Calif. Social Media Transparency Law ‘Fails Constitutional Muster,’ Says X’s Reply

X was denied a preliminary injunction in the district court to block AB-587's enforcement on grounds that it violates the First Amendment and that Section 230 of the Communications Decency Act preempts it (see 2401190038). Denial of the injunction turned on the company's failure to establish its likelihood of success on the merits, according to the Dec. 28 memorandum and order signed by U.S. District Judge William Shubb for Eastern California in Sacramento.

Bonta claims that AB-587 is a mere transparency law that doesn’t compel social media companies to adopt any specific content-moderation policies and simply provides consumers with information to make informed choices about what platforms to use, said X’s reply. But that argument “misses the mark,” it said.

While transparency about content moderation “may be a good thing," compelled-disclosure laws like AB-587 “present numerous First Amendment problems that trigger heightened scrutiny,” which AB-587 can’t “satisfy,” said X’s reply. That’s because such laws “expressly target controversial but constitutionally protected content” that’s disfavored by the state, it said. Compelled-disclosure laws also are unnecessary because X “already publishes all of its content-moderation policies,” it said.

The “undisputed record” and AB-587’s legislative history make clear that AB-587 “is intended to and has the effect of applying public pressure to platforms,” such as X, to reduce or eliminate categories of so-called “awful but lawful” speech that are disfavored by the state, said the reply. Bonta doesn’t dispute that one of the law’s “undisguised and intended purposes” is to require platforms to disclose details about the most politically controversial categories of content “in the hopes and expectation” that those disclosures will generate public pressure on them to eliminate that content, it said.

But Bonta “never grapples” with the fact that state laws “attempting to circumvent that illegality” by applying indirect pressure to discriminate against certain speech in conformance with the state’s wishes “are unconstitutional too,” said X’s reply. The U.S. Supreme Court has long held that what can’t be done directly under the Constitution also can’t be done indirectly, it said. “This is especially true in the First Amendment context,” it said.

The “undisputed record” also shows that AB-587 is designed to facilitate “similar pressure by the government directly on social media companies to interfere impermissibly in their constitutionally protected editorial judgments and force them to regulate content” as the state desires, said X’s reply. Bonta has already used AB-587 to apply that pressure, it said.

AB 587’s vague enforcement provisions give Bonta “nearly unfettered discretion” to issue document demands or initiate enforcement actions, based solely on his “unilateral determination” that a company’s terms of service (TOS) report may contain material omissions or misrepresentations, said X’s reply. That standard is so vague that it can be applied to almost any situation where Bonta “disagrees with a company’s content-moderation decisions,” it said.

Bonta relies heavily, as did the district court, on the application of the Zauderer standard in the NetChoice cases to Florida and Texas statutes that “differ dramatically” from AB-587, said X’s reply brief. In Zauderer, the Supreme Court held in 1984 that in certain circumstances, laws that compel factual, commercial speech are reviewed under a less exacting form of First Amendment scrutiny.

The Florida and Texas statutes, unlike AB-587, didn’t target “particular categories of content for special treatment,” said X’s reply. It also didn’t target “the most politically fraught and controversial ones” that generate controversy, “no matter what position is taken about them,” it said. This aspect of AB-587 “makes it impossible” for the company to publish a TOS report “without engaging in core political speech that, by its nature, will engender political controversy,” it said.

X takes the position that Zauderer can’t apply because the TOS report doesn’t compel “statements of pure fact,” said the reply. Zauderer also can’t apply because the compelled disclosures themselves “are highly controversial,” it said. The legislative record demonstrates that this is one of AB-587’s main features -- “forcing disclosures to generate controversy that will lead to more censorship,” it said.

It was the state’s burden to show, with at least some evidence, “that consumers need or want these disclosures to help decide where to consume social media and that these disclosures will directly and materially advance a compelling or substantial governmental interest,” said the reply. The state “has failed to satisfy its burden,” it said. Its factual record is “entirely bare,” and AB-587 “fails constitutional muster accordingly,” it said.

Section 230 “protects X from liability for how it moderates content,” said the reply. By allowing Bonta “to prosecute and investigate X” based on the substance of its TOS reports, AB-587 “directly interferes with that protection and is thus preempted by Section 230,” it said.