Key Points:

• State wants a delay on egg rule lawsuit decision ahead of law rewrite

• Cage-free rule enforcement paused; new version expected by October

• Lawsuit claims agriculture department exceeded authority and raised egg prices with 2022 regulation

Attorneys for the state want a judge to delay their decision on the legality of a law concerning cage-free hens created by the Department of Agriculture. 

But it is less than clear that anything decided by Maricopa County Superior Court Judge Scott Blaney will make a difference in the price of eggs in Arizona — especially with the state’s largest egg producer having to euthanize millions of hens due to bird flu.

Lawyers also pointed out to Blaney that the ruling, initiated by a Tucson restaurant owner concerned about rising egg prices, isn’t even in effect yet and hasn’t yet had an impact on the cost of products in Arizona. 

The case before Blaney concerns whether the Department of Agriculture had the authority to enact a rule in 2022 to prohibit major egg producers in the state from keeping their hens confined to 62-square-inch cages for their entire lives. In a 2023 lawsuit, Grant Kruger contended the agency exceeded its authority. And he said his status as a purchaser of eggs for his three Tucson restaurants — he figures the additional cost of cage-free eggs could cost him up to $3,380 a year — gives him status to sue. Attorneys for the state disagree, and the judge has yet to issue a ruling.

But now the lawyers representing the Department of Agriculture have a backup plan: They want Blaney to delay his decision. In new filings, they are pointing out to Blaney that the department is not enforcing the rule which, had it been in effect, would already have required cage-free conditions for laying hens. That was done because of concerns that implementation would exacerbate already high egg prices.

Additionally, Gov. Katie Hobbs directed the Department of Agriculture to recraft the rule in March, effectively delaying enforcement until 2032. That recrafting would also “clarify” other parts of the existing rule, and it is expected to be voted on by the Department of Agriculture in August before implementation in October. And what that means, the attorneys for the state are telling Blaney, is that if he acts now on the legality of the current rule, any decision could be irrelevant by the time the new rule is enacted.

“Further, depending on the substance of any modified rule, it is conceivable that plaintiffs might sue again, taking the parties and court back to square one based on new text, new arguments and a new record,” the state’s lawyers are arguing. “That is not an efficient use of scarce public resources,” they continued. “It would be far more efficient to wait for the rulemaking to finish and then assess how to proceed at that point.”

Put simply, the lawyers for the state argue Kruger and his restaurants currently face no possible damage from the rule and would not be harmed by a delay in the case while the new rule is being considered. There was no immediate response from the Goldwater Institute, which filed the lawsuit on Kruger’s behalf, to the request.

At the heart of the case is the 2022 rule which, as adopted, initially spelled out that eggs sold in Arizona must be raised in cages no smaller than one-square-foot of floor space — 144 square inches — twice as much as what was then allowed. And, beginning in January of this year, the hens were supposed to be “housed in a cage-free manner.” That rule was crafted to apply to not only egg producers in Arizona, but also to any out-of-state firm that ships their eggs here.

In adopting the regulations, the state agency figured the rule would add somewhere between a penny and 3.25 cents per egg. Using an estimate of annual per capita consumption of slightly more than 270 eggs a year, that pencils out to somewhere between $2.71 and $8.79 per person. Kruger, however, said he purchased 578 cases of eggs in a 12-month period, or 104,400 eggs. And, using the higher estimate, that would cost $3,380 a year.

Blaney ruled last year that cost gives Kruger, owner of Union Public House, Reforma Modern Mexican Mezcal + Tequila, and Proof Artisanal Pizza and Pasta, legal standing to sue. Now, the question is whether, as Kruger contends, the rule goes beyond the authority of the Department of Agriculture.

But some facts on the ground have caught up with the legal wrangling. In November, the agency agreed not to begin enforcement until 2027, citing the Avian flu that has affected egg production. Then in March, Hobbs directed the agency to recraft the rule, with the goal of pushing back their effective date until 2032.

That, however, was not done in a vacuum. It came as Sen. Shawnna Bolick was advancing legislation to permanently strip the Department of Agriculture of its authority to enact any rules at all on housing for chickens. 

“While we can’t solve the cause of bird flu, we can pass a law for Arizonans to see some relief on their grocery bills and hopefully eradicate the daily limits imposed on consumers at grocery stores due to higher demand,” the Phoenix Republican said in a prepared statement. 

She never addressed the fact that enforcement already had been suspended and no egg producer was being forced to do anything.

Then, when Bolick’s measure did finally get to Hobbs, she could say that there was no immediate need to change a law — one she believed was needed.

 “It is important, however, that this department retain its ability to regulate space standards for egg-laying hens,” the governor wrote. “Removing this ability entirely could have serious implications in the future if action is needed to protect human health or animal welfare.”

Ultimately, however, the governor’s views may not matter. It will be Blaney who decides whether to side with Kruger and conclude that the Legislature never gave the Department of Agriculture the authority to enact the cage-free rule in the first place.