A Trump-appointed judge just dismissed a lawsuit by Elon Musk’s X seeking to void a New York state law requiring social media companies to disclose how they define and monitor hate speech, extremism, harassment, foreign political interference and disinformation.
U.S. District Judge John Cronan in Manhattan rejected X’s argument that the Stop Hiding Hate Act violated the U.S. Constitution's First Amendment by exposing it to lawsuits and big fines unless it disclosed "highly sensitive and controversial speech" that the state found objectionable.
Additionally, Cronan dismissed the case with prejudice, prohibiting X from refiling an updated claim on the same issue.
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.
Most notably, 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.
However, Cronan wrote that “[t]he First Amendment poses no obstacle to New York’s law."
He added:
“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.”
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.
Nevertheless, the law was struck down on First Amendment grounds.
In this case, Cronan dismissed the California case (X Corp vs Bonta) stating that the level of scrutiny applicable was “Zauderer scrutiny,” which is “more relaxed than ordinary intermediate or strict scrutiny.”
Under the 'Zauderer standard', the government can usually force a business to state purely factual, uncontroversial information about what it sells, so long as the requirement is reasonably related to preventing consumer confusion and is not unduly burdensome.
Calorie counts, ingredient lists, and “you may still owe costs if you lose” in a lawyer ad are the classic examples.
Cronan put the Stop Hiding Hate reports in that box, analogized them to menu-labeling, and applied the relaxed standard.
He also held Section 230 does not preempt a reporting duty that attaches to incomplete or false filings rather than to the moderation decisions themselves.
The problem is the categories.
The law does not just say “publish your existing terms of service.”
It requires platforms to state whether and how they define “hate speech or racism,” “extremism or radicalization,” “disinformation or misinformation,” “harassment,” and “foreign political interference,” then report enforcement data sliced by those buckets.
However, those labels are not commercial product specs, they are contested political and legal concepts.
Platforms that refuse the state’s taxonomy, use different terms (“hateful conduct,” “violent speech,” “synthetic media”), or treat some of those categories as viewpoint-laden rather than objective, are being forced to translate their editorial judgments into the state’s vocabulary under threat of $15,000-a-day fines.
That is closer to compelled speech about contested public issues than to “this yogurt has 140 calories.”
A Trump-appointed SDNY judge reaching the opposite result from a Ninth Circuit panel is not a partisan surprise; it is a circuit split on a hard First Amendment question.
However, choosing to rule with prejudice” and no leave to amend is aggressive.
X’s theory is not frivolous; a sister circuit already accepted a version of it, as we detailed above.
Dismissing the case so that X cannot replead after discovery or after further appellate development in Bonta treats a close constitutional question as settled when it is not.