ExTwitter Pays Trump $10M to Settle Case It Had Already Won

Here's a dumb thing that happened: Elon Musk's ExTwitter just agreed to pay Donald Trump $10 million to settle a lawsuit that ExTwitter had already won. (Yes, you read that right: already won.) This is becoming something of a pattern in tech and media these days - call it the digital-age protection racket.

The plot twist was telegraphed back in November, when ExTwitter filed something with the Ninth Circuit that basically said hey, don't bother ruling on this appeal, we're working on a settlement." The appeal in question? Oh, just Trump's absolutely batshit lawsuit claiming that Twitter (this was back in the pre-Ex days) violated his First Amendment rights by shutting down his account while he was president.

Let's do a quick First Amendment refresher: The First Amendment stops the government from silencing speech. That's it. That's the whole thing. Private companies can moderate their platforms however they want. (This is not exactly a controversial interpretation - it's First Amendment 101.) But in this case, Trump (who was the head of the government at the time of the events in the case) was suing the private company arguing that it somehow violated his First Amendment rights to ban his account, even if he had violated the company's rules.

The case had not gone well for Trump. The judge in the case, James Donato, absolutely ripped it to shreds in dismissing it:

Plaintiffs' main claim is that defendants have censor[ed]" plaintiffs' Twitter accounts in violation of their right to free speech under the First Amendment to the United States Constitution... Plaintiffs are not starting from a position of strength. Twitter is a private company, and the First Amendment applies only to governmental abridgements of speech, and not to alleged abridgements by private companies."

Now, Trump's lawyers tried to get creative here. Their argument went something like: Okay sure, Twitter is private, BUT..." (There's always a but" in these cases.) The theory was that it was actually state action because... well, because the Biden campaign (not even the administration - they weren't in office yet!) had complained about Section 230 generally. And also because some Democratic members of Congress had opinions about Facebook (not even Twitter!) content moderation decisions. The judge was, let's say, unimpressed with this legal theory:

Paragraph 55 is said to offer examples of Democrat legislators threatening new regulations, antitrust breakup, and removal of Section 230 immunity for Defendants and other social media platforms if Twitter did not censor views and content with which these Members of Congress disagreed." ... The actual quotes do not live up to that billing. The statements attributed to Bruce Reed, Biden's Top Tech Advisor," and Michelle Obama are of no moment because Reed and Obama were not legislators.... Other statements in Paragraph 55 pertain only to Facebook, and not Twitter. ... (Senator Markey's question and Mark Zuckerberg's answer regarding Facebook's algorithms and policies; Rep. Adam Schiff's Tweet that Facebook must ban" Trump). Then-Senator Kamala Harris is quoted three times for calling for Trump's Twitter account [to be] suspended" and calling on Dorsey to do something about this Tweet" from Trump, but conspicuously missing is any threatening remark directed to Twitter....

So Trump did what losing plaintiffs do: he appealed to the Ninth Circuit. (And in what might be the most eyebrow-raising detail of this whole saga, he was represented by former Chief Judge of the Ninth Circuit, Alex Kozinski. Yes, that Alex Kozinski.) The oral arguments are available online, and... well, let's just say the judges were not buying what Trump was selling. Judge Bybee, in particular, seemed personally offended by the legal theory, noting he couldn't think of a single case that would support Trump's arguments. (In judge-speak, that's basically saying what are you even doing here?")

In fact, Judge Bybee got so worked up that he even yelled at Twitter's lawyer for suggesting that maybe, hypothetically, a more coercive statement from the two top House and Senate officials might count as state action, as compared to the random legislator comments at issue in this case. A huge landgrab," he called it, if the court were to accept such an argument. (When a judge is telling the winning side they're being too generous to the other side's theory, you know things aren't going well.)

The case was dead on arrival. It was quite clear that Twitter was going to win the case. Easily. And, I'll note, that the oral arguments at the Ninth Circuit took place in October 2023, a year after Elon had taken over the company. Which means Elon's own lawyers were still in court explaining why Trump's lawsuit was nonsense.

However, the Ninth Circuit decided to hold off on ruling on the case at that time, because one of the claims involved Florida's social media law, which had been challenged and dumped as unconstitutional by both a district court and the Eleventh Circuit, and a week before the oral arguments were heard in this case, the Supreme Court had said they'd review that law. That's the case that became Moody v. NetChoice which the Supreme Court eventually ruled on last summer, making it clear that the First Amendment protects a company's content moderation decisions.

That ruling would only help Twitter's arguments against Trump's. If Twitter's defense against Trump was strong before, it was practically bulletproof after.

All this history matters for one simple reason: to understand just how completely, utterly doomed Trump's case was. This wasn't one of those well, maybe if you squint at it sideways" kind of cases. This was a lose at the district court, lose at the appeals court, and by the way, here's a Supreme Court ruling that makes your position even more wrong" kind of case. The kind of case that law professors use as examples of what not to do.

But, of course, that was about the time Elon started supporting Trump. And so now Elon has settled" the case, giving Donald Trump $10 million. For a case that pretty much everyone knows ExTwitter would win.

If this feels like deja vu, it should. Just last month, Mark Zuckerberg and Meta pulled exactly the same move, writing Trump a $25 million check for a case that had been sitting on ice specifically waiting for Twitter to finish winning this case.

There's really no way to pretty this up: The whole thing reeks of corruption. Sure, Elon and Trump are best buddies now. And yes, Elon has already funneled hundreds of millions of dollars into getting Trump elected. So maybe we shouldn't be surprised that they'd settle this case just to get it behind them. But paying $10 million to make a losing case go away? That's not a settlement - that's a gift with a legal document as wrapping paper.

Between this and Meta's $25 million payout last month, Trump appears to have discovered a profitable new business model: file legally dubious lawsuits against tech and media companies and wait for politically motivated settlements to roll in. The standard corporate excuse of settling to avoid legal costs" rings particularly hollow here, given that ExTwitter had already incurred most of those costs and was on the verge of a clear victory.

What we're witnessing is the emergence of a dangerous precedent in tech and media policy: companies with close ties to political figures can simply bypass their own content moderation policies through post-hoc protection payments. It's a practice that not only undermines platform governance but also sends a troubling message about the relationship between these companies and political power.

The cynicism isn't just warranted - it's necessary. When companies start treating losing lawsuits as investment opportunities in future political favor, we're way past the point where benefit-of-the-doubt makes any sense. This isn't normal corporate behavior. This is what corruption looks like when it puts on a suit and pretends to be legitimate business.