The Supreme Court has agreed to consider Meta's plea to halt a class action lawsuit by investors stemming from the Cambridge Analytica scandal.
This lawsuit accuses Meta, the company formerly known as Facebook, of not revealing the abuse of user data, which led to a decline in its stock value.
According to The Hill, investors filed a lawsuit claiming that Meta did not adequately inform them about how Facebook users' personal data could be exploited. They allege that Cambridge Analytica, a company that backed former President Trump's 2016 campaign, improperly used this data.
According to the investors, Meta's mishandling of the incident caused a noticeable drop in the company’s stock price. Despite Meta's arguments, a lower court ruling permitted the case to move forward. Now, the Supreme Court will review this decision.
Meta, which has rebranded from Facebook, has already endured substantial financial consequences due to this data breach. The company previously paid a $5.1 billion fine to federal regulators and settled a $725 million privacy case with users.
The Ninth Circuit Court of Appeals determined the lawsuit had merit and allowed it to proceed. Meta is challenging this, claiming that the lower court’s decision was flawed.
Meta contends that the lower court’s understanding of the issues was misguided. It argued that the ruling "reflects a misguided conception of falsity and the nature of risk." Furthermore, Meta claims it contradicts Congress’s attempts to limit private securities lawsuits.
On the other hand, the investors believe that Meta is misrepresenting the case's foundation. According to them, the lawsuit does not conflict with any Supreme Court or circuit court decisions. Investors state that the issues raised by Meta are based on a "mischaracterization of what the Ninth Circuit held." This directly contradicts Meta’s assertions about requiring a Supreme Court review.
The central legal question that the Supreme Court will address is whether the lower court’s allowance of the case aligns with existing legal precedents. Meta insists that continuing the lawsuit sets a dangerous precedent for future cases involving information disclosures and stock prices.
The origins of the Cambridge Analytica scandal have significantly impacted Meta's finances and reputation. This lawsuit adds another layer of complexity to the issues arising from the misuse of Facebook data.
What remains to be seen is whether the Supreme Court will side with Meta's interpretation or uphold the Ninth Circuit Court of Appeals’ decision. The outcome of this reviewing process will have wide-ranging implications for Meta and its investors.
The highest court in the United States will weigh in on Meta's attempt to dismiss a class action lawsuit over the Cambridge Analytica scandal. The lawsuit alleges that Meta's previous failure to disclose the misuse of user information negatively impacted its stock price.
The case continues despite Meta having paid substantial settlements and fines over similar privacy issues. The Supreme Court's interpretation of the Ninth Circuit's ruling could set important legal precedents.
