The state of California has violated the First Amendment by demanding X Corp. and other social media platform operators report to the state about their moderation policies and efforts to restrict "hate speech" and "misinformation" online, a federal appeals panel has ruled.
On Sept. 4, a three-judge panel of the U.S. Ninth Circuit Court of Appeals reversed a federal judge who had ruled in favor of the state and rejected X Corp.'s attempt to secured an injunction blocking the state from enforcing the new state rules.
Smith is an appointee of former President George W. Bush. Bennett was appointed to the court by former President Donald Trump. Johnstone was appointed by President Joe Biden.
The case centered on the California state law, known as AB587, which was enacted by California state lawmakers and signed by Gov. Gavin Newsom in 2022.
The law would require large social media platform operators, like X Corp., formerly known as Twitter, as well as Facebook and others, to file reports with the California Attorney General's office disclosing their platforms' terms of service and information the state called "Content Category Reports."
Those Content Category Reports would require the social media companies to provide the state with information about how the companies define and moderate six types of posts, including: "hate speech" and racism; "extremism" or "radicalization;" "disinformation or misinformation;" harassment; foreign political interference; and "controlled substance distribution."
In enacting AB587 , California lawmakers advertised the measure as promoting "transparency." They said the law merely asks for information, and does not seek to dictate to the companies when or how to moderate user posts.
X Corp. and its president Elon Musk, however, pointed to statements made by supporters of the legislation in Sacramento, who asserted the measure could be used essentially to generate public pressure on social media companies to more strenuously police user speech on their platforms.
Government pressure on social media platform operators has been the subject of other court actions, as conservatives, in particular, have pointed to extensive communications between representatives of the Biden administration and, earlier, Biden's presidential campaign in a bid to push the companies to adopt speech policies and terms of service. Conservative critics and free speech defenders said the changes have resulted in conservative political speech and policy positions being labeled as "misinformation" or unacceptable "hate speech," and subject to censorship on Facebook and X, when it was formerly known as Twitter. They have pointed particularly to alleged censorship of opinions and statements critical of Biden and his family; critical of the government response to Covid and of Covid vaccines; and questioning of the results and processes surrounding the 2020 elections, among other controversial political topics.
Before Musk acquired X, then known as Twitter, in 2022, the company was particularly blasted by conservatives for controversial censorship decisions seen as favorable to Democrats, including disabling former President Donald Trump's Twitter account. After acquiring the platform, Musk revised policies in favor of free speech, calling himself a "free speech absolutist."
In the years since, Musk and X have particularly come in for criticism from progressives in America and beyond for allowing controversial voices to express themselves on the platform without censorship.
Following the passage of AB587, X and Musk filed suit to challenge the law, asserting it would infringe their constitutional speech rights by essentially forcing them to comply not only with a requirement of state law but also California Democrats' description and interpretation of controversial political questions.
A Sacramento federal judge sided with the state and Attorney General Rob Bonta, finding the law seeks to regulate so-called "commercial speech." Under U.S. Supreme Court precedent, the government is generally given greater leeway to regulate commercial speech, rather than traditional speech.
The appellate judges, however, said AB587 goes beyond regulating "commercial speech," agreeing with X that the Content Category Reports require X to do more than comply with a governmental request for information.
"Here, the Content Category Reports are not commercial speech," Judge Smith wrote. "They require a company to recast its content moderation practices in language prescribed by the State, implicitly opining on whether and how certain controversial categories of content should be moderated...
"...While a social media platform’s existing TOS (terms of service) and content moderation policies may be commercial speech, its opinions about and reasons for those policies are different in character and kind. The Content Category Report provisions would require a social media company to convey the company’s policy views on intensely debated and politically fraught topics, including hate speech, racism, misinformation, and radicalization, and also convey how the company has applied its policies."
The judges also specifically rejected the state's assertions concerning the need for "transparency."
"... Even if the Content Category Report provisions concern only transparency, the relevant question here is: transparency into what?" Smith wrote.
"Insight into whether a social media company considers, for example, (1) a post citing rhetoric from on-campus protests to constitute hate speech; (2) reports about a seized laptop to constitute foreign political interference; or (3) posts about election fraud to constitute misinformation is sensitive, constitutionally protected speech that the State could not otherwise compel a social media company to disclose without satisfying strict scrutiny.
"The mere fact that those beliefs are memorialized in the company’s content moderation policy does not, by itself, convert expression about those beliefs into commercial speech. As X Corp. argues ... such a rule would be untenable. It would mean that basically any compelled disclosure by any business about its activities would be commercial and subject to a lower tier of scrutiny, no matter how political in nature.
"Protection under the First Amendment cannot be vitiated so easily."
The appellate judges reversed the lower court ruling and sent the case back with instructions to enter an injunction blocking enforcement of the law's unconstitutional requirements.
Following the ruling, Musk posted on X to mark his company's victory: "Congrats to the X legal team for defending freedom of speech, the bedrock of democracy!"
The author of AB587, Assemblymember Jesse Gabriel, D-Encino, did not respond to a request from The Record for comment. However, after the lower court ruling in the state's favor, Gabriel had immediately celebrated, again lauding the law as a "transparency measure," and adding: "If Twitter has nothing to hide, then they should have no objection to complying with this law.”
X Corp. was represented in the action by attorneys Joel L. Kurtzberg, Floyd Abrams, Jason D. Rozbruch and Lisa J. Cole, of the firm of Cahill Gordon & Reindel, of New York; and William R. Warne and Meghan M. Baker, of Downey Brand LLP, of Sacramento.
The state was represented by attorneys from the California Attorney General's office, including Gabrielle D. Boutin.
The case also drew considerable interest from outside groups, who filed so-called amicus or friend of the court briefs.
These included amici briefs from the Foundation for Individual Rights and Expression, the U.S. Chamber of Commerce and the Reporters Committee for the Free Press, among others, in support of X Corp.; and the Democratic attorneys general of 17 states and the District of Columbia, among others, in support of Bonta and AB587.