A food-related legal controversy has returned to the news in California as the deadline looms for businesses to comply with a new law. Proponents of the law, the state’s Proposition 12, argue that it will reduce the occurrence of animal cruelty, while opponents argue the law will lead to—among other things—increased bacon prices and food shortages.
Ultimately, it remains to be seen how the law will affect the meat industry and California consumers, but given the enormity of the California market, the changes are likely to lead to widespread downstream effects and could eventually serve as a national model.
On November 6, 2018, California voters overwhelmingly approved California Proposition 12. The law, known as the Prevention of Cruelty to Farm Animals Act, aims to reduce animal cruelty by phasing out certain methods of farm animal confinement and enacting stricter regulations relating to animal raising conditions. Although the act became law nearly three years ago, its provisions did not all take effect immediately. Some of the most contentious requirements are scheduled to take effect at the end of this year. Since becoming law, the act has survived numerous legal challenges from opponents who contend the law will decimate the pork industry and lead to skyrocketing prices.
Generally, the law establishes new minimum requirements governing the amount of living space farmers must provide to egg-laying hens, breeding pigs, and calves raised for veal. Under the previous law, animals only had to have sufficient room to turn around freely, lie down, stand up, and fully extend their limbs.
Under the law, beginning January 1, 2022, egg-laying hens must be raised in a cage-free environment with at least as much usable floor space as required by the 2017 edition of the United Egg Producers’ Animal Husbandry Guidelines for U.S. Egg-Laying Flocks: Guidelines for Cage-Free Housing. For breeding pigs, the space requirements will increase from 20 square feet of floor space to 24 square feet. As for veal calves, the law mandates (since 2020) that they be given at least 43 square feet of space.
Due to jurisdictional limitations—California cannot regulate out-of-state farmers—the farm requirements are only enforceable against California farmers. So, to prevent businesses from simply sourcing out-of-state products, the act also bans California businesses from selling eggs, uncooked pork, or veal derived from animals raised in violation of the act’s requirements. Put differently, the requirements of Proposition 12 apply to covered products sold in California, irrespective of whether the subject animals were raised on farms in California or elsewhere. So, for example, a breeding pig confined in another state must be housed in compliance with Proposition 12 if her offspring will be sold for human consumption in California.
One key exception to the law is that it generally does not apply to foods that use eggs, pork, or veal as an ingredient or topping. Additionally, any inventory of shell eggs, liquid eggs, or pork products that are in stock prior to January 1, 2022, can remain in stock and do not need to be discarded if they were derived from animals raised in violation of the confinement standards.
Because the act regulates matters potentially subject to federal preemption, the drafters had to take care not to overstep. In simple terms, the Constitution’s Interstate Commerce Clause states that Congress has the power to regulate commerce among the several states. For example, the definitions of commercial “sale” and “farm” exclude transactions where physical possession of liquid eggs is taken at USDA Food Safety and Inspection Service (FSIS)-inspected plants. Nevertheless, any subsequent sale of noncompliant eggs is prohibited because the exemption attaches to the FSIS-inspected plant, but not the liquid egg product itself.
The penalties for violations of the law can be severe. Violations of the law are chargeable as misdemeanor offenses, punishable by a fine of up to $1,000, imprisonment in county jail for up to 180 days, or both. Moreover, violations of the sales ban also constitute acts of “unfair competition” under California’s Unfair Competition Law (UCL). Each violation of the UCL is punishable by a fine of $2,500.
Notably, civil actions for injunctive relief and restitution under the UCL may be initiated by anyone who has suffered an injury and has lost money or property because of the unfair competition. Because injured parties can bring claims—in addition to the Attorney General, district attorneys, and certain county and city attorneys—it will be especially important for businesses to ensure that the products they source are compliant with the law. Given the severity of the potential consequences, those transacting business in covered products should immediately work to gain a clear understanding of the legislation’s requirements and vagaries.
Generally, businesses can achieve compliance by obtaining written certification that the products they are selling originated from animals housed in accordance with Proposition 12 confinement standards. In turn, any companies that sell covered products in California should take immediate action to ensure that their suppliers are compliant and can provide certifications to that effect.
Additionally, it may be useful to procure sufficient reserves to work through the anticipated product shortages and price hikes that are widely expected when the new requirements take effect.
The law provides a defense for sellers who relied in good faith upon written certification by their suppliers that meat and egg products comply with new confinement standards. Thus, as long as there is a good faith effort to comply with the law, companies conducting business in California will have a defense.
Unfortunately, while the broad strokes of the law have been set in stone for years, the finer details, in terms of specific regulations, have yet to be published. The California Department of Food and Agriculture said that, although the regulations are not quite finished, the key rules will not change. In turn, companies will want to closely track any new developments that may affect their ability to comply with the regulations.
Despite the challenges that some farmers are likely to face when enacting the changes necessary to comply with the law’s requirements, this is far from the biggest challenge the industry has faced. In the last 25 years, the meat industry has faced a litany of extraordinary tests and, in each case, has managed to adapt. In fact, the meat industry has undergone a series of tectonic shifts, opponents of which have claimed would be the death knell for the industry. Yet, because of the remarkable ability the industry has shown to adapt, the opposite has proven true.
By most metrics, meat is safer and more plentiful than ever before. The number of recalls is down, the number of outbreaks is down, and the industry continues to thrive. This is a testament to the hard-working people in the industry who have continued to adapt and overcome, no matter the challenge. Certainly, this law will present significant challenges to many who produce our food. But, at the same time, we are sure that the industry will continue to innovate and adapt to meet the challenge. Likewise, we have no doubt that Californians will continue to bring home the bacon.
Chappelle is a food industry lawyer and a consultant at Food Industry Counsel, LLC. Reach him at [email protected]. Stevens, also a food industry attorney, is a founding member of Food Industry Counsel, LLC, and a member of the FQ&S Editorial Advisory Panel. Reach him at [email protected].