Media Matters Lawsuit: X Corp., FTC Settlement, and State AG Probes

The Media Matters lawsuit is a set of connected legal fights that began on November 20, 2023, when X Corp. sued Media Matters for America in federal court in Texas over a report alleging that ads for major brands were running alongside neo-Nazi and white-nationalist posts on X. What started as one case has grown into parallel proceedings in Ireland and Singapore, a counter-suit by Media Matters in California, investigations by two state attorneys general, and a Federal Trade Commission inquiry. As of 2026, the original Texas case is still active with no trial held, the state AG probes have been blocked or dropped, and the FTC has settled on terms favorable to Media Matters.

What Triggered the Lawsuit

On November 16, 2023, Media Matters published a report documenting that ads from Apple, IBM, Oracle, Comcast’s Bravo network, and NBCUniversal were being displayed next to posts promoting Adolf Hitler, Holocaust denial, and white nationalism.¹ The report contradicted assurances from X’s then-CEO Linda Yaccarino that the platform’s brand-safety tools worked, and it noted that X had reinstated banned extremist accounts and was paying some through its creator revenue-sharing program.

The advertiser response was immediate. IBM suspended all advertising on X the same day. Apple, Disney, Comcast, Warner Bros. Discovery, Lionsgate, Oracle, and the European Union paused or pulled spending in the days that followed.²³ Musk had already said in September 2023 that X’s U.S. advertising revenue was down roughly 60 percent. Four days after the report, X sued.

What X Is Claiming in Texas

X filed suit in the U.S. District Court for the Northern District of Texas against Media Matters, its president Angelo Carusone, and senior investigative reporter Eric Hananoki. The complaint brings three claims: tortious interference with existing contracts, tortious interference with prospective economic advantage, and business disparagement.⁴⁵

X alleges that Media Matters “knowingly and maliciously manufactured” the results by creating accounts that followed only a small number of major brand accounts and fringe extremist accounts, then scrolled and refreshed until ads appeared next to hateful posts. The company describes this as a deliberate manipulation of the algorithm to produce an unrepresentative user experience.⁶ X says the specific ad placements shown in the report occurred for only one viewer: Media Matters itself. Carusone called the suit “frivolous” and said it was intended to “bully X’s critics into silence.”⁷

Media Matters challenged the Texas venue as forum shopping and pushed to move the case to California, where X is headquartered. Judge Reed C. O’Connor denied transfer twice, first in May 2025 and again in September 2025 after the Fifth Circuit vacated a prior rejection and sent the question back.⁸

The Donor-List Fight

The most contested procedural question in Texas has been X’s demand that Media Matters turn over the names, addresses, and financial details of its donors. Media Matters resisted on First Amendment associational grounds and pointed to Musk’s public statement that X would “pursue not just [Media Matters] but anyone funding that organization.”⁹

In September 2024, the district court ruled that Media Matters had waived its First Amendment privilege by failing to search for or log the requested documents over four months, and granted X’s motion to compel. Media Matters appealed. On October 20, 2024, the Fifth Circuit stayed the order. The panel avoided the “novel and far-reaching” constitutional questions and ruled on narrower grounds under Federal Rule of Civil Procedure 26: the requests were not proportional to the needs of the case, and X had not shown why it needed the names and home addresses of “every donor, big or small.”¹⁰ The court said the loss of First Amendment freedoms is irreparable injury and that the public interest favored avoiding a chilling effect on association. The appeal was argued before the Fifth Circuit on February 18, 2025.¹¹

Discovery fights have continued. In April 2026, Judge O’Connor ordered Media Matters to provide X with employee lists and information about its editorial processes.⁸ In May 2025, X asked the court to block Musk’s deposition, arguing he “lacks specific knowledge about the case” and is “one of the busiest men on the planet.” The outcome of that motion has not been publicly confirmed.

The State Attorney General Investigations

Within days of X’s suit, two Republican state attorneys general opened investigations. Texas Attorney General Ken Paxton said he was “extremely troubled” by the manipulation allegations and issued a civil investigative demand under the Texas Deceptive Trade Practices Act.⁶ Missouri Attorney General Andrew Bailey opened a parallel inquiry and sued in March 2024 to compel Media Matters’ compliance.¹²

Media Matters challenged both in federal court in Washington, D.C. In April 2024, U.S. District Judge Amit Mehta issued a preliminary injunction blocking Paxton, finding a First Amendment retaliation claim likely to succeed.¹³ The D.C. Circuit affirmed on May 30, 2025.¹⁴ In August 2024, Judge Mehta granted a preliminary injunction against Bailey, finding that Bailey’s public statements were “direct evidence of retaliatory intent” and that the investigation was politically motivated retaliation that chilled protected speech. He wrote that “the most heinous act in which a democratic government can engage is to use its law enforcement machinery for political ends” and that “apparently is what has occurred here.”¹⁵ Bailey dropped his investigation in February 2025, telling the court his office had “not uncovered any evidence that Media Matters violated Missouri law.”¹⁶

The International Suits and California Counter-Suit

X did not stop with Texas. It filed defamation actions against Media Matters in Ireland and started proceedings in Singapore. In March 2025, Media Matters sued X and its foreign subsidiaries in the U.S. District Court for the Northern District of California, alleging breach of contract on the theory that X’s own terms of service required disputes to be filed “solely in the federal or state courts located in San Francisco County, California.” Media Matters called the global effort “a vendetta-driven campaign of libel tourism” and “a worldwide campaign of intimidation.”¹⁷

In April 2025, U.S. District Judge Vince Chhabria in San Francisco issued a preliminary injunction ordering X not to pursue the Ireland case or a threatened U.K. action. He did not enjoin the Singapore case, which was already well advanced.¹⁸ In July 2025, Judge Chhabria denied X’s attempt to use California’s anti-SLAPP statute to strike the claims, finding that petitioning activity in a foreign country is not protected under the statute. He called X’s argument that the foreign suits sought separate economic recovery “dubious” and said the suits were likely brought “to bully Media Matters.”¹⁹

The Ninth Circuit reversed on December 19, 2025. A three-judge panel vacated the anti-suit injunction, holding that Media Matters had waived its right to enforce the forum selection clause by actively litigating the Ireland case for over a year without raising it. The court found X had suffered prejudice because the parties had already submitted hundreds of pages of evidence in Ireland. With the Ireland injunction gone, the broader injunction covering other foreign jurisdictions was also lifted.²⁰²¹

Media Matters has said the cost of defending against these suits has run to millions and forced the layoff of more than a dozen employees. The organization reported over $9 million in legal fees for the fiscal year ending December 31, 2024, tied to the X litigation.²²

The FTC Investigation and Settlement

On May 20, 2025, the Federal Trade Commission issued a civil investigative demand to Media Matters as part of an inquiry into whether advocacy groups and ad agencies had colluded to withhold advertising from certain platforms under the label of “brand safety.” The demand sought documents back to January 2019, including materials from the X litigation, editorial methodologies, and all financial statements.²³

Media Matters sued the FTC on June 23, 2025, alleging First Amendment retaliation. On August 15, 2025, Judge Sparkle L. Sooknanan granted a preliminary injunction blocking the demand. She called it a “sweeping and sensitive” “fishing expedition” with a pretextual rationale, citing hostile public statements from FTC Chairman Andrew Ferguson and senior staff, including calling Media Matters “scum of the earth,” and the timing of the demand after Musk’s unsuccessful litigation efforts. Sworn declarations showed Media Matters had refrained from pursuing stories about the FTC, Ferguson, and Musk because of the investigation.²⁴ The judge wrote that “it should alarm all Americans when the Government retaliates against individuals or organizations for engaging in constitutionally protected public debate.”²⁵

The FTC appealed and then settled. On May 5, 2026, the case was dismissed on terms favorable to Media Matters: the FTC withdrew its demand, stated in writing that Media Matters is not the target of any investigation, and agreed never to reissue a “substantially similar” demand. Any future litigation involving the organization would be filed in the District of Columbia. Each side bore its own costs.²⁵²⁶

Where Things Stand

The original Texas case remains open. The most recent docket activity in the available record was dated March 2026, and discovery disputes over employee lists and editorial processes were ongoing.⁸ No trial has taken place, despite a scheduling order that originally targeted January 2025. The Fifth Circuit’s donor-list appeal was argued in February 2025 but has no published outcome in the available research. The California counter-suit was remanded by the Ninth Circuit for further proceedings after the anti-suit injunction was vacated in December 2025, and the district court may consider whether a narrower injunction is warranted.²¹ The Irish defamation case is now free to proceed. The FTC investigation is over. The Texas and Missouri state investigations have both been blocked or abandoned. Media Matters has reported over $9 million in legal fees in a single year and more than a dozen layoffs, alongside $21 million in total contributions for fiscal year 2024.²²

1
Media Matters. Musk Endorses Antisemitic Conspiracy Theory, X Has Been Placing Ads for Apple, Bravo, IBM, Oracle
2
Axios. Twitter X Boycott: Apple, IBM Advertisers
3
DW. Apple, Disney, IBM Pull Ads From X Over Antisemitic Material
4
Fifth Circuit Court of Appeals. X Corp. v. Media Matters, Response to Motion to Dismiss
5
Courthouse News Service. Elon Musk’s X Sues Media Matters Over Reporting on Ad Placements
6
The Guardian. X Twitter Lawsuit: Media Matters Nazism Ads
7
NBC News. X Sues Media Matters Over Report on Ads Appearing Near Nazi Posts
8
Law360. X Corp. v. Media Matters for America Case Articles
9
Fifth Circuit Court of Appeals. X Corp. v. Media Matters for America, No. 24-10900
10
Justia. X Corp. v. Media Matters, No. 24-10900
11
Knight First Amendment Institute. X Corp. v. Media Matters
12
Missouri Attorney General. Attorney General Bailey Files Suit Against Media Matters
13
FindLaw. Media Matters v. Paxton
14
Regulatory Oversight. Court of Appeals Blocks Texas AG From Enforcing Pre-Litigation Subpoena
15
Media Matters. Media Matters Statement on Winning Injunction Against Missouri AG Andrew Bailey
16
MediaPost. Missouri AG Drops Investigation of Media Matters
17
NPR. Media Matters Elon Musk New Lawsuit
18
Courthouse News Service. X Fights Block on International Defamation Cases at Ninth Circuit
19
Courthouse News Service. Media Matters v. X Corp., Order on Motion to Strike
20
Justia. Media Matters for America v. X Corp., No. 25-2463
21
Courthouse News Service. Ninth Circuit Lets X Pursue International Defamation Cases Against Media Matters
22
CharityWatch Blog. Media Matters vs. X Lawsuit: What the Legal Battle Means for Watchdogs and Donor Privacy
23
Federal Trade Commission. Media Matters, Order Denying Petition to Quash
24
Columbia Global Freedom of Expression. Media Matters for America v. Federal Trade Commission
25
Deadline. Media Matters FTC Settlement
26
Law360. FTC Swears Off Media Matters Boycott Probe Forever