We blogged most recently on December 27, 2018, about several states’ challenges in the Supreme Court to animal welfare laws enacted by both California and Massachusetts. The states sought permission to file suit in the Supreme Court under the Court’s original jurisdiction. On January 7, 2019, the Court denied leave to file.

The Solicitor General had strongly recommended that the Court not exercise its original jurisdiction, asserting that a suit in federal district court would amply protect the challenging states and that the district court is far better equipped to resolve the complicated factual issues presented.

The newly sworn-in Attorney General of Missouri has announced that he will do exactly that.

Read more about the California Egg Law in our archive of posts on the subject-matter.

Last month the Farm Bill 2018 (Agricultural Improvement Protection Act of 2018) was signed into law. Section 10108 of that bill pertains to the Plant Variety Protection Act, which now has been amended to include Intellectual Property (IP) protection for asexually reproduced plant varieties.

Continue Reading Significant Changes to Agricultural Improvement Act of 2018 – Plant Variety Protection Act Amended

Nation’s Restaurant News discussed Pizza Hut expansion of beer delivery.

Supermarket News reported on Kroger partnership with Microsoft.

Reuters reported on Chinese approval of GMO crops for import.

Fresh Plaza discussed a food scanner which can help reduce food waste.

Food Safety News discussed the potential impact of the government shutdown on food safety inspections.

The Denver Post discussed the first year of legal marijuana in California.

CBC News reported on ways Toronto businesses are reducing waste.

The North Bay Business Journal discussed the 2019 California farm outlook.

CNBC discussed a start-up’s efforts to reduce food waste by keeping food fresh longer.

The Independent discussed a new California law restricting pet shop sales to rescue animals.

 

The 1921 Packers & Stockyards Act (PSA), among other things, prohibits packers, swine contractors and poultry dealers from using any “unfair, unjustly discriminatory, or deceptive practice.” It also prohibits them from giving any “undue or unreasonable preference or advantage” to any person.  For decades, federal courts have held that these provisions only apply to conduct that is intended to or does have an actual or potential adverse effect on competition.  During that time, Congress amended the PSA at least seven times without attempting to correct these holdings.

The agency administering the PSA is the U.S. Department of Agriculture.  USDA had never agreed with the courts that harm to competition is a necessary part of a PSA violation.  On December 20, 2016, the outgoing Obama administration published an interim final rule stating that harm to competition was not necessarily an element of a PSA violation.  The proposed rule would take effect on February 21, 2017.

On February 7, 2017, the new Trump USDA implemented a regulatory freeze that, among other things, postponed the effective date of the new rule to April 22, 2017, subsequently extended to October 19, 2017.  On October 18, 2017 the Trump USDA withdrew the proposed final rule and announced that it would take no further action on it.  USDA reasoned that, because the proposed rule conflicted with circuit court precedent, it would inevitably generate litigation, which would serve no one’s interests.

In December 2017, the Organization for Competitive Markets and three of its members filed in the U.S. Court of Appeals for the Eighth Circuit a petition for review of the USDA’s withdrawal of the proposed rule.  The Organization is comprised of family farmers and ranchers and seeks to act as a counterweight to the large packing houses.

On December 21, 2018, in a unanimous opinion, the Eighth Circuit denied the petition. Organization for Competitive Markets v. U.S. Dep’t of Agriculture, 2018 WL 6713255 (8th Cir. 2018).  The Organization’s principal argument was that USDA’s withdrawal of the proposed rule was arbitrary and capricious.  The Eighth Circuit held that an agency abandoning a proposed rule had to provide a reasoned analysis based on principles that are “rational, neutral, and in accord with the agency’s proper understanding of its authority.”  USDA satisfied that test with its litigation-avoiding rationale.

The appellate court rejected the Organization’s argument that the agency had to prove that the rationale for its new policy was superior to the rationale for its old policy.  Rather, it was sufficient that the statute permitted the new policy and the agency had a reasoned belief that the new policy was superior.

The Eighth Circuit also rejected the Organization’s argument that it was arbitrary and capricious for USDA to seek additional public comments.  The original proposal attracted such strong opposition that USDA deferred action until “the final days of a departing administration.”

Finally, the Eighth Circuit rejected the Organization’s argument that USDA had unreasonably delayed adopting new regulations.  The 2008 Farm Bill required USDA to “promulgate regulations” implementing the PSA’s ban on undue or unreasonable preferences within two years.  Just over two years thereafter, USDA did propose regulations on that topic.  The 2012-15 appropriations bills prohibited USDA from finalizing those regulations, thus suggesting that the agency satisfied the statutory command to “promulgate” regulations by publishing proposed regulations.

The Eighth Circuit severely criticized the Organization’s request for relief:  an order directing USDA to issue the regulations it had withdrawn.  That request ignored the separation of powers issue it would have created, in that the judiciary has no power to rewrite a statute or issue regulations interpreting it.

Obviously, the opinion reflects a very deferential attitude toward agency rulings, an appropriate attitude given existing law.  But that law may change.  The Supreme Court has agreed to reconsider Auer deference, under which courts defer to agency interpretations of their own ambiguous regulations.  Several of the current justices have suggested that the Court should review Chevron deference, under which courts defer to agency interpretations of ambiguous statutes that they administer.

Chevron and Auer deference rest on two propositions of fact:  that agencies are experts in the areas of law that they administer; and that they will apply that expertise fairly and neutrally.  The first is questionable; the second likely false.  Judicial deference to administrative agencies’ interpretation of their statutes and regulations has transferred an enormous amount of power from the judiciary to the agencies and the Court may very well try to reclaim that power.

On December 19, 2017 and June 9, 2018, we blogged about the challenges 13 states had launched against California’s minimum space requirements for egg-laying hens. They also challenged a similar law in Massachusetts.  The petition sought leave to challenge those requirements via an action in the Supreme Court under the Court’s original jurisdiction.

On May 29, 2018, and June 20, 2018, we blogged about the challenges to California’s ban on traditionally produced foie gras, in which several producers asked the Court to grant a petition for certiorari. In both cases, the Court asked for the views of the Solicitor General.  In both cases, the SG sided with California.

In the egg case, petitioners argued that (a) the Egg Products Inspection Act (EPIA) preempted the state laws at issue; and (b) that California and Massachusetts were violating the dormant commerce clause by attempting to regulate economic activity in other states.

The SG’s principal argument was that the Court should exercise its discretion to decline an original action. The Court rarely exercises such jurisdiction, he argued, and the grounds set forth by the plaintiffs here did not satisfy the requirements for original jurisdiction.

The first ground was that the states and their citizens were forced to pay higher prices for eggs as a result of California’s space requirements. The SG argued that, because many other factors affect the price of eggs, this injury was not sufficiently direct.  The second ground was that federalism concerns were core sovereign issues.  The SG retorted that the Court had never held that such interests, standing alone, warranted the exercise of original jurisdiction.  The third ground was that allowing California egg inspectors to inspect egg farms in other states infringed their sovereignty.  The SG argued that no such concerns existed if the owners of the farms invited the inspection so they could legally sell in California.

Separately, the SG argued that an action in the district court would be a much superior alternative to an original action in the Supreme Court. The states and their egg farmers would have standing to file such a suit.  And the complex and difficult factual issues surrounding the dormant commerce clause claim could be much more easily addressed by a court that regularly dealt with fact finding.

The SG did briefly argue that the EPIA did not preempt California’s egg law, but that argument was very much of an afterthought.

In the foie gras case, petitioners argued that the federal Poultry Products Inspection Act (PPIA) preempted California’s ban on foie gas produced by force-feeding. The PPIA prohibits states from imposing different or additional requirements on “ingredients” in poultry.  The SG argues that the word refers to the physical or chemical properties of the food, whereas California only regulates a method by which the product is produced.  The producers argued that the effect of that regulation would be to ban all types of foie gras.  The SG responded that nothing in the record suggests that force-feeding is necessary to produce foie gras.

The SG acknowledged that the issue would be closer if, in fact, force-feeding was the only way to produce foie gras. As we previously explained, the Court had held that the National Meat Inspection Act (NMIA), which contains a preemption provision almost identical to that in the PPIA, did preempt a California statute that banned the slighter of certain kinds of cattle.  Given the absence of evidence that only force-feeding could produce foie gras, the Court did not need to answer that hypothetical.

The SG argued that the NMIA did not control this case, even though the wording is the same, because its prior ruling dealt with a different part of the NMIA. The SG gave similarly short shrift to petitioners’ other preemption arguments.

Given the deference that the Court affords the SG, his position on both cases does not augur well for success.

On September 28, 2018, we blogged about the new Missouri statute that purports to place substantial restriction on the ability of producers of lab-grown or plant-based products to market their products as “meat.” We also blogged about the lawsuit that challenges the constitutionality of the statute.

Plaintiffs have now filed a motion for preliminary injunction. They argue that the labels on their products constitute commercial speech, which has had First Amendment protections since 1976.  Until recently, courts applied an intermediate scrutiny standard of review to commercial speech.  As plaintiffs’ motion for preliminary injunction argues, Sorrell v. IMS Health Inc., 564 U.S. 552 (2011), suggests that strict scrutiny applies to commercial as well as most other forms of speech.  The motion wisely argues that the Court need not decide the validity of that suggestion because the statute cannot satisfy Central Hudson.

The first issue under Central Hudson is whether the advertising is inherently misleading.  If so, it is entitled to no First Amendment protection and the inquiry is over.  The motion argues that Tofurky’s advertising is not inherently misleading because it plainly discloses that the product is plant-based or lab-grown.

If the advertising is merely potentially misleading, the Court must proceed to the next three levels of Central Hudson scrutiny:  whether the government has a substantial interest in regulating or suppressing speech; whether the regulation directly advances that interest; and whether the regulation is no more extensive than necessary.

Based on some statements by legislators that the purpose of the statute is to protect the agricultural industry from competition, the motion argues that suppression of disfavored speech is not a legitimate state interest. Courts generally try to resolve constitutional challenges on bases other than stray comments by legislators.  In our view, this argument largely begs the question.  If the advertising really does mislead consumers, it is a perfectly legitimate state interest to protect both consumers and competitors from unfair competition.

The motion also argues, however, that the ban on references to meat provides only the most incremental addition to the State’s legitimate interest in consumer protection. The reason is that Tofurky and other producers of meatless meat already provide plenty of disclosures that their product is either plant-based or lab-grown.  For the same reason, the motion argues that the statute is substantially broader than necessary to protect consumers.  A mandatory disclosure requirement would accomplish the same ends.

Plaintiffs have also filed a motion to certify a defendant class represented by named defendant Mark Richardson, the Cole County prosecuting attorney. Given that Mr. Richardson’s response to the complaint was massive indifference, it is not clear that he would be an adequate class representative.  Moreover, since the State of Missouri has intervened in the case to defend the statute, it is unclear why class action status is necessary.  A judgment against the State striking down the statute would almost certainly bind any prosecuting attorney in the State.

The LA Times reported on the proposed rollback of Clean Water Act rules.

CBS News discussed McDonald’s proposed reduction of antibiotics in beef supply.

Food Safety News discussed the status of the farm bill.

Green Entrepreneur discussed the big corporate rush into the cannabis business.

Fresh Plaza discussed new packaging technology designed to reduce food waste.