American Booksellers Foundation v. Dean

In American Booksellers Foundation v. Dean, 342 F.3d 96 (2d Cir. 2003), the Second Circuit concluded that the Vermont dissemination statute violated the Dormant Commerce Clause because of its extraterritorial effect. Id. at 102-04. The court noted that "because the internet does not recognize geographic boundaries, it is difficult, if not impossible, for a state to regulate internet activities without 'projecting its legislation into other States.'" Id. at 103. The court declined to apply the Pike balancing test because it concluded that the extraterritorial effect resulted in a per se violation of the Dormant Commerce Clause. Id. at 104. The Pike balancing test provides: Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities. (Pike v. Bruce Church, Inc., 397 U.S. 137 (1970).)