Parties in Mont. TikTok Case Seek Stay Pending Federal TikTok Ban Decision

All parties in the consolidated district court case that challenges Montana’s statewide TikTok ban seek to stay those proceedings pending the “final adjudication” of TikTok’s constitutional challenge to the federal TikTok ban that's embedded in the Protecting Americans from Foreign Adversary Controlled Applications Act, said their joint motion Tuesday (docket 9:23-cv-00061) in U.S. District Court for Montana in Missoula. TikTok and parent ByteDance filed the constitutional challenge May 7 in the U.S. Court of Appeals for the D.C. Circuit (see 2405070045).

The federal statute’s prohibition on providing internet hosting and mobile app store services to TikTok and other ByteDance apps takes effect Jan. 19, unless ByteDance sells TikTok’s U.S. subsidiary. Project Liberty founder Frank McCourt announced Wednesday that he’s building a consortium with Guggenheim Securities and Kirkland & Ellis with the aim of purchasing TikTok's U.S. subsidiary.

The TikTok-ByteDance D.C. Circuit petition claims that the statute enabling the federal ban violates the First Amendment and the petitioners’ Fifth Amendment equal protection rights, is an unconstitutional bill of attainder, and constitutes an unlawful taking of private property without just compensation.

The parties submit that it would be “appropriate” to stay proceedings in the district court case pending final adjudication of the TikTok-ByteDance petition in the D.C. Circuit, said the joint motion. The petition “bears upon this case in several respects, and a stay would further the orderly course of justice by simplifying the issues and questions of law in this matter,” said the motion. Unclear is what impact, if any, the D.C. Circuit petition might have on Montana Attorney General Austin Knudsen’s (R) 9th Circuit appeal (docket 24-34) in which he seeks to vacate the district court’s preliminary injunction that blocks him from enforcing the statewide TikTok ban (see 2401030007).

As the district court is aware, the five individual TikTok users, plus TikTok itself, argue that SB-419, Montana’s statewide TikTok ban, “is preempted because it conflicts with federal law,” said the joint stay motion. The TikTok-ByteDance petition pending before the D.C. Circuit “will clarify the scope of the federal law in this area bearing upon this Court’s preemption analysis, in addition to addressing other matters bearing upon this case,” it said.

Since the D.C. Circuit's action “will clarify the legal issues for this litigation,” the parties submit that a stay would be appropriate, the joint motion said. A stay wouldn’t prejudice any party, “as reflected by this joint motion,” it said. The parties submit that “all factors considered for a stay” are satisfied in this case, it said. They seek an order directing them to file a status report within 30 days of the final adjudication of the D.C. Circuit action, it said.