The Legality of State Protectionist Laws Against Legal Process Outsourcing

INTRODUCTION ..................................................................................... 326 I. HISTORY AND BACKGROUND OF LPO ....................................... 327 A. Evolution of Outsourcing .................................................... 327 B. Growth of LPO Industry ..................................................... 329 C. Risks and Benefits of LPOs ................................................. 330 II. VARIOUS STATE AND FEDERAL ATTEMPTS AT RESTRICTING AND REGULATING OUTSOURCING ............................................. 331 A. State Protectionist Actions .................................................. 332 B. Federal Protectionist Actions ............................................. 333 1. Legislative Actions ....................................................... 333 2. Executive Actions ......................................................... 335 C. Private Lawsuit Against Outsourcing ................................. 335 III. THE LEGALITY OF PROTECTIONIST ACTIONS ............................ 336 A. State Protectionist Actions Against LPO Would Likely be Held Unconstitutional ......................................................... 336 1. Preemption .................................................................... 338 2. Dormant Foreign Affairs Power ................................... 340 3. Dormant Foreign Commerce Clause ............................. 342 4. Market Participant Exception ....................................... 345 B. Federal Action: If Congress Were to Enact a Bill Regulating LPO .................................................................. 348 CONCLUSION ......................................................................................... 348