When Congress Giveth, is the Dormant Commerce Clause Taken Away?–Free Speech Coalition v. Shurtleff

by Ethan Ackerman

Free Speech Coalition, Inc. v. Shurtleff, 2:05CV949DAK (D. Utah March 23, 2007)

Why do courts seem eager to use CAN-SPAM’s preemption language to give state email laws a free pass from the Dormant Commerce Clause?

Utah’s courts and legislatures are earning some scrutiny lately. Seems like the general meme in Salt Lake City is to write laws that pretty clearly reach outside the Wasatch and Cottonwood valleys and touch stuff all over the internets. While some lawyers (like the state legislature’s drafting counsel) are trying to reign things in, a recent Utah federal District Court ruling seems to be whipping the horses on.

The Free Speech Coalition, a trade association of “adult” publishers and marketers, has been tackling Utah’s Child Protection Registry on several legal fronts for some time, and the challenges have received some coverage (see, e.g., here and here). A recent ruling in the case upholding the Utah act on several fronts has enough interesting tidbits to merit several entries, so this entry will focus on just one – the rather unique results from the intersection of preemption doctrines and the CAN-SPAM Act’s preemption safe harbors.

The Harbor that Swallowed the Doctrine?

The District Court denied the Free Speech Coalition’s request for a preliminary injunction of the Utah act. Contrary to the Coalition’s assertions, the judge said the Utah act did not violate the Dormant Commerce Clause because it was authorized by Congress in the CAN-SPAM act. Several amici supported this argument, including the US Department of Justice and (perhaps somewhat self-interestedly) unspam, the for-profit operator of the Utah registry.

We’ve covered the Dormant Commerce Clause here before. Briefly, the Dormant Commerce Clause (DCC) constitutionally constrains some state laws, but it does not apply when federal law affirmatively authorizes those state laws. The rationale? Congress, not the states, can regulate interstate commerce – but Congress can, if it wants to, delegate its power to the states to do what they couldn’t otherwise do.

Judge Kimball says that’s what happened here. Due to CAN-SPAM, he said that “Congress has expressly allowed states to regulate commercial email” by choosing not to preempt some types of state laws related to email. By creating safe harbors for some state laws, Congress effectively immunized them from DCC challenges. Judge Kimball bolstered this conclusion by citing to the similar holding in Beyond Systems v. Keynetics, which also rejected a DCC challenge against a Maryland anti-spam law on the grounds that it was covered by CAN-SPAM’s safe harbor.

So why the trend away from applying the DCC? Prior to CAN-SPAM, a court had to evaluate whether a state law impermissibly burdened out-of-state commerce, and no medium is more interstate—and even international—than the Internet. Certainly the judge wasn’t declining to apply a rigorous DCC analysis because it was too much work – Judge Kimball did the analysis in a belt-and-suspenders alternate holding. What magical flick of Congress’ pen all of the sudden relieves a judge from evaluating the Constitutionality of a state law?

The judges in both Beyond Systems and Free Speech Coalition may be correct that state regulation explicitly authorized by federal law isn’t susceptible to a DCC challenge, but it’s a big jump to say that this Utah law was explicitly authorized by CAN-SPAM. To reach this conclusion, a court must pile several suspect conclusions on top of each other.

Strictly speaking, Congress didn’t explicitly authorize either the Utah or Maryland acts. Instead, it referred to a class of anti-spam laws generally in the CAN-SPAM act. That’s not a big deal. Congress can’t easily enumerate every unpreempted state law, and it’s impractical to have Congress update the safe harbor every time a new state law is passed or an existing one is amended. But that’s also the Achilles heel of preempting state laws by general reference – we can’t really tell if Congress intended to preserve a state law that wasn’t even written, or was subsequently amended, when Congress drafted the safe harbor. Thus, in my opinion, the prudent approach is to construe the authorization very narrowly.

In this case, the Utah law only arguably fits into a CAN-SPAM safe harbor. CAN-SPAM has two relevant safe harbors for (1) anti-deception email-only laws, and (2) non-email-specific computer crime laws. He said the Utah act may not fit in the first category but fit into the second category of computer crime laws.

However, to reach this conclusion, the Judge had to wrestle with an internal contradiction: the Utah Act had to relate to spam to qualify for CAN-SPAM’s preemption from DCC analysis, yet the court had to simultaneously say that the law was not email-specific enough that it qualified for the non-email-specific safe harbor.

The likely analytical error here is that CAN-SPAM’s preemption safe harbor intentionally sweeps wide beyond email – it’s trying not to preempt any laws that don’t relate to email. But that same breadth shouldn’t act as a DCC shield too. Congress wasn’t actually affirmatively blessing certain state email laws. It was merely acknowledging that some state laws might apply to lots of behavior (including email) that Congress would have no problem with. By rough analogy, a federal insurance law might preempt some, but not all, state insurance laws. Unrelated state insurance fraud laws would almost certainly NOT be preempted by the federal law, but that shouldn’t excuse those state fraud laws from a DCC analysis.

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Eric’s Comment: I just want to reinforce one point in Ethan’s analysis. Based on a straight reading of the CAN-SPAM statute, it is fairly clear to me that CAN-SPAM’s exclusion for state computer crime laws meant only medium-neutral laws. Thus, a state email-only crime–like Utah’s law here–should be preempted by CAN-SPAM. Otherwise, as Ethan points out, the exception effectively eliminates all preemptive effect of CAN-SPAM because states can freely enact any anti-spam laws–even those that conflict with CAN-SPAM or with other states’ laws– so long as the states attach criminal sanctions to the restrictions. It’s possible Congress just screwed this up massively, but for now, my hypothesis is that Congress drafted the preemption language properly and it’s this judge who screwed up.

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