As we previously reported, California legislature approved one of the nation's toughest net neutrality laws - California Internet Consumer Protection and Net Neutrality Act of 2018, known as SB 822. On Sunday, Governor Jerry Brown signed the bill, SB 822, into law.
The Trump administration wasted no time and swiftly filed suit against California to block California's new law late Sunday night. The Complaint was filed in the United States District Court for the Eastern District of California and can be found here.
The federal government seeks declaratory and injunctive relief against the State of California on the grounds that SB 822 is preempted by federal law and therefore violates the Supremacy Clause of the United States Constitution.
Specifically, the federal government argues that FCC's Restoring Internet Freedom, 33 FCC Rcd 311 (2018) ("2018 Order") direct preempts SB-882 and that SB-822 "conflicts with and otherwise impedes the accomplishment and execution of the full purposes and objectives of the federal law."
In its suit against California, the DOJ makes the point that California, among other states, has filed suit against the FCC to overturn the 2018 Order. But until the 2018 Order is overturned by the Court, it is the law of the land and that law precludes states like California to enact their own net neutrality rules.
Additionally, a recent Eight Circuit decision - Charter Advanced Servs. (MN), LLC v. Lange, No. 17-2290, 2018 WL 4260322, at *1 (8th Cir. Sept. 7, 2018) - may provide the DOJ some steam in its suit against California. How a service is classified affects a state's ability to regulate the service. Telecommunications services are generally subject to dual state and federal regulation, whereas information services are subject to federal law and any state regulation to the contrary is preempted by federal law. In Charter, the Court found that Charter Advance Service LLC's Voice Over Internet Protocol (VOIP) is an "information service" under the federal Telecommunications Act and thus preempts state regulation. Thus, the argument goes that the FCC's classification of broadband Internet access as "information services" means that any state regulation is preempted by federal law.
The DOJ's lawsuit against California is of great importance as it will be the litmus test for other states who seek to enact their own net neutrality rules after the roll back of Obama-Era net neutrality rules by the Trump administration. As of October 2, 2018, 30 states have introduced over 72 bills on the issue of net neutrality. Governors in six states (Hawaii, New Jersey, New York, Montana, Rhode Island, Vermont) have signed executed orders on net neutrality. Moreover, three states – Oregon, Vermont, and Washington – have enacted net neutrality legislation. See http://www.ncsl.org/research/telecommunications-and-information-technology/net-neutrality-legislation-in-states.aspx
The Court has issued a hearing on the DOJ's preliminary injunction motion for Wednesday, November 14, 2018. We'll keep an eye on this case for you.
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