Federal Court Dismisses Musk’s X Lawsuit Against New York Law Forcing Platforms to Define Speech

A federal court has dismissed a First Amendment-based lawsuit by social media platform X against New York State.

Elon Musk’s X Corp. first lodged the legal challenge in June last year, protesting a New York law requiring large social media platforms to disclose how they would identify and moderate specific categories of sensitive content on their platforms. It outlined the categories as “hate speech,” “racism,” “extremism,” “radicalization,” “disinformation,” “misinformation,” “harassment,” and “foreign political interference.”

Under the law, social media companies that generate more than $100 million in annual gross revenue may be liable to pay $15,000 per violation per day and face legal action.

On Aug. 26, Judge John P. Cronan of the U.S. District Court for the Southern District of New York dismissed the case with prejudice, prohibiting X from refiling an updated claim on the same issue.

“[T]he First Amendment poses no obstacle to New York’s law,” Cronan wrote.

X Corp. had argued that forced disclosures of its position on “intensely debated and politically fraught topics” as ordered by the Stop Hiding Hate Act, or S895B, under the threat of significant financial penalty and civil suit, were in violation of the company’s First Amendment rights.

“The First Amendment protects ‘both the right to speak freely and the right to refrain from speaking at all,’” it argued to the court.

New York Attorney General Letitia James formally filed for the case to be dismissed in November 2025, saying the law helped consumers understand what to expect from social media, without blocking platforms from ‌speaking out or exercising their own judgment when moderating content.

Cronan found in favor of the state. He wrote in his ruling: “Businesses might not always want to share every detail about the products or services they offer. But when the government requires those businesses to speak truthfully about their offerings, the First Amendment typically allows for that kind of disclosure requirement.”

In its court filings, X Corp. argued that the disclosure requirements differed from those for disclosing its existing terms of service or content-moderation policies, as they do not reference specific categories of controversial speech. The law, it said, requires platforms to “convey their opinions and policy views about whether and how to define and moderate those controversial categories of speech” that are non-commercial in nature.

Musk’s company also said it already dedicates resources to regulating “hateful conduct” and that this would not be recognized under New York’s categories of “hate speech,” “racism,” or “extremism.” It also listed its efforts to regulate what it calls “manipulated, or out-of-context media that may result in widespread confusion on public issues, impact public safety, or cause serious harm,” but that would not be recognized by the New York law.

X Corp. pointed to a separate lawsuit it brought against California’s Assembly Bill 587, which it argued was “identical in all material respects” to S895B. The Ninth U.S. Circuit Court of Appeals, which oversees California, held that AB 587’s content-category reporting provisions compelled non-commercial speech about contested political topics, which triggered strict scrutiny of the law under the First Amendment. As a result, the law was struck down on First Amendment grounds.

But Cronan said in his ruling that the content moderation policy disclosures sought by New York were purely “factual commercial information.” It is tied to “the terms of the commercial transaction between the platforms and users” and “relate[s] to the social media services [platforms] actually provide to consumers,” the judge wrote.

He declined to follow the Ninth Circuit’s reading of California’s similar statute in X Corp. v. Bonta. He said that in this case, the level of scrutiny applicable was “Zauderer scrutiny,” which is “more relaxed than ordinary intermediate or strict scrutiny.”

The Epoch Times contacted X Corp. for comment but did not receive a response by publication time.

Reuters contributed to this report.