California law to protect minors online gets another reprieve from Ninth Circuit

(CN) — A California law that seeks to protect minors by restricting the collection, use and sale of their information by online businesses and services was given another reprieve by the Ninth Circuit on Thursday.

The appellate panel vacated part of the preliminary injunction that a trial judge issued last year against enforcement of California’s Age-Appropriate Design Code Act.

It was the second time the court weighed in on the constitutionality of the 2022 law that is being challenged by NetChoice, a trade association of online businesses including Amazon, Google, Meta and X.

In its unanimous decision, the Ninth Circuit panel concluded NetChoice wasn’t likely to succeed on its so-called facial challenge to the law’s definition of which businesses it covers — that is, “business that provides an online service, product, or feature likely to be accessed by children.”

While the trial judge who blocked enforcement of the statute last year agreed with the trade association that this definition pertains to content and, as such, implicates protected speech under the First Amendment, the panel agreed with California’s argument that whether or not minors are likely to access a particular website or app isn’t necessarily related to the content that these offer.

Children are capable of using ride-hailing services like Lyft or Waymo, electronic ticketing services such as StubHub or Ticketmaster, financial transaction services such as Paypal or Venmo, fitness products such as NFL Play 60 or Peloton, health-related services such as iHealth or education-related products such as Wolfram Mathematica, U.S. Circuit Judge Milan Smith Jr., a George W. Bush appointee, said, citing examples offered by the state.

“It may well be the case that a significant number of children do not routinely access ride sharing services, electronic ticketing services, financial transaction services, or any other online service the state identified,” Smith wrote. “But the District Court made no factual findings on those questions, and that information is not otherwise in the record.”

In this regard, the judge said, NetChoice erroneously pursued a facial challenge, under which no possible application of the California statute could pass constitutional muster, by only focusing on how the law affects social media companies or publishers.

As to the specific provisions of the Age-Appropriate Design Code Act, the panel said NetChoice hadn’t met its burden to show that a requirement for online services and businesses to estimate the age of child users was facially unconstitutional.

“On the record before us, we cannot say that the age estimation requirement facially violates the First Amendment at all, much less in a substantial majority of its applications,” Smith said. “For one, it is unclear that the age estimation requirement prevents access to content.”

However, the appellate judges agreed with NetChoice that two other provisions of the law — one pertaining to the use of data in a manner that is “materially detrimental to the physical health, mental health or well-being of a child” and one pertaining to use of so-called dark patterns “to lead or encourage children to provide personal information beyond what is reasonably expected” — were unconstitutionally vague.

The panel upheld the preliminary injunction of these provisions and sent the case back to the federal judge in San Jose, California.

The other two judges deciding California’s appeal included U.S. Circuit Judge Mark Bennett, a Donald Trump appointee, and U.S. Circuit Judge Anthony Johnstone, a Joe Biden appointee.

Both California Attorney General Rob Bonta and NetChoice declared victory after the Ninth Circuit issued its opinion.

“Today, I celebrate a critical win in my office’s defense of California’s Age-Appropriate Design Code, a first in the nation law to make social media safer for our children,” Bonta said in a statement. “The Ninth Circuit has largely sided with California, ruling that tech companies were unlikely to show that the AADC as a whole poses a First Amendment risk, and allowing much of this law to go into effect.”

But Paul Taske, co-director of the NetChoice Litigation Center, maintained that today’s decision was “a huge victory for free speech and essentially a death knell for California’s online speech code.”

“This law is hanging on by a thread," Taske said in a statement. “To the extent there is some additional work to do in the district court, we look forward to making a full showing and striking down California’s Speech Code permanently.”

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