New Mexico Cuts $219 Billion Meta Claim to $25 Billion

A New Mexico judge has ordered Meta to pay $25 billion, a figure the state's attorneys argued for and the court reduced from a potential $219 billion. The penalty, imposed by Judge Francis Mathew, stems from claims that the company violated the Unfair Practices Act by misrepresenting how it handled user data. New Mexico's legal team had asked for between $35 billion and $45 billion in the case.

The state filed the lawsuit in 2021, tracing the dispute to the Cambridge Analytica scandal. Attorneys later introduced claims about content moderation. A jury sided with New Mexico in September, and the penalty calculation followed, based on $5,000 for each of 43 million violations. Meta is valued at approximately $1.7 trillion, putting the fine at under 1.5% of its market worth.

Meta plans to appeal. C.J. Mahoney, the company's chief legal officer, said the enforcement approach makes it "all but impossible to do business in the state of New Mexico" and described the suit as an attempt to "impose a tax on speech." He said the company is "confident we will prevail on appeal." Meta's shares declined Thursday amid its earnings report, heavy AI spending, and a drop in AI stocks.

This order is one of several financial hits. Earlier this year, a New Mexico jury assigned $375 million for violations tied to child safety, with a second phase producing a $567 million order. In August, Meta settled a federal case brought by most US states over features alleged to harm children, agreeing to pay between $17 billion and $18 billion over 10 years. A Los Angeles County superior court also found Meta and Google-owned YouTube liable for harming a young woman's mental health through app design, awarding her $6 million, mostly paid by Meta.

Corban Rhodes, a partner at DiCello Levitt representing New Mexico, said trials that go to verdict place evidence before the public for future cases. The New Mexico trial entered more than 100 exhibits into the public record, material Rhodes said had been kept secret for over a decade. One is a 2018 email from then-COO Sheryl Sandberg, written days after the Cambridge Analytica news broke, in which she noted "there were a MILLION developers with access to the data." Brian Quinn, a Boston College law professor, said indemnification law protects executives who act in good faith, but shareholders might demand the company stop covering directors who repeatedly appear in the same set of facts.

A Delaware judge ruled in March that insurers have no duty to defend Meta against the thousands of lawsuits it faces. Rhodes expects the next wave of litigation to center on AI.