The Inevitable Occurs, California Puts New Neutrality Law on Hold

November 1, 2018 | by Andrew Regitsky

The Inevitable Occurs, California Puts New Neutrality Law on Hold

The state of California got an incredible amount of publicity a few weeks ago when its governor signed into law a bill that would reinstate key net neutrality rules including forbidding the blocking, throttling or paid prioritization of Internet traffic. The law would even forbid such popular services as zero data offerings. However, despite the tremendous accolades the law received from many, it had no chance of prevailing once the Department of Justice (DOJ) filed an appeal.

With the appeal of the FCC’s 2017 Restoring Internet Freedom Order currently being heard at the DC Circuit Court of Appeals, and the fate of the California law inexorably tied to the outcome of that case, the Attorney General (AG) of California knew his law would surely be stayed by the California district court until the DC Circuit made its decision. That is why he just announced that the California law would not be enforced until all appeals of the 2017 Order have concluded.   

The AG was due to respond to the motion for a preliminary injunction filed against the California law by the DOJ on October 26, 2018. Instead the DOJ and the state informed the judge in the Eastern District of California of a deal. 

As mentioned, under the terms of the agreement, proceedings in the case are paused until all appellate resolutions of the challenge to the FCC's net neutrality repeal are concluded. California stated that it could enforce the law once the Supreme Court either rules on the FCC's repeal or denies a petition to review based on the DC Circuit decision. That could take years.  

Moreover, even when the California net neutrality bill became law, it was obvious to most legal experts that it violated the Hobbs Act and would not override the national law. As the DOJ stated:

The Hobbs Act vests “exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of . . . all final orders of the Federal Communications Commission” in “[t]he court of appeals” sitting in direct review of the challenged order—here, the D.C. Circuit. Because the Hobbs Act provides that parties seeking to challenge the validity of FCC orders must do so through actions in the circuit courts...FCC regulations currently in effect must be presumed valid in district court actions such as this one, as district courts “lack jurisdiction to pass on the validity” of such rules...

The Hobbs Act’s protections fully apply to the FCC’s preemption determinations as well... As the Ninth Circuit explained, “[i]f the district court disagreed” with the FCC, “the effect of the proceeding would have been to enjoin, set aside, or suspend” the Commission’s ruling in contravention of the Hobbs Act. 

Nor does it matter that any challenge by California to the Order’s validity in this case would be a defensive one. By its terms, the Hobbs Act deprives district courts of jurisdiction “to determine the validity” of an FCC order. (United States v. State of California Memorandum of Law in Support of Plaintiff’s Motion for Preliminary Injunction. United States District Court, Eastern District of California, filed September 30, 2018, at p. 22.)

The question arises, why did California make such a national splash for its net neutrality law when it had no chance of standing? I hate to be cynical, but it appears to be a case where politicians were seeking attention without accomplishing anything. Some parties even claim it was nothing more than a giant publicity stunt.

Unfortunately, FCC Chairman Ajit Pai appears equally determined to receive credit for California’s decision, actually claiming the agreement is a victory for the FCC, which it surely is not. 

I am pleased that California has agreed not to enforce its onerous Internet regulations. This substantial concession reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address. Indeed, California’s agreement not to enforce these regulations will allow Californians to continue to enjoy free-data plans that have proven to be popular among consumers. The internet is inherently an interstate information service, as the Supreme Court has recognized, which means that only the federal government can set policy in this area. (Ajit Pai, October 26, 2018 Statement).

The FCC has not obtained a legal victory. Instead, we are back to where we were a few months ago. The Restoring Internet Freedom Order remains the law of the land and is under appeal at the DC Circuit Court. Perhaps if Democrats win the House of Representatives next week and the Republicans hold the Senate, it will finally give both political parties the incentive to make a net neutrality deal and once and for all ending all this needless net neutrality litigation.