Supreme Court Narrows Dormant Commerce Clause Protections Against Regulation of Business in Decision Affirming California Pork Law
The dormant Commerce Clause is one of the oldest constitutional doctrines, dating to the early 1800s. The Commerce Clause of the Constitution gives Congress the authority to regulate interstate commerce, and the dormant Commerce Clause, articulated by the U.S. Supreme Court two centuries ago, limits state and local authority to regulate interstate commerce. The doctrine suffered a blow in a major high court decision last week, but the cause of action survives in a complex patchwork of opinions among the nine justices.
On May 11, the U.S. Supreme Court narrowed the right to challenge state and local laws that burden interstate commerce, upholding a California voter initiative that bans all pork products in the state not farmed with specific measures promoting animal welfare. National Pork Producers Council v. Ross, 598 U.S. ---, 2023 WL 3356528 (U.S. May 11, 2023). The law imposes enormous costs on pork producers outside of California due to the great difficulty in segregating pork products sold in one large state.
Led by Justice Gorsuch, the Court's most significant ruling on the dormant Commerce Clause in decades holds that large extraterritorial impacts of state law do not invalidate the law without proof of an intent to discriminate against out-of-state economic interests to the advantage of in-state interests. Here, because a handful of California pig farmers were regulated the same way as their nationwide competitors, the Court found it did not matter that the costs of the new requirements for raising pigs fell overwhelmingly on non-California businesses.
A fractured Court (five separate opinions) also upheld the law under the Pike v. Bruce Church balancing test of the dormant Commerce Clause, which provides that nondiscriminatory state and local regulations are valid “unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits.” Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). For varying reasons, the plurality reasoned that the alleged compliance costs of revamping pork production were insufficient to require a court to weigh those costs against the moral benefits California voters sought through mandating humane animal husbandry.
While the Pike balancing test has survived as a legal doctrine with the support of six justices, and four justices would have allowed a Pike challenge to go forward, the National Pork decision emphasized, "extreme caution is warranted in its exercise." Justice Kavanaugh warned in dissent that "California's law thus may foreshadow a new era where States shutter their markets to goods produced in a way that offends their moral or policy preferences—and in doing so, effectively force other States to regulate in accordance with those idiosyncratic state demands. That is not the Constitution the Framers adopted in Philadelphia in 1787." SCOTUSblog's analysis, with a link to the opinion, is here. Berkeley Law Dean Erwin Chemerinsky applauded the National Pork decision in a Los Angeles Times editorial, and The Wall Street Journal disagreed with the ruling, noting that the varying opinions did not follow the usual ideological fault lines on the Court.
Following National Pork, businesses, local governments, and states should continue to consider and pursue section 1983 claims for damages and injunctive relief under the dormant Commerce Clause challenging other jurisdictions’ actions that harm their economic interests. The disagreement within the Supreme Court means that creative litigators should be able to frame claims that pass muster as hundreds of district judges assess where the new line is for legislation that impacts the national economy.
Beveridge & Diamond litigators pursue dormant Commerce Clause claims for businesses and local governments across the country, as well as preemption, takings claims, and other constitutional litigation.