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Yesterday, the US Court of Appeals for the Fifth Circuit upheld Texas' law banning major social media websites from using most forms of content moderation. The decision is at odds with a recent Eleventh Circuit ruling striking down Florida's similar (though somewhat less sweeping) law. The Eleventh Circuit ruling was written by prominent conservative Trump appointee Judge Kevin Newsom. In May, the Supreme Court signaled that at least five justices believe the law to be unconstitutional, when it overturned a previous Fifth Circuit ruling lifting a trial court injunction against implementation of the Texas law. For reasons I summarized here, I agree with the Eleventh Circuit's approach, and believe the Texas and Florida laws violate the First Amendment's guarantee of freedom of speech. In this post, I argue that these laws also violate the Takings Clause of the Fifth Amendment.
The Takings Clause bars government from taking "private property" without paying "just compensation." In its 2021 ruling in Cedar Point Nursery v. Hassid, the Supreme Court ruled (correctly, in my view) that even a temporary government-mandated "physical occupation" or invasion of private property counts as a per se taking, automatically requiring compensation. Thus, the Court struck down a California law requiring agricultural growers to grant access to their property to union organizers. The Court emphasized that "[t]he right to exclude is universally held to be a fundamental element of the property right," and that violations of that right presumptively qualify as takings.
The Florida and Texas social media laws are also blatant attacks on the right to exclude. No one doubts that the Twitter site and its various features are Twitter's private property. And the whole point of the Florida and Texas laws is to force Twitter and other social media firms to grant access to users and content the firms would prefer to exclude, particularly various right-wing users. Just as the plaintiffs in Cedar Point wanted to bar union organizers from their land, so Twitter wishes to bar some content it finds abhorrent (or that might offend or annoy other users).
To be sure, there are obvious differences between virtual property, such as a website, and more conventional physical property, like that involved in the Cedar Point case. But the Taking Clause nonetheless applies to both. If Texas decided to seize the Twitter site, bar current users, and instead fill it with content praising the state government's policies, that would pretty obviously be a taking, much like if California decided to seize the Cedar Point tree nursery's land. In the same way, requiring Twitter to host unwanted content qualifies as an occupation of its property, no less than requiring a landowner to give access to unwanted entrants. The Supreme Court has previously ruled that intellectual property is protected by the Takings Clause. Websites present similar issues.
One could argue that forcing a website owner to host unwanted users isn't really a "physical occupation," because the property is virtual in nature. But websites, including the big social media firms, use physical server space. Other things equal, a site with more user-generated content requires more such space than one with less. Even aside from the connection to physical infrastructure, it seems to me that occupation of virtual "real estate" is analogous to occupation of land. Both are valuable forms of private property from which the owner generally has a right to exclude.
In Cedar Point, the Supreme Court did note some exceptions to the rule that government-mandated occupations of property qualify as takings. The one most relevant to the social media case is that for locations "generally open to the public," such as shopping malls. In his majority opinion in Cedar Point, Chief Justice John Roberts used this theory to distinguish the Supreme Court's 1980 decision in Pruneyard Shopping Center v. Robins, which held that a shopping mall could not bar people who wanted to leaflet on its property.
For reasons outlined in two articles by Prof. Gregory Sisk (see here and here), I think Pruneyard was a bad decision and should be overruled. But, in the meantime, it is readily distinguishable from the Texas and Florida social media laws. Despite appearances, sites like Twitter and Facebook are not "generally open to the public" in the sense that anyone who wants to can post content on the site. Rather, they are only open to those who agree to the sites' terms of services. As Twitter's terms of service, for example, make clear, "[y]ou may use the Services only if you agree to form a binding contract with Twitter and are not a person barred from receiving services under the laws of the applicable jurisdiction." The contract in question includes acceptance of Twitter's content moderation rules. Few if any shopping malls have similar access restrictions!
Cedar Point outlines a few other exceptions to the rule that physical occupations are per se takings. Examples include regulatory health and safety inspections. By similar logic, websites that, for example, sell potentially dangerous goods and services, might be required to post warnings about the possible risks. In addition, the "police power" sometimes creates a general exception to takings liability, as when police must enter a property to execute a search warrant. But none of these other exceptions even come close to justifying the Florida and Texas social media laws.
If government imposition of unwanted content on websites does not qualify as a taking, it would have dire implications for a wide range of websites, not just social media providers. The government could similarly force a wide range of other sites to accept unwanted content. Unscrupulous politicians and interest groups could take the opportunity to force all kinds of websites to promote their preferred content, or at least bar them from excluding content that the site owners disapprove of. Such a regime would be a serious menace to online property rights, though the consequences would be far less dire if the social media firms prevail in the current free speech litigation.
Unlike the Eleventh Circuit decision holding that the Florida social media law violates the First Amendment, a ruling that such a law violates the Takings Clause wouldn't necessarily bar states from enacting and enforcing such legislation. The could still do so, so long as they paid "just compensation," which usually means the "fair market value" of the property taken.
Calculating the amount of compensation due in a case like this might be complicated. In the case of many would-be users (those with few potential followers), the market value of a Twitter or Facebook account could be very low. But the aggregate compensation for forcing social media firms to accept large numbers of unwanted users could still be very large, perhaps large enough to deter states from passing such legislation in the first place.
The present litigation against the Florida and Texas laws does not involve Takings Clause claims. But such claims could potentially be filed in the future, especially in the Texas case, where the law seems likely to go into effect, unless and until the Supreme Court reverses the Fifth Circuit ruling on the First Amendment issue. If social media firms choose to pursue this issue, they could well prevail—and certainly deserve to do so.
UPDATE: I have made minor changes to this post.
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