North Carolina Department of Revenue’s Demand for Amazon Customer Records Violates the First Amendment

So holds Amazon.com v. Lay (W.D. Wash., decided yesterday):

Amazon pursues summary judgment as to its First Amendment claim that the DOR’s request for all information related to Amazon’s sales to North Carolina residents violates the First Amendment. The Court agrees and GRANTS the motion.

The First Amendment protects a buyer from having the expressive content of her purchase of books, music, and audiovisual materials disclosed to the government. Citizens are entitled to receive information and ideas through books, films, and other expressive materials anonymously. In the context of distribution of handbills, the Supreme Court held that anonymity “exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular.” McIntyre v. Ohio Elections Comm’n, 514 U.S. 334, 357 (1995); Talley v. California, 362 U.S. 60, 64 (1960) (protecting anonymity in handing out campaign literature). The fear of government tracking and censoring one’s reading, listening, and viewing choices chills the exercise of First Amendment rights. In a concurring opinion, Justice Douglas highlighted the deleterious effect of governmental meddling in the reading habits of its citizens: “Some will fear to read what is unpopular what the powers-that-be dislike. When the light of publicity may reach any student, any teacher, inquiry will be discouraged.” United States v. Rumely, 345 U.S. 41, 57-58 (1953) (Douglas, J., concurring).

Two district courts addressing subpoenas seeking book purchase records have similarly held the First Amendment rights are implicated where the government seeks the disclosure of reading, listening, and viewing habits. In In re Grand Jury Subpoena to Amazon.com Date August 7, 2006, 246 F.R.D. 570 (W.D. Wis. 2007), the court held that the government had to show a compelling need to obtain the personal identities and titles of books certain persons purchased through Amazon from a seller suspected of tax evasion. The government served Amazon a subpoena duces tecum seeking the identities of customers of the criminal defendant and information about their purchases. Id. at 571. Amazon provided the requested information, except the identities of the purchasers, objecting that the revelation of the purchasers’ identities would violate their First Amendment rights. Id. at 572. The court agreed. The court barred the government from contacting anyone who did not consent to talking to the government, noting that the First Amendment was implicated where the government might “peek into the reading habits of specific individuals without their prior knowledge or permission.” Id. at 572. A similar result was reached by a district court handling a subpoena request to obtain the book purchasing records of Monica Lewinsky. In re Grand Jury Subpoena to Kramerbooks & Afterwords, Inc., 26 Med. L. Rptr. 1599, 1600-01 (D.D.C. 1998). The court held that the Independent Counsel investigating President Clinton had to show a compelling interest and sufficient nexus to sustain his request. Id.

Amazon and the Intervenors have established that the First Amendment protects the disclosure of individual’s reading, listening, and viewing habits. For example, the Intervenors make uncontroverted statements that they fear the disclosure of their identities and purchases from Amazon to the DOR and that they will not continue to make such purchases if Amazon reveals the contents of the purchases and their identities. The DOR concedes that the First Amendment protects them from such disclosures. In fact, the DOR has repeatedly stated it does not want detailed information about purchases for fear of implicating the First Amendment. However, DOR has consistently requested this very information by reaffirming its broad requests. At the same time, the DOR has also refused to give up the detailed product information about Amazon’s customers’ purchases. The pending request for “all information as to all sales” by Amazon implicates the First Amendment rights of Amazon’s customers and the Intervenors. While the DOR states that it could not possibly match the names to the purchases, its promise of forbearance is insufficient to moot the First Amendment issue. See United States v. Stevens, 130 S. Ct. 1566, 1591 (2010) (stating that the Court “would not uphold an unconstitutional statute merely because the Government promised to use it responsibly”). The Court finds the disclosure of the identities and detailed information as to the expressive content of Amazons’ customers’ purchases will have a chilling effect that implicates the First Amendment.

Given that the DOR’s request implicates the First Amendment, the DOR must show “a compelling governmental interest warrants the burden, and that less restrictive means to achieve the government’s ends are not available.” United States v. C.E. Hobbs Found., 7 F.3d 169, 173 (9th Cir. 1993) (setting for the standard for a First Amendment challenge to an IRS summons). There must also be a “substantial relation between the information sought and a subject of overriding and compelling state interest.” Gibson v. Fla. Legislative Investigation Comm., 372 U.S. 539, 546 (1963) (in the context of a legislative subpoena). The DOR must “actually need[] the disputed information.” In re Grand Jury Subpoena to Amazon.com, 246 F.R.D. at 572.

The DOR concedes that it has no legitimate need or use for having details as to North Carolina Amazon customers’ literary, music, and film purchases. In spite of this, the DOR refuses to give up the detailed information about Amazon’s customers’ purchases, while at the same time requesting the identities of the customers and, arguably, detailed records of their purchases, including the expressive content. With no compelling need for both sets of information, the DOR’s request runs afoul of the First Amendment. It bears noting, too, that the DOR’s requests for information were made solely in the context of calculating Amazon’s potential tax liability. Amazon has provided all of the data necessary to determine its tax liability, except any potential tax exemptions. The DOR has failed to articulate the compelling need to calculate these possible exemptions, particularly where it has admitted that it can and will assess Amazon at the highest rate and it would permit Amazon to “challenge the assessment and … establish that exemptions or lower tax rates applied to some products.” Even assuming there is a compelling need to calculate Amazon’s tax liability inclusive of exemptions, the DOR’s requests are not the least restrictive means to obtain the information. The request is overbroad. The Court GRANTS the motion for summary judgment.

Thanks to Daniel Cowan for the pointer. For more on the dispute, see this earlier post. For my somewhat skeptical views about some First Amendment defenses to such subpoenas, see PDF pp. 30-37 of this article, though I agree that the justification for this particular sort of subpoena — as opposed to some of the subpoenas I discuss in the article — is extremely weak.