California law on neutrality is preempted, 9th Circuit panel hears

An attorney for a wireless communications company trade group told a 9th U.S. Circuit Court of Appeals panel Tuesday that California's net neutrality law should be enjoined because it is preempted by federal law.

The telecom and cable companies are seeking a preliminary injunction to block enforcement of a 2018 state law, SB 822, which bars them from favoring some content and users over others.

U.S. District Judge John A. Mendez in Sacramento rejected the preliminary injunction in February. The trade groups appealed. ACA Connects v. Bonta, 21-15430 (9th Cir., filed March 11, 2021).

California passed its own net neutrality law after the Federal Communications repealed federal net neutrality rules under President Donald Trump's administration.

Scott H. Angstreich, a partner with Kellogg, Hansen, Todd, Figel & Frederick PLLC who represents CTIA -- The Wireless Association, said the state's net neutrality law undermines the federal regime governing interstate activity.

"By copying the FCC's broadband definition, California is regulating the same service as the FCC and imposing on it the very rules the [agency] rejected," Angstreich told the panel.

Instead of a single, national standard under the Communications Act, Angstreich said the industry faces a "patchwork of conflicting state regulations."

But Deputy Attorney General P. Patty Li, citing the importance of ensuring that cell phones are not throttled or blocked during wildfires, argued that states do not need federal authorization to exercise their own police powers.

"There is no conflict between California's net neutrality law and the 2018 order" by the FCC repealing federal rules, Li told the panel.

To bolster his case, Angstreich cited a 1994 opinion written by one of the panelists, Senior 9th Circuit Judge Mary M. Schroeder, in which state regulations on phone companies offering enhanced services were preempted. California v. FCC, 39 F.3d 919, 932 (9th Cir. 1994).

Schroeder, an appointee of President Jimmy Carter, asked whether federal preemption would preclude lawsuits filed by California residents.

"Under my understanding of Mozilla [a 2019 decision by the D.C. Circuit Court of Appeals], the consumer protection laws are still there," she said. Mozilla Corp. v. FCC, 940 F.3d 1 74-86 (D.C. Cir. 2019).

"The FCC has delegated statutory authority," Angstreich replied. "Mozilla does not suggest the states can upend that."

Senior 9th Circuit Judge J. Clifford Wallace, an appointee of President Richard M. Nixon, questioned whether a preliminary injunction was necessary, asking why the case shouldn't move forward before the appeals court makes a decision.

Angstreich said any discovery will not address a key legal question. "Either the order has preemptive effect or it doesn't," he said.

9th Circuit Judge Danielle J. Forrest, an appointee of President Donald Trump, asked several questions of attorneys on both sides. At one point, she sounded skeptical of the industry's position.

"That's not how statutes typically work," she told Angstreich.

The Trump administration originally joined the industry groups seeking a preliminary injunction against the California law. But President Joe Biden's administration dropped its involvement in the case.