[00:00:01] Speaker 03:
Good morning, and welcome to the Ninth Circuit.

[00:00:05] Speaker 03:
We are joined today by our colleague, Judge Mylon Smith, who is participating by Zoom.

[00:00:12] Speaker 03:
We are here to hear oral argument in the case of Net Choice versus Bonta.

[00:00:17] Speaker 03:
The parties have two minutes aside.

[00:00:21] Speaker 03:
Judge Smith, can you hear me?

[00:00:23] Speaker 00:
Yes, ma'am.

[00:00:24] Speaker 03:
And counsel, if you could just say something, I just want to make sure Judge Smith can hear you as well.

[00:00:29] Speaker 04:
Good morning, Judge Smith.

[00:00:31] Speaker 00:
Good morning.

[00:00:32] Speaker 00:
I can hear you as well.

[00:00:33] Speaker 03:
Thank you.

[00:00:33] Speaker 03:
Super.

[00:00:33] Speaker 03:
Super.

[00:00:34] Speaker 03:
So counsel whenever you're ready.

[00:00:36] Speaker 04:
Good morning, your honor.

[00:00:37] Speaker 04:
Kristen Lisca on behalf of the state of California here.

[00:00:41] Speaker 04:
May it please the court and I would like to reserve five minutes of my time for rebuttal.

[00:00:45] Speaker 04:
I'll keep an eye on the clock.

[00:00:48] Speaker 04:
The California legislature passed the age appropriate design code act to protect the privacy and safety of children online.

[00:00:55] Speaker 04:
Indeed, the enacting legislation expressly states that the legislature's intent in passing the law

[00:01:00] Speaker 04:
was to promote privacy protections for children.

[00:01:03] Speaker 04:
Such concerns for children's privacy and safety online are not unfounded.

[00:01:07] Speaker 04:
According to one estimate, advertising technology companies collect an average of 72 million data points about a child by age 13.

[00:01:15] Speaker 04:
As the record established below demonstrates, online companies' use and collection of data poses real risks of harm to children's privacy and safety.

[00:01:23] Speaker 04:
to effectuate its purpose of protecting children, the Act solely regulates those online services, products, or features that are likely to be accessed by children.

[00:01:33] Speaker 04:
The statute defines likely to be accessed by children to mean that it is reasonable to expect, based on a list of indicators, that children would access the online service, product, or feature.

[00:01:43] Speaker 00:
Council, since you're focusing on those indicators, I want to start off by

[00:01:50] Speaker 00:
giving my understanding of the state's view on something.

[00:01:54] Speaker 00:
As you know, CADCA's coverage definition refers to six separate indicators, whether or not online service is likely to be accessed by children.

[00:02:06] Speaker 00:
In your view, should the district court have assessed each indicator separately,

[00:02:13] Speaker 04:
I think with respect to the fact that this is a facial challenge, if we're looking at this in a facial way, I think that the question would be every application, which would require looking at each particular provision.

[00:02:23] Speaker 04:
To the extent that there's a problem with one specific one, that's more of an as applied type of challenge, I would think.

[00:02:34] Speaker 04:
And so that would be the nature of how to look at this in that context.

[00:02:38] Speaker 00:
What I'm concerned about is this.

[00:02:39] Speaker 00:
The district court looked at it

[00:02:43] Speaker 00:
Basically, I'm blank.

[00:02:47] Speaker 00:
As I look at it, the indicators, some are content-based, some are neutral.

[00:02:54] Speaker 00:
So how should we treat the district court's injunction as to the entire CADCA on the basis of a, in quotes, gateway coverage definition?

[00:03:05] Speaker 04:
So I think that the

[00:03:06] Speaker 04:
The way to look at the lower court's decision, it does sort of turn on if we're talking about the threshold First Amendment step of does this regulate speech?

[00:03:16] Speaker 04:
Does it trigger First Amendment scrutiny versus the subsidiary step, which is the content-based, content-neutral step?

[00:03:22] Speaker 04:
If we're looking to the first indicator and we're doing the facial analysis that Moody laid out, the question would be what are the different applications of this provision?

[00:03:30] Speaker 04:
And several of those applications will turn or a business would be subject to the statute for reasons that have nothing to do with their expressive activity.

[00:03:39] Speaker 04:
And the statute as applied on the whole does not regulate speech or signal out specifically expressive actors for regulation, given the different features involved.

[00:03:49] Speaker 04:
Because I do not understand plaintiffs.

[00:03:51] Speaker 00:
If I understand correctly, then you're saying as far as the state is concerned, it doesn't bother you that arguably

[00:03:59] Speaker 00:
some of these indicators are content-based where others are content-neutral.

[00:04:04] Speaker 04:
I think if plaintiffs wanted to challenge a specific prong, if they were to say this one aspect of this statute definition and enjoin just that one, we might focus analysis on a specific indicator.

[00:04:18] Speaker 04:
But plaintiffs are seeking to enjoin the full statute based on the entire definitional provision.

[00:04:22] Speaker 04:
That's my understanding of their argument.

[00:04:24] Speaker 04:
I'm sure my friend on the other side can weigh in on that.

[00:04:27] Speaker 04:
And if the goal is to enjoin the full definitional provision and the full statute, you would need to look at the whole aspects of what everything is doing rather than focus on one indicator.

[00:04:38] Speaker 03:
So, counsel, let me follow up on Judge Smith's question because I want to make sure I understand the state's position.

[00:04:46] Speaker 03:
Is the state's position with regard to the six, A through F, is it that none of them regulate

[00:04:57] Speaker 03:
speech and that all are just content and that there's no First Amendment aspects essentially to any of them, whereas the state's position

[00:05:08] Speaker 03:
Well, you know, they didn't make that argument, so we really don't have a specific answer to that question or something else.

[00:05:15] Speaker 04:
So our position is that this definition as a whole, the whole definition of likely to be accessed by children, neither regulates speech itself, the definitional provision, as distinct from the rest of the statute, and that the whole definitional provision, all of the different indicators looked at together,

[00:05:32] Speaker 04:
do not signal out those in expressive activity, so it does not trigger First Amendment scrutiny.

[00:05:37] Speaker 04:
That would be distinct from asking if one indicator did, and the fact that one indicator did might be an argument that would suggest a proper injunction of that specific indicator, but that's not what the lower court did below, and that's where we think the error lies.

[00:05:51] Speaker 01:
And that's not what you take the plaintiffs to be arguing here.

[00:05:54] Speaker 01:
That's correct.

[00:05:56] Speaker 01:
For them, as it's framed, their facial challenge rises or falls on 31A, the overall piece.

[00:06:02] Speaker 01:
They haven't framed any challenge around the coverage indicators specifically, and so if we're forced to answer the question of whether the top line likely to be accessed by children is facially unconstitutional because it's content-based, our answer to that has to be no.

[00:06:20] Speaker 04:
That would be our understanding, correct.

[00:06:21] Speaker 04:
They have not asked this court to enjoin, say, specifically

[00:06:24] Speaker 04:
Indicator e which is the design element one they've asked this court to enjoy or that's the lower court and the lower course decision Enjoying the entire statute as a whole and the entire definitional provision as a whole which we would say under Moody especially in a facial challenge necessitates looking at all of the pieces together and the entire definitional provision in its totality and asking a

[00:06:45] Speaker 04:
at that threshold, does it regulate speech or signal?

[00:06:47] Speaker 01:
But you can see that a facial challenge could lie against any of the particular coverage indicators if that's how plaintiffs wanted to frame it.

[00:06:55] Speaker 04:
I think that plaintiffs could bring a facial challenge specifically to one indicator if that's how they had wanted to frame it.

[00:07:01] Speaker 01:
And then how does it work?

[00:07:03] Speaker 01:
And again, I take it that the district court didn't reach this because the plaintiffs didn't frame it this way.

[00:07:10] Speaker 01:
But in the next steps in this case, once we get past the preliminary steps, they wanted to proceed on this.

[00:07:19] Speaker 01:
Would we then look at, and this is even before we get to the moody questions,

[00:07:24] Speaker 01:
We then look at each coverage indicator.

[00:07:26] Speaker 01:
So if we had a concern that, say, E were content-based or a concern that C did not meet intermediate scrutiny for commercial speech or might have some applications, we would then have to look at, for example, all of the substantive regulations

[00:07:53] Speaker 01:
of it that would fall under E?

[00:07:55] Speaker 04:
So I would think that the way the Moody analysis would go, if they had followed through with this, would be to ask all of the applications of the definitional provision, how does that apply?

[00:08:07] Speaker 04:
I think the question is, what are they seeking to enjoin?

[00:08:11] Speaker 04:
If they're seeking to enjoin the entire substantive statute, then yes.

[00:08:15] Speaker 04:
I think with respect to performing a tailoring analysis,

[00:08:18] Speaker 04:
You know, this court's decision in the other net choice case, the SB 976 case, and the way Moody does this analysis is that plaintiffs need to put forth a factual record so that this court can determine every application of the statute and whether or not those applications are constitutional or not.

[00:08:34] Speaker 04:
So if they were to enjoin the substantive regulations, this court would need to drill into how do those substantive regulations apply to who do they apply and which of those applications meet the proper tailoring level.

[00:08:46] Speaker 01:
But I guess coming at it then from the other end, there's the data use and dark patterns requirements ran into trouble on vagueness grounds.

[00:08:59] Speaker 01:
That's not a First Amendment challenge that would require us to sort out the Moody question.

[00:09:03] Speaker 01:
So from the bottom up, again, if we look at, assume E is what we're trying to analyze,

[00:09:10] Speaker 01:
for First Amendment purposes and for a facial challenge we have to do the moody analysis of what its application is, what do we do with the fact if we, with the vagueness challenge to the underlying requirements that would be applied for uses that fall within coverage indicator E?

[00:09:30] Speaker 04:
I think that the question is what specifically plaintiffs are seeking to enjoin.

[00:09:35] Speaker 04:
So I think that if we had a situation of we want to enjoin specifically E, we don't want the state to enforce indicator E, then this court would be asking questions about how does E apply, how does it meet intermediate scrutiny, the tailoring, strict scrutiny, whatever the level is.

[00:09:50] Speaker 04:
If the question is we want to enjoin the data use provision because that provision is vague, the question is the language of that provision itself vague.

[00:09:57] Speaker 04:
So I think we need to look to what it is that they wish to enjoin and ask how that particular provision

[00:10:03] Speaker 04:
meets the necessary task that is applied to it.

[00:10:06] Speaker 01:
We're now a ways ahead of where the plaintiffs brought the district court and what we're faced with even after remand.

[00:10:17] Speaker 01:
Maybe we should then, I guess I'd like to hear your take on the vagueness questions around the data use and dark patterns requirement.

[00:10:23] Speaker 01:
I take it if the vagueness challenges to those parts succeed,

[00:10:27] Speaker 01:
There's not a whole lot left to apply under any coverage indicator in the act.

[00:10:34] Speaker 04:
If the vagueness is specifically to those provisions?

[00:10:37] Speaker 01:
Right.

[00:10:37] Speaker 01:
It is, is it not, to the district court not hold those vague?

[00:10:41] Speaker 04:
Yes, just specifically to the data use provisions themselves, yes.

[00:10:45] Speaker 04:
I mean, but that would be an argument that would justify enjoining those specific provisions, and I think it is worthwhile to also keep in mind

[00:10:53] Speaker 04:
There are about 14 substantive provisions in the statute and plaintiffs individually challenge only about half of those.

[00:10:59] Speaker 04:
So to the extent that there may be, you know, this court may agree that the vagueness issues apply to those specific provisions.

[00:11:06] Speaker 01:
Well, we've taken the report piece off the first time around.

[00:11:10] Speaker 01:
Yes.

[00:11:10] Speaker 01:
And a lot of those other provisions are voluntary.

[00:11:13] Speaker 01:
So I guess why shouldn't we then setting aside the First Amendment challenges, why shouldn't we

[00:11:20] Speaker 01:
affirm on the vagueness challenges to the data use requirements.

[00:11:24] Speaker 04:
So we would argue that those provisions are not vague.

[00:11:28] Speaker 04:
As we discussed, I think plaintiff focus is on it may be helpful to sort of break them apart into two groups.

[00:11:34] Speaker 04:
There's the first data use provision, which involves the material detriment to a child, the material harm to a child language.

[00:11:42] Speaker 04:
The other three data use provisions and the dark pattern specifically involve the best interest of the child language.

[00:11:48] Speaker 04:
And I think it's important to consider the vagueness of those separate phrases separately.

[00:11:53] Speaker 04:
So we think that it's clear with respect to materially detrimental to a child's well-being that has a clear understanding of what those language means.

[00:12:02] Speaker 04:
And the cases talk about how the fact that applying a standard may involve some degree of discretion or reasonable minds may differ does not make the standard itself vague.

[00:12:13] Speaker 01:
Where does that language come from?

[00:12:16] Speaker 04:
So we cite to some of those cases in our brief

[00:12:21] Speaker 01:
I mean, what would a California court applying this or a federal court trying to apply California law to this, where would we look to try to, that entire phrase, try to sort out what that would mean?

[00:12:34] Speaker 04:
Yeah, so as we walk through in our opening brief, I don't have those exact pages in front of me, but I know we go through this analysis.

[00:12:41] Speaker 04:
The California courts first look to what the plain meaning of language is, and the plain meaning of material detriment to a child's well-being would be something that causes a,

[00:12:50] Speaker 04:
more than de minimis level of harm to a child.

[00:12:54] Speaker 04:
And I think that what it means for something to be materially detrimental has a clear plain language meaning.

[00:13:01] Speaker 04:
It may be difficult to determine on the margins whether or not a particular thing is materially detrimental, but I think there is a clear understanding of what it means that something is.

[00:13:12] Speaker 04:
And that's really what Vignes' focus is on.

[00:13:14] Speaker 04:
I mean, this is the language coming from Johnson versus United States.

[00:13:17] Speaker 04:
We cite it through, I think, a DC Circuit case on page 18 of our reply brief, that the Vignes doctrine does not doubt the constitutionality of laws that call for the application of a qualitative standard to real world conduct

[00:13:29] Speaker 04:
because the law is full of instances where a man's fate depends upon his estimating, rightly, some matter of degree.

[00:13:35] Speaker 03:
So in the state's view, it doesn't matter if the statute is, for example, dealing with content on the internet as opposed to what types of anesthesia you should use for a child under the age of eight.

[00:13:56] Speaker 03:
That sort of the same thing.

[00:13:58] Speaker 04:
Well, if this question is, what does it mean to ask if I know that my action is going to cause material detriment to a child?

[00:14:07] Speaker 04:
That is a clear enough standard, we would say.

[00:14:09] Speaker 04:
That it may be different to ask it in the context of prescribing anesthesia for an eight-year-old versus how I use the child's data.

[00:14:16] Speaker 04:
And I want to be very clear to bring back that what the first data use provision, which is where this material detrimental language is, it requires that they know that the use of the data is going to cause harm to the child.

[00:14:29] Speaker 04:
So that's very different than asking kind of abstract questions about is it harmful for children to use social media.

[00:14:35] Speaker 04:
It's I want to use a child's data this specific way.

[00:14:38] Speaker 04:
Do I know or have reason to know, which we give what that standard looks like, which is the sort of

[00:14:45] Speaker 04:
you have a basis upon which to conclude that this is true, that this use will cause harm to this child.

[00:14:51] Speaker 04:
And if I don't know that, then the law doesn't apply.

[00:14:54] Speaker 04:
And if I do know that what I want to do with this data will cause material harm to a child, it seems entirely reasonable to tell companies, please don't do things that you know will cause material harm to children.

[00:15:06] Speaker 01:
It's not just a knowledge requirement, right?

[00:15:10] Speaker 01:
Negligence requirement?

[00:15:11] Speaker 01:
Is it a recklessness requirement?

[00:15:13] Speaker 01:
Reason to know.

[00:15:14] Speaker 01:
How should we read that?

[00:15:14] Speaker 04:
It's reason to know, which Black's Law Dictionary defines, and this is on 18 to 19 of our reply, as a person possessing information from which a person of ordinary intelligence would infer the fact in question exists.

[00:15:26] Speaker 04:
So there's no duty of inquiry.

[00:15:28] Speaker 04:
It's sort of getting at what I would think that the reason to know gets at the kind of deliberate indifference, the sort of willful blindness.

[00:15:35] Speaker 04:
I have the information in front of me, but I'm just not going to read the report that you sent me that says this.

[00:15:40] Speaker 00:
Well, or that if any reasonable person had that information, they would earn are so different that you you can have something that causes sleep loss or hurt feelings or so on.

[00:15:53] Speaker 00:
And some families and others think it's wonderful.

[00:15:57] Speaker 00:
Who's to judge all this?

[00:15:59] Speaker 04:
So again, I think that

[00:16:01] Speaker 04:
Taking a step back, some things are going to be pretty clear.

[00:16:04] Speaker 04:
I think everyone would agree that if a child's facing substantial sleep loss, that's detrimental to that child's health and well-being.

[00:16:11] Speaker 04:
And the question, again, is not things like hurt feelings.

[00:16:13] Speaker 04:
They bring up these hypotheticals like a child might post comments on the blog and face bullying.

[00:16:19] Speaker 04:
But again, how does their companies, if I run a forum, how does my use of that child's data

[00:16:25] Speaker 04:
Cause bullying if I don't know that my use of the child's data will cause the child to be exposed bullying then that it's not within the scope of the statute the simple fact that a child may use my product at face harm is not what the statute is asking companies to deal with is if I use a child's data in a way that I know will cause that child harm.

[00:16:45] Speaker 04:
I cannot do that.

[00:16:46] Speaker 03:
Or have reason to know.

[00:16:48] Speaker 04:
Or have reason to know in the sense that I have information at hand that I should have used to conclude that there would be harm.

[00:16:53] Speaker 04:
But I don't have to go investigate.

[00:16:55] Speaker 04:
There's no duty of inquiry.

[00:16:57] Speaker 04:
I don't have to try and figure out if a child's harmed generally.

[00:17:00] Speaker 04:
I just have to ask, do I know or have reason to know that doing this will hurt a child?

[00:17:05] Speaker 04:
And it's pretty reasonable to say to companies, please don't do things that you know will hurt a child.

[00:17:09] Speaker 01:
Ms.

[00:17:09] Speaker 01:
Lisca, I guess you've pointed to perhaps there are some analogies

[00:17:13] Speaker 01:
California child welfare laws or anything, but is there like a tort case or anything you could point us to that encapsulates this principle?

[00:17:22] Speaker 01:
I presume that there might be instances in some jurisdictions where tort liability might lie against someone who knowingly injured a child or did something materially detrimental to their health, but is there an anchor that we could look to?

[00:17:40] Speaker 01:
Did the legislature have something in mind?

[00:17:42] Speaker 04:
So I think with the materially detrimental to a child's well-being, that's just the plain language of the statute, but I think it has plain common sense meaning.

[00:17:49] Speaker 04:
We cite dictionary definitions, I believe, in our opening brief.

[00:17:53] Speaker 04:
With respect to the other data use provisions and the dark patterns which deal with the best interests of a child, that is a term of art that I believe the legislature pulled from the family law standard.

[00:18:05] Speaker 04:
which asks simply whether or not something is in the child's best interest.

[00:18:09] Speaker 04:
And again, I think it's also worth remembering that with respect to the data use provisions, this best interest of the child part comes as part of an exception to the use.

[00:18:18] Speaker 01:
Is that ever done wholesale?

[00:18:20] Speaker 01:
I mean, as I understand it in family court, it's usually done with a particular child in particular circumstances.

[00:18:27] Speaker 01:
How are we supposed to apply that wholesale?

[00:18:28] Speaker 04:
So again, I think it's very important that it's coming through in the use of an exception.

[00:18:33] Speaker 04:
So the statute itself prohibits certain ways that data is used.

[00:18:36] Speaker 04:
Each of the three used are different in what they prohibit.

[00:18:39] Speaker 04:
But they allow it if there is a compelling basis to conclude this in the child's best interest.

[00:18:43] Speaker 04:
So a company is going to be encountering this exception when it wants to do a particular activity that it is otherwise prohibited from doing.

[00:18:51] Speaker 04:
So it will be encountering it in the context of

[00:18:55] Speaker 04:
I would guess you could imagine a lot of times very specific cases.

[00:18:59] Speaker 01:
This is enforceable by the state.

[00:19:03] Speaker 01:
There's a complainant that comes forward, a parent comes forward, the complaint is filed, the state

[00:19:13] Speaker 01:
brings an enforcement action.

[00:19:15] Speaker 01:
Is the provider supposed to then put the child on the stand or do discovery to try to figure out whether it was or was not in the complainant's child's best interest?

[00:19:29] Speaker 04:
I mean, I think that the question would be if the business had a compelling basis.

[00:19:34] Speaker 04:
I believe it's compelling basis or compelling reason to believe it's in the child's best interest.

[00:19:38] Speaker 04:
So at the threshold, if it's on the margin, they probably don't have a compelling basis to conclude.

[00:19:43] Speaker 04:
And you can think of a lot of examples.

[00:19:45] Speaker 04:
For instance, a child has gone missing and the parents want to know their last known location.

[00:19:50] Speaker 04:
Or they need to share information on a child's location with authorities because the child

[00:19:54] Speaker 04:
has, you know, there's reason to believe a child, a specific child is in danger and someone has come to the company and said, we need certain information on this child because they're in danger.

[00:20:03] Speaker 01:
And that would be a defense against the entire data collection practice.

[00:20:09] Speaker 04:
I am low on time, but I want to make sure I answer this question.

[00:20:17] Speaker 04:
The way that this would work would be that you're generally not allowed to say share data or use data for a purpose other than it was collected, for instance.

[00:20:25] Speaker 04:
So I have collected this child's data for purposes of providing some kind of service, and I want to use it for another reason or give it to another person.

[00:20:34] Speaker 04:
I would then have to ask, is doing that with this particular child's data within the best interest of the child?

[00:20:41] Speaker 04:
So it's going to arise in a very fact-specific context rather than a sort of general practices context, which is why, again, I think that the fact that this is within an exception is important here

[00:20:53] Speaker 04:
when looking at the statute and determining if the statute as a whole puts a person on notice of what behavior is or isn't allowed.

[00:21:00] Speaker 03:
All right.

[00:21:00] Speaker 03:
Thank you, counsel.

[00:21:01] Speaker 03:
And for your planning purposes, we'll give you a couple of minutes for rebuttal, even though you've used your time.

[00:21:06] Speaker 04:
Thank you, your honor.

[00:21:27] Speaker 02:
Thank you, Your Honors, and may it please the Court, David Gossett for plaintiff net choice.

[00:21:32] Speaker 02:
California's Age Appropriate Design Code Act is a wolf garbed in sheep's clothing.

[00:21:37] Speaker 02:
While the state now defends it as a law merely about data management practices, this Court has already noted that it is really about the government instructing companies what content they can show to minors.

[00:21:48] Speaker 02:
The law cannot withstand First Amendment scrutiny, and Judge Freeman appropriately enjoined it.

[00:21:53] Speaker 02:
In so doing, she followed both this Court's instructions from the last time we were here and the mode of analysis the Supreme Court mandated in Moody.

[00:22:02] Speaker 02:
As the Court is well aware, we've raised numerous grounds to challenge the preliminary injunction.

[00:22:07] Speaker 02:
Given the discussion this morning, I plan, assuming the Court doesn't direct me elsewhere, to focus primarily on two of those, a coverage definition argument and severability, which has not come up yet.

[00:22:20] Speaker 02:
On our coverage definition argument, which the court's obviously quite attuned to, there are a couple of major points that I think are important to flag.

[00:22:31] Speaker 02:
The first is that it is a unitary definition.

[00:22:36] Speaker 02:
It is not a divisible provision in the way that, for example, the dark patterns provision is different from the geolocation data provision.

[00:22:46] Speaker 02:
It is six different

[00:22:49] Speaker 02:
sort of factors that six different, to use the statutory term, indicators that the provider or the state can look at to decide if any given service is covered.

[00:23:00] Speaker 02:
So I don't think they can be subdivided out.

[00:23:04] Speaker 02:
You have to look at all six of those to decide if any given service is, sorry, you're obviously about to ask my question.

[00:23:10] Speaker 03:
I haven't opened my mouth yet.

[00:23:11] Speaker 02:
But you were so clearly about to, so I'm going to let you, because I think my point, I made that first point.

[00:23:16] Speaker 03:
So how do we know?

[00:23:18] Speaker 03:
How do we know that the interpretation of the statute is we look at all six holistically, we don't say if you meet one, it counts or A, it counts.

[00:23:33] Speaker 03:
If you meet C, it counts.

[00:23:34] Speaker 03:
How do we know that?

[00:23:36] Speaker 03:
That that's the interpretation that the California courts would give to this provision.

[00:23:42] Speaker 02:
I think several reasons.

[00:23:43] Speaker 02:
One, I mean, there's no severability clause.

[00:23:45] Speaker 02:
And we'll get to our severability argument, which is different.

[00:23:47] Speaker 02:
But there is no severability clause.

[00:23:48] Speaker 03:
Right.

[00:23:49] Speaker 03:
But this is different than severability.

[00:23:52] Speaker 03:
This is how you determine how you mix A through F. Sure.

[00:23:59] Speaker 02:
I said severability because I understood Judge Smith's argument, or just a question.

[00:24:04] Speaker 02:
Judge Smith doesn't make arguments, to be about whether you could strike one or two of them and therefore defend it.

[00:24:11] Speaker 02:
That's a severability analysis.

[00:24:14] Speaker 02:
The other is, just textually, they are indicators for a unitary decision.

[00:24:19] Speaker 02:
The decision is, does a service fit into this statutory term, likely to be accessed by children?

[00:24:26] Speaker 02:
based on the following indicators.

[00:24:27] Speaker 02:
And it's not an either or list.

[00:24:30] Speaker 02:
There is no or after between E and F. They're all factors that each go to the determination of whether a service is or is not.

[00:24:39] Speaker 02:
So to define that, you have to look at the content on the service.

[00:24:42] Speaker 02:
That indicator might not push you that way.

[00:24:45] Speaker 03:
Let's look at F. Sure.

[00:24:47] Speaker 03:
A significant number, a significant amount of the audience

[00:24:51] Speaker 03:
et cetera, et cetera, et cetera, based on internal company research to be children.

[00:24:56] Speaker 03:
I mean, if the answer to that question was yes, wouldn't that mean the answer is that it is likely to be accessed by children, just taking F separately?

[00:25:09] Speaker 02:
No, for two reasons.

[00:25:11] Speaker 02:
One, you could envision a situation where

[00:25:15] Speaker 02:
a significant percentage of the users of a service or children, but it still didn't fall within it.

[00:25:21] Speaker 02:
If you looked at all the other definitions, that would be the one factor.

[00:25:24] Speaker 02:
There could be a service that is aggressively trying not to be marketed to children, but that it turns out

[00:25:33] Speaker 02:
a significant amount and we don't know if that's 2% or 10% or 20% actually are children.

[00:25:38] Speaker 02:
The second is an argument that we have explained in our brief that the very term audience in that suggests that the focus of the provision and the whole law is about content providing services.

[00:25:52] Speaker 02:
The focus of this law has always been about

[00:25:55] Speaker 02:
Keeping kids off the internet, keeping kids from seeing material that the state does not want them to see.

[00:26:02] Speaker 02:
We know that 98% of the time children spend on the internet is on sites that involve presentation of material to those children.

[00:26:10] Speaker 02:
That it's not about, I mean, people spend, even if children, some teenagers go on Uber,

[00:26:17] Speaker 02:
That's a tiny amount of the time and it's not the focus here of the law.

[00:26:22] Speaker 01:
Doesn't that just present the moody problem more straightforwardly?

[00:26:27] Speaker 01:
So a couple things, right?

[00:26:29] Speaker 01:
Even if we take your reading of the coverage indicators, it is at least an invitation by plaintiffs in the district court to engage in the kind of facial challenge balancing that's required in terms of identifying, okay, well,

[00:26:45] Speaker 01:
What is the scope of the applications of each of these and is it substantially overbroad?

[00:26:52] Speaker 01:
Is there a legitimate sweep?

[00:26:53] Speaker 01:
Where did any of that happen on remand?

[00:26:57] Speaker 02:
I don't think that's the right way of framing this challenge because, and this is another point I wanted to make for separate reasons, but I will make here, which is that

[00:27:09] Speaker 02:
We are not challenging the coverage definition directly.

[00:27:12] Speaker 02:
We are challenging the coverage definition because it then imposes the speech-based burdens of the rest of the law on covered services or non-covered services.

[00:27:23] Speaker 02:
So to decide if any given any service is covered by the statute, you have to look at the content on that statute, on that service.

[00:27:31] Speaker 01:
You have to look.

[00:27:32] Speaker 01:
Well, but that's not enough under Project Veritas, City of Austin.

[00:27:36] Speaker 01:
That no longer can be the...

[00:27:38] Speaker 01:
the trigger for that.

[00:27:41] Speaker 01:
Just looking at the content, it has to regulate the content.

[00:27:46] Speaker 02:
That's actually, I may have misspoken it, because that's sort of what I was trying to say.

[00:27:50] Speaker 02:
This is not at all like Project Veritas, because the substantive rules here involve content-based rules.

[00:27:58] Speaker 02:
So if you are subject to this law, then there are a variety of content-based rules that apply to you.

[00:28:05] Speaker 01:
Well, but that strikes me as an argument.

[00:28:07] Speaker 02:
A variety of First Amendment.

[00:28:08] Speaker 01:
Right.

[00:28:08] Speaker 01:
So to compare this to Project Veritas, Project Veritas says don't record unless you can, or basically for these purposes, you can record if it's a conversation with a police officer.

[00:28:21] Speaker 01:
This says you can't do these separate things, which I take to be your claim is that they're vague and not that themselves are content-based.

[00:28:34] Speaker 01:
You can't do these separate things if you're talking with children, if you're in a conversation with children.

[00:28:41] Speaker 01:
Because your challenges to the substantive provisions, once we get past the coverage indicators, I take to be setting aside the age estimation requirement, but the data use and dark patterns requirement, your challenges there are vagueness, not free speech.

[00:28:56] Speaker 02:
No, we raised free speech challenges to those.

[00:29:01] Speaker 02:
The district court rolled against us.

[00:29:02] Speaker 01:
But we did raise those challenges.

[00:29:04] Speaker 01:
But we're not in a position to affirm any invalidation of those on free speech grounds.

[00:29:08] Speaker 01:
What's before us is a vagueness challenge.

[00:29:11] Speaker 01:
And so I still think maybe there's a world in which we're dealing with free speech questions all the way down, and then we have the mother of all moody analyses in terms of trying to understand exactly what the scope of the application is.

[00:29:25] Speaker 01:
Right now, at least before us, we're dealing with the free speech element is just at that screening stage, either in the coverage.

[00:29:33] Speaker 02:
I don't think that's right.

[00:29:34] Speaker 02:
So for example, the same definitional provision also triggers the requirement that a service enforce its

[00:29:47] Speaker 02:
its terms of service as the state sees that they should.

[00:29:53] Speaker 02:
I mean, the state has given up on its talents to that, but that is similarly triggered by this.

[00:29:58] Speaker 02:
More generally, I'm not sure I agree with your characterization of Project Veritas.

[00:30:02] Speaker 02:
In Project Veritas, it was still, there was a distinction, the carve-out was for open recordings of conversations with police officers.

[00:30:14] Speaker 02:
You were still barred from doing closed recordings of conversations with police officers.

[00:30:20] Speaker 02:
So there was not a content-based distinction because the law still barred some recordings with police officers.

[00:30:28] Speaker 02:
It was just a time, place, and manner when you could do so, which is very different from saying the burdens apply.

[00:30:37] Speaker 01:
But the interlocutor-based threshold there, that would be problematic under

[00:30:42] Speaker 02:
free speech doctrine either way, whether it was happening at the first or the second step with a police officer.

[00:30:58] Speaker 02:
how I would explain how City of Austin applies here and how that also shows why we're right in the circumstance.

[00:31:08] Speaker 02:
There are two very similar cases.

[00:31:09] Speaker 02:
There's City of Austin and Reed, both of which are about restrictions on signs.

[00:31:15] Speaker 02:
In City of Austin, you have to glance at the sign to decide, are you selling the product on location or off location?

[00:31:22] Speaker 02:
But there's nothing about the

[00:31:23] Speaker 02:
regulation of the actual sign.

[00:31:27] Speaker 02:
In Reed, you were allowed to put up certain signs with certain contents and not allowed to put up signs with other content.

[00:31:35] Speaker 02:
Here, similarly, the law here says if you're covered by this, you must enforce your

[00:31:45] Speaker 02:
your sort of terms of service.

[00:31:48] Speaker 02:
And you have all these other rules that are, again, content-based distinctions.

[00:31:54] Speaker 01:
I think it is certainly the case that material detriment is... So you must enforce your rules.

[00:32:01] Speaker 01:
Set aside kind of how that works out in practice.

[00:32:04] Speaker 01:
Why is that kind of independently, if it just said that all businesses with terms of service in the state of California shall enforce their rules, how is that content-based?

[00:32:15] Speaker 02:
Well, our challenge to that, which was our moody analysis that the district court looked at and agreed with, we challenged that with respect to specifically terms of service on the presentation of material and whether or not a service was presenting material that was detrimental, harmful to children.

[00:32:35] Speaker 02:
So we limited the challenge on the denominator of the moody analysis such that it was

[00:32:44] Speaker 02:
the application only of the terms of service about the presentation of material to children, not about other things.

[00:32:52] Speaker 02:
And within that scope, every application was content-based and a restriction on our First Amendment rights.

[00:33:00] Speaker 01:
Where should we look for the district court's moody analysis of that piece, right?

[00:33:05] Speaker 01:
I mean, I guess at some

[00:33:07] Speaker 01:
Moody has to come in somewhere.

[00:33:09] Speaker 01:
And I think for different accounts that maybe it's happening, we're looking at the entire scope of your challenge.

[00:33:15] Speaker 01:
There's other cases that suggest that we should look at it for each provision that you've challenged.

[00:33:22] Speaker 01:
So now you've identified the terms of service for material.

[00:33:29] Speaker 01:
You're bringing a facial challenge to that scope of the terms of service provision as it's covered by the coverage indicators.

[00:33:35] Speaker 01:
How does Moody work there?

[00:33:36] Speaker 01:
How are we supposed to determine whether you win a total facial invalidation of that regime or not?

[00:33:47] Speaker 01:
Or is it as applied?

[00:33:49] Speaker 02:
No, I think it's clearly a facial challenge.

[00:33:52] Speaker 02:
What the Supreme Court has said in, for example, the case about the Washington

[00:33:59] Speaker 02:
is that you can undertake the moody analysis or the First Amendment analysis in a facial challenge with respect to the scope that is being challenged.

[00:34:16] Speaker 02:
So in that instance, the plaintiff challenged the Washington PRA only as it applied to citizen referendums.

[00:34:26] Speaker 02:
And the court therefore undertook the analysis within that scope only and used that as the denominator and looked at it there.

[00:34:35] Speaker 02:
In our case, we very carefully went through this and differentiated our different challenges.

[00:34:41] Speaker 02:
So for example, the information use provision, the dark patterns provision, which as you noted, the court struck down on vagueness grounds.

[00:34:52] Speaker 02:
Our First Amendment challenges to those were similarly facial challenges only with respect to the application as to the presentation of content to children.

[00:35:08] Speaker 02:
Adam, could you get me the last page of the complaint that has that limit?

[00:35:14] Speaker 02:
ER568.

[00:35:15] Speaker 02:
Thank you.

[00:35:16] Speaker 02:
Thank you, Kristen.

[00:35:18] Speaker 02:
So we defined it that way, and the court looked at it that way.

[00:35:21] Speaker 02:
But at that point, it didn't.

[00:35:23] Speaker 01:
Does Moody does not require that a First Amendment facial challenge must be analyzed on a provision by provision basis?

[00:35:29] Speaker 02:
That's clearly true on one level.

[00:35:32] Speaker 02:
I mean, you can't save a statute by adding an entirely unrelated statute to it.

[00:35:38] Speaker 02:
So that has to be right on the surface level.

[00:35:41] Speaker 02:
But then, so we think that our coverage definition challenge falls in every application because the coverage definition

[00:35:53] Speaker 02:
triggers burdens on speech.

[00:35:56] Speaker 02:
It triggers burdens.

[00:35:57] Speaker 02:
And it triggers burdens differentially based on speech.

[00:36:00] Speaker 02:
So it's like the Minnesota Star case, which was a tax on newsprint that only applied to certain speech.

[00:36:08] Speaker 01:
Right.

[00:36:09] Speaker 01:
I'm with you there.

[00:36:10] Speaker 01:
To the extent that we're trying to any sort of regulation, entirely non-speech-related substantive regulations that are triggered by coverage indicators that are speech-based would be speech-based.

[00:36:21] Speaker 01:
What I'm trying to understand is where

[00:36:23] Speaker 01:
where the district court addressed this kind of all the way down, speech-based all the way down, so that it would impact, setting aside the question of the scope of the coverage, would impact the entire law, even as to coverage indicators that may not be speech-based.

[00:36:42] Speaker 02:
I don't, so.

[00:36:45] Speaker 02:
Well, I mean, I think she did, because she differentiated in her opinion between the facial challenges to individual provisions and the facial challenges to the coverage definition, which infuses every other application of the act.

[00:37:01] Speaker 01:
I do, though, want to, if with the courts.

[00:37:03] Speaker 01:
I think you're about to go on a severability.

[00:37:05] Speaker 01:
I was.

[00:37:05] Speaker 01:
I'd prefer to first to hear about how does

[00:37:10] Speaker 01:
Paxton, how should we read Paxton as to the age estimation requirement, standing alone?

[00:37:16] Speaker 01:
Which Paxton?

[00:37:17] Speaker 01:
Sorry, the Supreme Court, it's like there are a lot of moody, of net choice obscenities.

[00:37:23] Speaker 01:
Oh, free speech coalition.

[00:37:25] Speaker 01:
I think they applied intermediate scrutiny to Texas's age estimation requirement.

[00:37:31] Speaker 02:
Free speech coalition, yes.

[00:37:32] Speaker 02:
Okay, so I think two things I will say about

[00:37:35] Speaker 02:
free speech coalition, which is how I've always thought of it just because they're just like you can't refer to a case.

[00:37:40] Speaker 01:
I think I'll do that now, too.

[00:37:42] Speaker 02:
First, the court is clear that heightened scrutiny applies because it's clearly a restriction on speech.

[00:37:48] Speaker 02:
The question before the court was, do you apply strict scrutiny or do you apply intermediate scrutiny?

[00:37:56] Speaker 02:
And the court said it's intermediate scrutiny because all of the speech that is being precluded under that statute is speech as to which children have no First Amendment rights.

[00:38:09] Speaker 02:
The law was entirely targeted on pornography, essentially.

[00:38:13] Speaker 02:
obscene pornography that was obscene as to children.

[00:38:16] Speaker 02:
They had no First Amendment right to see it.

[00:38:17] Speaker 02:
And so the court said, look, that is clearly a non-First Amendment protected thing.

[00:38:23] Speaker 02:
And we have to engage in some balancing, because we know we're going to have to impose burdens on kids.

[00:38:28] Speaker 02:
But the state has the right to do this.

[00:38:30] Speaker 02:
So we're lowering the burden.

[00:38:31] Speaker 02:
Nothing about the decision, though, as I read it, backs away from the principle in the video games case and elsewhere

[00:38:39] Speaker 02:
If there is some First Amendment right of children to see the speech, then you're in strict scrutiny.

[00:38:47] Speaker 01:
There's a question about whether what the court's doing there is applying the scope of intermediate scrutiny or just applying that intermediate scrutiny applies to the technology of age estimation and then

[00:39:00] Speaker 01:
There's just very weighty interests with respect to that.

[00:39:06] Speaker 02:
I think this statute would fall under either of those, in part because, again, when you move away from the aspects of this law that are about restricting speech to minors that the state thinks the minors shouldn't be, the data practices parts that Ms.

[00:39:24] Speaker 02:
Litz discussed here,

[00:39:26] Speaker 02:
Almost all of those were already regulated by the CCPA.

[00:39:29] Speaker 02:
So if you do the Patel analysis of what's new here, it's essentially nothing outside of what the law does to prevent speech and regulate what content kids say.

[00:39:42] Speaker 02:
I will flag something that was before the court the first time we were here.

[00:39:47] Speaker 02:
In Dr. Radetzky's declaration, the state's declaration in the first preliminary injunction motion,

[00:39:54] Speaker 02:
She mentions harmful content and keeping kids from harmful content 71 times.

[00:40:00] Speaker 02:
Her declaration the second time doesn't use the word content.

[00:40:03] Speaker 02:
I mean, the state is trying now to defend the law on grounds that it is a data privacy law.

[00:40:09] Speaker 02:
But Judge Freeman has rejected that repeatedly.

[00:40:13] Speaker 02:
And I think this court essentially rejected that the first time.

[00:40:16] Speaker 02:
But to turn quickly to the severability analysis, because in many ways it's the easy solution here.

[00:40:25] Speaker 02:
I think the state has almost nothing to say in response to it, and notably said very little in their briefs about it.

[00:40:31] Speaker 02:
As enacted, the statute was a regulatory and compliance focused regime.

[00:40:36] Speaker 02:
It had a notice and cure provision.

[00:40:38] Speaker 02:
It required companies to

[00:40:40] Speaker 02:
ex ante look at their practices and then and think this through so that they would not fall afoul of the rules.

[00:40:48] Speaker 02:
It followed from the UK's version that similarly is completely a compliance based regime.

[00:40:53] Speaker 02:
It doesn't even have the force of law.

[00:40:56] Speaker 02:
This court's already said that compliance regime, the way it was structured, was unconstitutional.

[00:41:04] Speaker 02:
And so removing that makes this into a gotcha law.

[00:41:09] Speaker 02:
It makes it into a gotcha law where it is now entirely up to Attorney General Bonta what practices are unlawful when he's going to bring the burden of the state down on any given company in the state.

[00:41:24] Speaker 02:
But beyond that, that goes to why it's perfectly reasonable to think that it's not volitionally separable.

[00:41:30] Speaker 02:
But the other thing is we know precisely that it is not from the statutory history of its enactment.

[00:41:36] Speaker 02:
This law was before the California legislature over the course of a six-month period repeatedly.

[00:41:44] Speaker 02:
The initial version of the law did not have a notice and cure provision.

[00:41:49] Speaker 02:
People objected to the law on that basis.

[00:41:51] Speaker 02:
This is ER 343 and 344.

[00:41:53] Speaker 02:
People specifically asked that the law be clarified, that the attorney general could enforce it, there was no private right of action, and that there be a notice and cure provision.

[00:42:01] Speaker 02:
In response to that, Assemblymember Wix added the AG provision and the no private right of action provision, but didn't add a notice and cure provision.

[00:42:10] Speaker 02:
That's in June.

[00:42:12] Speaker 02:
In August, still the law does not have that.

[00:42:14] Speaker 02:
The law is sent to the suspension file, where legislation goes to die.

[00:42:18] Speaker 02:
The law comes out of that.

[00:42:20] Speaker 02:
Someone brings it out, presumably because Assemblymember Wix really wants this law to pass, and she adds in a 45-day notice and cure provision.

[00:42:29] Speaker 02:
That still isn't enough.

[00:42:30] Speaker 02:
Why don't you conclude, please?

[00:42:32] Speaker 02:
OK, sorry.

[00:42:32] Speaker 02:
Still isn't enough.

[00:42:34] Speaker 02:
And it's only when she adds in a 90-day notice and cure provision that the law, in fact, is enacted and passed by the legislature.

[00:42:41] Speaker 02:
So we know here, and the state hasn't met its burden here, because the burden is on them, that the law wouldn't have passed without the notice and cure provision.

[00:42:52] Speaker 02:
Thank you, counsel.

[00:42:53] Speaker 03:
Thank you very much, Your Honor.

[00:42:54] Speaker 03:
And we'll give you two minutes for rebuttal.

[00:43:01] Speaker 04:
To the state No to me that's all right Two quick points I'd like to make and then and one slightly longer one if I have enough time The first is with respect to this question about how to do the Mooney analysis with the definitional provision I think the question becomes

[00:43:25] Speaker 04:
What are we saying is subject to the proper level scrutiny?

[00:43:28] Speaker 04:
So if the argument is that the substantive regulations are subject to strict scrutiny.

[00:43:32] Speaker 04:
which is what the lower court said happens here.

[00:43:35] Speaker 04:
Then the question becomes do the substantive regulations meet strict scrutiny that requires the analysis of what's the compelling interest, the least restrictive means test.

[00:43:44] Speaker 04:
That's going to have to look at the moody analysis of that question.

[00:43:48] Speaker 04:
So what are the applications of the substantive regulations?

[00:43:51] Speaker 04:
Which applications meet strict scrutiny?

[00:43:53] Speaker 04:
Which applications don't?

[00:43:54] Speaker 04:
Because it's the substantive regulations we say are subject to it.

[00:43:58] Speaker 04:
Second quick point on this age estimation question in Paxton.

[00:44:01] Speaker 04:
I think the salience of Paxton is what level of review applies to age estimation depends upon what age estimation is asking you to do as an alternative, estimate age or X. And here it's estimate age or apply the act's substantive regulations, some of which this court indicated in its prior ruling do not regulate speech at all on their face.

[00:44:22] Speaker 04:
So we would say the remedy is to challenge the regulations that are violating the First Amendment.

[00:44:27] Speaker 04:
The age estimation provision is a conduct regulation that stands alone.

[00:44:31] Speaker 04:
And finally, on this question about the definitional indicator, we agree that to the extent that children are using the app in significant numbers or using a product, that it meets the definition.

[00:44:43] Speaker 04:
And it might be helpful to briefly do, to point the court to considering a brick and mortar analogy.

[00:44:49] Speaker 04:
You can imagine a law that regulates businesses, physical businesses children are likely to access that use the exact same definition here.

[00:44:56] Speaker 04:
It's clearly going to catch within its scope businesses that may make choices about design elements or advertisements, but the service they provide to children has nothing to do with expression.

[00:45:05] Speaker 04:
And it'll catch businesses that do have expression like putting on movies or plays for children, but we're regulating them because children are in the space, not because of what they want to say to the children.

[00:45:16] Speaker 04:
Thank you, Your Honors.

[00:45:18] Speaker 03:
We thank counsel for their argument.

[00:45:19] Speaker 03:
The case just argued is submitted and with that we are adjourned.