION, AND THE NATIONAL MINING
`ASSOCIATION AS AMICI CURIAE IN SUPPORT OF APPELLANT
`
`Patrick Hedren
`Erica Klenicki
`MANUFACTURERS’ CENTER
`FOR LEGAL ACTION
`733 10th Street NW
`Washington, DC 20001
`Phone: (202) 637-3000
`Counsel for National Association
`of Manufacturers
`
`September 30, 2020
`
`Catherine E. Stetson
`Danielle Desaulniers Stempel
`HOGAN LOVELLS US LLP
`555 Thirteenth Street NW
`Washington, DC 20004
`Phone: (202) 637-5600
`Fax: (202) 637-5910
`cate.stetson@hoganlovells.com
`Counsel for Amici Curiae
`
`Additional Counsel Listed on Inside Cover
`
`

`

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`
`Additional counsel:
`Steven P. Lehotsky
`Jonathan D. Urick
`U.S. CHAMBER LITIGATION CENTER
`1615 H Street NW
`Washington, DC 20062
`Phone: (202) 463-5948
`
`Counsel for Chamber of Commerce
`of the United States of America
`
`Stephanie K. Harris
`FMI – THE FOOD INDUSTRY ASSOCIATION
`2345 Crystal Drive
`Suite 800
`Arlington, VA 22202
`Phone: (202) 220-0614
`
`Counsel for FMI – The Food Industry Association
`
`Scott Yager
`NATIONAL CATTLEMEN’S BEEF ASSOCIATION
`1275 Pennsylvania Avenue NW
`Suite 801
`Washington DC 20004
`Phone: (202) 347-0228
`
`Counsel for National Cattlemen’s Beef Association
`
`Katie Sweeney
`NATIONAL MINING ASSOCIATION
`101 Constitution Avenue NW
`Suite 500 East
`Washington, DC 20001
`Phone: (202) 463-2600
`
`Counsel for National Mining Association
`
`

`

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`CORPORATE DISCLOSURE STATEMENT
`Amici are the National Association of Manufacturers, the Chamber of
`
`Commerce of the United States of America, FMI – The Food Industry Association,
`
`the National Cattlemen’s Beef Association, and the National Mining Association.
`
`Pursuant to Federal Rules of Appellate Procedure 26.1 and 29(a)(4)(A),
`
`undersigned counsel certifies that each is a nonprofit trade association, and that
`
`each has no parent corporation and no publicly held corporation owns 10% or more
`
`of any of amici’s stock.
`
`Dated: September 30, 2020
`
`/s/ Catherine E. Stetson
`Catherine E. Stetson
`
` i
`
`

`

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`
`TABLE OF CONTENTS
`
`Page
`CORPORATE DISCLOSURE STATEMENT ......................................................... i
`TABLE OF AUTHORITIES ................................................................................... iii
`STATEMENT OF COMPLIANCE WITH RULE 29 ............................................... 1
`IDENTITY AND INTEREST OF AMICI CURIAE .................................................. 1
`INTRODUCTION AND SUMMARY OF THE ARGUMENT ............................... 4
`ARGUMENT ............................................................................................................. 6
`I.
`CALIFORNIA’S EXTRATERRITORIAL AND UNDULY
`BURDENSOME PROHIBITION OF PORK SALES
`VIOLATES THE COMMERCE CLAUSE .................................................... 6
`A.
`Proposition 12 Regulates Extraterritorially ........................................... 8
`B.
`Proposition 12 Will Substantially And Irreparably
`Burden Out-of-State Producers, And No Legitimate
`Local Interest Justifies This Burden .................................................... 17
`II. ALLOWING PROPOSITION 12 TO TAKE EFFECT
`WOULD GREEN-LIGHT SIMILAR REGULATORY
`EFFORTS NATIONWIDE ........................................................................... 26
`CONCLUSION ........................................................................................................ 30
`CERTIFICATE OF COMPLIANCE
`CERTIFICATE OF SERVICE
`
`ii
`
`

`

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`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES:
`Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Harris,
`729 F.3d 937 (9th Cir. 2013) ........................................................................ 18, 19
`BMW of N. Am., Inc. v. Gore,
`517 U.S. 559 (1996) .............................................................................................. 8
`Bonaparte v. Tax Court,
`104 U.S. 592 (1881) .............................................................................................. 9
`Boyle v. Zacharie,
`31 U.S. (6 Pet.) 635 (1832) ................................................................................... 9
`Brown-Forman Distillers Corp. v. New York State Liquor Auth.,
`476 U.S. 573 (1986) .............................................................................. 4, 7, 17, 25
`C & A Carbone, Inc. v. Town of Clarkstown,
`511 U.S. 383 (1994) ............................................................................ 7, 10, 11, 20
`Coyle v. Smith,
`221 U.S. 559 (1911) .............................................................................................. 8
`Conservation Force, Inc. v. Manning,
`301 F.3d 985 (9th Cir. 2002) ................................................................................ 6
`Daniels Sharpsmart, Inc. v. Smith,
`889 F.3d 608 (9th Cir. 2018) ............................................................................ 6, 8
`Duncan v. Becerra,
`366 F. Supp. 3d 1131 (S.D. Cal. 2019),
`aff’d, 970 F.3d 1133 (9th Cir. 2020) ................................................................... 20
`
`Exxon Corp. v. Governor of Maryland,
`437 U.S. 117 (1978) ...................................................................................... 22, 23
`
`Franchise Tax Bd. of California v. Hyatt,
`139 S. Ct. 1485 (2019) .......................................................................................... 9
`
`iii
`
`

`

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`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`Great Atl. & Pac. Tea Co. v. Cottrell,
`424 U.S. 366 (1976) ............................................................................................ 10
`Healy v. Beer Inst.,
`491 U.S. 324 (1989) .....................................................................................passim
`Kassel v. Consol. Freightways Corp. of Del.,
`450 U.S. 662 (1981) ...................................................................................... 21, 29
`Legato Vapors, LLC v. Cook,
`847 F.3d 825 (7th Cir. 2017) .......................................................................passim
`Maine v. Taylor,
`477 U.S. 131 (1986) .............................................................................................. 6
`N. Am. Meat Inst. v. Becerra,
`No. 2:19-CV-08569-CAS (FFMx), 2020 WL 919153 (C.D. Cal.
`Feb. 24, 2020) ..................................................................................................... 20
`Nat’l Ass’n of Optometrists & Opticians v. Harris,
`682 F.3d 1144 (9th Cir. 2012) ............................................................................ 23
`Nat’l Foreign Trade Council v. Natsios,
`181 F.3d 38 (1st Cir. 1999), aff’d sub nom. Crosby v. National
`Foreign Trade Council, 530 U.S. 363 (2000) .............................................. 14, 29
`Nat’l Meat Ass’n v. Brown,
`No. CVF-08-1963 LJO DLB, 2009 WL 426213 (E.D. Cal. Feb. 19,
`2009) .................................................................................................................. 18
`Nat’l Meat Ass’n v. Harris,
`565 U.S. 452 (2012) ............................................................................................ 18
`NCAA v. Miller,
`10 F.3d 633 (9th Cir. 1993) .........................................................................passim
`New York Life Ins. Co. v. Head,
`234 U.S. 149 (1914) .............................................................................................. 9
`
` iv
`
`

`

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`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`
`Ogden v. Saunders,
`25 U.S. (12 Wheat.) 213 (1827) ........................................................................... 9
`Pharm. Research & Mfrs. of Am. v. County of Alameda,
`768 F.3d 1037 (9th Cir. 2014) ............................................................................ 25
`Pike v. Bruce Church,
`397 U.S. 137 (1970) ...................................................................................... 17, 24
`Rocky Mountain Farmers Union v. Corey,
`730 F.3d 1070 (9th Cir. 2013) ............................................................................ 19
`Rocky Mountain Farmers Union v. Corey,
`913 F.3d 940 (9th Cir. 2019) ........................................................................ 19, 25
`Sam Francis Found. v. Christies, Inc.,
`784 F.3d 1320 (9th Cir. 2015) ............................................................ 7, 10, 12, 29
`Tennessee Wine & Spirits Retailers Ass’n v. Thomas,
`139 S. Ct. 2449 (2019) .............................................................................. 6, 26, 29
`World-Wide Volkswagen Corp. v. Woodson,
`444 U.S. 286 (1980) .............................................................................................. 9
`CONSTITUTIONAL PROVISIONS:
`U.S. Const. art. I, § 8, cl. 1 ......................................................................................... 6
`U.S. Const. art. I, § 8, cl. 3 ......................................................................................... 6
`STATUTES:
`42 U.S.C. § 7543(e)(2)(A) ....................................................................................... 26
`Ariz. Rev. Stat. Ann. § 13-2910.07.................................................................... 15, 27
`Cal. Health & Safety Code § 25991(a) .................................................................... 16
`Colo. Rev. Stat. § 35-50.5-102 .......................................................................... 15, 27
`Fla. Const. art. 10, § 21 ...................................................................................... 15, 27
`
` v
`
`

`

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`
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`Me. Stat. tit. 17, § 1039 ...................................................................................... 15, 28
`Mich. Comp. Laws § 287.746 ............................................................................ 15, 28
`Ohio Admin. Code 901:12-8-02 ........................................................................ 15, 28
`Or. Rev. Stat. § 600.150 ..................................................................................... 15, 28
`R.I. Gen. Laws § 4-1.1-3 .................................................................................... 15, 28
`LEGISLATIVE MATERIAL:
`Prevention of Farm Animal Cruelty Act, 2016 Mass. Acts 1052 ...................... 15, 28
`Prevention of Cruelty to Farm Animals Act, Prop. 12 § 2. ..................................... 20
`OTHER AUTHORITIES:
`The Federalist No. 22 (Alexander Hamilton) .......................................................... 28
`Barry Friedman & Daniel T. Deacon, A Course Unbroken: The
`Constitutional Legitimacy of the Dormant Commerce Clause, 97
`Va. L. Rev. 1877 (2011) ............................................................................... 28, 29
`Letter from James Monroe to James Madison (July 26, 1785),
`available at https://bit.ly/2SWWhGD ................................................................ 29
`Baylen J. Linnekin, The “California Effect” & the Future of
`American Food: How California’s Growing Crackdown on Food
`& Agriculture Harms the State & the Nation, 13 Chap. L. Rev. 357
`(2010) ...................................................................................................... 18, 22, 28
`James Madison, Vices of the Political System of the United States, in 2
`Writings of James Madison 361 (Gaillard Hunt ed., 1901) ............................... 28
`Susan Lorde Martin, The Extraterritoriality Doctrine of the Dormant
`Commerce Clause Is Not Dead, 100 Marq. L. Rev. 497 (2016) ........................ 10
`Office of the Att’y Gen., Ballot Initiatives, State of Cal. Dep’t of
`Justice, https://oag.ca.gov/initiatives (last visited Sept. 30, 2020) ..................... 19
`
` vi
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`

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`STATEMENT OF COMPLIANCE WITH RULE 29
`
`Pursuant to Federal Rule of Appellate Procedure 29(a)(2), amici curiae
`
`submit this brief without an accompanying motion for leave to file because all
`
`parties have consented to its filing. No counsel for any party authored this brief in
`
`whole or in part and no entity or person, aside from amici curiae, their members,
`
`and their counsel, made any monetary contribution intended to fund the
`
`preparation or submission of this brief.
`
`IDENTITY AND INTEREST OF AMICI CURIAE
`
`The National Association of Manufacturers (NAM)
`
`is
`
`the
`
`largest
`
`manufacturing association in the United States, representing small and large
`
`manufacturers in every industrial sector and in all 50 States. Manufacturing
`
`employs more than 12 million men and women, contributes $2.25 trillion to the
`
`U.S. economy annually, has the largest economic impact of any major sector, and
`
`accounts for more
`
`than
`
`three-quarters of all private-sector research and
`
`development in the Nation. The NAM is the voice of the manufacturing
`
`community and the leading advocate for a policy agenda that helps manufacturers
`
`compete in the global economy and create jobs across the United States.
`
`Founded in 1912, the Chamber of Commerce of the United States of
`
`America (the Chamber) is the world’s largest business federation. It represents
`
`approximately 300,000 direct members and indirectly represents the interests of
`
`1
`
`

`

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`more than three million businesses of every size, in every industry, and from every
`
`region of the country. Its membership includes businesses across all segments of
`
`the economy, including the agriculture and food sectors.
`
`FMI – The Food Industry Association (FMI) works with and on behalf of
`
`the entire industry to advance a safer, healthier, and more efficient consumer food
`
`supply chain. FMI brings together a wide range of members across the value
`
`chain—from retailers that sell to consumers, to producers that supply food and
`
`other products, as well as the wide variety of companies providing critical
`
`services—to amplify the collective work of the industry.
`
`The National Cattlemen’s Beef Association (NCBA) is the largest and oldest
`
`national trade association representing American cattle producers. Through state
`
`affiliates, NCBA represents more than 175,000 of America’s farmers and ranchers,
`
`who provide a significant portion of the nation’s supply of food. NCBA works to
`
`advance the economic, political, and social interests of the U.S. cattle business and
`
`to be an advocate for the cattle industry’s policy positions and economic interests.
`
`The National Mining Association (NMA) is a trade association representing
`
`over 260 corporations and organizations that produce most of America’s coal,
`
`metals, and industrial and agricultural minerals. NMA’s members include
`
`manufacturers of mining and mineral processing machinery and supplies,
`
`2
`
`

`

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`transporters, financial and engineering firms, and other businesses involved in the
`
`nation’s mining industries.
`
`Amici represent their members’ interests in matters before Congress, the
`
`Executive Branch, and the courts. NAM and the Chamber regularly file amicus
`
`curiae briefs in cases that raise issues of vital concern to the Nation’s business
`
`community, including cases involving challenges to state and federal regulations.
`
`Like NAM and the Chamber, FMI, NCBA, and NMA have filed amicus curiae
`
`briefs in cases that implicate issues of special concern to their members. In fact,
`
`several of the amici are also participating as amici curiae in a similar Commerce
`
`Clause challenge to Proposition 12 that is pending before this Court. See Nat’l
`
`Ass’n of Mfrs. et al. Amicus Br., N. Am. Meat Inst. v. Becerra, No. 19-56408 (9th
`
`Cir. Jan. 10, 2020).
`
`Amici have a strong interest in this case because Proposition 12 regulates the
`
`conduct of farmers, processors, wholesalers, and retailers nationwide. In addition,
`
`Proposition 12, if allowed to stand, may embolden other States to regulate beyond
`
`their borders, resulting in a complex web of inconsistent and competing
`
`extraterritorial regulations in the agriculture and food industries, and beyond.
`
`Fragmenting these interstate markets will create inefficiencies and could impose
`
`significant costs on industry and consumers.
`
`3
`
`

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`INTRODUCTION AND SUMMARY OF THE ARGUMENT
`
`“[T]he Commerce Clause . . . precludes the application of a state statute to
`
`commerce that takes place wholly outside of the State’s borders, whether or not the
`
`commerce has effects within the State.” Healy v. Beer Inst., 491 U.S. 324, 336
`
`(1989) (internal quotation marks omitted). In holding that Proposition 12—a law
`
`that seeks to control the out-of-State production of pork—does not regulate beyond
`
`California’s borders, the District Court upended that deeply rooted tradition.
`
`State laws violate the Commerce Clause when they regulate extraterritorially
`
`or substantially burden out-of-state producers absent a sufficient and legitimate
`
`local interest. Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476
`
`U.S. 573, 578–579 (1986). Proposition 12 violates the Commerce Clause twice
`
`over. First, Proposition 12 plainly regulates beyond California’s borders,
`
`impinging on other States’ sovereign authority to legislate within their own
`
`jurisdictions.
`
` Second, Proposition 12’s ostensible purpose—improving
`
`confinement conditions for farm animals—is wholly untethered from any
`
`California-specific nexus. Because more than 99% of Proposition 12’s effects will
`
`take place out-of-state, the substantial and market-distorting compliance costs that
`
`4
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`will be felt nationwide far outstrip any ancillary benefits that may flow to
`
`California consumers.1
`
`The District Court ignored these foundational limits and instead held that
`
`Proposition 12 does not violate the Commerce Clause. Allowing that erroneous
`
`decision to stand spells havoc for our national food supply. If California can enact
`
`laws controlling the production of out-of-state pork, so too can Texas dictate how
`
`avocados and tomatoes are grown in California. States and localities could also
`
`rely on the logic underlying this sales ban to justify setting nationwide standards
`
`for virtually any geographically favored industry that is elsewhere disfavored.
`
`Allowing States to assert their own policy preferences on farmers, processors,
`
`wholesalers, and retailers nationwide will fracture national markets into regional
`
`and local affairs. But that future is precisely what the framers intended the
`
`Commerce Clause to prevent, as the federal courts have recognized in striking
`
`down such regulatory overreaches since the Founding. Proposition 12 is no
`
`different. The District Court’s decision should be reversed.
`
`1 Although this lawsuit concerns only Proposition 12’s unconstitutional regulation
`of pork, because Proposition 12’s regulation of veal will have the same negative
`effects on that industry, it too violates the Commerce Clause. See Nat’l Ass’n of
`Mfrs. et al. Amicus Br., N. Am. Meat Inst., No. 19-56408.
`
`5
`
`

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`ARGUMENT
`
`I.
`
`UNDULY
`AND
`EXTRATERRITORIAL
`CALIFORNIA’S
`BURDENSOME PROHIBITION OF PORK SALES VIOLATES THE
`COMMERCE CLAUSE.
`The United States Constitution provides that “Congress,” and Congress
`
`alone, “shall have Power . . . To regulate Commerce . . . among the several States.”
`
`U.S. Const. art. I, § 8, cls. 1, 3. A core purpose of the Commerce Clause is “to
`
`prevent state governments from imposing burdens on unrepresented out-of-state
`
`interests merely to assuage the political will of the state’s represented citizens.”
`
`Conservation Force, Inc. v. Manning, 301 F.3d 985, 998 (9th Cir. 2002) (holding
`
`that cap on nonresident hunting designed to increase recreational-hunting
`
`opportunities for Arizona citizens is subject to “strict scrutiny” under the
`
`Commerce Clause). Although local regulation will often and inevitably have some
`
`effects on interstate commerce, that Clause limits States’ and localities’ ability to
`
`“erect barriers against interstate trade.” Maine v. Taylor, 477 U.S. 131, 137 (1986)
`
`(internal quotation marks omitted); see also Daniels Sharpsmart, Inc. v. Smith, 889
`
`F.3d 608, 615 (9th Cir. 2018) (“The mere fact that some nexus to a state exists will
`
`not justify regulation of wholly out-of-state transactions.”). The Commerce Clause
`
`thus “prevents the States from adopting protectionist measures” and “preserves a
`
`national market for goods and services.” Tennessee Wine & Spirits Retailers Ass’n
`
`v. Thomas, 139 S. Ct. 2449, 2459 (2019).
`
`6
`
`

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`Federal courts apply a “two-tiered approach to analyzing state economic
`
`regulation under the Commerce Clause.” Brown-Forman, 476 U.S. at 578–579.
`
`The first tier includes state statutes that “directly regulate[ ] or discriminate[ ]
`
`against interstate commerce.” Id. at 579. Such regulations are “virtually per se
`
`invalid,” id., and will be upheld only if the State proves, “under rigorous scrutiny,”
`
`that there are “no other means to advance a legitimate local interest” available,
`
`C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 392 (1994); accord
`
`NCAA v. Miller, 10 F.3d 633, 638 (9th Cir. 1993). Statutes that impose “only
`
`indirect effects on interstate commerce and regulate[ ] evenhandedly” fall into the
`
`second tier. Brown-Forman, 476 U.S. at 579. For regulations in this tier, courts
`
`employ a balancing test that asks “whether the State’s interest is legitimate and
`
`whether the burden on interstate commerce clearly exceeds the local benefits.” Id.
`
`Just as States have long claimed the right to use their general police powers
`
`to regulate interstate commerce in agriculture and food products, the federal courts
`
`have long put those claims to the test and, when appropriate, invalidated those
`
`attempts found constitutionally lacking. See, e.g., Legato Vapors, LLC v. Cook,
`
`847 F.3d 825, 830–832 (7th Cir. 2017) (holding invalid restrictions on out-of-state
`
`vaping manufacturers); Sam Francis Found. v. Christies, Inc., 784 F.3d 1320, 1323
`
`(9th Cir. 2015) (en banc) (same, for the regulation of out-of-state art sales).
`
`Proposition 12 is no different. This classic extraterritorial regulation seeks to
`
`7
`
`

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`control the out-of-state production of pork. And, as with virtually all such
`
`regulations, California has not and cannot demonstrate that Proposition 12 survives
`
`the rigorous scrutiny the Constitution compels.
`
`Analyzing Proposition 12 as a facially neutral regulation (which it is not)
`
`leads to the same result: Any potential interest California might have in enacting
`
`this regulation is dwarfed by the substantial burdens it will impose on commerce
`
`nationwide. The District Court’s contrary conclusion should be reversed.
`
`A.
`
`Proposition 12 Regulates Extraterritorially.
`
`Proposition 12 exceeds the Constitution’s limits by seeking to regulate
`
`commerce outside California’s borders. The doctrine of extraterritoriality prohibits
`
`States from “regulating commerce occurring wholly outside [their] borders.”
`
`Healy, 491 U.S. at 332. No matter how wise California or New York or Texas or
`
`Vermont may believe a particular policy to be, “[o]ne state cannot be permitted to
`
`dictate what other states must do within their own borders.” Daniels Sharpsmart,
`
`889 F.3d at 615; accord BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 570–571
`
`(1996).
`
`This principle has deep roots in the Constitution’s structure and the Nation’s
`
`history. State sovereignty is a cornerstone of our constitutional compact and
`
`reflects our Country’s “union of States, equal in power, dignity and authority.”
`
`Coyle v. Smith, 221 U.S. 559, 567 (1911). “The sovereignty of each State . . .
`
`8
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`

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`implie[s] a limitation on the sovereignty of all of its sister States”—a limitation
`
`that is inherent in “the original scheme of the Constitution.” World-Wide
`
`Volkswagen Corp. v. Woodson, 444 U.S. 286, 293 (1980); see also Franchise Tax
`
`Bd. of California v. Hyatt, 139 S. Ct. 1485, 1497–98 (2019). Thus “[n]o State can
`
`legislate except with reference to its own jurisdiction.” Bonaparte v. Tax Court,
`
`104 U.S. 592, 594 (1881); see also New York Life Ins. Co. v. Head, 234 U.S. 149,
`
`161 (1914) (calling this territorial limit an “obvious[ ]” and “necessary result of the
`
`Constitution”). When “States pass beyond their own [territorial] limits . . . there
`
`arises a conflict of sovereign power . . . which renders the exercise of such a power
`
`incompatible with the rights of other States, and with the [C]onstitution of the
`
`United States.” Ogden v. Saunders, 25 U.S. (12 Wheat.) 213, 369 (1827) (opinion
`
`of Johnson, J.); see also Boyle v. Zacharie, 31 U.S. (6 Pet.) 635, 643 (1832) (Story,
`
`J.) (confirming that Justice Johnson spoke for the Ogden majority).
`
`Proposition 12’s sales ban ignores these foundational bounds on California’s
`
`authority.
`
` That law is the latest—and most consequential—assertion of
`
`California’s authority over its sister States’ regulation of agriculture and food
`
`production to date: It requires out-of-state farmers, producers, and distributors to
`
`spend hundreds of millions of dollars to restructure their operations nationwide,
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`simply because California voters decided to adopt a particular policy preference.
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`Appellants’ Br. 36–45. One State’s power to regulate beyond its borders, directly
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`9
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`or otherwise, simply does not stretch that far, for “state autonomy over ‘local
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`needs’ does not inhibit ‘the overriding requirement of freedom for the national
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`commerce.’ ” Christies, Inc., 784 F.3d at 1323 (quoting Great Atl. & Pac. Tea Co.
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`v. Cottrell, 424 U.S. 366, 371 (1976)).
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`The District Court’s contrary decision gives short shrift to these foundational
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`limits. It recognized—as it must—that the extraterritoriality doctrine exists, and
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`that it applies to regulations like Proposition 12. See ER 9; Susan Lorde Martin,
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`The Extraterritoriality Doctrine of the Dormant Commerce Clause Is Not Dead,
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`100 Marq. L. Rev. 497, 498 (2016) (explaining that this doctrine “still serves well
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`the dual purposes of promoting interstate commerce and discouraging hostility
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`among states while each carries out its own policies in its own best interest”). But
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`the District Court failed to meaningfully scrutinize the scope of Proposition 12
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`because it concluded that the regulated conduct does not take place “wholly”
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`outside California’s jurisdiction. ER 9. That argument ignores the teachings of the
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`Supreme Court, this Court, and other courts of appeals; the realities of the national
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`pork supply chain; and the substantial evidence marshalled by Plaintiffs
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`demonstrating that Proposition 12 regulates huge swaths of conduct occurring
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`wholly outside the Golden State.
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`“States and localities may not attach restrictions to exports or imports in
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`order to control commerce in other States.” C & A Carbone, 511 U.S. at 393; see
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`10
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`Case: 20-55631, 09/30/2020, ID: 11841979, DktEntry: 21, Page 19 of 40
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`Healy, 491 U.S. at 336. Proposition 12 does just that. By regulating the manner in
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`which pork farmers house and breed sows, Proposition 12 effectively controls
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`every step of the national pork supply chain. It is common for a sow in, say, Iowa
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`to give birth to piglets, which are then sold to a second facility for feeding, and to a
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`third for finishing. Once they reach the appropriate weight, these pigs are sent to a
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`fourth facility, often in another State—for instance, Illinois—for processing
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`(slaughter and butcher). That processing facility may divide the butchered pork
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`among various wholesalers, retailers, and secondary processors. For example, a
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`wholesaler in Kansas might purchase the loin and sell it to a retailer in California; a
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`retailer in Texas might purchase the pork belly; and a secondary processor in
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`Wisconsin might purchase the shoulder butt to make sausages. See Appellants’ Br.
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`5–7, 44–45 (summarizing supply chain process); ER 5–6 (same).
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`This particular supply chain is hypothetical, but the interstate transactions it
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`describes are not uncommon. And as this supply chain demonstrates, by regulating
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`the California-based retailer’s purchase, Proposition 12 will inevitably affect
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`multiple wholly out-of-California transactions. That violates the Commerce
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`Clause. See Healy, 491 U.S. at 336; Mot. for J. on the Pleadings (MJP) at 8, D. Ct.
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`Dkt. No. 19 (acknowledging that laws which have “inevitable effects” in other
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`States violate the Commerce Clause (internal quotation marks and brackets
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`omitted)). To comply with Proposition 12, the breeding farm in Iowa must alter
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`11
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`Case: 20-55631, 09/30/2020, ID: 11841979, DktEntry: 21, Page 20 of 40
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`how it houses the sow; the feeding and finishing facilities in Iowa must segregate
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`Proposition 12-compliant pigs; the processing facility in Illinois must track the
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`origins of each pig it butchers; and the wholesalers and retailers in Kansas and
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`California must track the origins of each whole cut of pork. See Appellants’ Br.
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`41–45; ER 5–6. These out-of-state impacts far exceed the kind of incidental
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`requirements associated with labeling regimes and other facially neutral laws.
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`Because the “practical effect of th[is] regulation is to control” commercial
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`transactions that “take[ ] place wholly outside of the State’s borders, whether or not
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`the commerce has effects within the State,” Proposition 12 “exceeds the inherent
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`limits of [California’s] authority.” Healy, 491 U.S. at 336 (internal quotation
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`marks omitted).
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`Not surprisingly, recent decisions from this Court and other courts of
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`appeals have invalidated similar laws that sought to regulate beyond a State’s
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`borders. For example, in Christies, the en banc Court held that California’s Resale
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`Royalty Act violated the Commerce Clause because it regulated sales of fine art
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`“that take place outside California” with “no necessary connection with the state
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`other than the residency of the seller.” 784 F.3d at 1323 (explaining that this law
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`would have required a purchaser in New York to pay a royalty to a sculptor in
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`North Dakota, “even if the sculpture, the artist, and the buyer never traveled to, or
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`had any connection with, California”). And in NCAA v. Miller, this Court
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`12
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`Case: 20-55631, 09/30/2020, ID: 11841979, DktEntry: 21, Page 21 of 40
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`invalidated a Nevada law that would have required the NCAA to apply Nevada’s
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`rules to all NCAA institutions in all States. 10 F.3d 633 (9th Cir. 1993). As this
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`Court explained, because the statute would “control the regulation of the integrity
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`of a product in interstate commerce that occurs wholly outside Nevada’s borders,”
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`it had the “sort of extraterritorial effect . . . forbidden by the Commerce Clause.”
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`Id. at 639.
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`Likewise, in Legato Vapors, the Seventh Circuit rejected Indiana’s attempt
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`to “dictate[ ] how out-of-state manufacturers” of electronic cigarettes and vaping
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`devices that sold products in Indiana “must build and secure their facilities,