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Thursday, May 13, 2021

Fed Courts Puzzle

After Twitter banned Donald Trump and others, Texas Attorney General Ken Paxton issued a Civil Investigative Demand (CID), a demand from the Consumer Protection Division seeking documents relevant to an investigation into possible violations of state consumer-protection law. Twitter filed suit in the Northern District of California, seeking a declaratory judgment and injunction stopping investigation or action to enforce the demand, alleging that investigation was begun to retaliate against Twitter for content decisions Texas did not like.

The Northern District of California dismissed the action as not ripe. The demand is not self-executing and requires the state to initiate an enforcement action in state court; absent a court order, Twitter can ignore the demand without penalty. The initiation of a retaliatory investigation, without more, is not sufficient adverse action to make a retaliation claim. The court distinguished precedent involving employment investigations, which carry the threat of termination or other adverse employment action, and subpoenas and other investigatory documents that carried sanctions without court involvement. Here, Texas would have to file an action in state court and any consequences on Twitter come from a state court finding that demand is valid. Because "to date,no action has been taken to enforce the CID," Twitter's action is premature.

But the effect will be to lock Twitter out of federal court on its First Amendment claim. Once the AG initiates the enforcement proceeding, Twitter would have an opportunity to raise its First Amendment arguments.  That the means the federal court might have to abstain under Younger--this would be a civil enforcement proceeding akin to a criminal proceeding, in which the state as party seeks enforce its laws, the proceeding would be pending, and Twitter would have an adequate opportunity to raise its federal constitutional arguments. Alternatively, should the state court find the CID valid, Twitter would be complaining about a state court judgment, triggering Rooker-Feldman. At a minimum, issue preclusion would prevent federal relitigation of the First Amendment questions raised and decided in the state enforcement proceeding. Twitter's only option is to appeal the enforcement action through the Texas system and hope SCOTUS would take the case on review. In the meantime, it can do nothing about the threat over its head and the chilling effect it is intended to create.

Update: An emailer shares my skepticism, wondering why this case should not be Steffel v. Thompson--a declaratory judgment on the First Amendment defense to any enforcement action. He suggests this was an error in framing. The court described Twitter's sought remedies, quoting the complaint, as an injunction prohibiting "any action to enforce the CID or to further the unlawful investigation" and a declaratory judgment that the "First Amendment bars . .. Paxton's January 13, 2021 CID and the investigation." By framing the DJ around the investigation rather than enforcement--whether on her own or based on the complaint--the court pulled the case out of Steffel. The result is to keep Twitter out of federal court, except through SCOTUS review.

Posted by Howard Wasserman on May 13, 2021 at 02:38 PM in Civil Procedure, First Amendment, Howard Wasserman, Judicial Process | Permalink

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