We have commented on several bills filed this session that impose liability without the requirement of an actual injury, proof of causation, or even a standard of liability. Another of these will be heard in House Judiciary on Wednesday.
HB 3357 creates a new private cause of action for damages “if the defendant: (1) engages in obscenity; or (2) knowingly or intentionally benefits from participating in an entity that engages in obscenity.” The bill goes on to hold an “information content provider or interactive computer service” liable for damages “arising from the distribution, transmission, or display of harmful material to a minor if, knowing the character and content of the material, the provider or service knowingly or intentionally benefits from participating” in disseminating the material “by facilitating, aiding, encouraging, or contributing to” the dissemination “in a manner that: (1) is readily accessible to minors; or (2) includes a minor’s visual image, audio voice, or participation in any manner.” Additionally, the bill makes a shareholder or member of a legal entity jointly and severally liable with a defendant entity if the shareholder or member received a “direct personal benefit.” The bill directs a court to award a prevailing plaintiff actual damages, including mental anguish damages regardless of physical or any other harm, court costs, attorney’s fees, and punitive damages. Defendants are jointly and severally liable and the same defendants may be sued multiple times for the same conduct.
Where to begin? It appears that the purpose of the bill is to allow private enforcement of § 43.24, Penal Code, which describes the crime of “obscenity” and to which the bill refers. In the criminal context, at least, “obscenity” has a more or less concrete definition that provides some notice of the elements of the offense while providing safeguards for legitimate First Amendment speech acts. And for the very reason that prosecuting obscenity (and convincing a grand jury to go along with it) implicates core First Amendment considerations, the procedural due process protections baked in to the criminal justice system are vital to preventing prosecutorial abuses.
Unfortunately, none of those protections have been carried over in HB 3357. Instead, the bill prohibits a defendant from mounting any effective defense whatsoever, including having been acquitted in a criminal proceeding, citing prior court decisions regarding the constitutionality of laws proscribing obscenity, or relying on dispositive judicial decisions if they are not binding on the court in which the case was brought. Not only does the bill strip defendants of defenses they would have in any other setting, it does away with the basic constitutional protection against double jeopardy. The bill permits—even encourages—a defendant to be sued over and over again for the same conduct. There is something fundamentally offensive to the constitution in depriving a defendant of basic due process rights, as this bill does. There is also a real question as to whether HB 3557 violates the Open Courts provision of the Texas Constitution. More on this point later.
This bill would be problematic enough if it ended there, but it’s only getting started. The bill reaches out to ensnare almost anyone who may have a connection to the dissemination of “harmful” material that might be accessed by a child (remember, nowhere does the bill require that a minor actually see or otherwise consume the material). The universe of potential defendants includes information content providers (i.e., any business, entity, or individual with an Internet website, including churches, charities, political parties, media organizations, arts groups, student publications, the list goes on) or interactive computer services (any information service, system, or access software provider that enables computer access by multiple users to a computer server). We should note that this section of the bill does not say that the subject material has to be “obscene,” only “harmful to a minor.” We’re not sure that’s an intentional loophole, but we are guessing that it is. If determining whether certain material is “obscene” is largely in the eye of the beholder, then how do we determine what material is “harmful to a minor”? Again, the bill has no standard and renders compliance impossible.
HB 3357 further encompasses shareholders or members of any legally organized entity if the shareholder or member “caused the entity to be used” for disseminating information and benefited from it. In other words, HB 3357 exposes to civil liability all employees, officers, directors, and shareholders of all private and public entities, if they have a website that in some way may be viewed by somebody as containing “obscene” material. This section, at least, does require that the material actually be “obscene,” but the “cause to be used” language likewise creates a duty without a standard. The problem is that without knowing in advance what material might trigger litigation under this bill (remember, the bill bars a defendant from relying on pretty much any existing judicial decisions on the matter), a shareholder or member will never know whether their mere participation in the business will “cause the entity to be used for the purpose of engaging in obscenity.” To make matters worse, the bill makes a shareholder or member jointly and severally liable for all the damages, whatever they may be. There may be some businesses that can afford to insure a risk like that, but most will not and, as a consequence, won’t be able to get anybody with any sense to serve on their boards of directors.
We alluded to the fact that HB 3357 creates a “no injury” cause of action. That was inaccurate. It actually creates three: the first by anyone against anyone, the second against a content provider or computer service, and the third against a shareholder or member. Elsewhere we have discussed at length the grave due process concerns raised by allowing a person to sue any other person for specified statutory damages without a showing of an actual, concrete injury. In other words, HB 3357 confers to standing to sue out of whole cloth, violating the constitutional standing rule that protects both the rights of parties in civil litigation and the independence of the courts to determine the justiciability of disputes. The bill assumes “harm” by sole virtue of the dissemination of the subject material in a way that might pass under the eyes of a minor. But the plaintiff in the lawsuit doesn’t have to prove that an actual minor viewed anything, much less was harmed by it. In fact, proposed § 98C.002 doesn’t require that a minor be involved at all, only that the defendant engaged in “obscenity” or “knowingly or intentionally benefits from participating in an entity that engages in the obscenity.” In short, HB 3352 permits a person to sue any other person simply because they think something that person put out to the public is “obscene.”
There’s a lot more we could say about this, but bills that presume harm, dispense with causation, impose damages without proof of harm or causation, and leave defendants without any effective means of defense are simply antithetical to the system of constitutional republicanism we purport to hold so dear. It is a laudable objective to protect minors from exploitation and other abuses, to be sure, and we applaud the Legislature for focusing on more effective ways to do that. But regulating social conduct by way of civil litigation raises the same concern in this context as it does in, say, the climate change or firearms context. This is what the Legislature, criminal justice system, and regulatory agencies are for. Civil courts do not and should not make policy in this way, nor do they want to.
