The Case of the Cultivated Chicken with Paul Sherman

Mariann Sullivan: It's a pleasure to have you. I find this case fascinating. Before I decided to look into the papers and all, I knew it was an important case, but it's also a super interesting case. Before we get into all of that, I imagine most of our listeners here do know a fair amount about what cultivated meat is.

So we don't have to start right at the beginning there, but can you just briefly describe the actual product we're talking about, your plaintiff and the journey through federal regulation, which all happened before Florida got involved.

Paul Sherman: Yeah, so I represent a company called Upside Foods. Upside is one of two companies in the country that has received the green light from the USDA to sell a cultivated, in their case, poultry product throughout the United States. Their product is made from cells that were harvested from an embryonic chick. They replicate those cells in a cultivator, and then they're able to combine them into a product that looks like a boneless, skinless chicken cutlet. And I've actually tasted it. It tastes like a boneless, skinless chicken cutlet. So to go through the USDA and the FDA process, they had to have a pre market consultation with the FDA. Because this is a new kind of product, the FDA and the USDA spent a lot more time looking at it and investigating the safety of cultivated poultry than they typically would for a new product that's coming on the market. They ultimately concluded they were satisfied, they had no further questions about the safety of Upside's product. And then at that point, they issued what's called a grant of inspection, which allows Upside to manufacture its product, subject to the same inspection regime that applies to any other poultry manufacturer. And they issued an approved label through the USDA, which indicates the ingredients that are in Upside's product, in this case, the main ingredient is cultivated chicken cells. So once they had all those things, they were cleared to sell their product throughout the country and they have distributed it. It's not on store shelves, but they distribute it through some restaurants and also through tasting events where they invite people to try the product because they're big believers that, you know, with a new product like this where people might be a little unsure, really tasting is believing.

Mariann Sullivan: And they had done some things in Florida. I don't think they were marketing it in Florida, but there had been a few events or something like that. Is that right?

Paul Sherman: Yeah, so the law was signed into effect on May 1st of this year, but it did not go into effect until July 1st. So they had a tasting event in Miami just a few days before the law went into effect. They had over a hundred people come out and try their product. I was one of the people. I got to try the product. Then a couple days later, because of this law, which I'm sure we're going to discuss

Mariann Sullivan: Yeah, that'll be my next question.

Paul Sherman: Yeah, they, had to stop distributing it.

Mariann Sullivan: Yeah, so tell us about the law.

Paul Sherman: Sure.

Mariann Sullivan: And a little bit about the politics that surrounded its passage as well.

Paul Sherman: Certainly, so, after Upside received the green light from the USDA to sell its product, manufacturers of conventional meat and poultry were very frightened of this competition, and they started lobbying heavily throughout the country to ban the manufacturer, distribution or sale of cultivated meat, cultivated meat and poultry, and in Florida, they succeeded. On May 1st, Governor DeSantis signed the first law in the country that bans these products and, as a result, it prevents Upside from operating in one of the most populous states in the country. We have of course, filed a lawsuit challenging that. We think that it's really just a classic example of special interest politics where you have this concentrated interest group, the cattlemen who are the primary people who lobbied for it, but also small chicken farmers and things like that who just don't want this out of state competition coming in. And in fact, it's quite apparent from statements made at the signing ceremony that that was the overwhelming motivation for the law. Governor DeSantis signed the law standing behind a podium that said, Save Our Beef, and all of the statements at the signing ceremony were about the harm that cultivated meat and poultry products could cause not to the health of Floridians, but to the economic success or failure of the local agriculture, but that's not a legitimate use of government power.

Mariann Sullivan: It just occurred to me, it's always the cattlemen who are at the head of these, these issues. It just occurred to me that this is a cultivated chicken product, and it's still the cattlemen who are campaigning so hard against it. But before we get to that, just a little bit about the law, because the penalties are fairly draconian, right?

Paul Sherman: Yeah, I believe it is a, I can't remember the class of misdemeanor that it is...

Mariann Sullivan: But it is a crime, it's not just a civil penalty.

Paul Sherman: It's not just a civil penalty. It is a crime. You can go to jail for it. You can be criminally prosecuted. That's why in our lawsuit we've brought claims not just against the Commissioner of Agriculture, who's responsible for the civil enforcement of the law, but also against certain state attorneys, who would criminally prosecute the law in jurisdictions that Upside would like to distribute its product.

Mariann Sullivan: You're not questioning and no one else is either, that this law clearly applies to plaintiff's product. That's not at issue here, right?

Paul Sherman: No, no one disputes that the law actually applies to the product. There was some argument about standing at the preliminary injunction stage, but that was more about whether they faced a credible threat of prosecution. And the judge had no difficulty finding that they did face such a threat.

Mariann Sullivan: We'll get to that in more detail too, because as animal lawyers everybody's always very interested in standing issues. That's usually the toughest thing that keeps us out of court. So, as you mentioned, Upside, which is run by the wonderful Uma Valeti, who was on our other podcast years and years and years ago.

I'm proud to say we're ahead of our head of the game here. Just a lovely man. And really at the forefront of this nascent industry. And as you mentioned, they decided to sue, you mentioned who the defendants were. I think that was the complete cadre of defendants, I think, but what court are you suing in?

Paul Sherman: So we filed our lawsuit in the U. S. District Court for the Northern District of Florida, which is where Tallahassee is, and we have sued the Commissioner of Agriculture, Wilton Simpson, who is charged with the civil enforcement of the law, and we've also sued state attorneys for various judicial circuits in Florida that cover areas including Miami and Tallahassee, the Tampa Bay area and Central Florida outside of Orlando.

These are all areas where Upside would like to be able to distribute its product.

Mariann Sullivan: Okay, and I know in the complaint, and then there was an amended complaint, and I don't want to get into all of, you know, all that time, it gets too complicated. But your main arguments have to do with preemption and the Dormant Commerce Clause. But before we get to that, and I want to go into those in more depth, but before we get to that, I'd like to talk about the preliminary injunction. I imagine most of our listeners have heard about this preliminary injunction. And, it had to do with the preemption causes of action. So why did you decide to bring a preliminary injunction based on preemption, your preemption causes of action and not your dormant commerce clause cause of action?

Paul Sherman: Right. So, we have two classes of claims, as you mentioned. We've alleged that the law violates the dormant aspect of the Commerce Clause, and we've also alleged that it's preempted under two provisions of the Poultry Product Inspection Act. One is a preemption provision that forbids states from enacting ingredient requirements for poultry products that differ from or add to the requirements in federal law, and the other prohibits states from adding requirements to the facilities, operations, or premises of official establishments where poultry products are created. We ended up moving for the preliminary injunction only on the preemption claims. The major reason was that the dormant commerce claim is a more evidence based standard where the court was going to have to engage in a certain amount of weighing of the strength of the state's interest, versus my client's interest. We thought that the preemption arguments were just much more straightforward because if the court concludes that these are requirements in addition to or different from federal requirements, there's really no other evidence that matters. They're just preempted. So that was the reason we went with that approach and, you know, unfortunately, the district court disagreed with us and held that these are not preempted. We think that was a plain error of law. I'm sure we'll discuss it in great detail.

And that's now on appeal to the 11th Circuit.

Mariann Sullivan: Yeah, let's talk about the court's decision in the preliminary injunction. First of all, we talked a little bit about standing, but the court rather easily decided that you had standing. Can you just discuss the court's rationale? I mean, at least it's to some of your defendants, not as to all of your defendants, but you know, who cares?

As long as you have standing as to somebody, you're in court.

Paul Sherman: Right. So, you know, as we explained in our briefing to the district court, and as the district court agreed, the standing here is extremely straightforward, and the Supreme Court has said, when you allege that you want to engage in a course of conduct, and the government makes that course of conduct illegal, you almost always have standing to challenge that law.

So here we have a company that is ready, willing, and able to distribute its cultivated poultry product in Florida. It has all of the necessary federal approvals it needs to do that. And the only thing holding it back from doing that is that it's a crime in Florida. So that meets all of the classic requirements for standing.

You have an injury in fact, that is caused by the state law, and it's redressable by an order from the district court. Because a ruling that Florida's law is unconstitutional and, an order enjoining the state from enforcing it to Upside would clearly allow Upside to resume what it wants to do.

Mariann Sullivan: And there's also an argument in the case, but I don't want to reach it right now because the court really set it aside on the preliminary injunction because it was finding on other grounds. And that's whether you have a cause of action, and sometimes the concept of constitutional standing and cause of action can get a little, combined in people's heads, but they're very separate things.

You not only have to have this constitutional standing based on the injury and other elements of what has happened to your client, but you have to have a cause of action to sue. And that is a question in this case. But once again, I'm sorry, everybody, if I'm making this more complicated, but it's not entirely simple on what order we should do things in.

And because the court didn't deal with that on the preliminary injunction, I'd like to move on and deal with that when we get further into the case, because I really want to get to the court's decision on preemption. And the preemption argument actually was based specifically on express preemption language in the Poultry Products Inspection Act, which makes it a lot simpler to analyze than a lot of times, preemption arguments can be when they're implied.

Tell us if there's anything additionally we should know about what express preemption is under the Poultry Products Inspection Act.

Paul Sherman: Sure. So the Poultry Products Inspection Act and the Federal Meat Inspection Act, which is very, very similar in its structure. In fact, the Poultry Products Inspection Act was modeled after the Federal Meat Inspection Act. And amendments to it in the Wholesome Meat Act, in 1957, contains express preemption language. So for listeners who may not be super familiar with the doctrine of federal preemption, federal preemption is this idea that springs from the supremacy clause of the Constitution, which says that the Constitution and laws that are validly enacted under it are the supreme law of the land. An implication of that is that federal law trumps state law, in various circumstances.

And there's an array of types of preemption, the easiest and most straightforward is express preemption, where Congress by statute simply says, this federal law displaces any state law that meets the following requirements. There's other types of preemption. Conflict preemption where there's a conflict between state and federal law. Field preemption where Congress has regulated so pervasively in a specific area that we say that Congress kind of owns that area and states are not allowed to step in and enact requirements, implied preemption. But here it's very straightforward, express preemption. And because express preemption is created by statute, enacted by Congress, the scope of express preemption is determined by the statutory text. So in this case, you know, we'll discuss the two preemption provisions, but I think just kind of to frame things for your listeners, I think the major problem with the ruling below is that the district court assumed that to be preempted, there had to be some direct conflict between Florida's law and the requirements of federal law such that you couldn't comply with both. And that's not actually what's at issue here. What is at issue is is a regime of express preemption that sets a single standard for poultry products, which is the federal standard, and states are not allowed to enact additional requirements, even if they are non conflicting.

Mariann Sullivan: The statute explicitly says that. As a threshold matter, there was an issue of whether cultivated poultry is even covered by the Poultry Products Inspection Act, correct? And the court did find that it was, but can you explain that holding and some of the conflicts between the parties there?

Paul Sherman: Yeah, so, there is a federal definition of poultry product. The government in this case argued that Upside's cultivated product does not meet that definition, in sort of two ways. One is kind of more fact based and one is more a matter of statutory interpretation. But the federal definition of a poultry product, which I'll say the definition, and then I'll kind of break it down into the important parts, is a poultry carcass or any part thereof, or a product made, in whole or in part, from a poultry carcass or any part thereof. So, if you parse that out and break it down, any product that is made in part, even only in part, from part of a poultry carcass is a poultry product and subject to regulation under the Poultry Products Inspection Act. So in Upside's case, the initial cells for the cultivation of their product were taken from an embryonic chicken that was removed from its shell and humanely slaughtered. Cells were extracted from it, and those cells are used today, or the descendants of those cells are used today to make Upside's product. So one of the initial questions in the case was just a factual question. Do these cells come from a poultry carcass or were they taken from a live chicken? There are some disputes about whether the law could apply to a product that's made from cells that are extracted from a live chicken, but it didn't really matter in this case because factually that's not what was at issue.

And then the government argued, now, I should say on that, Congress could amend the definition of poultry product so that it clearly encompassed even products that were made from cells extracted from live animals. That would be within Congress's power.

Then the question was, if you take these cells and you multiply them, does that fall within the definition of a poultry product, or is this something else? What the government argued is that to be a poultry product, the finished product has to contain part of a poultry carcass.

And they said, this product doesn't contain part of a poultry carcass, because you take these cells out of the chicken, and then, when they replicate, those cells disappear, and you have new cells that were never inside a chicken, and so therefore this is not a poultry product. We disagreed with that because what that really does is it conflates the statutory phrase made from with a very different phrase made of. If you said that poultry products have to be made of part of a poultry carcass, that would suggest that they have to contain part of the poultry carcass. But the statute says made from, and an analogy that we used in our briefing is under federal law, bourbon whiskey has to be made from corn. But no one would suggest that bourbon whiskey is made of corn, or that bourbon whiskey contains corn. Corn is used in the manufacture of the product through this, you know, process of distillation. Similarly, in Upside's case, part of a poultry carcass, cells that have been removed, are used to create the cultivated cells that are in the finished product, and those cells are made from the original part of the chicken. And the District Court agreed with us. His discussion is not as in depth. He thought it was relatively straightforward.

Mariann Sullivan: He did seem to think that was the easy part of the case.

Paul Sherman: Yeah, and you know, It's a super important threshold issue, so we spent a lot of time in our briefing really trying to nail that down and then the District Court seemed to think it was easy.

I'm glad he thought it was easy. It should be easy. but it's an important issue because if you don't cross that threshold into being a poultry product, then the PPIA doesn't apply and you can't make the preemption arguments.

Mariann Sullivan: Right, doesn't even matter what the preemption clause says in that case. It is so striking. They argue a lot, or, you know, at least my perusal of their briefs, you sent me a lot of papers, so I can't say I read them all in detail. But, my perusal just kind of reiterates almost this originalist kind of desire to, they keep saying they were never thinking of this when they wrote this statute, this is not what they were thinking, but is that really, I mean, clearly the language of the statute fits your situation. You can't argue in every single situation that the legislature had to be thinking of your exact situation when they passed the statute. It's within both the letter and the spirit of the statute, I would say,

Paul Sherman: Yeah, so they really did focus a lot in their briefing on congressional intent. They talk about how this is a newfangled product that,

Mariann Sullivan: They use that word, I noticed they use that word. It sounded

Paul Sherman: That no one was thinking of. You know, interestingly enough, there is this essay by none other than Winston Churchill written years before the Poultry Product Inspection Act was enacted called 50 Years Hence, where he makes these predictions about the far off future of, I think it would have been the 1980s. And he suggests that, you know, gone will be the days when we will slaughter an entire chicken simply to get the breast or the wing, but we will grow those parts in a suitable medium. So the idea that it was impossible for people to think about cultivated meat in the 1950s is simply not true. But ultimately, you know, Congress's intent in terms of the type of products that they were imagining isn't what controls. What controls is what's the scope of the language they enacted. And it's clear that Congress enacted language that they thought would capture all poultry products, no matter how they were manufactured, with one narrow exception, which applies to products that contain sort of trivial amounts of poultry and that the Secretary of Agriculture has explicitly exempted from regulation as poultry products.

Uh, so, the Secretary of Agriculture has done that, for example, for things like chicken broth, which contains poultry cells in kind of trivial amounts, but is not regulated as a complete poultry product in the way that other poultry products are. Upside's product has not been subject to this exemption.

The contrary, the USDA treats it as a poultry product, and so therefore it falls within the broad definition that Congress enacted, even if it's not a product that Congress would have imagined in the 1950s.

Mariann Sullivan: Yeah. And, not only is it within that language, it makes total sense that this is a product that should be regulated. To say that, that the law doesn't even apply would actually reduce the amount of protection that American consumers were receiving upon the introduction of this new iteration of poultry. All right, but let's get back to the express preemption argument. So we're over the threshold issue, whether it's poultry. As you mentioned, the court found that a fairly easy question. But then, before we get to the actual two specific definitions or language, pieces of language within the statute, your overall argument is really that the court dealt with this as conflict preemption and should have dealt with it as an express preemption. Can you explain that a little bit more and why that has such an effect on the interpretation of the specific language?

Paul Sherman: Yeah, so the problem with the court's ruling is that it suggested that there can't be preemption here because there's nothing in federal law, in either the statute or the USDA's regulations, that requires the use of cultivated chicken cells in any product, or that requires that cultivated chicken products be manufactured. So, as a result, it's perfectly possible to comply with both the federal requirements for poultry products and Florida's requirement for poultry products, which is simply, don't make cultivated poultry products. There's no conflict there.

But the problem, as I mentioned, is that the scope of express preemption is determined by the statutory language. Now, Congress can enact a regime of express preemption that only preempts conflicting requirements. And it has done this, for example, with regard to certain labeling regulations under the Food, Drug, and Cosmetics Act. But Congress is also free to preempt state requirements, even if there is no conflict. And that's what Congress has done in this situation, because the law expressly forbids states from enacting requirements that are different than or in addition to federal requirements. So the result is that if the federal requirements in this case are that cultivated poultry products are treated the same as any other poultry product. But Florida has enacted a requirement that is in addition to those and the requirement is that your poultry product can't contain cultivated cells. That's not a requirement of federal law, and so therefore it is federally preempted, even though cultivated cells are not required by federal law.

Mariann Sullivan: And can you talk a little bit about the ingredient requirement?

Paul Sherman: Yeah, so, there are two preemption provisions that we're dealing with. The first is the federal ingredient requirement, so the ingredient requirement language forbids states from enacting any requirement with respect to the ingredients in poultry products that is in addition to or different than the federal requirement.

Our argument is pretty straightforward, which is simply that the USDA has determined that cultivated chicken cells are a permissible ingredient in poultry products and Florida says they are not. That is clearly a requirement regarding the physical components of a poultry product that is in addition to or different than the federal requirement and therefore it is preempted by federal law. You know, we can talk, either now or later, as you prefer, about how this case differs from some other cases that have raised ingredient preemption

Mariann Sullivan: Now, I think this is a good place to talk about that specific, aspect of the case and other, uh, it is so interesting that almost all of these examples have to do with animal products.

Really a huge, huge issue in animal law.

And you really realize that reading your briefs, like, you never run across animal cases.

And all of a sudden, every single case has to do with animal products.

Paul Sherman: Yeah, so the primary cases that the government relies on and that the district court relied on below involve regulation of foie gras, so goose or duck liver from birds that have been force fed, and also some state laws prohibiting the slaughter of horses for human consumption. With regard to the ingredients prong, that's really related to the foie gras case. I'm sure many of your listeners know, California, over a decade ago, banned the sale of foie gras from birds that had been force fed. It also banned the force feeding of birds. Manufacturers of foie gras challenged that law and they said that it was preempted under the ingredient provisions of the PPIA. This went back and forth to the Ninth Circuit. Ultimately they lost, and the court held no, this is not a prohibited ingredient requirement. The reason why, though, I think highlights some differences between this case, that we are litigating and that case. So, what the Ninth Circuit held is that it's not an ingredient requirement because the Plaintiffs in that case characterized it as a prohibition on including force fed livers, as an ingredient in products like Torshawn or other things made from goose liver. What the Ninth Circuit held is, it's not the livers that are force fed, it's the birds that are force fed. And they're force fed when they are outside of the USDA's regulatory ambit, when they are still on the farm. And the USDA has for many years held that it doesn't have any jurisdiction over animal husbandry practices. The distinction between that case and this case is that what disqualified the livers from inclusion in a product was things that happened before the product arrived at a USDA regulated official establishment. In our case, what disqualifies the product from being sold is what happens inside a USDA official establishment.

So you're allowed to receive chickens at an official establishment. You're allowed to slaughter them. You're allowed to remove parts of them and process them in any way that the USDA has said is permissible. And Florida has decided that one of those ways results in an ingredient that it does not want in chicken products.

That strikes directly at what the Poultry Product Act's preemption provision was intended to prevent. So that is kind of the basis of our ingredients prong argument and why it's distinguishable from the foie gras case.

Mariann Sullivan: Yeah, it does seem even simpler than that somehow, but I'm probably missing something. But, just the difference between process and product. There's almost this tension between finding that this product is covered by the Poultry Products Inspection Act, and then finding that it's an ingredient.

Do you think that's because one says it's exactly this, it is poultry, and then the other is saying it's an ingredient of poultry. Do you think that's where the court was struggling?

Paul Sherman: I think one of the things that the government is struggling with is there's this inherent tension in their argument where they say, no, no, no, it's not that we object to this ingredient of cultivated cells, it's that we object to this process of cell cultivation. But that leans directly into the other preemption provision that we have challenged this law under, which is that states are not allowed to impose requirements for the premises, facilities, or operations of the official establishments that make poultry products. So it know, the USDA has said that cultivation of cells is a permissible way that these establishments can make meat and poultry products, and Florida is saying that no, it's not. So whether you conceive of this as an ingredient requirement or as a premises facilities operations requirement, it doesn't really matter to us. If you think it's either one, and it seems that it has to be, then Florida's law is preempted.

Mariann Sullivan: And tell us about the court's decision.

Paul Sherman: So the court ultimately disagreed with us, and it disagreed on the grounds that I've mentioned, which is it said the USDA and Congress have not required the use of cultivated poultry cells in products. They've not required the manufacturer of cultivated cells in poultry products. It also, you know, I mentioned the horse meat cases. It relied on those for some of the premises, facilities, and operations argument. Those cases involved states that had banned the slaughter of horses for human consumption. Those laws were challenged under the Federal Meat Inspection Act as facilities requirements. And the circuit courts disagreed in those cases and said, no, because what those do is they actually prevent the horses from being brought to the facilities. Because if you prohibit the slaughter for human consumption, the horses won't go to the facilities in the first place. Those cases, I think, would be applicable in this situation if Florida had decided to prohibit the slaughter of chickens for human consumption. In that case, you wouldn't have chickens being brought to official establishments.

They wouldn't fall within the USDA's regulatory scope. Florida hasn't done that. Florida allows the slaughter of chickens. It exports hundreds of millions of dollars worth of chicken products every year. Instead, Florida is reaching directly into the operations of these official establishments. And the U. S. Supreme Court, in a case called National Meat Association v. Harris, said you can't do that. The Federal Meat Inspection Act, and by extension, the Poultry Product Inspection Act, has a very broad preemptive scope, and you also can't get around that scope by styling your law as a prohibition on the sale of products that are manufactured in a way that the state disagrees with.

That the Supreme Court said it would make a mockery of the preemption requirements. So because the district court, I think, fundamentally misunderstood the scope of the preemption, and required that there be some kind of conflict between state and federal law, got the issue wrong, We have appealed that to the 11th Circuit, and in fact, just on Monday of this week, December 16th, we filed our opening appellate brief in that case, and I think we do a good job in that brief of explaining why the PPIA does not require this kind of conflict and instead is intended to set forth a single standard for the products that are made in official establishments, which is the federal standard.

And if you meet that standard, you can be sold in all 50 states.

Mariann Sullivan: So, that's currently on appeal and I think that we've covered those issues, but they're so intertwined with the other issues not every issue was covered in the motion for preliminary injunction. Before we move on to those other issues is there anything you want to add to that discussion or can we start talking about some of the additional issues?

Which as you mentioned earlier, involves a dormant commerce clause argument.

Paul Sherman: Yeah, no, I'm happy to move on to the Dormant Commerce

Mariann Sullivan: Okay, all right, maybe we should start. Even though I consider the dormant commerce clause issue super important, and you apparently do too, because I think that you started off with it in your motion papers, even. But we're going to leave it to the end, everybody. I'm sorry, because that would just be too confusing to skip over the additional preemption issues and then get back to them later.

So it's coming, I promise. But, as I noted, there were procedural issues related to preemption that the court has not dealt with, and put aside and said, I don't have to reach that because I'm deciding against the plaintiff on another issue. And they mostly have to do with whether you have a cause of action to get into court. And one of your arguments, I mean, there's no private right of action within the Poultry Products Inspection Act, that's clear. And you're not even arguing that there's an implied one. That's not where you're going. But one of your arguments that you have made is that you may sue under 42 U. S. C. 1983, a statute which many people are very familiar with. But I think you probably, since some people haven't thought about it since law school, maybe you should explain what that statute is and who gets the cause of action under it.

Paul Sherman: Yeah, this was an issue that the district court sort of raised at the oral argument on the motion for preliminary injunction. We discussed it in great detail. He ended up not resolving it in his ruling because he determined that even if we had a cause of action, we had not properly shown that the law was preempted. I frankly think the district court made this issue more complicated than it needs to be and required sort of a level of pleading that goes beyond what is required by the Federal Rules of Civil Procedure, but to give kind of a big picture overview, to get into court, you have to be able to allege a cause of action. Even though preemption springs from the Supremacy Clause, the Supreme Court has held that the Supremacy Clause does not create an independent right of action, so you have to have some other basis to go into court. What we are asking for in this case, though, is completely routine. People go into court all the time and say, this state law is preempted by this federal law. And when they go in and do that, they do it kind of under one of two mechanisms, I think that our complaint is sufficient to allege both.

We ended up filing an amended complaint at the district court's suggestion to clarify that we are invoking both.

Mariann Sullivan: It is always good to do what the court tells you to do, regardless of whether you think they're right or not.

Paul Sherman: There, there's a, a footnote in the District Court's opinion that said we would be wise to amend our complaint. I always want to do things the district

Mariann Sullivan: Absolutely. Absolutely.

Paul Sherman: So we were happy to amend our complaint. So a lot of the argument and briefing dealt with whether we had stated a claim under section 1983, which is a Civil Rights Act. Most of the time if you see someone filing a. federal lawsuit against a state or state actors alleging that their constitutional rights have been violated, it is brought under section 1983. so basically every First Amendment lawsuit you've ever heard of is brought under section 1983. And the idea behind section 1983 is simply that if you have a federal right and that right is violated by state State actors acting under official color of law. You are allowed to sue them and get a declaration that your rights are being violated and potentially get an injunction prohibiting them from doing that. So we have this big fight in the district court about whether the Poultry Product Inspection Act creates the kind of right that is enforceable under Section 1983. and It's a complicated topic. Courts have to look at sort of like who is the beneficiary of the law? Is this plaintiff one of the intended beneficiaries of the law? Does the law unambiguously confer this right? What we argued is that if you look at the text of the Poultry Products Inspection Act, you know, look at the statements of purposes and congressional intent, it's clear that the law was intended not just to protect the public, by ensuring that poultry products are wholesome, but also to protect, manufacturers of poultry products.

There's language about how manufacturers are harmed, when unwholesome poultry products enter the market. And we think that the language of the express preemption provision is also sufficiently clear that it unambiguously confers a right on people to invoke it under section 1983. There's a useful case from the Supreme Court called New Jersey Thoroughbred Horseman's Association where it discusses what the effect of an express preemption provision is. And as the court describes it, it creates an individual right to be regulated in only the way that federal law provides. So that's the argument we've made for why Section 1983 applies. We have also argued and our amended complaint makes clear, that simply the court has inherent equitable power to enjoin state action that violates the Constitution. And this is another way in which federal preemption lawsuits are commonly brought. At the end of the day, it really doesn't matter which of these theories a court believes is the most appropriate way for it to resolve this case. The only thing it ultimately matters for is when we prevail, and I think we will prevail, whether we are entitled to recover attorney's fees from the government.

Because if you win a lawsuit under Section 1983, you are entitled to recover your reasonable attorney's fees. That's not the case if you get an injunction simply under the court's inherent equitable power. But the Institute for Justice doesn't litigate these cases because we're looking to recover attorney's fees.

We go into every case with no expectation that we will recover attorney's fees. It's not part of our budgetary calculations.

It's

Mariann Sullivan: it couldn't hurt.

Paul Sherman: It's a wonderful thing when it, when it happens and we like to see the government held accountable. I mean, fee shifting like this I think discourages the government from enacting laws that it has reason to suspect are unconstitutional. but, you know, ultimately, whichever ofthese theories the court entertains as the cause of action, as long as the court decides that what Florida has done is unconstitutional, that's what matters to me and my client.

Mariann Sullivan: This question is a little out of left field but as you were talking it occurred to me. In other situations I would imagine the poultry industry or any regulated entity under the Poultry Products Inspection Act or the Federal Meat Inspection Act would want there to be this kind of cause of action and standing.

Because they may frequently have a complaint with how the government is regulating products. And the argument that is being made now might actually preclude that if it were successful.

Am I right?

Paul Sherman: Yeah, that's correct. So the position the government has taken is that not only can we not raise a cause of action under Section 1983, but that, in fact, the only party that can bring a lawsuit alleging that a state law is preempted under the Poultry Product Inspection Act, is the United States itself. There's a provision of the Poultry Product Inspection Act that says all actions to enjoin violations of this chapter shall be brought in the name of the United States. And they've pointed to that to say you can't bring these preemption lawsuits. The district court didn't really get into that. It fundamentally misunderstands the Poultry Products Inspection Act. Because what we are seeking to enjoin here is not a violation of the PPIA in the relevant sense. What that provision refers to, what it's designed to deal with is to say, Tyson can't come into court and say that Purdue violating the Poultry Products Act.

Mariann Sullivan: Enforcement issues.

Paul Sherman: Exactly. All of those enforcement issues, enforcing the terms of the PPIA, those have to be brought by the United States against manufacturers or whatever. Here, when Florida enacts a law that is preempted under the PPIA, it violates the It Upside's rights, and it violates the preemption language in that sense, but it's not a statutory violation of the type that only Congress can enforce. And of course, federal courts have routinely heard preemption cases under the Poultry Products Inspection Act. Not only was there the Foie Gras case from California, which I mentioned, but there's a case called National Broiler Council versus Voss. And the Food, Drug, and Cosmetic Act actually has similar language reserving enforcement to the United States. Labeling preemption claims are brought all the time under the FDCA. If the government were correct, courts should not have heard any of those lawsuits. That, you know, all of those lawsuits were decided improperly, and nobody noticed till now. That's just totally implausible.

Mariann Sullivan: I just want to add, just in case there's any confusion, even though there shouldn't be, because we've been talking about it, but when you say the government, you're talking about the government of Florida. It just gets a little confusing because we're both talking about the federal government and the government that you're talking about here is the government of Florida and what they did with this statute, which is obvious from everything you said.

I just wanted to make sure everybody didn't have a brain fog about that.

Paul Sherman: That's correct, I'm talking about the government defendants in this case.

Mariann Sullivan: Right. Exactly. I think, in my mind, we have now talked about preemption sufficiently and I'd like to move on to the Dormant Commerce Clause, but do you have anything else you want to add?

Paul Sherman: No, I'm happy to move on.

Mariann Sullivan: Great. So, the Dormant Commerce Clause argument, anybody familiar with animal law is way more familiar than they want to be with the Dormant Commerce Clause.

And, I assume since you argued it first in your papers in response to the motion to dismiss that you also consider it a very, very strong argument. Can you summarize it for us?

Paul Sherman: Yeah, so for listeners who may not be as familiar with the Dormant Commerce Clause, just to give you a little bit of history, a major reason for the enactment of the Constitution was to ensure a national common market and to prevent states from enacting laws that benefited their in state trade at the expense of this interstate market so that everyone could enjoy this nationwide free trade zone, which is a major reason for American prosperity. So since the Supreme Court's earliest decisions on the scope of the Commerce Clause, Commerce Clause grants Congress the authority to regulate interstate commerce, the court has held that the negative implication of that grant of power is that states do not have the power to regulate interstate commerce and state laws that either facially discriminate against interstate commerce, that say, you know, we're going to treat these in state products better than out of state products. Those are subject to strict scrutiny and will typically be struck down. But the Supreme Court has also recognized that state legislators are sophisticated and they know how to word things so that they can achieve a protectionist result without facially discriminating. And so, laws, even that do not facially discriminate, will be subject to heightened scrutiny if they have the effect of discriminating against interstate commerce or were enacted with the purpose of discriminating against interstate commerce. There's also another category of cases which is subject to a lower standard of judicial scrutiny, called pike balancing. These are situations where states enact a law that incidentally burdens interstate commerce. What we have argued in this case is that Florida enacted this law for the purpose of keeping out of state cultivated meat and poultry products from competing with in state conventional agricultural products. this seems to me to be crystal clear from statements made in the legislative

Mariann Sullivan: did kind of say it out loud.

Paul Sherman: Signing statement, yeah, I mean, they, they said the quiet part out loud. That nobody made a secret of it, I mean, there are statements from defendant Wilton Simpson, that, you know, it's Californians who are participating in this crap, legislators said, you know, if people want this, they can go to California, but they sure as heck shouldn't get it in Florida. They described the product as a direct threat to the livelihood of cattle farmers and state chicken farmers. So it seems very clear to me that the law was enacted with the purpose of protecting these businesses from out of state competition, and it actually has that effect. There are no, Florida based manufacturers of cultivated meat or poultry. There were not at the time the law was enacted, all of it is manufactured outside the state. And so the effect of this law is to prevent these products from crossing into Florida as they otherwise would. So we think that that's a clear violation of the Dormant Commerce Clause, subject to strict scrutiny. That means the government has an evidentiary burden to show that there's no other way that it could have addressed its now alleged health and safety concerns, without burdening interstate commerce. That's the kind of decision that has to be made on a factual record. It can't be made on the pleadings at the motion to dismiss stage. So, you know, we expect that even though the district court disagreed with us about the scope of the preemption provisions, he should deny the motion to dismiss as to the dormant commerce argument. Some of your listeners may be familiar with the National Pork Producers vs. Ross case, which was decided by the US Supreme Court a couple years ago. So in that case, California forbade the sale of pork from pigs that had not been subject to certain humane treatment requirements while they were alive. That was challenged under the dormant commerce clause and the Supreme Court rejected the challenge and upheld the law. What distinguishes this case from that case is that in Ross. nobody alleged that the law was enacted for a protectionist motive. It applied to exactly the same to existing in state manufacturers of pork products and pork farmers, as it did to people out of the state, and so as a result, that case was decided under the much lower pike balancing standard. But the pike balancing standard doesn't apply in this case because the purpose and effect of this law is to discriminate against interstate commerce.

Mariann Sullivan: So do you think they could make the argument that the goal was not so much to protect the Florida meat industry, but just to protect the meat industry? Because there's plenty of meat in Florida that is not raised in Florida. and would that, that, that would be fine, right? At least, it would be fine under the Dormant Commerce Clause. It's allowed to protect industries, even arbitrarily, for no reason whatsoever, as long as they're not specifically Florida industries.

Paul Sherman: I don't think that would work because the language of the Dormant Commerce Clause decisions forbids, uh, it doesn't require purpose and effect of discrimination. You trigger strict scrutiny with the purpose or effect of discrimination. And whether it discriminates against out of state products, I think, is a question of fact, That doesn't turn on the mindset or the motivation of the people who enacted the law.

Although I, I think The many statements that they've made, that they want to protect our farmers,

Mariann Sullivan: Yeah.

Paul Sherman: You know, and Florida agriculture, shows that they did have the purpose of, protecting their in state interests. A leading case in this area is a Supreme Court decision called Hunt v. Washington Apple Commission. Which involved North Carolina law, which forbade sellers of apples from having any grading statement about the quality of the apples on the outside of their packaging, other than, I think, the USDA grading statement. North Carolina enacted this law. And it burdened interstate commerce because Washington state, which is famed for its apples, had its own grading statements which were superior, or at least arguably superior to the FDA regulated grading statements. And so it put Washington sellers at a competitive disadvantage. They could no longer indicate on the outside of their packaging that their apples, you know, met whatever Washington's highest standard was, uh, and of course this benefited the sellers of North Carolina grown apples because they didn't have to compete against that standard anymore. The Supreme Court held this has the effect of discriminating against interstate commerce. It noted that there was some evidence in the record that it also was enacted with the purpose of discriminating against interstate commerce, but it actually didn't base its ruling on that. It said, we don't even have to decide that part because this has the effect of discriminating.

So, here where all of the products are made outside of the state, they're prevented from crossing the state line, and as a result, they're prevented from competing with conventional meat and poultry products, I think we satisfy the standard.

Mariann Sullivan: How much do you have to show to satisfy that standard? I mean, they argue that the law is facially neutral, which I think it is. It doesn't say out of state cultivated meat can't be sold here. It would apply to in state cultivated meat producers. And they also make the point that this industry is minuscule.

I mean, there are very, very few producers anywhere. So it's not surprising that there aren't any in Florida. How do you argue that it nevertheless is focused on out of state producers when there are so few.

Paul Sherman: Yeah, so there is not a requirement that you show that this has some substantial effect on interstate commerce, or that the in state poultry manufacturers are making a killing because they've kept out these cultivated products. All you have to show is that it has the effect of discriminating against interstate commerce. I think a complete prohibition on products that are made entirely outside of the state from coming in and competing is discriminatory, even if a lot of those products are not made. You know, cultivated meat and poultry is a small product now and companies are still working on making it cost competitive. but the purpose of this law is in part, to prevent that from ever happening by kind of killing it in its crib. You know, they said at the signing statement, we want to nip this in the bud right now, because they don't want people developing a taste for this and getting to try it and seeing that it's a, wholesome, delicious product that they may eventually want to buy when it's available in the marketplace. So, I think really all we have to do is demonstrate. under the appropriate evidentiary standard, preponderance of the evidence, that Florida's law has this effect of discriminating, and I think we'll be able to do that.

Mariann Sullivan: Is it relevant to your argument that other states are starting to follow Florida's example?

Paul Sherman: Well, I think it shows the danger of Florida's law and why it's important for the court to step in now. I mean, we want to have a national common market. We don't want a fragmented market. I mean, among other things, it makes it much harder for companies to sell their products across the country if even a single state prohibits it, because national meat distributors and national restaurant chains don't want to buy products that they can only sell in certain states.

That's just another layer.

Mariann Sullivan: Yeah. It's a much more complicated business in those ways, all of food distribution is, than people realize when they hear about one state doing something. It's not just a matter of one state doing something. It throws a lot off, in the ability to market a product.

Paul Sherman: Yeah, so Alabama has enacted a similar ban. That one went into effect on October 1st passed it just a couple of weeks after Florida signed its ban Because Alabama is in the 11th Circuit if we get a ruling from the 11th Circuit that Florida's law is preempted That would naturally apply to Alabama's law as well.

Mariann Sullivan: So, I think that you mentioned that the relief you're asking for is to give the law heightened scrutiny. Can you just talk a little bit more about what that means and why that, would that resolve the issue?

Paul Sherman: So basically all constitutional cases are decided to a very large degree on the level of judicial scrutiny, that the court applies to it. For those who maybe recall being in your Con Law 2 case, there are some laws that courts scrutinize very closely and they require the government to produce actual evidence that there's a real problem and this law is in some way tailored to addressing that problem and that it doesn't prohibit activity that doesn't pose that problem. And then at the other end of the scale, there are some standards of scrutiny that are much lower. Rational basis review, is an example where as long as the government can articulate any legitimate government interest, and it's rational to believe that the law has some connection to that, laws evaluated under that standard will be upheld. What the Supreme Court has said is that under the Dormant Commerce Clause, laws that have the purpose or effect of discriminating against interstate commerce are subject to strict scrutiny, which is the highest standard of judicial scrutiny. It's not the same as saying that something is per se unconstitutional, but it's a very high standard and it's very rarely met. The government has to show that it has a compelling interest in regulating, and that it could not achieve its ends through some less burdensome regulatory means that didn't discriminate against interstate commerce. So if Florida is legitimately concerned that these products are unwholesome or unsafe, it has other options that are available to it. Florida could, I mean, I would not be encouraging this, but if Florida wanted to, it could subsidize the sale of conventional meat and poultry in its state so that it's more affordable to people. Or so that, Florida farmers would be able to weather the storm caused by this new competition. Florida could publicize information to people who buy these products so that they're aware of the state of the science, although Florida would not be able to regulate the label of these products, it could require people who sell these products, potentially, there are some First Amendment issues here, but it could potentially be required to make certain disclosures so that everyone knows that they are buying cultivated poultry products, and doesn't mistakenly think they are buying conventional products.

Mariann Sullivan: Since they're twice as expensive, or ten times as expensive at the moment, that's not really an issue.

Paul Sherman: An, as an aside, you know, it's funny because I'm on Twitter and I discuss these issues and someone always chimes in and suggests that products are not clearly labeled and that people don't know what they're buying. And I have to assure you, no one in history has ever bought a cultivated meat or poultry product and thought they were buying a conventional meat or poultry product. The reason these companies have developed these products is so they can trumpet to the world, that you can enjoy the taste of meat or poultry without the large scale slaughter of animals that's required for conventional meat and poultry.

Mariann Sullivan: It's exactly the same with all, like, with the plant based products and with the plant based milks. That's their marketing advantage, and they're usually more expensive because they're not subsidized, and they want everybody, but they keep, like, changing. Oh, it has to be bigger type to make it really obvious.

Nobody's buying it thinking that it's coming from an animal. And the case is even stronger here.

Paul Sherman: Yeah, and the Institute for Justice has actually litigated First Amendment cases involving the labeling of plant based meat alternatives. And it's absolutely clear that the people who are pushing for these laws don't really believe that consumers are confused. What they want is for soy milk to be labeled something that consumers will think is gross.

You know, they want it to be like soy juice or you know, soy extract or something, although, you know, incidentally, like, plant extracts have been called milks for literally centuries.

Mariann Sullivan: Milk of magnesia. Are we banning it? You know?

Paul Sherman: And, you know, our view on the First Amendment issues is simply that, the government is not the holder of some kind of national dictionary, and can't, can't prescribe the ways the words can be used.

If consumers and producers understand the meaning of a term, and it's the way it's naturally used, then they should be allowed to use it.

Mariann Sullivan: There's so much evidence that, of course, they do. Yeah, the government does not own the language.

Paul Sherman: Absolutely

Mariann Sullivan: You know, I understand how some of these regulations arose when there was deception or whatever, but we have to think of it in that context. They didn't arise in order to regulate language in, in appropriate ways.

Mm hmm.

Paul Sherman: There are ways to deal with consumer confusion. The First Amendment protects commercial speech, but speech that, well, for example, speech that is deemed to be inherently misleading, actually does not fall within the scope of the First Amendment. That's considered the same as fraudulent speech, but speech that's merely potentially misleading. Typically, the remedy for that is that the government can require a disclosure. That, you know, you have to say, just to clarify, you know, this is, Plant based or whatever. But again, it's so unnecessary when you're dealing with these plant based products that are trying to appeal to the vegetarian and the

Mariann Sullivan: Exactly, exactly. And, you know, doing so more successfully than they used to, especially in the milk area and making everybody very upset. All right, we've gone a little far afield because we both got excited about labeling issues. But is there anything before I leave you that, or ask you about the next steps in the case that we didn't cover about the Dormant Commerce Clause issue that you wanted to add?

Paul Sherman: No, I think we we covered all of it. You know, I will just say, this has been a fascinating case for me to work on because I come to these issues not from an animal rights or animal law background. I come to it from a free markets economic liberty background. And

Mariann Sullivan: No, I was, I definitely wanted to ask you about the Institute for Justice and how it is that you got involved in these issues and how you are proving that there is crossover between animal issues and every possible philosophy of fairness. Uh, so continue, but I didn't want you to think I wasn't going, I wasn't going to ask you about your organization.

Paul Sherman: so, so for those who may not be as familiar with it, the Institute for Justice is a non profit public interest law firm that was founded in 1991. We litigatecross the country on behalf of people whose rights are threatened by the government, and we litigate in four key areas. Educational choice, freedom of speech, Property rights, we've done cases involving things like eminent domain and civil forfeiture abuse, and economic liberty, which is the right to earn an honest living subject to only reasonable government regulation. And when I heard about Florida's law, I grew up in Florida, I still have family in Florida, and so when I saw that the law was enacted on May 1st, I was outraged primarily because I think if Floridians want to eat cultivated meat, they have a right to eat cultivated meat.

Mariann Sullivan: I, I think that's such a, a point that I'm not sure we've even made, like, nobody's preventing anybody from not buying it. We're not suggesting that anybody should prevent anybody from not buying it. Like nobody in Florida would have to eat cultivated meat.

All they're doing is that nobody should even have that choice.

Paul Sherman: Yeah, yeah, and the Institute for Justice, we're an ideologically libertarian organization, so we're not affiliated with the libertarian party, but we do believe in limited government and maximizing the scope of personal freedom, and I just strongly believed that the products that are available for Florida consumers is a decision that should largely be made by those consumers and the people who try to appeal to them, in this case, Upside, which thinks they have an innovative product that Florida consumers would like, and they should have the opportunity to try that.

I've really enjoyed working on the case because I've gotten to meet with a lot of people who come to these issues from an animal rights background, and it's been nice to show them that we can have common cause, even if our ideological priors may be different.

Mariann Sullivan: Right, and you know, caring about animals, I think, crosses every possible, boundary, and I hope that's one of the reasons that you care about this case, and not just the ability of people to do business in a fair way, but I do think that caring about animals crosses every possible ideological boundary.

It's part of human nature, or part of some people's human nature. And I think it's been a fascinating conversation and you know, we're glad to have you on board. But tell us next steps too.

Paul Sherman: So the next steps in the case, obviously we have the appeal of the denial of the

Mariann Sullivan: And you just filed your brief, so there'll be a little time before

Paul Sherman: Yeah, so the,

Mariann Sullivan: anything happens.

Paul Sherman: uh, Wilton Simpson has gotten an extension until February 14th, I believe, to file his response brief. Our reply will be due March 7th. I'm hoping that we'll be able to argue that appeal in either April or May. Meanwhile, the case is moving forward in the district court. On December 20th. which will be before this comes out, the government will be filing its reply in support of its motion to dismiss. I don't know if the district court's going to hold oral argument on the motion to dismiss, but in the meanwhile, discovery is ongoing.

We have served discovery requests on the government and received some responses

Mariann Sullivan: Excellent.

Paul Sherman: And the government has served some additional discovery requests on us. The only thing that we're holding off on right now is expert discovery. The thinking being that if the court might grant the motion to dismiss, the parties don't need to be investing in expert witnesses until we know whether the case is actually going forward. But hopefully we'll have that answer soon. As I said, I do expect that the motion to dismiss will be denied, at least as to the dormant commerce arguments, and then we'll move forward with expert reports and proceed either to summary judgment or trial.

Mariann Sullivan: Okay. We'll be looking forward to hearing more about it.

Thank you so much for an incredibly clear and thorough description of what's happening down there in Florida.

Paul Sherman: Well, thank you so much for having me. It's been my pleasure.