The Dormant Commerce Clause and Geolocation: Introduction

[Jack Goldsmith and I will have this article out in the Texas Law Review early next year, and I'm serializing it here. There is still plenty of time for editing, so we'd love to hear any recommendations you folks might have; in the meantime, you can read the entire PDF of the latest draft (though with some formatting glitches stemming from the editing process) here.]

Many state laws apply to internet communications. Indeed, we take many of them for granted. If you publish an online magazine or a blog that comments on people from all fifty states, you might be subjected to the libel law of each state.[1] If you sell online images of famous people (or, to be au courant, NFTs), you might be subjected to each state's right of publicity law.[2] Likewise as to the torts of disclosure of private facts, false light, and more. To be sure, the First Amendment uniformly protects much of this speech. But if you go beyond the First Amendment's protections, you could in principle be subject to many different state laws.

When, if ever, must courts reject such laws as unduly burdening interstate commerce in violation of the Dormant Commerce Clause? Courts in the 1990s and early 2000s often invalidated some internet-related state statutes under this Clause—especially ones that restricted "harmful to minors" material.[3] But more recently, and increasingly, courts have upheld state laws regulating various internet transactions.[4]

The issue has been most notably implicated by recent state statutes that limit platforms' ability to block user posts based on the posts' viewpoint.[5] The Florida and Texas social media platform viewpoint-neutrality statutes were indeed challenged under the Dormant Commerce Clause—and though the courts didn't reach the challenges, because they struck down the statutes on other grounds,[6] the question will doubtless recur as states increasingly seek to regulate social media platforms.[7] The Court's decision returning abortion regulation to the states may also lead to statutes limiting abortion advertising that is targeted to states where abortion is illegal, and to Dormant Commerce Clause (as well as First Amendment) challenges to those statutes.[8]

The Dormant Commerce Clause argument against state regulation of internet services is basically this: By imposing liability on internet speech sent to one state, a state law would potentially affect speech sent from and received in other states, and would in this respect be improperly extraterritorial. Requiring platforms or speakers to consider the laws of all fifty states can gravely burden such entities, and therefore interstate commerce. And in some situations, the laws may even conflict with each other—for instance, if state A limits sending pornographic material into the state in a way that children can easily access it, but state B makes service providers quasi-common-carriers that are barred from blocking such material.

Yet there is good reason to preserve state discretion here: American federalism has long embraced a territorialist-pluralist vision of different states having different laws, as the example of varying tort law rules illustrates. These differences stem in part from different states having laws that presumably match the views of their populations, which naturally differ from state to state. But even beyond that, this vision allows for experimentation, with different states testing out different rules that may then be evaluated by courts and legislatures in other states (or by Congress). Against this background, our federal system presumptively preserves traditional state power to control what happens "in" or what is sent "into" states, and to protect state residents from what the state perceives as harms.

A quarter century ago, the internet seemed to make this vision impossible to preserve.[9] But today, technology can enhance such territorialist pluralism. On­line services can, relatively reliably, determine the state in which a user is located, and their software can then act differently depending on which state is involved. Such so-called "geolocation" isn't perfect; but so long as the law requires only reasonable attempts at geolocation rather than perfection, the burden on interstate commerce ought not be excessive. As the Ninth Circuit stated in rejecting a Commerce Clause challenge to a California law that required CNN (among others) to provide closed captioning on programs downloaded by users in California:

[T]he DPA [Disabled Persons Act], which applies only to CNN's videos as they are accessed by California viewers, does not have the practical effect of directly regulating conduct wholly outside of California. Even though CNN.com is a single website, the record before us shows that CNN could enable a captioning option for California visitors to its site, leave the remainder unchanged, and thereby avoid the potential for extraterritorial application of the DPA. . . . In fact, CNN already serves different versions of its home page depending on the visitor's country, and provides no explanation for why it could not do the same for California residents.[10]

This article explores what geolocation technology means for the Dor­mant Commerce Clause.[11] We build toward an analysis of state regulations of social media platforms, because those are in the news and currently in court. But as our reasoning along the way makes plain, the analysis applies to Dormant Commerce Clause issues implicated by a much wider range of state internet regulation as well.

This article was written and circulated for publication before the Court granted certiorari in National Pork Producers Council v. Ross,[12] and is being published before the case is decided. But once the Court decides that case, we will publish an update in the Texas Law Review Online (vol. 102) that will discuss how (if at all) National Pork Producers affects our analysis.

[1]. Depending on the circumstances, you might not be subject to jurisdiction in all those states. But even if you are sued for libel in your home state, the court, applying normal choice-of-law principles, will generally apply the law of the plaintiff's domicile.‌ Restatement (Second) of Conflict of Laws § 150 (Am. L. Inst.).

[2]. See infra p. 15.

[3]. E.g., Am. Booksellers Found. v. Dean, 342 F.3d 96, 103–04 (2d Cir. 2003) (Vermont statute).

[4]. See, e.g., Greater L.‌A. Agency on Deafness, Inc. v. CNN, Inc.‌, 742 F.‌3d 414 , 434 (9th Cir. 2014) (upholding California statute requiring CNN to provide close captioning online in California); Online Merchants Guild v. Cameron, 995 F.‌3d 540 (6th Cir. 2021) (upholding Kentucky's price-gouging law as applied to sales on Amazon.com); SPGGC, LLC v. Blumenthal, 505 F.‌3d 183, 195 (2d Cir. 2007) (upholding Connecticut consumer protection law as applied to online gift card sales).

[5]. The questions whether they are barred by the First Amendment or by § 230 are separate questions, dealt with in separate articles.‌ See infra notes 137–138.

[6]. See cases cited infra note 159.

[7]. See, e.g., 2021 Ga. S.B. 393; 2021 Mich. H.B. No. 5973.

[8]. For an example of such a bill that is so broad that it extends even beyond advertising, see Eugene Volokh, S.C. Bill Would Apparently Outlaw News Sites' Writing About Legal Abortion Clinics in Neighboring States, Volokh Conspiracy (Reason.com), June 30, 2022, 10:18 pm, https://perma.cc/US7Y-X5HD. For an example of an (unsuccessful) Dormant Commerce Clause challenge to an advertising statute—a California law limiting water treatment health claims—see infra note 74.

[9]. See David R. Johnson & David Post, Law and Borders—The Rise of Law in Cyberspace, 48 Stan. L. Rev. 1367 (1996).

[10]. Greater L.A. Agency on Deafness, Inc. v. CNN, Inc., 742 F.‌3d 414, 434 (9th Cir. 2014); see also Nat'l Fed'n of the Blind v. Target Corp.‌, 452 F. Supp. 2d 946, 961 (N.‌D. Cal. 2006) (taking the same view of the same California statute, since "Target could choose to make a California-specific website"; even if Target had to change "its entire website in order to comply with California law, this does not mean that California is regulating out-of-state conduct"); cf. Backpage.‌com, LLC v. Cooper, 939 F. Supp. 2d 805, 817, 841 (M.‌D. Tenn. 2013) (striking down Tennessee statute that banned the sale of ads "that would appear to a reasonable person to be for the purpose of engaging in what would be a commercial sex act . . . with a minor," partly because "[n]o­where in the language of the statute is there any limit on the statute's geographic scope that specifies what conduct, if any, must take place in Tennessee").‌

[11]. For an earlier effort when the technology was in its infancy, see Jack L. Goldsmith & Alan O. Sykes, The Internet and the Dormant Commerce Clause, 110 Yale L.‌J. 785, 810–12 (2001).

[12]. No. 20-55631 (cert. granted Mar. 28, 2022).