“A Curious Distinction With No Basis in Law”
“A Curious Distinction With No Basis in Law”
Why a Seattle judge poked a new hole in Section 230, and why Meta’s appealing.
By this summer, the U.S. Supreme Court is expected to weigh in on “a central building block of the modern internet,” a short provision of federal law known as Section 230. That provision, now 27 years old, grants digital platforms immunity from lawsuits over content that’s posted on their sites by others. The Supreme Court is presently trying to decide whether platforms should keep their Section 230 immunity when they algorithmically amplify others’ speech, a now-standard practice that wasn’t contemplated when Section 230 was created in 1996. During oral arguments, Supreme Court Justice Elana Kagan warned that she and her colleagues are “not, like, the nine greatest experts on the internet,” and in general the justices sounded ready to make only cautious moves, if any, toward limiting the ever-broadening reach of Section 230’s liability shield (which now blocks digital platforms from so many types of lawsuits that a “partial” list took up 12 pages in the appendix of this Supreme Court amicus brief). As the tech and legal worlds await the high court’s decision on this matter, perhaps it’s a good time for an update on a considerably less famous Section 230 case, decided last fall by a much, much lower court. This case poked what appears to be a novel hole in Section 230’s liability shield, with the parties rumbling straight into an appeal that could eventually set new precedent regarding transparency requirements and digital platforms.
The novel hole in Section 230 was created last fall by Seattle Judge Douglass North. From his bench at the King County Superior Courthouse, Judge North hit Meta Platforms, the owner of Facebook, with a record $24.6 million fine for intentionally and repeatedly violating Washington State’s political ad transparency law. On his way to issuing that fine, Judge North also declared that Section 230, which Meta had raised as a defense, doesn’t actually shield digital platforms when they break state disclosure requirements. To stretch Section 230 immunity that far, Judge North said in an oral ruling on September 2, 2022, would be “a misapplication of the law.”
The month after Judge North said this, he announced his $24.6 million fine. Then, a few days later, he commanded Meta to pay Washington State an additional $10.5 million in attorney fees. A few days after that, in quite the judicial mic drop, Judge North retired.
The sizable fine against Meta received wide notice, with Washington State Attorney General Bob Ferguson declaring it “the largest campaign finance penalty anywhere in the country—ever.” But Meta’s immediate appeal of Judge North’s orders went pretty much unnoticed, as did Meta’s request for an emergency stay of an injunction Judge North had issued commanding Meta to come into swift compliance with Washington State law. The one publication I’m aware of that did write about Meta’s appeal, Broadcast Law Blog, has a prediction, though. It believes the case of State of Washington v. Meta Platforms is ultimately headed beyond its present stop at the Washington State Court of Appeals, making this a case that “bears watching” for its potential to become “one that establishes broader precedent.”
So what, exactly, was the judicial reasoning that launched this potentially precedent-setting Section 230 case that’s bubbling up from one of the lowest courts in land?
That reasoning has been under-noticed, too. My guess is this is due, in significant part, to Judge North’s decision to only explain his legal reasoning in an oral ruling. When judges write out reasoned explanations for their decisions, those explanations tend to be detailed, citation-heavy affairs that are easy to screenshot for Twitter or share around as .PDFs among legal scholars and analysts. When the explanation is oral, however, one either needs to have been at the hearing or one needs to get a copy of the transcript (not the simplest process when it comes to King County Superior Court cases). I was at Judge North’s September 2022 hearing, and I can tell you: It was pretty much just me and the lawyers, with no other journalists present as the judge quickly dismissed Meta’s Section 230 defense along with Meta’s other defense, a claim that Washington State’s disclosure regime violates the company’s First Amendment rights.
Although I reported on Judge North’s ruling at the time, I haven’t had a chance to detail his legal reasoning until now. (Here’s why.) So with the hope that this period before the Supreme Court’s Section 230 decision is a good moment for a deep dive into a different, somewhat below-the-radar Section 230 case, here’s a look at Judge North’s legal reasoning in State of Washington v. Meta Platforms. It’s drawn from transcripts, court filings, and my in-court experience, and it includes an update on the progress of this case at the Washington State Court of Appeals, Division I, in Seattle.
First, the update on Meta’s appeal. (If you only care about Judge North’s reasoning, skip on down to the next section.) The appeal was filed on October 28, 2022, the same day as Judge North’s final order regarding attorney fees. Meta’s opening appeal brief is presently due next month, but already the state and Meta have tussled over whether there are even “debatable issues” that, under the applicable legal standard, warrant Judge North’s orders being put on hold (or “stayed,” in legal parlance) as this case is appealed. That tussle has created a sort of preview of each side’s appeal arguments.
In a filing in November, lawyers for Washington State Attorney General Ferguson accused Meta of showing “a staggering arrogance and disregard for the law” in the company’s request for an emergency stay, and they cast Meta’s stay attempt as a ploy to get a special exemption from Washington’s political ad disclosure law as the appeal progresses. Meta, in response, wrote that the state had “fundamentally” misunderstood its stay request. Meta was not seeking special permission to ignore the disclosure law, the company’s lawyers wrote. Rather, it was seeking to stay the injunction Judge North had issued at the close of the original case. That injunction would put Meta under Superior Court supervision and would require Meta to come into full compliance with Washington State disclosure law within 30 days or else, in Meta’s telling, face additional penalties and “potential contempt sanctions” of $2,000 per day. Those additional penalties, Meta said, go beyond what’s entailed in just having to follow the state’s campaign finance disclosure laws like any other regulated entity.
Having considered these and other arguments, Appeals Court Commissioner Jennifer D. Koh ruled on November 18, 2022 that Meta’s arguments had cleared the “low bar” for demonstrating that the appeal involves “debatable issues” related to Section 230 and the First Amendment. Thus, Commissioner Koh wrote, a stay of Judge North’s injunction is justified. Commissioner Koh also sided with Meta regarding the stay’s scope, writing that Meta “very clearly” was only seeking to stay the injunction, “not the State’s ability to enforce the underlying statutes and regulations with regard to any alleged new violations while this appeal is pending.” In other words, Meta still has to comply with Washington State’s political ad disclosure law during the appeal process.
Another point of contention during the stay disagreement was just how big a bond Meta should post, given Judge North’s $24.6 million fine. To cover the fine, plus any interest that accrues on it during the appeal, plus any attorney fees that may be awarded after the appeal, Meta had arranged to post a $41.5 million bond. The state, for its part, felt that bond amount was too low and argued for a bond of “at least $50,000,000, if not more,” given the “many” violations that “will occur during the appeal” and the likelihood, in the state’s view, that Meta will end up paying the state’s attorney fees again. Commissioner Koh rejected the state’s $50 million bond proposal as “unrealistic and unnecessary,” finding Meta’s $41.5 million bond sufficient “at this point in the appeal process.” (If you’re wondering where one even goes to get a $41.5 million bond, the answer, based on Meta’s filings, appears to be U.S. Specialty Insurance Company, an insurer of “general aviation and non-standard aircraft risks.”)
The bottom line on the appeal progress: Judge North’s injunction has been put on ice by Commissioner Koh “pending further ruling or order of this Court,” and Meta’s $41.5 million bond is ready and waiting for whoever may, or may not, be entitled to some or all of that money at the end of the appeal process.
Now, on to Judge North’s reasoning, which will be a central focus in Meta’s appeal.
The case only arrived in front of Judge North because of a uniquely strong law and set of regulations in Washington State that require entities selling local political ads to disclose detailed information about those ads—including, for digital platforms, ad targeting information. The purpose of the state’s disclosure requirements is to give the public information about the sources and methods of any efforts at influencing the outcomes of Washington State’s elections.
Judge North found that Meta was intentionally not providing the public with targeting and other information the company is required to disclose about Washington State political ads, and he counted 822 violations of the law by Meta in recent years. As Judge North noted in his September oral ruling, radio stations, television stations, and newspapers that sell political advertising in Washington State have been complying with the state’s disclosure rules “for 50 years.” But Meta had argued to Judge North that as a digital platform it should be treated differently, because Section 230 immunizes digital platforms from legal consequences for not complying with Washington State’s disclosure law. Specifically, Meta claimed that enforcement of Washington State’s disclosure law in this case would violate Section 230 by treating a digital platform (here, Meta-owned Facebook) as the publisher of third-party speech (here, political ads sold and distributed by Facebook).
“Frankly,” an attorney for Meta told Judge North at the hearing last September, “Congress enacted [Section] 230 for the exact reason we have here, because it recognized that monitoring the amount of information on digital platforms was just infeasible for these platforms given the amount of [third-party] content.”
Lawyers for Washington State countered that Meta is not being treated as a “publisher” of political ads by the state’s lawsuit, because the lawsuit is not about Meta’s decision to sell or distribute political ads. Instead, the state contends, its lawsuit is about an obligation that kicks in after Meta decides to sell and distribute political ads targeting Washington’s elections. That is, Meta’s “obligation to disclose information” about those political ads to “any person” who makes a request. That’s a recordkeeping issue, in the state’s view, not a publishing issue.
“The undisputed evidence,” an attorney for Washington State told Judge North at the September hearing, “is that Meta collects the required information as part of its regular course of business but simply made the choice not to provide it because doing so is inconsistent with Meta’s political ad strategy.” The attorney for the state also pointed to expert witness testimony that he said showed Meta could “easily and inexpensively comply” with Washington’s disclosure regime, if it wanted to.
Judge North sided firmly with the state on the Section 230 question, but his September oral ruling on this point was brief, just over 80 words long.
Section 230, Judge North said, is not about things like political ad disclosure requirements but instead “is directed at something different. It’s directed at preventing platforms from being liable—you know, civil liability, defamation... This [case] is a different matter that has to do with disclosure, and it’s clearly not governed by [Section] 230. That’s a misapplication of the law, to try and apply [Section] 230 to it.”
Meta’s appeal makes clear the company isn’t pleased by Judge North’s differentiation between suing an online platform for defamatory statements posted by others (the exact type of lawsuit that led to the creation of Section 230) and suing an online platform to enforce state disclosure laws (something that wasn’t on the radar of Section 230’s creators). In an appeal filing, Meta argues that Judge North, through his oral ruling, created “a curious distinction with no basis in law or fact.”
The state, for its part, has reinforced Judge North’s distinction, stating flatly that “Section 230 does not immunize Meta from liability for disclosure requirements.” All of which creates a somewhat straightforward question for the appeals court: Is enforcement of state disclosure laws against digital platforms barred by Section 230, or not?
Meta’s appeal also raises the company’s claim that enforcement of Washington State’s disclosure law violates Meta’s First Amendment rights. Judge North appears to have found this First Amendment challenge far more substantive that Meta’s Section 230 challenge, at least based on the number of words he devoted to each topic in his oral ruling. As mentioned, Judge North dismissed Meta’s Section 230 defense in about 80 words. In dismissing Meta’s First Amendment defense, Judge North spoke nearly 1,000 words.
Those nearly 1,000 words create not just a ruling, but also an accessible explanation of the parties’ arguments in Superior Court and how Judge North viewed the law in this area, so I’m going to quote the judge at length on the First Amendment question.
First, Judge North rejected Meta’s argument that Washington’s disclosure law should receive the highest level of First Amendment scrutiny: “strict scrutiny.” When it comes to state laws affecting free speech, that sort of judicial scrutiny demands proof of a “compelling” governmental interest, plus a narrow tailoring of the law in order to meet the stated interest. In practice, strict scrutiny favors the speaker, in this case Meta. But Judge North passed on strict scrutiny, instead ruling that state disclosure laws should receive a lower level of scrutiny: “exacting scrutiny,” which only requires a “significant” governmental interest and narrow tailoring. This type of scrutiny involves a judicial balancing of interests, in this case the state’s interest in disclosure of political ad data weighed against Meta’s interest in not disclosing political ad data.
“There was some confusion about the standards some time back,” Judge North explained, referring to the “strict” vs. “exacting” scrutiny debate. “But in a trilogy[1] of cases in 2010, the U.S. Supreme Court made it clear that exacting scrutiny is the appropriate standard for challenges to public disclosure laws. And the reason for that is clear, because public disclosure laws serve one of the fundamental interests protected by the First Amendment, which is transparency. This [Washington State disclosure law] is not just somebody trying to regulate speech. This is the State providing the information that citizens need in order to be able to make intelligent decisions about their self-government. And that is an essential part of democracy.” Under exacting scrutiny, Judge North added, “minimal burdens” on speakers can be tolerated in the interest of “creating greater transparency.”
Meta, the judge continued, “has not demonstrated in this record any issue relating to burden upon them… All of the information that Meta has provided, whether it’s experts or anyone else, starts out with… ‘We can’t comply with this [disclosure law].’ And, therefore, that’s their given to begin with. And there is no attempt to analyze whether, in fact, they really could comply with it.”
On the other hand, Judge North said, Washington State provided evidence “from experts” indicating that “it would be perfectly reasonable for Meta to be able to comply.” The ad information that Washington’s law requires Meta to disclose, Judge North said, “is the information that Meta is already collecting. They necessarily collect it in order to be able to run the ads that they’re running. So they—all they have to do in order to display it is essentially press a button. Yes, there may be some small additional effort in sorting through special cases as to whether something is or isn’t a digital ad, but they’re already doing that.”
Judge North also described Washington’s disclosure requirements as quite reasonable when it comes to mandating transparency around digital ad targeting. “It is the targeting that tells you what the point of the ad is,” Judge North said. “Without the targeting information, you simply don’t know what it is that’s trying to be accomplished with the ad.”
Bluntly assessing Meta’s priorities, Judge North then suggested he sees Meta as being more focused on protecting its ad-targeting business than on protecting free speech. “In essence,” Judge North said, “the only reason why Meta refuses to comply with the law is, to put it colloquially, they don’t want to let the public see how the sausage is made. They don’t want the public to be able to judge the targeting that’s being done. They don’t want the public to know what kind of ads people are running that encourage or discourage people from participating in various events, because it’s a very lucrative business for Meta.”
In conclusion, Judge North said, data on the financing and reach of Washington State political ads sold by Meta “is clearly an appropriate subject for public disclosure, and the law is clearly constitutional.”
Not surprisingly, in its appeal filings Meta now argues, as it did before Judge North, that in fact Washington’s disclosure law “heavily burdens political speech on digital platforms” and is “far from narrowly tailored.” Meta also argues, as it did before Judge North, that strict scrutiny should apply in this case because, among other reasons, Washington’s disclosure law “compels” speech from digital platforms, in the form of disclosures that platforms such as Meta wouldn’t otherwise make. And of course, Meta also argues that Section 230 should bar this whole proceeding.
The state, for its part, argues, as it did before Judge North, that there is no Section 230 problem in this case and “no First Amendment violation,” either; that exacting scrutiny is the correct standard of First Amendment review in this matter; that Washington’s disclosure requirements are indeed narrowly tailored; and that, “as the record undisputedly shows, Meta chose not to comply with the disclosure law because it was inconsistent with company priorities.”
There’s a lot of road ahead before we hear what the Washington State Court of Appeals makes of the parties’ arguments, Judge North’s First Amendment reasoning, and Judge North’s finding that Section 230 doesn’t immunize digital platforms from state disclosure laws.
But at least you now have a long newsletter to keep you company while you wait for that decision and the Supreme Court’s upcoming Section 230 ruling!
Looking even further down the road: If a decision from the Washington State Court of Appeals were to itself be appealed, then the next stop for State of Washington v. Meta Platforms would be the Washington State Supreme Court. After that? The U.S. Supreme Court.
[1] For lawyers and others who may be interested: Judge North didn’t name the cases in this “trilogy” of U.S. Supreme Court cases from 2010 that he said set exacting scrutiny as the standard for evaluating disclosure laws. However, if Judge North was in agreement with the State of Washington’s arguments on this point, then he may have been referring to three cases from 2010 that are cited in the state’s filings: (1) Citizens United v. FEC, which is best known for opening the door to unlimited election spending by corporations but—more relevant to this case—also applied exacting scrutiny as it upheld disclosure requirements for political ads. (2) John Doe No. 1 v. Reed, which used exacting scrutiny to uphold a Washington State public disclosure requirement, this one allowing the names and addresses of referendum signers to be made public. (Interestingly, former Washington State Attorney General Rob McKenna, who’s now representing Meta in this case, argued at the U.S. Supreme Court on the state’s behalf in John Doe No. 1 v. Reed.) (3) Human Life of Wash. Inc. v. Brumsickle, which was a 2010 Ninth Circuit case that may have made it into Judge North’s “trilogy” of 2010 U.S. Supreme Court cases by mistake. (McKenna appears to have been involved in arguing that case, too, on the state’s behalf.) In Brumsickle, the Ninth Circuit held that disclosure requirements are subject to exacting scrutiny.
Another possibility is that Judge North’s “trilogy” comment came directly from the Ninth Circuit’s ruling in Brumsickle, which references “a trilogy of recent Supreme Court cases” that confirm “exacting scrutiny applies in the campaign finance disclosure context.” Judge North may have simply misspoken by dating all three cases in the Ninth Circuit’s Brumsickle “trilogy” to 2010 when, in fact, only two of the Supreme Court cases in that “trilogy” are from 2010: Citizens United v. FEC and Doe v. Reed. The third case in the “trilogy,” Davis v. FEC, was decided by the Supreme Court in 2008.