• by Wendy Davis  @wendyndavis, May 6, 2024

Meta Platforms is urging a federal appellate court to reconsider a recent 2-1 decision allowing Facebook and Instagram advertisers to proceed with a class-action fraud lawsuit over inflated metrics.

In papers filed Friday with the 9th Circuit Court of Appeals, Meta says the panel ruling doesn't “make any sense in a case like this,” given that the class of affected advertisers includes entities ranging from Fortune 500 companies to small businesses to government agencies.

Meta adds that the ruling will make it “virtually impossible” for defendants in other lawsuits to oppose class-action certification.

“The panel’s decision cannot be permitted to stand,” the company writes in a motion seeking a new hearing before 11 of the circuit's 29 judges.

Meta's latest papers come in a battle dating to 2018, when business owner Danielle Singer alleged in a class-action complaint that Facebook induced advertisers to purchase more ads, and pay more for them, by overstating the number of users who might see the ads. (Singer later dropped out of the litigation, and DZ Reserve, which operated an e-commerce store, and Max Martialis, which sold weapons accessories, became the lead plaintiffs.)

DZ Reserve, now out of business, spent around $1 million on Meta advertising campaigns and Max Martialis spent around $379 on Meta ads, according to the court's opinion.

The initial complaint cited a report by the industry organization Video Advertising Bureau, which said in 2017 that Facebook's estimates of audience reach in every U.S. state were higher than the states' populations. The advertisers added in an amended complaint filed in 2020 that Facebook employees were aware of complaints about the potential reach metric since September 2015.

Meta had argued to U.S. District Court Judge James Donato in San Francisco that the case shouldn't proceed as a class-action because the advertisers were too different from each other.

Donato rejected that position and allowed DZ Reserve and Max Martialis to proceed on behalf of all U.S. advertisers who used Facebook's Ad Manager or Power Editor to purchase ads on Facebook or Instagram after August 15, 2014. Had Donato accepted Meta's argument, the advertisers would have had to proceed individually -- which may have been too expensive for many Facebook advertisers.

Meta then appealed to the 9th Circuit, arguing that the class certified by Donato included advertisers that range from “sole proprietors to multinational corporations to governments.”

The company added that it would be impossible “to collectively adjudicate the unique mix of information seen by each advertiser.”

In March, the panel majority rejected Meta's argument, writing that fraud claims are “particularly well suited to class treatment.”

“Where, as in this case, a defendant has uniformly represented that a certain metric means something that it does not, the element of misrepresentation presents a common question,” Circuit Judge Sidney Thomas wrote in an opinion joined by J.Clifford Wallace.

Circuit Judge Danielle Forrest dissented, writing that the issues in the case involve “individualized questions,” including whether every advertiser in the class relied on misrepresentations by the company.

Meta says in its new papers that the critical question for class certification isn't whether it made misrepresentations, but how the alleged misrepresentations affected advertisers.

“If simply identifying the purported fraud were enough to certify a class, then all fraud class actions would be certified,” Meta writes.

The 9th Circuit hasn't yet indicated whether it will consider Meta's request.