NetChoice Lawsuits

A U.S. District Court judge in Maryland issued a final judgment Wednesday that bars the state from enforcing portions of its digital ad tax law. The judgment follows a U.S. Circuit Court of Appeals ruling Aug. 4 that the law’s pass-through provisions violate the First Amendment. The Computer & Communications Industry Association, NetChoice and the U.S. Chamber of Commerce had argued that the pass-through provisions prevented businesses from communicating with customers about the tax law’s effect on prices and were thus unconstitutional. The law imposes a tax of up to 10% of revenue on digital ad services.

The pass-through provision of Maryland's digital ad tax doesn't withstand First Amendment scrutiny, the 4th U.S. Circuit Court of Appeals ruled in a Friday opinion, reversing and remanding the case to the U.S. District Court for Maryland for further deliberation (see 2411010020). "The states are free to make controversial policy," wrote Judge Julius Richardson in the unanimous opinion (docket 24-1727): "But with that freedom comes constraint."

In a 6-3 decision, the U.S. Supreme Court on Friday upheld a Texas law requiring age verification for access to porn sites (see 2506270015 and 2501130012). The majority in Free Speech Coalition v. Paxton sided with Texas Attorney General Ken Paxton (R) in support of HB-1181, which the adult industry trade association Free Speech Coalition said violates the First Amendment (see 2409170012).

Maryland's law establishing a digital ad tax is "facially unconstitutional," the Computer & Communications Industry Association, the U.S. Chamber of Commerce and NetChoice told the 4th U.S. Circuit Court of Appeals in a reply brief Monday (see 2411010020). The groups challenged the law's pass-through provision (docket 24-1727), saying businesses can't communicate with consumers about how the tax may affect their services or operations. "A government cannot evade First Amendment scrutiny by defining what a statute makes unlawful as speech itself," the groups said. The law "attempts to bar businesses from telling the truth about what this tax means for consumer prices," said CCIA Senior Vice President Stephanie Joyce in a statement: "This kind of statutory muzzle has been rejected by the courts as an unconstitutional infringement of speech.”

Don’t dismiss tech groups’ challenge of a Florida social media law, NetChoice and the Computer & Communications Industry Association urged the U.S. District Court for Northern Florida this week (Case 4:21-cv-00220). The U.S. Supreme Court in July ruled the First Amendment protects social media platforms’ ability to moderate content, sending the tech industry’s suits against Florida and Texas laws back to the lower courts (see 2407010053). In November, CCIA and NetChoice submitted an amended complaint asking the district court to permanently enjoin Florida’s social media law (see 2411040033). However, Florida Attorney General Ashley Moody (R) responded by asking the court to dismiss the complaint “for lack of jurisdiction and failure to state a claim” (see 2411180038). NetChoice and CCIA responded Wednesday that SCOTUS eviscerated Florida’s argument that Facebook and other websites don’t engage in activity that the First Amendment protects when the platforms curate content. “With little left to say about the merits of Plaintiffs’ First Amendment claims, Florida offers a slew of new threshold objections, attacking everything from the way Plaintiffs organized their Amended Complaint to whether Plaintiffs have a cause of action to enjoin the enforcement of an unconstitutional statute. Florida’s arguments are meritless.”

FCC Commissioner Brendan Carr’s Nov. 13 letters to tech companies (see 2411150032) about their relationship with news website rating service NewsGuard are inaccurate and repeat false information, NewsGuard co-CEOs Steven Brill and Gordon Crovitz said in a letter Friday to Carr, the agency's incoming chair. “We wish you had reached out to us before sending your letter because it relies on false reporting about us,” the co-CEOs wrote. Carr also relied on reporting from Newsmax, which has “misled” the commissioner in order to undermine the service’s credibility because it rates Newsmax poorly, NewsGuard's letter said. “An analogy would be a maker of unsafe cars objecting to its rating by Consumer Reports by making false claims about the magazine’s testing process,” NewsGuard said.

Dismiss tech groups’ complaint against a Florida social media law “for lack of jurisdiction and failure to state a claim,” Florida Attorney General Ashley Moody (R) argued Friday at U.S. District Court for Northern Florida (docket 4:21-cv-0220). The U.S. Supreme Court in July ruled the First Amendment protects social media platforms’ ability to moderate content, sending the tech industry’s suits against Florida and Texas laws back to the lower courts (see 2407010053). The Computer & Communications Industry Association and NetChoice earlier this month submitted an amended complaint asking the district court to permanently enjoin Florida’s social media law (see 2411040033). The plaintiffs lack associational standing to advance First Amendment claims, which “require a host of factual determinations about the members and their platforms,” said Moody. In addition, the amended complaint “is a shotgun pleading,” said the Florida AG. “Plaintiffs have not stated a claim under the First Amendment, the Fourteenth Amendment, or Section 230 of the Communications Decency Act,” nor a claim for injunctive relief for their members.

California’s SB-976 violates free speech and puts children’s safety at risk, NetChoice said Tuesday in a lawsuit seeking to block the measure before it becomes effective Jan. 1 (see 2409230032). SB-976 violates the First Amendment when it limits access to online speech, forces companies to track children and increases the risk of data breach, said NetChoice in the complaint filed with the U.S. District Court for the Northern District of California.

The 5th U.S. Circuit Court of Appeals on Thursday remanded the tech industry’s lawsuit against Texas’ social media law (see 2409260062). A three-judge panel agreed with the U.S. Supreme Court that the “record is underdeveloped,” and said the lower court must answer key questions about application of HB-20. Given NetChoice and the Computer & Communications Industry Association filed a facial challenge against all applications of the law, they have the burden of developing a “factual record” to support that request, said Thursday's opinion. Judges Edith Jones, Leslie Southwick and Andrew Oldham heard oral argument in May 2022 (see 2205090061). “Plaintiffs have not yet developed that record or proved their claims,” the court said. “Therefore, the cause is remanded for further proceedings consistent with this opinion.” The ruling lists a number of outstanding questions about whom HB-20 covers, how companies must moderate content and the impact on free expression. “Because these are fact-intensive questions that must be answered by the district court in the first instance after thorough discovery, we remand.” The panel said it expects the district court to also “thoroughly” address questions about Section 230 of the Communications Decency Act and Texas’ argument that the tech industry’s position on free speech is inconsistent with its views on the liability shield. The Supreme Court remanded the case to the 5th Circuit in July (see 2407010053). CCIA Chief of Staff Stephanie Joyce said in a statement: "CCIA looks forward to further proving in court that Texas HB20 violates the First Amendment." The office for Texas Attorney General Ken Paxton (R) didn’t comment.

Florida’s social media law should be permanently enjoined since the U.S. Supreme Court found it potentially violates the First Amendment, tech industry groups told a federal court Friday, submitting an amended lawsuit (see 2411010060). The Supreme Court in July ruled the First Amendment protects social media platforms’ ability to moderate content, sending the tech industry’s suits against Florida and Texas laws back to the lower courts (see 2407010053). The Computer & Communications Industry Association and NetChoice on Friday submitted an amended complaint with the U.S. District Court for Northern Florida (docket 4:21-cv-0220) (see 2411010060). The Supreme Court settled the question whether platforms like Facebook and YouTube engage in First Amendment-protected activity when moderating and organizing content, said CCIA and NetChoice. Citing the high court’s ruling, the complaint said: “In short, when the government regulates websites’ ‘choices about the views they will, and will not, convey,’ it ‘interfere[s] with protected speech.’” The associations asked that the district court rule SB-7072’s challenged provisions facially violate the Constitution and award the plaintiffs damages. “The government cannot force any speaker, be it a private citizen or a social media website, to say or disseminate speech against their will,” said CCIA Chief of Staff Stephanie Joyce in a statement Friday.