Why the Florida and Texas Social Media Laws Violate the Takings Clause

The Fifth Circuit of the US Court of Appeals upheld Texas’ ban on major social media sites from using all forms of content moderation yesterday. The ruling is in contradiction to a recent Eleventh Circuit ruling which struck down Florida’s similar law. This was written by Kevin Newsom (a Trump-appointed conservative). When it overturned an older Fifth Circuit ruling that lifted a court’s injunction against Texas’ implementation, the Supreme Court made clear that the law is unconstitutional.  The Eleventh Circuit approach is what I have summarized. I believe that the Texas and Florida laws are in violation of the First Amendment’s guarantee for freedom of expression. These laws are also in violation of the Fifth Amendment’s Takings Clause, as I will argue in this blog post.

The Takings Clause prohibits government from taking private property without providing “just compensation”. Its 2021 rulingCedar Point Nursery v. HassidThe Supreme Court decided (correctly in my opinion) that any government-mandated temporary “physical occupation” of private property is a per se taking and automatically requires compensation.  Accordingly, the Court rescinded a California law that required farmers to give union organizers full access to their land. Court stressed the importance of “[t]”The right to exclude” is universally held as a fundamental property right element, and violations of it presume that they are takings.

Florida and Texas have passed social media laws that are blatantly hostile to the right of exclusion. There is no doubt that Twitter, its site and various features are Twitter’s property. Florida’s and Texas’s laws are designed to force Twitter, other social media platforms to give access to users and content they would rather exclude. Similar to the lawsuits in Cedar Point Twitter wanted to ban union organizers in their country, so it decided to block some content that it found offensive (or might offend) other users.

There are clear differences between virtual property (e.g. a website) and traditional physical property like the one involved in the Cedar Point case. However, the Taking Clause still applies to them both. Texas could seize Twitter and ban current users. Instead, it would fill the site with praises for the state’s policies. This is similar to California seizing Cedar Point’s tree nursery.  Similar to requesting that Twitter host undesirable content, it is considered an occupation of its property. Landowners are required to grant access to unwelcome entrants. The Takings Clause is a protection for intellectual property. This has been confirmed by the Supreme Court. Similar issues arise when it comes to websites.

It could be argued that forcing someone to use a website isn’t a “physical occupation”, since it is virtual. Websites, even those of the most prominent social media companies, require physical server space. A site that has more user-generated content will require more server space than one that has less. It seems that virtual property is equivalent to land, even if it does not have a physical connection. Both forms of valuable private property are exempt from the right of their owners.

Cedar PointThe Supreme Court noted some exceptions to this rule, which states that any government-mandated occupation of property is considered takings. This is relevant in relation to social media cases. It applies to locations that are “generally available to the public,” like shopping malls. His majority opinion is in Cedar PointThis theory was used by Chief Justice John Roberts to differentiate the Supreme Court’s 1980 ruling in PruneyardShopping Center v. Robins, This ruled that shoppers who wish to leave leaflets on the property of a mall cannot be barred.

Two articles written by Professor Gregory Sisk (see here, here) have prompted me to think about the reasons. PruneyardIt was a poor decision, and it should be overruled. However, the Texas and Florida laws regarding social media are easily distinguishable. Sites like Twitter or Facebook, despite their appearances are not secure. Not “The site is “generally open to the public”, meaning that any person can upload content to it. These sites are restricted to users who have agreed to their terms of service. You can find them here. Twitter’s terms of serviceFor example, the following statement is clear:[y]You may also use the ServicesOnly if you are willing to sign a contract with Twitteryou are not barred from services by the law of the relevant jurisdiction.  This contract includes the acceptance of Twitter’s content moderation guidelines. Similar restrictions are rare in shopping centers.

Cedar Point This article outlines some other exceptions to this rule. These include safety and regulatory inspections. Websites that sell dangerous products and services might have to warn visitors. The “police power”, which allows police to enter property in order to issue a search warrant, sometimes provides a general exemption from takings liability. None of these exceptions can be used to justify the Florida or Texas social media laws.

Websites that contain unwelcome content are subject to government regulation Not It would be considered a taking and have serious implications not only for social media platforms but also other websites. Another option is for the government to make other sites accept unwelcome content. Inscrupulous politicians or interest groups may take advantage of this opportunity to make websites accept their content. Or at the very least, they could ban sites from including content the owners don’t approve of. This regime could pose a grave threat to online property rights. However, the potential consequences of such a system would be much less severe if social media companies prevail in current free speech litigation.

Unlike the Eleventh Circuit’s decision that Florida’s social media law is in violation of the First Amendment. A ruling that such a law is violative to the Takings Clause would not necessarily prohibit states from enacting or enforcing such legislation. They could continue to do so provided they pay “just compensation”, which is usually the fair market value of the property.

This case might make it difficult to determine the right amount of compensation. A lot of potential users, or those with few followers on Twitter and Facebook could make a Twitter/Facebook account very valuable. The total amount of compensation that social media companies receive for refusing to allow large numbers or users is still substantial. It could even be large enough to prevent states from passing legislation.

Takings Clause claims are not involved in the current litigation against Florida and Texas law. However, such claims may be filed in future, particularly in Texas, where it seems that the law will go into effect unless the Supreme Court overturns Fifth Circuit’s decision on the First Amendment question. This issue could be a winning case for social media companies, and they certainly have the right to.