Supreme Court of the United States

“ Under our dormant Commerce Clause jurisprudence, one State may not discriminate against another’s producers or consumers. A law whose burdens fall incommensurately and inexplicably on out-of-state interests may be doing just that. ”

“ In Exxon, as far as anyone could tell, the law threatened only to shift market share from one set of out-of-state firms to another. Here, the pleadings allow for the same possibility—that California market share previously enjoyed by one group of profit-seeking, out-of-state businesses (farmers who stringently confine pigs and processors who decline to segregate their products) will be replaced by another (those who raise and trace Proposition 12-compliant pork) . ”

“ Not only that, they distort the market for animal products more generally by pressuring horsemeat manufacturers to transition to different products, ones they can lawfully sell nationwide. Under the lead dissent’s test, all it would take is one complaint from an unhappy out-of-state producer and—presto—the Constitution would protect the sale of horsemeat. Just find a judge anywhere in the country who considers the burden to producers “excessive.” ”

“ So even accepting everything petitioners say, we remain left with a task no court is equipped to undertake. On the one hand, some out-of-state producers who choose to comply with Proposition 12 may incur new costs. On the other hand, the law serves moral and health interests of some (disputable) magnitude for in-state residents. Some might reasonably find one set of concerns more compelling. Others might fairly disagree. How should we settle that dispute? The competing goods are incommensurable. ”

“ Both the district court and court of appeals dismissed the producers’ complaint for failing to state a claim.
We affirm. Companies that choose to sell products in various States must normally comply with the laws of those various States. Assuredly, under this Court’s dormant Commerce Clause decisions, no State may use its laws to discriminate purposefully against out-of-state economic interests. But the pork producers do not suggest that California’s law offends this principle. ”

“ Everyone agrees that Congress may seek to exercise this power to regulate the interstate trade of pork, much as it has done with various other products. Everyone agrees, too, that congressional enactments may preempt conflicting state laws. See Art. VI, cl. 2. But everyone also agrees that we have nothing like that here. Despite the persistent efforts of certain pork producers, Congress has yet to adopt any statute that might displace Proposition 12 or laws regulating pork production in other States. ”

“ Even under our received dormant Commerce Clause case law, petitioners begin in a tough spot. They do not allege that California’s law seeks to advantage in-state firms or disadvantage out-of-state rivals. In fact, petitioners disavow any discrimination-based claim, conceding that Proposition 12 imposes the same burdens on in-state pork producers that it imposes on out-of-state ones. ”

“ That has led petitioners to resort to litigation, pinning their hopes on what has come to be called the dormant Commerce Clause. Reading between the Constitution’s lines, petitioners observe, this Court has held that the Commerce Clause not only vests Congress with the power to regulate interstate trade; the Clause also “contain [s] a further, negative command,” one effectively forbidding the enforcement of “certain state [economic regulations] even when Congress has failed to legislate on the subject.” ”

“ Faced with this problem, petitioners reply that we should heavily discount the benefits of Proposition 12. They say that California has little interest in protecting the welfare of animals raised elsewhere and the law’s health benefits are overblown. But along the way, petitioners offer notable concessions too. They acknowledge that States may sometimes ban the in-state sale of products they deem unethical or immoral without regard to where those products are made (for example, goods manufactured with child labor) . ”

“ The producers in Exxon operated within Maryland and wished to continue doing so. By contrast, petitioners here allege that Proposition 12 will force compliance on farmers who do not wish to sell into the California market, exacerbate health issues in the national pig population, and undercut established operational practices. In my view, these allegations amount to economic harms against “the interstate market”—not just “particular interstate firms,” ibid.—such that they constitute a substantial burden under Pike. ”

“ This case involves the American pork industry, which today is a $20 billion-plus industry that generates hundreds of thousands of American jobs and serves millions of American consumers. Importantly for this case, the vast majority of pig farms are located in States other than California—such as Iowa, Minnesota, Illinois, Indiana, and North Carolina. And the vast majority of pork is likewise produced in States other than California. ”

“ In other words, if one State conditions sale of a good on the use of preferred farming, manufacturing, or production practices in another State where the good was grown or made, serious questions may arise under the Import-Export Clause. ”

“ That goes for pigs no less than gas stations.
Think of it another way. Petitioners must plead facts “plausibly” suggesting a substantial harm to interstate commerce; facts that render that outcome a “speculative” possibility are not enough. Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 555, 557 (2007) . In an effort to meet this standard, petitioners allege facts suggesting that certain out-of-state farmers and processing firms will find it difficult to comply with Proposition 12 and may choose not to do so. ”

“ The competing goods before us are insusceptible to resolution by reference to any juridical principle. Really, the task is like being asked to decide “whether a particular line is longer than a particular rock is heavy.” ”

“ In my view, and as Justice Gorsuch concludes for a separate plurality of the Court, petitioners’ Pike claim fails for a much narrower reason. Reading petitioners’ allegations in light of the Court’s decision in Exxon Corp. v. Governor of Maryland, 437 U. S. 117 (1978) , the complaint fails to allege a substantial burden on interstate commerce. See ante, at 21–25. Alleging a substantial burden on interstate commerce is a threshold requirement that plaintiffs must satisfy before courts need even engage in Pike’s balancing and tailoring analyses. ”

“ Yet it nevertheless reduced the myriad harms detailed by petitioners in their complaint to so-called “compliance costs” and wrote them off as independently insufficient to state a claim under Pike. Our precedents do not support such an approach. A majority of the Court agrees that—were it possible to balance benefits and burdens in this context—petitioners have plausibly stated a substantial burden against interstate commerce. ”

“ It has facilitated robust economic activity within the United States and has helped generate remarkable (albeit at times uneven) economic prosperity and growth in America relative to the other nations of the world. ”

“ Pike provides that nondiscriminatory state regulations are valid under the Commerce Clause “unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits.” 397 U. S., at 142. A majority of the Court thinks that petitioners’ complaint does not make for “an auspicious start” on that claim. Ante, at 18. In my view, that is through no fault of their own. The Ninth Circuit misapplied our existing Pike jurisprudence in evaluating petitioners’ allegations. ”

“ They nowhere suggest that an examination of Proposition 12’s practical effects in operation would disclose purposeful discrimination against out-of-state businesses. While this Court has left the “courtroom door open” to challenges premised on “even nondiscriminatory burdens,” Davis, 553 U. S., at 353, and while “a small number of our cases have invalidated state laws ... that appear to have been genuinely nondiscriminatory,” Tracy, 519 U. S., at 298, n. 12, [2] petitioners’ claim falls well outside Pike’s heartland. That is not an auspicious start. ”

“ New York dairy farmers “against competition from without”) .
Brown-Forman and Healy differed from Baldwin only in that they involved price-affirmation, rather than price-fixing, statutes. In Brown-Forman, New York required liquor distillers to affirm (on a monthly basis) that their in-state prices were no higher than their out-of-state prices. 476 U. S., at 576. Once more, the goal was plain: New York sought to force out-of-state distillers to “surrender” whatever cost advantages they enjoyed against their in-state rivals. ”

“ The derivative harms we have long considered in this context are in no sense “noneconomic.” Ante, at 27 (opinion of Gorsuch, J.) . Regulations that “aggravate ... the problem of highway accidents,” Kassel, 450 U. S., at 674, or “slow the movement of goods,” Rice, 434 U. S., at 445, impose economic burdens, even if those burdens may be difficult to quantify and may not arise immediately. ”

“ But on the question of whether to retain the Pike balancing test in cases like this one, The Chief Justice’s opinion reflects the majority view because six Justices agree to retain the Pike balancing test: The Chief Justice and Justices Alito, Sotomayor, Kagan, Kavanaugh, and Jackson. On that legal issue, Justice Gorsuch’s opinion advances a minority view. ”

“ These compliance costs will fall on California and out-of-state producers alike. Ibid. But because California imports almost all the pork it consumes, petitioners emphasized, “the majority” of Proposition 12’s compliance costs will be initially borne by out-of-state firms. ”

“ Often, such cases have addressed state laws that impose burdens on the arteries of commerce, on “trucks, trains, and the like.” Ibid., n. 2. Yet, there is at least one exception to that tradition. See Edgar v. ”