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Meta just failed to make its biggest legal headache go away. US District Judge Yvonne Gonzalez Rogers denied the company’s motion to dismiss claims from 29 state attorneys general who allege that Facebook and Instagram are deliberately designed to addict children and teenagers.
The ruling, handed down on June 30, means the states’ lawsuit will push forward into discovery and potentially trial.
What the states are actually claiming
The lawsuit is part of a multidistrict litigation case, MDL No. 3047, which consolidates social media addiction and personal injury claims into a single proceeding. The core claim is that Meta built addictive features into its platforms while explicitly targeting younger users, then hid the associated risks from parents and the public.
The allegations include consumer deception and violations of the Children’s Online Privacy Protection Act, commonly known as COPPA. That federal law imposes strict requirements on how companies collect and use data from children under 13.
Meta had argued the claims should be tossed. Judge Gonzalez Rogers disagreed, allowing the consumer deception and COPPA-related claims to move forward. Earlier court decisions in this saga, stretching back through 2024 and 2025, have followed a mixed pattern. Some claims proceeded while others were dismissed under Section 230 of the Communications Decency Act.
Meta’s growing courtroom problems
In March, a New Mexico jury awarded $375 million in damages against Meta over similar allegations involving the company’s impact on young users. Around June 25, just days before the latest ruling, a separate $6 million personal-injury verdict was upheld against Meta in a case that also involved YouTube.
Since roughly 2022, states have been filing and escalating legal challenges against major social media companies over youth mental health concerns.
What this means for investors
With 29 states now cleared to proceed past the dismissal stage, Meta faces the prospect of extensive discovery. That process could force the company to disclose internal research, communications, and product decisions related to youth engagement.
Features like infinite scroll, autoplay, notification systems, and algorithmic recommendation engines are all under scrutiny. If courts or regulators eventually mandate changes to these engagement mechanisms, the impact on user metrics, and by extension advertising revenue, could be material.
Investors should watch for what emerges during discovery, because internal documents have historically moved Meta’s stock more than the verdicts themselves. Every additional attorney general who joins makes a global settlement both more likely and more expensive.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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