The state Court of Appeals has lifted its stay and rejected TikTok’s request to block part of an investigation by state Attorney General Josh Stein.
By a unanimous vote, an unnamed three-judge Appeals Court panel issued its order Friday afternoon.
Lawyers representing Stein filed paperwork this week asking the state’s second-highest court to reverse its earlier ruling favoring the social media company.
An Appeals Court panel voted 2-1 on Dec. 21 to grant a temporary stay. TikTok opposes Stein’s request for access to records of Zoom videoconferences involving TikTok employees.
“A bipartisan group of state attorneys general … is investigating TikTok for the harms its social-media platform causes to young people,” attorneys from Stein’s state Justice Department wrote Tuesday. “That investigation determined that TikTok possesses an archive of tens of thousands of recorded Zoom meetings, which it long failed to disclose.”
“When TikTok refused to meaningfully search its Zoom archive for videos responsive to the Attorney General’s previous civil investigatory demands, he issued a separate civil investigative demand to TikTok for a mere list of the videos,” Justice Department lawyers added. “Because TikTok refused even that simple document request, the Attorney General sought and received an order under N.C.G.S. § 75-10 compelling TikTok to comply with his civil investigative demand.”
Stein’s lawyers argue that TikTok failed to follow proper procedure in securing a stay from the Appeals Court.
“Further, TikTok is not entitled to the writ’s extraordinary relief because it is unlikely to succeed on the merits of its Fourth Amendment challenge,” the Justice Department court filing argued. “The records at issue are merely lists of recorded Zoom meetings in an online archive that TikTok possesses but failed to disclose and failed to search meaningfully. It is undisputed that this archive contains videos relevant to the investigation, and the Attorney General has already identified videos with relevant admissions from TikTok employees.”
“The relaxed relevant-to-the-investigation standard applicable in the current investigatory context is easily met,” Stein’s lawyers added.
“TikTok’s compliance with a garden-variety discovery order does not pose irreparable harm — TikTok has negotiated a confidentiality agreement with the Attorney General, has already produced documents pursuant to that agreement, and remains free to seek a further protective order from the court,” according to the court filing. “Conversely, a stay will injure the public’s interest by delaying and hindering the Attorney General’s ability to obtain the information he is entitled to and to proceed with this important investigation within a reasonable time frame.”
TikTok filed a motion on Dec. 20 seeking both a stay and an order called a writ of supersedeas. The writ would block a Dec. 15 trial court order from taking effect.
Wake County Superior Court Judge Jonathan Perry issued an order calling on TikTok Inc. to comply with Stein’s demand. The compliance deadline had been set for Dec. 22.
“The Attorney General has broad authority under North Carolina law to conduct consumer protection investigations by issuing Civil Investigative Demands to companies for their records. But that authority is not unlimited,” TikTok’s lawyers argued in a court filing. “’[A] governmental investigation into corporate matters may be of such a sweeping nature and so unrelated to the matter properly under inquiry’ as to violate the Fourth Amendment.”
“This appeal involves a CID that oversteps this constitutional boundary,” TikTok argued. “In this case, the Attorney General has been working with other state attorneys general to investigate whether TTI purportedly ‘puts young people at risk’ and thereby violates North Carolina’s consumer protection statute. As part of this multistate investigation, TTI has produced more than 80,000 documents, answered dozens of written interrogatories, and made witnesses available for depositions and interviews.”
“TTI is cooperating with the Attorney General’s investigation. But with respect to the CID in question, the investigation has gone too far: the Attorney General has issued a CID seeking detailed information for every Zoom videoconference meeting that any employee of TTI or its global affiliates may have elected to record and store on Zoom’s cloud, regardless of where those employees work, what they do, or what the meeting was about,” according to the motion.
“TTI estimates there are more than 98,000 such recordings — the vast majority of which have no conceivable relevance to the Attorney General’s investigation,” TikTok lawyers argued. “The stated purpose of the Zoom CID is to enable the Attorney General to pick through the records to identify recordings for follow-up requests. But the Fourth Amendment does not permit this type of exploratory rummaging — just as it would not permit a CID for information about every TTI corporate email or calendar entry.”
In addition to a “clear Fourth Amendment flaw,” “TTI also would suffer irreparable harm during the pendency of the appeal in the absence of a stay, both because TTI’s constitutional rights would be violated (which is per se irreparable) and because the disclosure of TTI’s confidential information to the Attorney General (and other attorneys general with whom the material is shared) could not be remedied — even an order requiring the return or destruction of the materials could not undo the Attorney General’s intervening review of the materials.”
TikTok argued that Stein faces no urgency to acquire the requested Zoom videos. The company has “agreed to a tolling agreement.” Such agreements ensure that a lawsuit survives limits set by the statute of limitations.
“To be clear, TTI does not object to producing Zoom recordings that are relevant to the Attorney General’s investigation — it has already produced responsive recordings and will continue to do so,” according to the motion. “TTI has proposed several ways to identify other potentially relevant videos, which the Attorney General rejected.”
“If the Attorney General is permitted to cast a net for every Zoom meeting recorded by any employee of TTI or one of its global affiliates — irrespective of its subject or participants — then the Attorney General could automatically obtain information about every corporate meeting in any authorized investigation, effectively abrogating the Morton Salt ‘relatedness’ requirement in North Carolina,” TikTok argued. “The Court should stay the trial court’s order, preserve the status quo, and allow for an orderly consideration of the important constitutional issues raised by this appeal.”
Stein has been investigating TikTok since March 2022.
“I’m very concerned about the ways in which social media companies may be using their technology to hook our kids without regard for their emotional or mental health,” Stein said in a news release announcing the investigation. “This investigation will shed more light on TikTok’s business practices and how they may harm our children. I will do everything in my power to keep North Carolina’s children safe, whether they’re at school, on the playground, or online.”