770 F.Supp.3d 1164
N.D. Cal.2025Background
- California enacted the Age-Appropriate Design Code Act (CAADCA) to regulate online businesses that provide services, products, or features "likely to be accessed by children," imposing affirmative duties (notably a DPIA requirement) and prohibitions on covered businesses.
- NetChoice (trade association for major internet companies) sued California challenging CAADCA on First Amendment, vagueness, preemption (COPPA and §230), and dormant Commerce Clause grounds and moved for a preliminary injunction.
- This Court previously granted a preliminary injunction; the Ninth Circuit affirmed only as to the DPIA requirement (and inseverably connected provisions), vacated other aspects, and remanded for further Moody-based analysis.
- On remand the Court found the Act’s coverage definition content-based under Reed and Moody, applied strict scrutiny to the Regulatory Provisions as a whole, and concluded the State failed to carry the burden to justify the regime.
- The Court held certain Individual Provisions (policy-enforcement §1798.99.31(a)(9) as to content policies/community standards; age-estimation §1798.99.31(a)(5)) likely unconstitutional, found several provisions impermissibly vague (information-use §§1798.99.31(b)(1)-(4) and dark-patterns §1798.99.31(b)(7)), and ruled the DPIA provisions are not volitionally severable from the Act.
- The Court granted NetChoice’s second motion for a preliminary injunction enjoining enforcement of the CAADCA statewide, without bond, pending further order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAADCA's coverage definition ("likely to be accessed by children") is content-based and triggers strict scrutiny | Coverage definition targets speech directed to or likely to be consumed by children and thus is content-based; strict scrutiny should apply to the Regulatory Provisions as a whole | Coverage definition is content-neutral (identifies audience, not topic); Moody requires provision-by-provision analysis | Court: coverage definition is content-based; strict scrutiny applies to Regulatory Provisions collectively and State failed to meet its burden; statute likely invalid on its face |
| Whether the DPIA provisions (including the 90-day notice-and-cure) are severable from the remainder of the Act | DPIA and safe-harbor were critical to enactment and thus not volitionally severable; without them the Act’s legislative design changes | The DPIA provisions can be severed and the remainder enforced | Court: DPIA provisions are not volitionally severable (though they are functionally severable); supports enjoining whole Act because enjoined DPIA provisions were critical to passage |
| Validity of policy-enforcement (§1798.99.31(a)(9)) and age-estimation (§1798.99.31(a)(5)) requirements | (a)(9) compels editorial judgment and deputizes businesses as censors; (a)(5) forces intrusive age verification or suppression of adult-directed speech | State says (a)(9) enforces promises/terms and (a)(5) is a conduct regulation necessary to protect children; intermediate scrutiny suffices | Court: (a)(9) (as to content policies/community standards) likely fails strict scrutiny and is vague; (a)(5) likely fails strict scrutiny in all applications |
| Vagueness of information-use (§§1798.99.31(b)(1)-(4)) and dark-patterns (§1798.99.31(b)(7)) restrictions | Terms like “material detriment,” “best interests,” and related phrases are undefined and invite arbitrary enforcement | State points to statutory definitions (e.g., "dark pattern") and claims ordinary meaning suffices | Court: §§(b)(1)-(4) and (b)(7) are likely impermissibly vague (insufficient notice; risk of arbitrary enforcement) |
| Preemption and other federal defenses (Section 230, COPPA, dormant Commerce Clause) | CAADCA conflicts with §230 and COPPA and has extraterritorial effects violating the dormant Commerce Clause | State contends the Act supplements or complements federal law and lacks extraterritorial effect | Court: NetChoice has not shown likelihood of success on §230, COPPA, or dormant Commerce Clause claims at this stage |
Key Cases Cited
- Reed v. Town of Gilbert, 576 U.S. 155 (content-based regulation triggers strict scrutiny)
- Moody v. NetChoice, 603 U.S. 707 (facial First Amendment standard; assess scope and compare unconstitutional applications to constitutional ones)
- NetChoice, LLC v. Bonta, 113 F.4th 1101 (9th Cir. 2024) (Ninth Circuit decision directing Moody analysis; affirmed DPIA injunction)
- Brown v. Ent. Merchants Ass'n, 564 U.S. 786 (state may not suppress protected speech directed at minors unless strict scrutiny met)
- City of Austin v. Reagan Nat'l Advert. of Austin, 596 U.S. 61 (content-neutrality can survive even when application requires examining speech)
- Doe v. Reed, 561 U.S. 186 (facial First Amendment challenge to statute limited to a specific application permissible)
- United States v. Playboy Ent. Grp., 529 U.S. 803 (content-based restrictions require narrow tailoring)
- Ashcroft v. Free Speech Coalition, 535 U.S. 234 (protects adult access to lawful speech despite legislative interest in shielding children)
- Ashcroft v. ACLU, 542 U.S. 656 (statute suppressing adult speech when less restrictive alternatives exist is unacceptable)
- Video Software Dealers Ass'n v. Schwarzenegger, 556 F.3d 950 (Ninth Circuit recognition of compelling interest in protecting minors)
- Fair Hous. Council v. Roommates.com, 521 F.3d 1157 (§230 immunity principles and limits)