Amicus Curiae Brief — TitleMax of Virginia, Inc., et al., Petitioners v. Wendy S. Spicher, Secretary, Pennsylvania Department of Banking and Securities

No. 25-1359

In the Supreme Court of the United States

─────────────♦─────────────

TITLEMAX OF VIRGINIA, INC., ET AL.,

Petitioners,

v.

WENDY S. SPICHER, Secretary, Pennsylvania

Department of Banking and Securities,

Respondent.

─────────────♦─────────────

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Third Circuit

─────────────♦─────────────

BRIEF OF AMICUS CURIAE

STATE OF SOUTH CAROLINA

IN SUPPORT OF PETITIONERS

─────────────♦─────────────

ALAN WILSON

THOMAS T. HYDRICK

Attorney General of

Solicitor General

South Carolina

JOSEPH D. SPATE*

1000 Assembly St.

Deputy Solicitor General

Columbia, SC 29201

*Counsel of Record for

josephspate@scag.gov

State of South Carolina

(803) 734-3371

TABLE OF CONTENTS

TABLE OF AUTHORITIES ...................................... ii

INTEREST OF AMICUS CURIAE ........................... 1

SUMMARY OF ARGUMENT.................................... 2

REASONS FOR GRANTING THE PETITION ........ 2

I.

The question presented is exceptionally

important to South Carolina and its citizens. . 2

II.

This petition is an excellent vehicle to resolve

that question. .................................................... 5

CONCLUSION ........................................................... 9

ii

TABLE OF AUTHORITIES

Cases

Page(s)

Axon Enter., Inc. v. Fed. Trade Comm’n,

598 U.S. 175 (2023) ................................................. 3

Baldwin v. G.A.F. Seelig, Inc.,

294 U.S. 511 (1935) ................................................. 5

Carolina Trucks & Equip., Inc. v. Volvo Trucks of N.

Am., Inc.,

492 F.3d 484 (4th Cir. 2007)................................... 5

Colorado River Water Conservation Dist. v. United

States,

424 U.S. 800 (1976) ............................................. 2, 3

Drs. Hosp. of Augusta, L.L.C. v. CompTrust AGC

Workers’ Comp. Tr. Fund,

371 S.C. 5, 636 S.E.2d 862 (2006) .......................... 6

Edgar v. MITE Corp.,

457 U.S. 624 (1982) ................................................. 6

Healy v. Beer Inst., Inc.,

491 U.S. 324 (1989) ............................................. 6, 7

Middlesex Cnty. Ethics Comm. v. Garden State Bar

Ass’n,

457 U.S. 423 (1982) ................................................. 4

Midwest Title Loans, Inc. v. Mills,

593 F.3d 660 (7th Cir. 2010)........................... 7, 8, 9

Nat’l Pork Producers Council v. Ross,

598 U.S. 356 (2023) ................................................. 6

New Orleans Pub. Serv., Inc. v. Council of City of

New Orleans,

491 U.S. 350 (1989) ................................................. 2

Shelby County v. Holder,

570 U.S. 529 (2013) ................................................. 6

Sprint Comm’n Inc. v. Jacobs,

571 U.S. 69 (2013) ............................................... 3, 4

iii

TABLE OF AUTHORITIES

(continued)

State of Kansas v. Colorado,

206 U.S. 46 (1907) ................................................... 6

Steffel v. Thompson,

415 U.S. 452 (1974) ............................................. 3, 4

Younger v. Harris,

401 U.S. 37 (1971) ............................................... 2, 4

Statutes

28 U.S.C. § 1331 ......................................................... 3

1

INTEREST OF AMICUS CURIAE 1

Extraterritoriality is not a hypothetical concern for

South Carolina. It undermines foundational federalism principles that animate the authority of the

States. And, as this case illustrates, it has real world

consequences for the States and their inhabitants.

A state agency in Pennsylvania wants to control

the terms of loan contracts entered into in other

States between Pennsylvania residents and out-ofstate companies. These companies don’t have offices

or employees in Pennsylvania, don’t conduct any business in Pennsylvania, and don’t advertise in Pennsylvania. Yet the Pennsylvania agency has tried to force

its will extraterritorially by levying tens of millions of

dollars in fines on these out-of-state companies that

dare follow the law of the States where they actually

do business. And when the Pennsylvania agency is

called to answer for its threats to federalism in federal

court, it cries Younger abstention. But does Younger

work that way? The answer matters greatly to South

Carolina. It has an interest in preventing sister

States from supplanting policy decisions made within

South Carolina’s territorial limits.

South Carolina has longstanding concerns about

extraterritorial encroachment. That’s because one

State’s overreach intrudes into the authority of other

States. This Court should clear the fog by granting

certiorari and confirming that Younger isn’t a license

for extraterritoriality.

1 Counsel of record for all parties timely received notice of South

Carolina’s intention to file this brief.

2

SUMMARY OF ARGUMENT

States often champion the abstention doctrine outlined by this Court in Younger v. Harris, 401 U.S. 37

(1971), as soundly rooted in principles of federalism.

But when Younger abstention ceases to serve the underlying federalism principles that prompt it, South

Carolina has a decidedly different view of the relevance and applicability of the doctrine. In such circumstances, South Carolina contends that courts

should generally decline to apply Younger abstention

and should instead fulfill their “virtually unflagging”

obligation to hear and decide cases that raise weighty

federalism concerns. Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976).

In short, under these circumstances, courts shouldn’t

allow the tail to wag the dog.

In South Carolina’s view, the decision below represents one such instance where Younger abstention

was unwarranted considering the serious federalism

concerns raised by the underlying claims. This Court

should grant certiorari to clarify that a State may not

find refuge in Younger abstention when its own conduct raises serious federalism concerns.

REASONS FOR GRANTING THE PETITION

I.

The question presented is exceptionally

important to South Carolina and its citizens.

Petitioners ask this Court to resolve a question of

exceptional importance to South Carolina and its citizens: “[w]hether a State’s ‘generic,’ New Orleans Pub.

Serv., Inc. v. Council of City of New Orleans, 491 U.S.

350, 365 (1989), interest in regulating the

3

transactions that out-of-state companies enter into

with the State’s residents while in other states is sufficiently important to permit the State to evade federal court under Younger.” Pet. i. It raises important

concerns about the potential limits of Younger abstention in light of attempted extraterritorial regulation.

Start with the basics of abstention. This Court has

long admonished lower courts that “[a]bstention from

the exercise of federal jurisdiction is the exception,

not the rule.” Colorado River, 424 U.S. at 813. This is

largely because of the “virtually unflagging obligation

of the federal courts to exercise the jurisdiction given

them.” Id. at 817. After all, 28 U.S.C. § 1331 states

that “district courts shall have original jurisdiction of

all civil actions arising under the Constitution, laws,

or treaties of the United States.” “Not may have jurisdiction, but shall. Not some civil actions arising under

federal law, but all.” Axon Enter., Inc. v. Fed. Trade

Comm’n, 598 U.S. 175, 205 (2023) (Gorsuch, J., concurring) (emphasis in original).

Younger abstention is one such exception, and a

narrow one at that. Ordinarily, a pending action in

state court is “no bar to proceedings concerning the

same matter in the Federal court[s].” Sprint Comm’n

Inc. v. Jacobs, 571 U.S. 69, 73 (2013) (quoting Colorado River, 424 U.S. at 817). That doctrine is rooted

in “equity, comity, and federalism.” Steffel v. Thompson, 415 U.S. 452, 454 (1974). And those principles

lead to the conclusion that “federal courts should ordinarily refrain from enjoining ongoing state criminal

prosecutions.” Id. at 460. Abstention can be justified

in some of those cases because the “pending state proceeding” could “provide the federal plaintiff with the

4

necessary vehicle for vindicating his constitutional

rights . . . .” Id.

But Younger abstention is not an inexorable command and is only warranted in “exceptional” circumstances. Sprint, 571 U.S. at 78. For one, Younger abstention is only warranted for certain types of state

proceedings: (1) ongoing state criminal prosecutions;

(2) certain civil enforcement proceedings that are akin

to state criminal prosecutions; and (3) certain civil

proceedings involving orders that further a state

court’s ability to perform its judicial functions. Id.

For another, even when the state proceeding is of

the type to which Younger might conceivably apply,

courts must still consider additional factors before invoking Younger. Id. at 81. These factors, often called

the Middlesex factors, are: (1) whether there are ongoing judicial proceedings; (2) whether those proceedings implicate important state interests; and (3)

whether there is an adequate opportunity in the state

proceeding to raise constitutional challenges. See

Middlesex Cnty. Ethics Comm. v. Garden State Bar

Ass’n, 457 U.S. 423, 432 (1982).

And finally, even if those two hurdles are cleared,

Younger identifies several circumstances where abstention is not appropriate: (1) bad faith harassment

by state officials responsible for prosecution; (2) a

statute that is flagrantly violative of express constitutional prohibitions; and (3) other “extraordinary circumstances” or “unusual situations.” Younger, 401

U.S. at 53–54.

Petitioners raise a vital question about an important step in the Younger abstention analysis,

5

namely whether a State’s interest in regulating outof-state transactions satisfies the second Middlesex

factor. In raising this question, Petitioners necessarily ask this Court to grapple with complex questions of federalism and extraterritorial regulation,

and ultimately whether this Court will extend the

Younger abstention doctrine beyond its own theoretical underpinnings rooted in federalism.

II.

This petition is an excellent vehicle to resolve that question.

Petitioners’ case is an excellent vehicle to resolve

the Younger abstention question because it squarely

raises a complex question of alleged extraterritorial

regulation.

Petitioners’ Complaint alleges serious constitutional claims. And although all Petitioners’ claims

warrant careful consideration, their Commerce

Clause claim is particularly deserving of close review

because it raises extraterritoriality concerns that go

to the heart of our constitutional structure.

Courts have long recognized the principle that

“state laws may not generally operate extraterritorially.” Carolina Trucks & Equip., Inc. v. Volvo Trucks

of N. Am., Inc., 492 F.3d 484, 489 (4th Cir. 2007); see

also Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 521

(1935) (one state may not “project its legislation” into

another). This principle “is one of constitutional magnitude” rooted in both the structure and text our constitution. Carolina Trucks, 492 F.3d at 489–90.

First, it derives from the “structure of federalism,”

which is based upon “‘the autonomy of the individual

states within their respective spheres.’” Id. at 490

6

(quoting Healy v. Beer Inst., Inc., 491 U.S. 324, 336

(1989)); see also Drs. Hosp. of Augusta, L.L.C. v.

CompTrust AGC Workers’ Comp. Tr. Fund, 371 S.C.

5, 9, 636 S.E.2d 862, 864 (2006) (“[T]he principle that

state statutes generally have no extra-territorial effect remains a foundation of the respect for individual

sovereignty the states must share with one another.”).

Within this system of federalism, all states “enjoy

equal sovereignty.” Shelby County v. Holder, 570 U.S.

529, 535 (2013). And no one state may seek to “enforce

its own policy upon the other[s].” State of Kansas v.

Colorado, 206 U.S. 46, 95 (1907).

Second, the bar on extraterritoriality derives from

the text of the Constitution itself. In resolving extraterritoriality disputes, this Court has invoked a variety of express constitutional provisions, including the

Due Process Clause, the Full Faith and Credit Clause,

and particularly relevant here, the Commerce Clause.

See Nat’l Pork Producers Council v. Ross, 598 U.S.

356, 376 (2023).

The Commerce Clause seeks to maintain “a national economic union unfettered by state-imposed

limitations on interstate commerce.” Healy v. Beer

Inst., Inc., 491 U.S. 324, 336 (1989). It generally “precludes the application of a state statute to commerce

that takes place wholly outside of the State’s borders,

whether or not the commerce has effects within the

State.” Id. (quoting Edgar v. MITE Corp., 457 U.S.

624, 642–43 (1982)).

For example, in Healy v. Beer Institute, Inc., this

Court held a Connecticut beer price affirmation law

violated the Commerce Clause. In reaching that conclusion, the Court focused not only on the law’s

7

discriminatory effect but also on its extraterritorial

effect. 491 U.S. at 335–36. The Court observed in part

that “a statute that directly controls commerce occurring wholly outside the boundaries of a State exceeds

the inherent limits of the enacting State’s authority

and is invalid regardless of whether the statute’s extraterritorial reach was intended by the legislature.”

Id. at 336. “The critical inquiry is whether the practical effect of the regulation is to control conduct beyond

the boundaries of the State.” Id. at 336.

In Midwest Title Loans, Inc. v. Mills, 593 F.3d 660

(7th Cir. 2010), the Seventh Circuit relied on Healy to

enjoin the application of Indiana’s version of the Uniform Consumer Credit Code to an Illinois title loan

company. In that case, the title loan company operated in and originated loans out of Illinois. The Seventh Circuit described the title loan company’s operations as follows: “Each title loan that Midwest made

to a Hoosier was in the form of a check, drawn on an

Illinois bank, that was handed to the borrower at Midwest’s loan office and could be cashed there. Illinois

was also where the conditional transfer of title to the

collateral was made (the handing over of the keys-the

‘pawn’) and where the payments required by the loan

agreement were received by Midwest.” Id. at 669.

Indiana’s attempt to apply its own law to the Illinois title loan company violated the Commerce Clause

because it represented an attempt to “regulate activities in other states,” thereby “arbitrarily . . . exalt[ing]

the public policy of one state over that of another.” Id.

at 668–69. According to the Seventh Circuit, the fact

that the contract was made and executed in Illinois

was “enough to show that the territorial-application

8

provision [of the Indiana Consumer Code] violate[d]

the commerce clause.” Id. at 669.

Importantly, the Seventh Circuit’s conclusion was

not altered by the fact that the collateral for the loan

might have been located in Indiana. In reaching this

conclusion, the Seventh Circuit reasoned:

Nor is the location of the collateral in Indiana

a critical difference between this case and the

other cases that have invalidated extraterritorial regulations. It just illustrates that a transaction made in one state can have repercussions in another. A firecracker bought by an Illinoisan in Indiana could cause an injury to the

purchaser in Illinois. That would allow an Illinois court, in a suit by the injured purchaser

against the Indiana seller, to apply its own law.

But it would not allow Illinois to forbid Indiana

to sell firecrackers to residents of Illinois in Indiana merely because Illinois forbids firms in

Illinois to sell firecrackers and thus would not

be discriminating against an out-of-state business.

Id.

Petitioners’ allegations in this case are analogous

to the facts of Midwest—and are, in at least one respect, stronger. Like the title loan company in Midwest, the Petitioners in this case object to the application of the law of one state—here, Pennsylvania—to

loans that were provided to consumers at brick-andmortar stores in other states. Pet. 6. And much like

the loans in Midwest, the loans at issue here “were

originated [out]side the territorial and sovereign

9

boundaries of ” Pennsylvania. Pet. 11. Further, Petitioners “ha[ve] no offices or employees in Pennsylvania, do[ ] not conduct any business in Pennsylvania,

and do[ ] not advertise in Pennsylvania.” Pet. 11.

And in that respect, Petitioners’ claim in this case

is somewhat stronger than the claim of the title loan

company in Midwest because the loan company in

that case advertised in Indiana. See Midwest, 593

F.3d at 669 (“Our conclusion is not altered by the fact

that Midwest advertises in Indiana. If Indiana cannot

prevent Midwest from lending money to Hoosiers in

Illinois, it cannot prevent Midwest from truthfully advising them of this opportunity.”).

Most importantly, however, Petitioners’ claim

raises the same constitutional concerns that were present in Midwest. Like Indiana, Pennsylvania allegedly seeks to regulate activity in another state, exalting its policy preferences over those of other states.

Such allegations are weighty, serious, and implicate

not only the Commerce Clause but also the very structure of our federal system. As discussed above, those

concerns should compel the Court to decline to apply

Younger abstention in these circumstances.

CONCLUSION

This Court should grant the petition.

[Signature on following page]

10

Respectfully submitted,

ALAN WILSON

Attorney General of

South Carolina

1000 Assembly St.

Columbia, SC 29201

josephspate@scag.gov

(803) 734-3371

July 8, 2026

THOMAS T. HYDRICK

Solicitor General

JOSEPH D. SPATE*

Deputy Solicitor General

*Counsel of Record for

State of South Carolina