USCA1 Opinion

UNITED STATES COURT OF APPEALS

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
____________________

No. 95-1243

UNITED EGG PRODUCERS, ET AL.,

Plaintiffs, Appellees,

v.

DEPARTMENT OF AGRICULTURE OF THE

COMMONWEALTH OF PUERTO RICO, ET AL.,

Defendants, Appellants.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Juan M. Perez-Gimenez, U.S. District Judge]

___________________
____________________

Before

Torruella, Chief Judge,

___________

Campbell, Senior Circuit Judge,

____________________

and Watson,* Senior Judge.

____________
____________________

Edgardo Rodriguez-Quilichini,
_____________________________

Assistant Solicitor

General, w

whom Carlos Lugo-Fiol, Solicitor General, and Jacqueline Novas-Debi

________________
_____________________
Acting Deputy Solicitor General, were on brief for appellants.
Philip C. Olsson with
_________________

whom Olsson, Frank and Weeda, Enrique

_________________________ _______

Bray
____

and Nachman, Santiago, Bray & Guillemard

_______________________________________

were on

brief

Trade,

sitting

appellees.

____________________

March 6, 1996

____________________

*Of

the

United

designation.

States

Court of

International

____________________

CAMPBELL, Senior Circuit Judge.

____________________

Defendants-appellants the Puerto R

Department of Agriculture and its former Secretary, Alfonso D vila,

his

individual and

United

official capacities,

challenge an

order of

States District Court for the District of Puerto Rico grant

a permanent injunction

Regulation

against the enforcement of

Number 3, section X(F).

Section X(F)

Puerto Rico Mar

requires that e

imported into Puerto Rico

with the

two-letter postal code of the state of origin.

court ruled

Instituto

section

from the mainland United States

be stam

The distr

in favor of plaintiffs-appellees United Egg Producers

Puertorrique o de

X(F)

imposed a

Carnes,

Inc.,1

after determining

substantial

burden

on interstate

comme

contrary to the Dormant Commerce Clause.

I. The Egg Products Inspection Act and Section X(F)

I. The Egg Products Inspection Act and Section X(F)

Although not a state, the Commonwealth

to the constraints

as are the states.

of the Dormant Commerce Clause

ruled

that

subj

to the same deg

Trailer Marine Transp. Corp. v. Rivera Vazqu

_____________________________
_____________

977 F.2d 1, 7 (1st Cir. 1992).

court

of Puerto Rico is

In the proceedings below, the distr

the regulation

in

question,

Puerto Rico

Mar

Regulation

Number 3,

interstate commerce

section X(F),

was

an impermissible

hence invalid under the

burden

Dormant Commerce Clau

____________________

1United
association
Instituto
trade

Egg Producers
whose

members

is

an Atlanta,

include

Georgia,

egg producers

in

national

tr

every

sta

Puertorrique o de Carnes, Inc., is a San Juan, Puerto Ri

association

representing

Puerto Rican

products.

distributors

of

Section

X(F) requires the labeling of eggs imported from elsewhere

the United States into Puerto Rico:

Imported

eggs to be marketed

letters from
the

United

United

in Puerto Rico

the state of origin

States using

the

if produced in a

initials

States Postal Service, . .

established by the Egg Products

shall have the

state of

established by

the

. stamped on each egg, as

Inspection Act (21 USC 1031,

Section 23 b,2).

Puerto

Rico Market Regulation Number

purports

3, section X(F).

Section X

to have been promulgated in conformity with the Egg Produ

Inspection Act (EPIA), which provides that:

no

State

or

local
jurisdiction other than
those in
_____________________________________________

noncontiguous areas of the United States may require labeling

________________________________________
to show the State or other geographical area of production or
origin.

21

U.S.C.

1052(b)(2)

(emphasis supplied).

Puerto Rico

is,

course,

one

of the

noncontiguous

jurisdictions

excepted from

statute's prohibition against egg-labeling.

This appeal presents

of

Puerto

Rico's

Congressionally

Clause

Market

Regulation

authorized, so

constraints of the

Commerce

two main questions: (1) whether section X

as

Dormant Commerce

is applicable,

burdens interstate commerce.

to be

Number

beyond

was,

the reach

Clause; and (2)

whether

section

in

if the

effe

of

Dorm

X(F) impermissi

We address each of these issues.

II. Congressional Authorization

II. Congressional Authorization

The Commerce Clause provides that "Congress

. To regulate Commerce .

art.

I,

8,

cl.

3.

shall have Power .

. . among the several States."

The

Supreme

Court

U.S. Con

has interpreted

affirmative grant of authority

to Congress as also

has come to be called the Dormant Commerce Clause --

limitation

on

state authority

burdens on interstate

action.

to

enact

commerce even in

establishing w

a self-execut

laws imposing

the absence of

substant

Congressio

See South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S.

___ _______________________________
________

87 (1984).

The

Dormant Commerce Clause does

not, however, apply

state or local regulations directly authorized by Congress.

. . clear that

interstate

Congress may 'redefine the distribution

commerce'

by 'permit[ting]

the

states

commerce in a manner which would otherwise not be

at 87-88

U.S.

"It i

of power o

to regulate

permissible.'"

(quoting Southern Pac. Co. v. Arizona ex rel. Sullivan,

_________________
________________________

761, 769

(1945)); see also White

_________ _____

v. Massachusetts Council
______________________

Constr. Employers, 460 U.S. 204, 213 (1983);

_________________

New Hampshire,
______________

jurisdictions

455 U.S.

operating

331,

340

(1982).

under "Congressional

New England Power Co.

_____________________

Thus,

state or

consent"

lo

are free

enact laws burdening interstate commerce.

The standard for finding Congressional consent is, however,

hi

Congressional consent to otherwise impermissible state regulation m

be either "expressly stated,"

Sporhase v. Nebraska ex rel. Dougl

________
_______________________

458 U.S. 941, 960 (1982), or "made unmistakably clear," South-Centr

___________

467 U.S. at

91.

The

state or local

jurisdiction (in this case

Commonwealth of Puerto Rico) has the burden of demonstrating Congre

unmistakably

regulations.

To

clear

intent

to

allow

otherwise

discriminat

Wyoming v. Oklahoma, 502 U.S. 437, 458 (1992).

_______
________

determine if Congressional consent was extended

here, so

to

authorize

Puerto Rico's

impact

on commerce,

section

1052(b)(2),

labeling

we begin

Congress

regulation

by examining

did

not

or

other

geographical

area

Congress' language.

state

noncontiguous jurisdictions could "require

regardless of

affirmatively

labeling to show the St

of production

or

origin."

Inste

Congress excepted "noncontiguous areas of the United States" includ

Puerto Rico, from

the blanket

prohibition it was

labeling in all other places. 21 U.S.C.

1052(b)(2) can be said

1052(b)(2).

to go no further than to

from Congress' own egg-labeling ban.

placing upon

Read literal

exempt Puerto R

The exemption is consistent w

intending to allow Puerto Rico to adopt only egg-labeling requireme

that do not

otherwise violate

regulations

justified

protect

the

health of

the Dormant Commerce

Clause --

i.

by a

legitimate

state interest,

such

as

its

residents,

that could

not

be met

is perhaps

susceptible t

nondiscriminatory alternatives.2

To be

sure, the statutory exemption

reading going

beyond the above.

One can argue that

as Congress

____________________

2Before

the

enactment

requirements passed by the

of

1052(b)(2),

any

egg-label

states would have been subject

to Dorm

Commerce Clause analysis and upheld only if they did not substantia
burden interstate commerce or if the burden on interstate commerce
justified by

a legitimate state

1052(b)(2), states
prohibited

in

interest.

contiguous areas

of

After the
the United

enactment o
States

from enacting any egg-labeling requirements, regardless

whether it was possible to compose such a requirement in such a way

to

withstand Dormant

Commerce Clause

scrutiny.

In addition,

1052(b)(2), Congress indicated a preference for

noncontiguous

areas of

the United

States by

Puerto Rico and ot

specifically exempt

them from its blanket prohibition on egg-labeling.

before

it

the

noncontiguous

implication,

whole

subject

jurisdictions

Congressional

of

must

egg-labeling,

be

approval

understood

of

any

and

its

exemption

to

signify,

all

egg-label

requirements

in

those

places

regardless

whether

justified

unjustified by Dormant Commerce Clause considerations.

to us a

more extreme

legislative

affirmatively

jurisdictions

unable

history

reading than either

of the

the statutory language

necessitates.3

stated

grant

of

United States

to conclude that appellants

But this se

Absent,

permission

at

to

least,

noncontigu

to require egg-labeling,

have met their

we

burden of show

that Congress' intent to allow Puerto Rico to enact protectionist e

labeling

Taylor,
______

regulations was "unmistakably clear."

477 U.S.

exempt "from

when

131, 139

the implied

the congressional

clear'");

(1986) (holding

limitations of

direction

South-Central, 467
_____________

to do

U.S. at

See e.g.,
___ ____

that state

statutes

the [Commerce]

so

90

has been

Maine
_____

Clause o

'unmistaka

(finding that

"on th

occasions

in which consent

has been found,

congressional intent

____________________

3The

legislative history

Congress

intended

of

to immunize

1052(b)(2) is
regulations

Dormant Commerce Clause scrutiny.

Department
stated
to

that

require

of Agriculture,

It

section X(F)

opposition to

Sta

the exempti

1052(b)(2)'s "exemption would allow ... Puerto Rico

eggs shipped

"eliminate trade

1670, 91st

like

whet

is true that the United

arguing in

from the

labeled" and therefore recommended

to

silent on

Cong., 2nd

continental

United States

to

eliminating the exemption in or

barrier labeling requirements."

Sess. (1970).

We

H.R.

Rep.

are, however, unsure

weight, if any, to accord to the Department's position, given that

Department

did not expressly refer to the Dormant Commerce Clause

given that Congress decided to exempt noncontiguous jurisdictions f

its

prohibition

on

egg-labeling

objection.

in

spite

of

the

Departmen

policy to insulate state legislation from

been

'expressly stated'").

"[a]lthough

the

E.P.I.A. permits

labeling requirement,

to be

imposed in

We

Commerce Clause attack h

agree with

the district

noncontiguous

the statute does not permit

a manner

that discriminatorily

areas

court t

to impose

such a requirem

burdens interst

commerce."

III. Dormant Commerce Clause Analysis

III. Dormant Commerce Clause Analysis

Having

determined

that

section

X(F)

was

not

Congressiona

authorized in

Clause

X(F)

such a fashion

as to exempt

scrutiny altogether, we

violates

discriminates

the

Clause.

against

turn to the

We

impairing out-of-state commerce,

A regulation that

be

facially

(1970).

discriminatory

Here,

commerce

Dormant Comme

question whether sect

decide

whether section

by

disproportionat

and, if so, whether

Puerto Rico

Trailer Marine, 977 F.2d at 10-12.

______________

discriminates against

discriminatory in effect.

142

must

interstate

justify such discrimination.

it from

or

Pike
____

the Puerto

may

be

interstate commerce

neutral

on

its

face

v. Bruce Church, Inc., 397 U.S.

__________________

Rico

Department of

Agriculture

promulgated a regulation which imposes a burden on other United Sta

jurisdictions -- namely, egg-labeling -- that is not imposed on Pue

Rico.

The record amply supports the district court's finding that

enforced,

[section] X(F)

would impose

on mainland

and foreign

producers significant

costs not imposed on

Puerto Rican producers

Thus, section X(F) facially discriminates against interstate commer

Because section

X(F) discriminates

against interstate

commer

the burden falls on

appellants to show

that it "serves a

legitim

local

purpose"

that

could

not

be

served

discriminating against interstate commerce."

U.S. 332,

336 (1979).

legitimate

consumers.

They

argue

in protecting

that

imposing a

well

with

Hughes v. Oklahoma,
______
________

Appellants argue that

state interest

"as

section X(F) serves

the health of

labeling

Puerto Ri

requirement

imported eggs will enable authorities to remove from supermarkets e

produced in a geographic area known to be the source of an outbreak

salmonella

poisoning.

However,

appellants failed

to support

assertion with any evidence showing (1) whether there is a substant

problem with

salmonella

in

eggs;

(2) whether

egg-labeling

is

efficient way to

trace contaminated eggs;5

(3) whether section

____________________

4The evidence

produced below

tended

to show

that section

would increase the market price of eggs imported into Puerto Rico f
other

United

States

produced eggs.

For

jurisdictions,

of

local

Radlo Brothers

eggs to Puerto Rico, testified that in order

X(F) he would have to purchase

each of his thirty-five

Rico.

advantage

example, the Vice President of

company which exports

comply with section

to the

new machinery

locations from which he ships eggs

He further testified

ability to satisfy his other

that such egg-labeling

to Pue

would hinder

clients' emergency needs, because

th

clients would likely not accept labeled eggs.

5The utility

of egg-labeling as a

eggs is not self-evident.

Egg Producers described

means of tracing

contamina

Testimony by the Vice President of

a process

by which tainted

eggs are

Uni

tra

back to the farm that produced them through the standard documentat
already used by packers and producers.

was

passed with

the purpose

whether eggs imported

of tracing

from elsewhere

contaminated eggs;

in the United

and

States are

likely to be contaminated than eggs imported from other countries t

need

only be

labeled "foreign."

court's finding that

We

therefore accept

appellants "did not offer

the distr

evidence proving t

the discriminatory burden of [section] X(F) is justified by any fac

'unrelated

to

economic protectionism.'"

Limbach, 486 U.S. 269, 274 (1988).

_______

See
___

New Energy Co.

________________

We hold that section X(F) viola

the

court

Dormant Commerce

granting

section X(F).

So Ordered.
So Ordered.
___________

Clause, and

a permanent

affirm the

injunction

order of

against

the distr

the enforcement

10