Supreme Court Set to Hear Social Media Content Moderation Cases

The Supreme Court building in Washington, in a file photo. Rudy Sulgan/Getty Images

The Supreme Court has scheduled oral arguments for next month in a high-profile challenge to social media laws enacted in Texas and Florida.

The court’s calendar published on Jan. 5 also lists February hearing dates for a challenge to a federal anti-smog regulation and a Federal Reserve regulation governing fees for debit card transactions. In another case, the court will consider whether a cryptocurrency exchange can force customers to submit disputes to arbitration.

The NetChoice Cases

On Feb. 26, the court will hear Moody v. NetChoice LLC and NetChoice LLC v. Paxton.

NetChoice, a coalition of trade associations representing social media companies and e-commerce businesses, challenged a Florida statute that makes it a violation for a social media platform to deplatform a political candidate, punishable by a fine of $250,000 per day.

The law also establishes restrictions on deplatforming other users and requires consistent application of moderation rules.

The U.S. Court of Appeals for the 11th Circuit halted part of the law, and Florida appealed to the Supreme Court.

When signing the law in 2021, Florida Gov. Ron DeSantis, a Republican, said it ensures that Floridians “are guaranteed protection against the Silicon Valley elites.”

“Many in our state have experienced censorship and other tyrannical behavior firsthand in Cuba and Venezuela,” Mr. DeSantis said. “If Big Tech censors enforce rules inconsistently, to discriminate in favor of the dominant Silicon Valley ideology, they will now be held accountable.”

Former President Donald Trump filed a brief with the Supreme Court in October 2022 as a private citizen urging the court to hear the Florida case.

“Recent experience has fostered a widespread and growing concern that behemoth social media platforms are using their power to suppress political opposition,” the brief reads.

“This concern is heightened because platforms often shroud decisions to exclude certain users and viewpoints in secrecy, giving no meaningful explanation as to why certain users are excluded while others posting equivalent content are tolerated.”

Sixteen states argued in a court brief that the internet is the modern-day public square and that social media platforms engaging in censorship “undermine the free exchange of ideas that free speech protections exist to facilitate.”

Suppression of ideas threatens “the development of important insights and discoveries, many of which begin as fringe views,” the brief states.

The 11th Circuit struck down part of the Florida statute, finding that “with minor exceptions, the government can’t tell a private person or entity what to say or how to say it.”

Even the “biggest” platforms are “private actors whose rights the First Amendment protects ... [and] their so-called content-moderation decisions constitute protected exercises of editorial judgment.”

The U.S. Court of Appeals for the 5th Circuit took the opposite stance, finding that a Texas law was constitutional and rejecting the “idea that corporations have a freewheeling First Amendment right to censor what people say.”

Both state laws require platforms to explain their content moderation decisions.

Republican-led EPA Challenge

On Feb. 21, the court will hear a challenge by Republican-led states and the energy industry to the U.S. Environmental Protection Agency’s (EPA) “good neighbor” rule that would crack down on states whose industries are said to be contributing to smog.

The case is actually four cases that have been consolidated: Ohio v. EPA; Kinder Morgan Inc. v. EPA; American Forest and Paper Association v. EPA; and U.S. Steel Corp. v. EPA.

The Supreme Court declined to block the regulation but agreed on Dec. 20, 2023, to fast-track the case.

The EPA stated in March 2023 that the rule would reduce ground-level ozone, which “can cause respiratory issues, aggravate asthma and other lung diseases, and lead to missed days of work or school, emergency room visits, and premature deaths.”

The rule would also “significantly cut smog-forming nitrogen oxide pollution from power plants and other industrial facilities in 23 states” and “improve air quality for millions of people living in downwind communities, including Connecticut.”

The ozone-control program for power plants is currently being implemented in 10 states: Illinois, Indiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and Wisconsin.

According to the EPA, courts have blocked the program in 12 states: Alabama, Arkansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma, Texas, Utah, and West Virginia.

Corner Post v. Board of Governors

On Feb. 20, the court will hear Corner Post Inc. v. Board of Governors of the Federal Reserve System.

A convenience store and truck stop in North Dakota is asking the court to ignore a time limitation so it can challenge a Federal Reserve policy on debit card swipe fees that it argued is illegal.

The store sued the Federal Reserve in 2021 under the Administrative Procedure Act (APA), contesting a 2011 rule governing certain debit card transaction fees.

The store cited two provisions in federal law, arguing that it was entitled to move forward with its lawsuit because a six-year statute of limitations didn’t apply. The clock started running only after the store came into existence and was injured under the rule, the store argued.

The U.S. Court of Appeals for the 8th Circuit determined in December 2022 that the store’s claims under the APA were barred by the six-year statute of limitations, a position at odds with at least one other federal court of appeals. The court reasoned that the clock begins to run when the rule is published, not on the date a party claimed to have been injured by it. This means that the limitation period ran out in 2017, a year before the store opened for business.

Coinbase v. Suski

On Feb. 28, the court will hear Coinbase Inc. v. Suski.

Coinbase, a major cryptocurrency exchange, wants to compel disgruntled customers to submit to private arbitration instead of adjudicating their dispute in court. Companies often prefer arbitration to the courts, saying the process resolves cases with greater speed and reduced expense. Some consumer advocates prefer the courts because, in their view, the judicial system provides consumers with more options and is less likely to side with the companies being sued.

Coinbase customers participated in a sweepstakes that allowed entrants to win prizes of as much as $1.2 million in dogecoin, a digital currency. To enter the sweepstakes, participants had to agree to separate rules that stipulated that “California courts (state and federal) shall have sole jurisdiction of any controversies regarding the promotion” of the sweepstakes, according to Coinbase.

Despite this forum-selection provision, Coinbase insisted that the dispute raised by its customers who consented to arbitration of disputes in their user agreements with Coinbase go to arbitration.

The respondents argued that the forum-selection provision in the sweepstakes rules governs sweepstakes-related disputes and filed a class-action lawsuit in federal court in California, arguing that the sweepstakes rules violated California law.

Coinbase argued that any dispute about the primacy of the arbitration provision in the user agreement must be sent to an arbitrator.

A federal district judge refused to send the dispute about the arbitrability of the case to an arbitrator. The judge found that the forum-selection clause in the sweepstakes rules narrowed the parties’ arbitration agreement.

The Supreme Court previously weighed in on Coinbase-related disputes. In 2022, it refused emergency applications from Coinbase to stay two class-action lawsuits pending against the company. Coinbase had asked the court to put two user lawsuits on hold, arguing that not doing so would cause the company irreparable harm.

Cantero v. Bank of America

On Feb. 27, the court will hear Cantero v. Bank of America N.A.

The justices will consider whether a federal banking law preempts a New York state law that compels banks to pay interest on mortgage escrow accounts.

Bank of America is challenging New York state’s escrow interest law. The statute requires that banks pay at least 2 percent interest on accounts containing the extra money borrowers pay for insurance and property taxes. Thirteen states have similar pro-borrower laws.

Bank of America argued that the National Bank Act preempts such state laws.

The National Bank Act establishes a system of federally chartered national banks whose banking powers come exclusively from federal law and are extensively regulated by federal banking authorities, primarily the Office of the Comptroller of the Currency, Bank of America said in a brief.

Because the federal government creates national banks, states “can exercise no control” over them, the bank’s brief states, citing Supreme Court precedent.

The U.S. Court of Appeals for the 2nd Circuit ruled that the National Bank Act preempts a New York law requiring national banks to pay interest on funds held in mortgage escrow accounts.