Daily Journal: Extraterritorial state statutes and the emerging horizontal separation of powers doctrine

On May 11, the Supreme Court issued a somewhat convoluted decision in National Pork Producers Council & American Farm Bureau Federation v. Karen Ross. The case raised a significant question: can California – or any other state – enact statutes whose primary function is to dictate standards and conduct that occur in other states – that is, statutes that are extraterritorial in nature? Most people would assume the answer is no. And while the Court ultimately upheld Califonia’s law, saying that it doesn’t violate the dormant Commerce Clause, the opinions in the case lay out something of a trail for future litigation to follow that seeks to flesh out the horizontal separation of powers.

Some elaboration is necessary on the idea of the horizontal separation of powers. When most people think of the separation of powers, they think of the division of the legislative, executive, and judicial powers within the federal government. Others may think of federalism, which grants the national government certain powers and leaves the remaining powers to the states. The horizontal separation of powers simply means that California does not have the power to make law for Utah. Afterall, government authority is derived from the consent of the governed by way of their elected representatives and Utahans never consented to be ruled by California and they don’t get a vote in California’s elections.

Pork producers had challenged California’s Proposition 12, which requires that all pork sold in California must come from producers that comply with California’s animal-husbandry standards. Since almost all pork sold in California comes from elsewhere, Proposition 12 principally operates only on out-of-state production. When a law operates in this fashion, it carries impermissible extraterritorial effects.

The pork producers argued that the law violated the Constitution’s dormant Commerce Clause – which prevents states from discriminating against out-of-state economic interests. The Court rejected the dormant Commerce Clause argument. The ruling keeps intact the Court’s existing dormant Commerce Clause jurisprudence which requires that the law should be intended specifically to discriminate, not merely that it has the effect of discrimination.

Even so, the Court was careful to emphasize that the dormant Commerce clause remains a viable vehicle to challenge extraterritorial laws like California’s. The Court here only declined to accept the “incautious invitatio[n]” to say that California’s law is “almost per se” unconstitutional under existing precedent. The Court’s reserve leaves open many questions that future litigation will have to resolve as to how dormant Commerce Clause claims should be factually pleaded and litigated. The separate concurring writings of Justices Sotomayor and Barrett provide some guidance in that regard.

For litigators looking to challenge state regulations that reach into the affairs of other states, the most profound insight comes from Justice Kavanaugh’s opinion. Pacific Legal Foundation’s amicus brief supporting the pork producers emphasized the horizontal separation of powers principles at play when states enact extraterritorial laws like California’s.

Justice Kavanaugh, elaborating on this theme, laid out three constitutional provisions under which challenges to extraterritorial state laws should be brought: the Import-Export Clause, writes Kavanaugh, prevents states from imposing burdensome requirements on imports from other States; the Privileges and Immunities Clause regulates one state’s efforts to regulate production in other states; and the Full Faith and Credit Clause prevents states from adopting any policy of hostility to the laws of another state.

Importantly, the portion of the majority opinion that five justices signed on to (Justice Gorsuch, joined by Justices Thomas, Sotomayor, Kagan, and Barrett), recognizes that there may be other constitutional provisions that “mediate competing claims of sovereign [state] authority under our horizontal separation of powers.” In doing so, a five-justice majority seems to nod favorably in support of Justice Kavanaugh’s explanation that there are other constitutional provisions under which extraterritorial state laws can be stricken down. There seems to be, therefore, a six-justice majority that is eager to review state laws that principally operate to the detriment of out-of-state actors. And a different six-justice majority (Chief Justice Roberts, with Justices Alito, Sotomayor, Kagan, Kavanaugh, and Jackson) would maintain the viability of dormant Commerce Clause challenges to such state laws so long as plaintiffs can plausibly allege and prove purposeful discrimination against out-of-state economic interests.

Has the Court formally ushered in the horizontal separation of powers doctrine? That remains to be seen. But the Court certainly seems to be headed in that direction and Constitutional litigators would do well to clue in on the Supreme Court’s guidance on the matter.

This op-ed was originally published at Daily Journal on May 16, 2023.