Lower court history
On May 7, 2024, TikTok and ByteDance filed a lawsuit against U.S. Attorney General Merrick Garland in the Court of Appeals for the District of Columbia Circuit, challenging the legislation primarily on First Amendment grounds, alleging that the forced divestiture or ban of the platform would violate the free speech rights of the company and its users. The company accused the U.S. government of operating on "hypothetical" national security concerns, contending that it has not outlined any credible security threat posed by the platform in an adequate manner, and has not explained why TikTok "should be excluded from evaluation under the standards Congress concurrently imposed on every other platform."[13][14][15] The lawsuit also alleged that the Chinese government would not permit ByteDance to include the algorithm that has been the "key to the success of TikTok in the United States".[16]
In the lawsuit, TikTok requested a declaratory judgment to prevent the PAFACA from being enforced.[17] The Court of Appeals expedited the case, setting oral arguments for September 2024,[18] and a decision by December 2024.[19] In June 2024, TikTok presented briefs to the court that laid out why the company believes the ban to be unconstitutional under the First Amendment.[20] TikTok argued any divestiture or separation would take years and the law runs afoul of Americans' free speech rights.[20] The brief included a 90-page proposal about plans by TikTok to address American national security concerns.[21] The U.S. Department of Justice (DOJ) responded the following month, in which it asked the court to reject TikTok's legal challenge.[22] The DoJ argued the law is aimed at addressing national security concerns, not speech, and is aimed at China's ability to exploit TikTok to access Americans' sensitive personal information.[22] The DOJ alleged that ByteDance employees in China obtained sensitive information on U.S. users, such as views on abortion, religion, and gun control, from overseas TikTok employees through Lark.[23] In August and September 2024, DOJ filed classified documents with the court to outline additional security concerns regarding ByteDance's ownership of TikTok.[22][24]
Oral arguments were held on September 16, 2024.[24] On December 6, 2024, the Court of Appeals rejected TikTok's constitutional arguments and found that the law does not "contravene the First Amendment to the Constitution of the United States", nor does it "violate the Fifth Amendment guarantee of equal protection of the laws".[25] Judge Douglas H. Ginsburg wrote in the court's majority opinion: "The First Amendment exists to protect free speech in the United States. Here the Government acted solely to protect that freedom from a foreign adversary nation and to limit that adversary's ability to gather data on people in the United States."[26] While the majority opinion concluded that the law triggered heightened scrutiny, it did not decide whether strict scrutiny or intermediate scrutiny should apply but concluded that the law satisfied the strict scrutiny standard, while the concurring opinion in the case filed by Chief Judge Sri Srinivasan also concluded that the law did not violate the First Amendment but only needed to satisfy intermediate scrutiny.
However, because the government referenced content on TikTok in its justification for the law, the majority opinion concluded that the law could still trigger strict scrutiny. The government cited two national security concerns as justifications for the law: "(1) to counter the PRC's efforts to collect great quantities of data about tens of millions of Americans; and (2) to limit the PRC's ability to manipulate content covertly on the TikTok platform". The majority opinion concluded that these justifications were compelling government interests, and deferred to the government's evaluations of factual circumstances and predictions that TikTok would likely comply with PRC requests to manipulate content on the platform. After concluding that the law was facially content-neutral, the majority opinion concluded that any new owner of TikTok "could circulate the same mix of content as before without running afoul of the [PAFACA]", and that the government's concern was about "covert content manipulation" due to its control by a foreign adversary country rather than "content suppression"—which was how the company had characterized the government's position.
The majority opinion concluded that the TikTok-specific provisions of the law were narrowly tailored to achieving the government's national security concerns, and that it would be inappropriate for the court to "reject the Government's risk assessment and override its ultimate judgment" that a national security agreement that the company proposed to the government was less effective than the law's ban-or-divestment requirement. The concurring opinion also concluded that the law is content-neutral, but when considered along with the history of restrictions on foreign control of broadcast media in the United States, the concurring opinion concluded that the law only needed to satisfy intermediate scrutiny. With respect to TikTok's equal protection claims under the Due Process Clause, the DC Circuit concluded that the company's claims "boil[ed] down to pointing out that TikTok alone is singled out by name in the [PAFACA]" but that the differential treatment was justified by the "TikTok-specific national security harms identified and substantiated by the Government".
Following the Supreme Court's ruling in Lingle v. Chevron U.S.A. Inc. (2005), the DC Circuit rejected TikTok's assertion that the PAFACA constituted a per se regulatory taking under the Takings Clause because TikTok can pursue a qualified divestment under the law and thus would not be deprived of all economic use of TikTok, while the DC Circuit also concluded that the difficulties related to a divestment asserted by the company are instead caused by PRC export regulations rather than the PAFACA. Following the framework established in Nixon v. General Services Administration (1977), the DC Circuit also concluded that the PAFACA did not qualify as a bill of attainder because while the court concluded that the law applies with specificity, the court also concluded that it does not constitute a legislative punishment because the law's divestment requirement is "a sale, not a confiscation", is more analogous to a line of business restriction rather than an employment ban, serves a non-punitive and preventive national security purpose, and that "TikTok [did] not come close to satisfying [the] requirement" of demonstrating that the legislative record shows a congressional intent to punish by passing the law.
On December 9, TikTok and ByteDance filed a motion for an injunction in the case to allow the app to continue operating until the U.S. Supreme Court decides whether to hear an appeal of the DC Circuit Court of Appeals panel ruling.[6] The appellate court rejected the motion on December 13.[7] On the same day, the United States House Select Committee on Strategic Competition between the United States and the Chinese Communist Party sent letters in reference to the December 6 ruling to the chief executive officers of Apple Inc. and Alphabet Inc. to instruct the companies to be prepared to comply with the law by the January 19 deadline.[27]
