Internet Dormant Commerce Clause

In American Libraries Ass'n v. Pataki (S.D.N.Y. 1997) 969 F. Supp. 160, the court evaluated a New York statute similar to section 288.2, subdivision (b) that criminalized knowingly communicating harmful matter to minors over the Internet. The Pataki court evaluated the nature of the Internet, noting the Internet is a global, decentralized and borderless communications medium in which participants communicate in a variety of ways, including one-to-one messaging (such as e-mail), one-to-many messaging (such as "listserv" and "mail exploders"), distributed message databases (such as "Usenet newsgroups") and remote information retrieval (such as Web sites). (969 F. Supp. at pp. 164-165 & 167.) The Internet permits participants to communicate anonymously by using pseudonyms without disclosing either the age or geographic location of the participants. (Ibid.) New York Penal Law section 235.21, subdivision 3 made it a crime for an individual: "Knowing the character and content of the communication which, in whole or in part, depicts actual or simulated nudity, sexual conduct or sado-masochistic abuse, and which is harmful to minors, to intentionally use any computer communication system allowing the input, output, examination or transfer, of computer data or computer programs from one computer to another, to initiate or engage in such communication with a person who is a minor." The New York statute defined harmful matter in terms similar to the California definition (compare N.Y. Pen. Law 235.20, subd. 6 with Pen. Code, 313) and provided various affirmative defenses that have counterparts under California law. (Compare N.Y. Pen. Law 235.15 with Pen. Code, 288.2, subds. (c)-(e).) Pataki first concluded that because the New York law regulated a mode of communications used as a conduit for interstate commerce, it was subject to Commerce Clause scrutiny. It rejected the state's argument that because the law was directed at conduct that was not commerce, the commerce clause was inapplicable. It reasoned that the dormant commerce clause has been applied to laws that regulated activities undertaken without a profit motive (see Edwards v. California (1941) 314 U.S. 160, 172, fn. 1 [62 S. Ct. 164, 166, 86 L. Ed. 119] [law prohibiting transportation of indigents into California invalid under dormant commerce clause and it is "immaterial whether or not the transportation is commercial in character"]) and that the concept of commerce is given broad meaning by the courts. (See Camps Newfound/Owatonna, Inc. v. Town of Harrison (1997) 520 U.S. 564 [117 S. Ct. 1590, 137 L. Ed. 2d 852].) Moreover, because the Internet has become an important conduit for commercial activity, regulations affecting it are subject to commerce clause scrutiny. (Pataki, supra, 969 F. Supp. at pp. 169-173.) The Pataki court also rejected the state's claim that the law only affected intrastate activities. It reasoned that the language of the statute and its legislative history showed it was not limited to intrastate conduct, and instead was designed and intended to apply to any communication, whether intrastate or interstate, over which New York had the capacity to exercise criminal jurisdiction. (Pataki, supra, 969 F. Supp. at pp. 164-165 and 167.) The majority here asserts that section 288.2, subdivision (b) applies only to fully intrastate communications. However, there is nothing in the statute or its legislative history that supports a limitation of application from the full capacity to exercise criminal jurisdiction. (See discussion, post, at pp. 214-215.) Pataki then evaluated the New York statute under commerce clause principles and concluded it was per se invalid. First, the statute purported to regulate conduct occurring outside New York's borders. Second, the nature of the Internet requires uniform regulation and Internet users would be threatened by multiple inconsistent burdens were each state to impose its separate Internet regulations. The Pataki court also concluded that, under the Pike test, the statute's burdens on interstate commerce outweighed the putative local benefits of the statute. The principal basis for this conclusion was that although protecting minors from harmful matter was a compelling state interest, the local benefits from the statute were de minimis because: (1) the law had no effect on communications originating outside the United States; (2) the law had little effect on persons outside of New York who were not readily subject to prosecution in New York; (3) other existing laws permitted prosecution of persons engaged in child pornography or child molestation; (4) the testimony established that only a single person had been prosecuted under the law who would not have been prosecutable under other existing laws. Against this minimal benefit the court found significant burdens, both in the form of impinging on the sovereignty of sister jurisdictions, and in the form of chilling protected speech. ( Pataki, supra, 969 F. Supp. at pp. 177-181.) The commerce clause's ban on state regulations that have the effect of exporting the state's domestic policies into other states ( Edgar v. MITE Corp., supra, 457 U.S. 624, 642-643 [102 S. Ct. 2629, 2640-2641]; Healy v. the Beer Institute, supra, 491 U.S. 324, 336 [109 S. Ct. 2491, 2499]) convinced the Pataki court that the New York statute was per se invalid. the Pataki court reasoned that: "The Edgar/Healy extraterritoriality analysis rests on the premise that the Commerce Clause has two aspects: it subordinates each state's authority over interstate commerce to the federal power of regulation (a vertical limitation), and it embodies a principal of comity that mandates that one state not expand its regulatory powers in a manner that encroaches upon the sovereignty of its fellow states (a horizontal limitation)." (969 F. Supp. at pp. 175-176.)