NetChoice v. Bonta (California SB 1144)

NetChoice filed its third lawsuit against California, this time, targeting SB 1144, an unconstitutional attempt to regulate online marketplaces. This misguided law threatens to burden websites with red tape that directly conflicts with the Federal INFORM Act Congress passed in 2023, disproportionately harming small businesses while failing to address the actual problem: organized retail crime. Rather than going after criminals, California is once again targeting the digital economy with bureaucratic overreach.

SB 1144 violates the Constitution’s Supremacy Clause by contradicting the Federal INFORM Act, which established a national framework for online marketplaces just two years ago. California defies federal preemption, forcing companies to navigate a confusing web of mandates. Worse still, the law restricts lawful speech, infringes on editorial discretion protected by the First Amendment and imposes unlawful monitoring and censorship.

Far from enhancing public safety, SB 1144 undermines law enforcement’s ability to prosecute retail crime by making it harder to rely on evidence from marketplaces. Instead of empowering police, the law demands excessive paperwork from companies and even opens the door for absurd, unintended outcomes—like penalizing Girl Scouts for selling cookies online.

NetChoice urges California lawmakers to focus on real solutions to retail crime, like providing funding and support to law enforcement—not dismantling the digital marketplace with ineffective, unconstitutional red tape.

Read NetChoice’s complaint, filed on April 9, 2025, in the U.S. District Court for the Northern District of California, HERE.

Key Takeaways of NetChoice v. Bonta (SB 1144):

• Ignores Real Crimes: California’s INFORM Act amendments fail to address organized retail crime. Instead, they penalize marketplaces and impose burdens on lawful business and speech. 
• Violates Constitution’s Supremacy Clause: California is attempting to exercise authority that Congress took for itself when it passed the federal INFORM Act just two years ago, a clear violation of the U.S. Constitution’s Supremacy Clause.
• Dismantles Congress’ National Framework: If California succeeds, it will eviscerate the national framework Congress sought to create, and a patchwork system for regulating online marketplaces will emerge once again.  
• Violates First Amendment Rights: SB 1144 violates the First Amendment by restricting the ability of sellers to disseminate lawful speech and buyers to receive it. It also violates platforms’ right over editorial discretion outlined in Moody v. NetChoice. 
• Forces Unlawful Monitoring and Censorship: SB 1144 imposes a monitoring and censorship requirement on platforms to review all posts or face a significant liability for failure to remove content and sellers who refuse to submit the Act’s required documentation, violating Section 230 of the Communications Decency Act. 
• Hurts Small Businesses While Ignoring Criminals: SB 1144 does nothing to address the underlying issue—ensuring law enforcement has the necessary resources to put retail thieves in jail. Instead, it hurts small, online businesses. 
• Weakens Existing Law Enforcement Prosecution Tools: In fact, California’s law would undermine its intended purpose and make it more difficult for law enforcement to prosecute retail thieves by foreclosing the ability to rely on evidence provided by the marketplaces.

Our Team

Chris Marchese – Director of Litigation

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Paul Taske – Associate Director of Litigation

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