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Judge questions New Mexico’s product changes demands as State seeks $3.7B over 15 years for teen health
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Judge Bryan Biedscheid said at the beginning of the second phase of the trial that he is worried some of the changes sought by New Mexico could amount to “overreach.”
“I am a judge, I am not a legislator, I am not a regulator,” Biedscheid said
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In addition to product changes and declaring Meta Platforms a public nuissance, New Mexico is aslo asking the judge to order Meta to pay $3.7 B over 15 years ($247 million per year) to fund teen health.
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During this phase of the case, the judge will decide whether Meta Platforms is a “public nuissance” (involves endangering public health or safety) under the Mexico law, a finding that would enable him to order wide-ranging remedies to curb harm to teenagers.
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One of New Mexico’s public nuisance case was against Walgreens for its role in distributing highly addictive prescription painkillers, which ended up settling for $500 m versus $24 billion dollars over 14 years ($1.7 B per year) that was sought by the State.
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Like the bellwether youth-related lawsuits, there were more than 3,000 opioid lawsuits brought by states against Walgreens, CVS and Walmart but they settled most of them for $13.8 billion.
Assessment
I view it as modestly positive that the judge in the New Mexico lawsuit expressed concern that some of the remedies sought by the state could amount to “overreach.” Given the severity of the opioid crisis relative to concerns around social media addiction, and considering that social media is an important part of business activity and the broader economy, New Mexico may ultimately reach a significantly smaller settlement with Meta (perhaps in the $100–$200 million range). The more I study past precedent, the more I believe Meta’s total headwind from these bellwether cases may be less than $15 billion.