NetChoice v. Paxton
Slip Opinion (2024)
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Rule of Law:
To succeed on a facial First Amendment challenge, a plaintiff bears the heavy burden of developing a factual record comprehensive enough to show that the law's unconstitutional applications substantially outweigh its constitutional ones across the law's full range of applications, not merely its 'heartland' applications.
Facts:
- The state of Texas enacted House Bill 20 (H.B. 20), a law regulating the content moderation policies of large social media platforms.
- H.B. 20 prohibits social media platforms with more than 50 million monthly active users in the U.S. from censoring user expression based on the viewpoint it expresses.
- The law also requires these platforms to provide individualized explanations to users when their content is removed.
- NetChoice and the Computer & Communications Industry Association (CCIA) are trade groups representing major technology companies, including social media platforms affected by H.B. 20.
- These platforms utilize algorithms and content moderation policies to curate, arrange, and sometimes remove user-generated content, which they argue constitutes an exercise of editorial discretion.
- The services offered by the member companies are diverse and extend beyond public-facing feeds to include functions like direct messaging, e-commerce reviews, and payment services.
Procedural Posture:
- NetChoice and CCIA (Plaintiffs) sued the Attorney General of Texas in the U.S. District Court for the Western District of Texas, seeking a preliminary injunction to block enforcement of H.B. 20.
- The district court granted the plaintiffs' motion for a preliminary injunction.
- Texas (Defendant-Appellant) appealed the injunction to the U.S. Court of Appeals for the Fifth Circuit.
- The Fifth Circuit issued an order reversing the district court's injunction, finding the law was likely constitutional.
- NetChoice and CCIA (Petitioners) appealed to the U.S. Supreme Court.
- The Supreme Court, in Moody v. NetChoice, vacated the Fifth Circuit's judgment and remanded the case, holding that the factual record was too underdeveloped to resolve the facial challenge.
- The case is now before the Fifth Circuit on remand from the Supreme Court.
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Issue:
Given the Supreme Court's finding that the factual record is underdeveloped, is remand to the district court for further proceedings the appropriate next step to properly evaluate a facial First Amendment challenge to a state law regulating social media content moderation?
Opinions:
Majority - Oldham, Circuit Judge
Yes. Remand to the district court for further proceedings is necessary because the existing record is insufficient to conduct the required analysis for a facial First Amendment challenge. Following the Supreme Court's decision in Moody v. NetChoice, a proper facial challenge requires a two-step analysis: first, determining the law's full range of applications (both actors and activities covered), and second, weighing the unconstitutional applications against the constitutional ones. The Supreme Court found the record 'underdeveloped' on both fronts, criticizing the plaintiffs for focusing only on 'heartland applications' like Facebook's News Feed instead of the law's broader potential scope, which might include services like Gmail, Etsy, Venmo, or Uber. To assess the constitutionality of each application, the district court must engage in a fact-intensive inquiry into whether each regulated activity involves 'protected editorial discretion' and how much the law's disclosure requirements 'unduly burden expression.' This requires detailed discovery on how each platform's algorithms and moderation practices function for each specific service. Therefore, the case must be remanded for this essential factual development.
Analysis:
This decision solidifies the significant procedural and evidentiary hurdles for plaintiffs bringing facial First Amendment challenges against state regulations of technology platforms. By mandating a comprehensive, fact-intensive inquiry into every potential application of a statute, the court makes it exceedingly difficult and costly for challengers to obtain preliminary injunctions based on purely legal arguments. This ruling effectively shifts the battleground from abstract constitutional principles to granular, fact-specific details about algorithms and business practices, which may delay final resolution and allow challenged laws to remain in effect during prolonged discovery. Consequently, future litigants may be more inclined to pursue narrower, as-applied challenges rather than broad facial attacks on legislation.
