Meta stab at arbitration misses in long-running class action over ad reach

(CN) — A federal judge on Tuesday accused Meta of using a late arbitration bid to stall a long-delayed trial in a class action on claims the company intentionally misrepresented the reach of its paid ads.

“Overall, Meta waged a seven-year campaign of litigating this case in two federal courts, and took full advantage of the procedures available in the court system, while staying silent about the arbitration agreement,” U.S. District Judge James Donato wrote in an eight-page order.

The Barack Obama appointee added in a footnote that Meta’s attempt to involve a third federal court was thwarted when the Supreme Court denied its petition for a writ of certiorari.

In 2018, advertisers sued Meta and accused the company of inflating the potential reach of paid ads. In 2022, Donato granted class certification to those who purchased ads between 2018 and 2021. Meta appealed the class certification order, but the Ninth Circuit affirmed in 2024.

This past August, Meta filed a motion to compel arbitration and argued the unnamed class members agreed to arbitrate their claims when they purchased ads. In early October, less than two weeks before the case was set to go to trial, Meta again went to the Ninth Circuit, accusing Donato of “effectively denying” its motion to compel arbitration and pause proceedings.

In his order formally denying Meta’s motion, Donato noted defendants who reserve their right to arbitration typically don’t ask the court to weigh in on the merits or engage in discovery.

“Meta’s conduct could not have been more different,” Donato wrote. “It has fought in court without pause, and by its own admission mentioned the possibility of arbitration only once since 2018, which was in its opposition brief to class certification.”

Meta “sailed in,” as Donato put it, on the eve of trial to raise the issue of arbitration after years of engaging in “robust” discovery — a process Donato said was “so active and contentious that the court instituted the unusual measure of directing counsel for the parties to have ‘weekly discovery calls.’” Not once did the tech giant mention it would seek to resolve the claims through arbitration.

“It bears highlighting that Meta’s statement that it had ‘not waived’ the arbitration provision is well short of saying it would actually seek to enforce it,” Donato wrote.

The class includes anyone who purchased an ad from Meta between May 2018 and October 2021, unless they opted out by a July 2025 deadline, and Meta argued that it could only move to compel those unnamed class members to arbitrate after the opt-out period closed. Donato wasn’t persuaded.

“The point may be assumed solely for discussion, and it does not do the work Meta asks of it,” he wrote. “Even if Meta ‘could not actively move to compel arbitration until the moment that it did, the inferences drawn from the record all point towards waiver.’”

As a result of Meta’s actions in court, Donato found that the advertisers “have demonstrated that the totality of Meta’s conduct in court amounts to a clear waiver of the contractual arbitration provision with respect to the absent class members.”

Donato expressed concern about the timing of Meta’s arbitration request, noting it seemed likely Meta would file an interlocutory appeal of the court’s denial of arbitration, given Meta had already tried to appeal before Donato ruled on its motion.

“Plaintiffs have been waiting many years now for their day in court,” Donato wrote. “A long delay was caused by Meta’s unsuccessful appeal of the class certification order, and another delay in connection with this order may be imminent.”

Donato asked the Ninth Circuit to “proceed with appropriate expedition.”

Neither Meta nor counsel for the class members responded to a request for comment before press time.