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.
Arizona Department of Agriculture rules 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 room as prior standards required.
Starting next January, all laying hens also must be “housed in a cage-free manner.”
Grant Krueger, the owner of three Tucson restaurants — including Union Public House — says new rules designed to give egg-laying hens more room to move and stretch their wings will cost local eateries millions of dollars.
The rules are within the agency’s authority, Assistant Attorney General Joshua Whitaker told Maricopa County Superior Court Judge Scott Blaney.
He also said claims by Grant Krueger, owner of Union Hospitality Group, that the rules mean he’ll be forced to pay more for the eggs used in his restaurants and for personal consumption are “speculative.”
Even if there are higher costs — the Department of Agriculture estimated the rules would add somewhere between a penny and 3.25 cents per egg — Whitaker said there is no evidence producers will pass on that cost. Put simply, he said, Krueger has shown no harm.
Whitaker said even if there are higher costs to egg ranchers, and 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 dismiss it.
Much of Krueger’s complaint comes down to anticipated cost.
The 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 more a year.
Krueger is operating three Tucson 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 the 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, 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, because Rose Acre Farms, the only other operation of its size, already had cage-free practices.
The department had more than sufficient justification to adopt the rule, Whitaker said — 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,’’ as lower densities lower 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 the issue of animal welfare in his 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 said, “Stress indicators on hens, things like that, are really no different between conventional confinement cages and cage-free production systems.”
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 Blaney has to decide. Those start with Krueger’s contention the department 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 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 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 event which may never happen does not confer standing,’’ he said.
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.’’
No date has been set for a hearing.
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