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Supreme Court to hear free speech case over government pressure on social media sites to remove content

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Washington — The Supreme Court on Monday will be weighing whether the government crossed a constitutional line into censorship of lawful speech when it pressured social media platforms to take down content it deemed misleading.

The case poses a significant test of the First Amendment’s free speech protections in the digital age and stems from the Biden administration’s efforts to pressure social media platforms to remove content that it said spread falsehoods about the COVID-19 pandemic and the 2020 presidential election.

The Supreme Court is set to consider at what point the federal government’s attempts to protect against misinformation on social media cross into censorship of speech that is constitutionally protected.

“The key free speech issue is how far can the government go in verbally arm-twisting private speech intermediaries to remove speech before that constitutes a First Amendment violation or state action,” said Clay Calvert, a law professor at the University of Florida who is an expert in the First Amendment.

In addition to the social media case, known as Murthy v. Missouri, the Supreme Court on Monday will also hear a dispute over whether a New York financial regulator violated the National Rifle Association’s free speech rights when she pressured banks and insurance companies in the state to sever ties with the gun rights group.

At the core of both cases is so-called jawboning, or informal pressure by the government on an intermediary to take certain actions that will suppress speech. In the first dispute, the intermediaries are the platforms, and in the second case, the intermediaries are insurance companies.

“In both cases, the government doesn’t actually have the power to regulate speech or to decide whether the NRA can access banking institutions or not,” said Will Duffield, a policy analyst at the libertarian Cato Institute, adding that “the government is seemingly gaining, gathering, usurping new powers by leaning on these intermediaries in order to do things that it isn’t authorized to do itself.”

The social media case

The first legal battle before the court arose out of the Biden administration’s efforts to pressure platforms including Twitter, now known as X, YouTube and Facebook, to take down posts about COVID-19 and the 2020 election that it believed spread misinformation.

The dispute was brought by five social media users and two states, Louisiana and Missouri, who claimed their speech was stifled when platforms removed or downgraded their posts after strong-arming by officials in the White House, Centers for Disease Control, FBI and Department of Homeland Security.

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Facebook and X icons are seen displayed on a phone screen in this illustration photo taken in Krakow, Poland on August 21, 2023. 

Jakub Porzycki/NurPhoto via Getty Images

 

The challengers claimed that at the heart of the legal battle lies a “massive, sprawling federal ‘Censorship Enterprise'” through which federal officials communicated with social media platforms with the goal of pressuring them to censor and suppress speech they disfavored.

A federal district judge in Louisiana found that seven groups of Biden administration officials violated the First Amendment because they transformed the platforms’ content-moderation decisions into state action by “coercing” or “significantly encouraging” their activities. U.S. District Judge Terry Doughty limited the types of communications agencies and their employees could have with the platforms, but included several carve-outs.

The U.S. Court of Appeals for the 5th Circuit then determined that certain White House officials and the FBI violated free speech rights when they coerced and significantly encouraged platforms to suppress content related to COVID-19 vaccines and the election. It narrowed the scope of the district court’s order but said federal employees could not “coerce or significantly encourage” a platform’s content-moderation decisions.

The Justice Department appealed to the Supreme Court, and the justices agreed to decide whether the Biden administration impermissibly worked to suppress speech on Facebook, YouTube and X. The high court temporarily paused the lower court’s order limiting Biden administration officials’ contact with social media companies.

In filings with the court, the Biden administration argued that the social media users and states lack legal standing to even bring the case, but said officials must be free “to inform, to persuade, and to criticize.”

“The court imposed unprecedented limits on the ability of the president’s closest aides to speak about matters of public concern, on the FBI’s ability to address threats to the nation’s security, and on CDC’s ability to relay public-health information,” Solicitor General Elizabeth Prelogar, who represents the government before the Supreme Court, said.

She argued that senior Biden administration officials were using the bully pulpit to push social media companies to address falsehoods on their platforms, which has never been a free speech violation. As long as the government is seeking to inform and persuade, and not compel, Prelogar wrote, its speech does not run afoul of the First Amendment.

“Influence is also the natural result of successful efforts to inform, to persuade, or to criticize,” Prelogar wrote. “That the platforms often acted in response to the government’s communications thus does not remotely show that those communications were coercive.”

But state officials behind the challenge told the court that accepting the Justice Department’s argument would make the First Amendment “the easiest right to violate.”

White House officials, they said, frequently coupled private demands for social media companies to remove posts with public references to adverse consequences they could initiate, such as antitrust reforms or changes to the law that protect platforms from civil liability over content posted by third parties.

“By silencing speakers and entire viewpoints across social-media platforms, defendants systematically injure plaintiffs’ ability to participate in free online discourse,” state officials from Louisiana and Missouri wrote.

The legal fight is one of five that the justices are weighing in their current term that stand at the intersection of the right to free speech and social media. But in this case, the key question for the justices is whether the Biden administration was engaging in permissible persuasion or unlawful coercion when it urged social media platforms to suppress content.

“It’s going to have to define those rules about what speech is allowed and what’s not, how far can the government go before it violates the First Amendment rights of the individuals who are posting on the speech intermediaries,” Calvert said.

The Biden administration has said it is vital for federal officials to be able to communicate with social media companies on issues of public consequence, and using strong or critical language does not mean it’s crossing a constitutional line.

But David Greene, civil liberties director at the Electronic Frontier Foundation, said U.S. officials will not lose their ability to combat misinformation or disinformation. The government, though, has a responsibility to ensure people don’t perceive it as forcing their hands, he said.

“There are two main issues, and that is what do courts look at to determine whether and at what point a government crosses the line from voicing its opinion about how a social media platform should treat a specific post to unconstitutionally coercing the censorship, the negative moderation of that post,” he said. “There’s no disagreement that there is a point at which it becomes unconstitutional, but what the parties disagree on is what is that line and what is the appropriate analysis for setting that line, what factors to consider?”

Any cases that present close calls should go against the government, Greene said, because officials are “best placed to moderate their behavior to make sure it’s not interpreted as coercive.”

The NRA’s legal battle

In the second case, the court will consider whether the former superintendent of the New York State Department of Financial Services violated the NRA’s free speech rights when she pushed regulated insurance companies and banks to stop doing business with the group.

Superintendent Maria Vullo, who left her post in 2019, had been investigating since 2017 two insurers involved in NRA-endorsed affinity programs, Chubb and Lockton, and determined they violated state insurance law. The investigation found that a third, Lloyd’s of London, underwrote similar unlawful insurance products for the NRA.

In April 2018, after the Parkland shooting, Vullo issued guidance letters that urged regulated entities “to continue evaluating and managing their risks, including reputational risks” that may arise from their dealings with the NRA or similar gun rights groups.

Later that year, the Department of Financial Services entered into consent decrees with the three insurance companies that worked with the NRA. As part of the agreements, the insurers admitted they provided some unlawful NRA-supported programs and agreed to stop providing the policies to New York residents.

Vigil for Remembrance and Change
The National Rifle Association headquarters in Fairfax, Virginia on Aug. 5, 2019. 

Gun control advocates hold a Vigil for Remembrance and Change to honor of the victims of the mass shootings in El Paso, Texas and Dayton, Ohio, and Chicago, Illinois outside of the NRA headquarters in Fairfax, Virginia on August 5, 2019. (Photo by Michae

 

The NRA then sued the department, alleging that Vullo privately threatened insurers with enforcement action if they continued working with the group and created a system of “informal censorship” that was designed to suppress its speech, in violation of the First Amendment.

A federal district court sided with the NRA, finding that the group sufficiently alleged that Vullo’s actions “could be interpreted as a veiled threat to regulated industries to disassociate with the NRA or risk DFS enforcement action.”

But a federal appeals court disagreed and determined that the guidance letters and a press release couldn’t “reasonably be construed as being unconstitutionally threatening or coercive,” because they “were written in an even-handed, nonthreatening tone” and used words intended to persuade, not intimidate.

The NRA appealed the decision to the Supreme Court, which agreed to consider whether Vullo violated the group’s free speech rights when she urged financial entities to sever their ties with it.

“Allowing unpopular speech to form the basis for adverse regulatory action under the guise of ‘reputational risk,’ as Vullo attempted here, would gut a core pillar of the First Amendment,” the group, which is represented in part by the American Civil Liberties Union, told the court in a filing.

The NRA argued that Vullo “openly targeted the NRA for its political speech and used her extensive regulatory authority over a trillion-dollar industry to pressure the institutions she oversaw into blacklisting the organization.”

“In the main, she succeeded,” the organization wrote. “But in doing so, she violated the First Amendment principle that government regulators cannot abuse their authority to target disfavored speakers for punishment.”

Vullo, though, told the court that the insurance products the NRA was offering its members were unlawful, and noted that the NRA itself signed a consent order with the department after Vullo left office after it found the group was marketing insurance producers without the proper license from the state.

“Accepting the NRA’s arguments would set an exceptionally dangerous precedent,” lawyers for the state wrote in a Supreme Court brief. “The NRA’s arguments would encourage damages suits like this one and deter public officials from enforcing the law — even against entities like the NRA that committed serious violations.”

The NRA, they claimed, is asking the Supreme Court to give it “favored status because it espouses a controversial view,” and the group has never claimed that it was unable to exercise its free speech rights.

A decision from the Supreme Court in both cases is expected by the end of June.

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

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Tech News in Canada

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

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