Meta Sought Dismissal of Scam Ad Lawsuit
The technology giant argues its terms of service do not obligate it to prevent user exposure to misleading advertisements.
Updated on Sept. 22, 2026 in Financial Crime
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Meta has filed papers with the 9th Circuit Court of Appeals requesting the dismissal of a lawsuit involving scam advertisements. Plaintiffs allege the company failed to prevent losses after users interacted with deceptive content on its platform.
Why it matters
The case hinges on whether Meta's terms of service create enforceable legal obligations for the company to actively police its ad platform. A ruling could redefine the scope of platform liability regarding third-party content under breach of contract claims.
The 9th Circuit Court of Appeals is scheduled to hear oral arguments early next year. Meta is currently facing at least two other active lawsuits regarding online scams, including one brought by the Consumer Federation of America in April 2026.
The players
Meta
This is a technology company that owns and operates social media platforms including Facebook.
9th Circuit Court of Appeals
This is the federal court currently reviewing the appeal filed by Meta.
Jeffrey White
He is a U.S. District Court Judge who previously ruled the allegations could support contract claims.
Consumer Federation of America
This is a non-profit organization that represents consumer interests and filed a scam-related lawsuit against Meta.
The details
Plaintiffs argue that Meta representations created an explicit obligation for the firm to take action against deceptive ads after an internal study allegedly showed nearly 30% of ads from China-based advertisers violated company policy. Last year, U.S. District Court Judge Jeffrey White ruled that the allegations could support claims of breach of contract.
Timeline
In 2024, the 9th Circuit ruled that Section 230 did not provide Meta immunity against breach of contract claims.
During 2025, Judge Jeffrey White ruled that allegations could support contract claims.
In April 2026, the Consumer Federation of America filed a scam-related lawsuit.
In July 2026, plaintiffs filed legal papers regarding Meta's obligations.
The 9th Circuit Court of Appeals expects to hear oral arguments early in 2027.
Legal Context
This case tests the limits of platform immunity established by Section 230 of the Communications Decency Act. It marks a significant legal departure by focusing on breach of contract claims rather than standard content liability protections.
If the lawsuit proceeds, it may lead to stricter oversight and new security measures for advertisers on social media platforms. Users should remain cautious of deceptive ads, as current platforms continue to face challenges in removing fraudulent content.
The takeaway
The outcome of this appeal will likely set a new precedent for whether tech giants can be held contractually liable for fraudulent third-party content. Readers should exercise heightened scrutiny when engaging with advertisements that promise financial gains.
What happens next
The 9th Circuit Court of Appeals is expected to hear oral arguments in the case early in 2027.
Further reading
For more information on ongoing litigation, visit the Financial Crime section.
Source note: This article includes information reported by MediaPost.
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