This post is a minutes document summarizing Legal Impact for Chickens' Presentation "Effective Altruism x Law Presents: Impact Litigation for Animal Welfare." The event was posted on the Forum the week of January 16th, 2023, and was hosted on January 25th, at 1:30 PM EST, over Zoom, featuring Denise Morris from Legal Impact for Chickens.
The presenter has reviewed this summary. The author adopted all their suggestions.
Setting the Stage
Impact litigation to counter factory farm cruelty can do a lot of good. The United States slaughters nine billion chickens for food annually. Most of these animals live harsh lives on factory farms. States have criminal laws against animal cruelty. Officials rarely enforce those laws on factory farms, though, and when they do, they’re against low-level individual worker. Legal Impact for Chickens (LIC) is holding Costco officers to account for Costcofactory farms based on a shareholder derivate lawsuit to benefit nominal defendant Costco in Washington state, based on the criminal laws of Iowa and Nebraska, which is where Costco factory farms are located, and the cruelty is taking place.
The Shareholder Derivative Case for the Benefit of Nominal Defendant, Costco
To maximize production and profits, Costco has vertically integrated its chicken operations. This integration, and the way it plays out, demonstrates that Costco both owns and is responsible for the chickens they sell from birth to slaughter. This responsibility translates to liability: Costco is responsible for the damages done to the chickens they sell before they reach the shelf because the chickens are theirs.
Costco operates through a subsidiary company it owns and manages called Lincoln Premium Poultry (LPP). LPP, in turn, contracts out breeding and rearing to third parties. These third parties must raise Costco chickens on factory farms, using equipment built according to Costco specifications. The food to feed the chicks, how to feed the chicks, light, temperature, stocking density, ventilation, and veterinary services are all mandated or provided by LPP. Those parties are encouraged to sign 10–15-year contracts with the conglomerate, and often take on hefty loans to finance the equipment. These burdens and instructions make contractors dependent on Costco. Indeed, Costco allots contracts to contractors who lack experience raising chickens to increase this dependency. This strategy demonstrates why Costco remains responsible for chickens that contractors raise.
On Animals’ Sufferings
Through LPP and its contractors, Costco breeds chickens to grow unnaturally fast and in untenably large numbers. This breeding creates immense suffering for chickens.
Chickens that grow fast often have disabilities that require individualised care – a need never met. Some chickens cannot walk, and those that can, may fall on their backs and are unable to stand up again because of their unnatural proportions. Those chickens that can stand suffer from burned featherless bellies, which come from friction and ammonia burns due to contact with the filthy floor. Chickens’ growth is so quick that chickens suffer from white stripe syndrome: chickens grow so fast that their bodies can’t get blood to sections of their muscles, leaving white stripes where dead muscle is replaced with fat.
Some contractors house three-hundred-and-sixty thousand chickens at a time. The sheer number of animals in a confined space makes it impossible to maintain sanitary conditions, let alone care for the animals. Costco’s push for rapid-growing livestock and imposing the conditions that make it impossible to care for that livestock leave tens of thousands of chickens suffering and often dead due to thirst, hunger, and injury in any given factory farm, with some left to decompose for over a day. These facts found the case to say that these chickens’ owners are liable for animal cruelty and neglect, and that Costco is the owner.
Costco’s officers owe fiduciary duties to the corporation and its shareholders which enable LIC to hold Costco’s officers accountable. There are two notable duties in the complaint: a duty to act lawfully,and a duty of loyalty in the management, administration, and oversight of the company’s business affairs.. The duty to act lawfully is as follows: a company’s officers who cause a company to violate the law betrays the corporation and its shareholders who invested believing the company was acting lawfully. The duty of loyalty, also called a Caremark claim, is similar: directors made aware of a company breaking a law have a duty to correct the situation. Shareholders can sue the board of directors on either of these premises, on behalf of, and for the benefit of, nominal defendant Costco.
The illegality of Costco’s activities, per the criminal laws of Iowa and Nebraska, was presented previously when discussing animals’ suffering. A Caremark claim is triggered when board members are made aware of the situation by credible red flags. LIC knows that board members were made aware of the situation because there was a public report in the New York Times about it. In subsequent interviews, Costco went so far as to defend their practice to the public.
There is a legal doctrine closely linked to the first two worth mentioning: operating ultra vires. This doctrine states that Costco cannot operate beyond its purposes, as defined in its acts of incorporation. Those purposes by default include acting legally; to do anything illegal, then, is to go beyond the company’s stated purpose. LIC posits that Costco’s chicken operations violate all three legal standards.
Benefits of Impact Litigation
There are three impacts of impact litigation worth pointing out. First, court injunctions can put a stop to the suffering almost immediately by ordering businesses to restructure themselves. Second, successful cases set precedent for future cases. This precedent can be used as binding authority in the jurisdiction it’s enacted under, or persuasive authority in other jurisdictions. Third, this imposes a liability on companies to behave ethically towards animals. This liability will increase the dollar amount of meat, but as carbon pricing teaches, it’s a cost society is ready to absorb for the greater good.
EA sees Impact Litigation with high risk of having negative consequences, like solidifying harmful laws. How does LIC account for this risk?
Numerically, and with months of research. LIC strives to have a case so well grounded in facts and law that there’s a high probability of having a large positive impact. Only cases that meet this threshold get brought to court.
You mentioned you used to work in a corporate setting. What lessons did you pull from that experience that you’re using at LIC?
Be brave, believe in the person and their cause, dig for your research and be creative, and have faith in the legal system. Denise’s previous employment put her in court before conglomerates, where she felt there was no way she could win. The results were often surprising, and all thanks to hard work and hope.
Do you think you, or LIC, are too optimistic? Alternatively, is EA too pessimistic?
Definitely possible for the first: Denise is generally an optimistic person, who is used to going up against big problems. That said, what LIC is bringing to the courts is not a major reform, but a reasonable ask grounded in existing law. Maybe there is too much skepticism or optimism, but when all is said and done, the legal moves are grounded in doctrine.
Personally, how have you dealt with skepticism from your peers?
Denise’ hardest skeptic was her dad. Being a conservative numbers person, he needed to see to know that what Denise was doing was worthwhile. Denise produced that explanation, convincing even him that her time was well spent.
This, and other reforms at large, convinces her that society at large is ready for this kind of shift. And so, she doesn’t worry about skepticism as much: it’s turned more into an outlier than a norm.
How can interested folks reach LIC?
Join their newsletter online! Alternatively, you can find them on Facebook, Instagram, and Twitter. The Newsletter is especially useful for anyone wanting a more substantive analysis of what’s going on.
How transferrable is what LIC is doing to other domains or jurisdictions?
Fairly transferrable. The duties listed above come from Common Law doctrine, so would work well in any other Common Law jurisdiction or for another cause area. That said, transferring is being tested by bringing Delaware doctrine to Washington courts as persuasive authority. More information to follow.
Thanks for sharing this!
Given that they've been breaking the law and that hasn't stopped them, does it seem very likely that there'd be a court injunction to stop or that a court injunction would change anything? Why hasn't the law itself stopped them? Are fines the only penalty for violating the law? If they violate the court injunction, would the only penalty again be fines, or could executives face jail time?
Thank you so much for hosting Denise!