By Matthew Holloway |
A Maricopa County Superior Court judge has declared Arizona’s cage-free egg rule invalid and unenforceable, finding that the Arizona Department of Agriculture lacked the specific statutory authorization required to impose the mandate.
In his ruling, Judge Scott A. Blaney granted part of the plaintiffs’ motion for summary judgment and denied the state’s competing motion. The challenge was brought by Tucson restaurateur Grant Krueger and Union Hospitality Group, represented by the Goldwater Institute and Pacific Legal Foundation.
The rule, adopted in 2022, required, with limited exceptions, that egg-laying hens in Arizona be housed in cage-free environments and that eggs sold in the state come from hens housed under those conditions. Egg ranches with fewer than 20,000 egg-laying hens were exempt.
Blaney concluded that the regulation violated A.R.S. § 41-1030(D)(3), which prohibits agencies from making rules that are not specifically authorized by statute.
The Agriculture Department relied on A.R.S. § 3-710(J), which requires its director to “adopt rules for poultry husbandry and the production of eggs sold in this state.” Blaney found that general authority insufficient to authorize the cage-free requirements.
“[T]he language of the statute must not only be broad enough to authorize or permit the mandates/standards that the agency seeks to impose through its rule, that authorization must also be specific enough to suggest that the Legislature contemplated or anticipated the mandates or standards in the proposed rule,” Blaney wrote.
The judge found that the department’s interpretation would effectively remove the word “specifically” from the statutory restriction on agency rulemaking.
“Nothing in the broad language of the statute suggests that the Legislature intended to specifically authorize Defendant to institute an entirely new ban on the sale of all eggs that were not produced in a ‘cage free’ environment, with only a limited exemption for small producers,” the ruling stated.
The plaintiffs also challenged the constitutionality of the Legislature’s delegation of authority to the department. Blaney expressly declined to decide that argument because the statutory issue resolved the dispute. He likewise found it unnecessary to decide whether the rule was reasonably necessary.
The court’s findings addressed the regulation’s anticipated financial effects on consumers and restaurants. Holding other factors constant, Blaney found that cage-free requirements increase egg prices for consumers and retailers.
The ruling cited the department’s own rulemaking estimates, including a projected long-run wholesale increase of 39 cents per dozen and estimated annual consumer costs of $2.71 to $8.79 per person. Those figures were projections associated with the rule, rather than findings of actual statewide losses.
The department had concluded during rulemaking that anticipated public and animal welfare benefits outweighed the potential economic costs.
Union Hospitality Group purchased 104,040 eggs between November 2022 and October 2023, the ruling stated. The court found that the mandate would restrict the restaurant group’s purchasing options and would very likely increase its costs for eggs and egg products.
Blaney also found that Krueger would face restricted purchasing choices and higher prices as an individual consumer. Those anticipated effects supported the plaintiffs’ standing to challenge the regulation.
Implementation had already been delayed. According to the ruling, the department suspended full implementation until 2027 amid bird flu, egg shortages, and rising prices. In March 2025, Gov. Katie Hobbs directed a further delay until 2034. The court cited the department’s expectation that postponement would allow additional producers to supply Arizona and help reduce prices through increased availability.
Goldwater Institute Vice President for Legal Affairs Timothy Sandefur credited HB 2599, the 2021 legislation that established the specific-authorization requirement, as central to the challenge.
“Today’s ruling is not only a win for businesses and consumers in Arizona, but a superb example of how the administrative state—perhaps the single largest threat to constitutional democracy in this country—can be reined in,” Sandefur wrote. “Bureaucratic agencies too often exercise the legislative, executive, and judicial powers together, in violation of one of our most important constitutional principles, in order to write rules that have the force of the law—even though the employees of these agencies have never been elected by the people.”
Sandefur broadened his argument, adding, “And it’s not just questions about food production—which are important enough. Virtually every aspect of our lives today is touched in some manner by the power of the administrative state. That threatens to turn our free society into what we call the Permission Society—in which the individual has no rights, but only permissions, and must ask the government ‘mother may I?’ for every act in his or her life.”
Blaney directed the plaintiffs to submit a proposed judgment by November 20, along with any application for attorney’s fees and taxable costs. Defendants will have 20 days afterward to submit objections or responses. The ruling did not award a specific amount in fees or costs.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
