VIZIO, Inc. v. Klee In the

17‐227‐cv
VIZIO, Inc. v. Klee
In the 1
United States Court of Appeals 2
For the Second Circuit 3
________ 4
A UGUST TERM 2017 5
No. 17‐227‐cv 6
7
VIZIO, INC., 8
Plaintiff‐Appellant, 9
10
v. 11
12
R OBERT KLEE , in his official capacity as the Commissioner of the State 13
of Connecticut Department of Energy and Environmental 14
Protection, 15
Defendant‐Appellee. 16
________ 17
18
Appeal from the United States District Court 19
for the District of Connecticut. 20
No. 1:15‐cv‐00929 ― Victor A. Bolden, Judge. 21
________ 22
23
A RGUED: D ECEMBER 7, 2017 24
D ECIDED: MARCH 29, 2018 25
________ 26
27
Before: C ABRANES AND L IVINGSTON, Circuit Judges, G OLDBERG, Judge.* 28
________ 29
* Judge Richard W. Goldberg, of the United States Court of International Trade, sitting by
designation.

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2 No. 17‐227‐cv
Plaintiff‐Appellant VIZIO, Inc. filed a complaint against 1
Defendant‐Appellee Robert Klee, in his capacity as the Commissioner 2
of the State of Connecticut Department of Energy and Environmental 3
Protection, asserting that a Connecticut law imposing recycling fees 4
on electronics manufacturers violates the United States Constitution. 5
The United States District Court for the District of Connecticut (Victor 6
A. Bolden, Judge) granted Defendant‐Appellee’s Rule 12(b)(6) motion 7
to dismiss for failure to state a claim. On appeal, VIZIO advances only 8
its argument that the Connecticut law is unconstitutional under the 9
Commerce Clause. 10
We hold that VIZIO has failed to state a claim upon which relief 11
can be granted, and we therefore AFFIRM the December 29, 2016 12
judgment of the District Court. 13
________ 14
15
PRATIK A. S HAH (James E. Tysse, Z. W. Julius Chen, 16
and Martine E. Cicconi, on the brief), Akin Gump 17
Strauss Hauer & Feld LLP, Washington, DC, for 18
Plaintiff‐Appellant. 19
20
MICHAEL K. S KOLD, Assistant Attorney General, for 21
George Jepsen, Attorney General, Office of the 22
Attorney General, Hartford, CT, for Defendant‐ 23
Appellee. 24
________ 25
26
RICHARD W. GOLDBERG, Judge: 27
28
Plaintiff‐Appellant VIZIO, Inc. is a manufacturer of televisions 29
sold nationwide, including in Connecticut. VIZIO challenges 30
Connecticut’s statute and regulations creating and implementing its 31

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3 No. 17‐227‐cv
electronic recycling program, Conn. Gen. Stat. §§ 22a‐629 et seq.; Conn. 1
Agencies Regs. §§ 22a‐630(d)‐1, 22a‐638‐1 (collectively “Connecticut’s 2
E‐Waste Law”), on the grounds that they effectively regulate 3
interstate commerce in violation of the Commerce Clause, U.S. 4
C ONST. art. I, § 8, cl. 3. 5
Such a dormant Commerce Clause claim is analyzed through a 6
“well‐worn path,” see N.Y. Pet Welfare Ass’n, Inc. v. City of New York, 7
850 F.3d 79, 89 (2d Cir. 2017), and because VIZIO has failed to 8
articulate entitlement to relief under this familiar rubric, its claim 9
must be dismissed. 10
BACKGROUND 11
On June 17, 2015, VIZIO initiated a lawsuit seeking to enjoin 12
Connecticut from enforcing its e‐waste law. On appeal, we review 13
the constitutionality of that law under the Commerce Clause of the 14
U.S. Constitution, art. I, § 8, cl. 3. 15
I. Connecticut’s E‐Waste Law 16
In July 2007, the Connecticut legislature passed “An Act 17
Concerning the Collection and Recycling of Covered Electronic 18
Devices,” Public Act No. 07‐189, codified at Conn. Gen. Stat. 19
§§ 22a‐629 et seq. The statute created a program under which certain 20
manufacturers conducting business in the state would be required to 21
register with Connecticut’s Department of Energy and Environmental 22
Protection (“DEEP”) and pay a fee associated with the cost of 23
recycling the products they manufacture. In general, the law was 24
designed so that “each manufacturer [would] participate in the state‐ 25
wide electronics recycling program . . . to implement and finance the 26
collection, transportation and recycling of covered electronic 27
devices . . . .” Conn. Gen. Stat. § 22a‐631(a). As a manufacturer of 28
“non‐[cathode ray tube]‐based televisions,” Conn. Gen. Stat. 29

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4 No. 17‐227‐cv
§ 22a‐629(5), for sale in Connecticut, Conn. Gen. Stat. § 22a‐629(7), 1
VIZIO must contribute to the state’s television recycling program. See 2
Conn. Gen. Stat. § 22a‐631(a). VIZIO does not dispute that it is a 3
covered manufacturer under the law, nor does it contest 4
Connecticut’s power to compel VIZIO to pay into the recycling 5
program. VIZIO does, however, challenge the means by which 6
Connecticut calculates its recycling fee. 7
The recycling program is operated by “covered electronic 8
recyclers” (“CERs”), private entities who register with the state. See 9
Conn. Gen. Stat. § 22a‐629(6); see also Conn. Agencies Regs. 10
§ 22a‐638‐1(b). Those CERs collect all “covered electronic devices” for 11
recycling and dispose of them. See generally Conn. Gen. Stat. 12
§ 22a‐631. The manufacturers, in turn, pay their assigned fees directly 13
to the CERs. Conn. Agencies Regs. § 22a‐638‐1(j). 14
The Connecticut legislature charged DEEP with enacting 15
regulations “to establish annual registration and reasonable fees for 16
administering the [recycling] program . . . .” Conn. Gen. Stat. 17
§ 22a‐630(d). The law mandated that those fees would be 18
“representative of the manufacturer’s market share,” calculated 19
“based on available national market share data.” Conn. Gen. Stat. 20
§ 22a‐630(d) (emphasis added). DEEP’s regulations, which took effect 21
in June 2010, determine each manufacturers’ market share based on: 22
[I]nformation that approximates the total number of 23
units sold by all manufacturers for the previous year and 24
approximates the number of units sold that are 25
attributable to each manufacturer. This determination 26
shall be based upon nationally available market share 27
data, including, but not limited to, the number of units 28
shipped, retail sales data, consumer surveys, information 29

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5 No. 17‐227‐cv
provided by the manufacturers, or other nationally 1
available market share data. 2
Conn. Agencies Regs. § 22a‐638‐1(g)(2). It is this national market 3
share approach that VIZIO claims to be violative of the dormant 4
Commerce Clause. 5
In its first amended complaint, VIZIO alleged that “the 6
practical effect of the E‐Waste Law is to directly regulate VIZIO’s out‐ 7
of‐state sales and to control VIZIO’s conduct outside of the state’s 8
boundaries.” In short, VIZIO maintains that Connecticut’s national 9
market share approach unduly regulates interstate commerce by 10
tying in‐state fees to out‐of‐state transactions and by double charging 11
those out‐of‐state sales. 12
VIZIO asserts a host of costs associated with Connecticut’s E‐ 13
Waste Law, each of which VIZIO contends influences its out‐of‐state 14
pricing decisions by increasing the cost of doing business both in 15
Connecticut and nationwide. The result, VIZIO argues, is a 16
disproportionate share of the regulatory costs falling to producers like 17
VIZIO who manufacture products that are sold in‐ and out‐of‐state. 18
Additionally, VIZIO asserts that by considering a company’s national 19
sales, Connecticut double charges manufacturers for sales made 20
outside the state. All of this, VIZIO claims, infringes on the interstate 21
market for televisions “by reducing the narrow revenue margins that 22
VIZIO can capitalize upon to price and compete.” 23
According to VIZIO, the state’s calculation of fees under 24
Connecticut’s E‐Waste Law is problematic and VIZIO’s specific 25
circumstances highlight the law’s burdensome effects. Because 26
VIZIO’s assigned national market share was higher than the 27
company’s actual share of the Connecticut market, VIZIO contends 28
that the fees it paid were correspondingly disproportionate. Under 29
the law, VIZIO claims to have been assessed market shares of 14.33%, 30

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6 No. 17‐227‐cv
14.52%, and 16.088% in the years 2013 through 2015, respectively, and 1
has spent over $2.5 million to comply with the law over those three 2
years. These costs have accrued despite VIZIO’s insistence that 3
Connecticut’s E‐Waste Law principally funds the recycling of cathode 4
ray tube televisions, a product VIZIO has never manufactured. 5
Thus, VIZIO asserts that it is required to pay an outsized 6
recycling bill for televisions it did not produce, products which 7
burden the recycling program exponentially more than its own. And, 8
as a result, due to the law’s reference to out‐of‐state sales, VIZIO 9
maintains that it is assessed a fee not in proportion with its true share 10
of the Connecticut market or the actual burdens VIZIO places on the 11
recycling program. 12
II. Lower Court Proceedings 13
On August 20, 2015, Connecticut moved to dismiss VIZIO’s 14
complaint, arguing that VIZIO had failed to state a claim upon which 15
relief could be granted under Rule 12(b)(6) of the Federal Rules of 16
Civil Procedure. The district court dismissed VIZIO’s complaint in its 17
entirety, including several counts unrelated to the Commerce Clause. 18
VIZIO, Inc. v. Klee, No. 3:15‐CV‐00929, 2016 WL 1305116, at *28 (D. 19
Conn. Mar. 31, 2016). Yet the court granted leave to amend to “add 20
factual allegations from which the Court could reasonably infer that 21
the National Market Share provision of the E‐Waste Law has the 22
practical effect of directly controlling the interstate prices of its 23
televisions” so as to state a claim under the extraterritoriality theory 24
of dormant Commerce Clause jurisprudence. Id. at *15. 25
VIZIO filed its amended complaint on May 20, 2016, 26
supplementing its original pleadings with additional factual 27
allegations in an attempt to satisfy the pleading requirements of Rule 28
12(b)(6). Connecticut subsequently filed another motion to dismiss 29
and the court granted that motion in full, dismissing all of VIZIO’s 30

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7 No. 17‐227‐cv
remaining claims. VIZIO, Inc. v. Klee, 226 F. Supp. 3d 88, 105 (D. Conn. 1
2016). 2
VIZIO timely appealed. On appeal, VIZIO continues to 3
advance its position that Connecticut’s E‐Waste Law violates the 4
dormant Commerce Clause. Specifically, VIZIO argues that the law 5
directly controls interstate commerce in violation of the 6
extraterritoriality principle, amounts to an impermissible user fee, 7
and imposes impermissible burdens on interstate commerce in 8
relation to local benefits. Each of these arguments was properly 9
preserved and is ripe for review by this panel. 10
DISCUSSION 11
The Commerce Clause provides that Congress has the 12
exclusive power “[t]o regulate Commerce . . . among the several 13
States.” U.S. C ONST. art. I, § 8, cl. 3. This provision has long been read 14
to contain a negative corollary that “denies the States the power 15
unjustifiably to discriminate against or burden the interstate flow of 16
articles of commerce.” Or. Waste Sys., Inc. v. Dep’t of Envtl. Quality of 17
Or., 511 U.S. 93, 98 (1994). At issue in this case is that principle, 18
termed the “dormant Commerce Clause,” and whether Connecticut 19
has violated its dictates. 20
“Analysis of state and local laws under the dormant Commerce 21
Clause treads a well‐worn path. First, we determine whether the 22
challenged law ‘discriminates against interstate commerce,’ or 23
‘regulates evenhandedly with only incidental effects on interstate 24
commerce.’” N.Y. Pet Welfare Ass’n, 850 F.3d at 89 (citation omitted). 25
State laws may discriminate in several ways, including in their effect. 26
See Town of Southold v. Town of E. Hampton, 477 F.3d 38, 48 (2d Cir. 27
2007). However, if discrimination is not found and the law only 28
imposes incidental burdens on interstate commerce, we analyze the 29

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8 No. 17‐227‐cv
law under the standard set out in Pike v. Bruce Church, Inc., 397 U.S. 1
137, 142 (1970). 2
Here, VIZIO argues that Connecticut’s E‐Waste Law 3
discriminates against interstate commerce because the effect of the 4
law is to control prices beyond Connecticut’s borders. VIZIO claims 5
that by assessing a recycling fee calculated by reference to a 6
manufacturer’s national, rather than local, market share, Connecticut 7
impermissibly regulates interstate commerce. In so arguing, VIZIO 8
relies primarily on the principle that the “Commerce Clause . . . 9
precludes the application of a state statute to commerce that takes 10
place wholly outside of the State’s borders.” Healy v. Beer Inst., Inc., 11
491 U.S. 324, 336 (1989) (first alteration in original) (quoting Edgar v. 12
MITE Corp., 457 U.S. 624, 642 (1982) (plurality opinion)). 13
Alternatively, VIZIO contends that Connecticut’s E‐Waste Law is 14
improper because it imposes an unconstitutional user fee, see 15
Evansville‐Vanderburgh Airport Auth. Dist. v. Delta Airlines, Inc., 405 16
U.S. 707, 711–12 (1972), and its negative impact on interstate 17
commerce outweighs the benefits conferred on the local economy, see 18
Pike, 397 U.S. at 142. 19
Yet VIZIO’s claim must fail as it does not allege sufficient facts 20
to give rise to an entitlement to relief under the dormant Commerce 21
Clause. The thrust of VIZIO’s argument is that Connecticut is 22
prohibited from referencing national market share when it assesses 23
recycling fees because doing so regulates—thereby placing a burden 24
on—interstate commerce. However, such a principle has not before 25
been acknowledged in our dormant Commerce Clause jurisprudence 26
and we decline to extend that doctrine here. 27
Accordingly, we affirm the dismissal by the district court. 28
29

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9 No. 17‐227‐cv
I. Standard of Review 1
We review de novo the district court’s dismissal for failure to 2
state a claim under Rule 12(b)(6). See Sherman v. Town of Chester, 752 3
F.3d 554, 560 (2d Cir. 2014). We regard as true all well‐pleaded factual 4
allegations, draw all reasonable inferences in VIZIO’s favor, and 5
assess the complaint to “determine whether [the allegations] 6
plausibly give rise to an entitlement to relief.” Selevan v. N.Y. Thruway 7
Auth., 584 F.3d 82, 88 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 8
662, 679 (2009)). Nevertheless, the burden remains with VIZIO to 9
demonstrate that Connecticut’s E‐Waste Law imposes an 10
impermissible burden on interstate commerce. See USA Recycling, Inc. 11
v. Town of Babylon, 66 F.3d 1272, 1281 (2d Cir. 1995) (citing Hughes v. 12
Oklahoma, 441 U.S. 322, 336 (1979)). Thus, our review here focuses on 13
the dormant Commerce Clause and whether VIZIO’s theory of 14
unconstitutionality fits within its contours. 15
II. Extraterritorial Effect 16
Because VIZIO alleges that Connecticut’s E‐Waste Law merely 17
influences national pricing decisions, rather than directly controls 18
out‐of‐state commerce, its extraterritorial theory was properly 19
dismissed. A state law has unconstitutional extraterritorial effect if 20
its “practical effect . . . is to control conduct beyond the boundaries of 21
the State.” Healy, 491 U.S. at 336 (citing Brown‐Forman Distillers Corp. 22
v. N.Y. State Liquor Auth., 476 U.S. 573, 579 (1986)). When assessing a 23
plaintiff’s extraterritoriality theory, we focus squarely on whether the 24
state law has “the practical effect of requiring out‐of‐state commerce 25
to be conducted at the regulating state’s direction.” SPGGC, LLC v. 26
Blumenthal, 505 F.3d 183, 193 (2d Cir. 2007) (emphasis added) (quoting 27
Am. Booksellers Found. v. Dean, 342 F.3d 96, 102 (2d Cir. 2003)); see also 28
Energy & Env’t Legal Inst. v. Epel, 793 F.3d 1169, 1170 (10th Cir.) 29
(Gorsuch, J.) (referring to the extraterritoriality principle as “the most 30

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10 No. 17‐227‐cv
dormant doctrine in dormant commerce clause jurisprudence”). In 1
that analysis, courts shall not only consider the effect of the 2
challenged law, but also “what effect would arise if not one, but many 3
or every State adopted similar legislation.” Healy, 491 U.S. at 336. 4
The practical effect of Connecticut’s E‐Waste Law does not 5
“inescapably require” out‐of‐state conformance with its dictates such 6
that VIZIO cannot successfully argue that the law is 7
unconstitutionally extraterritorial in its effect. Nat’l Elec. Mfrs. Ass’n 8
v. Sorrell, 272 F.3d 104, 110 (2d Cir. 2001). The law does not “mak[e] 9
specific reference to the terms of . . . pricing” and does not “attach[] 10
in‐state consequences where the pricing terms violate[] the statute[].” 11
Freedom Holdings, Inc. v. Spitzer, 357 F.3d 205, 221 (2d Cir. 2004). 12
Connecticut’s E‐Waste Law does nothing to control interstate 13
commerce, but rather merely considers out‐of‐state activity in 14
imposing in‐state charges. Indeed, VIZIO is not compelled to conduct 15
its business outside of Connecticut on the state’s proscribed terms. 16
Rather, VIZIO is free to arrange its business in one manner or another 17
without consideration of out‐of‐state compliance with Connecticut’s 18
E‐Waste Law. 19
VIZIO argues that the state’s fee structure is pegged to VIZIO’s 20
national activities, which will inevitably affect its television prices 21
outside Connecticut. VIZIO attempts to characterize this as control, 22
arguing that Connecticut’s E‐Waste Law, “individually and 23
collectively with other states’ e‐waste laws, is establishing a piecemeal 24
pricing mechanism for interstate goods.” But this practical effect 25
amounts to no more than “upstream pricing impact” because the law 26
does not go “a step further[ and] control[] in‐state and out‐of‐state 27
pricing . . . .” Spitzer, 357 F.3d at 221. As such, Connecticut’s E‐Waste 28
Law is merely one of “innumerable valid state laws affect[ing] pricing 29
decisions in other States.” Healy, 491 U.S. at 345 (Scalia, J., concurring 30
in part and concurring in the judgment) (cautioning against allowing 31

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11 No. 17‐227‐cv
Commerce Clause jurisprudence to “degenerate into disputes over 1
degree of economic effect.”). VIZIO has not alleged that Connecticut 2
reaches out and directs VIZIO’s decision‐making apparatus or that of 3
any other interstate commercial participant. 4
In a final effort to articulate an entitlement to relief, VIZIO tries 5
to tack onto its control argument the principles 1) that “a State may 6
not tax value earned outside its borders,” Allied‐Signal, Inc. v. Dir., 7
Div. of Taxation, 504 U.S. 768, 777, 112 S. Ct. 2251, 119 L. Ed. 2d 533 8
(1992), and 2) that a state law may not “subject interstate commerce 9
to the risk of a double tax burden to which intrastate commerce is not 10
exposed,” Comptroller of the Treasury v. Wynne, 135 S. Ct. 1787, 1795 11
(2015) (citation omitted). But the E‐Waste Law does not impose a tax: 12
it requires electronics producers to pay fees to CERs, private recycling 13
facilities, “not to the government.” Sam Francis Found. v. Christies, Inc., 14
784 F.3d 1320, 1324 (9th Cir. 2015) (en banc), cert. denied, 136 S. Ct. 795 15
(2016); see also id. (observing that “state‐imposed taxes” are treated 16
differently than statutes that “regulate[] conduct among private 17
parties” under the dormant Commerce Clause). Moreover, neither 18
principle is part of the extraterritoriality doctrine, and for good 19
reason. As demonstrated above, Connecticut’s imposition of a fee 20
that accounts for national market share does not control interstate 21
commerce. VIZIO’s objection to the law is not that it taxes out‐of‐state 22
income, Allied‐Signal, 504 U.S. at 777–78, or that it discourages 23
participation in the interstate market, Wynne, 135 S. Ct. at 1801–04. 24
Rather, VIZIO’s challenge remains directed at Connecticut’s ability to 25
use national market share as a proxy for measuring its in‐state 26
activity. This is not discriminatory, see id. at 1804–05, nor is it control, 27

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12 No. 17‐227‐cv
see Healy, 491 U.S. at 336.1 Thus, VIZIO’s attempt to refashion its 1
control argument as one about double taxation is unavailing. 2
VIZIO also insists that our holding in Grand River Enterprises 3
Six Nations, Ltd. v. Pryor compels us to allow VIZIO’s suit to continue 4
to the discovery stage of litigation. See 425 F.3d 158, 173 (2d Cir. 2005). 5
We disagree. In Grand River, we allowed plaintiffs’ extraterritoriality 6
claim to proceed under a national market share theory. Id. Unlike the 7
plaintiffs in Grand River, however, VIZIO has not made any of the 8
allegations that we suggested in Grand River could give rise to a viable 9
claim: “that the [E‐Waste Law is] inconsistent with the legitimate 10
regulatory regimes of other states, that the [E‐Waste Law] force[s] 11
out‐of‐state merchants to seek [Connecticut] regulatory approval 12
before undertaking an out‐of‐state transaction, or that any sort of 13
interstate regulatory gridlock would occur if many or every state 14
adopted similar legislation.” Id. at 171 (quoting Spitzer, 357 F.3d at 15
221).2 The Grand River plaintiffs were successful precisely because 16
they did so plead. See id. As a result, we are not bound by our 17
previous holding in Grand River and decline to treat VIZIO in a similar 18
fashion to those plaintiffs in that distinguishable case.3 19
1 Indeed, state laws that could “result in the discriminatory double taxation of income earned out
of state” are not unconstitutional if that risk of double taxation stems from “the interaction of two
different but nondiscriminatory” tax systems. Wynne, 135 S. Ct. at 1801–02. VIZIO does not
argue that the E-Waste Law is inherently discriminatory, just that it would result in double
taxation if other states apportioned e-waste recycling fees based on in-state market share.
2 VIZIO does, however, assert that Connecticut’s E-Waste Law imposes “overlapping,
inconsistent, and confusing obligations on VIZIO” which ultimately can lead to “additional
cost[s]” in the form of “multiple e-waste fees for the same product or sale.” This alleged impact
does not amount to “effectively regulating the pricing mechanism for goods in interstate
commerce.” Grand River, 425 F.3d at 173 (internal quotation marks and brackets omitted)
(quoting Healy, 491 U.S. at 340).
3 Moreover, the Grand River court qualified its ruling by stating that it “[took] no position as to
the ultimate viability of the dormant commerce clause claim,” but chose to keep that claim alive so
as to remain “consistent with the district court’s decision to reinstate the Sherman Act claim . . . .”
Grand River, 425 F.3d at 173. And the Second Circuit later held that the Grand River claim was
not viable because the challengers had shown only that the regulations could affect nation-wide
prices, which was legally insufficient. Freedom Holdings, Inc. v. Cuomo, 624 F.3d 38, 67 (2d Cir.
2010). Yet that is all that VIZIO pleads here.

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13 No. 17‐227‐cv
In sum, VIZIO has only argued that Connecticut’s E‐Waste Law 1
merely affects pricing decisions, not that it “directly controls 2
commerce occurring wholly outside the boundaries of a State . . . .” 3
Healy, 491 U.S. at 336. More is required to make out an 4
extraterritoriality claim. Because VIZIO’s alleged “practical effect” is 5
insufficient and it has failed to identify an alternative recognized basis 6
under which its extraterritoriality claim can survive, we affirm the 7
district court’s dismissal of VIZIO’s claim for relief under the theory 8
of extraterritoriality. 9
III. Unconstitutional User Fee 10
VIZIO’s suggestion that we apply the Supreme Court’s “user 11
fee” analysis to these circumstances is also misguided. While the 12
imposition of a user fee may indicate that a dormant Commerce 13
Clause violation is afoot, see Selevan, 584 F.3d at 96–98, that analysis is 14
inapplicable here. Because Connecticut does not charge a fee for the 15
use of public property, VIZIO’s proposed framework is inapposite 16
and VIZIO’s claim for relief thereunder was rightfully dismissed by 17
the district court. 18
In Evansville, the Supreme Court announced a test in order to 19
examine contested tolls imposed for the use of state roads. 405 U.S. 20
at 716–17. That test deems permissible those user fees that are: 1) 21
“based on some fair approximation of use,” 2) “not excessive in 22
relation to the benefits conferred,” and 3) “not discriminat[ory] 23
against interstate commerce.” Nw. Airlines, Inc. v. County of Kent, 510 24
U.S. 355, 369 (1994) (citing Evansville, 405 U.S. at 716–17). Importantly, 25
the Evansville rubric applies “only to ‘charge[s] imposed by the State 26
for the use of state‐owned or state‐provided transportation or other 27
facilities and services.’” Or. Waste Sys., 511 U.S. at 103 n.6 (emphasis 28
added) (quoting Commonwealth Edison Co. v. Montana, 453 U.S. 609, 29
621 (1981)). 30

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14 No. 17‐227‐cv
Notwithstanding VIZIO’s arguments to the contrary, 1
Connecticut’s E‐Waste Law does not impose a user fee and, therefore, 2
the Evansville framework is ill‐suited to scrutinize the state’s tax. 3
Connecticut does not charge for the privilege of using public facilities 4
but instead merely imposes a fee on VIZIO in order to finance an 5
electronics recycling program. In fact, under Connecticut’s E‐Waste 6
Law manufacturers pay the recycling fees directly to the CERs, 7
privately owned facilities designated by the state as recyclers. See 8
Conn. Agencies Regs. §§ 22a‐638‐1(b), (j). Those private CERs then do 9
the work of actually recycling the goods. See Conn. Agencies Regs. 10
§ 22a‐638‐1(c). The state’s role lies only in the program’s creation, 11
maintenance, and in assigning manufacturers a rate. As such, 12
Connecticut cannot be said, in this context, to run a “state‐owned or 13
state‐provided” program and we decline to analyze the 14
reasonableness of the fees using the Evansville test. 15
VIZIO encourages this court to view the Oregon Waste Systems 16
holding as dicta. Essentially, VIZIO claims that because the overall 17
disposition of that case did not rely upon the reasoning provided in 18
footnote 6, we can treat it as persuasive rather than binding. We 19
decline to do so for two reasons. First, the questioned holding is not 20
merely dicta, as demonstrated by that Court’s treatment of the issue. 21
See Or. Waste Sys., 511 U.S. at 114 (Rehnquist, C.J., dissenting) (noting 22
the importance of footnote 6 in the Court’s conclusion); see also 23
Commonwealth Edison, 453 U.S. at 621 (describing the user‐fees 24
doctrine as applying to fees “imposed by the State for the use of state‐ 25
owned or state‐provided transportation or other facilities and services.” 26
(emphasis added)). Second, even if we were persuaded to follow 27
VIZIO’s line of reasoning, VIZIO has offered no reason why this 28
definition of “user fee” is either unreasonable or in need of revision. 29
Rather than offering an alternative, VIZIO merely states that we have 30
the option to decline to follow footnote 6. 31

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15 No. 17‐227‐cv
In sum, we do not see a justification—nor has VIZIO offered 1
one—for why the Evansville test ought to be applied to a program such 2
as Connecticut’s. As a result, VIZIO has failed to state a claim for 3
relief and the district court was correct to dismiss this “user fee” 4
argument. 5
IV. Burden on Interstate Commerce 6
Having dispensed with VIZIO’s primary arguments as to the 7
discriminatory nature of Connecticut’s E‐Waste Law, we now turn to 8
the task of balancing the competing national and local interests. 9
Because the law “regulates even‐handedly to effectuate a legitimate 10
local public interest, and its effects on interstate commerce are only 11
incidental, it will be upheld unless the burden imposed on such 12
commerce is clearly excessive in relation to the putative local 13
benefits.” Pike, 397 U.S. at 142. Ultimately, however, this final 14
attempt to maintain VIZIO’s dormant Commerce Clause challenge 15
under the Pike framework must be stifled because VIZIO once again 16
fails to plead sufficient facts to give rise to an entitlement to relief. 17
The Pike test is often directed at differentiating “protectionist 18
measures” from those that “can fairly be viewed as . . . directed to 19
legitimate local concerns, with effects upon interstate commerce that 20
are only incidental.” Philadelphia v. New Jersey, 437 U.S. 617, 624, 21
(1978). In order to sufficiently allege that Connecticut’s E‐Waste Law 22
is “protectionist” rather than dedicated to “legitimate local concerns,” 23
VIZIO must at least demonstrate that the “burden on interstate 24
commerce . . . is qualitatively or quantitatively different from that 25
imposed on intrastate commerce.” Town of Southold, 477 F.3d at 50 26
(quoting Sorrell, 272 F.3d at 109). What’s more, when faced with the 27
considerable public benefits presented by this law, VIZIO’s task 28
becomes even greater, as it “must overcome a ‘strong presumption of 29
validity.’” Kassel v. Consol. Freightways Corp. of Del., 450 U.S. 662, 670 30

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16 No. 17‐227‐cv
(1981) (quoting Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 524 1
(1959)). 2
While states are prohibited from discriminating against out‐of‐ 3
state actors, they “may impose incidental burdens on interstate 4
commerce . . . to promote safety or general welfare.” N.Y. State 5
Trawlers Ass’n v. Jorling, 16 F.3d 1303, 1307 (2d Cir. 1994). Here, we 6
examine precisely that sort of law and conclude that “any arguable 7
burden does not exceed the public benefits of the [law].” United 8
Haulers Ass’n, Inc. v. Oneida‐Herkimer Solid Waste Mgmt. Auth., 550 U.S. 9
330, 346 (2007). 10
The benefits provided by Connecticut’s E‐Waste Law are 11
legion. Primarily, the law funds the state’s recycling efforts, a clear 12
benefit to the public at large. Secondarily, the market share approach 13
itself provides additional benefits in that it, among other things: 14
apportions costs amongst state market participants, reduces the 15
administrative strain other approaches may carry in identifying 16
producers, and guarantees that any “orphan” products—those for 17
which an original manufacturer is unidentifiable—will be recycled, 18
see Conn. Gen. Stat. § 22a‐631(d). Analyzed against this backdrop, 19
VIZIO faces a high bar to sufficiently allege that Connecticut has 20
impermissibly implemented a program which benefits public health 21
and safety. 4 22
On balance we do not find an impermissible burden. Burdens 23
supportive of an unconstitutional finding have been recognized in the 24
following situations: “regulations that have a disparate impact on in‐ 25
versus out‐of‐state entities, laws that regulate beyond the state’s 26
4 VIZIO responds that, even if the E-Waste Law as a whole protects public health and safety, the
method by which it does so—specifically its “reliance on national-market share—is entirely
unrelated to any” such benefit. That is of no importance. We ask only whether the means chosen
is “a convenient and effective way” of accomplishing the ends sought. United Haulers Ass’n, 550
U.S. at 346.

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17 No. 17‐227‐cv
borders, and laws that create regulatory inconsistencies between 1
states.” N.Y. Pet Welfare Ass’n, 850 F.3d at 91. VIZIO’s Pike argument 2
rests somewhat uncomfortably in those first and third categories.5 3
First addressing VIZIO’s claims of disparate impact, VIZIO has 4
not demonstrated that there are “burdens on interstate commerce that 5
exceed the burdens on intrastate commerce.” USA Recycling, 66 F.3d 6
at 1287 (quoting Jorling, 16 F.3d at 1308). Nor has VIZIO alleged the 7
actual—or potential—existence of any in‐state manufacturer that is 8
less negatively affected by the national market approach. 9
In any event, the law does not contain any uneven burden 10
allocated on the basis of an actor’s residency and, as such, we do not 11
find a violation of the dormant Commerce Clause. Connecticut 12
considers a variety of factors when assigning manufacturers a market 13
share, see Conn. Agencies Regs. § 22a‐638‐1(g)(2), none of which 14
relates to residency. In other words, Connecticut’s E‐Waste Law 15
“treat[s] all private companies exactly the same,” no matter from 16
which state they hail. United Haulers Ass’n, 550 U.S. at 342. Short of 17
finding that burdens are distributed unequally based on in‐state 18
versus out‐of‐state distinctions, we are unable to find an 19
impermissible disparate impact. See C & A Carbone, Inc. v. Town of 20
Clarkstown, 511 U.S. 383, 390–92 (1994) (citing, inter alia, Philadelphia, 21
437 U.S. at 624; Hughes, 441 U.S. at 322)). 22
VIZIO does also claim that Connecticut’s E‐Waste Law double‐ 23
charges recycling costs in different states, imposing fees in 24
Connecticut for out‐of‐state sales in states where VIZIO has already 25
contributed to recycling efforts. Inasmuch as that claim could be 26
construed as a “regulatory inconsistency,” it is not of the variety 27
deemed unconstitutional under the Pike standard. Whatever the ill 28
5 Any argument by VIZIO that Connecticut regulates beyond its borders has been disposed of by
way of our extraterritoriality analysis. See supra Discussion Section II; see also Sorrell, 272 F.3d
at 110 (analyzing one component of a plaintiff’s Pike claim under the Healy rubric).

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18 No. 17‐227‐cv
effects VIZIO claims result from Connecticut’s E‐Waste Law, those 1
effects are only felt within the borders of that state. Regulatory 2
inconsistencies arise not from a regulation that takes effect entirely 3
inside a state’s borders, but instead from those that “project[] one state 4
regulatory regime into the jurisdiction of another State.” Healy, 491 5
U.S. at 337 (citing CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 88– 6
89 (1987)). Neither Connecticut’s consideration of out‐of‐state sales 7
as a basis for its e‐waste fees nor any resultant allegedly “duplicative” 8
charges in multiple states constitute a regulatory inconsistency. 9
Rather, it is merely an inconvenience for VIZIO to pay a seemingly 10
larger e‐waste bill. Connecticut has done nothing to create—or 11
increase the likelihood of—inconsistent obligations with which 12
VIZIO must comply in different states. See Brown‐Forman Distillers, 13
476 U.S. at 583–84. As a result, we do not find that any alleged double 14
charge impermissibly burdens interstate commerce. 15
Ultimately, any arguable burden on interstate commerce is not 16
clearly excessive in comparison to the local benefits. Thus, VIZIO 17
cannot state a claim under Pike, 397 U.S. at 142, and VIZIO’s complaint 18
was properly dismissed. 19
CONCLUSION 20
The viability of VIZIO’s claim hinges on our recognizing a 21
claim under the dormant Commerce Clause not acknowledged by 22
any court. VIZIO has failed to convince us that its claim should 23
proceed under a variety of theories, old and new. In sum, we: 1) 24
decline to extend the extraterritoriality doctrine in such a way as to 25
prohibit laws that merely consider out‐of‐state activity, 2) do not 26
apply the user fee analysis to VIZIO’s case, and 3) find no burden on 27
interstate commerce that is clearly excessive to the considerable 28
public benefits conferred by Connecticut’s E‐Waste Law. As a result, 29
VIZIO’s suit cannot proceed. 30

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19 No. 17‐227‐cv
VIZIO has failed to plead a cognizable basis for invalidating 1
Connecticut’s E‐Waste Law under the dormant Commerce Clause 2
and, accordingly, we uphold the decision of the district court to 3
dismiss VIZIO’s complaint with prejudice. 4

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