Outside lawyers in the Meta privacy case could collect up to $1.27 billion from New Mexico’s $25 billion judgment, according to Reuters’ review of their contract.

The potential payout follows an Oct. 21 ruling against Facebook’s parent company over misleading statements about privacy and other platform practices. Meta plans to appeal, setting up another legal battle over a judgment that state officials say could benefit public education.

The case brings together two consequential questions: how much a state can penalize a technology company for misleading consumers, and how private lawyers should be compensated for pursuing that company on the public’s behalf.

How the potential legal fees would work

Reuters reported that DiCello Levitt’s agreement permits fees of 20% on the first $50 million recovered, 15% on the next $50 million, 10% on the next $150 million and 5% above $250 million. Payment would come from the recovery, subject to judicial approval. The maximum is not guaranteed.

Such arrangements tie compensation to the outcome of litigation. They allow a government to obtain legal services while shifting the risk of an unsuccessful case to outside counsel.

The National Association of Attorneys General’s guide to state litigation describes contingency contracts as an established practice that courts have upheld in multiple jurisdictions. Private attorneys generally receive a percentage of what they recover for the state.

The model also has faced legal challenges. Defendants have argued that private lawyers’ financial interests can conflict with public enforcement responsibilities. The association’s guide documents decisions rejecting those challenges, while identifying government supervision and control as important considerations.

That history provides context for evaluating a large fee. A contingent arrangement compensates lawyers for undertaking a case whose outcome was uncertain. Public oversight addresses how that compensation fits the government’s obligations to the people it represents.

A case that took more than five years to reach judgment

According to DiCello Levitt’s account of the litigation, the firm represented New Mexico from the lawsuit’s filing in January 2021. The legal team also included Albuquerque firm McGinn Montoya Love Curry & Sievers and an attorney from the New Mexico Department of Justice.

The case reached a jury verdict Sept. 25, more than five years after it began. Judge Francis J. Mathew then determined the civil penalty.

DiCello Levitt said the trial brought more than 100 exhibits into the public record, including internal communications, investigative materials and data. The firm described the result as a significant victory for consumer protection.

Those claims come from lawyers who helped win the case. Their account establishes the work’s duration and scope, while the court’s findings provide the basis for assessing what the state proved.

What the Meta privacy case established

The New Mexico Department of Justice said the jury found 43,899,725 violations of the state’s Unfair Practices Act. The lawsuit grew out of the Cambridge Analytica scandal but extended beyond that episode.

The state challenged Facebook’s representations about users’ control over personal information, third-party access to data and its handling of misinformation and hate speech. Its position was that consumers received assurances that did not match the company’s practices.

Attorney General Raúl Torrez framed the result as a warning that large technology companies must answer for misleading consumers.

“New Mexicans deserve honesty, accountability, and the protection of their personal information,” Torrez said in the department’s announcement.

The court’s Oct. 21 judgment described repeated misleading representations over more than 11 years. Mathew found that Facebook continued making assurances after people inside the company identified limits and practices that contradicted them.

One finding concerned Facebook’s announcement that it would end applications’ access to information about users’ friends. The court found that favored business partners retained access through exceptions that Facebook did not disclose to users.

The judge also criticized the company’s response to Cambridge Analytica. Facebook promised a broad investigation into applications and notifications when data had been misused. The court found significant gaps between those commitments and the investigation it conducted.

Why the violation count matters

The nearly 44 million violations do not represent nearly 44 million individual New Mexico residents.

Under the court’s instructions, jurors assessed the expected audiences for misleading statements. Multiple representations could therefore generate violations involving the same population.

Applying $5,000 to each of the 43,899,720 deceptive-practice violations produced roughly $219.5 billion. Mathew reduced the penalty to $25 billion. The jury separately found five willful unconscionable practices.

The method of counting violations is now central to the judgment’s vulnerability on appeal.

In a separate Reuters analysis, Villanova University law professor Peter Ormerod identified potential audience exposure as a weakness. Meta could challenge penalties assessed without proof that particular consumers encountered or relied on the statements.

Penn State Dickinson Law professor Daryl Lim cautioned that the judgment’s size alone would not justify overturning it. State law permits separate penalties for willful violations. Meta also has raised constitutional arguments involving due process and excessive fines.

Meta says the ruling threatens online speech

Meta’s objections extend beyond the calculation.

The company told ABC News it would appeal. Chief Legal Officer C.J. Mahoney argued that New Mexico’s approach would make operating in the state difficult and impose restrictions on online expression.

“At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online,” Mahoney said.

He expressed confidence that Meta would prevail on appeal. During the trial, the company’s lawyers also challenged the state’s evidence as outdated.

The dispute therefore involves competing accounts of what the enforcement action reaches. New Mexico says it proved that Facebook misrepresented its practices. Meta argues that the state’s approach intrudes on decisions involving online speech.

An appeal will give the company an opportunity to challenge the legal basis and financial consequences of the ruling. The trial judgment remains a significant victory for the state, but it does not establish how those challenges will end.

Why public schools have a stake

Torrez told ABC News that money the state receives would go into its education fund. DiCello Levitt similarly identified New Mexico’s current school fund as the beneficiary of recovered civil penalties.

That places the case’s financial outcome in a broader public context. State officials are describing a recovery that could support education, while the company is contesting the judgment that would produce it.

The award also differs from compensation distributed through a private class-action settlement. This case imposed civil penalties payable to the state. It did not establish a claims process through which individual Facebook users could apply for a portion of the judgment.

A new chapter in Facebook’s privacy enforcement history

Facebook has faced substantial privacy penalties before.

In 2019, the Federal Trade Commission announced a $5 billion settlement resolving allegations that the company violated an earlier order by misleading users about control over their personal information.

The agreement included changes to privacy oversight and corporate accountability. The FTC said those requirements were intended to change how Facebook handled privacy decisions throughout the company.

A federal judge subsequently approved that agreement in 2020, as USA Herald previously reported. The New Mexico judgment is five times the amount of that federal penalty, although the cases involve different proceedings and legal claims.

The privacy case is also separate from New Mexico’s litigation over children’s safety on Meta’s platforms. USA Herald covered the March verdict imposing $375 million in that case, which concerned allegations involving young users and harmful platform experiences.

Those distinctions matter as multiple judgments against the same company generate headlines. The cases have different records, claims and consequences.

For the privacy case, the immediate focus shifts to Meta’s promised appeal. New Mexico has secured a major trial-court victory. The next stage will determine how much of that victory survives legal review and ultimately becomes money the state can use.