Arizona restaurateur looks for inflation relief in court

Two libertarian groups are suing Arizona’s Department of Agriculture on behalf of a local restaurateur to overturn limitations on what eggs can be sold within the state.

The action alleges that restricting what’s on the market to eggs from hens living in cages larger than 1 square foot is an abuse of executive power that will cost Arizona businesses and consumers an extra $66 million annually.

It was technically filed by Tucson-based Union Hospitality Group, an operator of multiple restaurant concepts, and its owner, Grant Krueger. The company says it purchases about 2,000 eggs a week for its three Tucson dining establishments, which include the full-service operation Union Public House.

Krueger is a director of the Arizona Restaurant Association.

Representing the plaintiffs in the state suit are attorneys provided by the Goldwater Institute and the Pacific Legal Foundation. Both groups say their mission is to shield Americans from government overreach and undue interference in citizens’ lives.

According to the action, Arizona’s Agriculture Department exceeded its constitutional authority in decreeing last November that only eggs from chickens housed in crates measuring more than 1 square foot be offered for purchase. It alleges that the new rule is in effect a law, and laws can only be passed under Arizona’s constitution by the legislature.

“Bureaucrats are trying to go around the lawmaking process to impose a policy that only helps the government’s favored special interests while hurting everyone else,” Goldwater Institute Staff Attorney John Thorpe said in a statement announcing the suit.

It was filed in the Arizona Superior Court for Maricopa County, a jurisdiction that encompasses Phoenix.

Arizona adopted the new egg production standard to promote more humane conditions for chickens. A hen’s cage measuring about 1 square foot has become a standard of sorts for the poultry industry. Animal-protection advocates say the enclosures provide too little room for the birds even to turn around.

Measures similar to Arizona’s new nesting rule have been adopted in a number of states in recent years, most notably in California and Massachusetts. The new regulations there were approved via ballot initiatives.

In both of those jurisdictions, the state modified the requirements just prior to adoption of the new nesting mandates, fearing that too few poultry farms were ready to meet the obligations. State leaders worried that egg supplies would drop dramatically and drive up prices amid an already historic level of food inflation.

The inflationary effects of Arizona’s new rule figures large in the objections aired publicly by the Goldwater Institute, the Pacific Legal Foundation and Krueger. The parties contend that Krueger’s restaurants already operate on razor-thin profit margins, in part because of food inflation.

Even if egg supplies should remain constant, poultry industry representatives say the cost of converting to larger hen cages will make eggs from so-called cage-free birds more expensive.

They also warn that maintaining current supply levels will be difficult because larger-sized cages mean fewer birds can be nested.