Judge Alison Nathan, nominated by President Biden to the Second Circuit court of appeals, wrote a 2-1 decision joined by Biden nominee Sarah Merriam that reversed a lower court injunction and restored a New York consumer protection law requiring broadband providers to sell reduced price access to lower income consumers. Judge Richard Sullivan, nominated by President Trump, dissented. The April 2024 ruling was in New York State Telecommunications Ass’n Inc. v. James.
What is the background of this case?
In 2021, New York passed a law, the Affordable Broadband Act (ABA), that tries to expand internet access by requiring internet service providers (ISPs) to offer broadband service to low-income New Yorkers at reduced prices. A group of trade associations representing ISPs challenged the law in federal court. They claimed that federal law concerning the internet impliedly pre-empts the New York law and makes it invalid.
A district court agreed and barred New York from enforcing the law. New York appealed to the Second Circuit.
How did Judges Nathan and Merriam and the Second Circuit Rule and Why is it Important
Judge Nathan wrote a 2-1 decision, joined by Judge Merriam, which reversed the district court, vacated the injunction, and put the ABA law back into place. In a careful 55-page opinion, Nathan and Merriam rejected the ISPs’ arguments for preemption, which were supported by dissenting Trump judge Richard Sullivan. The majority explained that “neither the text and structure” of federal law, “the history of this type of regulation, nor relevant precedent support” the ISPs primary argument that “Congress intended to pre-empt the field of rate regulation of interstate communications services” and stop the states from passing consumer protection laws like ABA.
In 2018, the FCC reclassified the Internet as an “information service” rather than a more highly regulated “common carrier” service like telephones. That limits how the FCC can regulate it. Judge Nathan explained, in accord with the views of two other circuit courts of appeal, that the Federal Communications Commission (FCC) does not have the “statutory authority to enact (or preempt) common carrier-style regulations of broadband” and thus pre-empt state laws like ABA. Overall, Nathan and Merriam explained, ISPs or others who think it “unfair” for a state to require provision of internet services to low-income families at a reduced price can seek relief from the state legislature, Congress, or the FCC. “But they cannot ask this Court to distort well-established principles of administrative law and federalism to strike down a state law they do not like.”
The decision of Judge Nathan and Merriam was obviously important to New York’s law helping protect low-income consumers to take effect. It also sets an important precedent concerning rejection of corporate attempts to use pre-emption theory to invalidate important state laws in areas that the federal government has also taken action. This is especially so in the Second Circuit, including New York, Vermont and Connecticut. The ruling also reinforces the importance of promptly confirming more fair-minded judges like Judges Nathan and Merriam to our federal courts.