A $25 Billion Verdict Against Meta Has States Second-Guessing Their Settlements

A New Mexico judge just handed Meta a $25 billion bill, and it's making a lot of state attorneys general wonder if they settled too cheap.

The order, issued last week, resolves claims that Meta misled users about how it protected their data and moderated misinformation and hate speech in the wake of the 2018 Cambridge Analytica scandal, according to The Verge. A jury found Meta had committed millions of violations of New Mexico's unfair practices law. The number dwarfs the $17 billion multistate settlement that attorneys general across the country announced with Meta this summer, a figure that was itself described as unprecedented at the time. It also towers over the roughly $459 million payment Meta agreed to in a related section of that same settlement, the part specifically covering the Cambridge Analytica-style claims most states chose to resolve rather than litigate.

Meta isn't rolling over. Chief legal officer C.J. Mahoney said in a statement that the company is "confident we will prevail on appeal" and characterized New Mexico's lawsuit as an attempt to impose "a tax on speech." Whether the $25 billion figure survives that appeal matters enormously for what happens next, because the ruling has already changed the calculus for everyone still deciding whether to fight Meta or cut a deal.

Pennies on the dollar

For the states that already settled, the comparison stings. "For the settling AGs, they're going to look at this and maybe experience some regret for all the claims that they waived, and start looking around and trying to figure out what's left that they didn't waive, if they can try to get some money like this too," says Daphne Keller, director of platform regulation at the Stanford Program in Law, Science & Technology, per The Verge. She's blunter about the math: "Assuming that even a fraction of this award gets upheld, then they clearly took pennies on the dollar compared to New Mexico."

That doesn't mean the settlement was a bad trade on its own terms. States that signed on got certainty and a faster payout, even though Meta is spreading the $459 million over 10 years. They also locked in product commitments, like restrictions on teen usage, that a court win might never have produced. And those changes could take effect quickly after approval, which child-safety advocates see as critical for limiting ongoing harm. It's also worth remembering that different states are working with different laws and different evidence, so a New Mexico-style outcome wasn't necessarily on the table everywhere.

Still, Keller says the New Mexico result, paired with a separate nearly $1 billion judgment against Meta in the same state, is likely to stiffen the spine of anyone with live privacy or kids-safety claims against the company. Putting herself in the shoes of an attorney general with similar claims on the table, she says: "I become less willing to settle in those cases. Or if I do settle, I ask for more."

The holdouts feel vindicated

Not every state joined the summer settlement in the first place. Florida did not, and its attorney general, James Uthmeier, treated the New Mexico verdict as proof he made the right call. "As I said at the time, the multi-state settlement with Meta was a slap on the wrist," he wrote on X, according to The Verge. "Florida isn't going to sell out to Meta. We're going to hold them accountable."

The District of Columbia is in a similar position. It never resolved its Cambridge Analytica-related claims and is still pursuing them in court, making it the most likely next test of whether New Mexico's result can be repeated elsewhere.

Even the attorneys general who did settle aren't fully boxed in. They can't reopen the claims Meta already resolved with them, but nothing stops them from pushing harder against other platforms facing similar accusations, including TikTok, YouTube, and Snap. Meanwhile, the settlement didn't cover everyone with a stake in these fights. School districts, tribes, and individual plaintiffs with outstanding lawsuits against Meta were never part of it, and Keller says the New Mexico number gives them real reason to keep fighting rather than look for a quick settlement of their own. "This is very encouraging and will make them hopeful that continuing to litigate aggressively will lead to a big payout," she says.

That said, nobody expects every case to land a $25 billion jackpot. "Realistically, there's so many cases, it's not feasible that every single case can have an outcome like this," Keller says. "Meta actually would go broke because the multipliers are so large. But any one, or 10, or 50 of them could hit the jackpot."

Fifty states, fifty strategies

Part of what makes this moment messy is that there's no single playbook. With Congress stalled on major tech legislation and the Trump administration generally favoring a lighter regulatory touch, states have increasingly taken tech policy and antitrust fights into their own hands. Colorado Law associate professor Blake Reid calls it a broader "move toward state-level tech policy," per The Verge.

But that decentralization cuts both ways. "The trick of that is, now you have 50 states that all have different sets of resources, and different sets of politics, and different sets of incentives, and frankly just different skill levels in terms of the sophistication that it takes to do litigation at this scale," Reid says. "And it's the same Meta, but now it's up to 50 small opponents that are going to break in different ways."

Reid is skeptical that every attorney general will want to roll the dice the way New Mexico did, especially with the appeal still pending and no guarantee the $25 billion holds up. "Is that a game that every state attorney general wants to play?" he asks. "And I think the settlement in the other case suggests maybe not." Litigation at this scale is expensive, slow, and unpredictable in a way that a negotiated settlement simply isn't.

Even so, Reid thinks the ruling will shift expectations. Attorneys general now have a concrete number to point to when they talk about what a courtroom win against a platform like Meta could actually be worth. And if Meta or other tech companies keep losing cases like this one, the appetite among regulators and plaintiffs to swing for bigger outcomes is only likely to grow.

What happens next largely rides on the appeal. If New Mexico's $25 billion order gets gutted or reversed, the settling states will look like they made the prudent call. If it survives, even partially, it becomes the new reference point for every attorney general, school district, and private plaintiff deciding whether a quick settlement is worth more than their day in court.