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.