On-line Application of Vermont “harmful to minors” Law Violates First Amendment and Dormant Commerce Clause

American Booksellers addresses the ability of states to regulate on-line transmission of sexually explicit material to minors. The case raises the specific question whether a state statute that limits electronic distribution of sexually explicit material—though it requires knowledge by the distributor that the recipient is a minor—nonetheless violates the First Amendment and dormant Commerce Clause. At stake is a recently enacted Vermont Statute, 13 V.S.A. § 2802(a), that prohibits electronic distribution of sexually explicit material deemed “harmful to minors” when the distribution occurs “outside the presence of a minor” but with “actual knowledge” by the distributor that the recipient is a minor. Plaintiffs Sexual Health Network, Inc., a for-profit corporation distributing sexuality-related information through its website, and American Civil Liberties Union of Vermont, whose website contains links to websites with sex-related information, filed suit against Vermont’s Governor, Attorney General and various State’s Attorneys to enjoin enforcement of 13 V.S.A. § 2802(a). The case was heard by the Second Circuit on appeal from a decision for plaintiffs at the District Court for the District of Vermont.

The Second Circuit affirmed the District Court’s finding that the statute violated the First Amendment and the dormant Commerce Clause as applied to plaintiffs’ websites, but limited the injunction issued by the District Court to enjoin defendants from enforcing § 2802(a) “only as applied to the kind of Internet speech presented by plaintiffs” (the District court enjoined enforcement of the statute generally).

Am. Booksellers Found. v. Dean, No. 02-7785, 2003 U.S. App. LEXIS 17908 (2nd Cir. Aug. 27, 2003).
Scope of Vermont’s Statute

The court began its discussion of the statute by rejecting the narrow interpretation of its scope urged by defendants. The “core prohibition” of Section 2802(a), according to the court, read as follows: “No person may, with knowledge of its character and content, and with actual knowledge that the recipient is a minor, sell, lend, distribute or give away [pornographic material] which is harmful to minors.”

Defendants argued that the language of the statute requiring “actual knowledge” that the recipient is a minor necessarily limited its application to include only direct “person-to-person” communications. In rejecting defendants’ argument, the court reasoned that “’[a]ctual knowledge’ that a recipient is a minor is possible not only in cases of two-person email but also when the disseminator of the material knows that there will be minors among the many people who visit the website or participated in the discussion group.”

The court concluded that the scope of the statute’s prohibition could be “easily read” to include material “posted on websites and to Internet or email discussion groups.” It was within this broad interpretation of the statute’s scope that its constitutional defects, discussed below, were found (in dicta, the court suggested that if the statute included language truly limiting its application only to direct, person-to-person communications, such as “two-person email correspondence”, it would be constitutional).

First Amendment

Though states may restrict a minor’s access to material considered harmful to minors even if the material is not obscene with respect to adults, First Amendment rights to free expression are violated, said the court, when restrictions aimed at protecting minors from such speech also limit non-obscene expression among adults. Application of Vermont’s statute to Internet media was offensive, because, according to the unchallenged findings of the District Court, currently available technologies that prevent access by minors to websites also discourage and exclude many adults from similar access—thus burdening protected speech. Moreover, because Vermont’s interest in discouraging on-line transmission of sexually explicit material to minors could be achieved through means less burdensome of protected speech (i.e., via the use of “a variety of user-based Internet filtering technologies that allow parents and teachers to oversee a minor’s use of the Internet”), the court found that the statute violated the First Amendment because it restriction of protected speech was not narrowly tailored.

Dormant Commerce Clause

For reasons likewise issuing from the nature of on-line media, the court found the statute violative of the dormant Commerce Clause as applied to plaintiffs’ websites. Dormant Commerce Clause analysis, the court noted, treats state regulations that “affirmatively” and “clearly” discriminate against interstate commerce differently than “evenhanded regulations that ‘burden interstate transactions only incidentally.’” Regulations within the former category are “virtually invalid per se,” while those within the latter are subject to the balancing test set forth in Pike v. Bruce Church, and will be held invalid only if “the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits.”

In its per se analysis, working from the proposition that state regulations may burden interstate commerce in violation of the dormant Commerce Clause when a statute “has the practical effect of requiring out-of-state commerce to be conducted at the regulating state’s direction,” the court immediately noted the problem posed by state regulation of Internet commerce: “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.”

The court thus reasoned that a state statute prohibiting distribution of certain kinds of information to its citizens via the Internet unavoidably (and impermissibly) requires non-citizens to avoid posting the same prohibited information—because of the boundary-less nature of the Internet, citizenship within a particular state is hardly a prerequisite for on-line distribution of information therein. The court concluded that “Vermont has projected § 2802(a) onto the rest of the nation …. [a]lthough Vermont aims to protect only Vermont minors, the rest of the nation is forced to comply with its regulation or risk prosecution.” Taking its line of reasoning to its logical conclusion (in dicta), the court prophesied the eventual extinction of all state-regulation of the Internet: “We think it likely that the Internet will soon be seen as falling within that class of subjects that are protected from State regulation [by the dormant Commerce Clause] because they ‘imperatively demand a single uniform rule.’”

Unlike the district court, however, which separately determined that Section 2802(a) violated the dormant Commerce Clause per se and failed the Pike balancing test, the Second Circuit, after concluding that the statute presented a per se violation of the dormant Commerce Clause because of the nature of its extraterritorial effects (i.e., its demand that other states “comply with its regulation or risk prosecution”), declined to consider whether the statute also failed the balancing test.

Ultimately, despite the court’s strong language in its First Amendment and dormant Commerce Clause analyses, and its suggestion that states may soon be precluded from any regulation of the Internet, the court dramatically narrowed the scope of the injunction issued by the District Court. Where the District Court found that Section 2802(a) violated the First Amendment and dormant Commerce Clause on its face, and, accordingly, enjoined enforcement of the statute generally, the Second Circuit considered the validity of the statute only as applied to plaintiffs (because plaintiffs challenged the statute based only on their own speech), and limited the injunction to enjoin defendants from enforcing the statute only “against the Internet speech upon which plaintiffs base their suit.”