WASHINGTON, June 21, 2018 – The United States Supreme Court on Thursday dealt a blow to the online retail industry by overturning a 26-year-old ruling, Quill v. North Dakota, which had prohibited states from forcing mail-order retailers to collect sales tax from customers in states where they lacked a physical presence.
The 5-4 ruling on Thursday, in South Dakota v. Wayfair, means customers of online retailers like Amazon will no longer be able to avoid paying their state’s sales tax, and those retailers – which are now some of the largest in the United States – will no longer enjoy an advantage over their brick-and-mortar competitors.
The case could put an end to years of non-stop growth by online-only retailers like Amazon, which many small business owners claim came at their own expense, costing Americans their jobs as the brick-and-mortar retail industry has contracted in the face of online competition.
The decision could provide a needed boost the state and local governments that have long complained that the inability to collect sales tax from online retailers has caused their sales tax revenue to plummet as consumers have increasingly stayed home for even the most basic shopping needs.
Trump weighs in
President Trump took to his Twitter account late Thursday to applaud the ruling.
“Big Supreme Court win on internet sales tax – about time! Big victory for fairness and for our country. Great victory for consumers and retailers,” he wrote.
Trump, who initially entered the public consciousness as a real estate developer, has often suggested that Amazon — the United States’ largest online retailer — was gaining an unfair advantage over brick-and-mortar merchants from the rules under which online retailers operated until today.
“Unlike others, [Amazon] pay little or no taxes to state & local governments,” Trump wrote in a March 29 tweet attacking Amazon and The Washington Post, which is owned separately by Amazon founder Jeff Bezos.
During his campaign for the presidency, Trump often suggested that Bezos had purchased the Post in order to influence legislation to prevent Amazon from having to pay sales taxes.
Trump’s assertions regarding Amazon and state sales taxes have no connection to reality, as Amazon has paid sales taxes in states which require it for a number of years.
While the president suggested that the ruling would help small businesses, Steve DelBianco, president and CEO of the free-market advocacy group NetChoice, explained that Thursday’s court ruling would actually hurt the small business of which Trump has styled himself a champion.
“While a fraction of online commerce was free of sales tax before this ruling, the Supreme Court has now created an even greater imbalance by placing far greater burdens on Internet shopping compared to its “offline” counterparts,” said DelBianco, whose group has long opposed allowing states to require online retailers to pay sales tax absent a physical presence in a given state.
DelBianco explained that now that Supreme Court has “legislated from the bench,” small online merchants have their “already razor-thin profit margins” cut even further, while brick-and-mortar remain unaffected.
“When these businesses disappear, consumers will be the biggest losers,” he said.
Former Congressman Chris Cox, the group’s outside counsel and author of the Internet Tax Freedom Act, said the court’s decision will do the most harm to small online retailers and those with a single location, “because they can’t afford the overhead to comply with thousands of different tax rules across the country.”
Cox predicted that many small online retailers would be forced to close their doors or be bought out by online retail giants.
“The last hope for consumers and small online business owners is for Congress to take action. It should be Congress, not the courts, that sets the rules for interstate sales tax collection,” he added.
Supreme Court Declares Trump First Amendment Case Moot, But Legal Issues For Social Media Coming
April 5, 2021—Despite accepting a petition that avoids the Supreme Court deliberating on whether a president can block social media users, Justice Clarence Thomas on Monday issued a volley that may foreshadow future legal issues surrounding social media in the United States.
On Monday, the Supreme Court sent back to a lower court and ruled as moot a lawsuit over whether former President Donald Trump could block followers on Twitter, after accepting a petition by the federal government to end the case because Trump wasn’t president anymore.
The case dates back to March 2018, when the Knight First Amendment Institute and others brought a case against former president Trump in the Southern District of New York for blocking users based on their political views, arguing the practice is a violation of the first amendment.
The lower court judge agreed, and the decision was upheld by the United States Court of Appeals.
In accepting the petition by the government, Justice Thomas stated that adjudicating legal issues surrounding digital platforms is uniquely difficult. “Applying old doctrines to new digital platforms is rarely straightforward,” he wrote. The case in question hinged on the constitutionality of then-President Trump banning people from interacting with his Twitter account, which the plaintiff argued was a protected public forum.
Thomas stated that while today’s conclusion was able to be vacated, that likely would not be the case in the future. He went on to say that digital platforms exercise “concentrated control of so much speech in the hands of a few private parties.”
He continued: “We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.”
Even though Facebook and Google were not the platforms in question in this case, Thomas pointed to them as “dominant digital platforms” and stated that they have “enormous control over speech.” He stated that Google, Facebook, and Twitter have the capabilities to suppress information and speech at will, and referenced the “cataclysmic consequences” for authors that Amazon disagrees with.
Thomas also rejected the notion that other options exist.
“A person always could choose to avoid the toll bridge or train and instead swim the Charles River or hike the Oregon Trail. But in assessing whether a company exercises substantial market power, what matters is whether the alternatives are comparable.”
The Supreme Court Finally Says It Won’t Reconsider Old Net Neutrality Case
BROADBAND BREAKFAST INSIGHT: Talk about finally letting the other shoe drop! On Monday, the Supreme Court, on a 4-3 vote (with two of the conservatives justices recusing themselves) refused to consider the old net neutrality case – the one lodged by the Obama administration, and which put extensive net neutrality regulations into effect. Those rules, affirmed by the D.C. Circuit Court of Appeals, were arguably moot because of Federal Communications Commission Chairman Ajit Pai’s December 2017 re-write of these rules. But the case lingered on and on and on.
Divided court denies review in “net neutrality” cases, from SCOTUSblog:
This morning the Supreme Court issued orders from the justices’ private conference on Friday. The justices did not add any new cases to their docket for the term – they did that on Friday afternoon – nor did they call for the views of the U.S. solicitor general in any cases. But one order today in particular was significant: The justices declined to review a decision by the U.S. Court of Appeals for the District of Columbia Circuit upholding the Obama administration’s “net neutrality” rules, which (generally speaking) required internet service providers to treat all traffic on the internet equally.
The rules, which were issued in 2015, have since been replaced by a 2018 order by the Federal Communications Commission eliminating net neutrality, so the justices were not expected to weigh in on the merits of these cases. Instead, the real question was the fate of the D.C. Circuit’s decision upholding the rules: Would the Supreme Court allow it to stand – which would mean that it could serve as precedent for future cases – or would the justices instead invalidate the D.C. Circuit’s decision and send it back with directions to dismiss the cases as moot (a doctrine known as Munsingwear vacatur), because the net neutrality rules are no longer in effect?
Today, over a year after the petitions seeking review of the D.C. Circuit’s decision were filed, a divided Supreme Court simply declined to consider the cases, leaving the D.C. Circuit’s decision in place. The court’s newest justice, Brett Kavanaugh, was expected to recuse himself from voting on the petitions because he had participated in the cases while on the D.C. Circuit, and he did. But Chief Justice John Roberts also recused himself – presumably (although there is no way to know for sure) because he owns stock in one of the companies challenging the rules.
Supreme Court Extends Fourth Amendment Protections To Include Mobile Phone Carrier Location Data
WASHINGTON, June 22, 2018 — People living, working, or traveling in the United States gained a bit more privacy Friday after the Supreme Court found that police must obtain a search warrant before asking wireless carriers to turn over some types records which reveal a mobile phone’s location history.
In the case of Carpenter v. Sessions, a five-justice majority found that prosecutors should have obtained a judge’s consent before asking two wireless carriers to turn over petitioner Timothy Carpenter’s cellular site location information.
The information included 12,898 location points documenting his movements over the course of 127 days. Instead of using the procedures laid out under the Stored Communications Act – which require a lower burden of proof – the high court required the probable cause standard needed for a search warrant.
Writing for himself and the four justices considered to be the court’s liberal wing — Ruth Bader Ginsberg, Stephen Breyer, Sonya Sotomayor and Elena Kagen, Chief Justice John Roberts opined that the “unique nature” of CSLI differentiates it from other kinds of stored data held by a phone company.
That made it subject to the protections of the Fourth Amendment.
A higher expectation of privacy
“Whether the Government employs its own surveillance technology as in Jones or leverages the technology of a wireless carrier, we hold that an individual maintains a legitimate expectation of privacy in the record of his physical movements as captured through CSLI. The location information obtained from Carpenter’s wireless carriers was the product of a search,” he wrote.
Citing United States v. Jones., in which the court ruled that a search warrant is needed to place a GPS tracking device on a suspect’s vehicle, Roberts said Carpenter had a reasonable expectation of privacy when it came to records of his movements, and allowing the government to access those records without a warrant “contravenes that expectation” despite the fact that his phone carrier — not the police — collected the information for commercial purposes.
Roberts also noted that the collection of a person’s mobile phone location records presents “even greater privacy concerns” than tracking a vehicle because people “compulsively carry cell phones with them all the time.”
“A cell phone faithfully follows its owner beyond public thoroughfares and into private residences, doctor’s offices, political headquarters, and other potentially revealing locales,” he explained, comparing the use of phone location records to having GPS ankle monitor which can go back in time attached to any person it wishes to track.
Conservative dissenters found fault with Roberts’ reasoning
Dissenting justices, however, found fault with the majority’s reasoning for a number of reasons.
Justice Anthony Kennedy, a Reagan appointee who is often a deciding swing vote in 5-4 decisions, admonished the majority for an “unnecessary and incorrect” departure from the precedents and principles of the Fourth Amendment that would hinder law enforcement with “undue restrictions” on the ability to investigate violent crimes.
Writing for himself and Justices Clarence Thomas and Samuel Alito, Kennedy explained that cell site location were no different from any other records which are subject to subpoena, adding that mobile phone service subscribers should have no expectation of privacy in them because of their imprecise nature.
But the opinion was also joined by the court’s newest member, Justice Neil Gorsuch, who argued that protecting Americans’ privacy would be easier if the court deep-sixed the current patchwork of case law.
Instead of continuing with an array of laws governing the government’s ability to track people with GPS devices, or by accessing records like CSLI, Gorsuch argued in favor of an approach guided by the specific protections laid out in the Fourth Amendment.
Civil libertarians pleased with the outcome
Despite the court’s clear divisions over this particular case, civil libertarians and privacy advocates hailed the ruling as a victory for Americans’ right to privacy while recognizing the need to update laws governing law enforcement access to personal information in the digital age.
American Civil Liberties Union attorney Nathan Freed Wessler, who represented Carpenter before the Supreme Court, called the decision “a groundbreaking victory for Americans’ privacy rights in the digital age.”
“The government can no longer claim that the mere act of using technology eliminates the Fourth Amendment’s protections. Today’s decision rightly recognizes the need to protect the highly sensitive location data from our cell phones, but it also provides a path forward for safeguarding other sensitive digital information in future cases — from our emails, smart home appliances, and technology that is yet to be invented.”
Sen. Ed Markey, D-Mass., praised the court’s decision as an appropriate 21st century update to fourth amendment jurisprudence.
“Where we go or where we have been is sensitive information that should only be revealed to law enforcement with a warrant. The Court’s decision takes a big step forward for privacy by saying the government can’t track a person’s past movements through the records of their cell phone signal without probable cause,” said Markey, a member of the Senate Commerce Committee.
“Police need a warrant to search an individual’s home, and that will now be the standard for mobile phone location records, as well. We need to continue to update our laws to protect the privacy of Americans in this increasingly digital world,” he said.
However, Markey also acknowledged the need for Congress to update privacy laws for the digital world.
Not all digital data is created equal
Julian Sanchez, a Cato Institute scholar who has written extensively the intersection of technology, privacy, and civil liberties, told BroadbandBreakfast that one positive takeaway from the Carpenter decision is “the idea that not all data is not created equal.
“The fact that some types of information are obtainable from third parties from a subpoena doesn’t mean that every conceivable kind of data — no matter how intimate — is subject to the same rule,” Sanchez said when reached by phone on Friday. “But they don’t say a whole lot about what, other than location, that might be.”
Sanchez cautioned that the narrow nature of the ruling, in which the court took pains to distinguish CSLI as subject to the Fourth Amendment’s protections while still leaving open the possibility that other kinds of data that might reveal location information deserved similar treatment, meant the court did not give much guidance as to what else might be protected.
“There’s a huge quantity of information that third parties retain that is arguable sensitive or intimate or revealing in various ways,” he said, adding that because of a differences between the protections provided by the Stored Communications Act and the Electronic Communications Privacy Act, the same kinds of data can be treated differently by different companies when it comes to allowing the government to access it without a warrant.
For example, Sanchez said differences between the SCA and ECPA mean that if GPS data collected by Google is treated as communications between Google and the owner of a mobile phone, it would not necessarily be given the same protections Carpenter now gives data held by wireless service providers.
Resolving the “incoherence” between the SCA and ECPA should be a priority for lawmakers, Sanchez said.
“One thing Congress could do is step up and say what types of data might be subject to stronger protections, and not just assume that that the only relevant distinction is between communications content and everything else, which is how the law currently treats it.”
Sen. Leahy argues for a new legal paradigm on privacy
Sanchez’s sentiments were echoed in a statement by the ranking member of the Senate Judiciary Committee, Sen. Patrick Leahy, D-Vt., who said Friday’s ruling “perfectly illustrates that old legal constructions, like the third-party doctrine, struggle to keep up with our ‘seismic shifts in digital technology.’
“As more and more of our sensitive information is held by third parties, this decision is a step forward in ensuring that our most private information — our communications, our photos, our financial and medical records, our every location — receives the Fourth Amendment protection it deserves,” said Leahy.
Leahy cautioned that Congress “must not rely on the courts to modernize our antiquated privacy laws” while noting that a bill he co-sponsored with Sen. Mike Lee, R-Utah., would require police to obtain a warrant for the exact type of data at issue in Carpenter, and would close “other major loopholes in protecting our Fourth Amendment privacy rights, like requiring a warrant for electronic content.”
“Congress must not abdicate its own responsibilities as technology advances, and it should quickly take up our legislation to accomplish these key reforms.”
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