Federal preemption is the legal issue here, but treatment of animals is the reason it matters. Under the Federal Meat Inspection Act, it is illegal to sell meat from animals that were sick or that died other than by slaughter. (Title 21, U.S. Code, sec. 644.) What this essentially means, is that "downed" animals have to be inspected to determine whether they're sick or just tired before they can be slaughtered and used for food.
The U.S. Supreme Court just heard arguments about a California law that would bar "the purchase, sale and butchering of animals that can’t walk and require slaughterhouses under the threat of fines and jail time to immediately kill nonambulatory animals," according to an AP article published in the Washington Post.
The legal issue is whether the federal law preempts this state law, which is stricter. The case is National Meat Association v. Harris. The District Court issued a preliminary injunction against enforcement of the law on the grounds that it was preempted. The Ninth Circuit vacated the injunction. The National Meat Association petitioned for cert, which the U.S. Supreme Court granted. So the Supremes just heard arguments this week.
I haven't read all the briefs yet, but I intend to. Preemption issues are more interesting than they seem at first. (See my Findlaw article about labeling farmed salmon.) The freedom of a state to make its own laws is really what is at stake, and California has a history of passing laws that go beyond federal legislation.
Some useful links:
Legal Information Institute summary (an excellent explanation of the issues and the arguments prepared by two law students)
9th Circuit opinion
Brief for non-state respondents ( several animal rights groups)
Brief for state respondent
Amicus brief: Chamber of Commerce of the United States
But I'm pretty sure we should not eat pigs anyway.