Why Florida and Texas social media laws violate the revenue clause

Yesterday, the United States Court of Appeals for the Fifth Circuit upheld Texas law prohibiting major social media websites from using most forms of content moderation. The ruling is at odds with a recent Eleventh Circuit ruling striking down a similar Florida law (drafted by prominent Trump-appointed conservative Judge Kevin Newsom). In May, the Supreme Court signaled that at least five justices ruled the law was unconstitutional, when it overturned a previous Fifth Circuit ruling lifting a trial court injunction against Texas law enforcement. For the reasons I have summarized here, I agree with the Eleventh Circuit’s approach and believe that the Texas and Florida laws violate the First Amendment guarantee of free speech. In this article, I argue that these laws also violate the taking clause of the Fifth Amendment.

The taking clause prohibits the government from seizing “private property” without paying “just compensation”. In its 2021 decision in Cedar Point Nursery c. Hasid, the Supreme Court ruled (correctly, in my view) that even temporary government-mandated “physical occupation” or invasion of private property counts as a taking in itself, automatically requiring compensation. Thus, the Court struck down a California law requiring agricultural producers to grant access to their property to union organizers. The Court pointed out that “[t]he right to exclude is universally regarded as a fundamental element of the right to property”, and that violations of this right are presumed to be taken.

Florida and Texas social media laws are also blatant attacks on the right to exclusion. No one doubts that the Twitter site and its various features are the private property of Twitter. And the whole point of the Florida and Texas law is to force Twitter and other social media companies to grant access to users and content the companies would prefer to exclude, especially various right-wing users. Just like the plaintiffs in cedar point wanted to ban union organizers from accessing their land, so Twitter wants to ban certain content that it finds abhorrent (or that might offend or annoy other users).

Certainly, there are obvious differences between virtual property, such as a website, and more conventional physical property, such as that involved in the cedar point Case. But the catch clause nevertheless applies to both. If Texas decided to seize the Twitter site, ban current users, and fill it with content praising state government policies, that would obviously be a catch, much like California deciding to seize the lands from the Cedar Point nursery. Similarly, forcing Twitter to host undesirable content is considered an occupation of its property, as is requiring a landowner to provide access to undesirable entrants. The Supreme Court has already ruled that intellectual property is protected by the strike clause. Websites have similar issues.

You could say that forcing a website owner to host unwanted users isn’t really a “physical occupation” because ownership is virtual in nature. But websites, including large social media companies, use physical server space. All things being equal, a site with more user-generated content requires more space than one with less. Even aside from connecting to physical infrastructure, it seems to me that occupying virtual “real estate” is analogous to occupying land. Both are valuable forms of private property which the owner generally has the right to exclude.

In cedar point, the Supreme Court noted a few exceptions to the rule that government-mandated occupations of property are considered revenue. Most relevant to the case of social media is that of places “generally open to the public”, such as shopping malls. In its majority opinion in cedar pointChief Justice John Roberts used this theory to distinguish the 1980 Supreme Court decision in Pruneyard Mall v. Robins, which ruled that a mall could not ban people who wanted to tow on its property.

For reasons explained in two articles by Prof. Gregory Sisk (see here and here), I think Pruneyard was a bad decision and should be reversed. But, in the meantime, it is easily distinguishable from the social media laws of Texas and Florida. 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 to the site. Rather, they are only open to those who agree to the sites terms of use. Twitter Terms of Servicefor example, clearly indicate “[y]ou can use the Services only if you agree to enter into a binding contract with Twitter and are not a person prohibited from receiving services under the laws of the applicable jurisdiction. The contract in question includes acceptance of Twitter’s content moderation policies. Few, if any, malls have similar access restrictions!

cedar point sets out a few other exceptions to the rule that physical occupations are in themselves prizes. Regulatory health and safety inspections are examples. Following a similar logic, websites that, for example, sell potentially dangerous goods and services, could be required to publish warnings about possible risks. Additionally, “police power” sometimes creates a general exception to liability for expropriation, such as when the police must enter a property to execute a search warrant. But none of these other exceptions even manages to justify the social media laws of Florida and Texas.

If government imposition of unwanted content on websites not to call it a catch would have disastrous implications for a wide range of websites, not just social media providers. The government could also force a wide range of other sites to accept unwanted content. Unscrupulous politicians and interest groups could use the opportunity to force all kinds of websites to promote their favorite content, or at least prevent them from excluding content that site owners disapprove of. Such a regime would pose a serious threat to property rights online, though the consequences would be far less severe if social media companies prevailed in the current free speech dispute.

Unlike the Eleventh Circuit’s ruling that Florida’s social media law violates the First Amendment, a ruling that such a law violates the Takedown Clause would not necessarily prevent states from enacting and enforcing a such legislation. They could still do so, as 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 can be complicated. In the case of many potential users (those with few potential followers), the market value of a Twitter or Facebook account could be very low. But the overall compensation for forcing social media companies 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 current litigation against the laws of Florida and Texas does not involve claims under the jack clause. But such claims could potentially be filed in the future, particularly in the Texas case, where the law appears likely to go into effect unless and until the Supreme Court overturns the ruling of the fifth. circuit on the issue of the First Amendment. If social media companies choose to tackle this problem, they just might win out — and certainly deserve it.