New Mexico Wants Up to US$40B From Meta. Here’s How the Math Works

A jury in Santa Fe did not give New Mexico a dollar figure. It gave the state a count. On Sept. 25, jurors found that 26 of 29 challenged public statements by Facebook were wilfully deceptive, and they tallied 43.9 million separate violations of New Mexico’s Unfair Practices Act, according to IBTimes UK’s reading of the verdict form. Turning that count into money is now the job of one judge.

The opening bids are far apart. At a hearing on Oct. 1, state special prosecutor Randi McGinn asked Santa Fe County Judge Francis Mathew to order Meta to pay US$35 billion to US$40 billion (CA$48.7 billion to CA$55.6 billion). Meta’s lawyers, in court filings, asked him to cap the penalties at US$3.45 billion (CA$4.8 billion), Reuters reported. The case grows out of the Cambridge Analytica scandal, in which data was harvested from roughly 87 million profiles through a personality quiz.

Step one: multiply

The statute does the first part mechanically. New Mexico allows a civil penalty of up to US$5,000 (CA$6,950) for each wilful violation, Reuters and Courthouse News both report.

The jury’s count is where it gets big. Per Courthouse News, jurors assigned 2.1 million violations to each statement that appeared in major news outlets and about 1.4 million to each made through Meta’s own channels. The verdict form splits it as 11 statements at 2.1 million and 15 at 1,386,648. Multiply by the maximum and you get US$219.5 billion (about CA$305 billion). Reuters rounds the same ceiling to roughly US$215 billion, using a count of “more than 43 million.” IBTimes UK adds a detail Meta will not enjoy: statements attributed to Mark Zuckerberg account for about 24.4 million of the violations, or 55.6 per cent.

Meta saw this coming. Before trial it disclosed to shareholders a potential exposure of US$62.85 billion (CA$87.4 billion), based on what the attorney general had said he would seek.

Step two: cut it down to something constitutional

Nobody, including the state, expects the ceiling. McGinn asked the court to apply the maximum penalty per violation, then use its discretion to reduce the total to between US$35 billion and US$40 billion “in keeping with due process principles and constitutional prohibitions against excessive fines,” the Santa Fe New Mexican reported. Courthouse News and Reuters describe that as roughly a 20 per cent cut-down. The arithmetic is a little looser: a fifth of US$219.5 billion is about US$43.9 billion, so the actual request works out to 16 to 18 per cent.

The legal limit she is steering around is real. The U.S. Supreme Court held in 1998 that a punitive forfeiture violates the Excessive Fines Clause if it is “grossly disproportional to the gravity of a defendant’s offense”. Meta’s lawyer, Matt Nicholson, argued the state’s number violates the company’s Eighth and Fourteenth Amendment rights, Source NM reported. In court he called it “an astronomical penalty that would obviously violate a host of constitutional provisions,” and added: “This case was about 26 statements over 11 years.”

Meta’s other lever is the count itself. Nicholson suggested a lower per-violation fine applied to fewer violations, arguing penalties should cover only actual Facebook users in New Mexico rather than the jury’s per-statement multiplication, the New Mexican reported. He also told the court the state was trying to “run up the score on penalties,” per Source NM.

McGinn’s answer was blunt. “Meta has not learned its lesson, and this court should speak to Meta in the only language that it understands,” she said, per Courthouse News.

What a realistic number looks like

The judge sent mixed signals. Reuters quotes him pushing back on Meta: “Well, when the parties go to trial, they roll the dice. They have to accept the consequences of their decision to go to trial, do they not?” Yet Courthouse News reports that Mathew said he believes due process would call for a much smaller fine than McGinn wants, comparing one state’s ask with the US$17 billion shared among 47 others.

That comparison is the most useful clue in the room. In August, Meta agreed to pay 47 states up to US$17.1 billion (CA$23.8 billion) over child-safety and addiction claims, spread over a decade, with only about 70 per cent guaranteed. New Mexico, Florida and Texas were not part of it. Divide the ceiling evenly and that is about US$364 million per state, which is our arithmetic, not the settlement’s formula.

New Mexico also has its own precedent against Meta. In a separate child-safety case, Judge Bryan Biedscheid ordered US$567 million in August on top of US$375 million from March, for a total of US$942 million. Meta said it would appeal.

Our read: the judge’s own benchmark points well below the state’s request, while his “roll the dice” line suggests he won’t simply accept Meta’s US$3.45 billion floor. Even a figure in the low single-digit billions would dwarf the US$942 million New Mexico has already won from Meta in its child-safety case.

Timing is fuzzy too. Courthouse News says Mathew will rule within two weeks; Source NM heard “two to three weeks”; Reuters says later this month. The New Mexican reports he gave the parties until Tuesday, Oct. 6, to file briefs and planned to have “something” two weeks after that. Whatever he writes will be the first number in this case that a jury didn’t produce by multiplication.