US District Judge John Cronan in Manhattan rejected X's argument that the Stop Hiding Hate Act violated the US 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.
The judge said requiring X to report "purely factual and uncontroversial information" about its content moderation policies was reasonably related to New York's interest in letting people make informed choices about using social media.
"Businesses always exercise their discretion, judgment, and opinions when deciding what goods or services to offer," Cronan wrote.
"Burger King chooses to generally offer higher-calorie items than, say, Sweetgreen, but the disclosure of calorie information remains purely factual. So too here."
The dismissal is with prejudice, meaning X cannot amend its complaint.
X, formerly Twitter, is part of Musk's rocket and satellite company SpaceX. Neither lawyers for X nor SpaceX immediately responded to requests for comment.
The office of New York Attorney General Letitia James defended the law. It did not immediately respond to similar requests for comment.
Signed in December 2024 by Governor Kathy Hochul, the New York law required social media companies with at least $US100 million of annual revenue to disclose how they eliminate hate on their platforms, and report their progress.
Civil fines can reach $US15,000 per violation per day. The law was written with help from the Anti-Defamation League.
In seeking a dismissal, James said the law helped consumers understand what to expect from social media, without blocking platforms from speaking out or exercising judgment when moderating content.
Musk scrapped Twitter's content moderation policy after he bought that company in 2022. The world's richest person has described himself as a free speech absolutist.
