Justices dismiss Facebook-Cambridge Analytica data breach dispute

This morning the justices dismissed Facebook v. Amalgamated Bank as improvidently granted that is, without issuing a ruling on the merits, and instead signaling that it was a mistake to grant review. The brief unsigned order leaves in place a ruling by the U.S. Court of Appeals for the 9th Circuit that allowed a securities fraud class action against Meta to go forward on the theory that Facebooks disclosures improperly downplayed the risks of a data breach to shareholders. The company had disclosed the risk of hypothetical future data breaches, which shareholders argue violated securities law because Cambridge Analytica had already exploited the data of millions of users. When Cambridges misuse of user data later became widely known, Facebooks stock price fell dramatically.

At the oral argument, even the more conservative justices seemed skeptical of Facebooks arguments, so its failure to persuade a majority to rein in the lower court is not surprising. At this point, the case will return to the lower courts, where the action will proceed against Meta.

[Disclosure: Tom Goldstein, the publisher of SCOTUSblog, argued on behalf of the investors in the court of appeals but was not involved in the Supreme Court proceedings in the case.]