U.S. District Judge John Cronan in Manhattan rejected X's argument that the Stop Hiding Hate Act violated the U.S. Constitution's First Amendment by exposing it to lawsuits and big fines unless it disclosed "highly sensitive and controversial speech" that the state found objectionable.

Additionally, Cronan dismissed the case with prejudice, prohibiting X from refiling an updated claim on the same issue.

New York Attorney General Letitia James formally filed for the case to be dismissed in November 2025, saying the law helped consumers understand what to expect from social media, without blocking platforms from ‌speaking out or exercising their own judgment when moderating content.

Most notably, X Corp. pointed to a separate lawsuit it brought against California's Assembly Bill 587, which it argued was "identical in all material respects" to S895B.

The Ninth U.S. Circuit Court of Appeals, which oversees California, held that AB 587's content-category reporting provisions compelled non-commercial speech about contested political topics, which triggered strict scrutiny of the law under the First Amendment.

However, Cronan wrote that "[t]he First Amendment poses no obstacle to New York's law."

He added:

"Businesses might not always want to share every detail about the products or services they offer. But when the government requires those businesses to speak truthfully about their offerings, the First Amendment typically allows for that kind of disclosure requirement."

Musk's company also said it already dedicates resources to regulating "hateful conduct" and that this would not be recognized under New York's categories of "hate speech," "racism," or "extremism." It also listed its efforts to regulate what it calls "manipulated, or out-of-context media that may result in widespread confusion on public issues, impact public safety, or cause serious harm," but that would not be recognized by the New York law.

Nevertheless, the law was struck down on First Amendment grounds.

In this case, Cronan dismissed the California case (X Corp vs Bonta) stating that the level of scrutiny applicable was "Zauderer scrutiny," which is "more relaxed than ordinary intermediate or strict scrutiny."