Responding to Charity Navigator’s DA on the Humane Society of the United States

I was sent a link to a story and asked if it was true. The story noted that Charity Navigator, the charity watch dog group, had attached a Donor Advisory to the Humane Society of the United State’s listing, specifically because of the lawsuits related to the Ringling Brothers circus.

I was astonished. A donor advisory because of a single Endangered Species Act lawsuit? Many nonprofits are involved in lawsuits as they work to achieve the goals that are part of their underlying mission. I have a hefty annual PACER (federal court document system) fee because of the documents I download for the numerous environmental and animal welfare cases I follow—and I’m only following a tiny fraction of the cases I’d really like to follow.

Was the Donor Advisory given because the animal welfare groups lost the case? I would hope not, because penalizing nonprofits for taking a chance in court would have a chilling effect on their ability to do their work.

Was the Advisory given, then, because they also entered into a settlement for attorney fees? That seems to be more likely, especially considering the hefty size of the attorney fee settlement ($15 million). However, that a single incident related to a single court case would override 60 years of history in the Charity Navigator’s decision seemed both capricious and arbitrary. If civil lawsuits were not part of the arsenal of the organization, or if HSUS was in the habit of losing these cases and having to pay hefty attorney fees on a regular basis, then I think it would give most people pause before donating—but a single instance? Frankly, my first reaction was, “Well, aren’t you the precious.”

Charity Navigator also referenced the fact that Ringling Brothers filed a counter-lawsuit against the animal welfare organizations based on RICO—the Racketeering law. The reference to RICO does sound serious, if it weren’t for the fact that because of the RICO law’s overly loose design, and due to the Supreme Court’s over-reliance on the “intent” of Congress when passing the law, RICO’s purpose has been badly muddied over the years. Now, rather than go after the Mafia or sophisticated white-collar criminal networks, RICO has become a highly tempting tool in corporate America’s tool belt, especially after the recent findings in the Chevron RICO lawsuit related to the earlier lawsuit brought by poor Ecuadorians against the oil company for environmental damage to their lands.

Regardless, neither lawsuit—the original Endangered Species Act lawsuit brought by the animal welfare groups (not including HSUS), or the RICO case—ever reached a decision on the merits. The former was dismissed because of lack of standing, and the second never went to trial. As part of the attorney fee settlement, Feld Entertainment (parent company for the circus) agreed to dismiss the RICO lawsuit. The fact that the corporation filed a complaint should be seen as irrelevant and not figure into any agency’s determination of whether the organizations involved are sound or not. Not unless Charity Navigator believes that all one has to do is file a complaint in court and it’s automatically taken as true.

Charity Navigator noted the reasons why the Judge dismissed the ESA case for lack of standing, though the agency’s understanding of the legal documents and associated time line of all the events are equally confused and inaccurate. For one, the agency stated that Feld filed the RICO lawsuit after the ESA case was decided. Feld originally filed the RICO lawsuit in 2007 when Judge Sullivan denied the company’s request to amend its answer and assert a RICO counter-claim. The new lawsuit was stayed until the ESA case was decided in 2009, and Feld amended its original complaint in 2010, when the RICO case started up again.

I wanted to pull out part of the memorandum Judge Sullivan wrote in 2007 when he rejected Feld Entertainment’s request to amend their answer (leading to the RICO lawsuit). It relates to Feld’s implication that the animal welfare groups were involved in a complex and corrupt scheme to pay their co-plaintiff, Tom Rider that the company lawyers claimed they didn’t know about until 2006.

Finally, the Court cannot ignore the fact that defendant has been aware that plaintiff Tom Rider has been receiving payments from the plaintiff organizations for more than two years. Although defendant alleges an “elaborate cover-up” that prevented it from becoming “fully aware of the extent, mechanics, and purpose of the payment scheme until at least June 30, 2006,” Def.’s Mot. to Amend at 4, such a statement ignores the evidence in this case that was available to defendant before June 30, 2006 and does not excuse defendant’s delay from June 30 forward. Plaintiffs’ counsel admitted in open court on September 16, 2005 that the plaintiff organizations provided grants to Tom Rider to “speak out about what really happened” when he worked at the circus.

In other words, Feld’s lawyers found out about the “elaborate scheme” to fund Tom Rider, because the animal welfare groups mentioned funding Tom Rider during a court hearing in 2005.

As for that funding, it is true that the animal welfare groups paid Tom Rider about $190,000 over close to ten years. However, what isn’t noted is that some of that “money” wasn’t money at all. Rider was given a computer, a cell phone to keep in contact with the groups, a used van so he could travel around the country speaking out about the trial and his experiences with the circus, and various other goods. The groups also provided IRS forms for years 2000 through 2006 for Rider. When I added up the income for these years, it came to $152,176.00. However, after all of Tom Rider’s expenses were deducted, over the seven years he “took home” a total of $12,582, for an average of $149.78 a month. That’s to pay for all of his personal expenses—including a cheap dark blue polyester suit and equally cheap white shirt and tie he wore to the trial. (Tom Rider must have stood out for the plainness of his garb when next to Feld Entertainment’s $825.00 an hour DC lawyers during the trial.)

Among the small selection of oddly one-sided court documents that Charity Navigator linked, another was the Judge Sullivan decision denying the animal welfare group’s motion to dismiss the RICO case. What stands out in this document is a reference to the original Judge Sullivan decision, specifically a comment about the Rider funding:

The Court further found that the ESA plaintiffs had been “less than forthcoming about the extent of the payments to Mr. Rider.”

I compare this statement with Sullivan’s statement I quoted earlier, wherein Sullivan denied Feld’s request to amend its complaint because of the supposed underhanded and secret funding—an assertion that Sullivan rejected in 2007. The newer constradictory 2009 statement was just one of the many inconsistencies in Judge Sullivan’s decisions over the years related to these two cases.

But the last issue that Charity Navigator seemed to fixate on was Feld’s attempt to get confidential donor lists from the animal welfare groups. I’ve written about this request, and my great disappointment in Judge Facciola’s decision to grant the request.

Nothing will ever convince me this wasn’t a bad decision, with the potential to set an extremely bad precedent. Even when the discovery was limited primarily to those people who attended a single event, it’s appalling that a confidential donor lists can be given to a corporation who represents everything the donors loath and disdain—and a corporation with a particularly bad record when it comes to dealing with animal welfare groups and other people—not to mention its abysmal record when it comes to its animal acts.

The animal welfare groups settled because when you have a billionaire throwing $825.00 an hour lawyers at a case, and said billionaire doesn’t care how much it costs to win, it didn’t make sense to continue fighting a fight that was already stacked against them. When Judge Sullivan ruled on the ESA case, he should have recused himself in the RICO case, because to rule favorably for the animal welfare groups in the RICO case would be to say he was inherently mistaken in many of his assertions in the ESA case. When he turned the case over to the Magistrate Judge, Judge Facciola should have exercised independent thinking rather than just continue to parrot Judge Sullivan. In light of this judicial bias, and the fact that the groups would continue to spend way too much money fighting a lawsuit that the other side would deliberately stretch out as long as it possibly could, keeping up the fight was a lose-lose situation.

Top all that with the threat to the anonymity of their donors, and the groups settled. Point of fact, if they settled specifically to protect their donors, more power to them. They should be commended for doing so, not punished.

What’s ironic is in my original posts on the donor list request, I noted that if the animal welfare groups had to give these lists out, it would most likely impact on their ratings in sites such as Charity Navigator. Never in my wildest dreams did I expect that Charity Navigator would give a donor advisory to the groups just because a judge ordered that the list be provided, not that they were provided. The groups had planned on appealing this ruling before they settled, and frankly, I think they had a good chance of winning the appeal. But the very fact that a no longer existing possibility of an event is enough to trigger a donor advisory leaves me to wonder how many more innocent nonprofits will be labeled with a donor advisory just because someone sent in a newspaper article about the possibility of an event?

Kenneth Feld’s $825.00 an hour lead attorney, John Simpson, was recently interviewed for a legal publication. In it, he spoke about the donor list;

They didn’t want a situation where I’m taking the deposition of some donor asking — if you knew they were going to take this money to pay a witness, would you have given this donation?” Simpson said. “I don’t think they wanted that kind of discovery to take place. Some people might have made the donation anyway. But most of these people would have said — no, I wouldn’t have done that. And you would have been in the middle of their donor relations and potentially cutting off their donations in the future.”

In actuality, the one fund raiser that was at issue in the donor list request did specifically state that the money was for the lawsuit, and other requests for funds specifically stated the money was for Tom Rider’s media campaign. In addition, there is a legitimate concern about what would happen to individuals put into an intimidating situation by a high priced, DC powerhouse attorney. Mr. Simpson has a way of asking questions in depositions, and then subsequently paraphrasing the responses so that even the most innocent and naive utteranceseems dark, and dastardly. It was unfortunate that Judge Sullivan allowed his scarcely concealed disdain for Tom Rider to lead him to basically accept whatever Feld’s lawyers said, even though the animal welfare groups presented solid arguments in defense.

Lastly, Charity Navigator linked an article in the Washington Examiner, as if this was further evidence of good reasoning for the donor advisory. Might as well link Fox News as a character reference for the EPA, or The Daily Caller as a reasoned source of news for President Obama.

Just because something shows up in a publication online does not make what’s stated truth, or even reliable opinion. That a charity watch dog would link a publication known for its political and social bias, as some form of justification for a decision only undermines its own credibility. Yes, the HSUS and the FFA are involved in lawsuits with a couple of insurance companies regarding their liability coverage. As noted, though, it’s common for insurance companies to deny claims of liability when it comes to litigation fees. Kenneth Feld, himself, is involved in a lawsuit with his insurance company about it not wanting to pay those $825.00 an hour fees for Feld’s attorneys in the lawsuit with his sister.

However, there were several insurance companies involved with the groups and this court case. One way or another most, if not all, of the attorney fee settlement will be paid by one or more insurance companies.

An interesting side note about the insurance company lawsuits is the fact that the Humane Society’s lawsuit is being handled in federal court, while the Fund For Animals lawsuit is being managed in the Maryland state court system. This disproves one Feld Entertainment claim that HSUS and FFA are one organization (and hence, justifying Feld’s dragging HSUS into the lawsuit). The reason for the lawsuit split is that FFA is a Maryland corporation, while HSUS is not, and the insurance company was able to argue that it could move the HSUS case to the federal level because of jurisdictional diversity. Nothing more succinctly demonstrates that FFA and HSUS are not the same corporate organization. Yet HSUS has received a donor advisory for a lawsuit it was never involved in. FFA was involved in the ESA suit, but not HSUS.

There is so much to this case, too much to cover in a single writing, but I did want to touch on the major points given by Charity Navigator in its donor advisory. Will the advisory hurt an organization like HSUS? Unlikely. The Humane Society of the United States is one of the older, more established, and largest animal welfare organizations in the country. Its charity ratings to this point have been excellent. A reputable organization like the BBB lists it as an accredited charity, and one only has to do a quick search online to see that it is currently involved in many different animal welfare efforts across the country—from rescuing animals in North Carolina to defending American burros. If people donate or not to the organization it won’t be because of Charity Navigator’s listing, because most people wouldn’t need Charity Navigator to learn more about the HSUS.

But such donor advisories could negatively impact on lesser known, smaller charities. I hope that when Charity Navigator issues such a drastic warning from this day on, it does so based on a foundation that is a little less arbitrary, and much less capricious, than the one they used for HSUS and the other animal welfare groups involved in this court case.

Animal welfare groups settle with Feld Entertainment

Last update

I’ve had a day to get over the shock at the settlement amount.

All of the statements by the animal welfare folk I posted links to make logical sense. And believe it or not, once I got over the shock at the amount of the settlement, I wasn’t necessarily against a settlement in the ESA attorney fee battle—though, I believed it was important to continue the fight in the RICO case. What I had expected was a settlement closer to the amount given in the original animal welfare attorney fee reply—about five million.

This amount would have been a loss for the groups, yes, but it wouldn’t have been such a PR bonanza for Feld. The larger amount, though…that’s going to cut deep, and not just in a monetary sense.

Regardless of what I’ve said today, I am not mad at the groups. I am profoundly disappointed, which, in some ways, is worse.

This settlement has ramifications beyond just the animal welfare groups and the fight for circus elephants. Corporations have started using RICO as a weapon against nonprofits, and what the corporations now see is that nonprofits won’t even stay around to fight a RICO case when one is brought. No matter the “logic” or the legal arguments—and, most likely, the insurance company demands—the harmful consequences of this settlement will have a disturbing and lasting effect.

I have said I won’t finish my original book, and this is true. That book is dead. That book was based on a heroic battle against all odds. I guess, in a way, it was a book of fiction because in our courts and in our philosophical equivalencies, there is no room for heroes.

But I am still going to write something about these cases. I have so much of the history, have spent so much time in research and among court documents. I am going to write something—I’m just not sure what, and I’m not sure when.

second update

Other statements:

From firm of Meyer Glitzenstein & Crystal the animal welfare attorneys in the original Endangered Species Act lawsuit.

From the Animal Welfare Institute.

From Wayne Pacelle, President of the Humane Society of the US.

update The Humane Society of the United State has issued a statement. No donor money is going to Feld, the insurance companies that provide liability insurance for the animal welfare groups are most likely paying the costs.

Does this statement make this settlement better?

No.

earlier After all the years following this court case, what I didn’t expect was for the animal welfare groups to basically capitulate to Feld Entertainment.

They agreed to a $15.7 million dollar settlement. Combined with the previous $9.3 million settlement by the ASPCA and Feld Entertainment actually made a profit on this court case.

And oh, how Feld is crowing about it today.

“After winning 14 years of litigation, Feld Entertainment has been vindicated. This case was a colossal abuse of the justice system in which the animal rights groups and their lawyers apparently believed the ends justified the means. It also marks the first time in U.S. history where a defendant in an Endangered Species Act case was found entitled to recover attorneys’ fees against the plaintiffs due to the Court’s finding of frivolous, vexatious and unreasonable litigation,” said Feld Entertainment’s legal counsel in this matter, John Simpson, a partner with Norton Rose Fulbright’s Washington, D.C., office. “The total settlement amounts represent recovery of 100 percent of the legal fees Feld Entertainment incurred in defending against the ESA lawsuit.”

Justice was not served in this case, or with this payment. It’s difficult to see how we can trust any of these animal welfare groups to stay the course with any new litigation or other effort after this settlement.

I had originally planned on writing about this case. I have close to three years of research into these two legal cases. Thousands of dollars of PACER fees, too.

But what good is telling the story when it ends with, “…and the animal welfare groups, tails between their legs, slunk off into the sunset”?

And what of the battle for the circus elephants? Though this settlement doesn’t change the facts—that the life for circus elephants is miserable—how can we continue this fight, when every time we open our mouths, this settlement will get shoved into our faces?

I guess we’ll see what the future holds. I do know, Justice was not served in this case.

Judge strikes blow against groups

Think back on the last donation you made for a cause. Perhaps it was to the Natural Resource Defense Council to aid them in their court battle to protect the Palisades Interstate Park. Maybe it was the Sierra Club, to support its Clean Air Act lawsuit against a Montana coal-fired power plant, or to any organization or individual battling Chevron in its epic, and manic court fight against Ecuadorians, lawyers, journalists, filmmakers, big tech companies, and most US environmentalists.

The donation was made. Your side of the court battle will win, or it won’t. End of story. Or at least, you think it’s the end of the story.

Imagine that eight years after you made the donation, you get a legal letter or subpoena from an intimidating Washington DC law firm representing the coal plant or oil company, informing you you’re going to be deposed and/or forced to appear in court in an ongoing racketeering lawsuit against the organization you supported. Said lawyers will explain that they are seeking co-plaintiffs in their multimillion dollar lawsuit, with an implication underlying the communication that if you’re not with us, you’re agin us.

And all because you donated $10.00 to an organization like the NRDC or the Sierra Club, to support them in their efforts.

Does this sound far-fetched, insane, impossible? Think again, because that’s just what’s happening in the RICO court case brought by Feld Entertainment (parent company of the Ringling Brothers circus) against several animal welfare groups and individuals because of the groups’ legal efforts on behalf of circus elephants.

Magistrate Judge Facciola of the DC district court ordered the animal welfare group defendants (the Humane Society of the US, the Animal Welfare Institute, Born Free USA, and Fund for Animals), to turn over confidential donor lists containing the names and contact information for every person or organization that donated money to the groups to support the then Endangered Species Act (ESA) lawsuit against Ringling Brothers.

From the order:

Accordingly, defendants will have to provide Feld with the names of 1) those donors who received a solicitation and earmarked a donation to support the ESA lawsuit or Rider (or both); and 2) those donors who attended a fund raiser and earmarked a donation in the same way. Donors who neither received a solicitation nor attended a fund raiser cannot possibly have been defrauded and therefore the disclosure of their identities is unnecessary.

By denying the animal welfare groups’ motion for a protective order for the donor information, Judge Facciola is giving permission for Feld Entertainment’s lawyers to contact, and question, these individuals. Feld’s lawyers assert in court documents that those who donated to the animal welfare groups in relation to this court action were defrauded, and would, therefore, be willing to enter the court as co-plaintiffs with Feld Entertainment, owner of Ringling Brothers circus…the organization considered the poster child for circuses with trained elephant acts, the very thing these donors deplore.

Not a problem, you might think, and seemingly Judge Facciola concurs with you. The scenario Facciola seems to have in mind is that Feld’s lawyers will politely have a chit chat with the folks, ask a few questions, get a few replies, and life will go on. And if the donors despise Ringling Brothers as much as I say, these polite chit chats should be short, and to the point.

Real life is never as simple or as black and white as court documents may imply. I have read most of the deposition transcripts from the earlier ESA (Endangered Species Act) case, which Judge Facciola most likely has not. Of course, he hasn’t; he wasn’t the presiding judge in that case. If he had, though, he might come to realize, as I have, that the opinion Judge Sullivan formed about the ESA case was based, for the most part, on out-of-context responses by an unsophisticated man from the Midwest (Tom Rider), under a daunting barrage of questions fired by an intimidating group of high powered Washington DC lawyers. I would like to think that if Judge Facciola did better understand the actual circumstances leading up to Judge Sullivan’s decision—the reality, not the fiction presented by Feld in court documents—he might have paused, just a moment, before subjecting innocent non-party citizens to the same treatment.

I’ve already sent out warnings into the community of those fighting for the welfare of circus elephants about what may be coming their way. I’m not a lawyer, so can’t give advice, but I have stated if I were to receive notice from Feld’s people, I would never appear in a deposition without having a lawyer present—yet another unconscionable burden on people who did nothing more than donate ten bucks eight years ago in order to help circus elephants.

Judge Facciola’s decision was a not a good one—disregarding argument and cavalier as regarding the First Amendment protections due to the non-party donors. That’s the key: he’s disregarded the rights of those not represented in the court room. And by doing so, he’s setting precedent that should seriously worry any group fighting for any cause—whether it be against the Keystone pipeline, for the wolves, in support of safer and healthier food, clean water and air, or circus elephants.

Thankfully, the animal welfare groups are fighting back to the limits set by law. But I worry, I seriously worry, the impact this case can have on any activist group in the future. Particularly after the Chevron court win and the glee with which corporations now consider RICO as both shield and weapon.

Think about it: how willing will you be to donate ten bucks to a cause if it meant you’ll be yanked into court years later?

Koster’s Missouri Egg Challenge

Update: On March 20th, the plaintiffs in one of the cases (Rocky Mountain Farmers Union et al v Corey et al) referenced in this work, have petitioned the Supreme Court to hear its appeal.

Update: On March 5, Iowa, Oklahoma, Kentucky, Alabama, and Nebraska joined with Missouri in an Amended Complaint. The arguments are the same, the primary difference is the addition of other states. My arguments remain the same with a caveat that multiple states being involved does not add weight to the complaint. Well, other than the tax payers of these states should also express their curiosity as to why tax payer money is funding a legal fight benefiting one select industry.

Earlier: On February 3rd, 2014, the Attorney General for the state of Missouri, Chris Koster, filed suit in the Eastern District of California’s District Court challenging one of California’s egg laws. Some of the news stories about the lawsuit stated that Koster is challenging California’s well known Proposition 2, which ensures better living conditions for egg-laying hens. However, the Missouri AG is really challenging AB 1437, which was passed by the California legislature in 2010 in order to ensure that all shell eggs sold in California, regardless of origination, meet minimum living standards for the hens that lay them.

According to the Missouri complaint, AB 1437 violates the “dormant” Commerce Clause, by enacting a state law that discriminates against interstate or foreign commerce. But rather than go against the general context of the text, the complaint is targeting the alleged reasoning behind passing AB 1437 (to ensure all shell egg producers follow the same minimum requirements), as well as the timing (in-state producers received 2,249 days to come into compliance, while out of state producers received 1,640 days). The implication is that the law is “protectionist”, protecting California producers to the detriment of Missouri producers.

The complaint makes much of a report from the California Department of Food and Agriculture, which warned about a possible Commerce Clause challenge to AB 1437. In the report, the CDFA stated that the state might need to prove its allegations about food safety and cage size in order to avoid a constitutional challenge.

Pre-law warning aside, the case is going to be a difficult battle for the Missouri AG. The plaintiffs have to show that the law is deliberately discriminatory, or, failing this, that the out-of state producers’ pain outweighs the in-state benefits. In 2012, an in-state egg producer sued California because of Proposition 2, stating that the law was both unconstitutionally vague and in violation of the Commerce Clause. The lawsuit, William Cramer v. Edmund G. Brown, et alwas dismissed with prejudice by Judge John Walter who, in his decision, quoted from another case, Pacific Northwest Venison Producers v. Smitch:

If the regulations discriminate in favor of in-state interests, the state has the burden of establishing that a legitimate state interest unrelated to economic protectionism is served by the regulations that could not be served as well by less discriminatory alternatives…In contrast, if the regulations apply evenhandedly to in-state and out-of state interests, the party challenging the regulations must establish that the incidental burdens on interstate and foreign commerce are clearly excessive in relation to the putative local benefits.

The Cramer v. Brown lawsuit was about Proposition 2, which focuses on the animal welfare aspect of the regulations:

The purpose of this act is to prohibit the cruel confinement of farm animals in a manner that does not allow them to turn around freely, lie down, stand up, and fully extend their limbs.

Though the stated basis for both California egg laws differs, they are complementary, with an end result that’s the same: a minimum set of standards governing the environment for hens whose eggs are intended for human consumption within California. .

Throughout the Koster complaint, much is made of ancillary reports and publications related to AB 1437 and the fact that the law levels the playing field for California egg producers. This actually forms the basis for the legal challenge: that the bill only impacts on producers external to the state (since Proposition 2 impacts on producers internal to the state), and therefore places an undue burden on these out-of state producers.

The legislative history of AB 1437 suggests that bill’s true purpose was not to protect public health but rather to protect California farmers from the market effects of Prop 2 by “leveling the playing field” for out-of-state egg producers.

However, Koster’s legal challenge doesn’t demonstrate how out-of state producers are economically disadvantaged in relation to in state producers, other than the in state producers had longer to implement changes. Even then, the complaint text is breathtakingly disingenuous when it claims, “If Missouri farmers want to continue selling eggs in the California market on January 1, 2015…those farmers need to begin making the necessary capital improvements to their farms now…”

Well, yes, but then Missouri farmers have been aware of the 2015 deadline since July of 2010 in order to make those changes. That Koster didn’t decide to file the lawsuit until now is more a measure of *Missouri politics than logistical impossibilities.

What the complaint does mention is that Missouri egg producers had an advantage over California egg producers after Proposition 2 was passed, and it was the loss of this advantage that led to violation of the Commerce Clause:

63. AB1437 and 3 CA ADC § 1350(d)(1) violate the Commerce Clause because they are protectionist measures intended to benefit California egg producers at the expense of Missouri egg producers by eliminating the competitive advantage Missouri producers would enjoy once Prop 2 becomes effective.

Must states protect other state producers’ advantage? To understand whether this is a viable claim, we need to take a closer look at the Commerce Clause.

The Commerce Clause grants Congress the power to regulate commerce between states. The “dormant” Commerce Congress is an implied negative converse: states are prohibited from passing legislation that adversely or improperly impacts on interstate commerce. Interpretation of the law has been refined over time. Now, the courts first determine whether the state law discriminates against out of state interests in deference to the states own producers, either deliberately or incidentally. If the legislation is deliberate and protectionist, then the state is out of luck. However, if the discrimination is a side effect of the act then it’s up to the state to provide arguments why the ends it needs to achieve can’t be achieved any other way.

So how does AB 1437 fit into this? Interestingly, so.

If you sell shell eggs in California, you have to follow the same requirements regardless of your location. Proposition 2 started this process by requiring minimum standards for egg hens within the state, but if we took away Proposition 2, the same requirements would still exist because of AB 1437. Technically, AB 1437 seemingly does “discriminate” against out-of state producers more than in-state producers, since its focus is on the eggs sold in the state, rather than the hens within the state. However, the text of AB 1437 doesn’t differentiate based on location or producer, and neither does California statute 3 CA ADC § 1350(d)(1):

Commencing January 1, 2015, no egg handler or producer may sell or contract to sell a shelled egg for human consumption in California if it is the product of an egg laying hen that was confined in an enclosure that fails to comply with the following **standards.

Now the question becomes: does the fact that Missouri no longer has an advantage over California producers constitute “discrimination”? There is one Supreme Court case, Hunt v. Washington State Apple Advertising Commission, which seems to imply so.

North Carolina passed a law that apples had to have a USDA label. Washington State apple producers didn’t want to use the USDA label because Washington state standards actually exceed USDA standards—a fact that gives Washington apple growers an advantage over North Carolina apple growers. Washington state growers challenged the law, stating that it violated the Commerce Clause because the law degraded the Washington state growers’ advantage.

The Supreme Court agreed, which does seem to corroborate the notion that removing an out-of state producer’s advantage is discriminatory. However, there’s some subtlety to the ruling. According to the Oyez entry:

The Court voted unanimously that the North Carolina regulation was an unconstitutional exercise of the state’s power over interstate commerce. Although the regulation was facially neutral, it had a discriminatory impact on the Washington growers while shielding the local growers from the same burden. The regulation removed the competitive advantage gained by the Washington apples from stricter inspection standards. The regulation produced a leveling effect that works to the local advantage by “downgrading” apples from other states unjustly. Therefore, the regulation places an unreasonable burden on interstate commerce.

And therein lies the catch: the North Carolina apple producers were already using the USDA labels, so the new law had no impact on them. Unlike the North Carolina apple producers, the California egg producers have to follow a new law beginning in 2015—the same law that out-of state producers have to follow. Unlike the North Carolina apple producers, no one is “advantaged” on January 1, 2015 with the California laws. Or, in the egg producers’ perspective: all parties are disadvantaged, equally.

If the law isn’t deliberately discriminating, then the judge applies what is known as the “Pike balancing test” from the case, Pike v. Bruce Church, Inc..

Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.

The judge has to balance the benefits of the law against the burden imposed on out-of state producers.

Does California have a right to pass laws that support its citizens animal welfare and food safety interests? Judge Walter in Cramer v. Brown believes so.

As Plaintiff admits, the prevention of animal cruelty is a legitimate state interest. See United States v. Stevens, __ U.S. __, 130 S. Ct. 1577, 1585 (2010) (“[T]he prohibition of animal cruelty itself has a long history in American law, starting with the early settlement of the Colonies.”). In order to outweigh this legitimate state interest, Plaintiff must allege facts that demonstrate that the incidental burdens on interstate commerce are clearly excessive in relation to the local benefit and that these burdens are substantial. See National Ass’n of Optometrists & Opticians v. Harris, 682 F.3d 1144, 1148 (9th Cir. 2012) (“A critical requirement for proving a violation of the dormant Commerce Clause is that there must be a substantial burden on interstate commerce.”). Instead, Plaintiff alleges purely hypothetical and entirely speculative burdens on interstate commerce. Moreover, those hypothetical and speculative burdens, even if they are realized, are not clearly excessive in relation to the legitimate state interest in preventing cruelty to animals.

Another California court decision corroborates Judge Walter’s decision. Recently the Ninth Circuit Court of Appeals affirmed a judicial decision to deny a preliminary injunction against one of California’s foie gras ban laws. This lawsuit also contends that the law is a violation of the dormant Commerce Clause. The judges disagreed:

Plaintiffs contend that § 25982 targets wholly extraterritorial activity because it is “aimed in only one direction: at out-of-state producers.” Plaintiffs reason that § 25982 is “apparently directed at farmers who feed their ducks and geese outside [California],” because § 25981 already prohibits businesses in California from force feeding birds.

Plaintiffs misinterpret the interplay between the statutory provisions. Plaintiffs assume that § 25981 and § 25982 are functionally equivalent, with § 25981 targeting California entities and § 25982 targeting out-of-state entities. In truth, § 25981 serves an entirely different purpose than § 25982. Section 25981 prohibits entities from force feeding birds in California. But for § 25981, a California producer could force feed ducks in California, and then sell foie gras outside of California. Section 25981, however, does not prohibit the sale of products produced by force feeding birds. That is where § 25982 comes in. Section 25982 applies to both California entities and out-of-state entities and precludes sales within California of products produced by force feeding birds regardless of where the force feeding occurred. Otherwise, California entities could obtain foie gras produced out-ofstate and sell it in California. Thus, Plaintiffs’ assertion that § 25982 is directed solely at out-of-state producers is incorrect.

The case is still ongoing, but if the decision is any indication, has little chance for success.

Returning to AB 1437, contrary to the assertions in the complaint that the new regulations, “serve no legitimate state purpose because they do not protect the welfare of any animals within the State of California, and their stated purpose—to prevent salmonella contamination—is pretextual”, the new regulation does serve the legitimate interests of the citizens of the state as to the safety of the food they eat. The text of AB 1437 references both the Pew Commission on Industrial Farm Production and the World Health Organization in their findings of proportionally higher level of salmonella contamination associated with stress, and that the hen’s stress level is directly related to the environment in which it is kept. A quick Google search brings up several other studies and reports that also make a connection between environment and hen health, and hence egg safety.

The Missouri AG disagrees. The complaint, in effect, places the court in the position of having to determine the credibility of scientific findings it has neither the skill nor background to judge.

It is just this difficulty that has led the Roberts Court to cast a jaundiced eye against the Pike Balancing Test, and, indirectly, against the dormant Commerce Clause, itself. And in our court system, interpretation of law flows down hill.

The Koster complaint doesn’t rely solely on the Commerce Clause in its arguments. The complaint also claims that the Federal Egg Products Inspection Act (FEPA) implicitly preempts the California laws, and they are therefore null and void under the Constitution’s Supremacy Clause. It’s an odd argument, considering Missouri’s own frequent attempts to explicitly nullify federal law.

Regardless of the unintended irony of the claim, the FEPA focuses specifically on egg processing and processing facilities, and not on the environment housing egg hens. At most, the state and federal laws complement each other. I have to assume this argument in the complaint is the legal equivalent of throwing everything at the wall and hoping somethingsticks.

Before he filed, Koster stated the following in an interview with the Kansas City Star:

“This is not an agriculture case, and it’s not just about egg production,” Koster said. “It’s about the tendency by California to press the boundaries of intrusion into an area protected by the Commerce Clause of the U.S. Constitution.”

In another case currently under way in the California federal courts, Rocky Mountain Farmers Union v. Corey, several out-of state fuel suppliers sued the state of California regarding its Low Carbon Fuel Standard (LCFS). The groups claimed that the standard placed an undue burden on producers outside of California, and hence the regulations were in violation of the dormant Commerce Clause. A federal judge initially agreed, but the decision was overturned by the Ninth Circuit Appeals court. What stood out for me in the court’s decision, other than it being a victory for cleaner air, is the following:

Our conclusion is reinforced by the grave need in this context for state experimentation. Congress of course can act at any time to displace state laws that seek to regulate the carbon intensity of fuels, but Congress has expressly empowered California to take a leadership role as to air quality. If GHG emissions continue to increase, California may see its coastline crumble under rising seas, its labor force imperiled by rising temperatures, and its farms devastated by severe droughts. To be effective, California’s effort to combat these harms must not be so complicated and costly as to be unworkable. California’s regulatory experiment seeking to decrease GHG emissions and create a market that recognizes the harmful costs of products with a high carbon intensity does not facially discriminate against out-of-state ethanol.

While Congress hasn’t specifically anointed California to take on food safety or animal welfare issues, our country has long encouraged states to be the vanguard when it comes to change. Right now, states are taking the initiative with gay marriage and marijuana use, to mention two that are frequently in the news. These states become, in effect, laboratories where change is tested, and laws are refined. Such refinement can then be used to better craft laws that apply to all states.

In addition, changes at the state level can lead to acceptance of federal laws in today’s political environment where anything new coming from the US government is treated as suspect. An attempt to incorporate minimum requirements for egg hens at a national level has not been successful, even though it is supported by both egg producers and animal welfare groups, because there hasn’t been enough impetus for the change at the state level yet. Come January 1, 2015, the impetus will increase.

In my opinion, Chris Koster is wrong in his conclusions about the California laws, and it’s highly unlikely that his suit will prevail in court. Stories about the court case have stated that Koster expects the case to cost the state of Missouri only about $10,000 in legal fees. Legal battles of this nature are very expensive, so I have to assume Koster expects the case to be dismissed relatively quickly, and rightfully so.

Then Missouri Attorney General Chris Koster will have to explain to the citizens of the state of Missouri why he’s using tax payer money for a lawsuit that should have been filed by the egg producers, themselves, as is usual with court cases of this nature.

Since Chris Koster is planning on a run for Governor, and since the Missouri Farm Bureau has inordinate influence in Missouri elections, I’ll leave it up to the reader to speculate as to the exact nature of the Missouri politics.

** What standards? An enclosure with 9 or more hens must provide 116 square inches of floor space per bird; less than nine, a formula is used (322 + [(n – 1) x 87.3] / n, where “n” is number of birds). Oh, and birds must have access to food and water. This is a space about 11 inches square, with access to food and water. This is not the bird equivalent of Four Seasons. It’s not even a bird equivalent of Motel 6. That egg producers consider this burdensome should give everyone pause.

Ringling Brothers Parent Company going after advocacy group donor lists

Feld Entertainment, Inc (FEI), owner of the Ringling Brothers and Barnum & Bailey circus, is attempting to coerce confidential donor lists from the animal welfare groups it has battled with for 13+ years in the DC federal courts. FEI’s lawyers are doing so in an attempt to prove that the animal welfare organizations it’s suing—the Humane Society of the United States, Animal Welfare Institute, Fund for Animals, Born Free USA, and the Wildlife Advocacy Project—engaged in “donor fraud” in their solicitation of funds to continue their battle to help circus elephants.

Specifically, FEI’s discovery request demands the following:

27. All documents that refer, reflect or relate to donations (whether financial or in kind) that were designated or otherwise earmarked by the donor for use in connection with the ESA Action or that were designated or otherwise earmarked by the donor to support work or any other form of activity concerning Tom Rider, FEI or FEI’s elephants.

28. All documents, not otherwise covered by Request No. 27, that refer, reflect or relate to donations (whether financial or in kind) that were made as a result of the ESA Action, Tom Rider, FEI or FEI’s elephants.

29. All documents sufficient to identify each and every person or entity who made any of the donations described in Request Nos. 27 and 28.

Considering that any donation to any of the agencies in the last 15 years could have come about, at least in part, because of the agencies’ actions in regards to circus elephants, and we’re basically looking at giving FEI access to every person who has donated to one of these animal welfare groups. Even if the court narrows the request to only those donations specifically designated for the struggle to free Ringling Brothers circus elephants, we’re still looking at exposing a significant number of donors to direct inclusion in a complicated, intimidating legal action.

Donors’ freedom of association rights, guaranteed under the First Amendment, allow us to support organizations and causes without fear of repercussion or reprisal. An important aspect to this is being able to privately provide financial support to advocacy groups, as long as state and federal laws are met.

The only possible reason for demanding these lists is so that FEI’s lawyers can, we presume, contact donors directly in an attempt to find “co-plaintiffs” for its lawsuit. FEI assures us it would not do so to “harass” the people, according to its definition of “harass”, but we can easily imagine the shock people would experience receiving a letter from FEI’s lawyers related to this lawsuit. Depending on how the letter is worded, many of these people may feel that if they don’t join with Feld, they’ll find themselves lumped into the lawsuit on the other side. This is the worst case scenario demonstrating why it’s essential for these donor lists to be kept private.

From the animal welfare group’s request for a protective order against this demand:

Subjecting individuals to the stress of depositions, the cost of retaining counsel, and the risk of crushing RICO liability, for their simple act of contributing to a nonprofit organization, is incompatible with the First Amendment’s protection of free speech and association. Furthermore, FEI’s history with regard to animal welfare and animal rights supporters raises real concerns that the harassment to which donors could be subjected would not stop at being embroiled in this litigation.

As an excuse for its actions, the FEI lawyers note that several donors to the organizations are already a matter of public record. However, the lawyers dance around the fact that the donors who have been listed publicly are typically either organizational donors who must indicate their donations in their own public tax forms or individual or organizations donating over a certain amount (usually $5,000), requiring public disclosure.

FEI doesn’t want these people and organizations, though. It wants the names of the little guy, like you and me. FEI’s lawyers can’t intimidate organizations and wealthier donors, both of whom have easy access to legal advice. But you and I? Look around you; look at your friends, family, and co-workers…how would most of these folk react to receiving an intimidating communication from a high priced and powerful law firm? How would you?

There are also serious consequences to the animal welfare organizations. All of the organizations involved in the lawsuit have posted privacy policies. These policies are necessary if they hope to get decent scores from the charity rating services, such as Charity Navigator and the BBB. If the animal welfare organizations are forced into giving their donor lists over to an entity their supporters consider an adversary, such action will, most likely, impact negatively on their rating score. Charity Navigator and the BBB may be sympathetic to the fact that the animal welfare groups have been coerced into giving over their lists, but charity ratings services are focused on providing service to donors, and they’ll have to respond accordingly. Lower charity ratings can, and do, impact on donations.

More importantly, people are going to hesitate before donating to any organization or effort that will end up involving them in the middle of long, drawn out, and incredibly acrimonious legal action.

What’re FEI’s lawyers take on the issue of donor privacy? A laughable suggestion that if only the court would grant its request to have everything in the case covered under a blanket protective order, the donors First Amendment rights won’t be an issue, because the donor lists wouldn’t be made public. I call this suggestion “laughable” because FEI’s lawyers again dance around—on tippy toes, like little Brooks Brothers-suited ballarinas—the fact that the one organization the donors loath the most is the one who would get their contact information and donor activity. Not only get this information but also use it to contact them in hopes of dragging them into a frightening legal morass.

FEI’s lawyers claim they need this information because the bad ass animal welfare lawyers aren’t allowing them to proceed with their action unless there is more than one plaintiff:

Defendants have placed FEI between the proverbial “rock and a hard place.” They claim that FEI must allege more than one scheme and victim to state a RICO “pattern,” but then argue that the First Amendment blocks any and all discovery as to the second scheme and additional victims alleged in the First Amended Complaint.

Though the lawyers for the animal welfare groups are very capable, they’re not faster than a speeding bullet, nor can they jump Feld Entertainment’s legal slush fund in a single bound. I believe it is actually the Judge, applying his legal understanding and training, in combination with precedent and the underlying law, that is forcing FEI into the proverbial “rock and hard place”. This case was fragile from the very beginning—allowing the loss of First Amendment protections and exposing hundreds or even thousands of people to legal intimidation, in a desperate attempt to make it less so, is unconscionable.

The request is made even more absurd by the fact that this case has been covered in the news for many years. People in the animal welfare movement, especially among those fighting for the welfare of circus elephants, are aware of this case. This story, itself, will be linked in several Facebook groups devoted to elephants, generally, and circus elephants, specifically. This, in addition to a Facebook page devoted to the court cases. No one has come forward, no one has joined with Feld. No one.

Hopefully, the Judge will consider the wide dissemination of this information and will determine there is no need to give FEI these donor lists…and the donors First Amendment rights will be preserved.