We were all set to write a deep and insightful takings analysis of the U.S. Court of Appeals’ recent opinion in Net Choice, LLC v. Paxton, No. 21-51178 (Sep. 16, 2022), a challenge by the major social media platforms to a Texas statute that limits the platforms’ ability to censor speech or “de-platform” (kick out) speakers they don’t like.

In NetChoice, the Fifth Circuit sustained the statute against a Free Speech challenge. There’s been a lot of commentary on the court’s reasoning, as well as the conflicting result reached by the Eleventh Circuit in a similar case. See here and here, for example.

But the arguments in both of those cases focused on the First Amendment speech issues. Naturally, we don’t limit our view of the issues, and see lurking property rights questions. But in the Fifth Circuit case, the plaintiffs purposely avoided raising takings claims:

This and other frequent invocations of private property rights suggest the Platforms’ real complaint is with the Texas legislature meddling in their right to control their own business. But the Platforms have not brought a regulatory takings claim. Cf. Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). Instead, they’ve asked for the more drastic remedy of invalidation of an economic regulation—a remedy the federal courts have not been in the business of providing since the Lochner era. Given the courts’ deference to state economic regulations for the last eight decades, “it would be freakish to single out” this historically grounded nondiscrimination requirement “for special treatment.” Cf. Gundy v. United States, 139 S. Ct. 2116, 2131 (2019) (Alito, J., concurring).

Slip op. at 63 n.33.

Our old “friend” PruneYard makes appearances in both opinions — but again, only on the speech issues and not the property rights issue.

What we’re getting at is that the property rights lens may be another way of looking at this issue – do these private platforms have property rights, and if so are the state statutes forcing them to open up that property to intruders, thus violating their right to exclude? And as we noted above, we were all set to go down that analytical path when lawprof Ilya Somin beat us to it, with “Why the Florida and Texas Social Media Laws Violate the Takings Clause” at Volokh.

We suggest you read his analysis, but here’s a highlight:

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 law is 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.

Professor Somin also considers PruneYard, concluding that it is “a bad decision and should be overruled.” Unlike the shopping center in that case, social media platforms are not generally open to the public (you have to first agree to the terms of service, which includes acknowledgement of the platforms’ power to censor your speech, or kick you off based on what you are saying).

This issue is not going away. With different outcomes from the Fifth and Eleventh Circuits on the speech issues, we, like others, suspect this one is going further up the food chain. But what of the property issues? For now, with no case to discuss, it remains a mostly academic issue. Let’s see what the future might bring.

NetChoice, LLC v. Paxton, No. 21-51178 (5th Cir. Sep. 16, 2022)