The US Court of Appeals for the Ninth Circuit delivered an important First Amendment victory last month in X Corp. v. Bonta, ruling that Elon Musk’s company would likely win its free-speech challenge against California’s content-moderation disclosure statute. Ostensibly designed as “a pure transparency measure,” the law compels platforms to biannually report whether and how they define and moderate controversial forms of expression including hate speech, extremism, radicalization, and misinformation.

In ruling against California, Milan D. Smith, Jr. wrote for a unanimous three-judge panel that these are “intensely debated and politically fraught topics” that nonetheless involve “constitutionally protected speech.” He observed that California, with its “Content Category Report” requirement, forces a platform “to reveal its policy opinion about contentious issues” by having it “recast its content-moderation practices in language prescribed by the State, implicitly opining on whether and how certain controversial categories of content should be moderated.”

The court found this likely violates the unenumerated First Amendment right not to speak (the right against government-compelled expression). Significantly, the Ninth Circuit rejected California’s claim it was only compelling commercial expression and that the law therefore should be analyzed under a relaxed form of scrutiny articulated decades ago by the US Supreme Court in Zauderer v. Office of Disciplinary Counsel. The court determined the law should face the demanding strict scrutiny test and would likely fail it because its burdens are “more extensive than necessary” to serve California’s alleged transparency interest.

Does applying a different level of scrutiny really matter in a case like this? Absolutely. In fact, the lower court judge in X Corp. v. Bonta had applied the easy-to-meet Zauderer test and determined the Content Category Report mandate likely passed First Amendment muster and thus should not be enjoined. As I argued earlier, applying Zauderer was misguided because it “involved a radically different factual scenario—compelling speech in attorneys’ advertisements to prevent ‘consumer deception’ about costs and fees in contingency fee arrangements.”

The Ninth Circuit’s conclusion that strict scrutiny—not the deferential Zauderer test—applies should please Justice Clarence Thomas. As I described in August, Thomas recently wrote that the Court “should reconsider Zauderer” and later decisions applying it in compelled-speech cases. His primary concern is that the test gives short shrift to First Amendment interests.

Policy wise, the Ninth Circuit’s ruling strikes a blow against California’s regulatory efforts to shame platforms into censoring content that the First Amendment protects but that Golden State lawmakers find objectionable. As I explained about one year ago, shortly after X Corp. sued California Attorney General Rob Bonta to block the law’s enforcement:

Requiring factual disclosures about policies affecting the moderation of unprotected categories of expression such as obscenity and child pornography is one matter. But government intermeddling with a privately run marketplace of ideas that skews it in the government’s preferred direction when it comes to constitutionally safeguarded varieties of speech is a vastly different and extremely problematic mandate.

In remarking on the Ninth Circuit’s ruling, TechDirt’s Mike Masnick wrote that “the true intent of [the statute] is not about transparency, but about using that transparency as a weapon to pressure companies to moderate categories of content that the state of California doesn’t like.” Back in 2022, when the law (Assembly Bill 587) was percolating in the legislature, Professor Eric Goldman asserted a similar sentiment: “by prioritizing certain content categories, the bill tells social media platforms that they must make special publication decisions in those categories to please the regulators and enforcers who are watching them.”

If the Ninth Circuit’s opinion in X Corp. v. Bonta seems vaguely familiar, it’s likely because it follows on the heels of another defeat for California in another compelled-speech case affecting social media platforms, NetChoice v. Bonta. The court’s August ruling in NetChoice, as I described, blocked enforcement of a key part of the California Age-Appropriate Design Code Act that compels platforms to prepare detailed “Data Protection Impact Assessment” reports about assessing and mitigating risks of exposing minors to “harmful” but lawful speech that might be caused by things like a platform’s design and algorithms.

The Ninth Circuit wrote that “the DPIA report requirement invites First Amendment scrutiny because it deputizes covered businesses into serving as censors for the State.” As with its ruling in X Corp., the Ninth Circuit’s NetChoice decision blocking the DPIA reports was: 1) unanimous; 2) written by Judge Smith, a George W. Bush nominee; and 3) based on strict scrutiny’s application.

California’s backdoor efforts to censor First Amendment-protected expression online by compelling businesses to speak are failing with what was once considered—prior to former President Trump’s time in the White House—one of the nation’s most liberal appellate courts. That was then, this is now: X Corp. and NetChoice are decidedly pro-First Amendment, pro-business decisions.

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