Fifth Circuit Stays Preliminary Injunctions Against Texas App Store Accountability Act Pending Appeal

The decision

On June 4, 2026, a panel of the U.S. Court of Appeals for the Fifth Circuit granted Texas’s opposed motion to stay, pending appeal, two preliminary injunctions that had barred enforcement of Senate Bill 2420, the App Store Accountability Act. The ruling is a published per curiam order on a stay motion, not a decision on the merits of the appeals. The panel concluded that Texas had made a strong showing that it is likely to succeed on appeal and had satisfied the remaining stay factors: “We grant the opposed motion because Texas has met its burden under Nken v. Holder.”

Every substantive conclusion in the order is framed as a likelihood. The order does not hold that SB2420 is constitutional, and the consolidated appeals remain pending. A footnote states that the order “supersedes this panel’s order granting an administrative stay.”

Background

According to the order, the Texas Legislature enacted SB2420 “with bipartisan support to help parents direct and supervise children’s downloads of apps and in-app purchases.” The Act, codified at Chapter 121 of the Texas Business & Commerce Code, does so by requiring age verification, parental consent, and age rating and content display.

Two suits challenging the Act were filed in the United States District Court for the Western District of Texas against Ken Paxton in his official capacity as Texas Attorney General. One was brought by Students Engaged in Advancing Texas (SEAT) and two individual plaintiffs identified by initials, each proceeding through a next friend; the other by the Computer & Communications Industry Association (CCIA). The order states that the district court “issued universal preliminary injunctions against SB2420 after applying strict scrutiny.” Among other conclusions described in the order, the district court treated two exceptions in section 121.022 as “coverage definitions” affecting the whole Act, found that the Act did not provide meaningful guidance about determining an app’s age rating, and found the terms “new opportunities to make a purchase” and “material[] changes” in section 121.053(b) unconstitutionally vague.

Texas appealed in both cases. The appeals were consolidated, and Texas moved for a stay pending appeal. The panel entered an administrative stay and then issued the June 4 order.

The court’s reasoning

The order applies the four factors of Nken v. Holder: the applicant’s likelihood of success on the merits, irreparable injury absent a stay, injury to other parties, and the public interest. On the first factor, the panel identified five respects in which the district court likely erred.

Level of scrutiny

First, the panel concluded that the district court likely erred by applying strict scrutiny to significant parts, if not all, of the Act. In the court’s view, SB2420 at most regulates speech proposing a commercial transaction, which is subject to intermediate scrutiny under Central Hudson Gas & Electric Corp. v. Public Service Commission of New York. The court reasoned that app store transactions are commercial in nature because users browse a catalog, obtain information, and download or purchase applications. “App listings propose commercial transactions, regardless of whether any monetary payment is made.” The court described the “payment” for ostensibly free apps as access to user data and private information, and observed that minors who download apps must accept terms of service, including agreements about how their data is used.

In a footnote, the court went further, stating that SB2420 “may not regulate speech at all” because it does not target substantive content but instead “regulates commercial conduct with an incidental relationship to speech.” Under intermediate scrutiny, citing Board of Trustees v. Fox, Texas need only establish a “reasonable fit” between its goal and its restrictions, without satisfying “a least-restrictive-means requirement.”

Intermediate scrutiny

Second, assuming for purposes of argument that the Act regulates commercial speech, the panel concluded Texas had likely shown that it survives intermediate scrutiny. Quoting Free Speech Coalition, Inc. v. Paxton, the court stated the test as whether the Act advances important governmental interests unrelated to suppressing speech without burdening substantially more speech than necessary. It concluded that age verification, parental consent and content ratings likely directly and materially advance Texas’s substantial interest in protecting children’s data, safety and privacy, citing article 1, section 37 of the Texas Constitution, Ginsberg v. New York and Wisconsin v. Yoder.

The court wrote: “That some works protected by the First Amendment may be the object of app downloads or in-app purchases does not categorically exempt them from ordinary regulations governing commercial transactions.” Otherwise, it reasoned, any company could trigger strict scrutiny by incidentally including speech in a transaction. It added: “Creatively repackaging content-neutral commercial regulations as content-specific ones proposes too general a level of analysis.” A footnote acknowledged that the converse may also occur, with litigants exploiting the distinction to obtain more favorable scrutiny.

The two exceptions

Third, the panel concluded the district court likely erred in treating two exceptions to the parental-consent provisions as “coverage definitions.” A footnote notes that both exceptions appear in and apply only to section 121.022 and are not among the definitions in section 121.002. The court stated that “SB2420’s emergency-services exception is not likely content-based but, instead, focuses on why the service is needed, not what is being communicated,” noting that section 121.022(h)(1) limits data collection to information collected in compliance with the Children’s Online Privacy Protection Act and necessary for emergency services, with no account required.

As to the exception for apps provided by nonprofit developers of standardized tests, the court wrote that it “need not conclusively resolve the question” of that exception. It stated that the speaker-based distinction does not necessarily reflect a content preference and that section 121.022(h)(2)(B) mitigates data-privacy concerns. In any event, the court concluded, that exception could be severed under the Act’s severability provision, citing Barr v. American Association of Political Consultants, because the remainder is “capable of functioning independently” and “fully operative as a law.” In a footnote, the court stated: “We do not suggest that there are any problematic provisions of SB2420 and merely follow the law’s unambiguous textual severability command.” The same footnote stated that the district court failed to conduct a proper facial-invalidity analysis under Moody v. NetChoice and United States v. Hansen, and that it was “highly unlikely” the plaintiffs had met that standard. Another footnote stated the district court “improperly inverted its analysis,” citing Free Speech Coalition on underinclusiveness.

Vagueness

“Fourth, SB2420’s terms are likely not unconstitutionally vague.” On age ratings, the court explained that section 121.022(f)(1) refers to ratings and content determined by the developer under section 121.052, so an app store cannot “knowingly misrepresent[]” age rating or content information under section 121.026(a)(2), and a developer is not liable for an incorrect rating if it uses widely adopted industry standards and “applies those standards consistently and in good faith.” The court found the phrase “new opportunities to make a purchase” clear from its plain and ordinary language and its context. It stated that, “in the context of updates needed for informed parental consent, a ‘material[] change[]’ is one that has the capacity to influence whether the parent allows a minor to continue to use an app,” and that courts routinely interpret the term. Citing Ward v. Rock Against Racism and Grayned v. City of Rockford, the court noted that perfect clarity is not required. It added that any of the phrases could be severed.

Scope of the injunctions

Fifth, the panel concluded that the universal injunctions likely “fall[] outside the bounds of a federal court’s equitable authority” in barring enforcement against anyone, citing Trump v. CASA, Inc. The court wrote: “Though we express great skepticism that Plaintiffs are entitled to relief, any such relief, if warranted, would be an injunction limited to enforcement against the Students Engaged in Advancing Texas (“SEAT”) plaintiffs” and identified CCIA members. The order stays the injunctions in full; it does not itself narrow them.

The remaining stay factors

Quoting Veasey v. Abbott, the court stated: “When a statute is enjoined, the State necessarily suffers the irreparable harm of denying the public interest in the enforcement of its laws.” Because the injunctions affect a State, the balance-of-equities and public-interest factors merge under Nken. The court described Texas’s interest in protecting children as substantial, if not compelling. It wrote that “[t]he need to protect children is intensified in the digital world, where app stores have violated existing consumer protection and child privacy laws for years, despite a federal consent decree,” citing an amici curiae brief of the National Center on Sexual Exploitation and The Digital Childhood Institute. It found any burden on app stores and developers minimal because the Act requires only “commercially reasonable” verification methods and permits “widely adopted industry standards” for age ratings, and concluded that the equities and public interest are “clearcut in Texas’s favor.”

Separate opinions

None. An asterisk footnote to the order states: “Judge Haynes concurs in the sentence of the order granting the stay pending appeal.” No separate writing accompanies that notation.

Status

The stay leaves SB2420 enforceable while the consolidated appeals proceed. The order does not set a schedule for the appeals or address further proceedings.

On June 10, 2026, SEAT and its co-plaintiffs filed an emergency application in the Supreme Court of the United States (No. 25A1389) asking that Court to vacate the Fifth Circuit’s stay. SCOTUSblog and Bloomberg Law reported on June 15 that the challengers had asked the Justices to halt enforcement of the law while the appeal proceeds. On June 22, Texas filed a response opposing the applications, docketed as Nos. 25A1389 and 25A1390. As of publication, the applications remained pending.