Case: 21-51178 Document: 361-1 Page: 1 Date Filed: 11/07/2024
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
____________
FILED
November 7, 2024
No. 21-51178 Lyle W. Cayce
____________ Clerk
NetChoice, L.L.C., a 501(c)(6) District of Columbia organization doing
business as NetChoice; Computer & Communications
Industry Association, a 501(c)(6) non-stock Virginia Corporation doing
business as CCIA,
Plaintiffs—Appellees,
versus
Ken Paxton, in his official capacity as Attorney General of Texas,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:21-CV-840
______________________________
ON REMAND FROM
THE SUPREME COURT OF THE UNITED STATES
Before Jones, Southwick, and Oldham, Circuit Judges.
Andrew S. Oldham, Circuit Judge:
In Moody v. NetChoice, LLC, 144 S. Ct. 2383 (2024), the Supreme
Court emphasized that facial challenges to state laws are difficult to successfully mount. In the First Amendment context, such challenges require a court
to “explore the law[’s] full range of applications—the constitutionally
Case: 21-51178 Document: 361-1 Page: 2 Date Filed: 11/07/2024
No. 21-51178
impermissible and permissible both—and compare the two sets.” Id. at 2398
(emphasis added). Plaintiffs can meet this burden “only if the law’s unconstitutional applications substantially outweigh its constitutional ones.”
Id. at
2397.
As the Supreme Court recognized, it is impossible to apply that standard here because “the record is underdeveloped.” Id. at 2399. Who is covered by Texas House Bill 20 (“H.B. 20”)? For these actors, which activities
are covered by H.B. 20? For these covered activities, how do the covered actors moderate content? And how much does requiring each covered actor to
explain its content-moderation decisions burden its 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 Court in Moody repeated a familiar refrain: “facial challenges are
disfavored.” Id. at 2409. There are a “host of good reasons” for this judicial
skepticism.
Id. at 2397. For example, facial challenges “rest on speculation,”
ibid. (quotation omitted), “short circuit the democratic process,”
ibid. (quotation omitted), and sit uncomfortably with Article III, see
id. at 2413
(Thomas, J., concurring in the judgment). Because of the significant risks associated with facial challenges—even those under the First Amendment—
challengers bear a heavy burden. See
id. at 2397 (majority opinion);
id. at 2409
(Barrett, J., concurring) (“[T]hese cases illustrate the dangers of bringing a
facial challenge. . . . In fact, dealing with a broad swath of varied platforms
and functions in a facial challenge strikes me as a daunting, if not impossible,
task.”);
id. at 2411 (Jackson, J., concurring in part and concurring in the judgment) (“[A]s all Members of the Court acknowledge, plaintiffs bringing a facial challenge must clear a high bar.”);
id. at 2428 (Alito, J., concurring in the
judgment) (“Facial challenges also strain the limits of the federal courts’
2
Case: 21-51178 Document: 361-1 Page: 3 Date Filed: 11/07/2024
No. 21-51178
constitutional authority to decide only actual ‘Cases’ and ‘Controversies,’”
so “parties mounting facial attacks [must] satisfy demanding requirements.”).
A proper First Amendment facial challenge proceeds in two steps.
The “first step” is to determine every hypothetical application of the challenged law. Id. at 2398 (majority opinion). The second step is “to decide
which of the law[’s] applications violate the First Amendment, and to measure them against the rest.”
Ibid. If the “law’s unconstitutional applications
substantially outweigh its constitutional ones,” then and only then is the law
facially unconstitutional.
Id. at 2397. “[T]he record” in this case “is underdeveloped” on both fronts. See
id. at 2399; see also
id. at 2410–11 (Barrett, J.,
concurring) (noting the record failed to “thoroughly expose[] the relevant
facts about particular social-media platforms and functions”);
id. at 2411
(Jackson, J., concurring in part and concurring in the judgment) (noting
plaintiffs failed to show “how the regulated activities actually function”);
id.
at 2412 (Thomas, J., concurring in the judgment) (noting plaintiffs “failed to
provide many of the basic facts necessary to evaluate their challenges to H.B.
20”);
id. at 2422 (Alito, J., concurring in the judgment) (noting the “incompleteness of this record”). That is a consequence of how this case was litigated in district court:
[T]he unfortunate posture of this case stems from the fact that
NetChoice steadfastly opposed (and the district court blocked)
the very discovery that Moody appears to require. In the district
court, plaintiffs argued that no discovery was necessary because the issues were purely legal questions. And the district
court largely agreed with that, requiring the State of Texas to
complete discovery in a mere 30 days to avoid “burdening
plaintiffs without good cause.”
Order, NetChoice, LLC v. Paxton, No. 21-51178, at 4 (5th Cir. Sept. 18, 2024)
(cleaned up).
3
Case: 21-51178 Document: 361-1 Page: 4 Date Filed: 11/07/2024
No. 21-51178
*
Here is how we expect the case to proceed on remand.
At the first step, the district court must determine “the full range of
activities” that H.B. 20 covers. Moody, 144 S. Ct. at 2397 (majority opinion).
That means it must determine “what actors” are covered by H.B. 20. Id. at
2398. The district court also must decide “[w]hat activities” by those actors
are covered by H.B. 20. Ibid. Plaintiffs urge us (and the district court) to ignore the Supreme Court’s instructions because, in plaintiffs’ view, it is
enough to consider H.B. 20’s “heartland applications.” See Supp. Br. of
Plaintiffs–Appellees at 1, 2, 3, 5 (repeatedly arguing that “heartland applications” are enough). But that is the precise error the Supreme Court identified
in Moody. See 144 S. Ct. at 2397–98 (explaining that plaintiffs approached this
case more like an as-applied challenge than like a facial one because they
“treated [H.B. 20] as having certain heartland applications, and mostly confined their battle to that terrain”). The Moody Court was emphatic that plaintiffs cannot succeed on their First Amendment facial claims by focusing on
H.B. 20’s “heartland applications.” We therefore expect the district court
to reject plaintiffs’ invocation of H.B. 20’s “heartland applications” on remand. The questions, broadly stated, are who and what is covered by H.B.
20—and the district court cannot truncate its evaluation of those questions
at plaintiffs’ behest.
Plaintiffs also claim the “parameters” of H.B. 20 are “easy to draw.”
Supp. Br. of Plaintiffs–Appellees at 1. Once again, the Supreme Court disagreed. The Court stated that H.B. 20, “at least on [its] face, appear[s] to apply beyond Facebook’s News Feed and its ilk.” Moody, 144 S. Ct. at 2398. It
explicitly questioned whether H.B. 20 regulated “direct messaging or events
management” services, or “how an email provider like Gmail filters incoming messages, how an online marketplace like Etsy displays customer
4
Case: 21-51178 Document: 361-1 Page: 5 Date Filed: 11/07/2024
No. 21-51178
reviews, how a payment service like Venmo manages friends’ financial exchanges, or how a ride-sharing service like Uber runs[.]” Ibid. (citations omitted). True, H.B. 20 excludes “electronic mail” from its definition of
“[s]ocial media platform.” Tex. Bus. & Com. Code § 120.001(1)(B).
But that is only one of the myriad possible applications of H.B. 20. And because the “online world is variegated and complex, encompassing an evergrowing number of apps, services, functionalities, and methods for communication and connection,” those “examples” are only the tip of the iceberg.
Moody, 144 S. Ct. at 2398. That is why the Supreme Court admonished:
“[T]here is much work to do below” on the first step. Id. at 2394.
There is serious need of factual development at the second step of the
analysis as well. To determine if any given application of H.B. 20’s “content-moderation provisions” 1 is unconstitutional, the district court must determine “whether there is an intrusion on protected editorial discretion.” Id. at
2398 (citation omitted). That requires a detailed understanding of how each
covered actor moderates content on each covered platform. See id. at 2437
(Alito, J., concurring in the judgment) (“Without more information about
how regulated platforms moderate content, it is not possible to determine
whether these laws lack a plainly legitimate sweep.” (quotation omitted)).
Focusing primarily on Facebook’s News Feed or YouTube’s homepage will
not suffice, as “[c]urating a feed and transmitting direct messages,” for example, likely “involve different levels of editorial choice, so that the one creates an expressive product and the other does not.” Id. at 2398 (majority
opinion).
Moreover, one of the principal factual deficiencies in the current record, according to the Supreme Court, concerns the algorithms used by
_____________________
1
See Tex. Civ. Prac. & Rem. Code §§ 143A.002, 143A.004, 143A.006.
5
Case: 21-51178 Document: 361-1 Page: 6 Date Filed: 11/07/2024
No. 21-51178
plaintiffs’ members. See, e.g., id. at 2404 n.5; id. at 2410–11 (Barrett, J., concurring); id. at 2424, 2427, 2436–38 (Alito, J., concurring in the judgment).
It matters, for example, if an algorithm “respond[s] solely to how users act
online,” or if the algorithm incorporates “a wealth of user-agnostic judgments” about the kinds of speech it wants to promote. Id. at 2404 n.5 (majority opinion); see also id. at 2410 (Barrett, J., concurring). And this is only
one example of how the “precise technical nature of the computer files at
issue” in each covered platform’s algorithm might change the constitutional
analysis. ROA.539 (quotation omitted). It also bears emphasizing that the
same covered actor might use a different algorithm (or use the same algorithm differently) on different covered services. For example, it might be true
that X is a covered actor and that both its “For You” feed and its “Following” feed are covered services. But it might also be true that X moderates
content differently or that its algorithms otherwise operate differently across
those two feeds. That is why the district court must carefully consider how
each covered actor moderates content on each covered service.
When performing the second step of the analysis, the district court
must separately consider H.B. 20’s individualized-explanation provisions. 2
As the Supreme Court has instructed, that requires “asking, again as to each
thing covered, whether the required disclosures unduly burden expression.”
Moody, 144 S. Ct. at 2398 (majority opinion). The first issue to address here
is the same one addressed above: whether each covered actor on each covered
platform is even engaging in expressive activity at all when it makes content-
_____________________
2
See Tex. Bus. & Com. Code §§ 120.101–.04. We previously held that the
“one-and-done” disclosures and the “biannual transparency-report requirement” were
facially constitutional, and the Supreme Court did not review that decision. See NetChoice,
LLC v. Paxton, 49 F.4th 439, 485–86 (5th Cir. 2022). The parties correctly agree that holding still binds the district court on remand. See Supp. Br. of Appellant (Texas) at 9–10;
Supp. Br. of Plaintiffs–Appellees at 3 n.2.
6
Case: 21-51178 Document: 361-1 Page: 7 Date Filed: 11/07/2024
No. 21-51178
moderation decisions. See id. at 2399 n.3 (explaining that these provisions
“violate the First Amendment” only “if they unduly burden expressive activity” (emphasis added)). Then for each covered platform engaging in expressive activity, the district court must assess how much the requirement to
explain that platform’s content-moderation decisions burdens the actor’s expression. See id. at 2398.
Plaintiffs again object because, in their view, the “precise burdens on
specific websites are not material.” Supp. Br. of Plaintiffs–Appellees at 10.
But it is hard to see how the district court could possibly determine whether
each and every covered actor on each and every one of its covered services is
facing an undue burden on its expression without considering, well, those
burdens. And the Supreme Court has made clear that the district court must
consider those burdens, including variations in those burdens across platforms. Cf. Moody, 144 S. Ct. at 2411 (Barrett, J., concurring) (“[T]he analysis
is bound to be fact intensive, and it will surely vary from function to function
and platform to platform.”).
…
It is plaintiffs’ burden to develop a factual record to support their request for facial injunctive relief against enforcement of a state statute. Plaintiffs have not yet developed that record or proved their claims. Therefore,
the cause is REMANDED for further proceedings consistent with this
opinion. 3
_____________________
3
Texas raises several additional arguments, including that plaintiffs do not have
associational standing, that H.B. 20’s severability provision must be considered if any provision is deemed facially unconstitutional, that many of H.B. 20’s applications regulate
only conduct, and that plaintiffs’ position here is inconsistent with their stance on 47
U.S.C. § 230. We decline to address these arguments at this juncture. On remand, we
expect that the district court will consider them thoroughly.
7
