On September 16, the Fifth Circuit issued its decision in NetChoice L.L.C. v. Paxton, upholding Texas HB 20, a law that limits the ability of large social media platforms to moderate content and imposes various disclosure and appeal requirements on them.  The Fifth Circuit vacated the district court’s preliminary injunction, which previously blocked the Texas Attorney General from enforcing the law.  NetChoice is likely to ask the U.S. Supreme Court to review the Fifth Circuit’s decision.

HB 20 prohibits “social media platforms” with “more than 50 million active users” from “censor[ing] a user, a user’s expression, or a user’s ability to receive the expression of another person” based on the “viewpoint” of the user or another person, or the user’s location.  HB 20 also includes various transparency requirements for covered entities, for example, requiring them to publish information about their algorithms for displaying content, to publish an “acceptable use policy” with information about their content restrictions, and to provide users an explanation for each decision to remove their content, as well as a right to appeal the decision.

Shortly after HB 20 was enacted, NetChoice, L.L.C. and the Computer and Communications Industry Association challenged the law.  In December 2021, the district court issued a preliminary injunction, concluding that the law violated covered entities’ First Amendment rights.  After the Fifth Circuit stayed the district court’s injunction, the Supreme Court vacated the Fifth Circuit’s stay, preventing the law from going into effect while the Fifth Circuit considered the case.  Now, the Fifth Circuit has issued its decision, concluding that the law does not violate the First Amendment.

There are several takeaways from the Fifth Circuit’s decision:

  • The Fifth Circuit rejected the plaintiffs’ First Amendment challenge to the “anti-censorship” provisions of the law.  
  • First, the court found that Section 7 of the law—which prohibits covered entities from “censor[ing]” expression on the basis of “viewpoint”—does not violate the First Amendment because it chills “censorship,” not speech.  The court held that for a law to be invalid under the First Amendment, it must compel an entity to speak or restrict the entity’s own speech.
  • Second, the court concluded that “[u]nlike newspapers, [covered entities] exercise virtually no editorial control or judgment” over the content shared on their services and often rely on algorithms to perform traditional editorial functions.  Without exercising greater editorial control, the court held, covered entities cannot claim that their content moderation decisions are expressive conduct protected by the First Amendment.  The court further explained that platforms have the ability to create original content on their service to “say whatever they want to distance themselves from the speech they host.”  
  • The Fifth Circuit upheld the law’s classification of social media platforms as common carriers.  This is a novel application of the common carrier doctrine to social media platforms, but a theory that Justice Thomas contemplated in a concurrence in Biden v. Knight First Amendment Institute at Columbia University, 593 U.S. __ (2021) (Thomas, J., concurring in denial of certiorari).
  • The Fifth Circuit did not consider whether the law is preempted by Section 230.  47 U.S.C. § 230 (“Section 230”) provides legal immunity to interactive computer services for their good faith decisions to remove content shared by third-party “publishers or speakers” on their website.  Section 230 has historically been applied to protect social media companies from liability for many decisions to remove third-party content, and to preempt laws that curtail their right to do so.  The court did not consider whether Section 230 preempts HB 20.
  • The plaintiffs likely will ask the Supreme Court to review the case.  In May, the Eleventh Circuit upheld an injunction blocking enforcement of Florida’s social media moderation law, which prohibits online services from moderating content by political candidates or “journalistic enterprises.”  Last week, the Florida Attorney General asked the Supreme Court to review the Eleventh Circuit’s conclusion that the Florida law violates the First Amendment.  The Fifth Circuit’s decision creates a circuit split and therefore increases the likelihood that the Supreme Court will agree to hear one, or both, cases.

We will continue to monitor the landscape of online content and keep you updated here on Inside Privacy.

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Photo of Terrell McSweeny Terrell McSweeny

Terrell McSweeny, former Commissioner of the Federal Trade Commission (FTC), has held senior appointments in the White House, Department of Justice (DOJ), and the U.S. Senate. At the FTC and DOJ Antitrust Division, she played key roles on significant antitrust and consumer protection…

Terrell McSweeny, former Commissioner of the Federal Trade Commission (FTC), has held senior appointments in the White House, Department of Justice (DOJ), and the U.S. Senate. At the FTC and DOJ Antitrust Division, she played key roles on significant antitrust and consumer protection enforcement matters. She brings to bear deep experience with regulations governing mergers and non-criminal, anti-competitive conduct, as well as issues relating to cybersecurity and privacy facing high-tech, financial, health care, pharmaceutical, automotive, media, and other industries. Terrell is internationally recognized for her work at the intersection of law and policy with cutting edge technologies including Artificial intelligence (“AI”), Digital Health, Fintech, and the Internet of Things (“IoT”). Clients benefit considerably from her extensive relationships with other enforcement agencies around the world.

Prior to joining the Commission, Terrell served as Chief Counsel for Competition Policy and Intergovernmental Relations for the U.S. Department of Justice, Antitrust Division. She joined the Antitrust Division after serving as Deputy Assistant to the President and Domestic Policy Advisor to the Vice President from January 2009 until February 2012, advising President Obama and Vice President Biden on policy in a variety of areas.

Terrell’s government service also includes her work as Senator Joe Biden’s Deputy Chief of Staff and Policy Director in the U.S. Senate, where she managed domestic and economic policy development and legislative initiatives, and as Counsel on the Senate Judiciary Committee, where she worked on issues such as criminal justice, innovation, women’s rights, domestic violence, judicial nominations, immigration, and civil rights.

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Megan Crowley is a litigator who represents clients in high-stakes matters, from case inception through trial and appeal. Her practice focuses on complex commercial disputes and litigation under the Administrative Procedure Act. Megan currently represents several leading technology companies in cutting-edge litigation relating…

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Megan rejoined Covington from the U.S. Department of Justice, where she defended executive branch agencies in some of their most high-profile cases. Drawing upon this experience, she has secured a number of landmark victories against the federal government in recent years. Megan was a key member of the Covington team that represented TikTok in its successful challenge to the Trump Administration’s efforts to ban the app, and its defense of the district court’s injunction on appeal. She also represented Xiaomi Corporation in its successful challenge to the Department of Defense designation that would have banned the company from U.S. financial markets, securing a preliminary injunction and, ultimately, a rescission of the ban.

Photo of Nicholas Xenakis Nicholas Xenakis

Nick Xenakis draws on his Capitol Hill experience to provide regulatory and legislative advice to clients in a range of industries, including technology. He has particular expertise in matters involving the Judiciary Committees, such as intellectual property, antitrust, national security, immigration, and criminal…

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Nick joined the firm’s Public Policy practice after serving most recently as Chief Counsel for Senator Dianne Feinstein (C-DA) and Staff Director of the Senate Judiciary Committee’s Human Rights and the Law Subcommittee, where he was responsible for managing the subcommittee and Senator Feinstein’s Judiciary staff. He also advised the Senator on all nominations, legislation, and oversight matters before the committee.

Previously, Nick was the General Counsel for the Senate Judiciary Committee, where he managed committee staff and directed legislative and policy efforts on all issues in the Committee’s jurisdiction. He also participated in key judicial and Cabinet confirmations, including of an Attorney General and two Supreme Court Justices. Nick was also responsible for managing a broad range of committee equities in larger legislation, including appropriations, COVID-relief packages, and the National Defense Authorization Act.

Before his time on Capitol Hill, Nick served as an attorney with the Federal Public Defender’s Office for the Eastern District of Virginia. There he represented indigent clients charged with misdemeanor, felony, and capital offenses in federal court throughout all stages of litigation, including trial and appeal. He also coordinated district-wide habeas litigation following the Supreme Court’s decision in Johnson v. United States (invalidating the residual clause of the Armed Career Criminal Act).

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Prior to re-joining the firm, she clerked…

Alexandra (Ali) Cooper-Ponte’s practice focuses on regulatory, enforcement, litigation, and investigations matters involving emerging technologies and national security. She advises clients on compliance with surveillance, cybersecurity, and data privacy laws and on trust and safety issues.

Prior to re-joining the firm, she clerked for Judge José A. Cabranes, United States Circuit Judge of the United States Court of Appeals for the Second Circuit. She also worked on electronic surveillance and law enforcement access issues at a large technology company prior to law school.

Photo of Madeline Salinas Madeline Salinas

Madeline Salinas is an associate in the firm’s Washington, DC office and a member of the Data Privacy and Cybersecurity and Communications and Media Practice Groups.