Federal judge halts Georgia’s organized online retail crimes law

(The Center Square) — A federal judge halted a new Georgia law targeting organized online retail crimes just hours before it was to go into effect on Monday.

On Sunday, U.S. District Judge Steven D. Grimberg filed an order granting NetChoice’s request for a preliminary injunction. The group is challenging Senate Bill 472, codified as Act 564, the “Combating Organized Retail Crime Act.”

“We are relieved that the Court halted Act 564 from hurting Georgia’s consumers and small businesses as our case, NetChoice v. Carr, proceeds,” Chris Marchese, director of the NetChoice Litigation Center, said in a statement. “No matter how you look at it, Act 564 violates federal law and the Constitution’s Supremacy Clause, smothering Georgia’s thriving businesses with red tape. We look forward to seeing Act 564 struck down in full.”

Proponents of the measure, which Republican Gov. Brian Kemp signed on May 6, say it protects businesses against organized online retail crimes and note that several Georgia-based groups and businesses, including the Georgia Retail Association, backed the measure. However, NetChoice argues that the federal Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers — or INFORM — Act preempts the state measure, which they contend also violates the First Amendment.

When asked for comment on Friday, a spokesperson for Georgia Attorney General Chris Carr, the named defendant in the lawsuit, pointed to the state’s response. According to the attorney general’s filing, Georgia lawmakers’ most recent change “simply closes a loophole in which sellers could avoid the disclosure requirements by collecting payments for their goods outside of the online marketplace.”

“NetChoice’s arguments boil down to the notion that its members do not know what to do,” Carr said in a response filed in federal court. “That is mistaken—the statute provides fair notice, is obviously not preempted, and doesn’t touch their speech. But if there were some points needing clarification, NetChoice could have asked the Attorney General or filed a declaratory action in state court. NetChoice’s decision to immediately jump to federal court and seek emergency relief is an error of its own making.”

Spokespeople for Republican Gov. Brian Kemp did not immediately respond to a request for comment.

By T.A. DeFeo | The Center Square contributor

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