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Regardless of the subsequent lifting of the order, it still illustrates that the government cannot make private parties carry out illegal acts on its behalf. If anything, the fact that the circuit's decision was later overturned shows that the courts are erring on the side of restraining the government when they try to make third parties carry out actions that the government cannot do legally.
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It's simply bizarre to claim that a blatantly partisan circuit court issuing capricious restrictions on their political opposition and having them vacated by SCOTUS is evidence of "the courts" erring to the contrary. The decision was overturned because the plaintiffs' case was a baseless fiction that the Biden administration was ever compelling those third parties to do anything, when in fact they simply used the same reporting mechanisms to alert the sites' operators of ToS violations as are available to any other user. The only example that case serves is of the most Republican-aligned circuit court consistently delivering garbage opinions to attack their party's opposition.
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