First Amendment | Fraser Blog

Five Stories That Matter in Michigan This Week – February 7, 2025

Update: FinCEN – Supreme Court – CTA Injunction

FinCEN has given notice of its appeal in the Smith case: the lawsuit that led to the current nationwide injunction that makes Beneficial Ownership Information (BOI) reporting voluntary under the Corporate Transparency Act (CTA). If the court grants FinCEN’s appeal and lifts the injunction, BOI reporting would again become mandatory.

Why it Matters: In that event, the government has informed the court that FinCEN plans to implement a 30-day filing extension and “assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities.” Read more.

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Michigan Cannabis Grower Wins $32M Verdict in Contract Dispute

A federal court jury awarded Michigan-based Hello Farms $32 million last week after finding that Curaleaf, a large cannabis company, breached its purchase agreement from 2020-2021. The dispute arose when Curaleaf, after purchasing only 2,000 of the contracted 16,000 pounds of cannabis, demanded to renegotiate the agreement due to rapidly falling market prices.

Why it Matters: This case highlights the significant challenges facing Michigan’s cannabis industry as it grapples with volatile market conditions and plummeting prices. Particularly for those operating under long-term purchase agreements, this verdict underscores the importance of carefully considering the various business and legal risks of making significant purchase production commitments in an unstable market environment. It’s crucial to seek out experienced legal counsel in such situations.

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U.S. Supreme Court’s Decision on TikTok

On January 17, 2025, the Supreme Court delivered a landmark decision in TikTok Inc. v. Garland, upholding the constitutionality of the Protecting Americans from Foreign Adversary Controlled Applications Act. TikTok argued that the law infringed upon its First Amendment rights, claiming that it was being unfairly targeted as a foreign adversary-controlled application and that the divestiture requirement placed an unconstitutional burden on free speech. However, the Supreme Court disagreed, ultimately finding that the Act was a content-neutral law that was not in violation of the First Amendment.

Why it Matters: This Supreme Court decision marks a pivotal moment in the ongoing struggle between the protection of technology-based free speech and national security concerns. When or if Congress considers applying the Act’s prohibitions to other social media platforms, how the Court addresses the constitutionality of those future challenges will be crucial to watch. Read more.

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Michigan CRA Issues Product Recall on Vapes Due to MCT Oil

The Michigan Cannabis Regulatory Agency recently released a bulletin on a voluntary product recall on certain vapes that were found to contain Medium Chain Triglyceride (MCT) Oil, which had been banned for use in 2024.

Why it Matters: The products affected are from the brand Platinum Vapes. MCT Oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. The CRA banned the use of MCT Oil starting October 1, 2024.

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Business Education Series: Anatomy of a Data Breach

Data breaches can wreak havoc on your company and almost always lead to litigation. With each new breach, we gain valuable insight into what companies could have done better. Your legal, contractual, and business obligations can sometimes be confusing and in conflict with each other.

Why it Matters: During the March Business Education Series facilitated by Nate Steed and Kelly R. Hollingsworth, this session will examine recent cases and best practices to protect your company from a breach including: lessons learned from recent data breaches; proactive strategies to insulate your business. Learn more.

Related Practice Groups and Professionals

Business & Tax | Robert D. Burgee
Cannabis Law | Sean Gallagher
Intellectual Property | Andrew Martin

U.S. Supreme Court’s Decision on TikTok

On January 17, 2025, the Supreme Court delivered a landmark decision in TikTok Inc. v. Garland, upholding the constitutionality of the Protecting Americans from Foreign Adversary Controlled Applications Act (“The Act”). The Act’s challenged provision prohibits any U.S. company from providing services to “distribute, maintain, or update the social media platform TikTok, unless the platform is severed from Chinese control.” However, the Act also creates an exemption from the Act’s prohibitions if the foreign adversary controlled application, aka TikTok, undergoes a “qualified divestiture.” The President determines when a “qualified divestiture” has taken place by ensuring that the application will “no longer be controlled by a foreign adversary,” specifically in regard to the apps’ operation of the content recommendation algorithm and the apps’ data sharing.

The central issue in TikTok Inc. v. Garland was whether the Act violated the First Amendment. TikTok argued that the law infringed upon its First Amendment rights, claiming that it was being unfairly targeted as a foreign adversary-controlled application and that the divestiture requirement placed an unconstitutional burden on free speech.

However, the Supreme Court disagreed, ultimately finding that the Act was a content-neutral law that was not in violation of the First Amendment. In order to be considered a content-neutral law, the Act needs to advance “important government interests unrelated to the suppression of free speech and … not burden substantially more speech than necessary to further those interests.” As for the “important government interests” the Act was pursuing, the Court highlighted Congress’s content-neutral justification for the Act’s provisions, which was to prevent China from gathering the private data of over 170 million U.S. citizens. Specifically, Congress was trying to address the concern that TikTok’s parent company, ByteDance Ltd., is a company operated from China, which makes it subject to Chinese laws that require the company to “assist or cooperate” with the Chinese government’s “intelligence work” and to ensure that the Chinese Government has “the power to access and control” the company’s private data.

The Court also explained that the Act’s prohibitions are not more burdensome than necessary because the prohibitions are a conditional ban on the app, which will be lifted if a “qualified divestiture” between TikTok and ByteDance, Inc., its parent company, is achieved. This conditional ban is necessary, the Court reasoned, since without the divestiture, the U.S.’s data collection concerns cannot be properly addressed.

As for what happens now, President Trump granted TikTok Inc. a 75 day extension to become in compliance of the Act. Therefore, unless Tik Tok has completed a qualified divesture by the end of Trump’s extension deadline, TikTok users may need to find another place to post and consume their media content.

For U.S. TikTok users, it is important to know a few things moving forward: Some users may wonder, “What rights do I have to the content I have created on TikTok? Can I use my content on other platforms? Can TikTok continue to use my content if I am no longer able to access the site?” First, yes, TikTok content creators on the app do own the content that they make and distribute on TikTok. The content creators also own the copyright to the content they make through the app. Content creators can also have the right to download their content to their personal devices and post their content to other platforms, as long as the users comply with both TikTok’s and the other platform’s user guidelines.

As for the last question, yes, TikTok does have the right to use the content that you posted and uploaded to their app even if you are no longer utilizing the application. Once you have uploaded “User Content” to TikTok, TikTok can, among other things, distribute, transmit, republish your videos worldwide and to other third parties without your consent.

This Supreme Court decision marks a pivotal moment in the ongoing struggle between the protection of technology-based free speech and national security concerns. When or if Congress considers applying the Act’s prohibitions to other social media platforms, how the Court addresses the constitutionality of those future challenges will be crucial to watch.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions. When it matters in Michigan, we are the trusted legal advisors for businesses and individuals.

Andrew G. Martin is an experienced registered patent attorney with history working in the automotive, electrical, and agricultural industries. He regularly advises startups and small businesses on the patent and trademark prosecution process, assisting clients from start to finish. You can reach him at 517.377.0834 or at amartin@fraserlawfirm.com.

Taylor Mikkelson and Jennie Brooks are law clerks at Fraser Trebilcock, both currently 2L at Michigan State University College of Law.

Sixth Circuit Allows Professor to Move Forward with Lawsuit Alleging University’s Preferred-Pronoun Policy Violates his Constitutional Rights

In a recent case with important implications for higher education institutions, the U.S. Court of Appeals for the Sixth Circuit held that a university professor plausibly pled claims that his employer’s enforcement of its policy requiring employees to refer to students by their preferred pronouns violated his constitutional rights under the free speech and free exercise clauses of the First Amendment.

The case, Meriwether v. Hartop, involves plaintiff Meriwether, a professor at defendant Shawnee State University (a public university). Meriwether, a devout Christian, sought a compromise with the university that would involve him using students’ preferred pronouns while placing a disclaimer in his syllabus, “noting that he was doing so under compulsion and setting forth his personal and religious beliefs about gender identity.” This proposed accommodation for Meriwether’s sincerely held religious beliefs was rejected by the university, which argued that the syllabus disclaimer, itself, would violate the policy.

In response to complaints filed by a transgender student of Meriwether, the university’s Title IX office conducted an investigation which concluded that Meriwether’s treatment of the transgender student, including refusing to use the student’s preferred pronoun, created a “hostile environment” violating the university’s non-discrimination policy. The university placed a written warning in Meriwether’s file, and Meriwether then brought suit against the university.

Meriwether argued that the university’s actions violated his rights under both the free speech and free exercise clauses of the First Amendment, and also asserted a due-process and equal-protection claims under the Fourteenth Amendment. His complaint was dismissed by an Ohio federal district court, and he appealed the decision, with the exception of the dismissal of the equal-protection claim, to the Sixth Circuit. The Sixth Circuit panel ruled that Meriwether’s case could proceed under both his free speech and free exercise claims.

With regard to the free speech claim, the Sixth Circuit panel ruled that the First Amendment protects the academic speech of university professors. In reaching this determination, the Sixth Circuit analyzed the U.S. Supreme Court’s decision in Garcetti v. Ceballos, 547 U.S. 410 (2006). In Garcetti, the Supreme Court held that, in normal circumstances, “when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline.” However, the Sixth Circuit held, in a decision consistent with the approach of the Fourth, Fifth, and Ninth Circuits, that the ruling in Garcetti does not apply in the academic context of a public university. Accordingly, the university violated Meriwether’s First Amendment rights.

As to the free exercise claim, the Sixth Circuit concluded that the university’s policy was not applied neutrally to religion as demonstrated by university officials showing hostility toward Meriwether’s religious beliefs and request for religious accommodation. As a result, the Sixth Circuit ruled that the university violated Meriwether’s free exercise rights.

Finally, the Sixth Circuit upheld the district court’s decision to dismiss Meriwether’s due process claim. Meriwether argued that the university’s policy violates due process because it is vague. However, the court found that Meriwether had notice of the policy and understood that it prohibited his conduct.

It is important to note that the Sixth Circuit’s ruling in this case only addressed the university’s motion to dismiss the complaint. Accordingly, for purposes of the appeal, Meriwether’s factual allegations were assumed to be true. He still has to prove his claims. However, the ruling does set important Sixth Circuit precedent affecting Michigan higher education institutions on issues of free speech and free exercise.

For any questions regarding this opinion, and how it may impact higher education institutions, please contact Ryan Kauffman.

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.