Minerva Dairy, Inc. v. Harsdorf, No. 18-1520 (7th Cir. 2018)
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Minerva, an Ohio‐based, family‐owned dairy company, produces Amish‐style butters in small, slow‐churned batches using fresh milk supplied by pasture‐raised cows. Minerva challenged Wisconsin’s butter‐grading requirement under the Due Process Clause, the Equal Protection Clause, and the dormant Commerce Clause. Wisconsin’s law applies to butter manufactured in‐state and out‐of‐state and provides that butter may be graded by either a Wisconsin‐licensed butter grader or by the USDA. Wisconsin’s standards are materially identical to the USDA’s standards. The district court rejected the challenges on summary judgment, holding that the statute is rationally related to Wisconsin’s legitimate interest in consumer protection and does not discriminate against out‐of‐state businesses. The Seventh Circuit affirmed. Consumer protection is a legitimate state interest; the butter‐grading requirement is rationally related to the state’s legitimate interest in “protect[ing] the integrity of interstate products so as not to depress the demand for goods that must travel across state lines.” The state presented some evidence that the statute effectively conveys consumer preferences. The statute does not violate the Equal Protection Clause simply because Wisconsin failed to implement mandatory grading for other commodities. Wisconsin’s butter‐grading law confers a competitive advantage on prospective butter-graders who live closer to testing locations but this geographical fact of life does not constitute discrimination against out‐of‐state applicants.
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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 18 1520 MINERVA DAIRY, INC., et al., Plaintiffs Appellants, v. SHEILA HARSDORF, In her official capacity as the Secretary of the Wisconsin Department of Agriculture, Trade and Con sumer Protection, et al., Defendants Appellees. ____________________ Appeal from the United States District Court for the Western District of Wisconsin. No. 17 cv 00299 — James D. Peterson, Chief Judge. ____________________ ARGUED SEPTEMBER 13, 2018 — DECIDED OCTOBER 3, 2018 ____________________ Before FLAUM, MANION, and ROVNER, Circuit Judges. FLAUM, Circuit Judge. Minerva Dairy is an Ohio based, family owned dairy company that produces, among other products, Amish style butters in small, slow churned batches using fresh milk supplied by pasture raised cows. Minerva challenges Wisconsin’s butter grading requirement as a vio lation of the Due Process Clause, the Equal Protection Clause, 2 No. 18 1520 and the dormant Commerce Clause. The district court granted summary judgment to the state defendants, holding that the Wisconsin statute is rationally related to the state’s legitimate interest in consumer protection and does not dis criminate against out of state businesses. We agree with the district court’s analysis and, therefore, we a rm the judg ment. I. Background1 A. Wisconsin’s Butter Grading Law Under Wisconsin law, “[i]t is unlawful to sell … any butter at retail unless it has been graded.” Wis. Stat. § 97.176(1). In addition, “[n]o person shall sell … any butter at retail unless its label bears a statement of the grade.” Wis. Admin. Code ATCP § 85.06(2). To satisfy this requirement, the butter may be graded by either a Wisconsin licensed butter grader or, al ternatively, by the United States Department of Agriculture (“USDA”).2 Wis. Stat. § 97.176(2); Wis. Admin. Code ATCP § 85.06(5). This grading requirement applies to butter manu factured both in state and out of state. Wis. Stat. § 97.176(5). Wisconsin recognizes four grades of butter: Grade AA (“fine and highly pleasing butter flavor”); Grade A (“pleasing and desirable butter flavor”); Grade B (“fairly pleasing butter flavor”); and “Wisconsin Undergrade Butter” (any butter that “fails to meet the requirements for Wisconsin Grade B”). Wis. 1 The following facts are undisputed except where otherwise noted. 2 The USDA offers a butter grading service to dairy product manufac turing plants for a price. 7 C.F.R. § 58.122(b). However, this grading ser vice is voluntary and is not required to sell butter interstate. Id. No. 18 1520 3 Admin. Code ATCP § 85.03.3 The butter grade is based on an “examination for flavor and aroma, body and texture, color, salt, [and] package” according to “tests or procedures ap proved by” the Department of Agriculture, Trade, and Con sumer Protection (“the Department”). Wis. Stat. § 97.176(3). Specifically, butter is graded on eighteen “[f]lavor character istics,” eight “[b]ody characteristics,” four “[c]olor character istics,” and two “salt characteristics.” Wis. Admin. Code ATCP § 85.04(1). The Department further qualifies all of these characteristics by “intensity”—“[s]light,” “[d]efinite,” or “[p]ronounced.” Id. § 85.04(2). To grade a batch of butter, a tester tastes a “representative butter sample” and identifies “[e]ach applicable flavor characteristic” and its “relative in tensity.” Id. § 85.02(1). This results in a “preliminary letter grade,” which can be reduced if there are defects in the “body, color and salt characteristics.” Id. § 85.02(1)–(3); see also id. § 85.05. There is an appeal process for producers who dispute the grade a batch of butter receives. See id. § 85.08. To become a licensed butter grader in Wisconsin, one must apply to the Department and pay a $75 fee. Wis. Admin. Code ATCP § 85.07. On the application form, the applicant must “nam[e] the location where the grading is to be done.” Id. § 85.07(1). The applicant must then take the butter grading exam at either the Department, the University of Wisconsin, or a prearranged butter making facility in Wisconsin. The exam includes a written test covering applicable Wisconsin 3 Wisconsin’s butter grading standards are materially identical to the USDA’s butter grading standards. See Agricultural Marketing Service, USDA, United States Standards for Grades of Butter (1989), https://www.ams.usda.gov/sites/default/files/media/Butter_Stand ard%5B1%5D.pdf. 4 No. 18 1520 law and the butter making process. In addition, the applicant must grade butter in front of the Department’s licensed grader. Although formal education or experience is not re quired to take the exam, most applicants have some previous experience at a butter plant or facility. Some applicants pre pare for the exam by taking a short course o ered by the Cen ter for Dairy Research at the University of Wisconsin. Approx imately ninety percent of applicants pass the butter grading exam. The license is renewable every two years upon pay ment of the $75 fee. Id. § 85.07(2). On its face, the statute does not prohibit out of state indi viduals from applying to become Wisconsin licensed butter graders. See Wis. Stat. § 97.175(2) (“A person desiring a license shall apply …”). In fact, there are currently twelve Wisconsin licensed butter graders who work either in Wisconsin, at an out of state facility, or both.4 However, plainti s allege that, prior to the filing of this lawsuit in April 2017, the Department did not allow Wisconsin licensed graders to grade butter at out of state facilities. To support this assertion, plainti s’ counsel submitted two declarations in which counsel states that she called the Department in March 2017 to inquire whether Wisconsin licensed graders could grade butter at out of state facilities. Plainti s’ counsel says she was directed to a Department o cial named Mike Pederson who advised her that the Department does not allow Wisconsin licensed graders to grade butter at out of state facilities. Pederson re sponded in a declaration of his own that he misunderstood 4 See Wisconsin Department of Agriculture, Trade and Consumer Pro tection, Buttermaker License Holders, available at https://myda tcp.wi.gov/Home/ServiceDetails/8474e17b fba1 e711 8100 0050568c4f26?Key=Services_Group (last visited Oct. 2, 2018). No. 18 1520 5 plainti s’ counsel’s question to be whether the Department had butter graders who could travel out of state to grade but ter at out of state facilities. He clarified that while the Depart ment does not send the graders it employs out of state, it does allow Wisconsin licensed butter graders to be employed and reside out of state. In this litigation, Peter Haase, director of the Department’s Bureau of Food and Recreational Businesses, testified that to his knowledge there had been no out of state butter graders prior to 2017. When asked whether there was a Department policy that prohibited out of state butter graders from being licensed in Wisconsin, Haase testified that there was not a “written policy” to that e ect. When asked whether there was an “unwritten policy,” Haase answered: “I can’t speak defin itively to what may or may not have been allowed prior to my tenure as bureau director, but I would have to agree that prior to 2017 there may have been a nonwritten understanding that individuals outside of Wisconsin could not hold a Wisconsin butter graders license.” When asked why the Department had that understanding, Haase said, “It’s my understanding that clear interpretation of statute or administrative rule didn’t prohibit it nor allow it.” Haase later filed a declaration in which he explained that, after the filing of this lawsuit, De partment o cials “confirmed the butter grading law allowed both in state and out of state butter makers to become li censed Wisconsin butter graders and could grade butter in any location, so long as that location was identified on the ap plication and license.” B. Factual and Procedural Background Adam Mueller is the president of Minerva Dairy, a family owned dairy company located in Minerva, Ohio. Among 6 No. 18 1520 other products, Minerva Dairy produces Amish style butters in small, slow churned batches using fresh milk supplied by pasture raised cows. Minerva Dairy does not pay to have its butter graded under the voluntary USDA grading system and has never had its butter graded by a Wisconsin licensed butter grader. Minerva Dairy has sold its artisanal butter to consum ers in every state, including Wisconsin. However, in early 2017 the Department received an anonymous complaint about ungraded Minerva Dairy butter being sold at a retail store called Stinebrink’s Lake Geneva Foods. After verifying the complaint, the Department sent Minerva Dairy a warning letter on February 28, 2017. As a result, the company stopped selling its butter at retail stores in Wisconsin. Mueller and Minerva (collectively, “Minerva” or “plainti s”) sued several Department o cials under 42 U.S.C. § 1983, alleging that Wisconsin’s butter grading statute violates the Due Process Clause, the Equal Protection Clause, and the dormant Commerce Clause. Minerva requested an injunction preventing the Department from enforcing the butter grading requirement and a declaration that the butter grading law is unconstitutional. The parties filed cross motions for summary judgment on Minerva’s three claims. The district court denied Minerva’s motion and granted summary judgment in favor of the De partment. In doing so, the court ruled that Wisconsin’s butter grading law did not violate the Due Process Clause or the Equal Protection Clause because it is rationally related to the state’s legitimate interest in consumer protection. The court further held that the statute did not violate the dormant Com merce Clause because it did not discriminate against out of state businesses. No. 18 1520 7 II. Discussion “We review a grant of summary judgment de novo, and ex amine the record and all reasonable inferences in the light most favorable to the non moving party.” Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014). “Summary judgment is proper if the moving party ‘shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’” Id. (quoting Fed. R. Civ. P. 56(a)). “We will reverse a grant of summary judgment if a material issue of fact exists that would allow a reasonable jury to find in favor of the non moving party.” Id. A. Wisconsin’s Butter Grading Law Does Not Violate the Due Process Clause The Fourteenth Amendment prohibits the state from “depriv[ing] any person of life, liberty, or property, without due process of law.” U.S. CONST. amend. XIV, § 1. One com ponent of substantive due process is the right to earn a living free from “unreasonable governmental interference.” Greene v. McElroy, 360 U.S. 474, 492 (1959). Where, as here, plainti s challenge an economic regulation, we apply the rational basis test. Nat’l Paint & Coatings Ass’n v. City of Chicago, 45 F.3d 1124, 1130 (7th Cir. 1995). “Under rational basis review, a statutory classification comes to court bearing ‘a strong presumption of validity,’ and the challenger must ‘negative every conceivable basis which might support it.’” Ind. Petroleum Marketers & Con venience Store Ass’n v. Cook, 808 F.3d 318, 322 (7th Cir. 2015) (quoting FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 314–15 (1993)). In other words, to uphold the statute, “we need only find a ‘reasonably conceivable state of facts that could provide a rational basis’ for the classification.” Id. (quoting Goodpaster v. City of Indianapolis, 736 F.3d 1060, 1072 (7th Cir. 2013)). “This 8 No. 18 1520 deferential standard of review is a notoriously ‘heavy legal lift for the challenger[].’” Monarch Beverage Co. v. Cook, 861 F.3d 678, 681 (7th Cir. 2017) (alteration in original) (quoting Ind. Petroleum Marketers, 808 F.3d at 322). Here, Wisconsin’s butter grading statute is rationally re lated to at least two conceivable state interests. First, as the district court explained, “[t]he state could believe that re quired butter grading would result in better informed butter consumers” and allow consumers to “purchase butter with confidence in its quality.” Courts have routinely held that consumer protection is a legitimate state interest. See, e.g., SPGGC, LLC v. Blumenthal, 505 F.3d 183, 194 (2d Cir. 2007) (upholding constitutional challenge to state law that regu lated terms and conditions of prepaid gift cards in part be cause “consumer protection is a field traditionally subject to state regulation”). And labeling laws like the one at issue here advance that interest by giving consumers relevant product information that may influence their purchasing decisions. See Am. Meat Inst. v. U.S. Dep t of Agric., 760 F.3d 18, 23–26 (D.C. Cir. 2014) (holding that the government had a “substan tial” interest in requiring country of origin labeling on food in part because it “enable[d] consumers to choose American made products”). Of course, not all consumers will care about a butter’s grade, just as not all consumers will care about whether a food item is genetically modified or organic. See National Bioengineered Food Disclosure Standard, Pub. L. No. 114 216, 130 Stat. 834 (2016) (directing USDA to develop GMO disclosure standards); Food, Agriculture, Conserva tion, & Trade Act of 1990, Pub. L. No. 101 624, 104 Stat. 3359 (establishing national standards governing the marketing of certain agricultural products as organic). But it is reasonable to think that some consumers care about the quality of butter No. 18 1520 9 they purchase—for example, experienced bakers—and the state has a legitimate interest in ensuring that those consum ers receive that information. Indeed, “many such [disclosure] mandates have persisted for decades without anyone ques tioning their constitutionality.” Am. Meat Inst., 760 F.3d at 26. Second, and relatedly, Wisconsin’s mandatory butter grading scheme is rationally related to the state’s legitimate interest in promoting commerce. On this point, the “historical pedigree” behind Wisconsin’s butter grading law is “telling.” See id. at 23–24 (noting that the “historical backdrop” behind country of origin labels “has made the value of this particular product information to consumers a matter of common sense”). Butter grades were initially established by individual local exchanges in order to ensure an “accurate basis for trad ing” and “to establish, for each grade, a market price com mensurate with quality.” See Edward Wiest, The Butter Indus try in the United States: An Economic Study of Butter and Oleo margarine 119 (1916). However, some local exchanges used di erent standards, so consumers in distant markets were not always sure what they were getting. See id. at 134–35. Thus, in 1919, the USDA established a universal standard to better “fa cilitate … business with customers in distant places who want to be sure they are getting what they pay for.” U.S. Dep’t of Agric., Know Your Butter Grades, Leaflet No. 264 (1949). Similarly, Wisconsin also had its own voluntary grading system, but it proved ine ective because many producers of low quality butter simply skipped grading and went straight to market. See Wis. Farm Bureau Fed’n, A Butter Grading Law: 10 No. 18 1520 Yes or No (1953)5 (“[T]he lackadaisical manner and even nega tive attitude of the producers of low quality butter prevents a state wide [voluntary] program from e ective operation.”). For that reason, in 1953, the Wisconsin Farm Bureau pub lished a brochure in support of a proposed butter grading law in which it explained that wide disparities in butter quality had driven many consumers to abandon butter altogether and turn to butter substitutes instead. See id. It determined that mandatory grading according to a universal standard would “stimulat[e] consumer demand for butter of a high uniform quality” and promote Wisconsin’s “national reputation” for butter. Id. In this way, the butter grading requirement is rationally related to the state’s legitimate interest in “protect[ing] the in tegrity of interstate products so as not to depress the demand for goods that must travel across state lines.” United States v. 40 Cases, More or Less of Pinocchio Brand 75% Corn, Peanut Oil & Soya Bean Oil Blended with 25% Pure Olive Oil, 289 F.2d 343, 345 (2d Cir. 1961); see also Sligh v. Kirkwood, 237 U.S. 52, 61 (1915) (upholding Florida law that made it unlawful to sell immature or unfit citrus fruits because it was rationally re lated to state’s legitimate interest in “[t]he protection of the state’s reputation in foreign markets, with the consequent beneficial e ect upon a great home industry”); Clark v. Dwyer, 353 P.2d 941, 946 (Wash. 1960) (en banc) (“[T]he protection of the reputation of Washington apples and the betterment of the industry, and as a result the general welfare, is [a purpose] 5 This brochure can be found at ECF No. 28 1 on the district court’s docket. No. 18 1520 11 which could properly be served in the exercise of the police power.”). Minerva counters that, even if these are legitimate state in terests, the butter grading law is not rationally related to these interests because consumers do not understand what the but ter grade means. To support this assertion, Minerva points out that state administrative o cials who are familiar with the grading system could not even describe some of the butter characteristics used in the grading process during their depo sitions. Minerva further argues that, even if consumers under stand the di erent butter characteristics, the grade would not convey information about any particular characteristic be cause it is expressed as a composite score. Finally, Minerva contends that, even if consumers understand the grade, they might disagree with the grader’s “subjective” taste prefer ences. According to Minerva, the district court failed to ade quately engage this evidence in the record to determine whether the law actually furthers the government’s stated purpose. These arguments fail for two reasons. First and foremost, on rational basis review “[the state] does not need to present actual evidence to support its pro ered rationale for the law, which can be ‘based on rational speculation unsupported by evidence or empirical data.’” Monarch, 861 F.3d at 683 (quot ing Beach Commc’ns, 508 U.S. at 315). Put di erently, “a legis lative choice is not subject to courtroom fact finding.” Beach Commc’ns, 508 U.S. at 315; see also Nat’l Paint, 45 F.3d at 1127 (“Outside the realm of ‘heightened scrutiny’ there is … never a role for evidentiary proceedings.”). Because it is reasonable 12 No. 18 1520 to conclude that mandatory butter grading will give consum ers relevant product information and promote commerce, the statute survives rational basis review. Second, even if the state were required to present actual evidence to support its rationale, Wisconsin’s butter grading statute would still survive rational basis review. The state has presented some evidence that (1) the industry standards re flect dominant consumer preferences, and (2) the butter grade statute e ectively conveys those preferences. One of the De partment’s experts, Steve Ingham, testified that, as compared to other products like cheese, “the range of widely accepted characteristics” is “considerably narrower for butter.” In par ticular, he explained that, based on “knowledge or tradition or habit,” consumers generally expect “that the word ‘butter’ means a sweet cream AA grade butter.” See also Know Your Butter Grades, supra (“[T]he grade terms describe certain well defined characteristics that are important to the consumer in buying butter.”). Perhaps for this reason, higher grade butter has traditionally sold better than lower grade butter. See id. (“[T]op grades frequently command a higher price.”). More over, although Wisconsin’s butter grade is reflected as a com posite score, some scholars have concluded that “brief, sim ple, easy disclosures” that “us[e] symbols instead of sen tences” can e ectively convey information to consumers. See Omri Ben Shahar & Carl E. Schneider, The Failure of Mandated Disclosure, 159 U. Pa. L. Rev. 647, 743 (2011) (citing studies). For example, one study found that Los Angeles County’s practice of grading restaurants for cleanliness with an “A,” “B”, or “C,” has influenced consumer behavior. See id. at 743 & n.420 (citing Ginger Zhe Jin & Phillip Leslie, The E ect of Information on Product Quality: Evidence from Restaurant Hy No. 18 1520 13 giene Grade Cards, 118 Q.J. Econ. 409, 449 (2003)). It is reasona ble for the state to believe that the butter grading system will similarly influence consumer behavior here. Therefore, plain ti s’ substantive due process challenge fails.6 B. Wisconsin’s Butter Grading Law Does Not Violate the Equal Protection Clause Like the Due Process Clause, the Equal Protection Clause “allows states great latitude in regulating the economy, pro vided the decision is not wacky.” Saukstelis v. City of Chicago, 932 F.2d 1171, 1173–74 (7th Cir. 1991) (“Courts bend over backward to explain why even the strangest rules are not that far gone.”). To carry their burden, plainti s must show that Wisconsin’s butter grading law “treats [them] … di erently than others similarly situated and the di erence in treatment is not rationally related to a legitimate state interest.” See Ind. Petroleum Marketers, 808 F.3d at 322. Plainti s contend that Wisconsin’s butter grading statute violates the Equal Protection Clause in two ways. First, they claim that there is no rational reason for the state to treat 6 Minerva also contends that, even if the butter grading law is rational on its face, it is not rational as applied to Minerva. This is so, Minerva argues, because it produces “artisanal butter that is not intended to taste, look, or feel like commodity butter.” In other words, Minerva claims that Wisconsin’s butter grading law is irrational because it damages Minerva’s brand equity. However, even if legislative classifications “incidentally affect adversely the market value of some of the [product] in question,” that does not somehow render the law irrational. Clark, 353 P.2d at 947 (holding that change in Washington’s apple grading law survived rational basis review, even though the change “operate[d] to reduce the market value of” certain red and partial red variety apples). 14 No. 18 1520 graded and ungraded butters di erently. On this point, plain ti s raise many of the same arguments they raised with re spect to their substantive due process claim. For example, they argue that there is no consumer protection rationale for the disparate treatment because the butter grading process is subjective and consumers do not understand what the grades mean. We have already rejected that argument for the reasons outlined supra. In addition, plainti s argue that there is no market based reason for the disparate treatment because “there’s no evidence that the butter trade would su er with out grading.” As explained supra, the state need not present such evidence under rational basis review; rather, the burden is on plainti s to present evidence that negates every conceiv able basis for the statute. In any event, the historical back ground strongly suggests that the statute is rationally related to the state’s legitimate interest in stimulating demand and protecting Wisconsin’s national reputation in the butter in dustry. Second, plainti s claim that the law irrationally discrimi nates between butter and other similarly situated commodi ties. Although the Department requires mandatory grading for butter, it makes grading for several other commodities— including cheese, honey, and maple syrup—voluntary. See Wis. Admin. Code ATCP § 87.04 (allowing the sale of un graded honey); id. § 81.22(1)(g) (allowing the sale of ungraded cheese); id. § 87.36(1) (allowing the sale of ungraded maple syrup). As a result, plainti s argue that if Wisconsin’s true goal is to inform consumers and promote commerce, the state’s regulatory scheme is underinclusive. However, the De partment presented at least some evidence that butter is ma terially di erent than other commodities, thus warranting dif ferent treatment. For example, a Department o cial testified No. 18 1520 15 that personal butter preferences are less diverse and idiosyn cratic than cheese, which suggests that objective grading is possible for butter but not for cheese. In addition, plainti s have not presented any evidence that other commodities were historically graded in the same way as butter to promote com merce. Moreover, even if mandatory grading of cheese, honey, and maple syrup would similarly advance consumer protection and promote commerce, “[t]he Equal Protection Clause allows the State to regulate ‘one step at a time, ad dressing itself to the phase of the problem which seems most acute.’” Clements v. Fashing, 457 U.S. 957, 969 (1982) (quoting Williamson v. Lee Optical of Okla. Co., 348 U.S. 483, 489 (1955)). In other words, “[t]he State ‘need not run the risk of losing an entire remedial scheme simply because it failed, through in advertence or otherwise, to cover every evil that might con ceivably have been attacked.’” Id. at 969–70 (quoting McDon ald v. Bd. of Election Comm’rs, 394 U.S. 802, 809 (1969)); see also Dandridge v. Williams, 397 U.S. 471, 486–87 (1970) (“[T]he Equal Protection Clause does not require that a State must choose between attacking every aspect of a problem or not at tacking the problem at all.”). Therefore, the butter grading statute does not violate the Equal Protection Clause simply because Wisconsin failed to implement mandatory grading schemes for other commodities. Plainti s rely heavily on the Supreme Court’s decision in City of Cleburne, Texas v. Cleburne Living Center, 473 U.S. 432 (1985). In that case, the Supreme Court held that a zoning ordinance that required a special use permit for a group home for the mentally challenged violated the Equal Protection Clause. Id. at 450. In so holding, the Court reasoned that the permit requirement was motivated largely by “the negative attitude of the majority of property owners located within 200 16 No. 18 1520 feet of the [proposed] facility.” Id. at 448. The Court explained that “mere negative attitudes, or fear, unsubstantiated by factors which are properly cognizable in a zoning proceeding, are not permissible bases for treating a home for the mentally retarded di erently from apartment houses, multiple dwellings, and the like.” Id. And the Court reiterated the well established principle that majority preferences are not a legitimate reason to treat classes of people di erently. See id. (“[T]he City may not avoid the strictures of [the Equal Protection] Clause by deferring to the wishes or objections of some fraction of the body politic.”). The only other pro ered justification for the permit requirement was the “size of the home and the number of people that would occupy it.” Id. at 449. But in that regard the group home for the mentally challenged was not materially di erent than a boarding house, nursing home, family dwelling, fraternity house, or dormitory—all of which would have been permitted under the city’s zoning ordinance without a special use permit. Id. at 449–50. Because the permit requirement “rest[ed] on an irrational prejudice against the mentally retarded,” it did not survive rational basis review. Id. at 450. City of Cleburne is inapplicable here. For starters, we have cautioned against overly broad readings of that case. See, e.g., Monarch, 861 F.3d at 685 (“City of Cleburne [is] better understood as [an] extraordinary rather than [an] exemplary rational basis case[].”). At most, City of Cleburne stands for the following uncontroversial proposition: No. 18 1520 17 If a law is challenged as a denial of equal pro tection, and all that the government can come up with in defense of the law is that the people who are hurt by it happen to be irrationally hated or irrationally feared by a majority of vot ers, it is di cult to argue that the law is rational if “rational” in this setting is to mean anything more than democratic preference. Milner v. Apfel, 148 F.3d 812, 817 (7th Cir. 1998) (describing this as “the basis of the City of Cleburne … case[]”). By contrast, as discussed, there are at least two legitimate state interests underlying the Wisconsin butter grading statute. In addition, there is at least some evidence that the state’s interests in con sumer protection and commerce are more acute with respect to butter than with respect to other commodities. Therefore, plainti s’ reliance on City of Cleburne is misplaced. For all these reasons, plainti s’ equal protection claim fails. C. Wisconsin’s Butter Grading Law Does Not Violate the Dormant Commerce Clause The Commerce Clause grants Congress the authority “[t]o regulate Commerce … among the several States.” U.S. CONST. art. I, § 8, cl. 3. Because the framers gave the federal govern ment the exclusive power to regulate interstate commerce, and because federal law preempts state law, the Supreme Court has inferred the existence of a “dormant” Commerce Clause that limits states’ abilities to restrict interstate com merce. See New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273 (1988) (“[T]he Commerce Clause not only grants Congress the 18 No. 18 1520 authority to regulate commerce among the States, but also di rectly limits the power of the States to discriminate against in terstate commerce.”). For purposes of dormant Commerce Clause analysis, we consider state laws in three categories. Park Pet Shop, Inc. v. City of Chicago, 872 F.3d 495, 501 (7th Cir. 2017). First, “‘laws that explicitly discriminate against interstate commerce’” are “presumptively unconstitutional.” Id. (quoting Nat’l Paint, 45 F.3d at 1131). Second, laws that “‘appear to be neutral among states’” on their face may nevertheless have a “discriminatory e ect on interstate commerce.” Id. (quoting Nat’l Paint, 45 F.3d at 1131). If “‘the e ect is powerful, acting as an embargo on interstate commerce without hindering intrastate sales,’” we treat such laws “as the equivalent of a facially discriminatory statute.” Id. (quoting Nat’l Paint, 45 F.3d at 1131). If, on the other hand, the law has “mild disparate e ects and potential neutral justifications,” we analyze it under the balancing test established by the Supreme Court in Pike v. Bruce Church, Inc., 397 U.S. 137 (1970). Id. (quoting Nat’l Paint, 45 F.3d at 1131). Under the Pike balancing test, we “weigh the burden on interstate commerce against the nature and strength of the state or local interest at stake.” Id. If the statute “regulates even handedly to e ectuate a legitimate local public interest, and its e ects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Id. at 502 (quoting Pike, 397 U.S. at 142). Importantly, the dormant Commerce Clause “does not ap ply to every state and local law that a ects interstate com merce,” but rather “only to laws that discriminate against in terstate commerce, either expressly or in practical e ect.” Id. No. 18 1520 19 at 501. If the state law “a ect[s] commerce without any real location among jurisdictions” and “do[es] not give local firms any competitive advantage over those located elsewhere,” we apply “the normal rational basis standard.” Id. at 502 (quot ing Nat’l Paint, 45 F.3d at 1131). In other words, “[n]o dispar ate treatment, no disparate impact, no problem under the dormant commerce clause.” Id. (quoting Nat’l Paint, 45 F.3d at 1132). Wisconsin’s butter grading statute does not expressly dis criminate against interstate commerce. The labeling require ment applies to all producers, whether they reside in state or out of state. See Wis. Admin. Code ATCP § 85.06(2) (“No per son shall sell … any butter at retail unless its label bears a statement of the grade … .”); Wis. Stat. § 97.176(1) (“It is un lawful to sell … any butter at retail unless it has been graded.”); Wis. Stat. § 97.176(5) (“Butter from outside of the state sold within the state shall be provided with a label … which indicates the grade in a manner equivalent to the re quirements for butter manufactured and sold within the state.”). The statute is neutral with respect to licensing, too. On its face, the statute allows any individual to apply for a butter grading license, regardless of whether they reside in state or out of state. See Wis. Admin. Code ATCP § 85.07; Wis. Stat. § 97.175(2). Nor does the statute have a discriminatory e ect on inter state commerce. At the outset, it is important to note that many of Minerva’s complaints about the law are not specific to out of state butter makers and are therefore irrelevant un der dormant Commerce Clause analysis. For example, Mi nerva argues that the butter grading requirement damages the brand equity of artisanal butter makers who do not want 20 No. 18 1520 to be associated with other commodity butters. But the statute a ects all artisanal butter makers in that respect, regardless of whether they reside in Wisconsin or out of state. In addition, Minerva complains that employing a permanent Wisconsin licensed butter grader is “cost prohibitive for artisanal butter makers like Minerva Dairy.” Again, though, both in state and out of state artisanal butter makers must bear the cost of em ploying a Wisconsin licensed butter grader if they want to sell their butter at retail in Wisconsin.7 Minerva also argues that the statute imposes additional supply chain costs, such as the cost of creating Wisconsin specific labels and finding a sup plier who will limit shipments to Wisconsin stores. But a sim ilarly situated artisanal butter maker in Wisconsin—i.e., one that sells interstate and wants to preserve its brand equity— would face exactly the same costs.8 Therefore, none of these arguments carry any weight under the dormant Commerce Clause, which is “concerned only with regulation that dis criminates against out of state firms.” Park Pet Shop, 872 F.3d at 503. Minerva’s best argument is that the statute imposes a dis parate cost on out of state individuals who apply to become Wisconsin licensed butter graders. After all, out of state ap plicants must travel to Wisconsin to take the required exami 7 Alternatively, butter makers may comply with Wisconsin’s butter grading requirement by using the USDA’s voluntary grading process. Mi nerva complains that this is too expensive. 8 Indeed, in its reply brief Minerva concedes that “[b]ecause a hypo thetical artisanal butter maker located in Wisconsin would face similar costs to Minerva Dairy, it is not clear that the law disparately affects out of state businesses as required by this Court’s precedent.” No. 18 1520 21 nation, whereas in state applicants do not have to travel out side the state. However, we recently rejected a similar argu ment in Park Pet Shop. There, the plainti s challenged the Chi cago “puppy mill” ordinance, which prohibits pet stores in the city from selling pets that were obtained through commer cial breeders. Id. at 498. The challengers argued that the ordi nance would have a discriminatory e ect on out of state breeders because Chicagoans would “turn[] directly to breed ers for their purebred pets” and would likely “prefer to pat ronize breeders located closer to the city over those that are farther away.” Id. at 502–03. We acknowledged that in this re spect “the ordinance may confer a competitive advantage on breeders that are not too distant from Chicago.” Id. at 503. However, we explained that “those breeders are as likely to be located in nearby Wisconsin or Indiana as they are in sub urban Chicago or downstate Illinois.” Id. Therefore, this e ect of the ordinance did not constitute impermissible discrimina tion against out of state breeders under the dormant Com merce Clause. See id. Wisconsin’s butter grading law similarly confers a competitive advantage on applicants who live closer to testing locations like the Department or the University of Wisconsin. But this geographical fact of life does not consti tute discrimination against out of state applicants. For exam ple, as defendants point out, “[a] would be grader who lives in Superior [Wisconsin] faces a greater burden than an appli cant living just north of Chicago.” Therefore, as the district court concluded, Wisconsin’s butter grading statute “dis criminates against long distance commerce,” but it does not categorically discriminate against out of state commerce. As a result, “the dormant Commerce Clause does not come into play and Pike balancing does not apply.” See Park Pet Shop, 872 F.3d at 502. 22 No. 18 1520 Finally, Minerva asks the Court to declare that the Department’s pre April 2017 enforcement of the butter grading law was unconstitutional. Again, Minerva claims that, prior to the filing of this lawsuit, the Department would not allow Wisconsin licensed graders to grade butter at out of state facilities. The district court held that Minerva waived this argument because it “did not adduce any evidence or make any argument concerning the pre April 2017 understanding.” As evidence that such a policy existed, Minerva pointed to Department o cial Peter Haase’s deposition testimony. When asked about whether there was an “unwritten policy” with respect to out of state butter graders prior to 2017, Haase responded: “I can’t speak definitively to what may or may not have been allowed prior to my tenure as bureau director, but I would have to agree that prior to 2017 there may have been a nonwritten understanding that individuals outside of Wisconsin could not hold a Wisconsin butter graders license.” Given his claimed lack of knowledge about policies in place before his tenure and his use of the word “may,” however, Haase’s deposition testimony cannot fairly be read as an admission that such a policy existed.9 We, therefore, agree with the 9 In its summary judgment motion, Minerva also pointed to declara tions its counsel submitted with its preliminary injunction briefing regard ing counsel’s conversation with Mike Pederson, a food sanitarian grader for the Department. Plaintiffs’ counsel declared that Pederson advised her on a phone call prior to the filing of this lawsuit that the Department does not allow Wisconsin licensed graders to grade butter at out of state facil ities. Pedersen responded in his own declaration that he misunderstood counsel’s question to be whether the Department permitted its butter graders to travel out of state to grade butter at out of state facilities. He clarified that while the Department does not send the graders it employs out of state, the Department allows Wisconsin licensed butter graders to No. 18 1520 23 district court that Minerva did not present evidence that the Department had such a discriminatory policy prior to April 2017. III. Conclusion For the foregoing reasons, we AFFIRM the judgment of the district court. be employed out of state and that such a grader could grade Minerva’s butter under Wisconsin’s requirements. Minerva did not directly ask Ped erson about this issue in his deposition, which occurred subsequent to these declarations, but Pederson testified consistently with his declaration that state law prevented him from visiting out of state butter plants. Thus, this evidence also fails to establish that, prior to this lawsuit, the Depart ment had an unwritten policy of preventing Wisconsin licensed butter graders from grading out of state butter.
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