• by Wendy Davis  @wendyndavis, November 5, 2024

The Chamber of Commerce and other business groups are backing Meta Platforms' request that the Supreme Court review a lower court decision allowing advertisers to proceed with a class-action fraud lawsuit over inflated metrics.

That ruling, issued in March by the 9th Circuit Court of Appeals, “will harm American businesses and the national economy,” the Chamber of Commerce, Computer & Communications Industry Association and Software & Information Industry Association say in a friend-of-the-court brief filed Monday with the Supreme Court.

The groups add that the 9th Circuit's ruling “will make it too easy to certify nationwide consumer-fraud classes.”

“This overly permissive approach to class certification will impose massive costs on defendant businesses -- costs that these businesses will need to pass along to consumers, employees, and the rest of the business community,” the organizations write.

The organizations are weighing in on 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 inflating 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.)

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

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

Donato sided against Meta and certified a class of at least 3 million U.S. advertisers who purchased ads through the company's Ad Manager since mid-August 2014.

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

The company said it wouldn't be possible “to collectively adjudicate the unique mix of information seen by each advertiser.”

In March, a three-judge panel of the 9th Circuit rejected Meta's argument 2-1.

“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.

Last month, Meta asked the Supreme Court to intervene. The company argued in a petition for review that questions about how its potential reach estimates affected advertisers require individualized analysis. 

Meta added that its advertisers range from “sole proprietors to Fortune 500 companies,” and that many make decisions based on factors other than potential reach -- such as whether people who say the ads clicked on them.

The Chamber of Commerce and other groups make a similar argument in their friend-of-the-court brief, writing that questions about whether Meta's advertisers relied on the erroneous metrics can only be answered on an advertiser-by-advertiser basis.

The Supreme Court hasn't said when it will consider Meta's petition.