The Supreme Court will consider a request by Meta to shut down a class action lawsuit against the company filed by investors relating to the Cambridge Analytica data privacy scandal, the court said Monday.
The lawsuit centers on allegations from investors that the Facebook parent company failed to disclose how Facebook users’ personal information would be misused by the firm Cambridge Analytica, which supported former President Trump’s 2016 presidential campaign.
The investors argue that Meta’s handling of the scandal led to price drops in the company price.
The highest court will review a lower court’s ruling that allowed the case to go forward.
Separate from the case, Meta has already paid a $5.1 billion fine to federal regulators and reached a $725 million privacy settlement with users based on the same Cambridge Analytica data breach.
The 9th Circuit Court of Appeals allowed the case to move forward, but in Meta’s bid for the Supreme Court’s review the company argued the lower court’s “rule reflects a misguided conception of falsity and the nature of risk, and it flies in the face of Congress’s efforts to rein in private securities lawsuits.”
The investors, however, in response to Meta’s bid argued that the case does not warrant a review because it is “founded on a mischaracterization of what the Ninth Circuit held” and because it “does not conflict with any decision” of the Supreme Court or any circuit.
The fate of the review could impact the rules around corporate disclosures.
