How a Recent SCOTUS Decision Protects California’s Social Media Giants—For Now

The technology industry is a major driver of California’’s economy, with tech contributing 19 percent of the state’s Gross Domestic Product—almost one of every five dollars generated in the state. In 2020, of the approximately 17 million Californians who were employed, more than one in 10 held a tech industry job. Without the technology sector, California’s economy would be in serious trouble.

The United States Supreme Court on May 31, 2022, put a temporary block on a Texas law that could have taken a significant bite out of California’s tech industry. The fight over the law, however, remained far from over.

The law passed in Texas in 2021 and signed by Gov. Greg Abbott in September created a logistical nightmare that risked shutting down, or at least slowing down, such social media giants as Menlo Park’s Facebook, San Francisco’s Twitter, San Bruno’s YouTube and Santa Monica’s Snapchat.

‘West Coast Oligarchs’

Why? Because all of those companies are run by “West Coast oligarchs” determined to “censor” the voices of political conservatives on social media. At least, that’s what one of the bill’s sponsors in the Texas legislature said. The law would “give Texans a path to hold Big Tech accountable and get their voice back online,” Texas State Senator Bryan Hughes said—via his Facebook account.

The law, however, appeared to violate the United States Constitution, specifically the First Amendment, which bars any law “abridging the freedom of speech, or of the press.” The Supreme Court has held in various cases that not just individual citizens but corporations as well have Constitutional rights, including those guaranteed by the First Amendment, and that “freedom of speech” includes a corporation’s right to decide what views and information it does and does not disseminate to its customers and the public.

The claim that motivated Texas lawmakers to pass the bill, that social media companies censor content posted by political conservatives, has no real basis in fact, according to a 2021 study by the New York University Stern Center for Business and Human Rights. If anything, the opposite is true. Looking at 2020 data on engagement with Facebook posts (that is, “likes,” shares and comments), the study showed that conservative media outlets Fox News and Breitbart far outstripped any other outlet, and that engagement with Donald Trump’s posts left other politicians in the dust.

‘Existential Threat’ to Social Media Industry

In an analysis for Vox.com, journalist Ian Millhiser, who covers the Supreme Court, wrote that the Texas law imposed such cumbersome requirements on platforms, that it “presented an existential threat to the entire social media industry.” 

In one key provision, the law required “transparency” in a social media company’s decision-making process when it removes a piece of content from its platform. Facebook alone took down 856 million posts in only the first three months of 2018 (the most recent data made available). Most of those posts were simply “spam,” unwanted posts sent by automated accounts to thousands of people at once. But many others included hate speech, images or descriptions of graphic violence, terrorism or, in some cases, simple nudity which is banned under Facebook’s rules.

Under the Texas law, the company would have been forced to provide a written explanation for each of those 865 million removals, and for its decision to remove any post, anytime. 

Another provision of the law banned social media platforms from removing content based on “the viewpoint of the user or another person,” even if that viewpoint was not expressed in the removed content. That provision, according to Millheiser’s analysis, could have “prevented major social media sites from engaging in the most basic forms of content moderation—such as suppressing posts by literal Nazis who advocate for mass genocide.” It could also prevent removal of posts by stalkers and bullies who commit online harassment and abuse. 

Though the law, technically, applies only to the state of Texas, social media companies operate their platforms on the internet, which covers all 50 states and, in fact, the whole world. That means in order to comply with Texas laws, the companies would likely need to apply the burdensome Texas rules to all of their users.

Social Media and ‘Common Carriers’

In December, a judge on the U.S. District Court for the Western District of Texas blocked the law from taking effect. The Supreme Court has previously ruled that large telecommunications companies that are classified as “common carriers” have no real First Amendment rights, though the definition of what constitutes a “common carrier” has remained unclear. 

In general, common carriers are broadly defined as companies that simply facilitate communication, such as phone companies, but who exercise no editorial control over communication on its network.

The state of Texas argued in the Western District that large social media companies—those with at least 50 million monthly active users—are indeed “common carriers.” But Judge Robert Pitman disagreed, writing that the entire purpose of social media is to create communities—and that means the responsibility to “curate” content. 

The platforms, the judge wrote, “are not engaged in indiscriminate, neutral transmission of any and all users’ speech.” In other words, they are not common carriers and therefore are protected by First Amendment free speech guarantees. The law, therefore, was unconstitutional, the judge concluded.

But when the state appealed the case to the Fifth Circuit U.S. Court of Appeals—where six of the court’s 17 judges were appointed by Trump—the law received a new lease on life. The case was heard by a three-judge panel, consisting of one Trump appointee, another conservative appointed by Pres. Ronald Reagan, and a more moderate judge appointed by Pres. George W. Bush.

The panel did not explain its May 11, 2022, reversal of Pitman’s ruling, though it did note that one of the three judges dissented from the decision. The court did not say which one.

An Unusual SCOTUS Alliance

About three weeks later, the U.S. Supreme Court blocked the law again—though the high court has not yet heard the case and may issue a full ruling at some later date. The court’s order to block the Texas law—and allow social media platforms to operate with their full First Amendment protections, at  least for the time being—came on a 5-4 vote, with the justices forming two unexpected coalitions.

Three of the court’s conservative justices, including Trump appointees Brett Kavanaugh and Amy Coney Barrett, along with Chief Justice John Roberts, were joined by two of its most liberal, Stephen Breyer and Sonia Sotomayor, in voting to block the Texas law. The five-justice majority did not publicly offer any reasons for the decision.

But one liberal, Elena Kagan, joined three of the court’s most right wing justices—Samuel Alito, Clarence Thomas, and Trump-appointee Neil Gorsuch—in voting against the block. But while Alito, Gorsuch and Thomas published their reasoning in a six-page dissenting opinion, Kagan merely stated that she “would deny the application to vacate stay.”

In the dissent, Alito, who authored the opinion, said he was not certain that the First Amendment should apply to the platforms.

“It is not at all obvious,” Alito wrote, “how our existing precedents, which predate the age of the internet, should apply to large social media companies.”