Netchoice Llc V Bonta

Key Facts

Issues

• The court evaluated NetChoice’s facial challenge to the CAADCA’s age estimation provision, which requires businesses to estimate the age of child users or apply child privacy protections universally. The analysis centered on whether this requirement necessarily burdens protected speech by linking age estimation to content restrictions, or if it remains a neutral data protection measure.
• The court vacated the district court’s severability determination, finding insufficient evidence to conclude whether the legislature would have enacted the CAADCA without the 90-day cure period. The analysis considered legislative history, statutory language, and the provision’s role in balancing enforcement and compliance.
• The court upheld the district court’s injunction against the CAADCA’s data use provisions (e.g., prohibitions on profiling, collecting non-essential data) and dark patterns restrictions (e.g., preventing manipulative interfaces harming children). These provisions were deemed vague due to undefined terms like 'material detriment' and 'best interests of children,' which lack clear guidance for compliance.
• The court examined whether the California Age-Appropriate Design Code Act (CAADCA)’s coverage definition, which triggers regulatory obligations based on an online service’s likelihood of being accessed by children, constitutes a content-based regulation requiring strict scrutiny. The analysis focused on whether the definition’s six enumerated indicators (e.g., content directed to children, audience composition, design elements) inherently target expressive activity, thereby implicating First Amendment protections.

Holdings

• The panel affirmed the district court's preliminary injunction for the CAADCA's data use and dark patterns restrictions, finding them unconstitutionally vague. These provisions lacked clear definitions for terms like 'material detriment' and 'best interests of children,' creating ambiguity about prohibited conduct and risking arbitrary enforcement.
• The panel vacated the district court's severability determination regarding the notice-and-cure provision (Cal. Civ. Code § 1798.99.35(c)(2)), finding the record insufficient to conclude whether the remaining provisions are volitionally separable. The court remanded for further analysis.
• The panel vacated the preliminary injunction for the CAADCA's coverage definition (Cal. Civ. Code § 1798.99.30(b)(4)), holding NetChoice failed to demonstrate the law's facial content-based nature in a substantial majority of applications. The court noted the definition's broad applicability and the absence of a developed record on third-party services.
• The panel vacated the preliminary injunction for the age estimation requirement (Cal. Civ. Code § 1798.99.31(a)(5)), concluding that NetChoice did not establish it facially violates the First Amendment. The court emphasized the need for a developed record to assess the provision's scope and its impact on speech.

Remedies

• The court vacated the preliminary injunction with respect to the CAADCA's age estimation requirement (Cal. Civ. Code § 1798.99.31(a)(5)) and coverage definition (id. § 1798.99.30(b)(4)), finding NetChoice's facial challenge to these provisions lacked sufficient record development to determine First Amendment implications in most applications.
• The court affirmed the district court's preliminary injunction with respect to the CAADCA's data use restrictions (Cal. Civ. Code §§ 1798.99.31(b)(1)–(4)) and dark patterns restriction (id. § 1798.99.31(b)(7)) on vagueness grounds, as these provisions lacked sufficient clarity to provide fair notice of prohibited conduct.
• The court vacated the district court's severability determination regarding the notice-and-cure provision (Cal. Civ. Code § 1798.99.35(c)(2)), remanding for further analysis on whether the provision is volitionally severable from the CAADCA's valid remainder.
• The court ordered both parties to bear their own costs on appeal, as stated in the conclusion of the opinion.

Legal Principles

• The court highlighted that facial challengers must demonstrate the law's unconstitutional applications 'substantially outweigh' its legitimate ones. NetChoice failed to develop a record showing the CAADCA's coverage definition or age estimation requirement facially violates the First Amendment in most applications.
• The court applied the Moody standard for facial challenges, requiring a detailed record to assess whether a statute's unconstitutional applications outweigh its legitimate sweep. It emphasized that facial challenges must account for all potential applications of the law, not just those affecting specific entities like social media platforms.
• The court affirmed the district court's preliminary injunction regarding the CAADCA's data use and dark patterns restrictions but vacated it for other provisions. The analysis focused on whether NetChoice met the burden to show a likelihood of success on the merits, irreparable harm, and public interest.

Precedent Name

• NetChoice, LLC v. Bonta (NetChoice I)
• Free Speech Coalition v. Paxton
• Moody v. NetChoice, LLC
• In re Marriage of LaMusga
• Project Veritas v. Schmidt
• NetChoice, LLC v. Yost
• NetChoice, LLC v. Bonta
• Gerken v. Fair Pol. Pracs. Comm'n.
• People v. Nguyen
• Ohio House, LLC v. City of Costa Mesa

Cited Statute

• California Consumer Privacy Act
• California Age-Appropriate Design Code Act
• Communications Decency Act
• Children's Online Privacy Protection Act

Judge Name

• Milan D. Smith, Jr.
• Mark J. Bennett
• Anthony D. Johnstone
• Beth Labson Freeman

Passage Text

• We cannot say that the age estimation requirement facially violates the First Amendment at all, much less in a substantial majority of its applications. The provision is clear that businesses that do not wish to conduct age estimation may publish any content they would like, as long as they default to data and privacy protections for all users.
• The panel vacated the preliminary injunction with respect to the entire CAADCA and remanded for the district court to consider the scope of the CAADCA's coverage definition anew and to weigh any unconstitutional applications against the constitutional ones.
• A statute can be impermissibly vague...if it fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits...These provisions do not do so.