Jay Fink had an interesting little business. If you lived in California, you could give him access to your email account, he’d look through the spam folder for spam that appeared to violate the state anti-spam law, and give you a spreadsheet and a file of PDFs. You could then sue the spammers, and if you won, you’d give Fink part of the money as his fee.Last July the state of California told him to get a Private Investigator license or close his business. Since the license is requires 6,000 hours of training in fields having nothing to do with looking at spam (e.g., arson investigation), Fink closed his business and sued the state. In January, each side filed motions and last week the judge issued the first significant order in the case. Fink didn’t entirely win, but pretty close.
Fink asked for a preliminary injunction to keep the state from requiring a PI license, offering a variety of reasons the requirement was unconstitutional. The state filed a motion to dismiss, arguing that Fink had no case. The judge went through each argument in turn.
Fink claimed that the licensing requirement was an limit on speech forbidden by the First Amendment, while the state said no, it limits conduct. The court looked at a lot of other decisions and decided that lots of licenses incidentally limit speech, and this license was primarily about conduct, so it’s not a content-based restriction on speech, even though it’s a restriction.
Next he claimed substantive due process, that the state prevented him from pursuing his occupation. Here he does better, the judge noting “an extreme mismatch between the State’s interests and the burdens imposed on him, due to the unusually non-sensitive nature of his work.” The licensing law is generally reasonable, but not in this case. The only material he is investigating is the contents of his clients’ spam folders, and he is not involved in any subsequent litigation other than collecting a cut if a suit succeeds.
A preliminary injunction requires “irreparable harm” which Fink has, being put out of work. And the court has to balance the hardships the two parties might experience, again much worse for Fink, who has no job, than for the State, which might have one unlicensed investigator doing non-sensitive work.
The state’s motion to dismiss is disposed of in a straightforward way. They lose on the First Amendment and due process claims. Fink made an equal protection claim, that he was treated differently from other people who read third parties’ mail such as an executive’s personal assistant, but the court found that what he does is different enough from what an assistant does to dismiss that claim, but allowing Fink to amend it and try again. There’s other minor claims the judge dismissed under long-standing precedents from the 1800s.
So Fink got the important part, the injunction against the state, with a strong suggestion to amend the complaint to get rid of the rejected claims and strengthen the equal protection claims, which he, or more likely his lawyers at the Institute for Justice, will surely do.
There will be more rounds in this case but in view of the judge’s “extreme mismatch” language, it’s hard to imagine how the state will prevail. So it looks like he’s back in business.
