The Dormant Commerce Clause and Geolocation: Conclusion
[Jack Goldsmith and I will have an article out about the Dormant Commerce Clause, geolocation, and state regulations of Internet transactions in the Texas Law Review early next year, and I've been serializing it here; this post is the conclusion of the series. 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.]
Throughout American history, most everyday behavior of Americans—shopping, speaking, gathering—has been governed largely by state law. People were protected by (and liable under) state consumer protections laws; public accommodations laws; the tort law of libel, invasion of privacy, and right of publicity; and more.
The internet has shifted a great deal of commercial, personal, and political activity "into cyberspace"—but behind that metaphor are people communicating from one state into another state, sometimes about the residents of a third state. Our commitment to federalism, both as a means of preserving local political decision-making and of fostering experimentation, remains important despite changing technology. And geolocation technology makes it possible to preserve, at least to a large extent, this traditional territorial pluralist vision.
Congress may choose to homogenize the rules for internet activity, by preempting state law. And the courts of course must enforce a floor of federal First Amendment protection for such activity. But beyond that, absent a hard-to-make showing of undue burden on interstate commerce, courts should play only a limited role in striking down on "extraterritoriality" grounds state laws that apply to internet transactions. That is so whether the state laws are tort law rules, antidiscrimination laws, common carrier laws, or other means by which states engage in the age-old endeavor of defining and reconciling the legitimate interests of citizens and business enterprises.