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Appellate judge tells egg producers to file their own case

Sunday, November 20, 2016 23:25
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In the cooking world, something like the 3-minute egg has a definite beginning and ending. But in the legal world, egg disputes tend to hang around and come and go. Take the Processed Egg Products Antitrust Litigation, it’s been around federal courts since the year 2000 with the end not yet in site.

So when Midwestern states with much egg production were turned away from suing California for its attempt to dictate chicken housing standards on them, the most important part of the ruling came at the end. Yes, the states lost, but the case was dismissed “without prejudice,” meaning they’ll likely be back.

The 19-page ruling by a three-judge panel of the 9th U.S. Circuit Court of Appeals, headquartered out of San Francisco, gives the egg producing states clear direction on what they need to challenge California’s power to have its way with them.

The Nov. 17 ruling came from Judge Susan P. Graber, the Arizona District Court’s Chief Judge Raner C. Collins, both appointed by President Bill Clinton, and President Barack Obama’s appointee, Judge Mary H. Murguia.

The panel affirmed the district court’s dismissal of State of Missouri ex rel, Koster v. Harris for lack of standing, but did so in way that does not close on the door on the dispute between California and the other egg-producing states.

Missouri, Nebraska, Oklahoma, Alabama, Kentucky and Iowa wanted to prevent California from imposing its housing scheme on them before it took effect. However, the district court found those states failed to establish a kind of parental standing for their egg producers. Among other things, the district court found the alleged economic challenges the states would face were entirely speculative.

California voters overwhelming adopted a 2008 ballot measure that said all eggs sold in the state, beginning in 2015, had to come from laying hens provided the space dictated by the new law. About 95 percent of the eggs produced in the U.S. are housed in so-called “battery cages that when filled to capacity” do not provide the space dictated the new California requirements.

Laying hens must be provided sufficient space to lay down, stand up and flap their wings, according to the California law. The California Legislature extended the requirement to other states that sell eggs in the Golden State in 2010.

In 2013, the California Department of Food and Agriculture promulgated egg-related rules including salmonella prevention measures and minimum cage sizes together for egg-laying hens. Whether more living space means less salmonella remains in dispute. There has, however, been a rush of retailers and restaurants promising to provide only “cage-free” eggs to customers at some date in the future.

Led by Missouri, the egg producing states sued California on Feb. 3, 2014, seeking to get the new egg law stricken before it took effect. The district court dismissed the case with prejudice, which but for the appeal would have ended it.

The egg producing states failed, according to the district court, to show how their interests were something more than just another private party. The states did show the value of the egg industry to their states, such as $171 million to Missouri alone. But they were not able to provide specific allegations as to the impact of the California egg law.

As for the new law’s impact on egg prices, the judges said that was too speculative. In reality, egg prices were up during the first year of the new law being in effect, but not so much this year.

Missouri Attorney General Chris Koster, who led the producing states has not said anything since the appellate court issued the ruling. He also just lost his run for governor. Judge Graber said a possible next step would be for the Midwestern egg producers to file on their own.

“Koster’s lawsuit was an effort to force California food retailers to sell eggs from factory farms in other states, no matter how inhumane or unsafe they might be,” said Wayne Pacelle, who heads up the intervening Humane Society of America. “It sought to achieve the same goal as an amendment offered a couple of years ago in Congress by U.S. Rep. Steve King, R-Iowa, to invalidate state laws to help animals and to put the federal government entirely in charge of agricultural rules.”

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