Bulletins

Big Tech just took its Texas fight to SCOTUS

NetChoice and CCIA filed an emergency application with the Supreme Court, asking it to toss out the Fifth Circuit's decision allowing Texas's social media law to go into effect.

An exterior view of the Supreme Court on a cloudy day.

The Supreme Court will now decide whether to take up the Texas social media case on its shadow docket.

Photo: Geoff Livingston/Getty Images

Tech industry groups NetChoice and CCIA have filed an emergency application with the Supreme Court, asking the court to stay the Fifth Circuit's ruling this week which enabled Texas’s so-called social media “censorship” law to go into effect.

Protocol first reported Thursday that NetChoice and CCIA, the plaintiffs in the case, would file their application on Friday. The two groups had warned other advocates of their intention to file and asked for their support in the form of amicus briefs.


The Fifth Circuit lifted an injunction on the law Wednesday pending appeal, offering no opinion laying out their decision.

“The divided panel’s shocking decision to greenlight an unconstitutional law—without explanation—demanded the extraordinary response of seeking emergency Supreme Court intervention,” Chris Marchese, counsel for NetChoice, told Protocol.

The Texas law, HB 20, prohibits social media platforms with more than 50 million users in the U.S. from moderating content on the basis of “viewpoint,” but that term is not well-defined and creates catastrophic new liability for tech platforms serving Texas. The law also, not coincidentally, contains provisions that aim to prohibit tech platforms from walling off their services in Texas altogether.

NetChoice and CCIA argue that the Texas law is unconstitutional, because it essentially amounts to the government compelling private businesses to carry speech they otherwise would remove. “The First Amendment prohibits Texas from forcing online platforms to host and promote foreign propaganda, pornography, pro-Nazi speech, and spam,” Marchese said. “Left standing, Texas HB 20 will turn the First Amendment on its head—to violate free speech, the government need only claim to be ‘protecting’ it.”

The emergency order doesn’t seek a final ruling on the underlying law, HB 20, but rather asks the Supreme Court to reinstate the injunction on the law, while the appeals case proceeds through the Fifth Circuit. The groups are arguing that denial of their request could cause “irreparable harm” to businesses covered by the law. That includes tech giants like Meta, YouTube and Twitter among others.

The Texas law declares that these platforms are common carriers and therefore can be subject to these speech requirements. Texas lawmakers aren’t alone in making that comparison. Justice Clarence Thomas has also flirted with the idea in a series of statements, where he has called on the court to rein in Section 230 protections and reconsider whether tech platforms are really so different from phone companies.

"A traditional telephone company laid physical wires to create a network connecting people," Thomas wrote last year. "Digital platforms lay information infrastructure that can be controlled in much the same way."

But forcing tech platforms to carry all, or even most, legal speech no matter how vile, risks turning them into even deeper cesspools of spam, pornography, hate speech and gore than they already are.

The Texas case could now be decided on the court’s shadow docket, through which it issues orders without hearing arguments. The decision of whether to take up the case in this way is now up to Justice Samuel Alito, who is assigned to the Fifth Circuit. He will decide whether to rule unilaterally or refer the case to the full court. If the court does take up the case, the decision could come within days.

While it’s historically rare for the Supreme Court to intervene in a case while it’s still pending appeal, experts on the shadow docket say that’s beginning to change, particularly when it comes to cases with the potential to have a huge impact. “The reality here is that the Fifth Circuit stay is going to create such an immediate impact that it’s going to be hard for the court to think that it's appropriate to wait,” Steve Vladeck, a University of Texas at Austin law professor and author of the forthcoming book The Shadow Docket, told Protocol earlier this week.

Latest Bulletins

Marqeta founder CEO Jason Gardner is stepping down, as the payments company underwent major leadership changes.

Gardner announced his plan during the company’s earnings call on Wednesday when he also said Chief Operating Officer Vidya Peters is leaving.

News of the departures and Marqeta’s “cautious” outlook in the wake of a slump in the fintech market triggered a selloff in Marqeta shares which fell about 25% on Thursday.

Gardner, who founded the company in 2010, said it was time to hand the reins of the company to a new leader.

“I always knew this time would come,” he told analysts. “When we went public in 2021, I promised to hand leadership to the best person at the appropriate time. After thoughtful consideration of what the next phase of growth will require, I’ve concluded that now is the time to begin the search for this person.”

He said the company will look for “a CEO with deep experience scaling an innovative, high-growth business.” Gardner said he will take on the role of executive chairman once his successor takes over.

Gardner said Simon Khalaf, who recently joined Marqeta as chief product officer, will take over Peters’ responsibilities temporarily. Marqeta is looking to hire a chief revenue officer, he said.

Gardner’s exit marks the end of an era for a pioneering payments company which blazed the trail for software infrastructure used for issuing debit and prepaid cards and processing payments.

Marqeta has played a critical role in the rapid growth of the fintech industry, providing payments technologies to companies like Affirm, Expensify and Square as well as Wall Street giants like JPMorgan Chase and Goldman Sachs.

“The world is changing rapidly, especially around financial services,” Gardner told Protocol in a 2021 interview. We see this great opportunity. And we're in the right place at the right time with our platform."

Marqeta went public in June 2021 when its stock rallied 13% to $30.52. But the market has changed dramatically since then. Marqeta has also felt the impact of the market downturn as fintech companies have struggled with sluggish growth and hurdles to raising capital.

Chief Financial Officer Mike Milotich told analysts Wednesday that “many fintechs are being less aggressive about their investments in expansion.”

“Given the current macroeconomic uncertainty as well as fintech-specific challenges with significant declines in valuation and increasing difficulties in raising capital, we feel it is prudent to be cautious about the next several months,” he said.

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Bulletins