Cook Alciati, partner, was quoted in the Law360 article “Meta Can’t Nix Misrepresentation Claims in Revenue Split Suit.” Cook and Michael Dorfman, partner, serve as plaintiff’s counsel for Shared Partnership, a Canadian news site, in the misrepresentation claim they brought against Meta Platforms Inc.
In a recent ruling, a California federal judge denied Meta’s attempt to dismiss misrepresentation claims brought by Shared. The claims allege that Meta, through Facebook, rejected ads without providing explanations in violation of its own policies. The lawsuit centers on Meta’s “Edit Your Ads” provision, which promised advertisers an explanation for why their ads were rejected and guidance on how to comply with policies. Shared claims that despite relying on this promise when investing millions in Facebook advertising, Meta failed to provide any explanation for the rejected ads and later suspended Shared’s advertising abilities.
US District Judge Richard Seeborg found that Shared sufficiently alleged it had relied on Meta’s commitments, making the misrepresentation claims valid. The judge also ruled that these claims were not untimely, as Meta argued, because Shared continued purchasing ads after April 2019, which falls within the three-year statute of limitations. The judge determined that Shared had adequately pled fraudulent inducement, an exception to California’s economic loss rule, and stated that Meta could revisit its timeliness argument later through a motion for summary judgment.
The case stems from Shared’s allegations that Facebook improperly removed its pages, suspended its access to ads, and rejected self-serve ads without explanation. Additionally, Shared claims Facebook failed to pay it promptly for revenue generated through its “instant articles” feature. This feature allowed Facebook to embed ads within articles, giving Shared a share of the ad revenue. Shared says it was repeatedly denied access to this program without notice and contrary to Facebook’s own terms.
Shared originally filed the case in 2022, accusing Meta of wrongfully cutting it off from its advertising ecosystem and revenue. While Meta argued that its terms of service blocked Shared’s claims, the court has allowed the case to move forward. Cook said, “Shared is pleased with the court’s ruling and looks forward to making continued progress toward trial.” Meta has yet to comment on the decision.
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