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The U.S. Supreme Court on Monday agreed to hear Meta Platforms' petition concerning the Ninth Circuit's decision to partially revive investors' claims related to the Cambridge Analytica data abuse scandal. Meta argued that the appellate panel adopted "extreme outlier positions."

Meta Shareholders Disclosure Suit Review: Petition for Review

In its March petition for a writ of certiorari, Meta Platforms Inc. contended that the Ninth Circuit's decision to partially revive the securities class action over the political consulting firm's data abuse scandal — previously dismissed three times by the district court — exacerbated divisions between circuits, particularly regarding what public companies must disclose in risk-disclosure statements.

Meta Shareholders Disclosure Suit Review: The Lawsuit's Origin

The lawsuit centers on a 13% share price drop, amounting to approximately $50 billion in Facebook's market value at the time. This decline followed revelations in March 2018 that Cambridge Analytica, which had connections to former President Donald Trump's 2016 presidential campaign, misused the data of up to 87 million unwitting Facebook users. The scandal precipitated a Federal Trade Commission investigation, culminating in Facebook agreeing to a $5 billion fine and the establishment of a board-level committee to oversee its future privacy efforts. Facebook has since been renamed Meta.

Legal Representation

Meta and its executives are represented by Joshua S. Lipshutz, Katherine Moran Meeks, Trenton Van Oss, Brian M. Lutz, Michael J. Kahn, and Raena Ferrer Calubaquib of Gibson Dunn & Crutcher LLP. The shareholders are represented by Kevin K. Russell of Goldstein Russell & Woofter LLC, alongside attorneys from Bernstein Litowitz Berger & Grossmann LLP and Robbins Geller Rudman & Dowd LLP.

Meta Shareholders Disclosure Suit Review : Pending Comments

Counsel for Meta and the shareholders did not immediately respond to requests for comment on Monday.

Implications of the Hearing

This Meta shareholders disclosure suit hearing by the Supreme Court could have significant implications for how public companies handle risk-disclosure statements and manage shareholder expectations. The outcome may set a precedent for future securities class actions, particularly those involving substantial data breaches and their impact on market value.