United States Court of Appeals For the Second Circuit

August Term 2022

Argued: January 12, 2023 Decided: April 26, 2024

No. 21-1975

NEW YORK STATE TELECOMMUNICATIONS ASSOCIATION, INC., CTIA - THE WIRELESS ASSOCIATION, ACA CONNECTS - AMERICA’S COMMUNICATIONS ASSOCIATION, USTELECOM - THE BROADBAND ASSOCIATION, NTCA - THE RURAL BROADBAND ASSOCIATION, SATELLITE BROADCASTING AND COMMUNICATIONS ASSOCIATION, ON BEHALF OF THEIR RESPECTIVE MEMBERS,

Plaintiffs-Appellees,

v. LETITIA A. JAMES, IN HER OFFICIAL CAPACITY AS ATTORNEY GENERAL OF NEW YORK,

Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of New York No. 21-cv-2389, Denis R. Hurley, Judge. Before: SULLIVAN, NATHAN, and MERRIAM, Circuit Judges.

In 2021, New York enacted the Affordable Broadband Act (ABA), which requires internet service providers to offer broadband internet to qualifying households at reduced prices. A group of trade organizations representing internet service providers sued, arguing that the ABA was impliedly preempted by federal law. The district court agreed with the Plaintiffs’ preemption theories and granted a preliminary injunction barring New York from enforcing the ABA. The parties later requested that the district court enter a stipulated final judgment and permanent injunction. Although the parties stipulated to judgment, we have appellate jurisdiction because the district court plainly rejected the legal basis for New York’s preemption defenses, all claims have been disposed of with prejudice, the stipulation was designed solely to obtain immediate appellate review and does not circumvent restrictions on our appellate jurisdiction, and New York expressly preserved the right to appeal. Turning to the merits, we conclude that neither of the Plaintiffs’ preemption theories is availing. First, the ABA is not field-preempted by the Communications Act of 1934 (as amended by the Telecommunications Act of 1996), because the Act does not establish a framework of rate regulation that is sufficiently comprehensive to imply that Congress intended to exclude the states from entering the field. Second, the ABA is not conflict-preempted by the Federal Communications Commission’s 2018 order classifying broadband as an information service. That order stripped the agency of its authority to regulate the rates charged for broadband internet, and a federal agency cannot exclude states from regulating in an area where the agency itself lacks regulatory authority. Accordingly, we REVERSE the judgment of the district court and VACATE the permanent injunction. Judge Sullivan dissents in a separate opinion.

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JUDITH N. VALE (Barbara D. Underwood, Steven C. Wu, Eric Del Pozo, on the brief) for Letitia James, Attorney General, State of New York, New York, NY, for Appellant. SCOTT H. ANGSTREICH, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C. (Andrew 2 E. Goldsmith, Joseph S. Hall, Alex A. Parkinson, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., Jeffrey A. Lamken, MoloLamken LLP, Jared P. Marx, Ha