Law 897: The Law in Cyberspace
Assignment for Monday October 11
(Please read everything designated as part of the "Reading Assignment." Links in the "Background" sections are completely optional. )
Dormant Commerce Clause
BACKGROUND:
While the U.S. Congress sought to protect minors from smut on the Internet by enacting the Communications Decency Act and the Child Online Protection Act, the states were not standing idly by. Many state legislatures passed laws prohibiting the transmission of material that was harmful to minors. Civil rights and library organizations challenged these laws under the first amendment, but they also argued that the laws were unconstitional under the commerce clause. In 1997, the U.S. District court for the Southern District of New York decided American Library Association v. Pataki, 969 F. Supp. 160 (SDNY 1977). The court struck down a statute that criminalized the Internet transmission of material harmful of minors on the ground that the statute sought to regulated activity beyond its borders, and, this, contravened the commerce clause:
The unique nature of the Internet highlights the likelihood
that a single actor might be subject to haphazard,
uncoordinated, and even outright inconsistent regulation by
states that the actor never intended to reach and possibly was
unaware were being accessed.
Typically, states' jurisdictional limits are related to
geography; geography, however, is a virtually meaningless
construct on the Internet. The menace of inconsistent state
regulation invites analysis under the Commerce Clause of the
Constitution, because that clause represented the framers'
reaction to overreaching by the individual states that might
jeopardize the growth of the nation — and in particular, the
national infrastructure of communications and trade — as a
whole.
....
[T]he New
York Act is concerned with interstate commerce and contravenes
the Commerce Clause for three reasons. First, the Act
represents an unconstitutional projection of New York law into
conduct that occurs wholly outside New York. Second, the Act
is invalid because although protecting children from indecent
material is a legitimate and indisputably worthy subject of
state legislation, the burdens on interstate commerce
resulting from the Act clearly exceed any local benefit
derived from it. Finally, the Internet is one of those areas
of commerce that must be marked off as a national preserve to
protect users from inconsistent legislation that, taken to its
most extreme, could paralyze development of the Internet
altogether. Thus, the Commerce Clause ordains that only
Congress can legislate in this area, subject, of course, to
whatever limitations other provisions of the Constitution
(such as the First Amendment) may require.
Other courts followed, striking down a number of state laws that purported to regulate or prohibit Internet pornography. In Cyberspace Communications, Inc. v. Engler, 142 F. Supp. 2d 827 (ED Mich 2001), the District Court for the Eastern District of Michigan enjoined a Michigan law prohibiting the distribution of obscene materials to Michigan children on commerce clause grounds. In American Booksellers v. Dean, 342 F.3d 96 (2d Cir. 2003), the Court of Appeals for the 2d Circuit held that a Vermont statute criminalizing the Internet distribution in Vermont of material harmful to minors presented "a per se violation of the dormant Commerce Clause." In PSInet v. Chapman (4th Cir 2004), the Court of Appeals for the 4th Circuit held that a similar Virginia statute violated the commerce clause.
When litigants tried to expand this strategy to attack anti-spam laws, however, the courts refused to go along. In Washington v. Heckel (WA2001) and Ferguson v. Friendfinders (Cal. App. 2002), state courts upheld state spam laws against dormant commerce clause challenge. In Beyond Systems v. Keynetics, (D. Md. 2006), a federal district court concluded that Maryland’s Commercial Electronic Mail Act did not violate the dormant commerce clause. Similarly, in National Federation of the Blind v. Target (ND Cal. 2006), a federal district court rejected Target's commerce clause challenge to the application of California disability laws to Target's website.
READING ASSIGNMENT:
Return to the syllabus
Internet Gambling
BACKGROUND
The complex network of federal, state, local and tribal laws regulating bricks-and-mortar gambling is beyond the scope of this course. Internet gambling has been a legislation magnet, attracting regulation efforts from those who believe that gambling is harmful or immoral, and that making it available online could exaccerbate its harms, to those with significant investments in casino gambling who fear that readily available online gambling opportunities will undermine the market for their businesses. The pursuit of new gambling legislation tends to be an especially popular pursuit in election years. In 1996, Minnesota's attorney general, Hubert Humphrey III, gained national attention when he brought suit against a Belize online gambling business under Minnesota state deceptive trade practices laws. Ten years later, Internet gambling had grown to a $12 billion dollar business. According to the House Report accompanying the Unlawful Internet Gambling Enforcement Act, $6 billion of that market originated with gamblers from the United States. Supporters of federal legislation to discourage Internet gambling persuaded members of Congress that
"The Internet’s ease of accessibility and anonymous nature: (1) make it difficult to prevent underage gambling; and (2) feed on the compulsive behavior of the millions of Americans suffering from gambling addiction. Worldwide Internet gambling sites offer organized crime groups another avenue to launder the proceeds of their criminal activity, and assist in the facilitation of crimes."
(House Report 109-112, part 2 (2006)).
READING ASSIGNMENT:
Return to the syllabus