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Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 1 of 31
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`No. 20-55631
`
`IN THE
`UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
`
`NATIONAL PORK PRODUCERS COUNCIL & AMERICAN FARM
`BUREAU FEDERATION,
`Plaintiffs-Appellants,
`
`v.
`
`KAREN ROSS, ET AL.,
`Defendants-Appellees.
`
` &
`
`
`
`
`ANIMAL LEGAL DEFENSE FUND, ET AL.,
`Intervenors-Defendants-Appellees.
`
`On Appeal from the United States District Court for the
`Southern District of California
`No. 3:19-cv-02324-W-AHG
`Hon. Thomas J. Whelan
`
`BRIEF OF INDIANA, ALABAMA, ALASKA, ARKAN-
`SAS, GEORGIA, IOWA, KANSAS, LOUISIANA, MIS-
`SOURI, MONTANA, NEBRASKA, NORTH DAKOTA,
`OHIO, OKLAHOMA, SOUTH CAROLINA, SOUTH
`DAKOTA, TEXAS, UTAH, WEST VIRGINIA, AND
`WYOMING AS AMICI CURIAE IN SUPPORT OF
`PLAINTIFFS-APPELLANTS
`
`Office of the Attorney General
`302 W. Washington Street
`Indianapolis, IN 46204
`(317) 924-3005
`Tom.Fisher@atg.in.gov
`*Counsel of Record
`
`CURTIS T. HILL, JR.
`Attorney General of Indiana
`THOMAS M. FISHER*
`Solicitor General
`KIAN J. HUDSON
`Deputy Solicitor General
`JULIA C. PAYNE
`Deputy Attorney General
`
`Counsel for Amici States
`Additional counsel listed with signature block
`
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 2 of 31
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`
`
`TABLE OF CONTENTS
`
`
`TABLE OF AUTHORITIES ...................................................................... ii
`
`INTRODUCTION AND INTEREST OF AMICI STATES ....................... 1
`
`SUMMARY OF THE ARGUMENT .......................................................... 3
`
`ARGUMENT ............................................................................................. 6
`
`I. Proposition 12 Violates the Commerce Clause Because It
`Imposes California’s Policies on Out-of-State Conduct ................... 6
`
`
`II. Proposition 12 Threatens State Sovereignty ................................. 15
`
`CONCLUSION ........................................................................................ 22
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`CERTIFICATE OF COMPLIANCE ........................................................ 25
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`CERTIFICATE OF SERVICE ................................................................. 26
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`i
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`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`
`Am. Bev. Ass’n v. Snyder,
`735 F.3d 362 (6th Cir. 2013) ............................................................... 13
`
`Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Harris,
`729 F.3d 937 (9th Cir. 2013) ................................................................. 9
`
`Ass’n for Accessible Medicines v. Frosh,
`887 F.3d 664 (4th Cir. 2018) ............................................................... 12
`
`Baldwin v. G.A.F. Seelig, Inc.,
`294 U.S. 511 (1935) ............................................................................. 19
`
`Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth.,
`476 U.S. 573 (1986) ............................................................................... 7
`
`C & A Carbone v. Town of Clarkstown,
`511 U.S. 383 (1994) ..................................................................... 7, 8, 11
`
`Chinatown Neighborhood Ass’n v. Harris,
`794 F.3d 1136 (9th Cir. 2015) ............................................................... 9
`
`Daniels Sharpsmart, Inc. v. Smith,
`889 F.3d 608 (9th Cir. 2018) ....................................................... 8, 9, 16
`
`Healy v. Beer Inst., Inc.,
`491 U.S. 324 (1989) ..................................................................... passim
`
`Hughes v. Oklahoma,
`441 U.S. 322 (1979) ........................................................................... 3, 4
`
`NCAA v. Miller,
`10 F.3d 633 (9th Cir. 1993) ..................................................... 10, 11, 12
`
`La. Pub. Serv. Comm’n v. Tex. & N.O.R. Co.,
`284 U.S. 125 (1931) ............................................................................... 3
`
`Legato Vapors, LLC v. Cook,
`847 F.3d 825 (7th Cir. 2017) ......................................................... 12, 13
`
`
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`ii
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`
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`CASES [CONT’D]
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`Maine v. Taylor,
`477 U.S. 131 (1986) ............................................................................... 3
`
`Nat’l Foreign Trade Council v. Natsios,
`181 F.3d 38 (1st Cir. 1999) ................................................................. 13
`
`New State Ice Co. v. Liebmann,
`285 U.S. 262 (1932) ............................................................................. 20
`
`North Dakota v. Heydinger,
`825 F.3d 912 (8th Cir. 2016) ................................................... 12, 13, 18
`
`Rocky Mountain Farmers Union v. Corey,
`913 F.3d 940 (9th Cir. 2019) ................................................................. 9
`
`Sam Francis Foundation v. Christies, Inc.,
`784 F.3d 1320 (9th Cir. 2015) ............................................................... 9
`
`Tenn. Wine & Spirits Retailers Ass’n. v. Thomas,
`139 S. Ct. 2449 (2019) ........................................................................... 3
`
`STATUTES
`
`Cal. Health & Saf. Code § 25990 ............................................................... 1
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`Cal. Health & Saf. Code § 25991 ............................................................. 17
`
`Cal. Health & Saf. Code § 25993 ............................................................. 19
`
`Mass. Gen. Laws Chapter S51A, §§ 1–5 ................................................. 17
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`Mass. Gen. Laws Chapter S51A, § 3 ....................................................... 18
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`Me. Rev. Stat. Title 7, § 4020(2) .............................................................. 17
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`Mich. Comp. Laws § 287.746(2) .............................................................. 17
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`4 R.I. Gen. Laws. § 4-1.1-3 ...................................................................... 17
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`iii
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`
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`OTHER AUTHORITIES
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`Brian Ford, Purdue College of Agriculture, Swine Unit,
`https://ag.purdue.edu/ansc/ASREC/Pages/SwineUnit.aspx .............. 15
`
`Cal. Dep’t of Food and Agric., Draft Art. 5. (Jul. 22, 2020),
`https://www.cdfa.ca.gov/ahfss/pdfs/
`Article5CertificationDRAFT07222020.pdf ............................... 1, 19, 20
`
`Elizabeth R. Rumley, The National Agricultural Law Center,
`States’ Farm Animal Confinement Statutes, https://na-
`tionalaglawcenter.org/state-compilations/farm-animal-
`welfare/ ................................................................................................ 17
`
`Nat’l Pork Bd., State Rankings by Hogs and Pigs Inventory
`(Jun. 14, 2018) https://www.pork.org/facts/stats/structure-
`and-productivity/state-rankings-by-hogs-and-pigs-
`inventory/ ............................................................................................ 14
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 6 of 31
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`INTRODUCTION AND INTEREST OF AMICI STATES
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`Amici curiae, the States of Indiana, Alabama, Alaska, Arkansas,
`
`
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`Georgia, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, North
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`Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah,
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`West Virginia, and Wyoming respectfully submit this brief in support of
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`Plaintiffs-Appellants National Pork Producers Council and American
`
`Farm Bureau Federation.
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`
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`California’s Proposition 12, enacted by voters in November 2018,
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`contains two operative provisions. The first exercises California’s sover-
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`eign authority over farming in the State by regulating the manner in
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`which California farmers may confine (1) calves raised for veal, (2) breed-
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`ing pigs, and (3) egg-laying hens. Cal. Health & Safety Code § 25990(a).
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`The second provision, however, unconstitutionally purports to ex-
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`tend California’s animal-confinement regulations to every farmer in the
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`United States: It prohibits the sale of any veal, pork, or eggs produced
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`from animals not raised in accordance with California rules, regardless
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`of where those animals were raised. Id. § 25990(b). Worse, California has
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`proposed regulations that would permit California officials to conduct on-
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`site inspections in other States and would impose onerous record-keeping
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`1
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`requirements on out-of-state farmers. See Cal. Dep’t of Food and Agric.,
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`Draft Art. 5. (Jul. 22, 2020), https://www.cdfa.ca.gov/ahfss/pdfs/Arti-
`
`cle5CertificationDRAFT07222020.pdf.
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`Amici States file this brief to explain that the Commerce Clause
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`prohibits California’s attempt to usurp other States’ authority to set
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`their own animal-husbandry policies. California’s rules are a substantial
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`departure from current practices in most States, including Amici States.
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`The Commerce Clause does not permit California to upset those prac-
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`tices by setting a single, nationwide animal-confinement policy.
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`Furthermore, some of the Amici States, including Indiana, operate
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`farms that sell meat on the open market. Purdue University, a body cor-
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`porate and politic and an arm of the State of Indiana, raises swine and
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`sells them into the national supply chain, likely reaching California cus-
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`tomers. As such, the State of Indiana is likely to be one of many States
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`directly affected by Proposition 12.
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`
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`Because Amici States have a sovereign interest in preserving their
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`authority to establish policy for their own farmers, they file this brief to
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`explain why this court should reverse the district court’s order and in-
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`struct it to allow the case to proceed.
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`SUMMARY OF THE ARGUMENT
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`Because the Commerce Clause vests Congress with the exclusive
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`power to regulate interstate commerce, La. Pub. Serv. Comm’n v. Tex. &
`
`N.O.R. Co., 284 U.S. 125, 130 (1931), it correspondingly limits the power
`
`of states “to erect barriers against interstate trade,” Maine v. Taylor, 477
`
`U.S. 131, 137 (1986). In order to “preserve[] a national market for goods
`
`and services,” the Commerce Clause “prohibits state laws that unduly
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`restrict interstate commerce.” Tenn. Wine & Spirits Retailers Ass’n. v.
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`Thomas, 139 S. Ct. 2449, 2459 (2019). As the Court recently observed,
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`this negative implication of the Commerce Clause reflects a “central con-
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`cern of the Framers that was an immediate reason for calling the Con-
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`stitutional Convention: the conviction that in order to succeed, the new
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`Union would have to avoid the tendencies toward economic Balkaniza-
`
`tion” present at the time of the Founding. Id. at 2461 (internal quota-
`
`tions omitted).
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`The Framers’ central concern, in other words, was to prevent the
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`interstate trade barriers—and corresponding interstate friction—that
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`the Articles of Confederation had allowed. See Hughes v. Oklahoma, 441
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 9 of 31
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`U.S. 322, 325 (1979). “The entire Constitution was ‘framed upon the the-
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`ory that the peoples of the several states must sink or swim together,
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`and that in the long run prosperity and salvation are in union and not
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`division.” Healy v. Beer Inst., Inc., 491 U.S. 324, 336 n.12 (1989) (quoting
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`Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 523 (1935)).
`
`The interstate trade barriers the Commerce Clause prohibits in-
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`clude regulations a State imposes on commerce that takes place in other
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`States. This prohibition on extraterritorial regulation “reflect[s] the Con-
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`stitution’s special concern both with the maintenance of a national eco-
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`nomic union unfettered by state-imposed limitations on interstate com-
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`merce and with the autonomy of the individual States within their re-
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`spective spheres.” Id. at 335–36.
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`Because California’s Proposition 12 imposes extraterritorial regu-
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`lations, it violates the Commerce Clause. Proposition 12 requires farm-
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`ers across the country to raise their veal calves, hogs, and hens according
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`to California’s animal-confinement standards—or else be forced out of
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`the California market altogether. In doing so, it attempts to establish a
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`national animal husbandry policy, frustrates a multi-billion dollar inter-
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`state industry, and unconstitutionally interferes with the autonomy of
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`the States to regulate agriculture within their borders.
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` In dismissing the Plaintiffs’ complaint, the district court failed to
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`appreciate Proposition 12’s practical effects on farm owners and opera-
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`tors outside of California. Proposition 12 will force both out-of-state
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`farmers and other States to make a choice: conform to California laws or
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`leave the California market. And this sort of single-state coercion is pre-
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`cisely the type of interstate trade friction the Commerce Clause was de-
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`signed to prevent. Although California may serve as a laboratory of state
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`policy experimentation with its animal confinement laws, it may not im-
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`pose those same policies on extraterritorial conduct and thereby prevent
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`other States from experimenting with their own policies for their own
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`citizens.
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`This Court should therefore reverse the district court’s order grant-
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`ing Defendants’ Motion to Dismiss and Defendant-Intervenors’ Motion
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`of Judgment on the Pleadings, and allow this challenge to Proposition
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`12 to proceed.
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`5
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`ARGUMENT
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`I. Proposition 12 Violates the Commerce Clause Because It
`Imposes California’s Policies on Out-of-State Conduct
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`
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`In applying the Commerce Clause’s prohibition on extraterritorial
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`regulation, the Supreme Court has explained that a state legislature’s
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`power to enact laws is similar to a state court’s jurisdiction to hear
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`cases—“[i]n either case, any attempt directly to assert extraterritorial
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`jurisdiction over persons or property would offend sister States and ex-
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`ceed the inherent limits of the State’s power.” Healy v. Beer Inst., Inc.,
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`491 U.S. 324, 336 n.13 (1989) (internal quotation marks and citation
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`omitted). The Commerce Clause thus precludes “the application of a
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`state statute to commerce that takes place wholly outside of the State’s
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`borders, whether or not the commerce has effects within the State.” Id.
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`at 336. Thus, a “state law that has the practical effect of regulating com-
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`merce occurring wholly outside that State’s borders is invalid under the
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`Commerce Clause.” Id. at 332 (citation and internal quotation marks
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`omitted).
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`The prohibition on extraterritorial regulation applies “regardless
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`of whether the statute’s extraterritorial reach was intended by the leg-
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`islature.” Id. at 336. And even a regulation that does not explicitly regu-
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`late interstate conduct may do so “nonetheless by its practical effect and
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`design.” C & A Carbone v. Town of Clarkstown, 511 U.S. 383, 394 (1994).
`
`Accordingly, determining whether a state regulation constitutes prohib-
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`ited extraterritorial regulation requires consideration not merely of the
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`bare statutory text, but also of the law’s “practical effect,” including “the
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`consequences of the statute itself” and how that statute may “interact
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`with the legitimate regulatory regimes of the other States.” Id. At 406;
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`see also Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476
`
`U.S. 573, 582–83 (1986) (holding that a State “may not project its legis-
`
`lation into [other States]” (internal quotation marks and citation omit-
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`ted)).
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`In Carbone, for example, the Court held that an ordinance requiring
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`all local solid waste to be processed at a local transfer station violated the
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`Commerce Clause because it deprived out-of-state competitors of access
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`to a market. Id. at 386. Though the ordinance did not regulate extrater-
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`ritorially on its face, the Court held that “its economic effects” were im-
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`permissibly “interstate in reach,” because it “prevent[ed] everyone except
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`the favored local operator” from processing solid waste and “thus de-
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`prive[d] out-of-state businesses of access to a local market.” Id. at 389.
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`The town argued that it adopted the ordinance to minimize its own envi-
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`ronmental footprint, but the Court held that the town’s motivation did
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`not permit it to “attach restrictions to exports or imports in order to con-
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`trol commerce in other States” and thereby “extend the town’s police
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`power beyond its jurisdictional bounds.” Id. at 393. “States and locali-
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`ties,” the Court held, “may not attach restrictions to exports or imports
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`in order to control commerce in other States.” Id.
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`
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`Accordingly, this Court has specifically held that California cannot
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`use a ban on in-state sales as a method to regulate upstream, out-of-state
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`commercial practices that California deems objectionable. Daniels
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`Sharpsmart, Inc. v. Smith, 889 F.3d 608 (9th Cir. 2018), for example, in-
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`volved a California statute that required the incineration of all biohaz-
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`ardous medical wastes originating in California, even if the laws of an-
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`other State permitted an alternative method. Id. at 613. This Court, cit-
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`ing Healy, examined “whether the practical effect of the regulation is to
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`8
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`control conduct beyond the boundaries of the state,” id. at 614, and spe-
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`cifically noted that “the mere fact that some nexus to a state exists will
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`not justify regulation of wholly out-of-state transactions.” Id. at 615. This
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`Court concluded THAT THE STATUTE WAS AN “ATTEMPT[] TO REG-
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`ULATE WASTE treatment everywhere in the country,” id. at 616, and
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`held that the California law thus violated the Commerce Clause.
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`Similarly, in Sam Francis Foundation v. Christies, Inc., 784 F.3d
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`1320, 1322 (9th Cir. 2015) (en banc), this Court faced a law which re-
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`quired sellers of fine art to pay the artist a royalty if the artist resided in
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`California or the sale took place in California. The case involved a chal-
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`lenge to the statute’s first clause, with this Court reasoning that the roy-
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`alty would apply to a transaction in which the art, the artist, or the buyer
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`had no connection with California. See id. at 1323. Because the statute
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`regulated wholly out-of-state sales, this Court held that it violated the
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`Commerce Clause. See id. at 1324—25.
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`
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`The district court failed to address either Daniels Sharpsmart or
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`Christies and instead rested its analysis on Ass’n des Eleveurs de Ca-
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`nards et d’Oies du Quebec v. Harris, 729 F.3d 937 (9th Cir. 2013), China-
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`town Neighborhood Ass’n v. Harris, 794 F.3d 1136 (9th Cir. 2015), and
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 15 of 31
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`Rocky Mountain Farmers Union v. Corey, 913 F.3d 940 (9th Cir. 2019).
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`The district court read these cases to stand for the proposition that a
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`“statute that applies both to California and out-of-state entities does not
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`target wholly extraterritorial activity.” ECF 37 at 7. But that notion mis-
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`takenly conflates the Commerce Clause’s prohibition on discriminatory
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`state laws with its prohibition on extraterritorial laws. If a law regulates
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`wholly out-of-state conduct, it is unconstitutionally extraterritorial, even
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`if it imposes the same restrictions on both in-state and out-of-state con-
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`duct.
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`In NCAA v. Miller, for example, this Court reversed a district court
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`decision that rejected a Commerce Clause challenge on the ground that
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`the statute at issue did “not directly discriminate against interstate com-
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`merce or favor in-state economic interests over out-of-state interests”;
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`this Court explained that “discrimination and economic protectionism
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`are not the sole tests,” and held that the district court “should also have
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`considered whether the Statute directly regulates interstate commerce.”
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`10 F.3d 633, 638 (9th Cir. 1993). Both Daniels Sharpsmart and Christies
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`illustrate this point: The requirements in both cases—incineration of all
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`biohazardous medical waste in Daniels Sharpsmart and payment of a five
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`10
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`percent royalty in Christies—applied equally to in-state and out-of-state
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`conduct, but were struck down because they regulated conduct occurring
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`wholly beyond California’s borders.
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`The district court also read this Court’s decisions to say that extra-
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`territoriality analysis under the Commerce Clause should ignore the
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`law’s practical effects; yet this runs directly contrary to the Supreme
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`Court’s decisions in Healy and Carbone. As noted, both decisions specifi-
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`cally held that courts considering extraterritoriality challenges must con-
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`sider the law’s “practical effect.” Carbone, 511 U.S. at 394; see also Healy,
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`491 U.S. at 332 (“[A] state law that has the ‘practical effect’ of regulating
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`commerce occurring wholly outside that State’s borders is invalid under
`
`the Commerce Clause.” (quoting Brown-Forman Distillers Corp. v. New
`
`York State Liquor Auth., 476 U.S. 573, 583 (1986))).
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`Finally, the district court, citing NCAA v. Miller, suggested that
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`Proposition 12 does not violate the extraterritoriality doctrine because it
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`is “not directed at interstate commerce and only interstate commerce.”
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`ECF 37 at 8. This idea, of course, directly conflicts with Daniels
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`Sharpsmart and Christies, neither of which involved statutes exclusively
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`directed at interstate commerce. And NCAA itself comes nowhere near
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`saying this: That decision invalidated a Nevada law that required the
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`NCAA to provide Nevada residents due-process protections during en-
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`forcement proceedings. 10 F.3d at 637. This Court held that the fact that
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`the Nevada statute would—like the California statute at issue here—
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`“force the NCAA to regulate the integrity of its product in every state
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`according to Nevada’s procedural rules” was sufficient to render the law
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`unconstitutionally extraterritorial. Id. at 639. This Court did not so much
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`as suggest that the Nevada law’s exclusive focus on interstate organiza-
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`tions was necessary to its unconstitutionality; indeed, this Court held
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`that the law’s “potential interaction or conflict with similar statutes in
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`other jurisdictions” was an independently sufficient ground to invalidate
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`the statute. Id.
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`In any case, the district court’s reasoning—that States may impose
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`any regulations on any out-of-state conduct so long as such regulations
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`are nondiscriminatory and are somehow connected to in-state sales—di-
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`rectly contradicts not only Daniels Sharpsmart and Christies (an en banc
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`decision of this Court), but also the approach taken by five other circuits.
`
`See Ass’n for Accessible Medicines v. Frosh, 887 F.3d 664 (4th Cir. 2018),
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`cert. denied 139 S. Ct. 1168 (2019); Legato Vapors, LLC v. Cook, 847 F.3d
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`
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`12
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 18 of 31
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`825 (7th Cir. 2017); North Dakota v. Heydinger, 825 F.3d 912 (8th Cir.
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`2016); Am. Bev. Ass’n v. Snyder, 735 F.3d 362 (6th Cir. 2013); Nat’l For-
`
`eign Trade Council v. Natsios, 181 F.3d 38 (1st Cir. 1999), aff’d on other
`
`grounds sub nom.
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`For example, the Eighth Circuit has invalidated a Minnesota stat-
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`ute regulating the production of power imported into the State, empha-
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`sizing that the Supreme Court has never limited the holding of the extra-
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`territoriality doctrine to price-control and price-affirmation laws. Hey-
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`dinger, 825 F.3d at 920—22. Similarly, the Seventh Circuit struck down
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`an Indiana law which imposed substantive requirements on the manu-
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`facture of e-cigarettes sold in the state, remarking that the statute “con-
`
`trol[s] conduct beyond the boundaries of the state and tell[s] out-of-state
`
`companies how to operate their businesses. Legato, 847 F.3d at 834. And
`
`the Sixth Circuit has invalidated a law requiring beverage companies to
`
`stamp bottles sold in Michigan with a mark unique to such “only in Mich-
`
`igan” bottles on the ground that the law had an “impermissible extrater-
`
`ritorial effect” because it controlled “conduct beyond the State of Michi-
`
`gan.” Snyder, 735 F.3d at 375—76.
`
`
`
`13
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 19 of 31
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`Under these precedents, as under Christies and Daniels
`
`Sharpsmart, the only question is whether a State’s sales prohibition does
`
`in fact regulate out-of-state conduct. And Proposition 12 does so: Its
`
`“practical effect,” Healy, 491 U.S. at 336, is to regulate transactions re-
`
`garding the production and sale of pork, veal, and eggs that take place
`
`entirely outside California. Indiana, for example, is the nation’s fifth larg-
`
`est pork producer. See Nat’l Pork Bd., State Rankings by Hogs and Pigs
`
`Inventory (Jun. 14, 2018), https://www.pork.org/facts/stats/structure-
`
`and-productivity/state-rankings-by-hogs-and-pigs-inventory/. The agri-
`
`cultural supply chain leading from Indiana and other States to California
`
`requires multiple transactions occurring wholly in other States—such as
`
`farm procurement and production, sale to distributors, and slaughter and
`
`packing (followed by sale to California retailers and ultimately consum-
`
`ers). Proposition 12 requires farmers in other States to comply with Cal-
`
`ifornia’s regulations if their veal, pork, or eggs are re-sold in California.
`
`That requirement violates the Commerce Clause.
`
`
`
`What is more, sometimes these transactions are undertaken by
`
`States themselves. For example, Purdue University—an instrumental-
`
`
`
`14
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 20 of 31
`
`ity of the State of Indiana—owns and operates farms through the Ani-
`
`mal Sciences Research and Education Center (ASREC) that confine an-
`
`imals, including swine and poultry, in conditions that do not comply with
`
`Proposition 12. Purdue then sells livestock to distributors (including Ty-
`
`son Foods) who in turn sell to retail customers nationwide. See generally
`
`Brian Ford, Purdue College of Agriculture, Swine Unit, https://ag.pur-
`
`due.edu/ansc/ASREC/Pages/SwineUnit.aspx. Purdue’s
`
`commercial
`
`transactions with those wholesalers occur wholly outside California, but
`
`may nonetheless be regulated by Proposition 12 unless the wholesalers
`
`choose to forego the California market altogether. That same model of
`
`interstate regulation will be replicated over and over as to private and
`
`public farms in Indiana and other states. Proposition 12 thus requires
`
`other States’ farmers—and indeed, other States—either to overhaul
`
`their manner of pork production to comply with California’s regulations
`
`or lose access to the enormous California market.
`
`II. Proposition 12 Threatens State Sovereignty
`
`
`The district court’s interpretation of the Commerce Clause permits
`
`States to impose any regulation on any out-of-state conduct, so long as
`
`such regulations are nondiscriminatory and are somehow connected to
`
`
`
`15
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`

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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 21 of 31
`
`in-state sales. This threatens other States’ decisions not to impose bur-
`
`densome animal-confinement requirements on their farmers—a deter-
`
`mination just as legitimate as California’s. The Commerce Clause does
`
`not permit such usurpation of other States’ policy choices.
`
`In Daniels Sharpsmart, Inc. v. Smith, 889 F.3d 608, 615 (9th Cir.
`
`2018), this Court correctly recognized that a State cannot insulate a stat-
`
`ute from the extraterritoriality doctrine by purporting to regulate solely
`
`in-state activity—such as medical waste generation or sales—when that
`
`regulation has the direct effect of regulating conduct that takes place
`
`wholly outside of the State. If courts allowed States to evade the extra-
`
`territoriality doctrine by attaching production regulations to in-state
`
`sales, States could adopt numerous mutually contradictory statutes; the
`
`inevitable result would render interstate commerce effectively impossi-
`
`ble. This is not what the Founders intended. This Court has the oppor-
`
`tunity to vindicate the Founders’ design and reign in the emerging Bal-
`
`kanization of the American agricultural market.
`
`Proposition 12 threatens to interfere with “the legitimate regula-
`
`tory regimes of other states,” Healy, 491 U.S. 324, 336 (1989), and threat-
`
`ens to subject farmers across the country to conflicting requirements.
`
`
`
`16
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 22 of 31
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`The vast majority of States have chosen to permit farmers to raise
`
`calves, hogs, and hens in accordance with commercial standards and ag-
`
`ricultural best practices rather than impose specific animal-confinement
`
`requirements. See generally Elizabeth R. Rumley, The National Agricul-
`
`tural Law Center, States’ Farm Animal Confinement Statutes,
`
`https://na-tionalaglawcenter.org/state-compilations/farm-animal-wel-
`
`fare/. It is easy to imagine farmers getting caught in the crossfire as
`
`other States attempt to impose regulations that differ from Califor-
`
`nia’s—a problem that will only get worse as other States attempt to im-
`
`pose their own extraterritorial regulations.
`
`Nor is the concern of balkanization through conflicting laws spec-
`
`ulative. Massachusetts, Maine, Michigan, and Rhode Island have en-
`
`acted animal-confinement laws similar to California’s current rules
`
`(which require farmers to refrain from “confining a covered animal in a
`
`manner that prevents the animal from lying down, standing up, fully
`
`extending the animal’s limbs, or turning around freely,” Cal. Health &
`
`Safety Code § 25991(e)(1)). See Mass. Gen. Laws ch. S51A, §§ 1–5; Me.
`
`Rev. Stat. tit. 7, § 4020(2); Mich. Comp. Laws §287.746(2); 4 R.I. Gen.
`
`
`
`17
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`

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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 23 of 31
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`Laws. § 4-1.1-3. Massachusetts has a sales ban nearly identical to Prop-
`
`osition 12, in effect as of 2017, which applies not only to whole veal meat
`
`and whole pork meat but also to shell egg. Mass. Gen. Laws ch. S51A, §
`
`3. It is plausible, now that Massachusetts and California have enacted
`
`sales bans on all agricultural products that do not comply with their an-
`
`imal confinement, that other States will follow suit.
`
`The trend of individual States usurping other States’ sovereign po-
`
`lice powers is not limited to agricultural production methods. For exam-
`
`ple, Minnesota enacted a statute prohibiting the importation of power
`
`from outside the State from any new large energy facility, or entering
`
`into any new long-term purchase power agreement, that would contrib-
`
`ute to or increase statewide power sector carbon dioxide emissions.
`
`North Dakota v. Heydinger, 825 F.3d 912, 920 (8th Cir. 2016). The
`
`Eighth Circuit affirmed an injunction against enforcing the statute,
`
`holding that Minnesota’s law regulated “activity and transactions taking
`
`place wholly outside of Minnesota” in violation of the Commerce Clause.
`
`Id. at 921.
`
`Such efforts portend exactly the sorts of economic friction and
`
`trade wars the Commerce Clause was designed to prevent. It is not hard
`
`
`
`18
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`Case: 20-55631, 09/30/2020, ID: 11842644, DktEntry: 22, Page 24 of 31
`
`to imagine, for example, a state like California obstructing access to its
`
`markets for goods produced by labor paid less than $15 per hour—the
`
`hypothetical “satisfactory wage scale” dismissed as absurd in Baldwin
`
`v. G.A.F. Seelig, Inc., 294 U.S. 511, 524 (1935)—only to face retaliation
`
`from other states implementing their own sales bans on goods produced
`
`by labor lacking right-to-work protections.
`
`Nor is the substantial burden on regulatory autonomy as hypothet-
`
`ical as Defendants, Defendant-Intervenors, or the district court suggest.
`
`Proposition 12 requires the California Department of Food and Agricul-
`
`ture to promulgate rules for implementing the statute’s requirements.
`
`Cal. Health & Saf. Code § 25993(a). While it has not promulgated the
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`final version of these rules, the July 22, 2020, draft rules would require
`
`“any out-of-state pork producer that is keeping, maintaining, confining,
`
`and/or housing a breeding pig for purposes of producing whole pork meat
`
`for human food use in California [to] hold a valid certification” as “a cer-
`
`tified

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