Court Challenges Restaurant Owner’s Right to Sue on Egg Regulations

The legality of new rules aimed at improving the welfare of laying hens in Arizona is being scrutinized in court. A judge’s decision will determine if Tucson restaurant owner Grant Krueger has sufficient standing to contest these regulations.

During a recent hearing, attorney John Thorpe from the Goldwater Institute argued that the state’s prohibition of restrictive housing conditions for hens would lead to increased costs for Krueger’s three restaurants: Union Public House, Reforma Modern Mexican Mezcal + Tequila, and Proof Artisanal Pizza and Pasta. Thorpe claims this economic impact grants Krueger the right to challenge the state rules.

In contrast, Assistant Attorney General Josh Whitaker contended that Krueger’s claims of financial harm are speculative. He emphasized the lack of concrete evidence supporting a direct correlation between the new regulations and price increases for eggs.

The rules in question, enacted by the state Department of Agriculture in 2022, stipulate that eggs sold in Arizona must come from hen housing that allows for a minimum of one square foot of space per bird—an increase from the previous requirements. Starting January, all eggs must come from “cage-free” environments.

The state estimates these regulations would add 1 to 3.25 cents to the cost of each egg, potentially amounting to an annual increase of $2.71 to $8.79 per person based on average egg consumption.

Krueger reported purchasing over 104,000 eggs in the last year, which, based on the higher estimate, translates to an annual cost increase of approximately $3,380. This claim forms the crux of Thorpe’s argument for Krueger’s standing.

Thorpe insisted this case impacts many Arizonans, as it regulates the production of a staple food. He maintained that the standing to challenge such regulations is valid due to their broad economic implications.

However, Whitaker pointed out that the rules only apply to operations with over 20,000 hens, a threshold met by only two Arizona companies, both of which are already moving towards cage-free practices. He asserted that without direct evidence of financial impact on Krueger, his claims lack a solid foundation.

The hearing highlighted the complexity of legal rights surrounding consumer access to goods. Thorpe voiced that regulations inhibiting the sale of preferred products should be contestable. He referenced a prior court ruling that permitted consumers to challenge FDA regulations on raw milk sales.

Whitaker maintained, however, that consumers are not being denied access to eggs entirely but may simply have fewer options regarding the types available. He likened current regulations to health codes requiring food safety practices.

Thorpe has further argued that statutory authority does not explicitly allow the Department of Agriculture to implement such regulations on housing sizes. Whitaker acknowledged the absence of explicit direction but pointed to previous legislative authority allowing the agency to manage “poultry husbandry.”

Adding another layer, Whitaker recalled an earlier attempt to implement cage-free egg production in Arizona, which ultimately failed but prompted state action to preemptively regulate. He argued that these regulations could economically benefit producers and consumers through a structured phase-in period.

The judge has yet to announce when a ruling on the case will be made, leaving both sides awaiting the decision with significant implications for egg production and consumer rights in Arizona.