Supreme Court Says Meta Must Face Multibillion-Dollar Fraud Lawsuit

The US Supreme Court has allowed a multibillion-dollar class action investor fraud lawsuit against Facebook parent Meta Platforms to proceed, after dismissing the company’s appeal to a lower court’s decision.

The Supreme Court on 6 November heard arguments in the case, which involves the privacy scandal in which Cambridge Analytica accessed Facebook user data.

On Friday the court dismissed the case, determining that it should not have been taken up in the first place.

The action leaves in place a lower court’s decision to allow the 2018 class action, led by Amalgamated Bank, to go ahead.

Data scandal

The decision was issued in a one-line order that was not accompanied by an explanation.

Meta said it was disappointed by the court’s “decision not to clarify this part of the law”.

“The plaintiff’s claims are baseless and we will continue to defend ourselves as this case is considered by the District Court,” the company said in a statement.

Cambridge Analytica, a firm linked to Donald Trump strategist Steve Bannon, paid a Facebook app developer for access to personal information on 87 million Facebook users and used the data to target US voters during the 2016 campaign.

Investors allege Meta did not fully disclose the risks of such data misuse, leading to two significant price drops in 2018 when the scandal became public.

Legal accountability

The case was dismissed by US District Judge Edward Davila, but the San Francisco-based 9th US Circuit Court of Appeals allowed it to go ahead, leading to Facebook’s Supreme Court appeal.

Meta has paid a $5.1 billion (£4bn) fine and reached a $725m privacy settlement with users over the matter.

The court this month is also considering a case involving Nvidia that similarly concerns the right of private litigants to hold companies to account for allegations of securities fraud.

Arguments in the Nvidia case were heard on 13 November and a decision has not yet been issued.