On Friday, the U.S. Supreme Court rejected Facebook’s appeal in a securities lawsuit, suggesting that it should not have taken up the case in the first place. In an unsigned, one-sentence ruling, the court provided no further details, stating that the case was “dismissed as improvidently granted.”
This decision means that Facebook will have to defend itself in a class action lawsuit over allegations it misled investors regarding the Cambridge Analytica data breach. The scandal involved Facebook’s use of data from millions of users without their consent to aid the 2016 presidential campaigns of Ted Cruz and Donald Trump.
Facebook must now defend itself in a class action over misleading investors regarding data breaches
The case revolves around a 2016 securities filing from Facebook, in which the company acknowledged that improper third-party access to its data could harm the business. While the filing framed this as a potential risk, shareholders argue that it misleadingly suggested no such incident had occurred, leading them to suffer losses.
After an appeals court allowed the case to proceed, the Supreme Court agreed to hear the matter in June and held oral arguments earlier this month. During the arguments, the justices appeared divided, posing hypothetical scenarios ranging from meteor strikes to Molotov cocktails, as they questioned both sides of the case.
Meta spokesperson Andy Stone expressed disappointment in the Court’s decision, stating, “The plaintiff’s claims are baseless and we will continue to defend ourselves as this case is considered by the District Court. We are disappointed in the Supreme Court’s decision not to clarify this part of the law.”
This ruling marked the Supreme Court’s first opinion of its current term, which began last month, and came earlier than the first opinions in the past two terms, which were issued in December or January.
It is rare for the Supreme Court to dismiss a case as improvidently granted, though it did so last term in a prominent case about emergency abortions in Idaho, and in a prior term regarding attorney-client privilege.
