Judge Quashes FTC Investigative Demand to Media Matters, Finding "Straightforward First Amendment Violation"

A short excerpt from Friday's long decision by Judge Sparkle Sooknanan (D.D.C.) in Media Matters for America v. FTC:

Speech on matters of public concern is the heartland of the First Amendment. The principle that public issues should be debated freely has long been woven into the very fabric of who we are as a Nation. Without it, our democracy stands on shaky ground. It should alarm all Americans when the Government retaliates against individuals or organizations for engaging in constitutionally protected public debate. And that alarm should ring even louder when the Government retaliates against those engaged in newsgathering and reporting.

This case presents a straightforward First Amendment violation. Media Matters for America is a nonprofit media company that is over two decades old. In November 2023, it ran a story reporting that as a result of Elon Musk's acquisition of Twitter (now "X"), advertisements on the social media platform were appearing next to antisemitic posts and other offensive content. Mr. Musk immediately promised to file "a thermonuclear lawsuit against Media Matters." And he followed through. In the weeks and months that followed, X Corp. and its subsidiaries sued Media Matters all over the world, at least until a federal district court preliminarily enjoined this aggressive litigation strategy. Meanwhile, seemingly at the behest of Steven Miller, the current White House Deputy Chief of Staff, the Missouri and Texas Attorneys General issued civil investigative demands (CIDs) to Media Matters, both of which were preliminarily enjoined in this Court as likely being retaliatory in violation of the First Amendment.

But these court victories did not end the fight for Media Matters. Now the Federal Trade Commission (FTC) has taken up the cause. After Andrew Ferguson took on his new role as the Chairman of the FTC, the agency issued a sweeping CID to Media Matters, purportedly to investigate an advertiser boycott concerning social media platforms. That CID should have come as no surprise.

Before President Trump selected him to head the FTC, Mr. Ferguson appeared on Steve Bannon's podcast, where he said that it is "really important that the FTC take investigative steps in the new administration under President Trump" because "progressives" and others who are "fighting "disinformation" were "not going to give up just because of the election." One of his supporters, Mike Davis, who urged President Trump to nominate him to the role, made several public comments about Media Matters, including that Mr. Musk should "nuke" the media company. And after taking the reins, Chairman Ferguson brought on several senior staffers at the FTC who previously made public comments about Media Matters.

Media Matters brought this lawsuit to challenge the FTC's CID, alleging that it is retaliatory in violation of the First Amendment and that it is overbroad in violation of the Fourth and First Amendments. Before the Court is a motion seeking preliminary injunctive relief from the CID. The Court agrees that a preliminary injunction is warranted….

Media Matters … alleges that the "Defendants violated, and continue to violate, [its] First Amendment rights by launching an investigation and serving a burdensome CID in retaliation for [Media Matters'] speech, press, and associational activities." "[T]he law is settled that … the First Amendment prohibits government officials from subjecting an individual to retaliatory actions … for speaking out." To prevail on a retaliation claim, a plaintiff must show: "(1) he engaged in conduct protected under the First Amendment; (2) the defendants took some retaliatory action sufficient to deter a person of ordinary firmness in plaintiff's position from speaking again; and (3) a causal link between the exercise of a constitutional right and the adverse action taken against him." At this preliminary stage, Media Matters has demonstrated that it is likely to show all three elements, so the Court finds that it is likely to succeed on the merits of this claim….

Here's the court's analysis of the second prong; for more on the third prong (the first was uncontested), read the full opinion:

Media Matters is … likely to show that the Defendants took a retaliatory action sufficient to deter a person of ordinary firmness in Media Matters' position from speaking again. This is because the FTC issued a sweeping and burdensome CID calling for sensitive materials. See White v. Lee (9th Cir. 2000) (holding an "investigation by … HUD officials" "more than meets" the standard requiring an act that "would chill or silence a person of ordinary firmness from future First Amendment activities" where the defendants "directed the plaintiffs under threat of subpoena to produce all their publications regarding [a certain] project, minutes of relevant meetings, correspondence with other organizations, and the names, addresses, and telephone numbers of persons who were involved in or had witnessed the alleged discriminatory conduct"); Cooksey v. Futrell (4th Cir. 2013) (holding "[a] person of ordinary firmness would surely feel a chilling effect" where an official told the plaintiff "that he and his website were under investigation and that the State Board does have the statutory authority to seek an injunction[.]").

This is especially true where, as here, "[t]he CID seeks" "a reporter's resource materials." A reporter of ordinary firmness would be wary of speaking again if she had to reveal the materials requested by this fishing expedition of a CID. See, e.g., Compl., Ex. D at 2, ECF No. 1-4 ("Provide all analyses or studies that Media Matters conducted, sponsored, or commissioned relating to advertising on social media or digital advertising platforms, including but not limited to any financial analyses or studies, and all data sets and code that would be necessary to replicate the analysis."); id. ("Provide documents sufficient to show the methodology by which Media Matters evaluates or categorizes any news, media, sources, platforms, outlets, websites, or other content publisher entities."); id. at 2–3 ("Provide all communications between Media Matters and any other person regarding any request for Media Matters to label any news, media, sources, outlets, platforms, websites, or other content publisher entities for 'brand suitability,' 'reliability,' 'misinformation,' 'hate speech,' 'false' or 'deceptive' content, or similar categories, regardless of whether the request was fulfilled."); id. at 3 ("Provide all documents, including correspondence, relating to Media Matters working with ad tech, technology, or developer companies or social media platforms to develop or advance any of [Media Matters'] programs, policies, or objectives, including but not limited to any agreements between Media Matters and these companies."); id. ("Provide each financial statement … prepared by or for Media Matters on any periodic basis."); see also id. at 4 (defining "Media Matters" to mean "Media Matters for America, together with its successors, predecessors, divisions, wholly- or partially-owned subsidiaries, committees, working groups, alliances, affiliates, and partnerships, whether domestic or foreign; and all the directors, officers, employees, consultants, agents, and representatives of the foregoing. Identify by name, address, and phone number, each agent or consultant.")….

The Defendants' main counterargument on the retaliatory act element is that "there is a significant question whether a retaliatory investigation claim is even cognizable." And they point to out-of-circuit cases holding state and local actors were protected by qualified immunity because retaliatory criminal investigations were not clearly violative of the First Amendment. See Archer v. Chisholm (7th Cir. 2017) (holding defendants are protected by qualified immunity where they allegedly engaged in a retaliatory criminal investigation because the plaintiff's asserted right was not "clearly established" given Supreme Court precedent stated that "the first amendment does not protect statements made as part of one's job" and the plaintiff's purportedly protected "activities were part of her job as a public employee" (cleaned up)); Rehberg v. Paulk (11th Cir. 2010) ("But even if we assume Rehberg has stated a constitutional violation by alleging that Hodges and Paulk initiated an investigation and issued subpoenas in retaliation for Rehberg's exercise of First Amendment rights, Hodges and Paulk still receive qualified immunity because Rehberg's right to be free from a retaliatory investigation is not clearly established."); Thompson v. Hall (11th Cir. 2011) (per curiam) ("Defendants Sheriff Hall and Deputy Utsey are entitled to qualified immunity insofar as Plaintiffs have alleged they carried out an investigation in 2005 in retaliation for Plaintiff Daniel Thompson's comments at the town hall meeting."); J.T.H. v. Missouri Dep't of Soc. Servs. Children's Div. (8th Cir. 2022) (holding "the complaint falls short of establishing that Cook violated a clearly established right" because "we have never recognized a retaliatory-investigation claim of this kind"); see also Sivella v. Twp. of Lyndhurst (3d Cir. 2011) ("We … conclude that … when [the mayor] sent a letter requesting the initiation of an investigation of no-show municipal jobs by the Township Chief of Police, allegedly in retaliation for Sivella's protected speech, it was not clearly established that such an adverse action amounted to a First Amendment violation.").

But the standard for qualified immunity is higher than what is required for preliminary injunctive relief. Indeed, the Ninth Circuit simultaneously held that it is not "clearly established that a retaliatory investigation per se violates the First Amendment" and that "[t]he scope and manner of the investigation" in White v. Lee (9th Cir. 2000), "violated plaintiffs' First Amendment rights."

The Defendants also cite language from three out-of-circuit opinions unrelated to qualified immunity. But the first case merely held that a retaliatory investigation did not amount to an adverse employment action under the First Amendment retaliation test for public employees—a test that is not at issue here. See Breaux v. City of Garland (5th Cir. 2000) ("[I]nvestigating alleged violations of departmental policies and making purportedly false accusations are not adverse employment actions."). And it even acknowledged that such an investigation could have a chilling effect. See id. ("This court has declined to expand the list of actionable actions, noting that some things are not actionable even though they have the effect of chilling the exercise of free speech" "to ensure that § 1983 does not enmesh federal courts in relatively trivial matters.").

It is true that the second and third cases squarely held that "a criminal investigation in and of itself does not implicate a federal constitutional right." Thompson; Rehberg. But that language does not foreclose the possibility that certain investigatory acts may cross the line when they come with particularly adverse consequences. And the FTC's CID has had plenty of knock-on effects according to Media Matters' declarants; it is "driving additional costs," it has caused "retention challenges," and it has resulted in Media Matters being "removed from coalition communications" "about FTC actions." It is hard to imagine any media company not being chilled by this sweeping and sensitive CID. The Court is therefore unpersuaded that these non-binding opinions render Media Matters unlikely to succeed on the merits of their retaliation claim.

The Defendants' argument is further undercut by D.C. Circuit precedent new and old. In Media Matters for America v. Paxton, the Texas Attorney General had forfeited the argument that "a retaliatory investigation is not a cognizable claim," so the Court did not address it head-on. But when discussing Media Matters' injury-in-fact for standing purposes, the Court quoted broad non-standing language from a prior opinion: "In distinguishing between 'good faith' and 'bad faith' investigations, this court has explained that 'all investigative techniques are subject to abuse and can conceivably be used to oppress citizens and groups,' and that bad faith use of investigative techniques can abridge journalists' First Amendment rights." It explained that "the First Amendment 'protect[s] [information-gathering] activities from official harassment,' and that 'official harassment [of the press] places a special burden on information-gathering, for in such cases the ultimate, though tacit, design is to obstruct rather than to investigate, and the official action is proscriptive rather than observatory in character.'"

The older D.C. Circuit opinion pulled no punches, stating that "there can be no doubt that, as a general proposition," the issuance of subpoenas "not in furtherance of Bona fide felony investigations, but in order to harass plaintiffs in their journalistic information-gathering activities," "would constitute an abridgement of a journalist's First Amendment rights." Reps. Comm. for Freedom of the Press; see also Branzburg v. Hayes (1972) ("[N]ews gathering is not without its First Amendment protections, and grand jury investigations if instituted or conducted other than in good faith, would pose wholly different issues for resolution under the First Amendment."); United States v. Morton Salt Co. (1950) (saying an agency's "power of inquisition" is "analogous to the Grand Jury"). So the Court sees no reason why the FTC's CID cannot amount to a sufficient retaliatory act as a matter of law….