Delaware judge refuses to dismiss Facebook shareholder suit over user data privacy breaches

A laptop keyboard and Faceook icon displayed on a phone screen are seen in this illustration photo taken in Krakow, Poland on May 7, 2023. (Photo by Jakub Porzycki/NurPhoto via Getty Images) DOVER, Del. - A Delaware judge on Wednesday refused to dismiss a shareholder lawsuit alleging that Facebook officers and directors violated both the law and their fiduciary duties in failing for years to protect the privacy of user data.Vice Chancellor J.

Travis Laster rejected arguments that the complaint should be dismissed because the plaintiffs did not first demand that Facebook's board take legal action before filing litigation themselves.

Under Delaware law, shareholders must make such a demand or demonstrate that doing so would be futile because a majority of directors were self-interested, lacked independence or faced a substantial likelihood of liability.Laster agreed with the plaintiffs that demand would be futile because there is reasonable doubt that a majority of the relevant Facebook board members, many with close personal and business ties to Mark Zuckerberg, would be willing to confront the CEO and founder of the company now known as Meta Platforms Inc., over its privacy failures.Meta has said in filings with securities regulators that it believes the lawsuit is without merit.In refusing to dismiss the lawsuit, the judge noted that he was required to accept the allegations in the complaint, which he described as "encyclopedic and specific" as true for purposes of ruling on the motion."It tells a story of directors who were on notice of the law breaking, and who either affirmatively went along with it or consciously disregarded it," Laster said.