NetChoice's challenge to Maryland's "Kids Code" law regulating online privacy protections for children survived the state's motion to dismiss, after a Maryland federal judge Monday said the trade association had made sufficient claims that the law burdens protected speech.

In his ruling, U.S. District Judge Richard D. Bennett credited NetChoice's claim that its members' editorial discretion in algorithmically curating and displaying content for users was under threat from the law, which NetChoice says would force covered entities to determine whether certain content or data practices could cause "psychological harm" to children. The ruling relied heavily on the U.S. Supreme Court's 2024 ruling in Moody v. NetChoice , in which the high court held that exercising "'editorial discretion in the selection and presentation' of content is … 'speech activity'" and protected.

"This case raises the constitutional balance between the state's significant authority to enact legislation to protect children, and the public's equally consequential right under the First Amendment … to be free of laws that burden their speech," Judge Bennett said. "While the First Amendment 'leaves undisturbed states' traditional power to prevent minors from accessing' some legitimately harmful speech, states cannot overly burden access to speech in their efforts to protect children."

He said NetChoice had laid out "plausible claims," but added that he had made no finding on the merits of those claims.

Passed last year, Maryland's Age-Appropriate Design Code Act targets online businesses with annual revenues of over $25 million or who buy, sell or share personal data from over 50,000 users annually, requiring them to act in the "best interests of children" when collecting and processing minors' personal data. Under the statute, the entities are required to submit detailed reports for every product likely to be accessed by children identifying what data is being collected and why, and assessing whether the product is designed consistently with the children's best interests. The reports must also evaluate the products for potential physical, psychological, privacy and discrimination harms.

But NetChoice — whose members include Meta Platforms Inc., Google LLC, Amazon.com Inc., Snap Inc., X Corp. and Netflix Inc. — claims the law forces digital platforms into an "impossible choice" of either censoring "broad categories of constitutionally protected speech" or creating "privacy-invasive age verification requirements."

In his ruling, Judge Bennett emphasized that even regulations that don't directly suppress speech could run afoul of the First Amendment, triggering heightened court scrutiny. NetChoice claims in its complaint that data collection is essential to providing curated, personalized content.

"At this stage, NetChoice has sufficiently alleged that altering data collection practices will concomitantly alter the services themselves, including protected speech," he stated. The judge went on to quote from the Moody decision, saying "Such requirements that private actors 'curtail[] their editorial choices must meet the First Amendment's requirements."

As the judge noted in his ruling Monday, the lawsuit challenging the Maryland law was one of more than 20 the organization has brought recently in 14 different states, many of which have targeted state laws aimed at curtailing addiction and harm to children allegedly caused by social media. The trade group has been engaged in a long-running battle with California's government over a law similar to Maryland's. It has also survived dismissal motions in Georgia and Mississippi in similar cases.

Like the judges in those courts, Judge Bennett ruled Monday that NetChoice has associational standing to challenge the Maryland law, having adequately claimed that some of its members engage in speech that the state's "Kids Code" would burden.

He also said the organization's claims of vagueness were enough to proceed. In its lawsuit, NetChoice calls the statute's requirement to act in the "best interests" of children "vague and subjective."

"NetChoice has sufficiently alleged that this standard depends on subjective determinations not defined in the Kids Code such that it fails to provide businesses or enforcing individuals reasonable, definite standards of practices that meet it," the judge stated.

Maryland Attorney General Anthony Brown's office did not immediately respond to Law360's request for comment Tuesday.

In a statement to Law360, Paul Taske, co-director of the NetChoice Litigation Center, celebrated the ruling.

"We are grateful that the court rejected Maryland's request to dismiss our case," Taske said. "We look forward to making our case in court and explaining why the law violates the First Amendment."

NetChoice is represented by Serena Orloff, Steven P. Lehotsky, Scott A. Keller and Jeremy Evan Maltz of Lehotsky Keller Cohn LLP, and Andrew C. White and Ilona Shparaga of Silverman Thompson Slutkin & White LLC.

Maryland is represented by Anthony G. Brown, Jessica M. Finberg and Howard R. Feldman of the Office of the Attorney General of Maryland.

The case is NetChoice v. Brown et al., case number 1:25-cv-00322, in the U.S. District Court for the District of Maryland.