Montana TikTok Ban Likely Violates First Amendment, Intrudes on Federal Foreign Affairs Power

Judge Donald Molloy's opinion Thursday in Alario v. Knudsen (D. Mont.) preliminarily enjoined Montana's ban on TikTok, which the state had defended largely on the theory that TikTok was owned by a Chinese corporation and "gathers significant information from its users, accessing data against their will to share with the People's Republic of China," which facilitates "corporate and international espionage in Montana." The court held that the ban was likely unconstitutional even if it was viewed as content-neutral and thus subject to the "intermediate scrutiny" applicable to content-neutral speech restrictions:

To pass intermediate scrutiny, a law must both "advance[ ] important governmental interests unrelated to the suppression of free speech[,] not burden substantially more speech than necessary to further those interests," and "leave open ample alternative channels for communication of the information." …

[T]he law's foreign policy purpose is not an important Montana state interest…. SB 419 explicitly bans TikTok because of its direct connection to a specific foreign nation…. As is explained in more detail below, Montana does not have constitutional authority in the field of foreign affairs.

The State attempts to persuade that its actual interest in passing this bill is consumer protection. However, it has yet to provide any evidence to support that argument…. [And e]ven accepting the State's argument that its stated government interest is consumer protection, the law still must be narrowly tailored to that interest….

First, SB 419 "burden[s] substantially more speech than is necessary." This is apparent on the law's face. SB 419 completely bans TikTok in Montana. It does not limit the application in a targeted way with the purpose of attacking the perceived Chinese problem. At the October 12 hearing, the State argued that the law is narrowly tailored because it is the only way the Legislature could have stopped the purportedly improper behavior it wanted to prevent. In its brief, the State cites a March 2023 article from Reuters reporting on a group of 45 United States attorneys general who moved to file in a Tennessee state court as amici curiae to argue that TikTok has deceptively and improperly ignored requests to produce internal company documents in response to state investigations. The State suggests that any legislation less stringent than an all-out ban would not be properly tailored when the company has already displayed a public willingness to disobey state regulatory requests. However, it is unclear how this single investigation into TikTok warrants a complete ban on the application.

In the same legislative session as SB 419, the Legislature also passed SB 384, a sweeping data privacy law called the Montana Data Privacy Act that purports to protect Montanans against unsafe data collection practices from social media companies in the state. To be clear, courts may not "sift[ ] through all the available or imagined alternative means of regulating [an issue] in order to determine whether the [state's] solution was the least intrusive means of achieving the desired end." But the State may not "regulate expression in such a manner that a substantial portion of the burden on speech does not serve to advance its goals." Banning TikTok outright to support a factually unsupported interest is a clear example of a regulation that burdens more speech than is necessary….

[T]he State has [also] not provided any evidence that the ban "will in fact alleviate these harms in a direct and material way." In the first instance, it is well-established that other social media companies, such as Meta, collect similar data as TikTok, and sell that data to undisclosed third parties, which harms consumers [citing lawsuits against Facebook for tracking users' browsing histories and allegedly selling them to advertisers -EV]. Additionally, there are many ways in which a foreign adversary, like China, could gather data from Montanans. For example, it could do so by "purchasing information from data brokers (a practice in which U.S. intelligence agencies also engage), conducting open-source intelligence gathering, and hacking operations like China's reported hack of the U.S. Office of Personnel Management" [citing a declaration by one of plaintiffs' experts]. Thus, it is not clear how SB 419 will alleviate the potential harm of protecting Montanans from China's purported evils….

[T]he law [also] fails intermediate scrutiny because it does not leave open "ample alternative channels of communication." … Each User Plaintiff testifies in their affidavits that TikTok provides them a way to communicate with their audience and community that they cannot get elsewhere on the Internet….

The court also dismissed a separate argument for the law, which is that "TikTok fails to remove, and may even promote, dangerous content that directs minors to engage in dangerous activities," which "includ[es] but [is] not limited to throwing objects at moving automobiles, taking excessive amounts of medication, lighting a mirror on fire and then attempting to extinguish it using only one's body parts, inducing unconsciousness through oxygen deprivation, cooking chicken in NyQuil, pouring hot wax on a user's face, attempting to break an unsuspecting passerby's skull by tripping him or her into landing face first into a hard surface, placing metal objects in electrical outlets, swerving cars at high rates of speed, smearing human feces on toddlers, licking doorknobs and toilet seats to place oneself at risk of contracting coronavirus, attempting to climb stacks of milkcrates, shooting passersby with air rifles, loosening lug nuts on vehicles, and stealing utilities from public places." The court noted that a ban on TikTok has little connection to protecting minors from such material, given that the material remains legal on all the other platforms.

The court also concluded that the law was preempted by the federal government's exclusive powers over foreign affairs (an argument that, unlike the First Amendment objection, wouldn't apply to a hypothetical future federal TikTok ban):

"[T]he Constitution entrusts foreign policy exclusively to the National Government" and so "state law must give way" where there is a conflict between state law and foreign policy. Am. Ins. Ass'n v. Garamendi (2003)….

"Courts have consistently struck down state laws which purport to regulate an area of traditional state competence, but in fact, affect foreign affairs." … SB 419's foreign affairs purpose … [is] clear. First, the preamble states that "TikTok gathers significant information from its users, accessing data against their will to share with [China]." It further states that the "continued operation [of TikTok] in Montana serves as a valuable tool to [China] to conduct corporate and international espionage in Montana and may allow [China] to track the real-time locations of public officials, journalists, and other individuals adverse to the Chinese Communist Party's interests." This demonstrates that the purpose of the statute is to prevent and prohibit the "international espionage" of one of the United States' few enumerated foreign adversaries, not to merely protect Montana consumers.

The bill's legislative history further supports this conclusion. For example, in the first Montana House of Representatives hearing on the bill, Defendant Attorney General Knudsen explained: "TikTok is spying on Americans, period. TikTok is a tool of the Chinese Communist Party. It is owned by a Chinese company, and under China law, if you are based in China, you will cooperate with the Chinese Communist Party, period." He further explained his belief that China sees "a war with the United States as inevitable, and [China is] using TikTok as an initial salvo in that war." This, he explains, is a reason the bill is necessary.

During the second reading of the bill, Representative Brandon Ler, a Republican from Savage, stated:

we are facing a threat unlike any other from the Chinese Communist Party hiding behind TikTok where they can spy on Americans by collecting personal information by keystrokes and even use their locations. That's why I urge you to join me in voting yes on Senate Bill 419 to ban TikTok in Montana. TikTok is a national security threat.

… The Legislature may have set out to protect Montanans from an allegedly grave threat. But "however laudable it may be, [it] is not an area of traditional state responsibility." …

SB 419 "intrudes on the federal government's exclusive power to conduct and regulate foreign affairs" …. A state law is intrusive if it has "'more than some incidental or indirect effect' on foreign affairs." Because SB 419 "expresses a distinct political point of view on a specific matter of foreign policy," it is intrusive. In Movsesian, the Ninth Circuit held that a California statute that imposed a "politically charged label of 'genocide' on the actions of the Ottoman Empire (and, consequently, present-day Turkey)," was making a political statement. Similarly, SB 419 attempts to establish a foreign policy for Montana. As explained in detail above, from the very first line of the bill, the Legislature makes a distinct foreign policy statement, which is that TikTok is owned by a Chinese corporation that is taking Montanans' TikTok user data and sharing it with the Chinese government for nefarious purposes….

And the court also held that the statute conflicted with the federal Defense Production Act:

Plaintiffs argue that the Defense Production Act directly conflicts with SB 419 because TikTok's parent company, ByteDance, and the United States are currently engaged in negotiations under the law….

Congress passed the Defense Production Act to help ensure the "ability of the domestic industrial base to supply materials and services for the national defense and to prepare for and respond to military conflicts, natural or man-caused disasters, or acts of terrorism within the United States." The sprawling act also establishes the Committee on Foreign Investment in the United States (the "Committee"), which is tasked with "conduct[ing] an investigation of the effects of [some foreign] transaction[s] on the national security of the United States and take any necessary actions in connection with the transaction to protect the national security of the United States." If the investigation returns credible risks, the Committee can either negotiate with the parties to the transaction or refer the matter to the President of the United States to prohibit it.

In 2020, TikTok and ByteDance petitioned for review of a Trump Administration August 2020 executive order requiring certain divestment activity for TikTok in the United States. As of February 2023, the negotiations under the Committee's framework have been held in abeyance while a mutual agreement is privately negotiated between the parties. This Committee matter is not the same as the instant matter before the Court, but it does indicate the depth of the federal government's involvement with TikTok under the Defense Production Act.

Conflict preemption doctrine seeks to protect the federal government's "capacity to bargain for the benefits of access to the entire national economy." Accordingly, although SB 419 may not directly impact the Committee's activity, the Committee's ongoing engagement with TikTok under the provisions of the Defense Production Act likely implicates the exact type of conflict the preemption doctrine seeks to prevent. The State argues in its defense that if Congress intended the Defense Production Act to preclude any state regulation of a business that was being investigated by the Committee, it would have explicitly said so by express preemption. This argument misses the point of conflict preemption, which preempts state regulation even in the absence of explicit federal preemption….

Finally, the court also held that the TikTok ban violates the dormant Foreign Commerce Clause because it "facially discriminates against a foreign nation—China—in commerce." (See Kraft General Foods, Inc. v. Iowa Dep't of Rev. & Fin. (1992) for more on that.)

The plaintiffs are represented by too many lawyers to list, from the firms Covington & Burling LLP, Jackson, Murdo & Grant, P.C., and Davis Wright Tremaine LLP.