By Howard Fischer
Capitol Media Services
PHOENIX -- State agriculture officials say a lawsuit by a Tucson restauranter about why they can't legally mandate the sale of cage-free eggs isn't all it's cracked up to be.
Attorneys representing the Department of Agriculture acknowledge that rules adopted by the agency now require that all eggs sold in Arizona must be raised in cages no smaller than one square foot of floor space -- 144 square inches -- per hen. That is twice as much as prior standards.
And beginning in January, those regulations say all laying hens must be "housed in a cage-free manner.''
But Assistant Attorney General Joshua Whitaker told Maricopa County Superior Court Judge Scott Blaney that the rules are within the authority of the state agency.
More to the point, Whitaker said that claims by Grant Krueger, owner of the Union Hospitality Group, that the rules will mean he will be forced to pay more for the eggs used in his restaurants and for personal consumption will be more expensive are "speculative.''
Even if there are higher costs -- the Department of Agriculture estimated that the rules would add somewhere between a penny and 3.25 cents per egg -- Whitaker said there is no evidence that producers actually will pass on that cost. Put simply, he said, Krueger has shown no harm.
And there's something else.
Whitaker said even if there are higher cost to egg ranchers, and even if they do pass them along, that still doesn't give Krueger standing to sue.
It now is up to Blaney to decide whether to allow the case to go to trial or to simply dismiss it.
Much of Krueger's complaint comes down to anticipated cost.
The state Department of Agriculture puts average annual per capita consumption at slightly more than 270 eggs a year. Using the higher cost estimates, that comes out to as much as $8.79 a year.
But Krueger is operating three restaurants under the banner of Union Hospitality Group: Union Public House, Reforma Modern Mexican Mezcal + Tequila, and Proof Artisanal Pizza and Pasta. And he said he purchased 578 cases of eggs in a recent 12-month period, or 104,040 eggs.
Using that higher estimate, that increases his costs by $3,380.
But part of what frys him is how all of this got enacted. And a lot of it is political.
In 2021, a group known as World Animal Protection was promoting an initiative to require cage-free systems by May 2023. Its proposal also would have made violations a crime.
That alarmed the owners of Hickman's Family Farms, the state's largest egg producer. So they agreed to back legislation that would impose the same mandate -- but not until 2025.
The measure died, however, amid opposition from the Arizona Farm Bureau Federation.
Undeterred, the Department of Agriculture, at least partly at the behest of Hickman's, essentially adopted a rule that mimicked what the legislation would have done had it been approved.
It is crafted to affect only producers with more than 20,000 laying hens. Whitaker said that means only Hickman's, as Rose Acre Farms, the only other operation of its size, already had cage-free practices.
Whitaker said the agency had more that sufficient justification to adopt the rule -- and not just to make a more orderly transition to cage-free eggs than the initiative would have allowed. For example, he said, the rule reflects "the best industry practices,'' with lower densities means lowering the risk of food-borne illnesses such as salmonella.''
And then there's the issue of animal welfare.
"The rule will allow laying hens to walk around, spread their wings, and express natural behaviors,'' he told the judge.
Krueger did not address that issue of animal welfare in the lawsuit.
But Joe Seyton of the Goldwater Institute which is representing him said it is legally irrelevant. He said if there is to be a policy about whether cages are cruel, that is a decision to be made by lawmakers, not a state agency.
Not everyone thinks cages are bad for the hens.
In lobbying in 2021 to kill the bill, Chelsea McGuire of the Farm Bureau sniffed at the contention of some animal rights groups that it's cruel to keep the laying hens in tiny pens.
"Stress indicators on hens, things like that, are really no different between conventional confinement cages and cage-free production systems,'' she said.
But that isn't how Sen. John Kavanagh, R-Fountain Hills saw it.
"Confining chickens to less than one square foot, I think, is really cruel,'' said Kavanagh, at the time a state representative.
"Granted, they don't have very high levels of sentient awareness,'' he continued. "But they feel pain and they're prevented from engaging in natural and instinctive behavior, even to the point of spreading their wings or being able to sit down when they lay their eggs.''
All that, however, sidesteps the central legal issues that Blaney has to decide. That starts with Krueger's contention that the Department of Agriculture had no authority to adopt such a rule.
Whitaker said that ignores the statute.
"The Legislature instructed that the director 'shall adopt rules for poultry husbandry and the production of eggs sold in this state,' '' he told the judge. "So that's exactly what the department did and has done for the last 16 years.''
What could be potentially more significant for the judge to consider is whether Krueger even has legal standing to challenge the rules.
In general, anyone seeking relief in court has to show a "distinct and palpable injury'' that is "fairly traceable'' to the conduct of who is being sued.
Krueger contends the rule will cost him and his restaurants money. But Whitaker said there is nothing in Krueger's lawsuit that says the part of the rules already in effect actually have raised his costs.
"Plaintiffs allege only hypothetical future harm, not that they have paid higher prices thus far,'' Whitaker noted.
"Their speculative fear in anticipation of an even which may never happen does not confer standing,'' he said. And Whitaker called it "pure speculation that retailers will pass along the estimated increase -- between $2.71 and $8.79 per person, per year -- to him rather than absorbing it.''
And even if the egg producers do pass on the costs, Whitaker said that still does not give Krueger as a customer the right to go to court.
"The rule does not regulate plaintiffs,'' Whitaker said. "They merely speculate that one day they might pay higher prices because of the independent decisions that regulated producers might make.''
No date has been set for a hearing.
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