X Corp. v. BontaX Corp. v. Bonta
First Amendment / Social Media Platforms
The panel reversed the district court‘s order denying social media platform owner X Corp.‘s motion for a preliminary injunction to enjoin enforcement of California Assembly Bill AB 587 (AB 587), which requires large social media companies to post their terms of service and to submit reports to the Attorney General of California (the State) about their terms of service and their content-moderation policies and practices.
The Content Category Report provisions of AB 587 require social media companies to submit to the State a semiannual report detailing whether and how they define six categories of content: hate speech or racism, extremism or radicalization, disinformation or misinformation, harassment, foreign political interference, and controlled substance distribution.
The panel held that X Corp. was likely to succeed on the merits of its claim that the Content Category Report provisions facially violate the First Amendment. A facial challenge is permissible because the Content Category Report provisions raise the same First Amendment issues for every social media company. The Content Category Report provisions compel non-commercial speech, and are subject to strict scrutiny because the provisions are content-based. The Content Category Report provisions likely fail strict scrutiny because they are not narrowly tailored to serve
The panel held that the remaining factors weighed in favor of a preliminary injunction.
Accordingly, the panel reversed the district court‘s denial of a preliminary injunction, and remanded with instructions to enter a preliminary injunction consistent with the opinion and to determine whether the Content Category Report provisions are severable from the remainder of AB 587 and, if so, which, if any, of the remaining challenged provisions should also be enjoined.
M. SMITH, Circuit Judge:
The California State Legislature enacted Assembly Bill 587 (AB 587) in September 2022.
FACTUAL AND PROCEDURAL BACKGROUND
AB 587 has three primary elements: (1) a requirement that social media companies1 publicly post their terms of service, including processes for flagging content and potential actions that may be taken with respect to flagged content (Terms of Service (TOS) Posting), see
On September 8, 2023, X Corp. filed a complaint against the State seeking declaratory relief and injunctive relief barring the law‘s enforcement. The complaint alleges three causes of action challenging the TOS Posting, TOS Report, and penalty provision of AB 587 as: (1) a violation of the free speech clauses of the U.S. and California Constitutions; (2) a violation of the Dormant Commerce Clause; and (3) federally preempted pursuant to the Communications Decency Act,
On December 28, 2023, the district court denied X Corp.‘s motion. The court began its analysis with X Corp.‘s First Amendment claim.5 The court held that X Corp. was unlikely to prevail because the TOS Posting and TOS Report requirements appeared constitutionally permissible in light of Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985), the Supreme Court‘s test for compelled commercial speech. See X Corp. v. Bonta, No. 23-cv-01939, 2023 WL 8948286, at *1–2 (E.D. Cal. Dec. 28, 2023).
The court‘s analysis of the TOS Report requirement focused primarily on the provisions requiring that social media companies report whether and how they define and address certain enumerated content categories. Id. at *2. The court acknowledged that such reports do “not so easily fit the traditional definition of commercial speech” because they “are not advertisements” and because “social media companies have no particular economic motivation to provide them.” Id. However, the court applied Zauderer to those provisions nevertheless so as to “follow[] the lead of the Fifth and Eleventh Circuits.” Id. (citing NetChoice, LLC v. Paxton, 49 F.4th 439, 485 (5th Cir. 2022), rev‘d on other grounds sub nom. Moody v. NetChoice, LLC, 144 S. Ct. 2383 (2024) (”NetChoice (Tex.)“), and NetChoice, LLC v. Att‘y Gen., Fla., 34 F.4th 1196, 1230 (11th Cir. 2022), rev‘d on other grounds sub nom. Moody, 144 S. Ct. 2383 (”NetChoice (Fla.)“)). The court then concluded that the TOS Report requirement satisfies Zauderer. Id. The court reasoned that the provisions require speech that is “purely factual” and “uncontroversial” because they “merely require[] social media companies to identify their existing content moderation policies, if any, related to the specified categories” and the “mere fact that the reports may be ‘tied in some way to a controversial issue’ does not make the reports themselves controversial.” Id. (quoting CTIA - The Wireless Ass‘n v. City of Berkeley, 928 F.3d 832, 845 (9th Cir. 2019) (”CTIA II“)). The court rejected X Corp.‘s argument that the TOS Report requirement is “unduly burdensome,” explaining that “AB 587 does not require that a social media company adopt any of the specified categories” of speech, and that in any event ”Zauderer is concerned not merely with logistical or economic burdens, but burdens on speech.” Id. It further held that the TOS Report requirement is “reasonably related to a substantial government interest in requiring social media companies to be transparent about their content moderation policies and practices so that consumers can make informed decisions about where they consume and disseminate news and information.” Id.
The district court also determined that X Corp. had failed to show a likelihood of success on its claim that AB 587 is preempted by
On January 12, 2024, X Corp. timely filed notice of its appeal. The provision of AB 587 most relevant in this appeal is section 22677(a), which reads in its entirety:
(a) On a semiannual basis in accordance with subdivision (b), a social media company shall submit to the Attorney General a terms of service report. The terms of service report shall include, for each social media platform owned or operated by the company, all of the following:
(1) The current version of the terms of service of the social media platform.
(2) If a social media company has filed its first report, a complete and detailed description of any changes to the terms of service since the previous report.
(3) A statement of whether the current version of the terms of service defines each of the following categories of content, and, if so, the definitions of those categories, including any subcategories:
(A) Hate speech or racism.
(B) Extremism or radicalization.
(C) Disinformation or misinformation.
(D) Harassment. (E) Foreign political interference.
(F) Controlled substance distribution.6
(4) A detailed description of content moderation practices used by the social media company for that platform, including, but not limited to, all of the following:
(A) Any existing policies intended to address the categories of content described in paragraph (3).
(B) How automated content moderation systems enforce terms of service of the social media platform and when these systems involve human review.
(C) How the social media company responds to user reports of violations of the terms of service.
(D) How the social media company would remove individual pieces of content, users, or groups that violate the terms of service, or take broader action against individual users or against groups of users that violate the terms of service.
(E) The languages in which the social media platform does not make terms of service available, but does offer product
features, including, but not limited to, menus and prompts. (5) (A) Information on content that was flagged by the social media company as content belonging to any of the categories described in paragraph (3), including all of the following:
(i) The total number of flagged items of content.
(ii) The total number of actioned items of content.
(iii) The total number of actioned items of content that resulted in action taken by the social media company against the user or group of users responsible for the content.
(iv) The total number of actioned items of content that were removed, demonetized, or deprioritized by the social media company.
(v) The number of times actioned items of content were viewed by users.
(vi) The number of times actioned items of content were shared, and the number of users that viewed the content before it was actioned.
(vii) The number of times users appealed social media company actions taken on that platform and the number of reversals of social media company actions on
appeal disaggregated by each type of action. (B) All information required by subparagraph (A) shall be disaggregated into the following categories:
(i) The category of content, including any relevant categories described in paragraph (3).
(ii) The type of content, including, but not limited to, posts, comments, messages, profiles of users, or groups of users.
(iii) The type of media of the content, including, but not limited to, text, images, and videos.
(iv) How the content was flagged, including, but not limited to, flagged by company employees or contractors, flagged by artificial intelligence software, flagged by community moderators, flagged by civil society partners, and flagged by users.
(v) How the content was actioned, including, but not limited to, actioned by company employees or contractors, actioned by artificial intelligence software, actioned by community moderators, actioned by civil society partners, and actioned by users.
We have jurisdiction pursuant to
“The appropriate legal standard to analyze a preliminary injunction motion requires a district court to determine whether a movant has established that (1) [it] is likely to succeed on the merits of [its] claim, (2) [it] is likely to suffer irreparable harm absent the preliminary injunction, (3) the balance of equities tips in [its] favor, and (4) a preliminary injunction is in the public interest.” Baird v. Bonta, 81 F.4th 1036, 1040 (9th Cir. 2023); see Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Because “the party opposing injunctive relief is a government entity” here, the third and fourth factors “merge.” Fellowship of Christian Athletes v. San Jose Unified Sch. Dist. Bd. of Educ., 82 F.4th 664, 695 (9th Cir. 2023) (en banc) (quoting Nken v. Holder, 556 U.S. 418, 435 (2009)).
ANALYSIS
On appeal, X Corp. challenges the district court‘s ruling on the TOS Report requirement and penalty provision as applied to the TOS Report requirement. X Corp. does not appeal the district court‘s denial of a preliminary injunction as to the TOS Posting requirement,
X Corp. seeks to reverse the district court‘s ruling as to the entirety of the TOS Report requirement. But the thrust of the appeal concerns section 22677(a)(3), which requires that social media companies report whether and how they define six categories of content, and sections 22677(a)(4)(A) and (a)(5), which directly incorporate section 22677(a)(3). For ease of reference, we refer to these sections as the Content Category Report provisions.
For the reasons below, we hold that the Content Category Report provisions likely compel non-commercial speech and are subject to strict scrutiny, under which they do not survive. We reverse the district court on that basis. Because we reverse on free speech grounds, we need not reach X Corp.‘s section 230 theory. We remand to the district court to determine in the first instance whether the Content Category Report provisions are severable from the remainder of AB 587, and if so, which, if any, of the remaining challenged provisions should also be subject to the preliminary injunction.7
I. X Corp. is likely to succeed in showing that the Content Category Report provisions facially violate the First Amendment.
“For a host of good reasons, courts usually handle constitutional claims case by case, not en masse.” Moody, 144 S. Ct. at 2397. The Supreme Court “has therefore made facial challenges hard to win.” Id. In a typical facial challenge, a plaintiff cannot succeed “unless he ‘establish[es] that no set of circumstances exists under which the [law] would be valid,’ or he shows that the law lacks a ‘plainly legitimate sweep.‘” Id. (alterations in original) (first quoting United States v. Salerno, 481 U.S. 739, 745 (1987); then quoting Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442, 449 (2008)).
However, in First Amendment cases, the Supreme Court “has lowered that very high bar.” Id. “To provide breathing room for free expression,” the Supreme Court has “substituted a less demanding though still rigorous standard.” Id. (cleaned up) (quoting United States v. Hansen, 599 U.S. 762, 769 (2023)); see also Tucson v. City of Seattle, 91 F.4th 1318, 1327 (9th Cir. 2024). “[I]f the law‘s unconstitutional applications substantially outweigh its constitutional ones,” then a court may sustain a facial challenge to the law and strike it down. Moody, 144 S. Ct. at 2397. As Moody clarified, a First Amendment facial challenge has two parts: first, the courts must “assess the state laws’ scope“; and second, the courts must “decide
“[N]o one has paid much attention to” the requirements for a facial challenge so far in this case. Id. at 2397. Nevertheless, we conclude that a facial challenge is permissible here. That is because all aspects of the Content Category Report, in every application to a covered social media company, raise the same First Amendment issues. As explained in further detail below, every Content Category Report must detail the company‘s policies and actions concerning certain state-specified categories of content (even if only to detail the company‘s decision not to define the enumerated categories of section 22677(a)(3)). In effect, the Content Category Report provisions compel every covered social media company to reveal its policy opinion about contentious issues, such as what constitutes hate speech or misinformation and whether to moderate such expression.8
A. The Content Category Report provisions compel non-commercial speech and are subject to strict scrutiny.
One of the First Amendment‘s core purposes is “to preserve an uninhibited marketplace of ideas in which truth will ultimately prevail.” McCullen v. Coakley, 573 U.S. 464, 476 (2014) (quoting FCC v. League of Women Voters of Cal., 468 U.S. 364, 377 (1984)). In evaluating whether a regulation violates the First Amendment, courts “distinguish between content-based and content-neutral regulations of speech.” Vidal v. Elster, 602 U.S. 286, 292 (2024) (internal quotation marks omitted) (quoting Nat‘l Inst. of Fam. & Life Advocs. v. Becerra, 585 U.S. 755, 766 (2018)). A content-based regulation “target[s] speech based on its communicative content,” restricting discussion of a subject matter or topic. Reed v. Town of Gilbert, 576 U.S. 155, 163 (2015). “As a general matter,” a content-based regulation is “presumptively unconstitutional and may be justified only if the government proves that [it is] narrowly tailored to serve compelling state interests.” Nat‘l Inst. of Fam. & Life Advocs., 585 U.S. at 766 (quoting Reed, 576 U.S. at 163). When a state “compel[s] individuals to speak a particular message,” the state “alter[s] the content of their speech,” and engages in content-based regulation. Id. (cleaned up) (quoting Riley v. Nat‘l Fed‘n of the Blind of N.C., Inc., 487 U.S. 781, 795 (1988)). The First Amendment‘s guarantee of freedom of speech makes no distinction of “constitutional significance” “between compelled speech and compelled silence.” Riley, 487 U.S. at 796–97.
In general, laws regulating commercial speech are subject to a lesser standard of scrutiny. See Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 64–65 (1983) (discussing recognition and evolution of commercial speech doctrine). This holds true for both corporations and individuals alike. See Pac. Gas & Elec. Co. v. Pub. Utils. Comm‘n of Cal., 475 U.S. 1, 16 (1986). Commercial speech is “usually defined as speech that does no more than propose a commercial transaction.” United States v. United Foods, Inc., 533 U.S. 405, 409 (2001). “Courts view this definition as just a starting point, however, and instead try to give effect to a ‘common-sense distinction’ between commercial speech and other varieties of speech.” Ariix, LLC v. NutriSearch Corp., 985 F.3d 1107, 1115 (9th Cir. 2021) (cleaned up) (quoting Jordan v. Jewel Food Stores, Inc., 743 F.3d 509, 516–17 (7th Cir. 2014)). Indeed, the “commercial speech analysis is fact-driven, due to the inherent difficulty of drawing bright lines that will clearly cabin commercial speech in a distinct category.” First Resort, Inc. v. Herrera, 860 F.3d 1263, 1272 (9th Cir. 2017) (internal quotation marks omitted) (quoting Greater Balt. Ctr. for Pregnancy Concerns, Inc. v. Mayor & City Council of Balt., 721 F.3d 264, 284 (4th Cir. 2013)).
Because of the difficulty of drawing clear lines between commercial and non-commercial speech, the Supreme Court in Bolger outlined three factors to consider. 463 U.S. at 64–67. “Where the facts present a close question, ‘strong support’ that the speech should be characterized as commercial speech is found where [1] the speech is an
Commercial speech is generally subject to intermediate scrutiny. Nat‘l Ass‘n of Wheat Growers v. Bonta, 85 F.4th 1263, 1266 (9th Cir. 2023). However, an exception applies to compelled commercial speech that is “purely factual and uncontroversial.” Id.; see Pac. Coast Horseshoeing Sch., Inc. v. Kirchmeyer, 961 F.3d 1062, 1074 (9th Cir. 2020) (citing Zauderer as a variation in the treatment of speech “within the class of commercial speech“). “In that scenario, the government need only demonstrate the compelled speech survives a lesser form of scrutiny akin to a rational basis test.” Nat‘l Wheat, 85 F.4th at 1266.
State legislatures do not have “freewheeling authority to declare new categories of speech outside the scope of the First Amendment.” United States v. Stevens, 559 U.S. 460, 472, (2010). Thus, “without persuasive evidence that a novel restriction on content is part of a long (if heretofore unrecognized) tradition of proscription, a legislature may not revise the ‘judgment [of] the American people,’ embodied in the First Amendment, ‘that the benefits of its restrictions on the Government outweigh the costs.‘” Brown v. Entm‘t Merchs. Ass‘n, 564 U.S. 786, 792 (2011) (alteration in original) (quoting Stevens, 559 U.S. at 470).
First, the Content Category Reports do not satisfy the “usual[] defin[ition]” of commercial speech—i.e., “speech that does no more than propose a commercial transaction.” See United Foods, Inc., 533 U.S. at 409; see also IMDb.com Inc. v. Becerra, 962 F.3d 1111, 1122 (2020) (“Because IMDb‘s public profiles do not ‘propose a commercial transaction,’ we need not reach the Bolger factors.“). The State appears to concede as much in its answering brief.
To the extent our circuit has recognized exceptions to that general rule, those exceptions are limited and are inapplicable to the Content Category Reports here. For example, as identified by the First Amendment and Internet Law Scholars amici, we have characterized the following speech as commercial even if not a clear fit with the Supreme Court‘s above articulation: (i) targeted, individualized solicitations, see Nationwide Biweekly Admin., Inc. v. Owen, 873 F.3d. 716, 731–32 (9th Cir. 2017); contract negotiations, see S.F. Apartment Ass‘n v. San Francisco, 881 F.3d 1169, 1177–78 (9th Cir. 2018); and retail product warnings, see CTIA II, 928 F.3d at 845. Though it does not directly or exclusively propose a commercial transaction, all of this speech communicates the terms of an actual or potential transaction. But the Content Category Reports go further: they express a view about those terms by conveying whether a company believes certain categories should be defined and proscribed.
Third, while a social media platform‘s existing TOS 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 require9 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 State suggests that this requirement is subject to lower scrutiny because “it is only a transparency measure” about the product. But even if the Content Category Report provisions concern only transparency, the relevant question here is: transparency into what? Even a pure “transparency” measure, if it compels non-commercial speech, is subject to strict scrutiny. See
The district court performed, essentially, no analysis on this question. In fact, the district court acknowledged that the Content Category Reports “do not so easily fit the traditional definition of commercial speech” as they “are not advertisements, and social media companies have no
But neither the Fifth nor Eleventh Circuit dealt with speech similar to the Content Category Reports. Unlike Texas HB 20 or Florida SB 7072, the Content Category Report provisions compel social media companies to report whether and how they believe particular, controversial categories of content should be defined and regulated on their platforms. Neither the Texas nor Florida provisions at issue in the NetChoice cases require a company to disclose the existence or substance of its policies addressing such categories. See NetChoice (Tex.), 49 F.4th at 446 (requiring platforms to disclose “how they moderate and promote content” and provide “high-level statistics” about their moderation efforts without mention of controversial topics); NetChoice (Fla.), 34 F.4th at 1206–07 (requiring platforms to disclose information about their content-moderation “standards” and “rule changes” without regard to particular content categories). Though perhaps relevant to an analysis of sections 22677(a)(1), (2), and (4)(B)–(E), these cases are unhelpful on the issue of the Content Category Reports and offer no compelling reason to apply Zauderer.
B. The Content Category Report provisions likely fail strict scrutiny.
Strict scrutiny “is a demanding standard.” Brown v. Ent. Merchants Ass‘n, 564 U.S. 786, 799 (2011). “It is rare that a regulation restricting speech because of its content will ever be permissible.” United States v. Playboy Ent. Grp., Inc., 529 U.S. 803, 818 (2000). A state must show that the statute “furthers a compelling governmental interest and is narrowly tailored to that end.” Reed, 576 U.S. at 171. “If a less restrictive alternative would serve the [g]overnment‘s purpose, the legislature must use that alternative.” Playboy Ent. Grp., Inc., 529 U.S. at 813.
At minimum, the Content Category Report provisions likely fail under strict scrutiny because they are not narrowly tailored. They are more extensive than necessary to serve the State‘s purported goal of “requiring social media companies to be transparent about their content-moderation policies and practices so that consumers can make informed decisions about where they consume and disseminate news and information.” Consumers would still be meaningfully informed if, for example, a company disclosed whether it
In any event, the State does not attempt to argue that the law survives strict scrutiny. For the reasons above, X Corp. has shown a likelihood of success on the merits of its First Amendment claim as to sections 22677(a)(3), (a)(4)(A), and (a)(5).
C. The remaining Winter factors weigh in favor of a preliminary injunction.
With respect to the second factor, a loss of First Amendment freedoms constitutes an irreparable injury. See Fellowship of Christian Athletes, 82 F.4th at 694 (“It is axiomatic that ‘[t]he loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury.‘” (citation omitted)). Because X Corp. has a colorable First Amendment claim, it has demonstrated that it likely will suffer irreparable harm. See Am. Bev. Ass‘n v. San Francisco, 916 F.3d 749, 758 (9th Cir. 2019) (en banc).
The third and fourth factors—balance of equities and public interest—also favor X Corp. “[I]t is always in the public interest to prevent the violation of a party‘s constitutional rights.” Fellowship of Christian Athletes, 82 F.4th at 695 (citation omitted). When a party “‘raise[s] serious First Amendment questions,’ that alone ‘compels a
Because X Corp. has shown a likelihood of success on the merits of its First Amendment claim, and the remaining Winter factors weigh in favor of an injunction, we reverse the district court‘s decision denying a preliminary injunction as to AB 587‘s Content Category Report provisions.
II. We remand to the district court to determine whether the Content Category Report provisions are likely severable from the remainder of AB 587.
“Severability is . . . a matter of state law.” Sam Francis Found. v. Christies, Inc., 784 F.3d 1320, 1325 (9th Cir. 2015) (en banc) (alteration in original) (quoting Leavitt v. Jane L., 518 U.S. 137, 139 (1996) (per curiam)). “In California, the presence of a severability clause in a statutory scheme that contains an invalid provision ‘normally calls for sustaining the valid part of the enactment.‘” Garcia v. City of Los Angeles, 11 F.4th 1113, 1120 (9th Cir. 2021) (quoting Cal. Redevelopment Ass‘n v. Matosantos, 267 P.3d 580, 607 (Cal. 2011)).
The parties did not brief severability on appeal, and the severability arguments below appear to have been cursory. During oral argument, counsel for the State suggested that, were we to find that any part of the statute should be enjoined, the issue of severability should be remanded. We agree and leave it to the district court to determine in the first instance whether the likely unconstitutional provisions of AB 587, sections 22677(a)(3), (a)(4)(A), and (a)(5), are
CONCLUSION
For the foregoing reasons, we REVERSE the district court‘s denial of a preliminary injunction as to California Business and Professions Code sections 22677(a)(3), (a)(4)(A), and (a)(5). We remand with instructions to enter a preliminary injunction consistent with this opinion and to determine whether these provisions are severable from the remainder of AB 587 and, if so, which, if any, of the remaining challenged provisions should also be enjoined.