Hens win! Animal welfare claims can’t stand up in court

Posted on March 15, 2017 by matt ohern
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On Feb. 27, 2017, the 9th Circuit United States Court of Appeals issued a common sense opinion regarding housing and safety conditions where hens lay eggs.
Compassion Over Killing, Animal Legal Defense Fund, (NGOs) and 6 individuals claimed FDA, USDA’s Agricultural Marketing Service, Food Safety and Inspection Service, and the Federal Trade Commission were required to “…promulgate regulations that would require all egg cartons to identify the conditions in which egg-laying hens were [housed] during production.” The Court of Appeals agreed with all of the federal agencies that they “…lacked authority to promulgate plaintiffs’ proposed labeling regulations for shell eggs.”
Compassion Over Killing and Animal Legal Defense Fund were represented by the large San Francisco law firm of Orrick Herrington & Sutcliffe LLP. The NGOs had submitted rule-making petitions to each of the federal agencies and asked each to revise labeling requirements on each carton of eggs sold in a store. NGO petitioners wanted all egg cartons to identify housing conditions for the egg-laying hens and they also wanted egg cartons in the grocery store to bear labels such as “Free-range Eggs, Cage-free Eggs” or the label of “Eggs from Caged Hens.”
Compassion Over Killing argued that “…consumers are being misled by certain statements and images on egg cartons that imply that the hens are being raised in cage-free environments.” Compassion Over Killing and Animal Legal Defense Fund told the court that various egg labels on cartons suggest images of uncaged hens and claimed the conditions the eggs were produced in were natural or animal friendly. It was argued that misleading images on egg cartons could mislead a consumer into believing hens were being raised in fields rather than in cages.
Nutritionally inferior?
The NGOs told the court that new regulations regulating the production of eggs are needed “…because eggs from caged hens are nutritionally inferior to and carry a greater risk of Salmonella contamination than eggs from free-range hens.”
Common sense prevailed!
Each federal agency denied Compassion Over Killing’s petition for rulemaking – arguing that none of them had either the authority or the information which would allow each agency to conclude that current egg-labeling practices are unfair or deceptive.
The FDA provided evidence which should be used in California courts to overturn its rule when it declared it had not been provided “…persuasive evidence that eggs from caged hens are either less nutritious or more likely to be contaminated with Salmonella than eggs from uncaged hens.” In troubling follow up language, the FDA did say if it wanted, it could bring individual enforcement actions against misbranded eggs.
The two NGOs also claimed that FDA had acted arbitrarily and capriciously when the agency denied claims that egg cartons are widely misbranded and that current labeling practices “affirmatively misrepresent” conditions regarding hens’ housing. The two NGOs again argued their scientific evidence regarding egg-laying hens have a greater risk of producing Salmonella contaminated eggs. Again, FDA rejected the NGOs’ scientific evidence. “[T]he court will not second guess the FDA’s conclusion that these studies were insufficiently reliable, largely because they fail to control for relevant variables.” This determination by federal agencies and a U.S. Court of Appeals provides a strong basis for challenging the California egg cage size statute.
Had the six Attorneys General challenging the California legislation used data from the federal agencies in a more appropriate legal procedure, they might have won in a U.S. District Court in California rather than losing. The U.S. Court of Appeals for the 9th Circuit has given the six state Attorneys General a new opportunity to amend their Complaint and win for egg farmers. The 6 Attorneys General have not chosen this correct legal procedure and instead have appealed a portion of their legal loss to the U.S. Supreme Court. (Likely to lose.)
Meantime, egg producing farmers are having criminal animal cruelty cases brought against them and are spending hundreds of millions of dollars increasing egg cage size for what federal agencies claim is based on bogus or unscientific grounds.
(This column first ran in Farm Futures on March 8, 2017)
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Progress on Trucks and Tolling?

Posted on March 15, 2017 by matt ohern
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Politico reported last week (Feb. 8th) on an interview with Chris Spear, the relatively new CEO of the American Trucking Associations. Spear told Politico that ATA sees room to compromise on toll finance—for newly constructed roads or bridges. But he drew the line on tolls for “existing roads that we’ve already paid for.” The previous week, House Transportation & Infrastructure Committee chairman, Rep Bill Shuster (R, PA), was quoted in the Washington Post along similar lines—that tolling “existing” Interstate highways is “a non-starter.”
As one who has lambasted some toll agencies for diverting toll revenues to canals, economic development, and transit, I agree with the underlying point made by Spear and Shuster. Charging a second time for infrastructure that users have already paid for is unfair and should not be allowed.
But what about when a highway or bridge wears out and needs replacing? And what if all the existing highway revenue (from fuel taxes) is already spoken for by the numerous programs embedded in the overall federal highway and transit program, each with its own vociferous constituency that will work very hard to make sure that any increase in fuel taxes is shared among all those programs? That is the actual situation we face today. There is no source of funding for the $1 trillion or more it will take to replace and modernize our aging Interstate highways.
So I invite my friends in the trucking industry to consider the use of toll finance solely to replace worn-out infrastructure on the most-vital corridors their business depends on: Interstate highways. The Interstates were designed and constructed with a 50-year design life, if properly maintained. Many corridors are already past their expiration date, and most of the rest will reach that status over the next two decades. Moreover, the trucking industry complains (justifiably) about the top 100 truck bottlenecks around the country—nearly all at interchanges on urban Interstates. And many of the most important Interstates for trucking lack enough lanes to handle the truck traffic FHWA projects between now and 2040—they are good candidates for dedicated truck lanes.
All these reasons would make it sensible for the trucking industry to support a carefully limited expansion of the current federal pilot program for toll-financed Interstate reconstruction/replacement. As laid out in the 2015 Reason study, “Truck-Friendly Tolls for 21st Century Interstates,” federal restrictions should include:

  • All-electronic tolling (no toll booths);
  • Toll rates limited to covering the capital and operating costs of the replacement Interstates (no revenue diversion);
  • State legislation to guarantee no revenue diversion;
  • Rebates of fuel taxes for the miles driven on toll-financed replacements (no “double taxation”); and,
  • Tolling to begin only after the replacement facility is finished and open to traffic.

On February 1st, the Alliance for Toll-Free Interstates send a letter to all members of the House T&I Committee, arguing against any expansion of tolling and for repealing the three-state pilot program. Interestingly, while every state trucking association and ATA all signed, as did various truck-stop groups, conspicuously absent were most of the major trucking companies themselves, including Fedex and UPS. Those two firms, along with major trucker YRC Worldwide, various shipper groups, the U.S. Chamber, and the National Association of Manufacturers recently created a coalition called Americans for Modern Transportation. Let’s hope that this group is willing to think outside the box about how we are actually going to pay for and implement a 21st century Interstate highway system.
(This article first ran in the February 2017 issue of Surface Transportation Innovations)
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Time for A New Path to Help Black Students

Posted on March 1, 2017 by matt ohern
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The Virginia General Assembly has taken an important step: For the first time, it has approved bills to expand public charter schools that will address the poor performance of predominantly low-income students.
The issue has now landed on the desk of Governor Terry McAuliffe, and he should sign the bill.
The effectiveness of quality charter schools is what has led black leaders across the country, from Sacramento Mayor Kevin Johnson to United Negro College Fund CEO Michael Lomax to advocate for charters.
And with good reason. Charter schools are immensely popular among Black families. According to a national public opinion survey of parents of school-aged children, 82 percent of Black parents believe that all parents should have the ability to choose their child’s public school, regardless of where they live. In just the past five years, Black student enrollment in charter schools has grown by 200,000. Black students now account for 27 percent of charter school enrollment, versus just 16 percent of traditional district school enrollment.
Black Virginians are no different. In a poll conducted last year by the respected Tarrance Group, 67 percent of Black respondents favored more charter schools. More importantly, they favored important elements not found in public schools: 95 percent favor requiring more parental involvement; 90 percent favor giving schools more freedom to hire the best teachers, and 81 percent favor rewarding high quality teachers with higher pay.
There is a reason for enthusiastic support in the Black community around the country: parents see for themselves how their children are flourishing in charter schools. According to the most thorough and respected study of charter school results, conducted by the Center for Research on Education Outcomes (CREDO) at Stanford University, Black students learn more when they attend charter schools. Black students in charter schools gained the equivalent of 14 extra days of learning in reading and 14 extra days of learning in math per year compared with their Black peers in traditional district schools. For low-income Black students attending charter schools, the learning gains were even more dramatic – the equivalent of 29 extra learning days in reading and 36 extra learning days in math.
Just 93 miles away in our nation’s capital, where public school enrollment and the student demographic profile is similar to Richmond, Petersburg, Norfolk and Portsmouth, parents are choosing public charter schools. In fact, charters are the fastest growing public school option for DC parents.
Black children in Virginia would benefit from such effective schools. Fifty-five percent of unaccredited schools in Virginia are in predominantly low-income Black communities. Some schools in those communities have been unaccredited for five, six … up to 11 years.
But Black parents here in Virginia are not given any other options. Children have only one choice: A one-size-fits-all option that often fails to meet the needs of children. In the words of charter school founder Sean “Diddy” Combs, “we have to prepare our kids for the realities of what’s out there.”
The Urban League has historically advocated for education equity and high-quality public school options. In recent years, it has played a key role in starting successful charter schools and as a Virginia member nothing would make me prouder than to play a similar role here. But successful charter school operators simply will not come to Virginia. Here, they do not have the right to manage their own schools. Local school boards have proven downright inhospitable or hostile and, when they have approved what they call a “charter school” it is often without the flexibility to best help an underserved population.
More than 6,000 charter schools today serve nearly 3 million students – more than a million of whom are children of color. Virginia has a total of 9 schools, and its ability to help the children who need it most is sorely limited.
By signing the charter school bill, Governor McAuliffe would open a new door to underserved children, a door that would help primarily Black students who deserve a better opportunity.
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Virginia Colleges Spend Millions on Federal Regs

Posted on March 1, 2017 by matt ohern
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The University of Virginia estimates that it spends $20 million a year complying with unfunded federal mandates, just for its academic division, reports Karin Kapsidelis with the Richmond Times-Dispatch. The College of William & Mary estimates its compliance costs at $4.5 million to $6.7 million, and Virginia Commonwealth University puts the number at $13 million.
The estimates come in response to a Congressional request for information as part of a review of federal review of unfunded mandates. Higher ed institutions say the costs were likely underestimated due to the short turnaround time for providing the figures.
While universities have blamed federal regulations in the past for pushing up the cost of higher education, Virginia institutions are not necessarily eager to roll them all back. Reports Kapsidelis:

“There are rules that if no one else put them on us, we would put them on ourselves,” said Samuel E. Jones, W&M’s senior vice president for finance and administration.
“There are some requirements we might want to take a hedge clipper to and not an ax,” said Gary Nimax, U.Va.’s assistant vice president for compliance. …
“We’re just waiting to see what might change,” said Nimax. … . “The idea of having fewer regulations is an attractive one.” But U.Va. would like to see the focus on cutting “the non-value-added pieces of these requirements,” he said.

Prime offenders are the Clery Act, which requires extensive reports on campus crime statistics that run nearly 1oo pages long, and Title IX, which forbids discrimination on the basis of sex in higher ed. The initial focus on campus athletic programs under Title IX has expanded to the regulation of student sexual behavior.
Bacon’s bottom line: For purposes of comparison, the University of Virginia generates roughly $500 million a year in tuition revenue and gets another $150 million in state support. The $20 million regulatory burden amounts to 3% of those two sources of revenue. An argument can be made that federal regulations do contribute to the mushrooming costs of higher education, but insofar as universities’ priorities mirror those of the federal government — how many institutions would dismantle their Title IX bureaucracies? — it would be unrealistic to expect that deregulation would save much money.
Update: In an article about the growing self-censorship of faculty members due to fear of transgressing some politically correct taboo, the Wall Street Journal quotes Dale Carpenter, a Southern Methodist University law professor:
Universities have developed entire bureaucracies to combat the problem of discrimination and a hostile environment. Those bureaucracies are needed but the also tend to feed on their own momentum.
(This article first ran in Bacon’s Rebellion on February 21, 2017)
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Infrastructure Wish Lists vs. Sound Investments

Posted on March 1, 2017 by matt ohern
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The months since Election Day have brought forth a proliferation of lists of “needed” infrastructure projects. First came the Treasury’s list of 40 mega-projects that I critiqued last month. This was followed in short order by a list of 50 projects that was presented as if it came from the new Trump Administration (but was actually generated by a DC lobbying firm). And not to be outdone, Senate Democrats released their own $1 trillion plan—no specific projects but many billions allocated to categories such as schools, rail, electricity and broadband, etc.
The only one of these to even raise the question of benefit/cost analysis was the report from Treasury—and those estimates were provided by project proponents and could not be taken seriously. The lobbyist list and Senate Democrats’ announcement both focused instead on job creation, a justification that would be satisfied just as easily by building pyramids or (as Keynes once suggested, half in jest) by paying people to dig holes and fill them in again.
Against this backdrop, it was a great relief to receive the U.S. DOT’s 2015 Status of the Nation’s Highways, Bridges, and Transit: Conditions & Performance (generally known as the biennial C&P report). In addition to providing an update on the current (actually 2012) conditions and performance of roadways and transit, both FHWA and FTA employ benefit/cost analysis to review possible scenarios for capital investment. The agencies’ methodologies are continually improved, and their work is far more meaningful than the simple engineering wish lists that are the focus of media and political attention.
For highways and bridges, FHWA does analyses for (1) all highways, (2) just federal-aid highways, (3) just National Highway System (NHS) highways, and (4) just Interstates. In this discussion, I focus solely on all highways, at all levels of government. The baseline capital investment is the total spent in 2012: $105.2 billion. That number was somewhat higher than usual due to federal stimulus spending in 2012. FHWA ran three future scenarios (2012-2032), and estimated the capital spending associated with each (based on B/C analysis):

Maintain 2012 conditions and performance $89.9 billion/year
Sustain 2012 spending levels $105.2
Improve conditions & performance $142.5

FTA carried out a similar analysis, using its own modeling system:

Maintain a state of good repair $17.0 billion/year
Sustain 2012 spending levels $17.0
Expansion, low growth in ridership $22.8
Expansion, high growth in ridership $26.4

To illustrate the difference between economically sound investments and engineering wish lists, let’s compare these DOT results with the 2016 report card of the American Society of Civil Engineers (ASCE). Its section on highways, bridges, and transit posits an investment “gap” for the 2016-2026 decade of $1,101 billion, or $110 billion per year. In the DOT C&P report, the gap for FHWA is the difference between the “improve” scenario and the current 2012 spending: $142.5B minus $105.2B = $37.3 billion. For FTA, the comparable gap, using the low ridership growth (1.4% per year) scenario is $5.8 billion. That makes a total gap of $43.1 billion per year—just 39% of the ASCE number.
One of the reasons I am so positive about public-private partnerships for major infrastructure projects is to sort out economically sound projects from pyramid-building. You will not find investors willing to put equity into projects whose costs exceed their benefits (which are what economists refer to as “value-subtracting enterprises,” meaning that the value of their outputs is less than the value of their inputs). Over the years I have learned not to take seriously grandiose lists of projects or mega-buck investment “needs” that have not been subjected to a rigorous, independent benefit/cost analysis. A trillion dollars of private capital investment would likely yield a large array of economically sound infrastructure improvements. A trillion dollars of net new federal spending risks funding numerous value-subtracting enterprises.
(This article first ran in the February 2017 issue of Surface Transportation Innovations)
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