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State Efforts to Regulate the Internet

Cases and Courts:

  • The King’s English, Inc. v. Shurtleff (D. Utah), now Florence v. Shurtleff.
  • Am. Booksellers Found. for Free Expression v. Strickland (6th Cir.), on certified questions to Ohio Supreme Court as Cordray v. Am. Booksellers Found. for Free Expression.
  • Interactive Media Ent’mt & Gaming Ass’n v. Wingate (Ky. Ct. App.), on appeal to Kentucky Supreme Court as Commonwealth v. Interactive Media Ent’mt & Gaming Ass’n.

Background

States are struggling to determine whether and how they can regulate the internet in those areas where the federal government has either chosen not to regulate or where its efforts have proven unconstitutional. Congress has had significant difficulty regulating indecent and obscene material online and in keeping it away from minors. In particular, the prohibitions in the Communications Decency Act (“CDA”) against transmitting or displaying indecent or obscene material were held unconstitutional in Reno v. ACLU, 521 U.S. 844 (1997) and the Child Online Protection Act (“COPA”), which sought to criminalize posting material “harmful to minors” was also held unconstitutional in Ashcroft v. ACLU, 542 U.S. 656 (2004).

More recently Congress has sought to regulate internet gambling, enacting the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”), 31 U.S.C. §§ 5361-5367. The UIGEA, however, does not itself criminalize internet gambling, but instead prohibits the use of the internet to transfer funds in circumstances where doing so already violates another state, federal, or tribal law.

The failures of the CDA and COPA, and the narrow scope of the UIGEA have created a situation in which many states seek to address these issues of internet regulation themselves, although the states too run into constitutional difficulties.

State Efforts to Regulate Internet Dissemination of Material “Harmful to Minors”

Various states have passed laws seeking to limit the internet dissemination of material “harmful to minors.” Many of these state dissemination statutes have been invalidated by federal courts on the basis that the statutes were overbroad and not narrowly tailored, in violation of the First Amendment or on the basis that such statutes burdened interstate commerce in violation of the Commerce Clause. Am. Library Ass’n v. Pataki, 969 F. Supp. 160 (S.D.N.Y. 1997) (New York); ACLU v. Johnson, 194 F.3d 1149 (10th Cir. 1999) (New Mexico); Cyberspace Commc’ns, Inc. v. Engler, 142 F. Supp. 2d 827 (E.D. Mich. 2001) (Michigan); Bookfriends, Inc. v. Taft, 223 F. Supp. 2d 932 (S.D. Ohio 2002) (Ohio); Am. Booksellers Found. v. Dean, 342 F.3d 96 (2nd Cir. 2003) (Vermont); PSINet, Inc. v. Chapman, 362 F.3d 227 (4th Cir. 2004) (Virginia); Southeast Booksellers Ass’n v. McMaster, 371 F. Supp. 2d 773 (D.S.C. 2005) (South Carolina).

In Miller v. California, the Supreme Court set out basic guidelines for the regulation of obscene, unprotected speech for adults. In order to be such, the speech must fall within the following guidelines:

(1) whether, the average person, applying contemporary community standards would find that the work appeals to the prurient interest;
(2) whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law; and
(3) whether the work taken as a whole, lacks serious literary, artistic, political, or scientific value.1

Prior to the ruling in Miller, the Supreme Court addressed the boundaries of protected speech and obscenity as to juveniles in Ginsberg v. New York, when it upheld a criminal statute which made it unlawful to sell material “harmful to minors” to persons under 17 years of age. The New York Statute defined material harmful to minors as follows:

that quality of…representation…of nudity…[which]…
(i) predominantly appeals to the prurient, shameful or morbid interest of minors, and

(ii) is patently offensive to prevailing standards in the adult community as a whole with respect to what is suitable material for minors, and

(iii) is utterly without redeeming social importance for minors.2

In Reno and Ashcroft, the Supreme Court adopted the first two prongs of the Ginsberg test and the third prong of the Miller test, as an appropriate standard to define obscene speech as to minors. Thus the three-part Miller-Ginsberg test examines:

1) whether the average person, applying contemporary community standards, would find that the work, taken as a whole, appeals to the prurient interest of minors;
2) whether the work depicts or describes, in a patently offensive way to prevailing standards in the adult community as a whole with respect to what is suitable material for minors, sexual conduct specifically defined by the applicable state law; and
3) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.

Many of the state “harmful to minors” statutes have attempted to incorporate this test as the definition of what is considered “harmful to minors” and thus prohibited from internet dissemination to minors.

The difficulty for these statutes arises largely from the difficulty in identifying the age or geographic location of senders and recipients of communications over the internet. For example, in Reno, the CDA provided that a person was guilty of transmitting indecent messages to a minor if he did it “knowing” that the recipient was under 18 years old.3 The Supreme Court recognized that given the absence of viable age verification technology, the “knowing” standard would interfere with adult-adult communication, since an adult internet user would have to assume that one or more minors will likely view most content published online, and therefore the CDA would burden that speech.4

Some states, however, have successfully limited their approach and survived constitutional challenges. In Simmons v. State, the Florida Supreme Court upheld Florida’s dissemination statute because it applied only to electronic mail sent to a specific individual that a defendant actually knew was a minor or believed to be a minor and thus did not supress adult-to-adult speech.5

State dissemination statutes are content-based regulations of protected speech, and thus, unlike content-neutral regulations, receive “strict scrutiny” by the courts. Under a strict scrutiny analysis, the content-based regulation will be upheld only where the state demonstrates that the limitation is necessary to serve a compelling state interest and that it is narrowly drawn to achieve that end. This is a high standard that many state dissemination statutes have failed to satisfy.

Another primary source of challenges to these statutes is in the Commerce Clause. The Commerce Clause grants Congress the “power… to regulate commerce with foreign nations, and among the several states.” U.S. Const. Art. I, § 8, cl. 3. Implicit in this affirmative grant is the negative or “dormant” Commerce Clause–the principle that the states impermissibly intrude on this federal power when they enact laws that unduly burden interstate commerce. Under the Commerce Clause, a state statute is per se invalid when it directly regulates or discriminates against interstate commerce, or when its effect is to favor in-state economic interests over out-of-state interests.6 Absent direct regulation or discrimination against interstate commerce, a state statute will be upheld “where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental… unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.”7

State efforts to regulate material deemed “harmful to minors” continues in two pending cases, Florence v. Shurtleff, No. 05-00485 (D. Utah) and Am. Booksellers Found. for Free Expression v. Cordray, No. 07-4375 (6th Cir.), challenging Utah and Ohio dissemination laws respectively.

Florence v. Shurtleff (Utah)

While Utah’s Harmful to Minors Act, Utah Code Ann. § 76-10-1206 (2007) has prohibited persons from intentionally distributing to minors material that is deemed “harmful to minors” since the early 1970s, the Utah Legislature extended this prohibition to the internet in 2005.8

In 2006, the court entered a stipulated preliminary injunction barring enforcement of the statute and an order staying discovery pending the conclusion of the 2007 General Session of the Utah State Legislature, in which amendments to HB 260 were planned.9

The Plaintiffs, which originally consisted of fourteen individuals and entities who are content and access providers on the internet, have been narrowed to a group eight in a series of opinions addressing issues of standing.10 Discovery in the case is now underway.11

While the most recent version of § 76-10-1206 contains exemptions for internet service providers and hosting companies, it would appear to still be phrased so as to apply simply to any “person” whether such content provider was based in the state of Utah or not. Several of the remaining plaintiffs are out-of-state content providers whose websites contain material that could be classified as “harmful to minors” under the statute. Also remaining among the plaintiffs is the named plaintiff, Florence, a Utah-based artist whose website displays his artwork, some of which depicts nude figures that he fears might be considered violative of the statute.

Although the briefing of the issues has not yet begun, the court is likely to revist some familiar ground, including both First Amendment and Commerce Clause-based challenges to the statute. As the statute does not appear limited, as the Florida statute in Simmons, to knowing transmission via email or instant message, it would be anomalous if it were not found unconstitutional.

Am. Booksellers Found. for Free Expression v. Cordray (Ohio)

Ohio’s O.R.C. § 2907.31 prohibits providing material and performances with certain sexual content to juveniles, while exempting material and performances disseminated to a juvenile by a “method of mass distribution [which] does not provide the [sender] the ability to prevent a particular recipient from receiving the information.” O.R.C. § 2907.31(D)(2)(b). The applicability of the law to matter communicated via the internet on websites, listservs, or in chat rooms was challenged by a group of publishers, distributors and retailers. The district court held the statute unconstitutional as applied to internet communication, finding it overbroad in violation of the First Amendment and enjoined the enforcement of the statute.12

On appeal to the Sixth Circuit, the Court decided, on its own initiative, to certify several questions of statutory interpretation to the Ohio Supreme Court.13 The Sixth Circuit has asked the Supreme Court of Ohio to answer these questions:

(1) Is the Attorney General correct in construing O.R.C. § 2907.31(D) to limit the scope of § 2907.31(A), as applied to electronic communications, to personally directed devices such as instant messaging, person-to-person e-mails, and private chat rooms?
(2) Is the Attorney General correct in construing O.R.C. § 2907.31(D) to exempt from liability material posted on generally accessible websites and in public chat rooms?

Notable about these certified questions is that Ohio’s Attorney General, in an effort to provide a constitutional reading of the statute, had himself urged these limiting constructions of the statute in briefing to the Sixth Circuit. While one might expect the plaintiffs to be pleased that even the state Attorney General appears to agree that certain broad–yet plausible–readings of the statute would be unconstitional, the plaintiffs are instead vexed by this strange ally, because, as the Sixth Circuit notes, the Attorney General has only propounded this view in this litigation, and not in an official opinion, and in any event “the Attorney General does not bind the state courts or local law enforcement authorities,” thus the Sixth Circuit believed it was “unable to accept [his] interpretation of the law as authoritative.”14

Further, since the Sixth Circuit certified these questions without input from the parties, the plaintiffs are concerned about some nuances that were lost in the shuffle.  The certified questions speak of “generally accessible” websites without defining the term, they do not address mailing lists or “listservs”, and appear to distinguish between public and private chat rooms although such a distinction had not been a focus of the litigation previously.

The Ohio Supreme Court has accepted the certified questions,15 and Petitioner’s merits brief was submitted on Jul. 10, 2009 and Respondent’s merits brief was submitted on Aug. 10, 2009.  A reply brief is due Sep. 21, 2009 and oral argument is scheduled for Oct. 20, 2009.16

The Ohio Supreme Court is thus faced with a daunting problem. Both of the parties before it agree, to a certain extent, that the statute the Court is being asked to consider is unconstitutional. The Attorney General urges the Court to adopt a limiting construction that, he argues, would render it constitutional, and the challengers primary argument is that the responsibility for writing a constitutional statute lies with Ohio’s General Assembly, not with the courts. This case presents another scenario where the states’ grasping with how they can constitutionally regulate internet communications has messy spillover consequences.

State Efforts to Regulate Internet Gambling

Commonwealth v. Interactive Media Ent’mt & Gaming Ass’n, No. 2009-000043 (Ky.).

States are also seeking to regulate other uses of the internet where the federal government has failed to act to their satisfaction.

On Sep. 18, 2008, a Franklin County Circuit Court in Kentucky ordered the “seizure” of 141 internet domain names as illegal “gambling device[s]” subject to forfeiture under KRS § 528.100. Commonwealth v. 141 Internet Domain Names, No. 08-CI-1409 (Franklin, Ky. Cir. Ct. Sep. 18, 2008). The order required the various registrars of the domains to immediately transfer the domain names to an account controlled by the Commonwealth of Kentucky. As an ex parte action brought against the domain names themselves, none of the owners of these domains or even the registrars were present for, or in many cases, given notice of, the initial forfeiture action. A subsequent hearing was held where various attorneys appeared on behalf of the domain owners and registrars and the court subsequently issued a more substantive opinion holding that it had jurisdiction over the in rem civil forfeiture claim, that the domain names were property subject to its in rem jurisdiction and possible civil forfeiture, that the domain names were “present in Kentucky” and thus subject to the Court’s jurisdiction, that the domain names were “gambling device[s]” subject to seizure under KRS § 528.100, and that the Court’s pre-notice ex parte seizure was consistent with due process. The Court wrote in summary,

We note that Opposing Groups and Lawyers argue any judicial interference of [sic] the Internet will create havoc. This doomsday argument does not ruffle the Court. The Internet, with all its benefits and advantages to modern day commerce and life, is still not above the law, whether on an international or municipal level. The challenge here is to reign in illegal activity and abuse of the Internet within the framework of our nation’s and Commonwealth’s existing common law norms and principles, until expressed guidelines from state and federal legislative bodies say otherwise. Commonwealth v. 141 Internet Domain Names, No. 08-CI-1409 (Franklin, Ky. Cir. Ct. Oct. 16, 2008).

The seizure order was appealed and struck down on Jan. 20, 2009 by the Kentucky Court of Appeals. Interactive Media Ent’mt & Gaming Ass’n v. Wingate, No. 2008-CA-002000 (Ky. Ct. App. 2009).

After the Court of Appeals struck down the seizure order, much of the news coverage and controversy surrounding the case seems to have disappeared, perhaps writing it off as some rare bit of over-reaching by a zealous local prosecutor and half-cocked judge. This would be a baseless assumption. The Court of Appeals decision was immediately appealed to the Kentucky Supreme Court and the Kentucky Secretary of the Justice and Public Safety Cabinet and the Governor himself, are still vigorously arguing for the merits of their approach and seeking to have the seizure order reinstated. Were the Kentucky Supreme Court to agree, we are merely in the calm before the real storm. Commentators also seem not to be troubled by the fact that the Kentucky Court of Appeals decision contained a dissent that held the domains were gambling devices subject to the statute. This is an issue about which careful judges can have a reasoned disagreement.

I am also unaware of any commentator that has noted in connection with the Kentucky appeal that the Court of Appeals of Washington has recently upheld its Gambling Act, Wash. Rev. Code § 9.46.240, which was amended in 2006 to prohibit the transmission of “gambling information” through “the internet” or “a telecommunications transmission system.” Rousso v. State, 204 P.3d 243 (Wash. Ct. App. 2009). In one of the only cases to interpret the UIGEA, the Court rejected a dormant Commerce Clause challenge and held that the State’s established interest in regulating gambling outweighed the burdens that the Gambling Act imposed on interstate and international commerce. While that case did not involve the additional drama of seizing domain names, the Court specifically rejected the analytic approach to the dormant Commerce Clause issues used in the “harmful to minors” cases such as Am. Library Ass’n v. Pataki, 969 F. Supp. 160 (S.D.N.Y. 1997). The Court rejects

“the idea that the Internet, as a technological medium for transmitting information, is so novel that special rules apply to it, rendering unconstitutional any state law that subjects it to regulation. Put bluntly, this is a simplistic understanding of the technology at issue, which, at its core, performs precisely the same functions as the “telephone, telegraph, radio, [or] semaphore”—the transmission of information over distance—only does so more quickly, cheaply, and efficiently. This being so, we decline to follow those cases that view the Internet as entirely off-limits to state regulation. Rather, the question is whether the burdens on commerce that the regulation imposes are “clearly excessive” in relation to the interests that the regulation seeks to serve.”17

Another striking aspect of the Kentucky domain names case is the crass commercial motivation that Kentucky officials brazenly admit motivates the action. Gov. Beshear is reported to have said, “The owners and operators of these illegal sites… deprive the Commonwealth of millions of dollars in revenue.”18 Gov. Beshear also noted that “unlicensed internet gambling significantly undermines and threatens horseracing, Kentucky’s signature industry and a key tourism industry, by creating unregulated and untaxed competition.”19 J. Michael Brown, Secretary of the Justice and Public Safety Cabinet, is reported to have said, “Gov. Beshear has once again demonstrated that he is willing to take bold and innovative steps to protect Kentuckians and Kentucky’s legitimate businesses… Illegal Internet gambling poses a unique threat to our Commonwealth… For some of our vital and most venerable legitimate enterprises, it undermines their exemplary regulatory compliance and siphons away their constituents.”20 When states seek to control sexually explicit content that they deem “harmful to minors” one is typically safe in assuming that the state’s motivations are well-intentioned. In the internet gambling context, however, Kentucky officials seem all too willing to admit that they are engaged in a protectionist move designed to favor in-state businesses at the expense of out-of-state interests.

The Courts and the State legislatures will continue to grapple with whether and how to regulate the internet in these areas, making these interesting and important cases to watch.

See also:

Footnotes

  1. Miller v. California, 413 U.S. 15 (1973). []
  2. Ginsberg v. New York, 390 U.S. 629 (1968). []
  3. Reno at 859. []
  4. Reno at 876. []
  5. Simmons v. State, 944 So. 2d 317 (2006). Simmons also upheld a “luring” or “importuning” statute which prohibited knowingly using a computer online service to seduce, solicit, lure, or entice a minor residing in Florida, to commit sexual acts proscribed by other Florida statutes. Such luring statutes are present in many states, and by containing the extra element of an intent to seduce, are distinguished from the dissemination statutes. []
  6. Philadelphia v. New Jersey, 437 U.S. 617 (1978). []
  7. Pike v. Bruce Church, Inc., 397 U.S. 137 (1970). []
  8. See H.B. 260, 56th Leg. Gen. Sess. (Utah 2005), amended by H.B. 5, 57th Leg., Gen Sess. (Utah 2007). []
  9. The King’s English, Inc. v. Shurtleff (D. Utah Aug. 25, 2006). []
  10. The King’s English, Inc. v. Shurtleff, 620 F. Supp. 2d 1272 (D. Utah Nov. 29, 2007); The King’s English, Inc. v. Shurtleff, 2008 U.S. Dist. LEXIS 60699 (D. Utah Aug. 8, 2008) (declining to reconsider). []
  11. On August 20, 2009, a certificate of service was filed by Utah Attorney General, Mark Shurtleff, indicating that the state’s answers to plaintiff’s discovery requests were served. []
  12. Am. Booksellers Found. for Free Expression v. Strickland, 512 F. Supp. 2d 1082 (S.D. Ohio 2007). The court had previously found unconstitutional an earlier version of the law that used a definition of “harmful to juveniles” that violated the First Amendment on several grounds. Bookfriends, Inc. v. Taft, 223 F. Supp. 2d 932 (S.D. Ohio 2002). []
  13. Am. Booksellers Found. for Free Expression v. Strickland, 560 F.3d 443, 447 (6th Cir. 2009). []
  14. Strickland, 560 F.3d at 447. []
  15. Cordray v. Am. Booksellers Found. for Free Expression, 907 N.E.2d 321 (Ohio 2009). []
  16. Cordray v. Am. Booksellers Found. for Free Expression, No. 2009-0609, Docket. []
  17. Rousso, 204 P.3d at 253. []
  18. Jessica Noll, Ky. Seizes Domain Names Of Web Gambling Sites, KYPost.com (Sep. 23, 2008). []
  19. Id. []
  20. Id. []

Categories: Indecent Speech and Censorship, Personal Jurisdiction.

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