CHICAGO (CN) – Banning sales by out-of-state breeders does not violate the commerce clause, the Seventh Circuit ruled Thursday, upholding a law meant to curb puppy mills.

Since its enactment by the City Council, Chicago’s “puppy mill” ordinance has limited pet shops to selling dogs, kittens and rabbits purchased only from animal shelters, nonprofit humane societies or animal-rescue organizations.

Shortly before the scheme took effect in 2015, however, Chicago-based pet shops Park Pet Shop and Pocket Puppies Boutique, along with Missouri breeder Cedar Woods Farm, brought a federal complaint that accused lawmakers of doing more to help puppy mills with the law than shut them down.

“Instead of eliminating these substandard facilities, the ordinance actually favors their expansion, by eliminating the source of commercially bred puppies in the county that are regulated on multiple levels,” the complaint argued.

Both stores have voiced opposition to the scourge of so-called animal mills, but note that they purchase 90 percent of their puppies from out-of-state sources.

If the city ordinance puts them out of business, they say, consumers who want a pure-bred puppy will go “straight to the exact ‘bad actors’ that the ordinance claims to abhor.”

Upholding dismissal of the case Thursday, however, the Seventh Circuit found that the challengers failed to state a claim.

“The Illinois Constitution permits home-rule units like Chicago to regulate animal control and welfare concurrently with the state,” U.S. Circuit Judge Diane Sykes wrote for a three-person panel. “And the puppy-mill ordinance doesn’t discriminate against interstate commerce, even in mild practical effect, so it requires no special cost-benefit justification under the commerce clause.”

Dissenting in part, U.S. Circuit Judge David Hamilton said he would remand for further development of the commerce clause issue.

Now that the ordinance is in effect, Hamilton said he would give the pet shots the opportunity to amend their suit with evidence of the law’s actual impact on pet sales.

“It’s easy to imagine that the Chicago ordinance will not actually reduce the demand for high-cost, pure-bred pets,” Hamilton said.