Judge Dismisses Third Amended Complaint in Facebook Stock Price Class Action Lawsuit

Facebook Stock Class Action Lawsuit Overview: 

• Who: A California judge has dismissed a third amended complaint by Facebook investors. 
• Why: The judge says the plaintiffs have not remedied the deficiencies in their two other complaints.
• Where: The class action lawsuit was dismissed in California federal court. 

A California judge dismissed a third amended complaint by plaintiffs who purchased shares of Facebook common stock between Feb. 3, 2017, and July 25, 2018. The plaintiffs argued that Defendant Facebook, Inc. and Executive Defendants Mark Zuckerberg, Sheryl K. Sandberg and David W. Wehner made false and misleading statements and omissions in connection with the purchase and sale of Facebook stock. 

“This court has previously dismissed two other complaints, has provided plain!ffs ample opportunity to cure the deficiencies identified in those orders, and has warned plaintiffs that failure to cure the identified deficiencies would result in dismissal with prejudice,” U.S. District Judge Edward J. Davila said in his order to dismiss. “Because plaintiffs have not remedied those deficiencies, the court finds that amendment would be futile, and plaintiffs’ claims are dismissed without leave to amend.”

The plaintiffs claim that the shares of the social media company plummeted in value after media outlets reported in March 2018 that Facebook had misrepresented its response to data mining by Cambridge Analytica that was first reported in 2015. 

Plaintiffs Claim Facebook Made 36 Misleading Statements Regarding Stock

On Oct. 15, 2018, the plaintiffs filed their initial complaint. The court granted defendants’ motion to dismiss the consolidated complaint after finding that plaintiffs had failed to carry their burden to plead falsity and scienter. 

On Aug. 7, 2020, this court again granted the defendants’ motion to dismiss the complaint after finding that plaintiffs failed to carry their burden to plead falsity, scienter and loss causation. 

Then on Oct. 16, 2020, the plaintiffs filed their third amended complaint. Defendants moved to dismiss the third amended complaint on Dec. 18, 2020. 

The plaintiffs claim Facebook made a total of 36 materially misleading statements or omissions in press releases, filings with the U.S. Securities and Exchange Commission, earnings calls and public remarks, but Judge Davila found in a previous dismissal that only one of the statements was actionable for a securities fraud claim, Law 360 reports. And for this one actionable statement, the shareholders failed to establish that the company was intentionally or recklessly lying, the judge said.

Facebook has been the subject of several class action lawsuits, including one recently that claims TikTok, Google, Facebook and other “Big Tech” companies often steal private user data. 

Do you believe Facebook intentionally made misleading statements? Let us know in the comments! 

The investors are represented by Dennis Herman, Jason Davis and Kenneth Black of Robbins Geller Rudman & Dowd LLP; John Browne of Jeremy Robinson of Bernstein Litowitz Berger & Grossmann LLP; Claiborne Hane of Pierce Bainbridge Beck Price & Hecht LLP; and Jeremy Lieberman and J. Alexander Hood II of Pomerantz LLP.

The defendants are represented by Orin Snyder, Brian M. Lutz, Joshua S. Lipshutz and Paul J. Collins of Gibson Dunn & Crutcher LLP.

The Facebook Stock Class Action Lawsuit is In Re Facebook, Inc. Securities Litigation, Case No. 5:18-cv-01725-EJD, in the U.S. District Court for the Northern District of California San Jose Division.

Read About More Class Action Lawsuits & Class Action Settlements:

• TikTok, Google, Facebook, and Other ‘Big Tech’ Companies Often Steal Private User Data, Class Action Lawsuits Allege
• TikTok Data Privacy $92M Class Action Settlement
• Apple Watch Class Action Claims Product Sold With Defect That Causes Screens To Crack, Shatter, Detach
• OpenX Technologies Agrees To Pay $2 Million To Resolve FTC Claims It Collected Children’s Data Without Parental Consent