The Internet and the dormant commerce clause

Yale Law Journal

Volumn 110, Issue 5, 2001, Pages 785-827

  Goldsmith, Jack L ^a   Sykes, Alan O ^a  

^a NONE

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EID: 0012695292     PISSN: 00440094     EISSN: None     Source Type: Journal    
DOI: 10.2307/797608     Document Type: Review

References (177)

1. E.g., David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367 (1996).
2. For a comprehensive critique, see LAWRENCE LESSIG, CODE AND OTHER LAWS OF CYBERSPACE (1999).
3. Jack L. Goldsmith, Against Cyberanarchy, 65 U. CHI. L. REV. 1199, 1221-24 (1998).
4. See, e.g., Reno v. ACLU, 521 U.S. 844 (1997) (invalidating two provisions of the federal Communications Decency Act on First Amendment grounds); ACLU v. Reno, 217 F.3d 162 (3d Cir. 2000) (invalidating the federal Child Online Protection Act on First Amendment grounds).
5. 969 F. Supp. 160 (S.D.N.Y. 1997).
6. N.Y. PENAL LAW §§ 235.20(6), .21(3) (McKinney, WESTLAW through 2000 legislation).
7. Am. Libraries Ass'n, 969 F. Supp. at 168-69.
8. Id. at 169.
9. Declan McCullagh, Brick by Brick, TIME DIGITAL DAILY, Jan. 31, 1997, at http://www.time.com/time/digital/daily/0,2822,11738,00.html. For similar sentiments, see, for example, Spencer Kass, Regulation and the Internet, 26 S.U. L. REV. 93, 105 (1998), stating, "[C]ourts will find many state statutes [that] purport to regulate the Internet to be unconstitutional under a Dormant Commerce Clause analysis."
10. Declan McCullagh, Brick by Brick, TIME DIGITAL DAILY, Jan. 31, 1997, at http://www.time.com/time/digital/daily/0,2822,11738,00.html. For similar sentiments, see, for example, Spencer Kass, Regulation and the Internet, 26 S.U. L. REV. 93, 105 (1998), stating, "[C]ourts will find many state statutes [that] purport to regulate the Internet to be unconstitutional under a Dormant Commerce Clause analysis."
11. See cases cited infra notes 45, 57-58, 161.
12. E.g., Dan L. Burk, Federalism in Cyberspace, 28 CONN. L. REV. 1095, 1123-34 (1996); Bruce P. Keller, The Game's the Same: Why Gambling in Cyberspace Violates Federal Law, 108 YALE L.J. 1569, 1593-96 (1999); David Post, Gambling on Internet Laws, AM. LAW., Sept. 1998, at 97; Glenn Harlan Reynolds, Virtual Reality and "Virtual Welters": A Note on the Commerce Clause Implications of Regulating Cyberporn, 82 VA. L. REV. 535, 537-42 (1996).
13. E.g., Dan L. Burk, Federalism in Cyberspace, 28 CONN. L. REV. 1095, 1123-34 (1996); Bruce P. Keller, The Game's the Same: Why Gambling in Cyberspace Violates Federal Law, 108 YALE L.J. 1569, 1593-96 (1999); David Post, Gambling on Internet Laws, AM. LAW., Sept. 1998, at 97; Glenn Harlan Reynolds, Virtual Reality and "Virtual Welters": A Note on the Commerce Clause Implications of Regulating Cyberporn, 82 VA. L. REV. 535, 537-42 (1996).
14. E.g., Dan L. Burk, Federalism in Cyberspace, 28 CONN. L. REV. 1095, 1123-34 (1996); Bruce P. Keller, The Game's the Same: Why Gambling in Cyberspace Violates Federal Law, 108 YALE L.J. 1569, 1593-96 (1999); David Post, Gambling on Internet Laws, AM. LAW., Sept. 1998, at 97; Glenn Harlan Reynolds, Virtual Reality and "Virtual Welters": A Note on the Commerce Clause Implications of Regulating Cyberporn, 82 VA. L. REV. 535, 537-42 (1996).
15. E.g., Dan L. Burk, Federalism in Cyberspace, 28 CONN. L. REV. 1095, 1123-34 (1996); Bruce P. Keller, The Game's the Same: Why Gambling in Cyberspace Violates Federal Law, 108 YALE L.J. 1569, 1593-96 (1999); David Post, Gambling on Internet Laws, AM. LAW., Sept. 1998, at 97; Glenn Harlan Reynolds, Virtual Reality and "Virtual Welters": A Note on the Commerce Clause Implications of Regulating Cyberporn, 82 VA. L. REV. 535, 537-42 (1996).
16. Indeed, an important conclusion of our Essay is that one cannot assess the validity under the dormant Commerce Clause of state Internet regulations taken as a whole; rather, the analysis depends very much on the type of Internet service, the costs of geographical identification and filtering associated with that service, the type of regulation, the nature of the penalties, and more.
17. U.S. CONST. art. I, § 8, cl. 3.
18. See CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 87 (1987).
19. Hughes v. Oklahoma, 441 U.S. 322, 337 (1979).
20. A rare exception is found in Maine v. Taylor, 477 U.S. 131 (1986), which upheld a ban on the importation of bait fish.
21. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).
22. 491 U.S. 324 (1989).
23. Id. at 336.
24. Id. at 338.
25. Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573 (1986).
26. Edgar v. MITE Corp., 457 U.S. 624 (1982).
27. See Donald H. Regan, Siamese Essays: (I) CTS Corp. v. Dynamics Corp. of America and Dormant Commerce Clause Doctrine; (II) Extraterritorial State Legislation, 85 MICH. L. REV. 1865, 1884 (1987).
28. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 818 (1985) (quoting Allstate Ins. v. Hague, 449 U.S. 302, 312-13 (1981)).
29. Healy, 491 U.S. at 336 (quoting MITE, 457 U.S. at 642-43 (plurality opinion)) (emphasis added).
30. Such cases form the bread and butter of the field of conflict of laws. See, e.g., Wood v. Hustler Magazine, Inc., 736 F.2d 1084 (5th Cir. 1984) (holding that Texas law applies for an invasion of privacy caused by a publication in California); Rutherford v. Goodyear Tire & Rubber Co., 943 F. Supp. 789, 790-91 (W.D. Ky. 1996) (holding that Indiana product-design law governs even though products were designed in other states), aff'd, 142 F.3d 436 (6th Cir. 1998).
31. CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 88 (1987).
32. See Daniel R. Fischel, From MITE to CTS: State Anti-Takeover Statutes, the Williams Act, the Commerce Clause, and Insider Trading, 1987 SUP. CT. REV. 47, 88-90.
33. MITE, 457 U.S. at 641 (plurality opinion).
34. 969 F. Supp. 160 (S.D.N.Y. 1997).
35. N.Y. PENAL LAW §§ 235.20(6), .21(3) (McKinney, WESTLAW through 2000 legislation). The Act defines a communication as "harmful to minors" if it (a) "appeals to the prurient interest in sex of minors," (b) "[i]s patently offensive to prevailing standards" concerning material suitable for minors, and (c) "lacks serious literary, artistic, political and scientific value for minors." Id. § 235.20(6).
36. Id. § 235.21(3).
37. Id. § 70.00; see id. § 235.21.
38. Am. Libraries Ass'n, 969 F. Supp. at 167 (quoting ACLU v. Reno, 929 F. Supp. 824, 844 (E.D. Pa. 1996), aff'd, 521 U.S. 844 (1997)).
39. Id.
40. Id. at 166-67.
41. Id. at 180 (citing ACLU, 929 F. Supp. at 855-56).
42. Id. at 171.
43. Id. at 173-77.
44. Id. at 179.
45. Id. at 178.
46. Id. at 177-81.
47. Id. at 183.
48. Id. at 181-84.
49. See ACLU v. Johnson, 194 F.3d 1149 (10th Cir. 1999) (invalidating under the dormant Commerce Clause a New Mexico statute criminalizing dissemination by computer of materials harmful to minors); PSINet, Inc. v. Chapman, 108 F. Supp. 2d 611 (W.D. Va. 2000) (enjoining enforcement of a Virginia pornographic communication law at the preliminary injunction stage, in part on dormant Commerce Clause grounds); Cyberspace Communications, Inc. v. Engler, 55 F. Supp. 2d 737 (E.D. Mich. 1999) (invalidating under the dormant Commerce Clause a Michigan statute criminalizing the use of computers to distribute sexually explicit materials to minors).
50. See Hatch v. Superior Court, 94 Cal. Rptr. 2d 453, 485-86 (Ct. App. 2000); People v. Foley, 709 N.Y.S.2d 467 (2000). American Libraries Ass'n itself contemplated this distinction. 969 F. Supp. at 179.
51. Foley, 709 N.Y.S.2d at 477.
52. Hatch, 94 Cal. Rptr. 2d at 472-73.
53. See Spam Laws: United States: State Laws, at http://www.spamlaws.com/state/index.html (last visited Jan. 20, 2001).
54. CAL. BUS. & PROF. CODE §1 7538.4 (West 2000).
55. Id.
56. Id. § 17538(f).
57. Id. § 17538.45(f).
58. WASH. REV. CODE ANN. §§ 19.190.010-.020 (West 2000).
59. Id. 56. Id. § 19.190.040.
60. The California court simply issued a conclusory order asserting that the California law "unconstitutionally subjects interstate use of the Internet to inconsistent regulations, therefore violating the dormant Commerce Clause." Ferguson v. Friendfinder, Inc., No. 307309, at 2 (Cal. Super. Ct. June 2, 2000) (order sustaining demurrer).
61. State v. Heckel, No. 98-2-25480-7, at 34, 36 (Wash. Super. Ct. Mar. 10, 2000) (oral transcript).
62. Id. 60. State v. Heckel, No. 98-2-25480-7, 2000 WL 979720, at *1 (Wash. Super. Ct. Mar. 10, 2000) (order granting summary judgment).
63. A nonpecuniary externality is conventionally defined as a harm or benefit from a transaction that is not transmitted through the price system. A pecuniary externality, by contrast, is reflected in prices. Pollution from an industry that harms people other than those in the industry itself and its customers is the paradigm example of a nonpecuniary externality. The harm to an unsuccessful bidder at an auction (the loss of an opportunity to consummate a purchase at a favorable price) that results from being outbid is an example of a pecuniary externality. Only nonpecuniary externalities are a source of "market failure" that may warrant corrective intervention. DAVID D. FRIEDMAN, PRICE THEORY: AN INTERMEDIATE TEXT 517-26 (2d ed. 1990).
64. See, e.g., New Energy Co. v. Limbach, 486 U.S. 269, 273-74 (1988); H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 532-39 (1949); Daniel A. Farber & Robert E. Hudec, Free Trade and the Regulatory State: A GATT's-Eye View of the Dormant Commerce Clause, 47 VAND. L. REV. 1401, 1406 (1994); Donald H. Regan, The Supreme Court and State Protectionism: Making Sense of the Dormant Commerce Clause, 84 MICH. L. REV. 1091, 1110-25 (1986).
65. See, e.g., S. Pac. Co. v. Arizona, 325 U.S. 761, 767 n.2 (1945); S.C. State Highway Dep't v. Barnwell Bros., 303 U.S. 177, 185 n.2 (1938); JESSE H. CHOPER, JUDICIAL REVIEW AND THE NATIONAL POLITICAL PROCESS 205-06 (1980); Julian N. Eule, Laying the Dormant Commerce Clause to Rest, 91 YALE L.J. 425, 439 (1982).
66. Several prominent treatments of the dormant Commerce Clause have used economic efficiency as the touchstone for harmonizing the economic and process rationales for the doctrine. E.g., Saul Levmore, Interstate Exploitation and Judicial Intervention, 69 VA. L. REV. 563, 567-68 (1983); Mark Tushnet, Rethinking the Dormant Commerce Clause, 1979 WIS. L. REV. 125, 130-40.
67. For a general theoretical treatment, see, for example, WALLACE E. OATES, FISCAL FEDERALISM 11-13, 54-63 (1972). For application in the American federal context, see, for example, Michael W. McConnell, Federalism: Evaluating the Founders' Design, 54 U. CHI. L. REV. 1484, 1504 (1987). For application in the international context, see, for example, Alan O. Sykes, The (Limited) Role of Regulatory Harmonization in International Goods and Services Markets, 2 J. INT'L ECON. L. 49 (1999).
68. See generally JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT (1962) (discussing the role of interest groups in legislation in various voting systems); MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION (1965) (discussing the formation and effectiveness of pressure groups).
69. See generally JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT (1962) (discussing the role of interest groups in legislation in various voting systems); MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION (1965) (discussing the formation and effectiveness of pressure groups).
70. Such restrictions reduce competition and raise prices. A welfare loss occurs because goods or services are purchased from higher-cost domestic suppliers rather than lower-cost foreign suppliers, and because higher prices cause some consumers to exit the market even though they could benefit from transacting at the lower price that protectionism forecloses. FRIEDMAN, supra note 61, at 537-42; PETER H. LINDERT, INTERNATIONAL ECONOMICS 123-26 (9th ed. 1991). Some caveats exist, but none are essential to what follows and they need not detain us.
71. Supra text accompanying notes 14-16, 62. To see why discrimination against outsiders serves as a marker for protectionism, consider an environmental law that requires pollution-control devices on foreign-manufactured automobiles but not on locally manufactured automobiles. It is difficult to imagine a justification for such a nonneutral policy other than a desire on the part of local regulators to confer a cost advantage on local manufacturers and thus to protect them to a degree from the consequences of foreign competition (or, equivalently, a desire to shift the costs of regulation to foreign firms). A welfare loss arises because discriminatory regulation can induce consumers to choose domestic products over imported products even when the imported goods are superior in quality or less costly to produce, other things being equal. Any regulatory benefits could be achieved more cheaply through nondiscriminatory regulations. Dormant Commerce Clause jurisprudence thus embodies a strong presumption against the validity of discriminatory state legislation.
72. Donald Regan, Movement of Goods Under the Dormant Commerce Clause and the European Community Treaty 9-12 (2000) (unpublished manuscript, on file with authors).
73. R.H. Coase, The Problem of Social Cost, 3 J.L. & ECON. 1, 16-17 (1960).
74. See A.C. PIGOU, THE ECONOMICS OF WELFARE 192-96 (4th ed. 1932).
75. If partial or complete abatement of the harm is possible through means other than a reduction in output (pollution-control technology, for example), the analysis is much the same. The proper Pigouvian tax will still equal the value of the external harm from each unit of output, although the tax must adjust in accordance with whatever abatement measures are in place. Producers of the harm will then have a choice between paying the tax and investing in abatement measures that reduce or eliminate the tax. They will choose the most cost-effective option, and the resulting equilibrium with a possibly lower or zero tax due to abatement will also be efficient.
76. See FRIEDMAN, supra note 61, at 520 (discussing effluent fees charged to polluters).
77. Coase, supra note 70, at 6-8.
78. o, above S + t, and to the left of D.
79. See Fischel, supra note 28, at 75; Levmore, supra note 64, at 570-75.
80. E.g., Quill Corp. v. North Dakota, 504 U.S. 298 (1992) (holding that the dormant Commerce Clause prohibits states from imposing a use tax on mail-order firms).
81. Supra p. 795.
82. Under the First Amendment, the constitutionality of a prohibition on obscenity turns on "community standards" that differ across (small) jurisdictions. Miller v. California, 413 U.S. 15, 24-25 (1973).
83. Sable Communications, Inc. v. FCC, 492 U.S. 115, 125-26 (1989); see also Hamling v. United States, 418 U.S. 87, 106 (1974) ("The fact that distributors . . . may be subjected to varying community standards in the various federal judicial districts . . . does not render a federal statute unconstitutional . . . .").
84. 457 U.S. 624 (1982).
85. Id. at 626-27.
86. Id. at 642 (plurality opinion).
87. Id.
88. Id.
89. Healy v. Beer Inst., 491 U.S. 324 (1989); see supra notes 18-20 and accompanying text.
90. BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996).
91. Id. at 572-73.
92. E.g., Healy, 491 U.S. at 336 ("[A] statute that directly controls commerce occurring wholly outside the boundaries of a State exceeds the inherent limits of the enacting State's authority and is invalid regardless of whether the statute's extraterritorial reach was intended by the legislature."); MITE, 457 U.S. at 642-43 (plurality opinion) (holding that the dormant Commerce Clause "precludes the application of a state statute to commerce that takes place wholly outside of the State's borders, whether or not the commerce has effect within the state"). Moreover, it is clear that in some cases, the Court acts as if the extraterritoriality and balancing analyses are distinct. See, e.g., MITE, 457 U.S. at 641-46.
93. E.g., Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981) (applying Minnesota law to an accident in Wisconsin consistent with the Full Faith and Credit and Due Process Clauses); Alaska Packers Ass'n v. Indus. Accident Comm'n, 294 U.S. 532 (1935) (applying a California workman's compensation law to an employee injured in Alaska consistent with the Full Faith and Credit Clause).
94. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).
95. Cf. Fischel, supra note 28, at 90 (suggesting a balancing-test interpretation of CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69 (1987)).
96. E.g., Kassel v. Consol. Freightways Corp., 450 U.S. 662 (1981) (invalidating an Iowa restriction on truck length); Raymond Motor Transp., Inc. v. Rice, 434 U.S. 429 (1978) (invalidating a Wisconsin regulation barring 65-foot double trucks); Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520 (1959) (invalidating an Illinois mudguard regulation); S. Pac. Co. v. Arizona, 325 U.S. 761 (1945) (invalidating an Arizona regulation limiting train lengths); see also Regan, supra note 62, at 1092 (noting that transportation cases are balancing cases).
97. E.g., Bibb, 359 U.S. at 526-27.
98. E.g., S. Pac. Co., 325 U.S. at 770-71, 774.
99. 481 U.S. 69.
100. Healy v. Beer Inst., 491 U.S. 324, 337 (1989); Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 583-84 (1986).
101. This is true, for example, of Web gambling operators, such as Planet Luck, http://www.planetluck.com (last visited Nov. 22, 2000), and of some financial service pages, such as WSJ.com (the Wall Street Journal's online page), http://www.wsj.com (last visited Nov. 22, 2000).
102. Other methods that are currently less effective include credit card verification, content-filtering software, and digital certificates.
103. Such as Adult Check, http://www.adultcheck.com (last visited Nov. 22, 2000).
104. ACLU v. Reno, 31 F. Supp. 2d 473, 489 (E.D. Pa. 1999).
105. ACLU v. Reno, 217 F.3d 162, 170-71 & n.15 (3d Cir. 2000). To obtain an adult PIN, one must pay by credit card online, or fax or mail an application and a check and a copy of a passport or driver's license to the adult identification firm. ACLU, 31 F. Supp. 2d at 490. The online process takes a few minutes.
106. ACLU, 31 F. Supp. 2d at 490.
107. Id. at 491.
108. Id. at 488.
109. The information in this and the following paragraph is based on a technical memorandum by Infosplit.com, a leading geographical identification firm, Memorandum, InfoSplit Core Technology (Sept. 25, 2000) (on file with authors) [hereinafter InfoSplit memo], as well as on interviews with two experts on geographical filtering of the Internet, Telephone Interview with Martin Hald, Xdrive.com (Sept. 18, 2000); Telephone Interview with Cyril Houri, InfoSplit.com (Sept. 7, 2000), various news reports, e.g., Stefanie Olsen, Geographic Tracking Raises Opportunities, Fears, at http://www.news.cnet.com/news/0-1005-200.3424168.html (last visited Nov. 22, 2000), and the findings in the recent Yahoo decision, Ligue Contre le Racisme et L'Antisémitisme v. Yahoo! Inc., T.G.I. Paris, Nov. 20, 2000, available at http://www.junscom. net/txt/jurisfr/cti/tgiparis20001120.pdf (last visited Jan. 29, 2001); infra notes 165-167 and accompanying text. This technology is in flux, and nothing in our analysis turns on the precise accuracy of this information. The point that matters is that geographical filtering is increasingly feasible at some cost, that cost is dropping, and courts should inquire into these costs on a contemporary basis in performing a dormant Commerce Clause analysis.
110. E.g., Akamai, http://www.akamai.com (last visited Feb. 19, 2001) (using EdgeScape technology); BorderControl.com, http://www.bordercontrol.com (last visited Nov. 22, 2000); Digital Island, http://www.digitalisland.com (last visited Feb. 19, 2001) (using TraceWare technology); InfoSplit, http://www.infosplit.com (last visited Feb. 19, 2001).
111. See InfoSplit memo, supra note 107; Telephone Interview with Martin Hald, supra note 107; Telephone Interview with Cyril Houri, supra note 107; Olsen, supra note 107.
112. See Telephone Interview with Martin Hald, supra note 107; Telephone Interview with Cyril Houri, supra note 107; Olsen, supra note 107.
113. To take three of many examples: JumpTV.com uses geographical filtering to ensure that its retransmission of television signals via the Internet in Canada does not enter the United States and thereby violate U.S. copyright law. Steven Bonisteel, JumpTV Aims To Be Next iCraveTV -Without Lawsuits, at http://www.newsbytes.com/pubnews/00/155297.html (Sept. 15, 2000). Medical and science publisher HiWire Publishing relies on geographic filtering software "to avoid criminal liability for advertising pharmaceuticals on the Web in countries where they are banned." Max Smetannikov, Digital Island To Release "Traceware," at http://www.zdnet.com/ filters/printerfriendly/0,6061,2338594-35,00.html (Sept. 21, 2000). And Nevada's recent Internet gambling scheme uses a technology that ensures that gambling is taking place in Nevada. Ronna Abramson, Nevada Takes Small Step for Online Gambling, at http://www.thestandard.com/ article/display/0,1151,19410,00.html (Oct. 13, 2000).
114. Burk, supra note 11, at 1114.
115. Johnson & Post, supra note 1, at 1374.
116. See Goldsmith, supra note 3, at 1223-24, 1229-30; Lawrence Lessig, The Zones of Cyberspace, 48 STAN. L. REV. 1403, 1405 (1996).
117. See Goldsmith, supra note 3, at 1223-24, 1229-30; Lawrence Lessig, The Zones of Cyberspace, 48 STAN. L. REV. 1403, 1405 (1996).
118. Lawrence Lessig & Paul Resnick, Zoning Speech on the Internet: A Legal and Technical Model, 98 MICH. L. REV. 395, 427 & n.102 (1999).
119. Senator Robert Torricelli has proposed something like this in national legislation: the Electronic Mailbox Protection Act of 1997, S. 875, 105th Cong. (1997).
120. The state of Washington maintains a registry of e-mail addresses of Washington residents who do not want to receive spam. Wash. Ass'n of Internet Serv. Providers, WAISP Registry Page, at http://registry.waisp.org (last visited Jan. 20, 2001). But in order to ensure that the registry itself is not used as a spamming database, addresses registered on it can be verified only one address at a time.
121. Supra notes 50-56 and accompanying text.
122. Am. Libraries Ass'n v. Pataki, 969 F. Supp. 160, 179 (S.D.N.Y. 1997).
123. Id.
124. See id. (discussing such state laws).
125. CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 92 (1987) (citations omitted).
126. Most prominently, they can regulate the in-state financial intermediaries and Internet service providers that facilitate Internet communications with offshore sites. See Goldsmith, supra note 3, at 1222-23; Jack Goldsmith, Regulation of the Internet: Three Persistent Fallacies, 73 CHI.-KENT L. REV. 1119, 1223-27 (1999).
127. On the assumption that pornography sites from the United States were effectively blocked to children in regulating states, children would incur costs, perhaps nontrivial costs, in substituting unblocked foreign pornography websites. On most search engines, searches using terms such as "sex" or "nude" produce an enormous number of popular U.S. sites that children would have to cull through before finding foreign, unregulated sites. This could be a time-consuming process that would deter children's access at the margin. Of course, clever children can circumvent this process, blocking regulations in the United States might lead foreign sites to become more prevalent, and discrimination technology can make it easier for children to reach desired offshore sites. It still seems likely, however, that substitution to foreign websites would not be costless on average. The last five years of Internet history have made it clear that territorial governments can, through a variety of means, raise the cost of Internet flows from abroad. See sources cited supra note 123.
128. See Am. Libraries Ass'n, 969 F. Supp. at 179 (noting that prevention of sexual exploitation of minors is a major purpose of the New York statute).
129. E.g., Innes v. Tobin, 240 U.S. 127, 131 (1916); Gee v. Kansas, 912 F.2d 414, 418 (10th Cir. 1990).
130. See, e.g., Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418-20 (9th Cir. 1997).
131. 969 F. Supp. at 173-77.
132. See ACLU v. Reno, 217 F.3d 162, 166 (3d Cir. 2000) (invalidating the Child Online Protection Act on First Amendment grounds).
133. See LESSIG, supra note 2, at 54-58 (arguing that identification technology, even if imperfect, facilitates effective Internet regulation); Goldsmith, supra note 3, at 1229-30 (same).
134. See supra notes 34-38 and accompanying text; see also cases cited supra note 45 (following the assumptions in Am. Libraries Ass'n). 132. ACLU v. Reno, 929 F. Supp. 824, 845-46 (E.D. Pa. 1996), aff'd, 521 U.S. 844 (1997).
135. ACLU v. Reno, 31 F. Supp. 2d 473, 489-92 (E.D. Pa. 1999).
136. An early response to spamming was a common-law action for trespass to chattels. See, e.g., Compuserve, Inc. v. Cyber Promotions, Inc., 962 F. Supp. 1015, 1017 (S.D. Ohio 1997).
137. Indeed, economists have long argued that with costly enforcement, high penalties imposed on rare occasions may be the cheapest way to achieve optimal deterrence. E.g., Gary S. Becker, Crime and Punishment: An Economic Approach, 76 J. POL. ECON. 169, 183-84 (1968).
138. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).
139. Greater New Orleans Broad. Ass'n v. United States, 527 U.S. 173, 188 (1999) (citations and internal quotation marks omitted). Greater New Orleans Broadcasting applied intermediate scrutiny in the First Amendment context, but there is no reason to believe that the balancing test and associated level of least-restrictive-means scrutiny are any different in the dormant Commerce Clause context.
140. Supra note 32 and accompanying text.
141. See Derek Simmons, No Seconds on Spam, 3 J. SMALL & EMERGING BUS. L. 389, 390-97 (1999).
142. State v. Heckel, No. 98-2-25480-7, at 35-36 (Wash. Super. Ct. Mar. 10, 2000) (oral transcript).
143. Id.
144. See supra note 122 and accompanying text.
145. Supra notes 136-138 and accompanying text.
146. See supra notes 116-117 and accompanying text. As we explained in note 117, these technologies are potentially self-defeating.
147. See Daniel A. Farber, State Regulation and the Dormant Commerce Clause, 3 CONST. COMMENT. 395, 407-10 (1986); Regan, supra note 62, at 1147-54; Alan O. Sykes, Regulatory Protectionism and the Law of International Trade, 66 U. CHI. L. REV. 1, 43-45 (1999); Tushnet, supra note 64, at 160-61.
148. See Daniel A. Farber, State Regulation and the Dormant Commerce Clause, 3 CONST. COMMENT. 395, 407-10 (1986); Regan, supra note 62, at 1147-54; Alan O. Sykes, Regulatory Protectionism and the Law of International Trade, 66 U. CHI. L. REV. 1, 43-45 (1999); Tushnet, supra note 64, at 160-61.
149. See Daniel A. Farber, State Regulation and the Dormant Commerce Clause, 3 CONST. COMMENT. 395, 407-10 (1986); Regan, supra note 62, at 1147-54; Alan O. Sykes, Regulatory Protectionism and the Law of International Trade, 66 U. CHI. L. REV. 1, 43-45 (1999); Tushnet, supra note 64, at 160-61.
150. See Daniel A. Farber, State Regulation and the Dormant Commerce Clause, 3 CONST. COMMENT. 395, 407-10 (1986); Regan, supra note 62, at 1147-54; Alan O. Sykes, Regulatory Protectionism and the Law of International Trade, 66 U. CHI. L. REV. 1, 43-45 (1999); Tushnet, supra note 64, at 160-61.
151. In a recent Supreme Court dormant Commerce Clause decision, every opinion acknowledged the Court's relative incompetence at balancing. Gen. Motors v. Tracy, 519 U.S. 278, 308-09 (1997) ("[The] Court is institutionally unsuited to gather the facts upon which economic predictions can be made, and professionally untrained to make them. We are consequently ill qualified to develop Commerce Clause doctrine dependent on any such predictive judgments." (citations omitted)); id. at 312-13 (Scalia, J., concurring) (affirming Scalia's opposition to dormant Commerce Clause balancing); id. at 315 (Stevens, J., dissenting) (noting that "speculation about the 'real-world economic effects' of a decision like this one is beyond our institutional competence"). On this reading of Tracy, see Regan, supra note 69, at 15-18. Among the Justices, Scalia has pressed the case against balancing most vigorously. E.g., Tyler Pipe Indus. v. Wash. State Dep't of Revenue, 483 U.S. 232, 259-65 (1987) (Scalia, J., dissenting).
152. Among the forty or so dormant Commerce Clause decisions during the past twenty years, only two - Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888 (1988), and Edgar v. MITE Corp., 457 U.S. 624 (1982) - turned on a balancing rationale. In Bendix, the Court suggested that balancing was unnecessary because the statute in question, a discriminatory tolling provision, "might have been held to be a discrimination that invalidates without extended inquiry." 486 U.S. at 891. For a count and analysis of dormant Commerce Clause cases since 1980, see Regan, supra note 69.
153. See generally Yochai Benkler, Net Regulation: Taking Stock and Looking Forward, 71 COLO. L. REV. 1203 (2000) (describing recent Internet regulations).
154. Supra note 4.
155. Unsolicited Electronic Mail Act of 1999, H.R. 3113, 106th Cong. (2000).
156. See, e.g., Miller Proposes Bill To Can Spam, at http://techlawjournal.com/congl06/ spam/19990610.htm (June 10, 1999) (describing pending federal spam legislation modeled after California's antispam law).
157. See supra Section II.A.
158. See supra notes 100-114 and accompanying text.
159. Am. Libraries Ass'n v. Pataki, 969 F. Supp. 160, 179 (S.D.N.Y. 1997).
160. Id. at 183.
161. Supra Section III.B.
162. E.g., Swedenburg v. Kelly, No. 00 Civ. 0778, 2000 WL 1264285 (S.D.N.Y. Sept. 5, 2000).
163. E.g., Ford Motor Co. v. Tex. Dep't of Transp., 106 F. Supp. 2d 905 (W.D. Tex. 2000).
164. Santa Fe Natural Tobacco Co. v. Spitzer, No. 00 Civ. 7274, 2000 WL 1694307 (S.D.N.Y. Nov. 13, 2000).
165. See, e.g., Bridenbaugh v. Freeman-Wilson, 227 F.3d 848 (7th Cir. 2000).
166. 218 F.3d 30 (1st Cir. 2000).
167. Lorillard Tobacco Co. v. Reilly, 84 F. Supp. 2d 180, 204 n. 19 (D. Mass. 2000) (citing Am. Libraries Ass'n v. Pataki, 969 F. Supp. 160, 169 (S.D.N.Y. 1997)), aff'd in part and rev'd in part, 218 F.3d 30.
168. Consol. Cigar, 218 F.3d at 55-57.
169. See H. Joseph Hameline & William Miles, The Dormant Commerce Clause Meets the Internet, 41 BOSTON B.J. 8, 8 (1997).
170. See Ligue Contre le Racisme et L'Antisémitisme v. Yahoo! Inc., T.G.I. Paris, Nov. 20, 2000, available at www.juriscom.net/txt/jurisfr/cti/tgiparis20001120.pdf (last visited Jan. 29, 2001). For English-language stories about the opinion, see John Tagliabue, French Uphold Ruling Against Yahoo on Nazi Sites, N.Y. TIMES, Nov. 21, 2000, at C8; and Kristi Essick, Yahoo Told To Block Nazi Goods from French, at http://www.thestandard.com/article/display/0,1151,20320, 00.html (Nov. 20, 2000).
171. Yahoo!, T.G.I. Paris, Nov. 20, 2000, available at http://www.juriscom.net/txt/jurisfr/cti/ tgiparis20001120.pdf (last visited Jan. 29, 2001).
172. Id. at 2, 20.
173. See, e.g., Hartford Fire Ins. Co. v. California, 509 U.S. 764, 796 (1993) (applying U.S. antitrust law when activity in England has a "substantial effect in the United States"); Case 89/85, Ahlstroem v. Commission, 1988 E.C.R. 5193 (applying a similar "effects" test). See generally Roger P. Alford, The Extraterritorial Application of Antitrust Laws: A Postscript on Hartford Fire Insurance Co. v. California, 34 VA. J. INT'L L. 213 (1993) (explaining the convergence of European and American courts around the substantial-effects test for extraterritorial regulation). The Restatement (Third) of Foreign Relations Law states that the effects test is a legitimate basis for extraterritorial jurisdiction, RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES § 402 (1987), but adds that a state may not exercise such jurisdiction when it would be "unreasonable" to do so, id. § 403. This reasonableness requirement has little basis in state practice and does not reflect customary international law. William S. Dodge, Extraterritoriality and Conflict-of-Laws Theory: An Argument for Judicial Unilateralism, 39 HARV. INT'L L.J. 101, 139-40 & nn.241-42 (1998).
174. See Goldsmith, supra note 3, at 1217-19.
175. General Agreement on Tariffs and Trade (GATT), Oct. 30, 1947, art. III, 61 Stat. A-11, 55 U.N.T.S. 194 (incorporated into the agreement establishing the World Trade Organization), reprinted in JOHN H. JACKSON ET AL., DOCUMENTS SUPPLEMENT TO LEGAL PROBLEMS OF INTERNATIONAL ECONOMIC RELATIONS 20-21 (3d ed. 1995).
176. GATT, supra note 170, art. XX(a).
177. SEE ALAN O. SYKES, PRODUCT STANDARDS FOR INTERNATIONALLY INTEGRATED GOODS MARKETS 68 (1995).