There are some laws England for example restricting feeding live prey but I do not know of any general prohibition of the practice in the US unless the treatment of the prey was unduly cruel and unnecessary.
There are pet stores that will not sell certain animals if they believe that the purchaser will use them for live feed or bait and they are well within their rights to refuse such sales. I know of no US Supreme Court cases on the issue.
Let's view the question with some "common sense" before we go "technical legal": there is a huge difference between feeding brine shrimp to aquariums, live crickets to iguanas, and live rabits to pythons... so the first test is whether any "animal cruelty" issue is going to be triggered by anyone who knows about or observes the pet's feeding. Legally, the effect on the brine shrimp, the cricket and the rabbit is the same - they're a food item. But the cuddle factor (political correctness?) is really the issue. So best advice is to consult with reputable pet stores and veterinarians in your area regarding best feeding practices - these stores and pet clinics should be very current on what and how to feed any animal that is "legal" to keep as a pet.
