A Table of Contents. Don't see that too often
in an opinion. (And this doesn't include
the concurring opinion!)
We may do social media (Twitter/X and LinkedIn), but so far we have avoided TikTok. Our attention span is already short enough, and it doesn't need to get even shorter.
And even more critically, we understand the TikTok platform consists mainly of short dance videos. That only makes us want to avoid it even more (OK Boomer).
Well, as of today, we may not really have a choice. At least if the U.S. Court of Appeals for the D.C. Circuit's opinion in the case which challenges the Congressional ban on TikTok stands: TikTok Inc. v. Garland, No. 24-1130 (Dec. 6, 2024).
As you may know, in the Protecting Americans from Foreign Adversary Controlled Applications Act, Congress permitted the President to identify "foreign adversaries" and prohibit the distribution of maintenance of their apps. TikTok, a product of the People's Republic of China, is one of those apps.
The platforms challenged the Act, citing a host of problems -- see the Table of Contents above to give you a sense of the scope of the lawsuit.
And yes, the obligatory takings claim. A Lucas wipeout claim, to be specific.
The court held that the Act survived. Even the takings claim, which the opinion made short work of. Here's the entire analysis:
TikTok claims the Act constitutes a per se regulatory taking in violation of the Fifth Amendment because it will render TikTok defunct in the United States. The Government counters that TikTok has assets that can be sold, and that the Act requires only divestiture, which need not be uncompensated. Although the Act will certainly have a substantial effect on the TikTok platform in the United States, regardless whether TikTok divests, the Act does not qualify as a per se regulatory taking.The Supreme Court recognizes two situations in which regulatory action constitutes a per se taking: (1) where the government requires that an owner suffer a “physical invasion of [its] property,” and (2) where a regulation “completely deprives an owner of all economically beneficial use of [its] property.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538 (2005) (cleaned up); see Cedar Point Nursery v. Hassid, 594 U.S. 139, 153 (2021) (explaining the first category includes temporary invasions of property). TikTok’s argument is of the second variety, but it does not demonstrate the complete deprivation such a claim requires.Here the causal connection between the Act and the alleged diminution of value is attenuated because the Act authorizes a qualified divestiture before (or after) any prohibitions take effect. That presents TikTok with a number of possibilities short of total economic deprivation. ByteDance might spin off its global TikTok business, for instance, or it might sell a U.S. subset of the business to a qualified buyer.TikTok dismisses divestiture as impractical. One of the main impediments, however, appears to be export prohibitions that the PRC erected to make a forced divestiture more difficult if not impossible. But the PRC, not the divestiture offramp in the Act, is the source of TikTok’s difficulty. TikTok would have us turn the Takings Clause into a means by which a foreign adversary nation may render unconstitutional legislation designed to counter the national security threats presented by that very nation.In any event, TikTok has not been subjected to a complete deprivation of economic value. Beyond characterizing divestiture as impossible, TikTok does not dispute that it has assets that can be sold apart from the recommendation engine, including its codebase; large user base, brand value, and goodwill; and property owned by TikTok. In other words, TikTok has several economically beneficial options notwithstanding the PRC’s export restriction.
Slip op. at 64-65.
Back in the day, the only way into the PRC was
crossing the Lo Wu Bridge from Hong Kong, like
this was some kind of spy exchange.
We took this pic on the bridge in 1977.
Although we get the reasoning, we admit to it giving us a slight pause: Yes, free alienability is an essential stick and TikTok still has that and isn't Lucased out there. But the notion that to use your property you have an obligation to avoid the alleged taking by giving up ownership -- something akin to the old "last clear chance" doctrine in tort law -- sticks in our craw a bit. If this was a Penn Central claim, we'd think this would lean heavily on the character of the government action factor. But this was Lucas and Lucas only. No Penn Central.
Have we seen the last of this? If the list of counsel and amici is any indication, probably not.
Just no dance videos, please.
