## Facts

- California enacted the Internet Consumer Protection and Net Neutrality Act of 2018 (SB 822), restricting broadband providers’ practices such as blocking, throttling, and paid prioritization for service delivered to California customers.
- In 2015, the Federal Communications Commission (FCC) adopted federal net neutrality rules while classifying broadband internet access as a Title II “telecommunications service.”
- In 2018, the FCC reclassified broadband as a Title I “information service,” terminated federal net neutrality rules, and issued a directive asserting preemption of state net neutrality requirements.
- A federal appellate court later upheld the FCC’s 2018 reclassification but vacated the FCC’s categorical preemption directive for lack of demonstrated authority to broadly preempt state law.
- Broadband industry trade associations sued the California Attorney General, seeking to enjoin SB 822 as preempted by federal law.
- The district court denied a preliminary injunction, concluding the challengers had not shown a likelihood of success on federal preemption.
- The trade associations appealed the denial of the preliminary injunction.

## Issues

1. Whether SB 822 was likely preempted by the FCC’s 2018 deregulatory approach and related federal policy concerning broadband regulation.
2. Whether SB 822 was likely preempted because it conflicted with provisions of the Communications Act limiting federal regulation of information services and certain mobile services.
3. Whether SB 822 was likely preempted under field preemption on the theory that federal law occupies the field of interstate communications services.

## Decision

- The Ninth Circuit affirmed the denial of a preliminary injunction.
- The court held the challengers were unlikely to succeed on their claim that SB 822 is preempted by federal law.
- The court rejected conflict-preemption theories based on the FCC’s deregulatory policy, statutory-conflict theories based on the Communications Act, and field-preemption theories over interstate communications.

## Legal Principles

- For conflict preemption based on agency action, preemption generally requires a valid exercise of delegated federal regulatory authority; a policy preference to deregulate, without authority to displace state regulation, is insufficient.
- When a federal agency narrows or relinquishes its own regulatory authority in an area, it cannot rely on that diminished authority to broadly preempt state regulation addressing the resulting gap.
- Statutory provisions that limit a federal agency’s regulatory power do not, without more, establish implied nationwide limits on state regulation.
- Field preemption requires clear congressional intent to occupy the field; heavy federal regulation in an area does not alone bar all state regulation.
- On a preliminary injunction motion, the movant must show a likelihood of success on the merits; failure to show likely preemption defeats injunctive relief.

## Conclusion

The Ninth Circuit held that the challengers had not shown a likelihood of success in proving SB 822 is federally preempted, principally because the FCC’s 2018 reclassification reduced its regulatory authority and the Communications Act did not clearly bar state net neutrality rules; the court therefore affirmed the denial of a preliminary injunction against enforcement of California’s law.


ACA Connects v. Bonta, 24 F.4th 1233 (9th Cir. 2022)