Sauce for the Goose: The FCC Lacks Authority to Interpret Section 230 Post-Loper Bright
Frustrated by a perceived political bias against their views, several conservatives have called for government regulation over digital platforms’ content moderation policies. Proposed remedies range from treating digital platforms as common carriers to declaring that digital platforms are “state actors.” Always standing in the way of such interventions, however, is the First Amendment. As the Supreme Court recognized last term in Moody v. NetChoice, the First Amendment “does not go on leave when social media are involved,“ and “[o]n the spectrum of dangers to free expression, there are few greater than allowing the government to change the speech of private actors in order to achieve its own conception of speech nirvana.”
So with direct content moderation regulation off the table (at least for now), some argue for an indirect approach: hit digital platforms in their wallets by modifying, or even eliminating, the immunity for content posted by third parties on their sites provided by Section 230 of the Communications Decency Act.
Section 230 is the legal lifeblood of digital platforms. Absent Section 230, digital platforms like Yelp, Truth Social, Rumble, and X would be open to a tsunami of litigation anytime a user posts something that someone else considers to be “obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable,” regardless of “whether or not such material is constitutionally protected.”
Re-writing or outright eliminating Section 230 both require congressional action, but that process is politically messy, and legislative success is never guaranteed. The search for an alternative approach brings us to the “vast power” of the administrative state. Rather than modifying the law itself, might a favorable re-interpretation of Section 230 do the job?
The first Trump Administration tried to do exactly that.
In the waning days of his first term, President Trump directed the National Telecommunications and Information Administration (which is part of the Executive Branch) to request the Federal Communications Commission (which is an independent agency) to institute a rulemaking to interpret Section 230.
This request presented several complicated legal questions. Most notably, while Congress placed Section 230 under Title II of the Communications Act—the chapter of the Act which governs the provision of common carrier telecommunications services—Section 230 itself contains no mention of FCC rulemaking authority to define the bounds of the immunity it provides. (Equally important, despite the fact that Congress placed Section 230 in Title II, Section 230—by its express terms—does not give the FCC authority to regulate digital platforms as common carriers.) Section 230, on its face, simply appears to provide digital platforms with an affirmative defense in the case of civil litigation.
In response to the White House’s request, FCC Chairman Ajit Pai dutifully asked his General Counsel Thomas Johnson to deliver an opinion on the matter. Based on the state of the law at that time—October 2020—Johnson released a memorandum which outlined a two-prong argument in support of the FCC’s authority to issue rules to interpret Section 230.
First, pointing to the Supreme Court’s holdings in AT&T Corp. v. Iowa Utilities Board and City of Arlington v. FCC, Johnson argued that because Congress decided to place Section 230 under Title II, Section 201(b) of the Communications Act—which confers on the FCC the power to “prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this chapter”—allows the Commission to conduct a rulemaking to interpret Section 230. Second, given this rulemaking authority, Johnson argued that Chevron directs the courts to defer to the FCC’s “reasonable interpretations of all ambiguous terms in the Communications Act.”
Johnson concluded:
The fact that courts have been interpreting Section 230 for years does not prevent the Commission from construing its ambiguous terms. As the Supreme Court held in National Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005), the FCC may act as the “authoritative interpreter” of ambiguous provisions in statutes like the Communications Act that it administers, and nothing “preclude[s] agencies from revising unwise judicial constructions of ambiguous statutes.” Section 230 allows the FCC to determine whether courts have appropriately interpreted its proper scope. *** Under Brand X, the FCC may review these judicial interpretations to determine whether they reflect the best reading of the statute. Indeed, an agency’s role as “authoritative interpreter” may be particularly useful where, as here, courts have reached divergent interpretations of key provisions of an important statute, thus creating substantial uncertainty and disharmony in the law.
Johnson’s theory, however, was never put into practice or subject to judicial review. The 2020 presidential election was held shortly after Johnson released his memo, and the new FCC, now under Democratic control, dropped the matter.
But with the recent presidential election, it is déjà vu all over again. Particularly after the Supreme Court’s ruling in Moody, there is a re-kindled interest in using Section 230 reform to bring “Big Tech” to heel. An interesting question, therefore, is whether the second Trump Administration will revive the effort to have the FCC interpret Section 230. Given the radical change in administrative law since 2020—ironically made possible by the shift in the Court’s makeup thanks to President Trump’s first term appointments—transforming Section 230 from Big Tech’s safe harbor into a regulatory hammer may prove difficult.
Perhaps the biggest impediment to any effort to have the FCC write definitive rules about the meaning of Section 230 is the Supreme Court’s rejection of Chevron last term in Loper Bright Enterprises v. Raimondo. There, the Court made it crystal clear that it is the exclusive role of the courts—and not the administrative state—to interpret statutes. As the Court observed, “even when an ambiguity happens to implicate a technical matter, it does not follow that Congress has taken the power to authoritatively interpret the statute from the courts and given it to [an administrative] agency. Congress expects courts to handle technical statutory questions . . . .” The Court’s rationale was straightforward:
Courts interpret statutes, no matter the context, based on the traditional tools of statutory construction, not individual policy preferences. Indeed, the Framers crafted the Constitution to ensure that federal judges could exercise judgment free from the influence of the political branches. They were to construe the law with “[c]lear heads . . . and honest hearts,” not with an eye to policy preferences that had not made it into the statute.
Thus, the message of Loper Bright to the FCC is clear: regardless of your political desires, interpreting Section 230 is not your job. Loper Bright, in plain terms, put the kibosh on Johnson’s argument that it is the FCC’s job “to determine whether courts have appropriately interpreted its proper scope.”
The other potential impediment is the Court’s revitalization of the Major Questions doctrine in West Virginia v. EPA. A legitimate argument can be made that having the FCC severely limit the immunity granted by Section 230 is a question of “economic and political significance” best left to Congress. While we are still in the early stages of establishing the practical boundaries of West Virginia, two recent cases indicate that the Major Questions doctrine could come into play should the FCC attempt to write rules to interpret Section 230.
The first case is the Sixth Circuit’s reaction to the Biden Administration’s efforts to reimpose (yet again) legacy common carrier regulation on broadband internet access services. Last summer, that court stayed the FCC’s efforts on Major Questions grounds. Oral arguments on the merits were held last month, and a decision is expected shortly. By nearly all accounts, the FCC’s argument that it has the authority to reclassify broadband as a telecommunications service is far stronger than its argument that it has authority to interpret Section 230, so if the merits panel agrees with the earlier panel’s decision to grant a stay, then any effort by the FCC to re-interpret Section 230 seems doomed.
The other case is a district court decision last summer that blocked the Federal Trade Commission’s controversial non-compete rule from going into effect. In that case, the FTC claimed that the catch-all rulemaking authority contained in Section 6(g) of the FTC Act granted it the authority to conduct substantive rulemaking under the “unfair methods of competition” standard contained in Section 5 of the FTC Act. After reviewing the text and structure of the FTC Act, the district court found that the agency had exceeded its statutory authority and granted summary judgment, thus setting aside the FTC’s rule. While we still need to see what happens on appeal, this case sends a clear message that just because an administrative agency’s implementing statute has a catch-all rulemaking provision, it does not also mean that the agency has an unfettered ability to promulgate substantive rules. Rather, the ability to issue any substantive rules must be directly tethered to the specific mandate bestowed on the agency by Congress.
Both Loper Bright and West Virginia mark significant steps by the Supreme Court to ensure that administrative agencies stay in their proverbial lanes. Such regulatory restraint was long overdue. While conservatives praise these cases for curtailing the regulatory excesses of the Biden Administration, these same cases apply with equal force to any Republican administration. These cases are expressly designed to be an inconvenience for any administrative agency that seeks to wield power untethered from its statutory authority.
President Trump has made it clear that one of the hallmarks of his second term will be to dramatically reduce the power of the administrative state. Loper Bright and West Virginia do just that, and what is good for the goose must be good for the gander. The scope of those decisions seems sure to encompass any effort by the FCC to interpret Section 230, irrespective of the alleged prudence of Section 230 reform.
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