Association Des Eleveurs v. Rob BontaAssociation Des Eleveurs v. Rob Bonta
FOR PUBLICATION
OPINION
Appeal from the United States District Court for the Central District of California Stephen V. Wilson, District Judge, Presiding
* Rob Bonta has been substituted for his predecessor, Xavier Becerra, as California Attorney General under
Before: Andrew J. Kleinfeld, Ryan D.
Opinion by Judge R. Nelson; Partial Concurrence and Partial Dissent by Judge VanDyke
SUMMARY**
Civil Rights
The panel affirmed the district court‘s dismissal of plaintiffs’ preemption and dormant Commerce Clause claims and its summary judgment in favor of plaintiffs on a declaratory judgment claim in an action brought by various foie gras sellers challenging California‘s ban on the in-state sale of products that are “the result of force feeding a bird for the purpose of enlarging the bird‘s liver beyond normal size.”
The panel held that the sales ban was neither preempted nor unconstitutional and that certain out-of-state sales were permitted by California law.
The panel assumed without deciding that California‘s sales ban prohibits all foie gras sales in California. The panel then rejected plaintiffs’ impossibility preemption challenge asserting that the sales ban was preempted because it was impossible to comply with both California law and the federal Poultry Products Inspection Act (“PPIA“),
The panel held that the district court did not abuse its discretion by denying plaintiffs leave to amend to add a new express ingredient preemption claim alleging that the sales ban operates as an “ingredient requirement” by prohibiting foie gras as an ingredient in other poultry products. The panel held that this court already rejected a critical premise of that claim in Ass‘n des Eleveurs de Canards et d‘Oies du Québec v. Becerra, 870 F.3d 1140, 1145–53 (9th Cir. 2017) (”Canards II“), which was binding.
Rejecting plaintiffs’ dormant Commerce Clause claim, the panel held that California‘s sales ban prohibits only in-state sales of foie gras, so it was not impermissibly extraterritorial even if it influenced out-of-state producers’ conduct. The panel further rejected plaintiffs’ claim that the sales ban unduly burdened interstate commerce, determining that the sales ban was neither discriminatory nor was inherently unduly burdensome.
The panel next considered California Attorney General‘s cross-appeal from the declaratory judgment order which construed the sales ban to allow online, phone and fax sales to California buyers when title passes outside the state. The panel held that plaintiffs had standing to assert the claim; that the district court properly permitted out-of-state sales; and the district court did not err by rejecting the Attorney General‘s view that a sale occurs when a consumer takes possession of a product. The panel agreed with a California Court of Appeal‘s conclusion that the California Uniform Commercial Code provides a “reasonable” definition of “sale” for purposes of the sales ban.
Concurring in part and dissenting in part, Judge VanDyke agreed with the majority that the district court properly interpreted
** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.
COUNSEL
Peter H. Chang (argued), Deputy Attorney General; Mark R. Beckington, Supervising Deputy Attorney General; Thomas S. Patterson, Senior Assistant Attorney General; Rob Bonta, Attorney General; Office of the Attorney General, San Francisco, California; for Defendant-Appellant/Cross-Appellee.
Michael Tenenbaum (argued), Office of Michael Tenenbaum, Santa Monica, California, for Plaintiffs-Appellеes/Cross-Appellants.
OPINION
R. NELSON, Circuit Judge:
California prohibits the in-state sale of products that are “the result of force feeding a bird for the purpose of enlarging the bird‘s liver beyond normal size.”
I
In 2004, California passed a law targeting the practice of force feeding ducks or geese to produce foie gras. The law worked through two provisions. The first prohibited force feeding a bird “for the purpose of enlarging the bird‘s liver beyond normal size.”
At the end of the grace periоd, various foie gras sellers sued to enjoin enforcement of the sales ban provision. Since then, we have considered their arguments that the sales ban violates the Due Process Clause or is preempted by federal law under express, field, or obstacle preemption theories. See Ass‘n des Eleveurs de Canards et d‘Oies du Quebec v. Harris, 729 F.3d 937, 946–47 (9th Cir. 2013) (”Canards I“); Ass‘n des Eleveurs de Canards et d‘Oies du Québec v. Becerra, 870 F.3d 1140, 1145–53 (9th Cir. 2017) (”Canards II“) (rejecting prior express and implied preemption arguments following summary judgment). Following those decisions, the sellers returned to district court to add an impossibility preemption claim, a claim under the dormant Commerce Clause, and a claim for declaratory relief (clarifying that out-of-state sellers could sell foie gras to California buyers over the internet, phone, or fax). After further development of the record, they also sought to add an express ingredient preemption claim.
The district court denied leave to add the new express ingredient preemption claim and dismissed the impossibility preemption and dormant Commerce Clause claims. Ass‘n des Eleveurs de Canards et d‘Oies du Quebec v. Harris, No. 2:12-CV-05735-SVW-RZ, 2020 WL 595440, at *6 (C.D. Cal. Jan. 14, 2020). But it granted summary judgment to the sellers on their declaratory judgment claim, construing the sales ban to allow online, phone, and fax sales to California buyers when title passes outside the state. Ass‘n des Eleveurs de Canards et d‘Oies du Quebec v. Harris, No. 2:12-CV-05735-SVW-RZ, 2020 WL 5049182, at *5 (C.D. Cal. July 14, 2020).
Both sides object to the district court‘s latest decisiоns. California‘s Attorney General appeals the declaratory judgment order, challenging the sellers’ standing and arguing that the specified transactions are prohibited. For their part, the sellers cross-appeal the dismissal of their preemption and dormant Commerce Clause claims. They argue that it is impossible to comply with both California law and the PPIA and that the sales ban regulates extraterritorial conduct and unduly burdens interstate commerce. They also contend that they should have been allowed to add their express ingredient preemption claim.
II
We review de novo the district court‘s order granting a motion to dismiss for failure to state a claim, taking as true all allegations of material fact and construing them in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). We review the district court‘s denial of leave to amend for abuse of discretion. Brown v. Stored Value Cards, Inc., 953 F.3d 567, 573 (9th Cir. 2020).
We review de novo the district court‘s order granting summary judgment and “determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law.” Dietrich v. John Ascuaga‘s Nugget, 548 F.3d 892, 896 (9th Cir. 2008) (citation omitted). The scope of a statute is a question of law, which we also review de novo. Canards I, 729 F.3d at 945 (quoting In re Lieberman, 245 F.3d 1090, 1091 (9th Cir. 2001)).
“When interpreting state law, we are bound to follow the decisions of the state‘s highest court, and when the state supreme court has not spoken on an issue, we must determine what result the court would reach based on state appellate court opinions, statutes and treatises.” Diaz v. Kubler Corp., 785 F.3d 1326, 1329 (9th Cir. 2015) (quotation marks and brackets omitted).
III
We first discuss the sellers’ cross-appeal, which raises two preemption questions. The first is whether the sales ban is preempted because it is impossible to comply with both the PPIA and California law. The second is whether the district court should have granted leave to amend because the record now shows that the sales ban forbids the sale of all foie gras and therefore imposes an “ingredient requirement” that is “in addition to, or different than” those under federal law and regulations. See
Preemption is rooted in the “fundamental principle of the Constitution that Congress has the power to preempt state law.” Crosby v. Nat‘l Foreign Trade Council, 530 U.S. 363, 372 (2000). It comes in three forms: express preemption,
A
The sellers first argue that the sales ban is preempted because it is impossible to comply with both California law and the PPIA. In their view, they cannot comply with the sales ban if federal law requires foie gras to be produced via force feeding. They contend that the sales ban is a mandate that foie gras not include force-fed products and therefore their only option is to withdraw from the market. They then point to the Supreme Court‘s decision in Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), to argue that a state law is preempted if it requires producers to stop selling their products.
The PPIA is a federal law that protects consumers by ensuring that “poultry products... are wholesome, not adulterated, and properly marked, labeled, and packaged.”
Unfortunately for the sellers, the definition of foie gras is beside the point: it is not impossible to produce foie gras in accordance with a USDA Policy Book just because force-fed products cannot be sold in California. Even assuming the USDA guidance requires force feeding, the sellers can still force feed birds to make their products. They just cannot sell those products in California. The sales ban is neither a command to market non-force-fed products as foie gras nor to call force-fed products something different.
National Meat considered a California statute that (1) prohibited the sale of meat from “nonambulatory” animals and (2) required the animals’ immediate euthanization. Id. at 458–59. Federal law explicitly preempted state regulation of slaughterhouse operations. After examining “how the prohibition on sales operates within [the California statute] as a whole,” the Court held that “[t]he idea—and the inevitable effect—of the [sales ban] [wa]s to make sure that slaughterhouses remove nonambulatory pigs from the production process.” Id. at 463–64. The California law was preempted not because it was a sales ban but because it operated as a “command to slaughterhouses to structure their operations.” Id.
Here, the sellers invoke only the “ingredient requirements” provision of the PPIA‘s preemption clause. Of course, regulating how a food product is made could impact its physical composition. But California law is silent on what ingredients are needed to call a product foie gras. The sellers have not argued that the sales ban affects slaughterhouse operations like the sales ban challenged in National Meat. In fact, the Supreme Court differentiated the National Meat sales ban from laws like the one in this case. Id. at 467. When a sales ban “works at a remove” from the sites and activities directly governed by federal law and does not “reach[] into the slaughterhouse‘s facilities and affect[] its daily activities,” it is not preempted on National Meat‘s reasoning. See id.
That leaves the sellers’ argument that the sales ban forces them into the “stop-selling” solution rejected in another Supreme Court case. See Bartlett, 570 U.S. at 488. In Bartlett, the Supreme Court contemplated a New Hampshire law that allowed design-defect claims against drug manufacturers whose labels had been federally approved. The New Hampshire cause of action effectively required drug manufacturers to provide stronger safety warnings. Id. at 475. Meanwhile, federal law prohibited generic drug manufacturers from independently changing their labels. Id. New Hampshire law thus imposed a duty on manufacturers not to comply with federal law. Id. The Court rejected the idea that such impossibility could be resolved by forcing a seller to cease selling its products. Id. at 475–76.
Like their argument about National Meat, the sellers stretch the Supreme Court‘s reasoning too far. Bartlett does not prohibit states from imposing regulations that might require a manufacturer to withdraw from the market; it merely rejects the “stop-selling” rationale as an escape hatch when state and federal law impose conflicting obligations. If, for example, federal law required foie gras to be from force-fed birds but California law required foie gras not to be from force-fed birds, producers could not comply with both state and federal law. There is no such impossibility
In the dissent‘s view, any state law that prevented a manufacturer from selling its product would be preempted under Bartlett. But Bartlett has never been read so broadly, as evidenced by the bans upheld in this and at least two other circuits. See Chinatown Neighborhood Ass‘n v. Harris, 794 F.3d 1136, 1147 (9th Cir. 2015); Cavel Int‘l, Inc. v. Madigan, 500 F.3d 551, 554 (7th Cir. 2007); Empacadora de Carnes de Fresnillo, S.A. de C.V. v. Curry, 476 F.3d 326, 334–35 (5th Cir. 2007). In fact, federal appellate courts generally apply Bartlett only in the products liability context. Confining Bartlett to those circumstances makes sense—conflict preemption first requires conflicting obligations under state and federal law. Virtually every instance of conflict preemption could be resolved if a court ordered the affected parties to simply cease their activities; such an order would render impossibility preemption “all but meaningless.” Bartlett, 570 U.S. at 488.
It is another thing entirely to forbid a state from prohibiting sales just because a federal agency has issued some guidance that addresses some aspect of a product. If that were the case, several state sales bans would be preempted just because federal law touches the product in some way. See, e.g.,
B
The sellers’ contention that it is physically impossible to produce foie gras without force feeding also underlies their express preemption claim. They assert that the sales ban operates as an “ingredient requirement” by prohibiting foie gras as an ingredient in other poultry products (e.g., torchon).
The district court did not abuse its discretion when it denied leave to amend. Even if the sellers’ arguments about force feeding are correct, we have already rejected a critical premise of their claim.
In Canards II, we concluded that the sales ban is not an “ingredient requirement” preempted by the PPIA. 870 F.3d at 1146–52. We held that force feeding was not аn “ingredient requirement” because ingredient requirements refer to “the physical components of poultry products, not the way the animals are raised.” Id. at 1147–48. We then addressed the argument that the sales ban is functionally a ban on all foie gras. Id. at 1149–50. We decided that it “fail[ed] for two independent reasons.” Id. at 1149. The first was that nothing in the record showed “that force-feeding is required to produce foie gras.” Id. That reason no longer applies because the record now includes evidence to that effect. But Canards II also concluded that “even if section 25982 results in the total ban of foie gras regardless of its production method, it would still not run afoul of the PPIA‘s preemption clause.” Id. at 1150.
The sellers urge us to reconsider because they have now established the impossibility of non-force-fed foie gras—an
Id. at 1150. The sellers do not advance any new argument that could prevail given that holding. See Chappel v. Lab‘y Corp. of Am., 232 F.3d 719, 725–26 (9th Cir. 2000) (no abuse of discretion when amendment would be futile)..... does not mandate that particular types of poultry be produced for people to eat.... Nothing in the federal law or its implementing regulations limits a state‘s ability to regulate the types of poultry that may be sold for human consumption. If foie gras is made, producers must, of course, comply with the PPIA. But if a state bans a poultry product like foie gras, there is nothing for the PPIA to regulate.
The dissent calls our Canards II decision dicta that we can revisit because the sellers have produced new evidence. Dissent 36–40. But Canards II did not rely on the possibility of producing foie gras without force feeding, so sthe new evidence does not displace our prior decision. As for the dissent‘s characterization of that decision, Canards II‘s alternative holding cannot be dismissed as dicta. See Woods v. Interstate Realty Co., 337 U.S. 535, 537 (1949) (“[W]here a decision rests on two or more grounds, none can be relegated to the category of obiter dictum.“). As a published decision of this court, it controls as law of the circuit. See Gonzalez v. Arizona, 677 F.3d 383, 389 n.4 (9th Cir. 2012) (en banc), aff‘d sub nom. Arizona v. Inter Tribal Council of Ariz., Inc., 570 U.S. 1 (2013).2 The dissent believes “the panel in Canards II engaged in flawed analysis,” Dissent 28, and new evidence might present a “more difficult question” than the one presented in the sellers’ prior petition for certiorari, Dissent 38. Neither is a basis for us to ignore binding precedent. Because another panel has already answered the relevant question, that precedent must be followed unless overruled by a body competent to do so. Gonzalez, 677 F.3d at 389 n.4.3
C
The sellers also cross-appeal the dismissal of their dormant Commerce Clause claim. They argue that the sales ban is unconstitutional because it (1) impermissibly regulates out-of-state commerce and conduct and (2) unduly burdens interstate commerce.
The dormant Commerce Clause stems from our understanding that the Commerce Clause “implicitly preempt[s] state laws that regulate commerce in a manner that is disruptive to economic activities in the nation as a
State laws that effectively burden only out-of-state businesses (because there are no comparable in-state businesses) are not necessarily discriminatory. See Exxon Corp. v. Governor of Md., 437 U.S. 117, 119–26 (1978). The sellers do not argue against the sales ban on that basis. Instead, they argue that the sales ban is extraterritorial in its “practical effect” and burdens interstate commerce in a way that is “clearly excessive in relation to [its] putative local benefits.” See Nat‘l Ass‘n of Optometrists & Opticians v. Harris, 682 F.3d 1144, 1149 (9th Cir. 2012) (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)).4
i
The sellers argue that the sales ban is impermissibly extraterritorial bеcause force feeding is banned in California, see
Although “[s]tates may not mandate compliance with their preferred policies in wholly out-of-state transactions, ... they are free to regulate commerce and contracts within their boundaries with the goal of influencing the out-of-state choices of market participants.” Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070, 1103 (9th Cir. 2013). States are thus free to regulate in-state sales without such regulation being unconstitutional for its extraterritorial effect. See Nat‘l Pork Producers Council, 6 F.4th at 1029 (citing Rosenblatt, 940 F.3d at 445). California‘s sales ban prohibits only in-state sales of foie gras, Canards I, 729 F.3d at 949, so it is not impermissibly extraterritorial even if it influences out-of-state producers’ conduct.
This conclusion is supported by our reasoning in Daniels Sharpsmart, Inc. v. Smith, 889 F.3d 608 (9th Cir. 2018). In that case, California attempted “to reach beyond [its] borders ... and control transactions that occur wholly outside of the State after the material in question... ha[d] been removed from the State.” Id. at 615. Although we enjoined enforcement of the law in Daniels Sharpsmart, we clarified that we were not concerned about “an
ii
The sellers also contend that the sales ban unduly burdens interstate commerce. The district court disagreed, determining the sеllers had shown no cognizable burden on interstate commerce and recognizing California‘s legitimate local interest in “public health,” Canards, 2020 WL 5049182, at *2 n.1, and “[p]reventing animal cruelty,” Canards, 2020 WL 595440, at *3.
State laws that “regulat[e] even-handedly to effectuate a legitimate local public interest... will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Wayfair, 138 S. Ct. at 2091 (quoting Pike, 397 U.S. at 142). Although we have not identified every way a burden can be “clearly excessive,” our precedent “preclude[s] any judicial assessment of the benefits of a state law and the wisdom in adopting it unless the state statute either discriminates in favor of in-state commerce or imposes a significant burden on interstate
commerce.” Chinatown Neighborhood, 794 F.3d at 1146 (quotation marks, brackets, and ellipsis omitted).6
The sales ban is not discriminatory, so the statute does not impose an undue burden on that basis. Canards I, 729 F.3d at 948. And we have rejected the notion that sales bans are inherently unduly burdensome. In Chinatown Neighborhood, we held that a California law prohibiting in-state shark fin sales did not unduly burden interstate commerce when weighed against California‘s interest in “prevent[ing] animal cruelty.” Id. at 1147. We are not alone; the Fifth and Seventh Circuits similarly upheld laws banning the sale or importation of horse meat. Empacadora, 476 F.3d at 336–37; Cavel Int‘l, 500 F.3d at 559.
In a final attempt to resurrect their dormant Commerce Clause claim, the sellers assert that California can “convey[] its distaste for foie gras” in less burdensоme ways. But the dormant Commerce Clause does not impose a “least burdensome” requirement for state laws. See Canards I, 729 F.3d at 953 (quoting Nat‘l Ass‘n of Optometrists, 682 F.3d at 1157) (“[F]or us to invalidate a statute based on the availability of less burdensome alternatives, the statute would have to impose a significant burden on interstate commerce,’ which is not the case here.“). We decline the invitation to wade into murky policy waters.
D
For his part, the Attorney General contests two sellers’ standing and argues that the sales ban prohibits out-of-state
vendors’ sales to California buyers, even when
i
The Attorney General challenges the standing of two sellers—the Canadian Association (“Association”) and restauranteur Sean “Hot” Chaney—because they have not alleged that they sell (or plan to sell) foie gras to California buyers. According to the Attorney General, Association members do not directly sell foie gras to California buyers—instead, they sell to out-of-state third-party sellers who then sell to consumers. As for Chaney, the Attorney General argues that the restauranteur does not sell foie gras from outside California and Chaney‘s purported interest in purchasing foie gras is outside the scope of the declaratory claim.
In cases involving multiple plaintiffs, “[a]t least one plaintiff must have standing to seek each form of relief requested in the complaint.” Town of Chester v. Laroe Ests., Inc., 137 S. Ct. 1645, 1647 (2017). To establish standing, a plaintiff must show that it has “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Ctr. for Biological Diversity v. Mattis, 868 F.3d 803, 816 (9th Cir. 2017) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016), as revised (May 24, 2016)).
The Attorney General‘s challenge fails because the third seller, whose standing he does not contest, has standing to seek declaratory relief. Hudson Valley Foie Gras LLC (“Hudson Valley”) is a limited liability corporation that produces foie gras in New York and sells foie gras online. Its website server is located outside California. Purchases are processed by a third-party processor outside California then received at Hudson Valley‘s bank in New York. Orders are fulfilled and products are delivered to third-party shipping companies in New York facilities. Only then do third-party shippers deliver Hudson Valley‘s foie gras to buyers. As a result of the sales ban, Hudson Valley has been forced to stop accepting purchases from any buyer with a California address. In fact, California District Attorneys have threatened prosecution against Hudson Valley if they sell to Californiа consumers. Hudson Valley has therefore alleged a sufficient injury in fact traceable to the Attorney General‘s enforcement of the sales ban and redressable by a declaratory order clarifying the scope of California law. The district court‘s declaratory relief describes a group of sales allowed under California law; it does not award damages or afford other relief unique to any plaintiff.
The record also establishes standing for at least one of the challenged sellers. As an organization, the Association has standing to sue on behalf of its members when “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization‘s purposes; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Ecological Rts. Found. v. Pac. Lumber Co., 230 F.3d 1141, 1147 (9th Cir. 2000) (quoting Hunt v. Wash. State Apple Advert. Comm‘n, 432 U.S. 333, 343 (1977)). The Association‘s interest in protecting its members’ foie gras sales is germane to its purpose and no claim asserted or relief requested requires member participation. Because Palmex, a member of the Association, has
ii
The Attorney General also makes several argumеnts about the scope of the sales ban. He contends that the district court should not have used the definition provided in the
[1] The Seller is located outside of California[;]
[2] The foie gras being purchased is not present within California at the time of sale[;]
[3] The transaction is processed outside of California (via phone, fax, email, website, or otherwise)[;]
[4] Payment is received and processed outside of California[;] and
[5] The foie g[r]as is given to the purchaser or a third-party delivery service outside of California, and “[t]he shipping company [or purchaser] thereafter transports the product to the recipient designated by the purchaser,” even if the recipient is in California.
Canards, 2020 WL 5049182, at *5. In the Attorney General‘s view, the sales ban prohibits sales to California consumers regardless of seller location. But because the ban prohibits certain products from being “sold in California,” the question is not where a seller is located but where a sale occurs.
The California Supreme Court has not yet decided what constitutes a sale under the sales ban, so we must predict how it would answer the question. When interpreting state law, California courts look “to the plain meaning of the statutory language, then to its legislative history and finally to the reasonableness of a proposed construction.” Riverview Fire Prot. Dist. v. Workers’ Comp. Appeals Bd., 28 Cal. Rptr. 2d 601, 605 (1994).
In a different case involving this sales ban, the California Court of Appeal looked to the
The Attorney General contends that this definition does not apply because the
In the Attorney General‘s view, other parts of the
The Attorney General next argues that the district court erred by comparing the sales ban to other sections of California‘s
After noting that the
The Attorney General also contends that the district court‘s focus on payment processing imposes limitations not found in the sales ban‘s text or legislative history. In particular, he argues that “processing” does not determine the place of a sale and that, in the internet age, any sales ban permitting sales “processed” outside the state could be easily evaded. It is true that the sales ban does not mention “processing” of payments and transactions; it prohibits sales in California, regardless of seller location, payment processing, consumption, or possession. But the district court‘s language about “processing” merely limits its declaratory judgment to the facts presented and describes a category of transactions that occur outside California. It does not add conditions to what is prohibited by California law. And although the Attorney General correctly notes that the consummation of a sale provides “a sufficient nexus . . . to be treated as a local transaction taxable by th[e] State,” that language discusses limitations on state and local taxation, not what constitutes a “sale” under state law. See Wayfair, 138 S. Ct. at 2092 (quoting Okla. Tax Comm‘n v. Jefferson Lines, Inc., 514 U.S. 175, 184 (1995)).
The Attorney General finally argues that the declaratory judgment contradicts the legislature‘s intent in enacting the sales ban (i.e., to “discourage the consumption of products produced by force feeding birds and prevent complicity in a practice . . . deemed cruel to animals,” Canards I, 729 F.3d at 952), so any reasonable interpretation of the sales ban must prohibit direct sales to California buyers. But this argument is contradicted by the statutory text; there is no indication that the legislature intended to further its goal by banning consumption and possession of foie gras.
Policymakers’ statements about force feeding and foie gras point to the legislature‘s general intent to prevent complicity in animal cruelty or California‘s position that a ban on force-fed products does not amount to a ban of foie gras. The sales ban presumably reflects the legislature‘s balancing of those goals with consumer costs. In any event, we agree with the California Court of Appeal‘s conclusion that the
In conclusion, California‘s sales ban is neither preempted nor impermissible under the dormant Commerce Clause. The sellers have alleged standing to assert their declaratory judgment claim and the district court‘s order properly permits out-of-state sales.
AFFIRMED.
VANDYKE, Circuit Judge, concurring in part and dissenting in part.
I agree with the majority that the district court properly interpreted
California has prohibited the sale of any bird liver if that bird was force-fed, and the only way to make foie gras that complies with federal requirements is through force-feeding. This forces Plaintiffs into an impossible situation, and one in which the only solution is to stop selling any foie gras in California. Although the majority deems this solution sufficient, the Supreme Court has held that market participants cannot be forced to “stop selling” when it is impossible to comply with conflicting state and federal requirements, and the majority‘s attempt to free itself from this clear command is unavailing.
The majority also rejects Plaintiffs’ argument that
I. Impossibility Preemption
The preemption doctrine is a natural outworking of our constitutional structure. As the Supremacy Clause makes clear, “the Laws of the United States . . . shall be the supreme Law of the Land . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
Plaintiffs argue that it is impossible to sell foie gras in California in a way that is consistent with both the
This process-based definition is neither unique nor surprising. The most commonplace example of this is probably the USDA‘s guidelines around organic foods. As the USDA explains, “[t]he organic standards are process-based, meaning they establish the rules for an entire system of farming that follows a product from its beginnings on the farm all the way to retail.” UNITED STATES DEPARTMENT OF AGRICULTURE, ORGANIC 101: WHAT ORGANIC FARMING (AND PROCESSING) DOESN‘T ALLOW (2017) (emphasis added). As with foie gras, one cannot designate something as organic by examining only the end product, but rather must also know the process by which that product was produced.2
Once foie gras’ federal definition is properly understood, the tension with California‘s
In short, the federal government has defined foie gras to mean specially fed and fattened (i.e., force-fed) goose and duck liver, while California has banned the sale of any foie gras produced by force-feeding the bird. This means there is no universe in which Plaintiffs can comply with both the
Perhaps what is most puzzling about the majority opinion is that my colleagues seem to agree with much of what I just explained. They write: “If, for example, federal law required foie gras to be from force-fed birds but California law required foie gras not to be from force-fed birds, producers could not comply with both state and federal law.” Unfortunately, “[w]hat the [majority] does not see is that that is this case . . . .” Mut. Pharm. Co. v. Bartlett, 570 U.S. 472, 490 (2013).
As explained above, both premises of the majority‘s not so hypothetical hypothetical are true. The federal definition does in fact require “foie gras to be from force-fed birds,” and the California statute does in fact require “foie gras not to be from force-fed birds.” But despite these two realities, the majority still claims “[t]here is no such impossibility here. Even if federal law requires foie gras to be the liver of force-fed birds, California says only that it may not be sold in the state.” The majority seemingly relies on the idea that there is no preemption issue because the
But this line of reasoning has already been rejected by the Supreme Court. In National Meat Association v. Harris, the Supreme Court held that a California law banning the sale of nonambulаtory pigs (pigs that cannot walk) was preempted by the
The majority distinguishes this case from National Meat by arguing in part that the “sales ban in this case works ‘at a remove’ from the slaughterhouses implicated in National Meat.” But this argument has it backwards;
The majority also argues that National Meat is inapplicable because the statute here does not directly govern any aspects of the process regulated by federal law and “does not ‘reach[] into the slaughterhouse‘s facilities and affect[] its daily activities‘” because it bans only the sale of non-force-feed birds. But this argument is no different than the one the Supreme Court considered and rejected in National Meat. Defenders of California‘s law in National Meat argued that there was no preemption because the “ban on sales does not regulate a slaughterhouse‘s ‘operations’ because it kicks in only after they have ended: Once meat from a slaughtered pig has passed a post-mortem inspection, the Act ‘is not concerned with whether or how it is ever actually sold.‘” Id. at 463 (citation omitted). The Supreme Court disagreed, reasoning that to accept this argument would mean that “any State could impose any regulation on slaughterhouses just by framing it as a ban on the sale of meat produced in whatever way the State disapproved.” Id. at 464. The Supreme Court also referenced another preemption case to conclude “it ‘would make no sense’ to allow state regulations to escape preemption because they addressed the purchase, rather than manufacture, of a federally regulated product.” Id. (citing Engine Mfrs. Ass‘n v. South Coast Air Quality Mgmt. Dist., 541 U.S. 246, 255 (2004)).
National Meat makes clear that a state cannot sidestep a preemption issue simply by banning the sale of a certain good produced a certain way instead of directly banning the process itself. National Meat‘s practical rule would seem to apply a fortiori where the process by which the product is made is precisely how federal law defines the product that the state is attempting to partially ban. This is exactly what California has done with
Building off this logic, the majority leaves the sellers with one unenviable path forward: “[t]hey just cannot sell those products in California.” The problem with this supposed solution is that it too has already been flatly rejected by the Supreme Court. In Mutual Pharmaceutical Company v. Bartlett, the Supreme Court examined a New Hampshire law that effectively required Mutual Pharmaceutical to offer a stronger warning label for a certain drug. 570 U.S. 472, 475 (2013). Mutual argued that the New Hampshire law was preempted by the
The incoherence of the stop-selling theory becomes plain when viewed through
the lens of our previous cases. In every instance in which the Court has found impossibility pre-emption, the ‘direct conflict’ between federal-and state-law duties could easily have been avoided if the regulated actor had simply ceased acting.
The majority seeks to avoid this head-on collision with Bartlett by asserting that Bartlett “merely rejects the ‘stop-selling’ rationale as an escape hatch when state and federal law impose conflicting obligations.” But even this narrow reading of Bartlett squarely governs the case before us, since the stop-selling rationale is in fact being used as the escape hatch to avoid the conflict between state and federal requirements governing the production of foie gras. And as our caselaw makes clear, the preemption doctrine is implicated whenever a state and federal law conflict. Id. at 490; see also Maryland v. Louisiana, 451 U.S. 725, 728 (1981) (“It is basic to [the Supremacy Clause] that all conflicting state provisions be without effect.”) (emphasis added).3
Ultimately, the
II. Express Preemption
The harm in rejecting Plaintiffs’ impossibility preemption claim is compounded by the fact that the majority also upholds the district court‘s denial of Plaintiffs’ motion for leave to add a new express preemption claim. The
Both the district court and the majority today base their decisions largely on the fact that, because Canards II “already rejected a critical premise of their claim,” plaintiffs are bound by that decision under the “law of the case” doctrine. “[U]nder the ‘law of the case’ doctrine, one panel of an appellate court will not as a general rule reconsider questions which another panel has decided on a prior appeal in the samе case.” Merritt v. Mackey, 932 F.2d 1317, 1320 (9th Cir. 1991) (citation omitted). However, “[t]he doctrine is discretionary, not mandatory.” Id. And our circuit has explained that one situation where the law of the case doctrine should not bind a later panel is when “substantially different evidence was adduced at a subsequent
Most importantly, the Canards II panel found that “nothing in the record before us shows that force-feeding is required to produce foie gras.” Canards II, 870 F.3d at 1149. Unlike in Canards II, Plaintiffs in the record before us now have demonstrated that force-feeding is required to produce foie gras. This is critical because, as the United States Solicitor General observed in his brief before the Supreme Court recommending that the Supreme Court not grant review in Canards II, “[i]f in fact Section 25982 did operate to make unavailable in the State any poultry products containing foie gras—or perhaps a particular type of foie gras that was a materially distinct substance, physically or chemically—it would present a more difficult question.”4 Brief for the United States as Amicus Curiae at 14-15, Canards II. But the Solicitor General went on to recommend that because the Plaintiffs in Canards II have not “established that liver for foie gras cannot be produced by a method other than forсe-feeding the geese or ducks,” there was no need to “resolve this difficult question” at that point. Id. at 15-16.
Ignoring that this “more difficult question” is now presented to this panel for the first time in this case, the majority still finds the holding in Canards II binding because the Canards II panel stated that “even if section 25982 results in the total ban of foie gras regardless of its production method, it would still not run afoul of the
neither Canards II nor our case cannot somehow control our analysis here.5
The record in our case is unambiguous: California purports to ban only some foie gras, and that ban is entirely tied to the production method for that foie gras. As mentioned earlier, numerous California officials stressed this point at every stage of
The problem is not that California has directly enacted a “total ban of foie gras”—no one argues that it has. The problem is that California has attempted to ban only one particular production method for foie gras (forсe-feeding), but that one production method is also precisely how federal law defines the ingredient foie gras, and there is no other way to make foie gras. That express preemption claim was never squarely addressed in Canards II, because Canards II expressly assumed that force feeding was not the only way to produce foie gras. Plaintiffs should not be barred from having it addressed in the first instance now.
The majority similarly errs by relying on the Canards II dicta about whether a state can enact a “total ban” on some food product. That dicta may very well be correct; perhaps California could directly ban all foie gras if it so chose. See Canards II, 870 F.3d at 1150 (citing Empacadora de Carnes de Fresnillo, S.A. de C.V. v. Curry, 476 F.3d 326 (5th Cir. 2007) (upholding a total ban on horse meat); Cavel Int‘l, Inc. v. Madigan, 500 F.3d 551 (7th Cir. 2007) (same)). But it is also completely irrelevant to this case. As explained, the record is unmistakable that California has not attempted to enact a total ban on foie gras like some states did with horse meat. And the fact that California might have the authority to directly ban all foie gras is factually and legally distinct from the question that Plaintiffs seek to present on remand in this case: whether California can attempt to ban some foie gras in a way that directly conflicts with the federal definition of what foie gras is, particularly when that is also the only way to make foie gras.
The majority seems to assume that if
Once it is recognized that Canards II‘s express preemption ruling was based on a factual record very different than the one before us, we must examine if
The majority‘s takeaway from this argument is that I am advocating we “should go beyond the legislative text to assume California is trying to ban foie gras without explicitly doing so.” Again, the majority has it exactly backwards. The argument throughout my dissent is that the legislative text was clear: California enacted a law regulating the process by which foie gras was made, not an outright sales ban. A simple reading of that statute, not any divination of the lawmaker‘s intent, is the only foundation needed to sustain my view.
that conflicts with federal law. On the record before it, the Canards II panel argued the “ordinary meaning” of “ingredient” and the “statutory scheme as a whole” proves that the “‘ingredient requirements’ pertain to the physical components that comprise a poultry product, not animal husbandry or feeding practices.” 870 F.3d at 1148. But the expanded record in this case now shows that framing to be a false dichotomy. As Plaintiffs have now established, feeding practices do in fact affect the physical components of foie gras. The liver of a force-fed duck will be up to ten times larger, lighter in color, have a higher ratio of saturated fatty acids, as well as have a different texture, taste, and smell than the liver of a non-force-fed duck. One doesn‘t need to be a chemist to
(non-force-fed liver) (force-fed liver)
So while Canards II may (or may not) have been correct to say that there is no physical difference “between regular chicken and cage-free chicken,” id. at 1149, the same certainly cannot be said about “regular” duck liver and force-fed duck liver.
Given all the new evidence presented to this panel for this case, in addition to the outdated assumptions and erroneous reasoning offered in Canards II, I see no reason to bind ourselves to its conclusion on express preemption. I would therefore reverse the district court and allow Plaintiffs to add their express preemption claim.
Notes
to establish specifications or definitions and standards of identity or composition, covering the principal constituents of any poultry product with respect to which a specified name of the product or other labeling terminology may be used, whenever he determines such action is necessary to prevent sale of the product under false or misleading labeling.