Cross-posted at WLF’s Forbes.com contributor page
Instead of “The Golden State,” perhaps California should be known as “The Precautionary State.” California state, city, and county governments routinely take the maxim “better safe than sorry” to an extreme. Proposition 65 and San Francisco’s “cell phones cause cancer” warnings are two that we’ve addressed before here at The Legal Pulse. To that list one can now add Alameda County’s “Product Stewardship Program,” which aims to prevent pharmaceutical products from entering the water supply, something even the hyper-cautious World Health Organization believes isn’t a significant or current problem. Worse yet, because the program imposes the burden of running and paying for disposal entirely on out-of-state drug manufacturers, the county ordinance in question is also unconstitutional.
Cost and Burden Shifting. Alameda County had operated a pharmaceutical product disposal program itself for several years. But in 2011, light bulbs went on in county supervisors’ minds: instead of making taxpayers pay for this program (despite the fact that they benefit from medicines and their “proper” disposal), let’s make those who sell the products pay. The original plan called for both local pharmacies and pharmaceutical manufacturers to pay, but the pharmacies flexed their political muscles and in the end the ordinance exempted them from the program. So the program now benefits local interests at the expense of drug makers who do not manufacture in Alameda County.
Commerce Clause Challenge. Trade associations representing branded and generic drug makers sued Alameda County in federal court, arguing that the ordinance unconstitutionally regulated and burdened interstate commerce. On August 28, Judge Richard Seeborg of the Northern District of California denied the associations’ summary judgment motion, ruling that the ordinance neither discriminated against interstate commerce nor favored local interests over out-of-state ones. The associations have appealed to the Ninth Circuit. Last week, Washington Legal Foundation, on behalf of itself and the California Healthcare Institute, filed an amicus brief supporting the appeal.
Sink, Not Swim. The Framers of the Constitution drafted the Commerce Clause, WLF argues in its brief, in part to prevent states and localities from “escap[ing] any political accountability” for forcing out-of-state interests to subsidize local programs. The Supreme Court noted in a 1935 case that “people of the several states must sink or swim together.” The “sinking” here if Alameda’s ordinance is upheld, the brief notes, will be the inefficient “adoption of similar measures elsewhere.
Protectionist Retaliation? The ordinance creates the additional risk that other local or state government will adopt measures in retaliation to Alameda’s ordinance. One can imagine that elected officials in New Jersey, for example, where bio-pharmaceutical production has a huge economic footprint, will not be pleased that its local companies’ profits are being commandeered so another state’s consumers and businesses don’t have to pay for a public program. New Jersey might well decide it has a public program that California companies can subsidize.
New Jersey’s state and local governments devote budgetary funds to recycling food and beverage containers, no doubt including wine bottles. Where did that wine come from? Probably a lot of it came from California, whose wine makers accounted for 89.5% of total domestic wine production in 2010. Sure, New Jersey residents benefit from California wines, and New Jersey-based wholesalers and retailers profit from selling the wine. But surely Jerseyites shouldn’t have to pay for recycling California wine bottles, especially when California wine makers earn such big profits ($18.5 billion in 2010). And if requiring California wineries to bear some recycling costs helps out the growing New Jersey wine industry, all the better.
Implausible? Perhaps. Unconstitutional? No doubt, as WLF argues in its brief. But the Ninth Circuit will have the next word on the ordinance, and if the court finds the Alameda County ordinance constitutional, the New Jersey retaliation scenario becomes all the more plausible.