The U.S. Supreme Court decided to hear Meta's (META.O) Monday plea to dismiss a private securities fraud case against the social media giant for allegedly deceiving investors in 2017 and 2018 about how it and outside parties were utilizing user data.

The justices heard Facebook's appeal of a lower court's ruling permitting a California shareholder case headed by Amalgamated Bank (AMAL.O) to move forward, opens new tab. The matter will be heard by the court during its upcoming term, which starts in October.
Following media revelations that the British political consulting firm Cambridge Analytica had inappropriately acquired Facebook user data in connection with Donald Trump's successful presidential campaign in 2016, the plaintiffs launched a class action lawsuit in 2018. This was done in response to Facebook's stock plummeting. A hack at Cambridge Analytica revealed the information of up to 87 million users.

The plaintiffs amended their lawsuit in 2018 to add a second stock decline that year on reports that Facebook had shared data with dozens of third parties without the express consent of users. The suit seeks unspecified monetary damages.
The plaintiffs accused Facebook and top company officials of violating the Securities Exchange Act of 1934 by making false and misleading statements in 2017 and 2018, including that user data could be compromised when the company was aware in 2015 that Cambridge Analytica had violated its privacy policies.
U.S. District Judge Edward Davila dismissed the lawsuit by the shareholders in 2021 but the San Francisco-based 9th U.S. Circuit Court of Appeals in a 2-1 ruling restored their claims.
"The problem is that Facebook represented the risk of improper access to or disclosure of Facebook user data as purely hypothetical when that exact risk had already transpired," Judge Margaret McKeown wrote in the 9th Circuit decision.
Facebook urged the justices to take up its appeal, arguing that the 9th Circuit's ruling would "force public companies to inform investors of past incidents that pose no known threat to the business."
The Cambridge Analytica data breach fueled government investigations into Facebook's privacy practices, lawsuits and a U.S. congressional hearing where Meta Chief Executive Mark Zuckerberg was grilled by lawmakers.
Facebook paid more than $5 billion in penalties to U.S. authorities over the Cambridge Analytica scandal and paid $725 million to settle a separate class action lawsuit by Facebook users.