Meta ordered to pay NM $25 billion — and that’s only half the story

Meta just got slapped with an almost incomprehensible $25 billion judgment in New Mexico — and now comes another jaw-dropping number: the private attorneys who helped the state take on the Facebook parent company could potentially collect as much as $1.27 billion if the blockbuster award survives.

Yes, billion with a “B.”

The extraordinary legal battle exploded into the national spotlight after a New Mexico judge ordered Meta Platforms to pay $25 billion following a jury’s finding that the company misled Facebook users about privacy, access to their personal information, and other representations surrounding its platform.

The case traces back to the Cambridge Analytica scandal, in which the now-defunct political consulting company obtained information connected to tens of millions of Facebook users without their consent and used data for political profiling and targeting.

A New Mexico jury found in September that 26 of 29 statements examined in the case were misleading and calculated more than 43 million violations of the state’s consumer-protection law.

And the $25 billion figure could have been far worse.

District Judge Francis Mathew concluded that application of the state statute could support penalties exceeding a staggering $219 billion before ultimately cutting the judgment to $25 billion.

“Facebook’s wrongdoing — over the course of years and systematically broadcast to the public — goes to the heart of Facebook’s core business practices,” Mathew wrote in the order, according to Reuters.

Meta: New Mexico makes it ‘all but impossible to do business’

Meta is hardly surrendering.

The technology giant has vowed to appeal both the verdict and the mammoth financial judgment, setting up what could become a years-long courtroom war.

Meta Chief Legal Officer C.J. Mahoney blasted the decision, saying the state’s approach makes it “all but impossible to do business in the state of New Mexico.”

Meta has argued that New Mexico failed to establish that every consumer counted in the state’s enormous violation calculation actually saw or relied upon the disputed statements.

That issue could become crucial on appeal.

Legal experts interviewed by Reuters said Meta has substantial arguments for getting the award dramatically reduced, including challenges to how New Mexico calculated tens of millions of individual violations and constitutional arguments over excessive penalties.

In other words, New Mexico may have a $25 billion judgment on paper today — but the state is nowhere near depositing a $25 billion check.

Then came the BILLION-DOLLAR lawyer revelation

Just two days after news of the judgment rocked the technology world, another stunning detail emerged.

Reuters obtained New Mexico’s contract with Chicago-based private law firm DiCello Levitt — and the contingency agreement could allow the outside lawyers to seek up to $1.27 billion if the full $25 billion ultimately reaches state coffers.

Under the contract, the firm may seek a sliding percentage of the state’s recovery: 20% of the first $50 million, 15% of the next $50 million, 10% of the following $150 million, and 5% of amounts recovered above $250 million.

Run that formula against a full $25 billion recovery, and the potential legal fee reaches roughly $1.27 billion.

The money would come out of New Mexico’s recovery — not as an additional charge paid on top of Meta’s judgment.

And that eye-popping payday is far from guaranteed.

A judge would still have to approve the attorneys’ fees, Meta could prevail on appeal, and appellate courts could slash the underlying judgment.

‘We won’t see any of that money unless we win’

Albuquerque attorney Randi McGinn, whose firm worked with DiCello Levitt and played a prominent role at trial, acknowledged that reality.

“People will say it’s a lot of money,” McGinn told Reuters. “But the truth is, we won’t see any of that money unless we win an appeal.”

McGinn said her firm is entitled to roughly one-third of the fees it earned under its arrangement with DiCello Levitt.

DiCello Levitt declined to discuss its potential fee with Reuters, although attorney Corban Rhodes called the judgment a major moment for consumer privacy enforcement.

Contingency arrangements allow governments to hire outside lawyers without paying their standard hourly rates upfront. Instead, private firms assume the risk of litigation in exchange for a portion of any eventual recovery.

Supporters say the practice gives smaller state legal offices the firepower necessary to take on corporations with enormous legal teams.

Critics argue the arrangement can create questions about whether lawyers with a direct financial stake in enormous penalties have interests that perfectly align with the public.

Fordham University law professor Howard Erichson told Reuters that billion-dollar contingency fees are exceptionally unusual and said the sheer size of the possible award would likely draw careful judicial scrutiny.

New Mexico AG celebrates Big Tech takedown

Attorney General Raúl Torrez portrayed the ruling as a warning shot to technology companies.

“It has been a long time coming holding Big Tech accountable,” Torrez said after the ruling.

Torrez said the judgment signaled that New Mexico intends to aggressively protect consumers and their personal information.

The Meta case began in 2021 amid the fallout from revelations that Cambridge Analytica had harvested information associated with as many as 87 million Facebook users.

New Mexico alleged that Meta misrepresented who could gain access to Facebook users’ information and how the company handled harmful material on its platform.

Meta has denied wrongdoing and argued in court that it does not sell users’ personal data.

The $25 billion order dwarfs even the $5 billion penalty the Federal Trade Commission imposed on Facebook in 2019 over privacy issues stemming from the Cambridge Analytica scandal.

It also follows other major courtroom losses for Meta in New Mexico this year, including verdicts totaling hundreds of millions of dollars in litigation involving allegations about youth safety and sexual exploitation on the company’s platforms. Meta has contested those claims as well.

$25 billion today — maybe far less tomorrow

For now, the headline numbers are staggering:

$25 billion against Meta.

More than 43 million alleged consumer-law violations.

A theoretical statutory penalty topping $219 billion.

And potentially $1.27 billion for the private attorneys who helped New Mexico secure the judgment.

But one enormous question hangs over all of it: How much money will actually survive the appeals process?

Meta has made clear it intends to fight.

Legal experts say it has meaningful grounds to challenge the award.

And even McGinn cautioned that the litigation could drag on for years before anyone sees the money.

So New Mexico may currently be sitting on one of the biggest corporate judgments in American history.

Whether it ultimately becomes one of the biggest corporate payouts is an entirely different question.