California enacted Assembly Bill 587 in 2022, requiring large social media companies to publicly post their terms of service and submit semiannual reports to the state Attorney General. These reports must detail how the platforms define and address specific content categories, including hate speech, extremism, misinformation, harassment, foreign political interference, and controlled substance distribution. X Corp., the owner of the X platform (formerly Twitter), challenged the law, arguing it violated the First Amendment and was preempted by federal law. The district court denied X Corp.'s motion for a preliminary injunction, applying a lower standard of scrutiny for commercial speech and finding the law permissible. X Corp. appealed, arguing the reports were non-commercial speech requiring strict scrutiny.
The Ninth Circuit panel, writing for the court, determined that the Content Category Report provisions compel non-commercial speech rather than commercial speech. The court reasoned that the reports require platforms to opine on intensely debated and politically fraught topics, such as what constitutes hate speech or misinformation, rather than merely proposing a commercial transaction. Because the speech is content-based and non-commercial, it is subject to strict scrutiny. The court found the provisions likely fail strict scrutiny because they are not narrowly tailored to the state's goal of transparency. The court noted that consumers could be informed about moderation practices without the state forcing platforms to define controversial categories or report on specific content moderation decisions. The court also declined to reach X Corp.'s preemption argument under Section 230, as the First Amendment claim was dispositive. Finally, the court held that the remaining factors for a preliminary injunction—irreparable harm, balance of equities, and public interest—weighed in favor of X Corp., as the loss of First Amendment freedoms constitutes irreparable injury.
The decision requires the district court to issue a preliminary injunction preventing enforcement of the Content Category Report provisions of AB 587. The case is remanded for the district court to determine whether these provisions are severable from the rest of the statute. If found severable, the rest of the law may remain in effect; if not, the entire reporting scheme may be enjoined. This ruling signals that state mandates requiring social media platforms to define and report on specific controversial content categories face significant constitutional hurdles under the First Amendment.
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