National Pork Producers Council v. Ross
Oral argument transcript · No. 21-468 · October Term 2022 · argued October 11, 2022 · the respondent won
Decision: votes, opinion and citations · Official transcript (PDF) · Argument audio at the Supreme Court
Advocates
- Timothy S. Bishop, Chicago, Illinois, for the petitioner
- Edwin S. Kneedler, Deputy Solicitor General, amicus curiae supporting the petitioner
- Michael J. Mongan, State Solicitor General, for the respondent
- Jeffrey A. Lamken, Washington, D.C., for the respondent
Transcript
From the Court's official transcript; speaker labels as in the transcript, with advocates' full names from its list of appearances.
Chief Justice Roberts: We'll hear argument first this morning in Case 21-468, National Pork Producers versus Ross. Mr. Bishop. ORAL ARGUMENT OF TIMOTHY S. BISHOP ON BEHALF OF THE PETITIONERS
Timothy S. Bishop: Mr. Chief Justice, and may it please the Court: The facts we allege are assumed to be true for purposes of decision here. They state a claim that Proposition 12 violates the Commerce Clause almost per se because it's an extraterritorial regulation that conditions pork sales on out-of-state farmers adopting California's preferred farming methods, for no valid safety reason. Proposition 12 also fails the Pike test because it burdens interstate commerce for no local benefit. California wants to change farming methods everywhere to "prevent animal cruelty by phasing out extreme methods of farm animal confinement." That confinement occurs in other states. California imports 99.9 percent of its Official 1 pork. Decisions like Baldwin establish that even when a law is triggered only by in-state sales, a state may not project its legislation into other states in that way. To do so infringes the territorial autonomy of sister states and it impedes our national common market. No other state makes its farmers house pigs the way that California does. And very few farmers do. They keep sows in individual pens during the vulnerable breeding period, and they provide less than 24 square feet of space in group pens. An Iowa farmer doesn't know where pork from his sows will be sold. Pigs go to a nursery, a finisher, then a slaughterhouse, where the packer butchers them into parts that are sold around the world in response to demand. The only safe course is to raise all pigs the California way, which is what we see buyers demanding, and the costs of doing that inhere in pork parts sold in places where buyers are unwilling to pay more to satisfy California's policy preferences. If Proposition 12 is lawful, New York Official 1 can say that pigs have to have 26 feet of space an -- and send inspectors into farms to police compliance as California does. Oregon can condition imports on workers being paid the minimum wage. And Texas can condition sales on the producer employing only lawful U.S. residents. And at that point, we have truly abandoned the framers' idea of a national market. I invite the Court's questions.
Justice Thomas: Mr. Bishop, when exactly is a state -- intrastate regulation impermissibly extraterritorial?
Timothy S. Bishop: Well, the --
Justice Thomas: Because this, as I read California's law, it is about products being sold in California. Unlike some of the cases you cite, it's not reaching out and regulating something across state line or regulating prices.
Timothy S. Bishop: Well, the test that we propose is that a state law that conditions sales on an out-of-state business operating in a particular way is almost --
Justice Thomas: And how does Official 1 California exactly do that?
Timothy S. Bishop: You cannot sell pork in California unless you raise your sows in a particular way out of state. It's a condition on sale. That's very little different from Baldwin. Baldwin conditioned the sale of milk in New York predicated on the Vermont producer being paid the New York rate, and it did that because it thought that it was necessary to pay Vermont farmers that much in order for them to use sanitary methods on the dairy.
Justice Thomas: Right, but --
Timothy S. Bishop: This Court held that --
Justice Thomas: -- but what if -- what --
Timothy S. Bishop: -- New York could not project its legislation that way on Vermont.
Justice Thomas: But what if -- what if California -- I'm sorry to interrupt you, I apologize.
Timothy S. Bishop: That's all right.
Justice Thomas: What if California said a house has to be built according to certain rules by certain standards with certain products, hence, excluding products that are Official 1 made in another state? For example, it says that you can't build a house entirely out of wood, so you can't import wood from another state like -- that's a lumber state like Georgia.
Timothy S. Bishop: That -- that's -- that's different, Justice Thomas. We -- we have --
Justice Thomas: Why is it? I mean, it's affecting -- it's affecting your product from your -- from -- extraterritorially.
Timothy S. Bishop: No, a state may ban a product. There's no doubt about that. It could ban pork. It can ban lumber to be used in building houses. What it can't do is condition sales in the state on a business in another state adopting particular methods of production. That tramples on the other state's rights.
Justice Kagan: I understand New York has a law that says that if you want to import firewood into the state, you have to have used a certain kind of pesticide to make sure that various pests don't come in with the firewood. Would that be forbidden?
Timothy S. Bishop: Well, I think you can -- you can ban a product that contains certain Official 1 pests. The -- the -- Maine -- Maine versus Taylor, I think, establishes -- establishes that. And there is a --
Justice Kagan: But you -- but you can't -- New York can't say any producers that don't use -- that -- that don't use some -- you know --
Timothy S. Bishop: A particular --
Justice Kagan: -- some list of approved pesticides?
Timothy S. Bishop: A particular pesticide. I think -- and -- and this won't always be easy --
Justice Kagan: Your answer is that you can't?
Timothy S. Bishop: You can't, right.
Justice Kagan: So anytime a state does something that I say forces -- it doesn't really force, but it -- you know, if you want the -- the state's market, it forces you.
Timothy S. Bishop: Right.
Justice Kagan: Anytime a state does something that forces you to change production methods in any way, that would be --
Timothy S. Bishop: Yes. Official
Justice Kagan: -- banned?
Timothy S. Bishop: That's -- anytime -- well, banned, I mean, I say this is almost a per se rule, even for discrimination cases. There's always a safety out if the -- the state can show that the -- the rule is necessary --
Justice Jackson: But, counsel --
Timothy S. Bishop: -- for safety --
Justice Jackson: -- can I just --
Timothy S. Bishop: -- and can't be achieved --
Justice Jackson: -- can I just --
Timothy S. Bishop: -- but, yes, that is the -- that's our position.
Justice Jackson: Can I just clarify? Because I -- I perceive a difference in the rule that you're articulating right now than what's in your briefs, and I just want to make sure I understand the per se rule that you are articulating. I thought your briefs were asking us for a rule that says that a state may not elect -- enact laws that have the practical effect of controlling conduct outside the state's borders. And that's different, I think -- and maybe I'm Official 1 wrong, so you can tell me -- than the rule that you're now saying, which is a state law that conditions sales on an out-of-state business operating in a particular way is prohibited. So which --
Timothy S. Bishop: Well --
Justice Jackson: -- which one of these --
Timothy S. Bishop: -- well, I think, you know, our -- our -- our view is that an extraterritorial -- an extraterritorial rule always has that practical effect on -- on commerce. It does two things. It affects commerce out of state, and it tramples the rights of the states in which the business is located.
Justice Jackson: But I could -- I see a delta between the question of whether or not the state's regulation controls conduct outside of the state's borders and a -- what seems to me to be a narrower proposition that you want a per se rule that says if a state conditions sales on out of -- on an out-of-state business operating in a particular way. Am I wrong -- Official
Timothy S. Bishop: Well, it may --
Justice Jackson: -- that that's a narrower thing?
Timothy S. Bishop: -- it may be a narrower -- it may be a narrower subset, but this Court has used that control language in -- in cases like Carbone and -- and Baldwin to stand for this proposition that you may not condition in-state sales on out-of-state -- out-of-state operations.
Justice Alito: Mr. Bishop, you have -- you have several arguments, and I gather that your answer to Justice Kagan based on your extraterritoriality argument is no, New York can't do that.
Timothy S. Bishop: It can't do that, right.
Justice Alito: But what -- how would that play out under your other argument, which is that the Pike balancing test would apply?
Timothy S. Bishop: Well -- well, Pike -- Pike is a -- you know, it's a factual -- it's a factual test. It's a highly factual test, and so you consider what is the impact on interstate commerce, and then you weigh that against -- that -- that burden against the local interest. Official 1 But, I mean, what I -- what the rule -- what the extraterritorial rule that we are proposing does really operates at that first level, the burden level, and what it says is it's so clear that laws that condition sales on out-of-states operation, changes in operations is always going to be a significant burden on interstate commerce that implicates the very concerns that the framers had about balkanization.
Justice Kagan: So suppose it were Wyoming or Rhode Island --
Timothy S. Bishop: It wouldn't make --
Justice Kagan: -- that passes a law like this.
Timothy S. Bishop: -- it wouldn't make any difference, Your Honor.
Justice Kagan: It -- it -- it certainly makes a difference in the kind of burden that's involved, right?
Timothy S. Bishop: It -- it does.
Justice Kagan: Somebody could easily just cut off the Wyoming market.
Timothy S. Bishop: But what we are proposing, Your Honor, is a -- is a -- a per se Official 1 rule that these conditions on sale in state --
Justice Barrett: But that's not a matter of Pike balancing. Your per se rule goes to the extraterritorial rule, and I think Justice Alito was asking you about Pike.
Timothy S. Bishop: Right. Well, and I'm -- what I'm trying to explain is the -- is the relationship between extraterritoriality and Pike, which is that the extraterritoriality rule establishes per se that that burden is -- is present in every case. It cuts out the need to do the --
Justice Alito: It -- it establishes --
Timothy S. Bishop: -- individualized --
Justice Alito: -- it establishes that there is a substantial burden on interstate commerce.
Timothy S. Bishop: Yes, exactly, Justice Alito.
Justice Alito: Or there -- there certainly is in the case where the state is a behemoth like California, but if you go to Pike balancing, then you would also take into account in a situation like the one that was posited by Official 1 Justice Kagan the strength of the state's interest. And so, if New York has a --
Timothy S. Bishop: Yes. If this Court doesn't think --
Justice Alito: -- has a very strong interest in preventing a really dangerous product from coming into its borders, that would be taken into account.
Timothy S. Bishop: Yes, and we think that's taken into account under extraterritoriality too. I mean, even -- even in cases like Oregon Waste, where it's a discriminatory law, this Court does consider the safety rationale that is offered by the -- by the state, but the state has to offer a -- a real non-speculative safety rationale that is not --
Justice Gorsuch: Counsel, why -- why isn't this Pike balancing test a bit reading too much into too little? It's one paragraph in a short unanimous opinion and it relies on three very old cases, Baldwin, Healy, and Brown, which were all --
Timothy S. Bishop: They're not so old, Your Honor.
Justice Gorsuch: Well, they're a Official 1 hundred years old about -- around about -- that involve price fixing or price affirmation statutes that, in effect, are a form of discrimination against out-of-state market participants. At least that's how many people in many courts have read them. I confess I'm guilty of that too on the Tenth Circuit. That was my understanding of what Pike was about. What's wrong with that understanding, especially when the alternative you are selling us appears to be that this Court should engage in a freewheeling balancing test à la Lochner to protect an economic liberty rather than defer to state regulation on health and safety?
Timothy S. Bishop: Well, let me make two points. I mean, it -- Pike -- Pike -- you know, Healy is a 1989 case, and Brown-Forman is 1986. I mean, these are not ancient cases. There -- Pike is an extremely well-established precedent not only in this Court but in the lower courts, and it has been applied --
Justice Gorsuch: That's not a question. The question is what it means. Official 1 And -- and it could either mean what many lower courts have thought it's meant, looking at these very old dairy statutes, things like that, or it could mean something very broad that would endow this Court to weigh competing interest. Is -- does California have enough of an interest in pork compared to lumber, compared to fireworks, compared to whatever you want to come up with?
Timothy S. Bishop: The narrow read we --
Justice Gorsuch: What business do we have in that?
Timothy S. Bishop: The narrow reading would not satisfy the interests of the Commerce Clause. The Commerce Clause is intended to prevent balkanization. It was a reaction to -- to balkanize rules at the time of the constitutional convention. And it was intended to stop interstate -- interstate strife over these sorts of rules. A narrow rule focused on old dairy statutes is not going to achieve that. And what we're proposing, this per se rule that we are proposing --
Justice Gorsuch: It's new, right? Official
Timothy S. Bishop: -- it's away from --
Justice Gorsuch: It's -- it's a new rule?
Timothy S. Bishop: No. Well, we don't think it's new. We think it's firmly grounded --
Justice Gorsuch: Where -- where is that --
Timothy S. Bishop: -- in Baldwin.
Justice Gorsuch: -- in Pike? I don't see per se --
Timothy S. Bishop: It's -- it's in Baldwin, Your Honor.
Justice Gorsuch: It's in Baldwin? Okay.
Timothy S. Bishop: That's what -- that's what Baldwin --
Justice Gorsuch: With respect to price affirmation and price fixing?
Timothy S. Bishop: Price affirmation cannot conceivably be an appropriate limitation of this rule because it doesn't achieve what the Commerce Clause is supposed to achieve --
Justice Gorsuch: Well, then let me ask you how this --
Timothy S. Bishop: -- which is a national Official 1 market.
Justice Gorsuch: -- let me ask you how this works, though. You say -- you say California could ban pork.
Timothy S. Bishop: Yes.
Justice Gorsuch: Okay. Why doesn't that affect interstate commerce in some impermissible way?
Timothy S. Bishop: Well, it -- it does affect it. But the -- the -- the difference between a ban is that then it seems to us to be much more -- which are commonplace, bans are commonplace, they're much more in-state focused. All they do is reduce the size of the market for out-of-state businesses. That is very different from conditioning a sale on the precise way that an out-of-state business conducts itself, how it operates.
Justice Kagan: But -- but, presumably, the reason why out-of-state businesses care about change in production methods is that those production methods will be more costly. And if you're thinking about costs, California banning your product would be the greatest costs of all. So why would you, Official 1 you know, divide the world in that way?
Timothy S. Bishop: Well -- well, we're not only talking about costs, Justice Kagan. We're -- we're talking about the impact on the state where the business is located. You know, Iowa has 65,000 sow farms. It has a very great interest in how those sows are -- are housed. And what California is doing is essentially trampling on Iowa's ability to say, no, you know, our farmers really ought to be able to use --
Justice Kagan: Right. But its --
Timothy S. Bishop: -- breeding sows.
Justice Kagan: -- interest is cost-related. Its interest is, look, we think that this is, you know, sufficient and we don't want to do anything that's more expensive.
Timothy S. Bishop: It's not only cost-related. It could be morally related. California's moral position, moral view that pigs shouldn't be kept this way can be matched in Iowa by a view that the most important thing about sows is -- is producing --
Justice Kagan: Well, I must say --
Timothy S. Bishop: -- inexpensive -- Official
Justice Kagan: -- that seems unlikely.
Timothy S. Bishop: -- inexpensive pork.
Justice Kagan: I must say that seems unlikely.
Timothy S. Bishop: No, not at all, Your --
Justice Kagan: The -- the -- the question from Iowa's position, and it's an important question, is you're making this incredibly costly for us.
Timothy S. Bishop: No, I don't think -- I don't see how that -- how -- how you say that's unlikely. If California can tell folks in Iowa how to raise their sows, then Iowa can take the moral position that the most important -- the most important moral thing to do here is to feed people at a reasonable cost by -- by raising sows using pens. But people -- or the 350 --
Justice Kagan: I mean, we're supposed --
Timothy S. Bishop: -- million people in the country each --
Justice Kagan: -- you're suggesting that we decide this case on the premise that the Official 1 interests at stake in Iowa and among pork farmers have nothing to do with costs?
Timothy S. Bishop: No, that you should decide this case on the basis that Iowa's views on how pork should be raised, whatever those are, are just as weighty as California's.
Justice Sotomayor: But why?
Timothy S. Bishop: And that --
Justice Sotomayor: I -- I mean, I know that you dismiss the moral objection, and I'm going to put it aside, but we have brief from scientists that point out that there are some genuine scientific reasons for fearing the -- the -- the raising of pigs. You may disclaim it, and I know your complaint says something different, but some people could reasonably believe that close confinement of farm animal increases the likelihood of new diseases jumping from humans -- from animals to humans or vice versa. That -- we know that's happening. It is also reasonable to think that reducing close confinement of pigs may reduce the use of antibiotics in pigs, thus reducing the development of antibiotic-resistant Official 1 bacteria. And some think that the use of gestation crates increases the presence of diseases in piglets that carry -- can carry through to time of slaughter. Now I know you're going to tell me there's no scientific proof, but there is certainly a reasonable basis for these people to think this.
Timothy S. Bishop: We don't think there's a reasonable basis. Our -- our veterinarians say exactly the opposite. But, for current purposes, Justice Sotomayor, what counts is we're here on motion to dismiss, okay? There has been no opportunity to test these propositions in --
Justice Sotomayor: Well, how about I --
Chief Justice Roberts: Thank -- thank you -- thank you, counsel. Mr. Kneedler?
Justice Gorsuch: Chief?
Chief Justice Roberts: Oh, I'm sorry, Mr. Kneedler. Thank you. (Laughter.)
Chief Justice Roberts: Very anxious Official 1 to hear from you. Justice Thomas? Justice Alito?
Justice Alito: Would -- I think you touched on this in your final comments, but let me just make sure about it. Most of your argument seemed to be arguing the merits of the extraterritoriality argument and the Pike balancing argument to a lesser extent. But is that the question we have here? This is on the pleadings. So what is the standard that we're supposed to apply?
Timothy S. Bishop: Well, under Iqbal, we have to plausibly allege facts that are sufficient to a basis for our legal claims. You've got two counts in the complaint, one based on extraterritoriality, one based on -- on Pike. We -- we think that we have easily pled both an extraterritorial regulation and a significant burden on interstate commerce and that at that point, the state has to show that it has good reason for these rules. And that -- that whole process has been curtailed by the dismissal. We should get a remand in order to make our case. Official
Justice Alito: Justice Sotomayor recited factual allegations made in an amicus brief submitted in support of California, and, certainly, those merit serious consideration. But was any of that evidence in the record here?
Timothy S. Bishop: No. In fact, to the contrary. We think that we should be entitled to judgment as a matter of law on remand because California's expert agency, its Food and Agricultural Department, looked at the law and it concluded that the confinement standards, which is what Prop 12 is, confinement standards, are not based on specific peer-reviewed scientific literature or accepted as standards within the scientific community to reduce human foodborne illness, promote worker safety, the environment, or other human and safety concerns. When they realized that that was a litigation issue and they tried to claw some of it back, the best they could come up with is this: That the California voters -- it was reasonable, not unreasonable, for them to adopt this law as a "precautionary measure to address any potential threats." All right? Official 1 That is not enough under Pike or our extraterritoriality test to justify a law that has massive effects on interstate commerce.
Justice Alito: Thank you.
Chief Justice Roberts: Justice Sotomayor?
Justice Sotomayor: Counsel, your complaint acknowledges at paragraph 160 that consumer demand has led roughly 28 percent of the pork industry -- not quite a third, but that's a very high percentage -- to convert from individual gestation stall to group housing. To meet that consumer demand, 28 percent of the industry already must be able to trace its pork meat back to how individual pigs were housed because consumer demand demands it. We have marketed already pork marked as organic, crate-free, antibiotic-free, and beta-agonistic-free. I have no idea what that means. (Laughter.)
Justice Sotomayor: But I know it's there. I've seen it in supermarkets, okay? So some tracing is already happening. This is already recognized in your complaint. Official
Timothy S. Bishop: No. With all due respect, Justice Sotomayor, you're talking about two different things there. Twenty-eight percent of the market uses group housing after confirmation of pregnancy. What -- what -- what Prop 12 does is to prohibit the most critical period for individual confinement, which is the period after weaning through the confirmation --
Justice Sotomayor: You're missing my point.
Timothy S. Bishop: -- of pregnancy. No, but that -- that --
Justice Sotomayor: No, no --
Timothy S. Bishop: So it's not 28 percent. So let me tell you what --
Justice Sotomayor: Let me finish my question.
Timothy S. Bishop: So --
Justice Sotomayor: Let me finish my question. California's 13 percent of the market. It's a huge market. But there are people -- you have to concede there are some people who can sell there. They're already labeling themselves Official 1 as organic or crate-free or antibiotic-free or something-free. What is the critical difference? How much of the market does the producers in Iowa have to control? All of it?
Timothy S. Bishop: No. No, here's --
Justice Sotomayor: Or just a small part of it?
Timothy S. Bishop: No, no, look --
Justice Sotomayor: And why does that make a difference? Because no one's forcing them to sell to California. They can sell to any other state that they prefer to sell to.
Timothy S. Bishop: Your Honor, nationwide, 13,500 pigs are slaughtered each day that comply or about comply with Prop 12. California needs 65,000 pigs a day to satisfy its proper --
Justice Sotomayor: And so its people are going to go without pork?
Timothy S. Bishop: Half a million pigs are slaughtered in the state every day. What's organic Prop 12 is a tiny, tiny proportion. It's sold in Whole Foods --
Justice Sotomayor: You still haven't -- Official
Timothy S. Bishop: -- for $8 a pound.
Justice Sotomayor: -- you still haven't answered my question. What's the line that we draw to say that this is an impermissible control by California of others when it's giving it a choice to say: Sell my way or don't sell my way? If you want to sell my way, you can sell here. If you don't, sell in New York.
Timothy S. Bishop: Well, we think the rule derived from your cases, from Baldwin, from Healy, from Brown-Forman, from Carbone, is the one that I've expressed, that -- that it violates the Commerce Clause to condition in-state sales on out-of-state producers operating a particular way. And there's very good reasons for that in the reasons for the -- for the -- for the adoption of the Commerce Clause in the first place, to avoid balkanization, to avoid California imposing its philosophical views in other states, and to -- and to avoid trampling on the sovereign prerogative of other states. And a rule like this does all of those.
Chief Justice Roberts: Justice Kagan? Official
Justice Kagan: Mr. Bishop, suppose I asked you to for a moment ditch the extraterritoriality argument and just go to Pike balancing. What would your position sound like?
Timothy S. Bishop: That Prop 12 has a very significant effect on interstate commerce, that essentially what will happen, as we've explained in the briefs, is that farmers won't have -- most farmers won't have any choice but to adopt this form of -- of -- of raising sows, and the reason for that is that farmers don't know where the -- the offspring, where the meat from the offspring of their sows is going --
Justice Kagan: And on the other side?
Timothy S. Bishop: -- until much, much later. I'm sorry, Your Honor?
Justice Kagan: And on the other side? You know, there's a balance, two sides.
Timothy S. Bishop: Yeah, there's a balance, and -- and California, we think, has given up its safety -- any claim to -- to a genuine safety rationale here. But that would be a matter for --
Justice Kagan: Are you saying that California has no distinctly moral interest Official 1 here?
Timothy S. Bishop: It -- it has a moral interest that it can satisfy in state but not one that by these conditions on sales -- conditioning sale on what is done elsewhere.
Justice Kagan: So, within Pike balancing, there's a little bit of a per se rule of its own, which is that moral interests cannot justify conduct out of state? Is that the idea?
Timothy S. Bishop: Well, I -- I think that that's sort of an essential -- you can say that's in Pike balancing. I mean, it's an essential feature of our horizontal federalist system, which is that each state is sovereign within its own territory. And the reason this get brought into the Commerce Clause is because the framers were concerned about the sort of balkanization that arises when -- when states adopt these rules.
Justice Kagan: And -- and, again, just to make sure I understand your position, you're saying that California could adopt a complete ban on the product --
Timothy S. Bishop: Yes.
Justice Kagan: -- under your initial Official 1 territoriality rule? But also under Pike, it can't -- but can't do --
Timothy S. Bishop: Yes. And --
Justice Kagan: -- what California is doing here?
Timothy S. Bishop: But there are other things that it can do. I mean, Justice Sotomayor mentioned labeling. Labeling is commonplace. You know, San Francisco requires a label on meat disclosing what --
Justice Kagan: Well, gosh, that seems to regulate out-of-state conduct too.
Timothy S. Bishop: Well, no -- well, no, it really -- I mean, the label can be put on in state, but it's really just a question of, you know, putting a stamp on a -- a stamp on a -- on a package. It really -- it does -- it's something that --
Justice Kagan: That's just trivial?
Timothy S. Bishop: -- that's not substantial.
Justice Kagan: Is that the idea?
Timothy S. Bishop: It's -- yeah, it's trivial. I think it's trivial.
Justice Kagan: Okay. Official
Timothy S. Bishop: And what it does is it allows California not to be complicit, if they don't want to be complicit in raising pork the way we raise it, then they have the information in front of them to make that decision whether to buy it or not.
Justice Kagan: Thank you.
Timothy S. Bishop: And also, you know, whether to -- to -- to pay $8 a pound for pork at Walmart or 5.25 a pound at -- at -- at Whole Foods or 5.25 a pound at Walmart.
Chief Justice Roberts: Justice Gorsuch?
Justice Gorsuch: Mr. Bishop, just to follow up on Justice Kagan's line of questioning where we've kind of laid out the costs and benefits in our balancing test that you're asking us to do, why isn't that just a form of enshrining non-textual economic liberties in -- into the Constitution, something this Court -- a project this Court disavowed a long time ago? We're going to have to balance your veterinary experts against California's veterinary experts, the economic interests of Iowa farmers against California's moral concerns Official 1 and their views about complicity in animal cruelty. Is that any job for a court of law? I mean, the Commerce Clause, after all, is in Article I, which would allow Congress to resolve any of these questions.
Timothy S. Bishop: Well, I would like to say two things in response. One is the courts have not had difficulty applying the Pike test.
Justice Gorsuch: Well, with respect --
Timothy S. Bishop: I mean, we have not seen a slew --
Justice Gorsuch: -- let's put that aside because I think --
Timothy S. Bishop: -- and if -- if you look --
Justice Gorsuch: -- a lot of lower court judges would disagree with you.
Timothy S. Bishop: Well -- well -- I mean, we don't see a lot of state laws struck down under Pike balancing. When you do, it's generally because the state has completely failed, if you look at Kassel and Bibb and those cases, the state has completely failed to make a Official 1 case for the necessity of the law. But, you know, doctrinally, Your Honor, you said that the -- the Dormant Commerce Clause, which is -- you know, is just a label for an interpretation of the Commerce Clause that this Court has --
Justice Gorsuch: Well, you've -- you picked out a line of cases dating to 1935 that is maybe the most dormant line of our Dormant Commerce Clause jurisprudence.
Timothy S. Bishop: Well -- well, Your Honor, you -- I mean, you've said that these -- that these principles may be misbranded, but at this point, the misbranding goes pretty deep, right? I mean, the -- the -- this interpretation of the Commerce Clause dates back to -- to Cooley. The other ways in which the -- preventing the balkanization, preventing the trampling of states' territorial sovereignty that the doctrine is -- is -- is supposed to protect against. The other sources in the Constitution, the P&I Clause has been interpreted not to -- you know, not to apply to corporations. The Export and Import Clause has been interpreted Official 1 to -- to apply only to foreign trade. Maybe the Court got it wrong when it said that the Commerce Clause -- under the Commerce Clause, Congress doesn't have exclusive authority over true interstate commerce, but it's too late to fix all of those things.
Justice Gorsuch: Okay. Let me ask another line --
Timothy S. Bishop: So the only way to achieve --
Justice Gorsuch: -- line -- line of questioning. I'm sorry to interrupt, but I do want to respect others' time. Protecting interstate commerce, I would have thought as an old -- just from an antitrust mindset that we wouldn't be concerned about protecting particular firms, but we'd be concerned about protecting consumers at the end of the day. And -- and a similar analysis might apply here, it seems to me. Your -- your complaint definitely alleges harm to large pork producers in certain places who would have difficulty segregating out pieces of -- of pork. That -- I understand that. Official 1 Less clear to me is whether you've plausibly alleged harm to competition or harm to interstate commerce itself. We have other pork producers who say they're perfectly happy to step into the void that your firms don't wish to -- to fill and -- and to segregate out pork parts, including, I think, Perdue is saying that. And we also have one of your own members attesting that prices will not increase to consumers outside of California because they won't bear it. And we have economists saying the same thing on the other side, agricultural economists. So in what way have you plausibly alleged harm to interstate commerce or consumers rather than to your member firms?
Timothy S. Bishop: Well, we are here on motion to dismiss, and what we have alleged is, first of all, that prices -- prices cannot be contained. The price increase from Prop 12 cannot be contained within California because, at the time the farmer raises the sow, it doesn't know where six months later the pork is going to be sold to. In a farm, "We sell everything except Official 1 the oink," is the phrase, so the blood, the fat, the collagen, everything is sold, and it's sold around the world in response to demand. Every piece of that pig is going to bear the costs, the significant costs of raising pork the way that California demands. As to the -- as to the -- you know, the trace -- the difficulty of sort of tracing, the -- the organic market, Niman Farms, which is the -- the -- filed the amicus brief here, part of Perdue, these are a tiny, tiny proportion, as I said, 13,500 pigs a day slaughtered all around the country compared to the 500,000 that are slaughtered to supply the 350 million people in this country with reasonably priced pork. So this is not and we would prove at trial that this is not something you -- you suddenly -- you suddenly adapt to.
Chief Justice Roberts: Justice Kavanaugh?
Justice Kavanaugh: To the extent we have historically overinterpreted the Commerce Clause, I think you were getting at something that the amicus briefs also point out, is that you couldn't correct that without correcting Official 1 also a historical underinterpretation perhaps of the Export/Import Clause and the Privileges and Immunities Clause. And Justice Thomas and Justice Scalia wrote about the Export/Import Clause, and others have written about the Privileges and Immunities Clause. Correct?
Timothy S. Bishop: Yes. I mean, my -- it seems to me that it's just -- it's too late, all right? Maybe the -- maybe the problem with the --
Justice Kavanaugh: But -- but even if it's not too late, you can't do one without correcting the others, it would seem to me, or else you're going to --
Timothy S. Bishop: Yes. It's -- it's deeply -- there -- there are -- there are very few so deeply entrenched principles in American constitutional law as the Dormant Commerce Clause going back to Cooley, and it serves --
Justice Kavanaugh: But the point there --
Timothy S. Bishop: -- a very important function.
Justice Kavanaugh: -- is the Official 1 principle behind it is embedded in our Constitution, even if mislabeled.
Timothy S. Bishop: Yes.
Justice Kavanaugh: You couldn't just say, oh, let's get rid of all those cases because they're mislabeled without thinking about the other clauses --
Timothy S. Bishop: Exactly right.
Justice Kavanaugh: -- might pick up that same principle.
Timothy S. Bishop: Exactly, Your Honor.
Justice Kavanaugh: Okay. And second, there are a lot of far-reaching arguments in this case, but it seems to me, picking up on Justice Alito's question, the -- Pike is a long-standing precedent. You have a complaint that alleges a claim under Pike that's on its face sufficient. Isn't that just the easiest way to resolve this for now and we can --
Timothy S. Bishop: Well --
Justice Kavanaugh: -- deal with a lot of these far-reaching arguments down the road?
Timothy S. Bishop: -- we don't think the extraterritoriality is far-reaching. I mean, Official 1 the way to think about -- I think the way to think about it is, as I've said, it's -- it just means that you get into that first step of Pike without having to go through all the factual considerations that, you know, Justice Alito has referred to as being potentially problematic. If -- if you are conditioning sales on -- on businesses in other states operating a different way so that that rule is all about what happens out of state, then per se you get into that top --
Justice Kavanaugh: Okay. I've --
Timothy S. Bishop: -- top level.
Justice Kavanaugh: Thank you.
Justice Barrett: Counsel, I want to ask you about extraterritoriality. So can you tell me why you answered Justice Kagan that the labeling wouldn't matter? I mean, if it's a per se rule that you can't control what's going on in other states, and you said, well, it's just insignificant, it's de minimis, but wouldn't the per se rule, the principle, still apply?
Timothy S. Bishop: Well, I -- I don't think so. I mean, I think the de minimis point is -- Official 1 you know, is an important one. It -- this does have to be a -- you know, a real impact on -- on commerce and almost always, with a extraterritorial law, it is. But simply --
Justice Barrett: So it's not a per se rule we would be balancing. I mean, you're -- the principle that you're asking for -- and I guess this kind of goes to Justice Jackson's question about what exactly is the principle that you're articulating here. It seems to me that you're not just saying, well, if it controls markets and -- or the way that production is conducted in other states, it's if it does so in a significant way or a burdensome way?
Timothy S. Bishop: No, no. If it does that at all, then it's impermissible. But the --
Justice Barrett: Well, then why doesn't the labeling do it?
Timothy S. Bishop: -- but the labeling doesn't affect the way that the operation is run, the way that the pig is raised. If you are -- if you have to put a label on -- all you have to do is put a label on that says, you know, Official 1 this does not comply with Prop 12 or this was raised in 24 feet, it's -- it's -- it's a factual statement --
Justice Barrett: Well, it seems to me --
Timothy S. Bishop: -- about how you raised the --
Justice Barrett: -- that you're still then having to weigh it in. But -- but let me shift gears and just ask a different question also about extraterritoriality. It seems to me -- you know, Justice Gorsuch was pointing out that this line of cases, the Baldwin line, is the most dormant of the Dormant Commerce Clause cases, and I think his point was that Baldwin was decided in 1935, before Darby, before Wickard, and the idea of what constituted interstate commerce was very different then. We were trying to draw lines between intrastate and interstate commerce that don't exist anymore. We have these three cases that are in the pricing context, and it seems to me that you're asking for an extension of those. I mean, I get that you can draw on the principle Official 1 and the reasoning of those cases and the dicta, but it would still be an extension. And I'm wondering, how many laws would fall? I mean, California has higher emissions standards on automobiles than many other states. Does that fall?
Timothy S. Bishop: No. No. Absolutely not. I mean --
Justice Barrett: Why?
Timothy S. Bishop: -- that -- that is -- that -- that's -- that's entirely federalized. The -- they have a waiver from the -- the federal government regulates emissions, and California has a waiver from the federal government for that. If you look at the --
Justice Barrett: What if they didn't? What if -- I understand California has some new legislation --
Timothy S. Bishop: Well --
Justice Barrett: -- about electric cars and electric vehicles and by 2035, that would be --
Timothy S. Bishop: -- again, all -- and all done under waivers. But -- but take -- I mean, take the Apple example -- Official
Justice Barrett: Okay. Well -- well, let's assume -- I guess what I'm saying is Justice Kagan gave you the example of the firewood and the pesticide. If they have a waiver about emissions, fine. There must be many, many state laws that regulate extraterritoriality, extra -- outside of their territory in the way that you are saying is impermissible. So would this have --
Timothy S. Bishop: No.
Justice Barrett: -- far-reaching consequences?
Timothy S. Bishop: No, it wouldn't have far-reaching consequences. Let -- let -- two examples. Apple, in -- in Apple, that -- that involved the -- you know, the rule that you have to -- in order to sell electricity in Colorado, you have to buy 20 percent of the power from renewable sources. Clearly, that has a very important safety impact in Colorado. Air pollution anywhere is universal. So, I mean, those rules are not going to fall. The sort of rule that will fall is the Seventh Circuit's rule -- the one the Seventh Circuit considered in Legato Vapors, where Official 1 Indiana, on a safety rationale, tells vape companies how -- exactly how they have to operate if they want to sell into -- into Indiana. I mean, it is notable that there are -- there are not cases like this in the books. There are cases like -- the -- Baldwin and Brown-Forman and Carbone, which we think are very much on point, but the -- the closest by far is Legato Vapors, where the Seventh Circuit struck down that Indiana law.
Justice Barrett: Okay. Let me just ask, because I don't --
Timothy S. Bishop: States don't do this.
Justice Barrett: Okay. I don't -- I don't want to take up too much time, so let me just ask you one last clarifying question. In your interchange with Justice Kagan, did I understand you right when -- to say that morals, just when you're doing Pike balancing, can't count as a state interest as opposed to safety and health?
Timothy S. Bishop: Right, because, if the -- if -- if they could, then the -- the -- the common -- the common national market would just Official 1 fall apart because Texas can say you have to certify that -- that everything was produced by lawful residents. Oregon can say, unless you provide particular healthcare, which we think is -- you know, X is included in the healthcare plan, we're not going to buy those -- those products. And just --
Justice Barrett: Okay. Thank you.
Chief Justice Roberts: Justice Jackson?
Justice Jackson: Yes. So I just have one set of questions about extraterritoriality and one quickly about Pike balancing. So you've said repeatedly, I think, that extraterritoriality is about the burden. Am I right about that? It's about -- the -- the sort of rule that you want us to establish is related to the burden part of the Pike balancing? Didn't you say that?
Timothy S. Bishop: Extraterritoriality is a shortcut into burden, into the --
Justice Jackson: Yes, for -- for establishing the burden. But the problem I think you might have is that if that's the case, then you're about to lose the benefit of a per Official 1 se rule or a bright-line rule because, as Justice Kagan pointed out, the burden might vary depending upon whether it's California versus Rhode Island, that you can't have a per se rule that relates to the effect because then we've got to figure out how much control, how significant is this regulation, as opposed to the rules in -- or the way in which the rule played out in -- in Brown and Healy, where it was about the nature of the regulation, not its effect. So I worry that you really aren't talking about a per se rule. It's more always, as Justice Barrett pointed out, really a balancing.
Timothy S. Bishop: No, it's a per se -- it is a per se rule. I mean, it does have a -- a -- a -- a per se test, which is that if you -- you cannot condition in-state sales on out-of-state changes in business operations. If you do that, then you look at what the state's rationale is on the other side, but always, because a rule like that has one goal, and that is controlling conduct --
Justice Jackson: Right, but it's -- Official
Timothy S. Bishop: -- in other states.
Justice Jackson: -- but it's not about the degree of control. It's just if you do that kind of thing. Is that what you're saying?
Timothy S. Bishop: Yes.
Justice Jackson: All right. So with -- my other set of questions is about the Pike balancing. So let me ask you, would there be a problem under Pike if, instead of banning sales based on morality concerns or whatever else, California allowed the sales but required the pork to be labeled? You've said a couple times that you suggested that labeling was fine.
Timothy S. Bishop: Labeling is fine. It happens all the time. You know, you walk into the market, organic --
Justice Jackson: Right.
Timothy S. Bishop: -- is labeled, it's -- it's --
Justice Jackson: So, if it's fine, let me just ask you to react a little bit to this thought: I'm wondering whether the problem is that Pike balancing might not be nuanced Official 1 enough. Justice Gorsuch suggests, you know, we've got to do the balancing and that's a problem. But it seems to me that the Pike balancing has courts looking on the one hand to the burden, on the other hand to the benefit, but not whether there's a way to achieve that benefit in a less burdensome way. And -- and -- and so I would wonder whether the Pike balancing actually is amenable as it now stands or whether it needs to be corrected to allow for an assessment of a state that has a morality concern, for example, that it considers to be a benefit. Do courts or should courts analyze whether or not that benefit could be achieved in a less burdensome way?
Timothy S. Bishop: Well, there -- there is a less burdensome factor in Pike itself. I mean, the Pike test ends with -- by asking the question whether the state's goals could be promoted as well with a lesser impact on commerce. So there is a sort of least-restrictive means type element to the Pike -- to the Pike test. Official 1 But morality should not be part of that because, you know, we live in a very divided nation and these are --
Justice Jackson: Right, but why not? What if -- to the morality, as Justice Sotomayor says, is animal welfare. We have science, says the state. We really believe that, you know, these animals should not be kept in pens in this way. Why couldn't that be a reason that the state says so any animals that come in from Iowa we're going to label --
Timothy S. Bishop: Oh.
Justice Jackson: -- as non-compliant, you know, to our moral views about how this should be done?
Timothy S. Bishop: Yeah. Labeling -- labeling can be required.
Justice Jackson: But there's -- but it would be based on morality. It's just the way in which they're achieving it --
Timothy S. Bishop: Yes, a state is perfectly entitled to enforce its morals in state. I mean, that's what Justice Brandeis said, right -- Official
Justice Jackson: Yeah.
Timothy S. Bishop: -- with his, you know, experimentation. The states can -- can -- can experiment as much as they like. They can be laboratories, but the laboratory is the state.
Justice Jackson: Thank you.
Chief Justice Roberts: Thank you, counsel. Mr. Kneedler. ORAL ARGUMENT OF EDWIN S. KNEEDLER FOR THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE PETITIONERS
Edwin S. Kneedler: Mr. -- Mr. Chief Justice, and may it please the Court: Taking the allegations in the complaint as true, Proposition 12's sales ban is invalid under Pike because it imposes a substantial burden on interstate commerce without serving a legitimate local public interest. Proposition 12 imposes a trade barrier based on conduct beyond California's borders. It fails to respect the autonomy of California's sister states. It invites conflict and retaliation and threatens the balkanization of the national economic union. Official 1 California's disagreement with the manner in which pigs are housed in other states is not a cognizable local interest of California that could support the imposition of such a ban. A state's interest in protecting the health and safety of its residents can support a state law if that local interest is substantial and not outweighed by its effects on commerce. But the state here has taken the position that Proposition 12 does not rest on any scientific determination of such a basis, and Petitioners also plausibly allege that Proposition 12 does not substantially advance such an interest. The judgment of the court of appeals there should be reversed on the basis of Pike. I welcome the Court's questions.
Justice Thomas: Mr. Kneedler, couldn't you circumvent or avoid this problem completely by having national legislation, and then you would just simply have a preemption issue?
Edwin S. Kneedler: Yes, Congress could certainly act in this field. And I -- I would point out, for example, that with respect to labeling, the -- the -- the Meat -- in -- Official 1 National Meat Inspection Act regulates labeling. Labeling has to be approved by USDA, and so the content of the labeling could be localized, could be -- could be national. And, in fact, USDA has approved labels such as cage-free or Proposition 12 compliant, but it requires an explanation of what that means in order that the consumer can understand. So the -- the -- the state's interest in allowing its citizens to exercise their right not to be morally complicit if an individual consumer believes that is furthered by the labeling provisions that USDA has approved and would be prepared to approve.
Chief Justice Roberts: Mr. Kneedler, you mentioned the state's interest in health and safety. Does that extend to moral values of the state beyond health and safety?
Edwin S. Kneedler: Well, the -- the -- the state can certainly have moral -- rest on moral values or its determination of them for regulating conduct within the state. But the question with respect to the raising of pigs in other states, that -- the -- the -- how the moral issue should be weighed there as against Official 1 economic, as against countervailing interest on behalf of the pigs, is something that that state should regulate, not California.
Chief Justice Roberts: But what if they're totally unrelated? You can't sell eggs in California unless, you know, you have a certain amount of energy, I guess it could be related at some level, whatever, something totally unrelated to eggs. Is -- is that all right?
Edwin S. Kneedler: No, I -- I would think not. I mean, I -- I -- I think that the -- under -- under Pike balancing, there would have to be some legitimate basis for the -- for imposing such a burden on interstate commerce.
Chief Justice Roberts: Well, the legitimate basis is not some unrelated moral objective?
Edwin S. Kneedler: No, I -- I think a moral objective --
Chief Justice Roberts: In other words, the state is trying to drive conduct in the other state, just as it is here, but without any connection to a particular industry or activity. Official
Edwin S. Kneedler: Well, I think, if it is trying to regulate conduct in other states, whether related or not related, where it doesn't have a concrete, on-the-ground, scientifically based, in the case of health and welfare, basis, I -- I -- I think that's invalid under Pike balancing, whether it's a related or unrelated issue abroad. The -- the Court made this point in Baldwin when it said in -- in responding to the argument that perhaps the way farms are run in Vermont are not adequate, the Court said, if the manner of -- of farms being operated in Vermont is deficient, that's up to the legislature of Vermont, not up to the legislature of New York to address.
Chief Justice Roberts: The cases that you -- I think the cases that you cite most frequently in your brief or at least cite a lot, I think, can be distinguished on the grounds that they're dealing with the arteries of commerce. Kassel, you know, you have to change the length of the truck, trucks, interfering with the movement of commerce as opposed to production. Official 1 Is that a fair distinction?
Edwin S. Kneedler: Well, a -- a number of those -- I think it's particularly strong, but part of the reason that's so is because a limitation on truck length or on train length or on mud flaps inevitably has the effect of controlling conduct in another state because changes would be -- have to -- have to be made at the border or before it reaches the border.
Chief Justice Roberts: Well, that's why I'm suggesting maybe you're overreading them because it is inevitably going to have an -- an impact on interstate commerce.
Edwin S. Kneedler: But -- but the Court has not limited its Pike balancing, for example, to that sort of case at all. In fact, Carbone, for an example, is a case sort of the mirror image of Baldwin -- Baldwin, which had to do with a sales restriction on milk produced out of state. Carbone was a -- a local ordinance that restricted the export of a product out of the state, and it had the effect of -- of -- an effect on interstate commerce that was not a channel of commerce and it was not a pricing Official 1 issue. And the Court held that it was an impermissible basis for the state, among other things, for the -- excuse me -- locality to regulate the disposition of waste because of concerns about environmental impacts in another state. That would be for that other state to determine, not -- not the City of Clarkstown that was involved in -- in Carbone.
Justice Alito: Under --
Justice Kagan: Mr. --
Justice Alito: -- under Pike, do you think that a state's safety interests are treated -- should be treated differently from its moral interests?
Edwin S. Kneedler: Yes. If -- if -- if it is -- if the moral interest is a moral interest in objecting to the way -- to conduct that occurs in another state, yes, because we think there has to be a -- you know, concrete evidence showing an in-state, you know, tangible impact on the citizens' state. And, for example, the -- the director of the state agency involved here, while acknowledging there was no scientific basis for Official 1 the -- for this as a matter of safety or health, said still California citizens might benefit from knowing that the pigs that come into the state have been humanely handled in the way Californians discovered --
Justice Alito: But does that -- does that distinction really work? Because I understand that part of California's argument and part of the reason why the voters of California adopted this provision was to avoid the feeling of moral complicity that they would experience if they consumed -- if they purchased and consumed pork that had been produced in what they regard as an inhumane way. So, in the case -- if -- if the pork presents a safety problem, it's a safety problem that they -- that the people, the consumers in California, would experience. If it presents a moral problem, it's a -- a moral -- it's moral danger that they -- they don't want to incur.
Edwin S. Kneedler: Well, as I was explaining before, the labeling alternative, Pike -- Pike, as has been pointed out, contains a sort of less restrictive means sort of standard or -- or -- or safety valve. Official 1 And labeling allows those citizens of California who -- who want to avoid purchasing pork because they believe they would be morally complicit in conduct that they think is improper in another state, enables them to do so. So it -- it's -- it's tailored to the interest in allowing individual citizens in California to exercise their moral choice.
Justice Kagan: I mean, just to take an extreme example of this, Mr. Kneedler, suppose we imagine ourselves back into slavery days. Would it have been impermissible for a state to have said we're not going to traffic in products that have been produced by slavery?
Edwin S. Kneedler: I -- I think the logic of our position would say yes, but that -- that was at a much earlier -- earlier time, both in Commerce Clause and, of course, now we have the Thirteenth Amendment that -- that would prohibit -- and -- and that conduct is prohibited in the -- in the state where it occurs. This is the important thing to recognize.
Justice Kagan: Right. I was -- I was imagining ourselves back into a world where it Official 1 wasn't, but I -- I -- I take the point. How about, you know, you've -- you also have said total product bans are -- are permissible. But some total product bans are based on moral feelings or even sort of feelings of disgust, like a ban on horse meat. There's nothing dangerous about eating horse meat. People in Iceland do it all the time. There's a kind of yick, disgust factor, a kind of moral factor. So could a state not do a ban on horse meat?
Edwin S. Kneedler: No. I think, of course, a state acting within -- within its own territory can act on moral or other bases. And a lot of laws have moral underpinnings.
Justice Kagan: Well, this is a ban on the importation of horse meat for sale.
Edwin S. Kneedler: Well, I -- I -- I think, on the -- on the premise that you're explaining, it would be -- it would be a total ban on horse meat because the state has said it's yucky to -- to allow it.
Justice Kagan: Right, but -- but -- but it's a moral interest that's involved, and -- and the people who are going to be affected Official 1 are all of these out-of-state producers and horse people.
Edwin S. Kneedler: Well, there is an incidental effect on commerce in that respect, but this -- but I think the important distinction is the state's judgment and its action is focused on conduct within the state. There will be no horse meat in this -- in this state. And, the fact it's --
Justice Kagan: Well, there won't be a sale of horse meat, just as there won't be a sale of pork produced in a certain way. I guess I just don't really understand the distinction. It naturally seems like, you know, the greater includes the lesser.
Edwin S. Kneedler: But there are situations in which the greater does not include the lesser, such as when --
Justice Kagan: I'm trying to figure out why this is one of them.
Edwin S. Kneedler: Well, I -- I -- I think one of them is -- or the important one is -- is the interstate Commerce Clause addresses whether the state is trying to address interstate commerce as opposed to a domestic issue. And Official 1 this case turns on the fact that the product was produced in a certain way out of state and then is brought into the state. That is interstate commerce. If the state is simply regulating the production or the consumption of a product within the state, that is not -- that is not regulating interstate commerce. It may have an incidental effect on commerce because people won't ship it to the state anymore, but the important thing is that it's regulating within the state on the basis of valid state interests. But, when it comes to moral judgments, a state can make moral judgments for its own people, but, when it comes to conduct in another state, that's for that state's legislature to decide. If that -- a lot of laws can be -- can be explained or -- or described as based on moral determinations. Minimum wage laws, for example. And this was true in Baldwin. The Court made clear that a court could not limit the import of goods from another state on the ground that the workers were not paid a certain amount. Official 1 Or I would say parallel to the housing of the pigs here, if -- if California objected to the importation of pigs because the workers who worked at the pig farms were not housed properly, that would be -- that would be wrong too because that would be making -- that would be resting California law on a judgment about whether conduct in another state is proper or not.
Justice Barrett: Mr. Kneedler, can I ask you a question? I had understood your brief to really focus on Pike balancing --
Edwin S. Kneedler: Yes.
Justice Barrett: -- and to dismiss the -- say we not -- we need not reach the extraterritoriality point. The way that you're describing Pike balancing in response to Justice Kagan's questions seems like it very much incorporates extraterritoriality into the analysis because your answers have been very focused on the fact that California was trying to do something to reach outside of its borders and regulate conduct in -- in Iowa. What benefit would we get from considering that part of Pike balancing rather Official 1 than just its own line of the Dormant Commerce Clause?
Edwin S. Kneedler: Well, I -- I -- I -- I think the points I was making actually fit into both sides of the -- of the Pike balancing. Pike balancing, when it comes to the enacting state's interest, the Court said it has to be a legitimate local public interest. And California does not have a cognizable local interest in California in the conduct that is occurring elsewhere. So it's -- so the point I made about California regulating conduct outside the state is built in in that respect. But also, when California is, by -- by virtue of a sales ban, excluding products from other states, that is -- that is a pretty direct imposition on interstate commerce. It's effectively a trade barrier by saying it's not -- it's not a tariff because it doesn't -- you don't have to pay more, but it's excluding the product altogether by -- by the avenue of a -- of a sales ban.
Justice Jackson: Mr. Kneedler --
Justice Barrett: Well, so was Justice Kagan's example of just banning horse meat Official 1 altogether. I mean, it seems like that would be a trade barrier as well, right?
Edwin S. Kneedler: Well, but it's -- it's -- it's not -- its basis is not a trade barrier. Its basis is not this product was produced out of state and is coming into the state. Its basis is entirely on the local -- focusing entirely on the -- on the consumption or -- or sale within the state.
Justice Jackson: But, Mr. Kneedler, is that really a line that you can draw? Because it seems like it is totally based on the state's subjective interest in the particular circumstances. Like in both cases, the horse meat isn't coming in, to use Justice Kagan's analogy. In Scenario 1, you say the state says we don't want any horse meat because, say, you know, the science is such that we don't like horse meat and we're not going to offer it. And you say that's okay, even though it has impacts from all the horse farmers around the country. But, in Scenario 2, if the state says we don't like the horse meat because the way -- of the way the horses were raised in Kentucky, Official 1 that's not okay. And I'm just wondering if that's something that we can really take account of in a reasonable, you know, per se kind of way.
Edwin S. Kneedler: I'm not -- I'm not -- we're not proposing a per se rule. We believe this case should be decided under Pike balancing. But --
Justice Jackson: But, even under Pike balancing, how do we draw the line between those two scenarios based solely on whether the state is saying we don't like it because of what -- of the way in which these animals were raised versus we don't like it because we think the animals are going to harm our people?
Edwin S. Kneedler: Again, I think it's the distinction between -- and it reflects the -- the horizontal federalism that -- that is spread throughout the Constitution. California has to respect the autonomy of its sister states, the -- its sister state's ability to regulate conduct within its borders. And if Kentucky thinks that the -- a particular method of raising horses is okay, that's up to Kentucky. But the horizontal federalism and Official 1 autonomy of the states allows California, for example, to say we don't want horse meat in our state at all, irrespective of interstate commerce. In that situation, the law doesn't turn on -- doesn't -- its operative -- its operation does not turn on interstate commerce --
Justice Jackson: And it doesn't --
Edwin S. Kneedler: -- whereas this law does.
Justice Jackson: -- turn on the effect? It doesn't -- the effect is identical in both places in terms of the, you know, burden on the people who would otherwise sell into the state, but that's not the critical piece of this?
Edwin S. Kneedler: Right. In the -- in the total ban, it's an incidental effect on out-of-state people. On the -- where the law itself turns on the -- the -- the fact, the manner in which it was produced out of state, then that is -- that brings interstate commerce into it, and that -- that raises the Pike issue.
Chief Justice Roberts: Justice Thomas? Official 1 Justice Alito?
Justice Alito: Yes. Excuse me, Chief. Mr. Kneedler, this law applies to pork that is shipped into the United States from Canada and Mexico, doesn't it?
Edwin S. Kneedler: Yes.
Justice Alito: Does the United States have any position on whether regulating that is consistent with federal treaty law?
Edwin S. Kneedler: I --
Justice Alito: Is that consistent with NAFTA?
Edwin S. Kneedler: I -- I don't know the answer to that. I don't know that the government has taken a position on that, but -- but NAFTA and other trade agreements are examples of concerns about trade restrictions that are not price-based. And so we think the -- the Commerce Clause also should not be price-based for similar reasons.
Justice Alito: Well, I know this is unfair, so you can just tell me that it's -- it's not within the arguments presented to us, but could California ban the importation from Official 1 Mexico or Canada of any products that were not produced in a factory that complies with U.S. environmental laws? As I said, it's --
Edwin S. Kneedler: I --
Justice Alito: -- you can just --
Edwin S. Kneedler: -- I -- no, I -- I -- I don't think so. I mean, that would -- that would raise questions under the Foreign Commerce Clause and the -- and -- and some of the issues that this Court has considered before with respect to a state regulating with respect to things that -- that happen in a foreign country. That -- there's an additional concern under our constitutional structure for that sort of thing.
Justice Alito: So, if -- if the Dormant Commerce Clause applies to foreign commerce, do you think there should be a heightened standard? Would it be tougher to -- for a state to satisfy a -- to -- to survive a Dormant Commerce Clause challenge when the challenge concerns international commerce?
Edwin S. Kneedler: I -- I think there may well be. In fact, if -- if a -- if a state law Official 1 is expressly directed at interstate commerce, then, you know, it's singling out foreign -- not interstate -- foreign commerce. It's singling out foreign commerce for special treatment, which I think, under the Constitution and under the framers' intent, would be a -- would be a --
Justice Alito: All right. Thank you.
Edwin S. Kneedler: -- serious problem.
Chief Justice Roberts: Justice Sotomayor?
Justice Sotomayor: Mr. Kneedler, if Petitioner did not claim that there were these unique tracing and separation problems, already could do the tracing, could do the separation, would you still say that there was a substantial burden on interstate commerce? And if so --
Edwin S. Kneedler: Yes. Our --
Justice Sotomayor: -- why?
Edwin S. Kneedler: -- our position does not turn on -- does not turn on whether a product can be traced. Our position turns on the fact that the conduct on the farm would have to be changed to comply --
Justice Sotomayor: Is that because --
Edwin S. Kneedler: -- which would in turn Official 1 have costs. But --
Justice Sotomayor: Well, so any cost is a substantial burden on interstate commerce?
Edwin S. Kneedler: No. I mean, under -- under Pike balancing, if there is a substantiated legitimate local public interest, that -- that would prevail unless --
Justice Sotomayor: So whether --
Edwin S. Kneedler: -- it's greatly exceeded --
Justice Sotomayor: So you are going -- you're asking us to do what Justice Gorsuch said, give moral objection zero or maybe .5 importance, and a dollar increase in production, the balance then goes against the law?
Edwin S. Kneedler: Well, I -- I think there would probably be a -- you wouldn't -- you wouldn't have to get there because, if the burden is trivial, the case -- the suit wouldn't be brought, but it -- but it wouldn't be --
Justice Sotomayor: Has there ever --
Edwin S. Kneedler: -- it may not be a cognizable claim in that situation.
Justice Sotomayor: Any of our cases in Pike, even in extraterritoriality, can you Official 1 point to one where just increased cost has created an objectionable interstate burden?
Edwin S. Kneedler: Well, the Court in Pike itself discussed the fact that the -- that the requirement there would effectively impose a requirement on the company to build a warehouse for $200,000 in Arizona in order to be able to ship its cantaloupes out of -- out of state. And there have been other situations, some of the other -- I think Kassel, several other cases have focused on costs.
Justice Sotomayor: So give me that -- give me that line. Explain it to me. How much cost?
Edwin S. Kneedler: I think it -- I think it's difficult to quantify, but let -- let me make a -- an important antecedent point. Costs are a manifestation of the burdens on interstate commerce. But, when California law requires a foreign producer to change its operation because California disagrees with the way it's done, that is itself a burden on interstate commerce. It will, in turn, cost a lot of money, but -- but in terms of regulating interstate commerce, Official 1 you --
Justice Sotomayor: So why do we let consumer demand do it?
Edwin S. Kneedler: I'm sorry?
Justice Sotomayor: Why do we let consumer demand do it? I mean, consumer demand is requiring changes in production.
Edwin S. Kneedler: Well, as I say, the -- the -- the -- the state -- producers can voluntarily do that. They can ship their product into California. And, as I say, USDA --
Justice Sotomayor: They can -- they can voluntarily do that even under the state regulation. They can choose to or not choose to.
Edwin S. Kneedler: Yes. But -- but -- but I --
Justice Sotomayor: They can forego the California market or they can stay in it.
Edwin S. Kneedler: But I -- but I -- I -- I think that that's -- that would prove far too much because, what -- if you have a trade barrier preventing the shipment of a product from one state to another, the -- the -- the shipper in the other state can always say, I Official 1 won't ship there. I'll just -- I'll just trade elsewhere. That's not an answer to the Commerce Clause's concern about a -- about a national economic union, not its concern with balkanization and its respect for horizontal autonomy of -- of the respective states. I also want to point out --
Justice Sotomayor: You've answered my question. Thank you.
Edwin S. Kneedler: Oh, okay.
Chief Justice Roberts: Justice Kagan.
Justice Kagan: Mr. Kneedler, maybe I'm misunderstanding, but your argument here today seems stronger than your argument in the briefs, and I just want to say why I think that and -- and have you respond to it. I had understood in your briefs that you were putting a lot of weight on the fact that this is in the pleading stage and you were just saying: Look, the pleading requirements have been satisfied. We should go on and do the hard work at summary judgment or at trial or something. And if I understand your answers to a Official 1 lot of these questions, I honestly don't understand how you think California could win at summary judgment or at trial. So I guess my question to you is, is that fair? Is your argument basically California can't win and, if not, what it could say to win?
Edwin S. Kneedler: Well, first of all, our brief made two points about the asserted local interests of California. With respect to the moral interest, we, I think, pretty clearly said that California's moral opposition or philosophical opposition really --
Justice Kagan: Can't count.
Edwin S. Kneedler: -- can't count.
Justice Kagan: And I guess what -- what -- what really led to this question was your answer to Justice Sotomayor when you -- on the one hand, you say the moral can't count. There -- there is then the -- the health. And we haven't really talked about that much. But then, in answering Justice Sotomayor, you said it really doesn't matter if Petitioners are right about the tracing and about, you know, whether they could segregate Official 1 different kinds of products. That just doesn't matter because there's a sort of per se -- you know, there just -- there's just an effect on production processes. I suppose this gets into Justice Barrett's comment that it's -- it's just getting to sound a lot more per se.
Edwin S. Kneedler: No, I -- I didn't mean to say that costs are irrelevant. I think costs are an important factor under -- under Pike balancing, and the costs at least here that are alleged are -- you know, are substantial. But I also think that the -- that the --
Justice Kagan: But the costs that are alleged are substantial because Mr. Bishop has this point about the difficulty of segregation given the nature of the industry. If that turns out not to be true, does California then win? Can California then win?
Edwin S. Kneedler: I mean, there's still the cost of the individual pork producers having to reconfigure their farms. And so the ability to trace is only part of the -- part of the question. But -- and that there's allegations Official 1 and -- and declarations supporting the complaint that explain what would be entailed in expanding to 24 square feet or -- or pen -- group pens rather than individual pens. The -- the -- the adverse effects that may have on both the productivity and health of the sows, I mean, there are a lot of competing considerations.
Justice Kagan: Would it be fair to say that you think California should lose this case?
Edwin S. Kneedler: No, we have not taken a position on whether their health and safety rationale would -- would prevail. But the fact that California has not relied on that and -- and the plausible allegations we think in the complaint do -- do require that the plaintiffs be given a chance to prove their case. But -- but this statute is also unusual in that it is trying to project California's law into other states, which, for example, Carbone, not just Baldwin, said was a problem.
Justice Kagan: Thank you.
Chief Justice Roberts: Justice Official 1 Gorsuch?
Justice Gorsuch: Mr. Kneedler, you -- you place a lot of stress on the fact that there would be increased cost to certain producers out of state. But what if all of those costs are borne by California consumers who are willing to pay a higher price for a certain kind of product, pork products produced in compliance with their laws? Is there any reason -- would -- would that pose a problem under your theory? Let's say all of the costs are borne by California consumers.
Edwin S. Kneedler: I -- I -- I don't think -- excuse me. I don't think in the main that the Pike analysis would -- would turn on how the costs played out. I mean, for example, you could have a --
Justice Gorsuch: So -- so, if that's the case, then -- then this is really an argument about protecting certain modes of production by certain manufacturers out of state rather than letting the market play out. Even if some other persons might come into the market Official 1 or might already be in the market who are happy to participate in California's system and fulfill that need at a higher price, we still have an interstate commerce problem?
Edwin S. Kneedler: Well, the first point I wanted to make is a tariff might increase the cost, and consumers in California might be willing to pay it, but that doesn't render it okay under the Commerce Clause.
Justice Gorsuch: Okay. All right.
Edwin S. Kneedler: But --
Justice Gorsuch: No, I just want to understand your argument. So even if California consumers pay all of the cost of this law, all of it, it's still a problem?
Edwin S. Kneedler: Yes, because -- because, again, California is -- in -- in this instance --
Justice Gorsuch: Okay.
Edwin S. Kneedler: -- is regulating conduct outside the state.
Justice Gorsuch: And I want to pick up on that, all right, and the moral objection. You keep coming to the idea that they're trying to regulate something outside of the state. Official 1 But, as I understand California's position charitably, it's that Californians, 63 percent of them, voted to -- for this law. They don't wish to have California be complicit, even indirectly, in the -- in -- in livestock practices that they find abhorrent, wherever they occur, in California or anywhere else. Why isn't that a correct understanding of California's asserted moral interest and why isn't that an in-state moral interest?
Edwin S. Kneedler: First of all, it's individuals who ordinarily have moral objections to start with.
Justice Gorsuch: Oh, no, I thought -- well, hold on. Hold on.
Edwin S. Kneedler: And a state can --
Justice Gorsuch: Do -- can states --
Edwin S. Kneedler: A state -- a state --
Justice Gorsuch: Okay. All right.
Edwin S. Kneedler: -- a state --
Justice Gorsuch: So let's put that aside then.
Edwin S. Kneedler: But -- but a -- a state can enact a law regulating conduct within the state on the basis of morals. Official
Justice Gorsuch: So we can put that aside.
Edwin S. Kneedler: But -- but, when it comes to conduct outside the state, that would open a -- a -- a huge invitation and -- and -- and I think greatly undermine the Commerce Clause because a lot of regulation can be described --
Justice Gorsuch: So, if all pig producers --
Edwin S. Kneedler: -- as based on morals.
Justice Gorsuch: -- were in California, this law would be okay. It's just because pig producers are by and large mostly out of state that it poses a problem?
Edwin S. Kneedler: Well, California has independently imposed a -- a ban on pork production under these standards within the state.
Justice Gorsuch: I'm asking -- I'm -- I understand that. But answer my question if you will. If pork producers were in state, this law would be okay. It's just because they're out of state that it poses a problem?
Edwin S. Kneedler: Yes. Official
Justice Gorsuch: Okay.
Edwin S. Kneedler: And --
Justice Gorsuch: But -- but, if that's the case, again, why -- why is it uncharitable -- why isn't it uncharitable to suggest that they're trying to regulate out-of-state conduct when they may just be saying we don't wish to participate in this at all wherever it occurs --
Edwin S. Kneedler: Oh, I -- I -- I -- I -- I --
Justice Gorsuch: -- whether it's slavery or horse meat or pig production?
Edwin S. Kneedler: -- I -- I think that is -- you know, I think that is their asserted interest in the end. What I'm saying is that -- that the Commerce Clause and -- and our system of horizontal federalism generally can really not allow for that because it would -- it would -- it would create the very balkanization of not just commercial regulation but retaliatory non-commercial regulation between the states as one state tries to limit sales, and sales are a way of -- of -- of regulating, prohibiting sales is a way of regulating, by -- by prohibiting Official 1 sales in the state of anything that comes from a state where it was produced in a way they don't agree with. Produced by union labor, produced by non-union labor, produced -- not paying a sufficient minimum wage, not paying enough for milk, as in Baldwin, not disposing of their waste in a -- in a way that the enacting state finds -- finds reasonable, all those could be described in moral terms.
Chief Justice Roberts: Justice Kavanaugh?
Justice Kavanaugh: Two questions. One, the flip side of Justice Thomas's question. If Congress and the President agreed with California's moral judgment, could they pass a law regulating how pigs are housed, at least pigs that are involved in the interstate market?
Edwin S. Kneedler: Sure. Yes. I mean, that would -- they could definitely do that.
Justice Kavanaugh: And, second, you said this law is unusual. Can you elaborate on that? How unusual is it? And from the perspective of the United States, is it concerned about how usual it will become if Official 1 California's law is upheld here?
Edwin S. Kneedler: Yes, it -- as I was just explaining, I think there would be a concern about inviting state laws regulating conduct in another state. And the fact that it's done through sales as opposed to an outright prohibition -- I mean, this Court made a similar point in the -- in the National Meat Association case 10 years ago, the preemption case, where the Court said California could not implement its preferred policies with respect to pork coming out of slaughterhouses by making their regulation on sales rather than a -- than a prohibition. So the sales that -- the local sales can't be enough to justify the action. So what we have here is basically an attempt by California to regulate what is happening in other states. And, as I said, it -- that -- that is a -- a proposition that once -- once unleashed would be -- would be difficult to contain.
Justice Kavanaugh: Thank you.
Chief Justice Roberts: Justice Barrett? Official
Justice Barrett: Just one question, Mr. Kneedler. I asked Mr. Bishop how many laws this might affect if -- if we said that it was not permissible. So, if this fails either the extraterritoriality principle or Pike balancing, how many other laws would fall, that it might affect? And he said California's -- as I understood him to say, California's is essentially an outlier. States haven't tried to do this. You were talking about what might happen in the future if we allowed California to do it, opening up a can of worms of retaliation. What about the question I asked Mr. Bishop? Are there other laws like this? Is it really the case -- you know, Justice Kagan was giving the example of the -- the pesticide and the firewood -- treatment of firewood. I mean, are -- would we have to worry about calling into question a lot of laws that are pretty common?
Edwin S. Kneedler: No, I -- I -- I don't think so. With respect to the specific conduct -- context here, there are states that ban raising pigs that are using gestation pens, Official 1 let's say. Most of those are just limited to the state where the pigs are being raised. Massachusetts also has an extra ban. But, in -- in -- in other cases, for example, in the -- in the firewood case, the state has a legitimate interest, unlike here, we think on the moral basis, has a legitimate interest in protecting against the entry of firewood if there -- if there are pests in there that might infect local --
Justice Barrett: Because all the cases that you're aware of or that would be normal rest on safety and health rationales rather than morals legislation, that this really is --
Edwin S. Kneedler: Right. That they --
Justice Barrett: -- a unique effort in the moralist context?
Edwin S. Kneedler: Right. Yes. They -- they -- they would be judged under Pike -- under Pike balancing, and -- and if there is a legitimate state interest and there was not a less in -- invasive way to -- to control the problem, then the -- the state -- state may well be able to do that. Official 1 But there may be other ways to protect against the entry of injurious products in -- into the state, but that would -- that -- that's what Pike balancing is for and the way we think the Court should decide the case.
Chief Justice Roberts: Justice Jackson?
Justice Jackson: Yes. Mr. Kneedler, you've said a couple of times that the Commerce Clause cannot allow for what it is that California is doing in this situation, and that sounds pretty categorical to me. And I know that you have been trying to disclaim any reliance on the sort of extraterritoriality principle, that you say we should proceed under Pike balancing. But -- but I also hear you making a claim that sounds to me like an extraterritoriality principle, and can I just focus your attention on that for a second? I think that the Petitioners have actually introduced two different kinds of extraterritoriality principle. In their briefs, they say that the rule should be that a state may not enact laws that have the practical effect of controlling conduct. And I worried Official 1 about that when I read the brief because, to the extent we're talking about effect, then it introduces all kinds of questions, how much, how significant, and it doesn't sound like a bright-line rule anymore to me. But here today the Petitioners kind of move away a little bit from the controlling effect idea, and they say the per se rule should be essentially focused on the nature of the regulation, that the state law that conditions sales on out-of-state businesses operating in a certain way is the principle. And that's the one that you seem to be agreeing with. To the extent that you say that the problem is that a state who has a morality interest can't have a morality interest that is directed at the manner in which another state is conducting its business or other businesses are operating, why isn't that the same thing that the Petitioners are saying with respect to their extraterritoriality principle and, therefore, doesn't the government agree with them?
Edwin S. Kneedler: Well, with respect to a regulation like this -- and when I said what -- what -- allowing California to do what it's Official 1 doing would be a serious problem, I was focusing on the -- on the moral justification, which is -- which is a philosophic or a political disagreement with what's happening in another state, which we think is not, to use the language of Pike, a legitimate local public interest of California.
Justice Jackson: But isn't that the same thing he's saying when he says --
Edwin S. Kneedler: Well, this is a place --
Justice Jackson: -- it's conditioning -- yeah.
Edwin S. Kneedler: -- this is a place where I think that the two arguments might converge.
Justice Jackson: Okay.
Edwin S. Kneedler: And -- and, in fact, in -- in this Court's decision in Wayfair, the Court said that the Commerce Clause has two principal prohibitions, a prohibition against discrimination and a prohibition against undue burdens, oh, and these are subject to exceptions and variations. So the extraterritoriality principle, Official 1 as it becomes stronger in a case like this, putting health and safety to one side, could be seen as an independent argument, which is the way Petitioners are presenting it, and -- and you could read language in Baldwin or Healy to say that, or -- or simply a particularly strong version of Pike balancing where you're -- where you're comparing the effect on interstate commerce to what, under this rationale, is an insubstantial or nonexistent in-state interest.
Chief Justice Roberts: Thank you, counsel. General Mongan. ORAL ARGUMENT OF MICHAEL J. MONGAN ON BEHALF OF THE STATE RESPONDENTS
Michael J. Mongan: Mr. Chief Justice, and may it please the Court: Proposition 12 bars the in-state sale of certain pork products. California voters chose to pay higher prices to serve their local interest in refusing to provide a market to products they viewed as morally objectionable and potentially unsafe. The Commerce Clause does not prohibit that choice. Prop 12 is not protectionist or Official 1 discriminatory. It doesn't implicate the rule in Baldwin and Healy because it doesn't control prices in other states. And it doesn't violate the general principle against regulating wholly extraterritorial commerce. That principle has not been understood to bar states from setting standards for how the goods sold within their borders are manufactured or produced. States routinely enact that kind of law. And, Justice Barrett, at least 24 states have done so to serve local moral interests. Sales restrictions often have upstream out-of-state effects, but they're permissible as long as the condition on in-state sales focuses on the actual process for producing the goods sold in the regulating state. In this case, Prop 12's sow housing restrictions are tied to the production process for California-bound pork. They only address the particular breeding sows that are literally the mechanism for creating that pork. And the market already treats that aspect of the production process as a basis for differentiating between products. That's why Official 1 stores sell crate-free pork. Prop 12 places no restrictions on how out-of-state businesses produce pork for sale in other states, and Petitioners' own allegations show that producers can continue selling pork to other states using different production methods. If Petitioners think Prop 12 raises policy concerns, the solution the framers provided was for them to ask Congress to regulate under the express terms of the Commerce Clause, not for courts to expand the Dormant Commerce Clause.
Justice Thomas: Mr. Mongan, does it matter whether or not you focus directly on the upstream effects, that that's the point of the legislation, as opposed to a collateral effect of your legislation?
Michael J. Mongan: Your Honor, what matters is whether the state is regulating with respect to the goods sold within its borders and setting production standards, manufacturing standards for those goods.
Justice Thomas: So it doesn't matter that the purpose could be to have the upstream effect? Official
Michael J. Mongan: Well, Your Honor, I think, in -- in this case, and -- and what will often be the case, is that these laws are motivated by in-state local interests. And, here, there is two interests that were reflected in the ballot materials. One of them is a -- a local interest and the state not wanting its stores and markets to be complicit in selling a product that a substantial majority of the voters view as immoral, and many consumers and retailers as well, as evidenced by the shift to crate-free pork.
Justice Thomas: How far would you carry that? Could you -- other than beyond the health and safety concerns that you might have here, you'd say moral concerns. Could it extend to a state that has, for example, different political views on certain issues that are important to your voters?
Michael J. Mongan: I -- I don't think so, Your Honor, if I'm understanding the hypothetical correctly. So, for example, if a state were to bar the importation of goods from another state Official 1 because that state has a particular policy, that would be a facially discriminatory law. It would be equivalent to an embargo. And that's a paradigmatic Dormant Commerce Clause problem. It's quite different from a neutral in-state sales restriction of the type which is quite common across the country that allows all producers to freely compete so long as they produce goods that satisfy the --
Justice Kagan: But, Mr. Mongan --
Michael J. Mongan: -- the relevant standards.
Justice Kagan: -- a lot of policy disputes can be incorporated into laws like yours. So Mr. Kneedler gave examples of a few. You know, one, California can do laws that you have to be pro-labor. And Texas can do laws saying -- pro-labor union. And Texas can do laws that say you have to be anti-labor union, you know, close shop, open shop. You could -- you could have states making immigration policy, essentially, through these laws. You could have states doing a wide variety of things through the mechanism of Official 1 saying, well, unless you comply, you can't sell goods in our market. And, you know, we live in a divided country, and the -- the -- the balkanization that the framers were concerned about is surely present today. And I think that the -- the -- the -- the -- the real power of Mr. Kneedler's examples were, you know, do we want to live in a world where we're constantly at each others' throats and, you know, Texas is at war with California and California at war with Texas?
Michael J. Mongan: Right, I -- I certainly understand the concern, Your Honor. I think that there is and should be a constitutional check on that, which is that a state regulation of a product has to be sufficiently tied to the actual process of producing that product. And I think a lot of the hypotheticals that my friend pointed to that you've just recited, in addition to likely having some preemption problems, which I'm happy to speak to, but also deal with an in-state sales condition that is not sufficiently tied to production.
Justice Barrett: But where does that Official 1 come from? I mean, you -- you're saying that in response to Justice Kagan, you've said a couple times that -- you've emphasized that this restriction on how the pork -- how the pigs are raised is tied to the product itself, but why is that necessary? I mean, you know, your friend on the other side said, well, you know, you could have things that tied -- tied the availability of the market to the production of certain health services. So could you have California pass a law that said we're not going to buy any pork from companies that don't require all their employees to be vaccinated or from corporations that don't fund gender-affirming surgery or that sort of thing? What -- what's the importance and where does it come from of this tie to the product itself?
Michael J. Mongan: So, Your Honor, as to those hypotheticals, and then if I can get back to the first part of the question, I think those would be problematic because what you have there is a condition on in-state sales that's focused Official 1 on a general company-wide policy with respect to all of that company's activities wherever it does business, including the production of products for totally different states. It's not focused on production of the goods that are coming into the regulating state. I think that this is a principle that the lower courts have recognized in cases like Legato Vapors, that when you condition the sale of a product coming in on that type of wholly unrelated restriction, then you're not really regulating the product. You are -- it's tantamount to a regulation of a wholly out-of-state activity. And there's some support for this as well in -- in the Brown-Forman decision that was obviously focused on price controls, but the Court made clear you can't condition the privilege of selling liquor into New York on a restriction on how liquor is sold in out-of-state sales to consumers out of state and it'll be consumed out of state.
Justice Barrett: But couldn't Californians have a moral interest in saying they don't want to be complicit and open their Official 1 supermarket shelves to the wares of a company that mistreats its employees, for example, by not providing certain forms of healthcare?
Michael J. Mongan: So I -- I -- I certainly could imagine a state articulating that type of moral interest, but I don't think that stating the moral interest is the end of the constitutional analysis. Of course, there can be all sorts of constitutional checks on in-state sales restrictions under the Supremacy Clause or the First or Second or Fourteenth Amendment, and for purposes of the Commerce Clause or -- or -- or a general principle against regulating wholly extraterritorial activity, I think the line I've described is a -- is a sensible one because, on the one hand, states have to be able to regulate the products coming into their borders, but, on the other hand, I think we would all recognize that it would be problematic if states can condition the sales of those products on restrictions of wholly unrelated out-of-state purchasers.
Justice Alito: What about --
Justice Kavanaugh: I mean, wholly Official 100 unrelated is doing a ton of work in your answers to Justice Barrett. So what about a law that says you can't sell fruit in our state if it's produced -- handled by people who are not in the country legally? Is that state law permissible? And if not, how is it different from this law?
Michael J. Mongan: So I -- I want to get to the constitutional question. I think there would be an important threshold question there of INA preemption, and that does underscore --
Justice Kavanaugh: Put that aside.
Michael J. Mongan: Right, Your Honor.
Justice Kavanaugh: Put that aside because I can flip it to any number of other, as Justice Kagan said, social issues if you want me to.
Michael J. Mongan: I certainly understand that. So, if the question is, you know, could you adopt a regulation that says the particular goods that are coming into this state have to be produced by a -- you know, or -- or -- or have to be worked on by people who are lawfully documented individuals, I -- I don't think I see a Dormant Commerce Clause problem there. I'm not sure that it's different from Official 101 some other restrictions that have been on the -- the books with respect to, for example, the sale of goods produced by child labor. Now I'm sure there's a lot of people in California who might not be happy with that law, but I think --
Justice Kavanaugh: And so minimum wage, same answer?
Michael J. Mongan: No, I -- I would give a somewhat different answer on -- on the minimum wage question. The hypothetical that my friend raised in -- in his brief I think would be pretty plainly invalid under the rule in Baldwin and Healy because what you really have there is a law seeking to control the -- to limit the price of labor inputs in out-of-state transactions and tie it to the price of labor inputs in in-state transactions, and that's the type of dynamic where --
Justice Kavanaugh: Union membership?
Michael J. Mongan: Pardon?
Justice Kavanaugh: Union membership?
Michael J. Mongan: So, again, I think a court would ask there: Is there a sufficient nexus between that and the actual production Official 102 process for a particular good? And I suspect that that would be a hard law for a state to defend because a court would note that this --
Justice Kavanaugh: The word "complicity" can do a ton of work, and that word's been used quite a bit here.
Michael J. Mongan: So -- so I understand that, but I think that the important analytical point there from my perspective is that -- that that goes to the moral interest that's articulated but that that's not the end of the analysis. And I think, certainly, with respect to Prop 12, I -- I -- I -- I recognize that there are some tough line-drawing exercises with respect to some of these borderline hypotheticals. You don't have them with respect to Prop 12. And I think this is a sensible and necessary line to sort of differentiate between the situations where states are directly setting standards for products coming into their borders and the -- the more -- much more problematic scenarios that my friends are pointing to.
Justice Alito: I -- I don't Official 103 understand the distinction that you're drawing. Could you try to just -- maybe it's just not getting through to me -- explain it to me? What is the difference?
Michael J. Mongan: So --
Justice Alito: A state says, we don't want a particular product to come into our borders because we think it was produced in an immoral way.
Michael J. Mongan: So -- so, Your Honor, perhaps --
Justice Alito: Why doesn't that apply equally to a -- a law that says you can't bring any products into our state if they were produced by employees who did not have the right to work, the right to -- not to join a union?
Michael J. Mongan: So -- so, Your Honor, perhaps I can answer by pointing to some of the concrete examples that Justice Barrett was asking about because there are a number of -- of these morals-focused laws and they're not just the categorical bans like on horse meat and ivory.
Justice Alito: No, it would help me more if you could state the principle rather Official 104 than giving me examples.
Michael J. Mongan: Right. I -- I -- I think that the principle is that it -- it should be uncontroversial that a state may regulate the products sold within their borders --
Justice Alito: Right.
Michael J. Mongan: -- and that that extends -- and it does in many different examples -- to the packaging, production process, the -- the manufacturing process for those goods. I -- I think that it is sensible to draw a line of the type that the Seventh Circuit drew in Legato Vapors if you're conditioning in-state sales on restrictions that are much more attenuated from the actual production process. And I think the union hypotheticals, for example, that goes to a general matter of the relations between labor and employees and -- and -- and not to the particulars of how a product --
Justice Alito: More -- more attenuated?
Michael J. Mongan: -- is produced.
Justice Alito: What does that mean? How do you draw -- how do you know when it Official 105 becomes too -- too attenuated?
Michael J. Mongan: Well, I think a court would look to whether it is -- the regulation is actually geared to the mechanics of the production process or whether it is addressing, for example, some general corporate policy that applies, you know, much more broadly and is several steps removed from the production process. So --
Justice Kagan: And why is that the relevant inquiry? I mean, even if we could figure out which falls on which side, why is that the relevant inquiry?
Michael J. Mongan: I -- I think it's a relevant inquiry, Your Honor, because the -- the Court has recognized that there is, whether it's under the Commerce Clause or otherwise, a general principle against states regulating wholly extraterritorial commerce. And I would submit that I think a lot of the troubling hypotheticals are scenarios where, yes, there is a regulation of a -- a good, but the actual condition that's placed as a restriction on the in-state sale of that good is going to some activity that is fairly under Official 106 --
Justice Kagan: You're basically saying that the way we should think about this is to use an anti-leveraging principle, that a state can't use its power as a consumer or as -- you know, as a market to leverage policy views that are unconnected with the marketing of a product?
Michael J. Mongan: I -- I -- I think I would describe it as a -- as a principle that focuses on the -- the particular production process for -- for a product. And, yes, that would be the concern motivating that principle.
Chief Justice Roberts: Would --
Michael J. Mongan: But, Your Honor --
Chief Justice Roberts: I'm sorry, go ahead.
Michael J. Mongan: Oh. Well, I just wanted to make the point that this is not unique to California. I -- I would point the Court to Professor Snead's amicus brief, where he discusses this type of interest, including with respect to morals-based policies, such as the law that Arizona and seven other states have banning the sale of eggs from hens that don't Official 107 have enough space, or Louisiana's law --
Chief Justice Roberts: Right. You've been talking about -- as -- as if the morals aspect was the significant part of the inquiry. But wouldn't your case be a lot harder if there were a non-de minimis number of pork producers in California?
Michael J. Mongan: Your Honor, I guess -- is the question going to the -- to potential concerns about discrimination?
Chief Justice Roberts: Well, many of our cases can arguably be distinguished on the ground that they were concerned with protectionism.
Michael J. Mongan: Right. Right.
Chief Justice Roberts: And if there are pork producers in California who are going to be subject to this law, it's a way for California to make sure those producers aren't undermined by producers who don't have to comply with it.
Michael J. Mongan: That's -- that's right, Your Honor. And the core focus of this doctrine is on protectionism. And so I -- I think, in a situation like that, although the law is Official 108 facially neutral, a court would look to the particular circumstances to see if there's discriminatory effects of the type the Court found in Hunt. Of course, my friends have disclaimed any protectionism or discrimination claim here, and I don't see how that would be viable under the particular circumstances. And as to extraterritoriality considerations, I think that the Court has made quite clear that in cases like Exxon and Walsh, the fact that a state is regulating even with respect to an industry that doesn't have a presence in that state is not a Dormant Commerce Clause problem.
Chief Justice Roberts: Well, how do we decide -- you keep emphasizing the number of people in California who voted in favor of the referendum. What if there are a substantial number who voted for moral reasons and a substantial number who voted for economic reasons? How should we analyze that? Or, you know, obviously, what if we can't tell?
Michael J. Mongan: Well, I -- I certainly understand that. That's a common problem with looking at the purposes of legislation. Official 109 I -- I think, in this case, it is clear on the face of the statute and in the ballot materials, which under California law is powerful evidence of voter intent, that there are these two rationales that -- that we have discussed.
Chief Justice Roberts: So if it's -- you analyze a situation where you can't tell the basis for the reason, and as we've been discussing, you think it may be more vulnerable if it's a protectionist reason rather than a moral reason. How do we parse that -- that statute?
Michael J. Mongan: So, Your Honor, I think that's one of the challenges that the Court has wrestled with in the Dormant Commerce Clause arena, and, obviously, focusing on legislative purpose is -- is perhaps more disfavored now than it once was in some of the earlier cases. But, if you look at a case like Hunt, it's looking at objective manifestations of protectionism. You have a situation where there are out-of-state competitors who have established a competitive advantage, and the features of the statute is meant to neutralize Official 110 that advantage. But we don't have anything like that here, Your Honor.
Justice Jackson: But how -- how -- how does the principle that you articulate relate to the concerns of the Dormant Commerce Clause? I mean, I had understood that part of the concern was that when states do the kind of thing that you're talking about, even if they are doing so to protect the products in -- for a moral reason that are being sold into the state, it still has a significant impact on interstate commerce and that that's really what the Constitution cares about. So I'm -- I'm a little worried about the line that you draw between conditions -- between the types of conditions, conditions that are related to the product versus conditions that aren't, as it relates to the purposes of the Dormant Commerce Clause.
Michael J. Mongan: So -- so two points, Your Honor. I mean, I think my friend spoke about the history, the framing history, of the -- the Commerce Clause. I think the concern there was very clearly with discriminatory, facially discriminatory statutes like embargoes and Official 111 customs duties and the like. That's the type of dynamic described by the narrow rule in Baldwin and Healy. And we don't have anything like that here. The line that I have been describing, I think, is a reflection of the general principle against regulating wholly extraterritorial conduct. The plurality in Edgar pointed to that as a Commerce Clause principle, and a number of lower courts, including our own circuit, have applied it as such. And -- and it's a means of differentiating between the large number of valid in-state sales restrictions and some of the more problematic hypotheticals that we have -- that we have heard today.
Justice Jackson: So you're suggesting that it's only impermissible if it's wholly extraterritorial as identified by it being a condition that is not related at all to the actual product that's coming into the state? Is that the line that you're --
Michael J. Mongan: Your Honor, I -- I think that's about right. I mean, I'd point the Court, for example, to the Legato Vapors case Official 112 that -- that my friend referenced in the Seventh Circuit. So there you have an in-state sale condition on vaping products, but the feature that most concerned the Seventh Circuit was that it was requiring out-of-state manufacturers to enter into a particular security contract with a particular private term for a -- a firm for a five-year term. And the court had no difficulty saying that's not really regulating the product that's sold in the state. It's tantamount to a -- to a regulate of -- regulation of something that is wholly out of state.
Justice Jackson: And it doesn't matter at all to you whether the state's attempt to advance its interest with respect to this product affects the entire market, reshapes the way -- I mean, I think --
Michael J. Mongan: Right.
Justice Jackson: -- the problem that I'm having a little bit with -- with your side of this case is that we're only at the motion to dismiss stage. I know that there are likely to be some disputes about the extent to which this ultimately does impact, and how much, the -- the Official 113 -- the market, but at this stage, it seems to me that the Court has to accept that the regulation at issue here is going to have this substantial impact on the operation of this market, and you seem to be indicating that that's not a viable thing from the standpoint of analyzing whether there is some sort of interstate commerce problem.
Michael J. Mongan: Your Honor, if I -- if I could spend a moment on that --
Justice Jackson: Yes.
Michael J. Mongan: -- because I think this is very important and we've heard some rhetoric today. We are at the motion to dismiss stage, and we do have to focus on the specific complaint allegations. Those allegations acknowledge at paragraph 58 that producers are free to choose whether or not they shift to this production method. They've identified in their declarations eight of their own members who have definitively announced they're not shifting. The allegations, paragraphs 297 to 299, and the declaration acknowledge that segregation and tracing is available. And if Official 114 you can segregate and trace, that means that you can pass along the increased costs of production to the end California --
Justice Jackson: Right. They're available, but that's not the way the market is right now according to the complaint, and so some changes are going to have to be made. And I guess I'm just wondering why it isn't plausible to believe that the changes that are going to be made would be a burden on the industry?
Michael J. Mongan: Well, Your Honor, I don't even think that that is consistent with the allegation in the declarations. They have acknowledged that this can be done and is being done. I'd point you to Pet. App. 287a. This is a declaration from one of their members talking about how he currently segregates: "My hogs are marked with my farm identification number that permits them to be segregated from other product." That's for producing crate-free pork. And he's told in his contract with the end supplier that he's going to be paid a price per unit.
Justice Jackson: Right, but you're Official 115 going to the evidence. I thought we were at the motion to dismiss stage.
Michael J. Mongan: Well, I think --
Justice Jackson: I mean, I understand that there might be declarations that say something different, but we're supposed to be confined to the corners of the complaint with respect to what is happening in this industry.
Michael J. Mongan: I -- I certainly understand and agree with that, Your Honor, but I think even within the corners of the complaint, the declarations attached to the complaint, paragraphs 297 to 299, acknowledge that this is feasible and available. And it's evident in the market, which is why we have crate-free pork and organic pork available in -- in grocery stores. And they acknowledge the crate-free pork part of the -- of the industry. So I don't -- I think the burden ultimately here is one that will fall on California consumers, and that's not a burden that should weigh heavily, if at all, in any Pike balancing.
Justice Alito: Suppose the Official 116 pork-producing states and pork-consuming states get mad at you because of this and they decide, okay, fine, turnaround is fair play, so we're going to adopt regulations concerning the production of agricultural products that are produced almost exclusively in California. Would that be okay? For example, could a state say, we're really concerned about water shortages, so we're going to prohibit the shipment through our territory or the sale within our borders of any almonds where the trees are irrigated? Could they do that?
Michael J. Mongan: Your Honor, if it's focused on the sale within their borders, I think that the logical conclusion of our position is that they could do that. And I -- I think that there's likely to be political checks for that type of -- of law if it raises concerns in the marketplace. I mean, one thing is, if you adopt a regulation that is just too burdensome to comply with, then the industry will stop serving a state and the state has to decide do we want our regulation or do we want pork.
Justice Alito: Are you unconcerned Official 117 about all this? Is California unconcerned about all this because it is such a giant, you can wield this power, Wyoming couldn't do it, most other states couldn't do it, but you can do it? You can bully the other states, and so you're not really that concerned about retaliation? Is that part of your position?
Michael J. Mongan: No, Your Honor, that's certainly not how I would put it. I think that this is a concern held by California and many other states, including states who are pork-producing, like Michigan and Illinois, who filed an amicus brief on our side, and it goes to core features of state sovereign authority to control the -- the products that are sold within our borders.
Justice Alito: One of the arguments I -- I'd like you to respond to this that's made by Petitioner and some of -- some of their amici, is that big companies can comply with this, no problem, but what this is going to do is shut out of the market all the small companies.
Michael J. Mongan: So, Your Honor, if I can offer a formal response to that focused on the Official 118 -- the complaint and -- and then a -- a more practical response. They have alleged that. I think what this Court made clear in the Exxon case is that that type of concern is not the type of burden that the Dormant Commerce Clause is concerned with. It goes to the -- the nature of -- of delivery and -- and the methods of operation in an industry. I think that the practical response is that's actually not what we're seeing and that -- that smaller pork producers can choose whether to get a substantial premium for producing this type of specialty product or crate-free pork or continue producing for other states, 49 other states, exactly as many of their own members, as the complaint acknowledges, have decided to do.
Chief Justice Roberts: Justice Thomas? Justice Kagan? Justice Gorsuch?
Justice Kavanaugh: Do you accept Pike as a precedent of this Court, or are you asking for it to be overruled? Official
Michael J. Mongan: We are not asking it to be overruled, Your Honor. It -- we --
Justice Kavanaugh: That's -- thank you.
Chief Justice Roberts: Justice Barrett? Justice Jackson? Thank you, counsel. Mr. Lamken. ORAL ARGUMENT OF JEFFREY A. LAMKEN ON BEHALF OF THE HUMANE SOCIETY OF THE UNITED STATES, ET AL., RESPONDENTS
Jeffrey A. Lamken: Thank you, Mr. Chief Justice, and may it please the Court: Proposition 12 -- excuse me, the Dormant Commerce Clause's dormant aspect focused on protectionism, discrimination, interferences with the instrumentalities of interstate commerce. Proposition 12 concededly is none of those things. It prohibits the sale within California of pork that Californians find immoral and unsafe regardless of where it originates. Proposition 12 reflects a moral Official 120 tradition that has been respected for millennia that consuming meat that is a product of animal cruelty is itself immoral. California chose to rid its markets of those -- some of those immoral products, and the framers did not sub silentio prohibit states from banning immoral products by hiding in -- hiding that revolutionary limit in a negative implication in a clause that simply is an affirmative grant of authority to Congress, nor do they impose more demanding health and safety proof requirements. I welcome the Court's questions.
Justice Thomas: Counsel, how broadly would you define "immoral"?
Jeffrey A. Lamken: So, Your Honor, I think, when it comes to the product, you would look at the closeness of the relationship between the -- the -- the regulation and the product itself. In this case, it is very closely bound. You can look at three considerations in particular. First, the market distinguishes between these products. They distinguish -- and -- and regulators as well -- between crate-raised pork that's inhumane and a humanely raised pork. Official
Justice Thomas: No, I mean the term, a definition of the term "immoral," of the word "immoral."
Jeffrey A. Lamken: Yeah. So I think, in general, that would be my second consideration, is you -- one of the things you might look at is looking at whether this is a traditional basis for regulation, you would -- if it's something that distinguishes a product from being moral versus immoral. And, here, it's historically bound. The major religions, humanity has recognized for millennia that products can be immoral because they are a product of animal cruelty, in particular, for -- in particular food. And so that is one of the features we do. But we'd also look at whether the market recognizes things as distinct products based on their morality. And the market here and regulators here distinguish inhumanely raised crated-pork from humanely raised pork. Companies look at it. You have companies like -- from Burger King to Whole Foods make that distinction. Regulators make the distinction. The USDA's FSIS regulates labels. Official
Justice Jackson: But you're suggesting --
Jeffrey A. Lamken: It excludes --
Justice Jackson: -- you're suggesting as though that distinction is universally held, and if it were, I would think the market would have already accounted for it everywhere. The problem as I hear your other friend saying is that Iowa, for example, disagrees. Iowa does not believe that its porks are being held -- and I'm saying this hypothetically, I don't know what Iowa actually believes -- but assume we have a state that -- that -- that thinks it's not immoral to hold their sows in a particular way. To what extent does California get to control what Iowa does with respect to the housing of its pork?
Jeffrey A. Lamken: It does not. But the question in this case is, who decides the pork that appears on California grocery shelves that's purchased and consumed by Californians? To say that when another state has a lesser standard, it decides what appears on California grocery shelves -- Official
Justice Jackson: But why can't -- why can't California solve for its morality issue in a different way, in a less burden -- if we assume that it's really going to create a burden to allow California to ban all Iowa pork on the grounds that California disagrees with how Iowa produces pork, why shouldn't the balance to the extent we're making one be to simply allow California to express its morality interest through a less burdensome means, like segregating Iowa's pork when it comes in, putting a big label over it that says this is immorally produced or whatever, and that won't hurt Iowa as much? Why can't we say that that's the way this should be?
Jeffrey A. Lamken: So I should be clear that if it were a distinction between Iowa pork and other pork, that would be discriminatory. You don't get to distinguish based on the origin in a state, but distinguish between crate-free pork and immoral inhumane pork.
Justice Jackson: All right, fine. Whatever -- whatever the distinction is, the question is, why does California get to ban it? When it has all of the implications on commerce Official 124 with respect to the supply chain upstream, why isn't the -- the solution that California just gets to announce?
Jeffrey A. Lamken: Yes. So I think there's two -- the answer is in two parts. The first is that California has an interest in banning immoral products from its own markets. And it doesn't serve that interest to say, well, we'll put labels on it because it doesn't ban it from the market. It's still in --
Justice Jackson: But wait, why does it ban it? Isn't that just not trusting California consumers? If they -- if they agree, right, there was a problem earlier about, like, how do we know how many consumers agree or disagree with the morality interest, wouldn't it best be served and we would know based on labeling it, and if it doesn't get sold, then there we are?
Jeffrey A. Lamken: Well, it still leaves California's markets available for products that California has deemed immoral. But it also doesn't serve California's other interest, which is ensuring that all Californians have access to morally acceptable pork even if they don't have Official 125 the resources, they don't have the luxury of studying labels or going to the Whole Foods market on La Cienega. This ensures that all pork in California meets a certain level of moral acceptability --
Justice Barrett: Mr. Lamken, can I ask you about that moral -- I'm sorry to interrupt. I see your time's running out. You told Justice Thomas that the definition of "moral" -- and so you're -- you're saying to Justice Jackson things about, you know, California's moral interest. You told Justice Thomas that your definition of morality would be rooted in cultural traditions and that sort of thing. Is your suggestion that states can only regulate based on morals -- that sounds a lot like the substantive Due Process Clause, right? They're supported by the history and traditions of the American people but that other kinds of morals legislation that were maybe more edgy or new would not be a permissible basis?
Jeffrey A. Lamken: No, Your Honor. But I think when you're asking -- and I think this is the nexus question that the Court was asking Official 126 about. When you're asking is California regulating the product that's being sold in California, or is it so divorced from the nature of the product, its regulation, that what it's doing is reaching across state lines and attempting to control something that's wholly out of state, which, mind you, I don't think it's a Dormant Commerce Clause because -- issue because it extends beyond commerce. California, for example, couldn't regulate high school curriculum in Texas, even though it has nothing to do with commerce. But, when you're making that distinction, you would look at the closeness of the fit between, is this product somehow immoral? And things you would look at in deciding whether it affects the morality of the product is, one, you would look at is this a market and a regulatory distinction that's regulated? Which is precisely the case here. You would look at, is this a distinction that's historically recognized? And this is a deeply rooted historical distinction that we understand that our food can be moral or immoral based on whether it's the product of animal cruelty. Official 127 And, third, you might look at whether or not this is a common feature through state law generally. And, for example, here, nine states, from Louisiana to Nevada to Virginia, ban the in-state sale of cosmetics that are tested on animals. Congress --
Justice Alito: Now I don't -- I don't understand the distinction you're drawing between regulations that go to the nature of the product and regulations that control the way in which the product is -- is produced. Put aside the -- the health issues, the safety issues. Let's assume for the sake of argument that -- that pork produced in the way it's mostly produced is just as safe as pork produced in accordance with California regulations. If you analyze the pork -- you have two pork chops. One is -- one, you know, made one -- produced one way. One is produced the other way. The product is exactly the same.
Jeffrey A. Lamken: Your Honor, that -- how the product is produced and whether it's done in a humane fashion does distinguish the products. Consumers recognize it as a difference. The Official 128 United States of America recognizes it a difference. For example, it bans blood diamonds, conflict diamonds, but not ordinary diamonds. We can -- we ban things that are made by slave --
Justice Alito: No, I --
Jeffrey A. Lamken: -- enslaved people but not others.
Justice Alito: -- I understand all of that. I just don't understand how you're going to draw a distinction between --
Jeffrey A. Lamken: I --
Justice Alito: -- between the California law and, for example, a law that says you can't sell a product in our state if it was produced by -- by workers who did not have the right to work.
Jeffrey A. Lamken: Yeah, and I -- and I think the answer -- you draw the line on this. You'd look at, for example, the right to work example. You'd first ask, do consumers, do regulators look at that as a typical distinction that makes one product different from another? They typically don't. The next question is, do you -- is Official 129 this something with a deep historical tradition that you would recognize that it somehow infects the product and makes the product itself immoral? That's not going to happen with --
Justice Alito: It seems to me --
Jeffrey A. Lamken: And third --
Justice Alito: -- you're asking for a categorization of moral objection, so the old ones -- you know, the old ones are okay, but new ones are not really?
Jeffrey A. Lamken: You'd also look at how often it happens, whether it's regular in the law that that type of category occurs. And as I pointed out, nine states deal with animal -- animal testing. Congress distinguishes. Eight states ban eggs from caged hens. Nine states ban afforded -- aborted fetal tissue but not fetal tissue that's not from abortions. Look at the alternative here. The alternative is that states cannot ban goods based on their morality. The alternative is, if a state thinks it's ethical to eat pork but unethical to eat inhumanely, cruelly raised pork, it can only ban pork entirely?
Justice Jackson: But why is that -- Official
Jeffrey A. Lamken: That is --
Justice Jackson: -- why is that -- why is that problematic? I'm just -- I'm just trying to understand how a moral objection gets you all the way to banning. Why wouldn't a state be able to advance its moral interest by identifying those goods and services that don't comport with the state's moral views? I understand health and safety, right, because, if you have a health and safety problem, then the state says we can't let people have access to these goods because it's going to hurt them. But I -- I think you have a different set of issues when you're talking about a moral objection and whether or not it's bad to prevent a state from banning a product on that ground when you have this alternative to --
Jeffrey A. Lamken: And I -- I think the answer is the states, just like the United States, are allowed to say certain products have a factor to them that renders them immoral and they will deny the access to that product to their markets.
Justice Kagan: So, in other words, 60 Official 131 --
Chief Justice Roberts: Thank you. I'll get to you in a second. Mr. Lamken, we've heard a lot about morality. I think people in some states, maybe the ones that produce a lot of pork, Iowa or North Carolina or Indiana, may think there's a moral value in providing a low-cost source of protein to people, maybe particularly at times of rising food prices. But, under your analysis, it's California's view of morality that prevails over the views of people in other states because of the market power that they have. So, I mean, isn't that a consideration we should take into effect in --
Jeffrey A. Lamken: So --
Chief Justice Roberts: -- analyzing this under the Commerce Clause? If, in fact, moral values are going to be given weight at least as significant as economic ones, why isn't that something that we should be sensitive to under the Commerce Clause?
Jeffrey A. Lamken: And each of those states is able to produce pork and consume pork in the Official 132 fashion they choose. This is a law that addresses only the pork that is consumed in the state of California. There's no --
Chief Justice Roberts: Yeah, but the reality is the reason they have this law is, one, because they don't have pork producers in California. So nobody is going to be hurt from that point of view. And, two, they want to affect conduct in other states. They want pork producers in Iowa and North Carolina and Indiana to have to produce pork the way they want them to, not necessarily even the way they want their own pork producers to produce, because they don't have any pork producers or a de minimis amount.
Jeffrey A. Lamken: Your Honor, the -- first, Exxon makes clear that what the Commerce Clause prodects -- protects is interstate commerce, not particular methods of production or organization of industry. And that makes sense. As Lopez makes clear, what matters here and what the core of the Commerce Clause is the instrumentalities and the movement of products in interstate commerce. Once you move to protecting the methods of Official 133 production and the cost of production, you've now moved to affecting commerce in a sort of Wickard versus Filburn kind of way. But that Wickard versus Filburn kind of way just doesn't have a role when it comes to cutting off state authority. And if we do -- if we do otherwise, we start making those judgments, this Court puts itself back in the role that it once took in Lochner of trying to effect and trying to decide, gee, how good is the state's limit, do we agree with the state limits, or is there another state limit? And what California's law does is it controls solely within California.
Chief Justice Roberts: Thank you.
Jeffrey A. Lamken: At most 13 percent.
Chief Justice Roberts: Justice Thomas? Justice Alito? Justice Sotomayor?
Justice Sotomayor: Are you giving up on the health and safety aspects of your claim?
Jeffrey A. Lamken: Absolutely not, Your Honor.
Justice Sotomayor: You spent all of Official 134 your argument on the moral issue.
Jeffrey A. Lamken: That -- that is a -- the -- a product of having 10 minutes, Your Honor. But I think the health and safety, the key point on that is that Petitioners have a burden -- a huge burden under this Court's Maine versus Taylor decision, and that is they have to show that it's not even plausible, that it's not arguable that there's a health and safety interest here. And the complaint doesn't come close to pleading that, because, first, it admits right at the outset, the complaint at the outset admits that there is -- and I'm going to quote if I find it -- that --- this is Pet. App. 228, paragraph 440. It admits that higher stocking density, so this is the intense confinement, correlates with higher salmonella rates for growing pigs. There's no reason to think that's irrational when you move from growing pigs to sows. And the American Health Association and the Physicians Committee explained the -- the mechanism by which this is a huge health impact, which is intense confinement causes stress which Official 135 has immunosuppressive effects not just for the sows but for the piglets. And is it irrational for California to believe, is it beyond debate, have the facts in the complaint set aside and shown that they're entitled to relief and shown that California just simply has no rational basis here for thinking that this has an effect? It does not come close. There's a burden, a price, under Rule 8 to get past the complaint stage, and that is that you have to show you're plausibly entitled to relief. To be entitled to relief here, Petitioners need to show that it's not even arguable that there's a health effect. They do not even come close, Your Honor.
Chief Justice Roberts: Justice Kagan?
Justice Kagan: Mr. Lamken, I -- I guess what troubles me is that this is a pleading stage case. So let's assume that moral interests count in the analysis. Let's just -- I'm not saying I'm -- I necessarily think that, but let's assume it. And let's assume that moral interests can extend beyond labeling, that people can say Official 136 labeling is not enough. We actually want to prevent those miss -- you know, those benighted people from eating this product regardless, whether they know what it is. So moral interests count. Moral interests extend beyond labeling. Still, you have this complaint which alleges -- and then whatever you want to say about the health interests. On the other hand, you have a complaint that alleges great costs to the pork farmers outside of California, almost all of whom are outside of California, and the entire industry. And I take Mr. Mongan's point that the complaint is considerably more nuanced than the briefs in this case, but you could imagine a complaint that basically made the points in the briefs, you could imagine the pork producers amending their complaint to sound more like Mr. Bishop's brief than the complaint that they actually wrote. And in that case, wouldn't we have to say, okay, this is the pleading stage, it goes back, somebody can do Pike balancing, it's very hard, you know, what exactly are we balancing, Official 137 these incommensurable things? But that's what our doctrine indicates should happen, so somebody should do that balancing.
Jeffrey A. Lamken: Right. Your Honor, I think there's two points. The -- the first is that I don't think they could -- well, second point is -- I'm going to come to, which is that's not this complaint, which is what the Court has before it. But before I get to that's not this complaint. Exxon --
Justice Kagan: Let's assume it's not this complaint. Let's assume a better complaint or a -- not a better complaint necessarily. Let's assume a stronger complaint.
Jeffrey A. Lamken: Right. So Exxon makes clear the particular structure or methods of operation are not what the Commerce Clause protects. The fact that costs might go up for production is divorced from the essence of the Commerce Clause itself, which is about the interstate movement of goods. Can you have that trade? When you step further away from that and you say I'm worried about how much it costs to make the pork in other states, you've now Official 138 stepped away from the core of the Commerce Clause, the interstate movement of goods, the channels of commerce, the instrumentalities of commerce that Lopez makes clear, and you're now in the land of, well, this is something that affects commerce, affects commerce in a Wickard/Filburn kind of way. That's just too far to read an implicit negative implication from constitutional text as a limit on what state authority can do. That goes too far. And I think Exxon makes that quite clear. But even apart from that, under Twombly, the -- the allegations need to make sense --
Justice Kagan: I guess what strikes me about this case, Mr. Lamken, is that both sides want to exclude things from the Pike analysis, right? Mr. Bishop wants to exclude all moral interests, as does Mr. Kneedler. And you want to exclude a world of economic harms because you think that that's not really what the Commerce Clause is all about. And isn't Pike just saying you get to throw them all in the mix and it's really hard, Official 139 but somebody has to make the judgment and it hasn't been made yet in this case?
Jeffrey A. Lamken: No, Your Honor, I think Exxon made that judgment, that you don't say, well, gee, it's going to be very expensive to force everybody who is out of -- in Exxon, all the burdens fell on out-of-state refiners. This oh, gee, this is restructuring the operation. No, Maryland gets to make the determination that it does not want refiners to be operating gas stations. Likewise here, California gets to make the judgment as to what's sold within the state. It may drive up costs for Californians. It may mean that pork farmers serving Californians pay more or cost -- it costs more for them. But that's simply an affecting commerce type of thing. That's not an interstate commerce problem. It's an affecting commerce problem, and I don't think courts should be in the middle of making that sort of determination from a negative implication from an affirmative grant of authority to Congress. But here, under Twombly, even if you just look at Twombly, Twombly says your Official 140 rationale needs to make -- your theory needs to make economic sense. It has to comport with common economic understanding. And with California being 13 percent of the market, it does not comport with common economic understanding that somehow the whole market is going to be shifted, as opposed to some producers serving California and some producers choosing to serve the other 87 --
Justice Kagan: Thank you.
Jeffrey A. Lamken: -- percent of the market.
Chief Justice Roberts: Justice Gorsuch? Justice Kavanaugh? Justice Barrett? Justice Jackson?
Justice Jackson: Can I just get a quick clarification of the burdens at this stage, sort of piggybacking on what Justice Kagan said. I understood you to say that the complaint has to show that it is not plausible that California has a health and safety concern under these circumstances. I -- I didn't think that that's what was going on. I thought the Official 141 complaint had to show that it is plausible that the burden outweighs any possible health interest that California has.
Jeffrey A. Lamken: Well, certainly, when you're looking at -- I think the government's argument here was that there's simply no health and safety interest, that the complaint is sufficient to show that. And I don't think that's true. The standard under --
Justice Jackson: Assume they -- isn't the -- isn't the -- the only thing that they have to show is, under Pike balancing, whatever the burdens are that they allege, plausibly outweigh whatever benefits or interests that California might have?
Jeffrey A. Lamken: Okay, but once you have a health and safety interest, they must show facts that plausibly show that California does not have a legitimate health and safety interest, that it's not even arguable. California is not required to wait for people to get sick, die, or end up in the hospital before it regulates. Maine versus Taylor is very clear about that. Official
Justice Jackson: All right. Thank you.
Jeffrey A. Lamken: And that was just as discriminatory.
Chief Justice Roberts: Thank you, counsel.
Jeffrey A. Lamken: Thank you, Your Honor.
Chief Justice Roberts: Mr. Bishop, rebuttal. REBUTTAL ARGUMENT OF TIMOTHY S. BISHOP ON BEHALF OF THE PETITIONERS
Timothy S. Bishop: Just very, very short, Your Honor. I've heard a lot about Exxon, but Exxon is solely about in-state restrictions. It had absolutely nothing to do with this case. Now I don't think that General Mongan's attempt to distinguish Prop 12 from other policy-directed conditions on sale works at all. I heard nothing that distinguishes Prop 12 from a law that says you cannot sell any food in this state unless it's produced by workers paid our minimum wage, offered certain medical care, who can belong to unions. Those are all conditions directly related to the production of the product, which Official 143 occurs out of state. And I heard no definition of attenuated conditions that is workable. And what I ask the Court to focus on is what our nation's interstate market looks like if California can condition sales on its moral or policy views and every other state can do the same. We'll be back to the pre-convention picture where you have balkanized markets and discord among the states, probably a lot worse now than in pre-convention times given the political differences among us. And that destroys the twin purposes of the Commerce Clause, which this Court said in Healy are to maintain the national economic union and preserve the territorial sovereignty of the states. We will not have a national economic union if California can impose its moral views this way. And just one -- one final point. I heard a lot of fighting the complaint. We have a 450-paragraph complaint, supported by declarations, that says that there are immense costs involved for the industry, immense harm to pigs that will result from complying with -- Official 144 with -- with Prop 12 and no safety benefit. I have a dozen pork farmers in the court today who would testify at trial that they are being forced by distributors and packers and retailers to comply with Prop 12 in a way that they think kills pigs, that harms their workers, that makes it extremely difficult for them to -- to -- to operate their farms in the way that they think is efficient and safe for -- for workers and pigs. And we are -- believe we're entitled to a trial to show that. Thank you.
Chief Justice Roberts: Thank you, counsel. The case is submitted. (Whereupon, at 12:15 p.m., the case was submitted.)