MEMORANDUM AND ORDER INTRODUCTION On May 6, 2021, the captioned Plaintiffs, a group of trade associations whose members provide broadband internet service to New Yorkers, moved this Court under Federal Rule of Civil Procedure 65(a) for a preliminary injunction barring New York State Attorney General Letitia A. James from enforcing the Affordable Broadband Act, N.Y. Gen. Bus. Law §399-zzzzz, which would require them by June 15, 2021 to offer qualifying low-income costumers high-speed broadband service at or below certain price ceilings. For the reasons set forth below, Plaintiffs’ motion is GRANTED. BACKGROUND Internet access has transcended beyond mere luxury to modern necessity. So integrated has the Internet become with contemporary American life that our nation adapted to — if not survived — the COVID-19 pandemic by relying on how easily it facilitates access to our fundamental needs: e.g., healthcare (“telehealth”), education (“remote learning”), employment (“work from home”), camaraderie (“social networking”). Def. Mem. in Opp. at 5 [DE 19] (“Def. Opp.”). But the Internet’s promise of access is only as promising as its accessibility — which depends in part on whether individuals can afford it. The New York State Affordable Broadband Act’s (the “ABA”) stated purpose is to ensure all New Yorkers have access to affordable Internet. Signed into law April 16, 2021, the ABA regulates every New York “broadband service,” defined as [a] mass-market retail service that provides the capability to transmit data to and receive data from all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service provided by a wireline, fixed wireless or satellite service provider,…[excluding] dial-up service. N.Y. Gen. Bus. Law §399-zzzzz(1). The ABA covers every broadband service provider operating in New York except those serving “no more than twenty-thousand households” whose compliance, as determined by the New York State Public Service Commission (the “PSC”), “would result in unreasonable or unsustainable financial impact.” Id. §399-zzzzz(5). Plaintiffs are trade associations whose members provide “wireline, fixed wireless, or satellite broadband service”; they are “broadband service” providers. Compl.
12-18, 26. The ABA mandates such providers offer, by June 15, 2021, all qualifying low-income households at least two Internet access plans: (i) download speeds of at least 25 megabits-per-second at no more than $15-per-month, or (ii) download speeds of at least 200 megabits-per-second at no more than $20-per-month. N.Y. Gen. Bus. Law §§399-zzzzz(2)-(4). A household qualifies if it: (a) is eligible for free or reduced-priced lunch through the National School Lunch Program; or (b) is eligible for, or receiving the supplemental nutrition assistance program benefits; or (c) is eligible for, or receiving Medicaid benefits; or (d) is eligible for, or enrolled in senior citizen rent increase exemption; or (e) is eligible for, or enrolled in disability rent increase exemption; or (f) is a recipient of an affordability benefit from a utility. Id. §399-zzzzz(2). These qualifications cover approximately “[7] million New Yorkers and 2.7 million households,”1 the latter of which exceeds one-third of all New York State households.2 Providers may raise prices only according to a statutory formula and only once every five years (for the $15 monthly plan) or two years (for the $20 monthly plan). Id. §§399-zzzzz(3)-(4). These Internet plans must be offered “on the same terms and conditions…as for the regularly priced offerings for similar service[s]” and on a standalone basis, i.e., separate from any “ bundled cable and/or phone services.” Id. §§399-zzzzz(3), (5). Providers must “make all commercially reasonable efforts to promote and advertise” the plans. Id. §399-zzzzz(7). The ABA empowers the New York State Attorney General, Defendant Letitia A. James, to seek injunctive relief against and civil penalties up to a $1000 per violation from any noncompliant providers. Id. §399-zzzzz(10). Plaintiffs brought this action on April 30, 2021, [DE 1], and on May 6, 2021 moved for a preliminary injunction barring Defendant from enforcing and giving effect to the ABA, Pls. Mem. in Support [DE 16] (“Pls. Mem.”). Declarations from six executives at Plaintiffs’ member organizations accompany Plaintiffs’ briefs. See Declaration of Jim Baase (“Empire Tele. Decl.”), Ex A. to Pls. Mem. [DE 16-1]; Declaration of Matthew Kramer Coakley, (“Verizon Decl.”), Ex. B. to Pls. Mem. [DE 16-2]; Declaration of Glen Faulkner (“Heart of the Catskills Decl.”), Ex. C to Pls. Mem. [DE 16-3]; Declaration of Jennifer Manner (“Hughes Network Decl.”), Ex. D to Pls. Mem. [DE 16-4]; Declaration of Jason Miller (“Delhi Tele. Decl.”), Ex. E to Pls. Mem. [DE 16-5]; Declaration of Mark T. Webster (“Champlain Tele. Decl.”), Ex. F to Pls. Mem. [DE 16-6]. Defendant opposed on May 17, 2021 and advised that the PSC scheduled a hearing for May 19, 2021 to address pending exemption applications. Def. Opp. at 10. At the hearing, the PSC granted “temporary exemption[s] to allow for the orderly review and evaluation of the exemption requests” to several companies, four of whose executives submitted declarations in support of Plaintiffs’ motion. Order Granting Temporary Exemptions attached to Def.’s May 20, 2021 Ltr. [DE 21] (“PSC Order”). The PSC issued a “Notice Soliciting Comment” on May 28, 2021, inviting public comment “on the criteria and factors that may be considered by the [PSC] in evaluating” the ABA’s “unreasonable or unsustainable financial impact” exemption criteria. Ex. B to Pls. June 1, 2021 Ltr. [DE 24-2]. Plaintiffs submitted their Reply brief on May 21, 2021. Pls. Reply in Support [DE 23] (“Pls. Reply”). Oral argument was held on June 3, 2021. DISCUSSION “To obtain a preliminary injunction against government enforcement of a statute, [a plaintiff] must establish (1) that it is likely to succeed on the merits, (2) that it is likely to suffer irreparable harm if the injunction is not granted, (3) that the balance of the equities tips in its favor, and (4) that the injunction serves the public interest.” SAM Party of New York v. Kosinski, 987 F.3d 267, 273-74 (2d Cir. 2021). First, the Court will address irreparable injury. “[T]he moving party must first demonstrate that such injury is likely before the other requirements for the issuance of an injunction will be considered,” Grand River Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60, 66 (2d Cir. 2007), for imminent, irreparable injury is “the single most important prerequisite for the issuance of a preliminary injunction.” Yang v. Kosinski, 960 F.3d 119, 128 & n.32 (2d Cir. 2020) Second, the Court analyzes Plaintiffs’ likelihood of success on the merits, despite Plaintiffs’ availment also of the alternative “serious questions” standard. Pls. Mem. at 6-7, 24. The Second Circuit “ha[s] repeatedly stated that the serious-questions standard cannot be used to preliminarily enjoin governmental action,” Trump v. Deutsche Bank AG, 943 F.3d 627, 637 (2d Cir. 2019), rev’d on other grounds sub nom., Trump v. Mazars USA, LLP, 140 S.Ct. 2019, 207 L.Ed.2d 951 (2020), and the ABA is the product of New York State’s legislative process, see Able v. United States, 44 F.3d 128, 131 (2d Cir. 1995) (instructing not to apply serious-questions standard to “governmental policies implemented through legislation or regulations developed through presumptively reasoned democratic processes [because they] are entitled to a higher degree of deference and should not be enjoined lightly”). Third, the Court balances the equities and weighs the public interest. Pharaohs GC, Inc. v. U.S. Small Bus. Admin., 990 F.3d 217, 225 (2d Cir. 2021) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008)). The Court finishes by addressing Federal Rule of Civil Procedure 65(c). I. Imminent, Irreparable Harm In the context of a preliminary injunction motion, irreparable harm must be “actual and imminent,” not “remote,” not “speculative,” and not capable of remedy should “a court wait[] until the end of trial to resolve” the matter. Grand River Enter. Six Nations, Ltd., 481 F.3d at 66. If redressable through monetary damages, an injury ordinarily will not justify preliminary injunctive relief, Moore v. Consol. Edison Co. of New York, 409 F.3d 506, 510 (2d Cir. 2005) (citing Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992)), unless the Eleventh Amendment precludes recovery of monetary damages, United States v. New York, 708 F.2d 92, 93 (2d Cir. 1983) (per curiam)). A. Parties’ Arguments Plaintiffs ground irreparable harm in a “Hobson’s choice” whereby they suffer injury whether or not they comply with ABA. Should they choose noncompliance, they face civil penalties and the Governor’s “promise” that they “will lose [their] franchise in the State of New York.” Should they comply, the ABA will “likely” require them to provide these services at a loss, raise advertising expenditures, impose administrative costs due to providers’ need “to develop a system for validating customers’ eligibility,” force them to cancel preexisting business plans for upgrades to, and expansion of, their broadband networks, and inflict reputational harm. Pls. Mem. at 18-20. Defendant counters that Plaintiffs “speculate” with “conclusory arguments” about “possible” future events, whose effects may be “long term” and not “imminent.” Def. Opp. at 8-10. Defendant says Plaintiffs fail to consider the “benefits” providers “are likely to gain from the ABA,” such as new customers and increased goodwill. Id. Defendant also notes an uncertainty as to whether or not certain of Plaintiffs’ member organizations must comply with the ABA, considering the specific services they offer and the availability of exemptions. Id. With respect to the latter, Defendant notified the Court that the PSC granted four organizations whose executives submitted declarations “temporary exemption[s]…pending complete review of individual exemption applications.” PSC Order at 7. B. Analysis Plaintiffs have adequately demonstrated imminent irreparable injury largely due to the monetary harm they would suffer. Though monetary damages would usually supply an adequate remedy at law negating the availability of preliminary injunctive relief, the harm takes on special import where, as here, the Eleventh Amendment precludes redressability. See United States v. New York, 708 F.2d at 93-94; e.g., UnitedHealthcare of N.Y., Inc. v. Vullo, 2018 WL 4572243, at *2 (S.D.N.Y. Sept. 21, 2018). “Where [monetary] damages cannot be later collected because the defendant enjoys [E]leventh [A]mendment immunity, the damages become irreparable.”3 N.Y.S. Trawlers Ass’n v. Jorling, 764 F. Supp. 24, 25-26 (E.D.N.Y.), aff’d, 940 F.2d 649 (2d Cir. 1991); e.g., John E. Andrus Mem’l, Inc. v. Daines, 600 F. Supp. 2d 563, 572 n.6 (S.D.N.Y. 2009) (plaintiffs “unable to collect a judgment for monetary damages” due to “sovereign immunity under the Eleventh Amendment” may have irreparable injury “presumed” because “the only relief available…is injunctive.”); Am. Soc. of Composers, Authors, & Publishers v. Pataki, 930 F. Supp. 873, 880 n.15 (S.D.N.Y. 1996). “[A]t least three circuits have held that unrecoverable damages may be irreparable harm, without reference to the amount of the loss.” Regeneron Pharms., Inc. v. U.S. Dep’t of Health & Hum. Servs., 2020 WL 7778037, at *4 (S.D.N.Y. Dec. 30, 2020) (citing Odebrecht Const., Inc. v. Sec’y, Fla. Dep’t of Transp., 715 F.3d 1268, 1289 (11th Cir. 2013); Chamber of Commerce v. Edmondson, 594 F.3d 742, 770-71 (10th Cir. 2010); and Iowa Utils. Bd. v. FCC, 109 F.3d 418, 426 (8th Cir. 1996)). Beginning June 15, 2021, Plaintiffs will suffer unrecoverable losses increasing with time, and the enormity of the matter — six plaintiffs with multiple member organizations attacking a statute affecting one-third of all New York households — portends a lengthy litigation. See, e.g., Regeneron Pharms., Inc., 2020 WL 7778037, at *4 (quoting Jayaraj v. Scappini, 66 F.3d 36, 40 (2d Cir. 1995)). The bulk of these losses will stem from lost income. Three of Plaintiffs’ declarants estimate the ABA will reduce annual net income by at least $1 million each. Empire Tele. Decl. 8 (“net income loss of approximately $2 million per year”); Heart of the Catskills Decl. 17 (“top-line revenue will decrease by $1,364,000, and net cash flow will decrease by $1,031,000,”); Delhi Tele. Decl. 7 (“net income loss of about $1 million per year (or $90,000 per month)”). While a telecommunications giant like Verizon may be able to absorb such a loss, others may not: the Champlain Telephone Company, for example, “estimates that nearly half [approximately 48 percent ] of [its] existing broadband customers will qualify for discounted rates,” with each such customer “caus[ing] a monetary loss.” Champlain Tele. Decl.
