Attorneys for Meta argued in March that the vice chancellor should toss or pause a derivative suit in Delaware by the Employees’ Retirement System of the State of Rhode Island, two funds of Kiwi Investment Management, and Cleveland Bakers and Teamsters Pension Fund.
The four funds’ March 2023 suit accused the company’s leadership and board of allowing “rampant and systemic” sex trafficking, human trafficking, and child exploitation to flourish on Facebook and Instagram. According to the company, those sued failed to take the necessary steps to root out the “predatory criminal activity” thriving on the social media platform.
“This court ‘routinely stays caremark claims that seek to shift losses from the corporation to the defendant fiduciaries’ when the losses are tied to underlying litigation,” Vice Chancellor Laster said.
As a condition of the stay, the vice chancellor ordered Meta to provide an update on the Texas and California cases every 90 days and when any “significant” case development or change occurs, including dismissal of claims or cases.
